White House weighs DPA path to expand oil refining capacity

The White House is considering using the Defense Production Act to expand U.S. oil refining capacity, a move that would push a wartime industrial law further into domestic energy policy as fuel prices become a political liability before November’s midterm elections.²

The legal framework is already in place. President Donald Trump signed Executive Order 14427 on September 8, and the Federal Register published it on September 11. The order amends earlier DPA delegations so the Interior and Energy secretaries can each independently exercise delegated authority over forms of energy under their purview.¹

Reuters reported the same day that the administration is weighing how to use the DPA to help refineries add capacity, after an April presidential determination authorized use of the law to support and expand U.S. petroleum production, refining and logistics capacity.²

No final decision has been made, according to Reuters. But the policy direction is clear: the administration is looking for ways to increase refining output without waiting years for an entirely new plant. Refining executives told officials that federal support would be better aimed at improving efficiency or expanding existing refineries than financing a new refinery from scratch.² Bloomberg Law’s Reuters pickup similarly framed the issue as a choice between improving or expanding current plants and building new capacity over a much longer timeline.³

What authority has already been delegated

The September 8 order does not fund a refinery project or order a company to build one. Instead, it changes who inside the administration can exercise certain DPA powers over energy.

Executive Order 14427 amends Executive Order 13603, the Obama-era order that organized DPA delegations across the federal government. The new order replaces a prior delegation to the Energy secretary over “all forms of energy” with a shared delegation to the Interior and Energy secretaries, each acting independently over forms of energy under their purview.¹

It also gives both secretaries delegated authority over energy production, construction, distribution, use and directly related activities.¹ For disputes between the two departments over energy matters, the order sends the issue first to the National Energy Dominance Council. If the dispute involves national defense infrastructure or military operations, the National Energy Dominance Council and National Security Council are both brought in, with coordination from the Department of War.¹

That delegation matters because refining is not only an energy-policy question. Under the DPA, the president can prioritize contracts, allocate materials and use financial tools when a product or industrial capability is deemed important to national defense. Reuters described the DPA as a tool of last resort that has not previously been used to add refining capacity.²

What could come next

The most plausible near-term move is not a federal order to build a new refinery. It is a package of support for existing refineries, potentially including regulatory changes, faster permitting, federal investment or DPA-backed financial incentives.

A White House spokeswoman told Reuters that expanding refining capacity is a priority and said officials are evaluating options including regulatory reform, faster permitting and additional investment.² The Daily Caller News Foundation also reported that statement and noted that the administration is examining ways to use federal support for refinery expansion.⁴

One possible DPA route is financial support. OilPrice.com reported that the deliberations could involve Section 303-style tools, such as incentives or funding to expand industrial capacity, while noting the practical limits: refineries are already running near maximum levels, and new refining projects take years.⁵

That makes upgrades to existing plants more attractive politically and operationally. Efficiency improvements, debottlenecking projects, expansions at current facilities and faster approvals could produce capacity gains sooner than a new refinery. Reuters reported that U.S. refinery utilization had reached 98%, underscoring both the urgency and the constraint: the system is already running close to full capacity.²

The Brownsville, Texas, refinery proposal has emerged as one possible test case, though Reuters reported it was unclear whether the project would receive DPA funding.² Daily Caller also identified Brownsville as a potential focal point for the administration’s broader refinery push.⁴

Why refining is the political pressure point

The administration’s interest comes as high diesel prices threaten to flow through the broader economy. Reuters reported that the national average diesel price had climbed above $6 a gallon for the first time, while gasoline remained elevated.² The Associated Press separately reported that diesel had passed $6 as the Iran war deepened pressure on the cost of hauling everyday goods.⁷

Diesel prices matter because diesel moves freight, farm products, construction equipment and many consumer goods. The Washington Examiner’s energy newsletter tied the refinery discussion to concerns that higher diesel prices could raise grocery bills and intensify cost-of-living pressure before the midterms.⁶

That timing gives the DPA debate its political edge. The law was designed for national defense industrial needs, but presidents have increasingly used it beyond conventional wartime production. Applying it to oil refining would test how far the executive branch can go in defining fuel infrastructure as a national-defense necessity during a price shock.

The limits: law, appropriations and Congress

The September order includes its own limiting language. It says implementation must be consistent with applicable law and subject to the availability of appropriations.¹ In practice, that means the delegation does not erase other statutory requirements or create unlimited money for refinery projects.

Congress therefore retains several pressure points. It can demand documents and testimony about how the administration chose projects, whether any companies received preferential treatment, how national-defense findings were made and whether DPA funds were used within statutory bounds. It can also limit, condition or refuse appropriations for DPA-related energy spending.

The most important distinction is between delegation and action. The White House has delegated authority and has an April determination covering petroleum refining, but a specific refinery subsidy, loan, purchase commitment or priority order would still need to fit within the DPA and available funding.¹²

That is why the next announcement matters. If the administration uses the DPA narrowly, such as financing efficiency upgrades at existing plants, it may frame the move as an emergency capacity measure aimed at fuel affordability. If it uses the law to back a politically connected project or bypass ordinary permitting fights, it could invite sharper congressional scrutiny and litigation risk.

For now, the administration has moved the legal machinery into position. The unresolved question is whether it will use that machinery as a targeted capacity tool, a broader energy-industrial policy instrument or a campaign-season demonstration that it is acting aggressively on fuel prices.

White House weighs DPA path to expand oil refining capacity

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What authority has already been delegated

What could come next

Why refining is the political pressure point

The limits: law, appropriations and Congress

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