President Joe Biden is under pressure to invoke Cold War-era powers to force more domestic oil production as the war in Ukraine strains supplies, raising gasoline prices and fueling inflation, reports Yahoo.
1950 Defense Production Act
Lawmakers and labor activists have urged Biden to compel deployment of drilling rigs and solar panels using the 1950 Defense Production Act, the same authority wielded by Harry Truman to make steel for the Korean War and Donald Trump to spur mask production to battle the coronavirus.
So far, the Biden administration has shown little enthusiasm for the move. “It would basically be providing money to oil companies to do something that they already probably have the capacity to do,” White House Press Secretary Jen Psaki said Thursday.
Nevertheless, Russia’s invasion of Ukraine is rapidly shifting the window of what’s possible. The administration is already weighing a narrow use of the 72-year-old law to jump-start production of electric heat pumps that can help Europe curb its reliance on Russian gas.
And in Washington, lawmakers eager to tame gasoline prices and combat Russia’s energy dominance are pushing the Defense Production Act as a prescription for supply-chain bottlenecks and languished gas projects.
Construction of the Mountain Valley Pipeline
Senator Joe Manchin, an influential Democrat from West Virginia, has urged Biden to wield the DPA to force construction of the Mountain Valley Pipeline to send gas to the East Coast, though the act wouldn’t overcome all of the pipeline’s legal and environmental obstacles. Separately, four senators, including Manchin and Lisa Murkowski, an Alaska Republican, on Friday asked Biden to use the act to accelerate production of lithium-ion battery materials needed to power electric vehicles.
Invoking the DPA to steer energy production seems radical in times of peace, said Kevin Book, managing director of research firm ClearView Energy Partners. “It’s not so radical when you’re actually in a war that is washing onto American shores as gasoline prices and could potentially mean acute shortages in Europe for American allies,” he said.
Ensuring the U.S. has resources that could be necessary
The federal law empowers the president to essentially nationalize private industry to ensure the U.S. has resources that could be necessary in a crisis. It even singles out energy as a “strategic and critical material,” giving the president wide latitude to prioritize contracts and force businesses to supply the government with materials and services.
Advantages
The statute is a powerful tool to help stabilize markets and forge “an industrial policy that makes sense for the 21st century American economy,” said Alex Williams, a research analyst at the labor advocacy group Employ America that published a blueprint for using the DPA to accelerate oil production.
Combating climate change
Beyond gas, the DPA is being considered as a tool to combat climate change.
More than 200 environmental, indigenous and progressive groups asked the president to use the DPA to rapidly scale up the production and deployment of electric-vehicle chargers, weatherization equipment and other clean energy technology.
And environmentalist Bill McKibben has pitched government officials to invoke the DPA to manufacture electric heat pumps that can help wean Europe off Russian gas.
Climate activists warn the administration risks forfeiting the campaign against global warming by propping up fossil fuels.
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Source: Yahoo
