Trump invokes wartime law enacted during the Korean War, orders expansion of energy production

\r\n
\r\n[Financial News] To curb surging oil prices driven by the fallout from the war with Iran, U.S. President Donald John Trump has even turned to a law with the character of a wartime mobilization measure. Treating energy supply as a national security issue, he plans to use federal funds to directly push ahead with oil and gas production.
On the 20th local time, Trump announced five presidential memorandums that would allow federal funds to be invested in the energy sector under the Defense Production Act (DPA). The measures cover the full energy chain, including oil production and refining, coal supply chains, natural gas transmission, and power grid infrastructure.
The move gives the DOE authority to directly inject funding into those sectors. A White House official explained that it would make it possible to address delays, funding shortages and market barriers across the industry through energy purchases and financial support. The funding will come from a large spending package passed last year.
In the memorandum, Trump said, "A resilient domestic energy production base is central to America's defense posture," adding, "Without immediate action, national security could remain exposed to ongoing risks." He also stressed that securing natural gas and liquefied natural gas (LNG) is directly tied to the energy security of U.S. allies.
The latest action comes amid pressure from rising oil prices. As international crude prices surged on fears of a blockade of the Strait of Hormuz by Iran, Trump has found himself under dual pressure to end the war early and expand energy supplies.
The DPA was enacted in 1950 during the Korean War, when shortages of military supplies prompted its passage. It gives the president broad authority to compel and support private-sector production. During his first administration, Trump used the law to expand ventilator production in response to COVID-19.
More recently, he also invoked the DPA in efforts to restart oil production off the coast of California, while the Joseph Robinette Biden Jr. administration used the same law to boost production of energy equipment such as solar panels and transformers.
\r\nAs uncertainty over energy prices continues amid a prolonged war, differences in views are emerging within the U.S. administration. In a recent CNN interview, Chris Wright said gasoline prices could remain above $3 per gallon until 2027, even if the Strait of Hormuz reopens. Trump dismissed that assessment in an interview with The Hill on the same day, saying it was "completely wrong."
\r\n
km@fnnews.com Kim Kyung-min Reporter