Defense Production Act Authorities and U.S. Domestic Energy Supplies

Defense Production Act Authorities and U.S. Domestic Energy Supplies

INSIGHTi

Defense Production Act Authorities and U.S.
Domestic Energy Supplies
March 11, 2022
On March 8, 2022, as part of a broader response to Russia’s invasion of Ukraine, President Joseph R.
Biden, Jr. issued an order prohibiting the U.S. import of and investment in oil, liquefied natural gas
(LNG), and coal supplies from the Russian Federation. Some Members of Congress have also introduced
legislation that would prohibit the U.S. import of mineral fuels and byproducts from Russia (see for
example H.R. 6968, as passed by the House).
While U.S. imports of Russian petroleum are relatively small and refiners have access to many
substitutes, there is broader concern that a material reduction of Russia’s total petroleum supply could put
upward pressure on oil and gasoline prices. In response, some have called on the President to exercise
authorities under the Defense Production Act of 1950 (DPA; 50 U.S.C. §4501 et seq.) to expand domestic
energy production. Media reports also indicated that Administration officials have considered using DPA
authorities to increase U.S. production of energy-efficient heat pumps and other equipment for U.S. allies
in Europe.
DPA Authorities Specific to Domestic Energy
Applications
The DPA confers broad presidential authorities to mobilize domestic industry in service of the national
defense, including programs for military and energy production or construction, military or critical
infrastructure assistance to any foreign nation, and “homeland security, stockpiling, space, and any
directly related activity” (50 U.S.C. §4552). The President has delegated authorities related to the
production, conservation, use, control, distribution, and allocation of energy supplies under DPA Title I
and Title III to the Secretary of Energy in Executive Order (E.O.) 11790, and E.O. 13603. For a more in-
depth discussion, see CRS Report R43767, The Defense Production Act of 1950: History, Authorities, and
Considerations for Congress. The Senate Banking Committee and the House Financial Services
Committee have jurisdiction over the DPA.
Several provisions, particularly under Title I, specify authorities concerning domestic energy:
Congressional Research Service
https://crsreports.congress.gov
IN11884
CRS INSIGHT
Prepared for Members and
Committees of Congress

Congressional Research Service
2
 50 U.S.C. §4511(c) allows the President to allocate or prioritize contracts relating to materials,
equipment, and services to maximize domestic energy supplies. Such use must be accompanied
by a presidential finding that such materials, services, and facilities are scarce, critical, and
essential to (1) maintain or expand exploration, production, refining, or transportation; (2) to
conserve energy supplies; or (3) to construct or maintain energy facilities. Furthermore, this
finding must conclude that any such efforts cannot be accomplished without requiring priority
performance of contracts or orders, or controlled distribution of any supplies of materials,
services, and facilities in the marketplace.
 50 U.S.C. §4514 limits the President’s use of the DPA to impose wage or price controls without
prior authorization through a joint resolution of Congress. 50 U.S.C. §4515 further limits the use
of the DPA to institute a gasoline rationing program without congressional approval.
 50 U.S.C. §4516 designates energy as a strategic and critical material. This designation enables
other DPA authorities, such as those under Title III, to be used for energy-related purposes. 50
U.S.C. §4516 also specifies that no provision of the DPA should be interpreted as granting any
“new direct or indirect authority to the President for the mandatory allocation or pricing of any
fuel or feedstock (including, but not limited to, crude oil, residual fuel oil, any refined petroleum
product, natural gas, or coal) or electricity or any other form of energy.”
DPA and Energy Supplies: Background
Past congressional actions to amend the DPA in response to the oil crises of the 1970s have sought to
clarify that an executive response under the DPA should be made to “actions taken outside of the United
States” that could impact domestic energy supplies, in order “to assure the availability of domestic energy
supplies for national defense needs.” Currently the DPA policy statement (50 U.S.C. §4502) specifies that
“to the maximum extent possible” U.S. domestic energy supplies should be augmented through “reliance
on renewable energy sources (including solar, geothermal, wind, and biomass sources), more efficient
energy storage and distribution technologies, and energy conservation measures.”
The Executive Branch previously employed DPA authorities domestically on a limited basis to respond to
the 2000-2001 California electricity crisis when the Department of Energy (DOE) made use of DPA Title
I prioritization authorities “to ensure that emergency supplies of natural gas continued to flow to
California utilities.” This use of DPA authorities generated some congressional concern, with some
Members contending that these authorities applied “only in the case of emergencies that had clear
national security implications.” DOE countered that DPA authorities to “maximize domestic energy
supplies” had been “an element of the inventory of energy agency authorities for a very long time” and
had been used to prioritize contracts associated with pipeline construction and upgrading DOE strategic
petroleum reserve storage facilities, among other purposes, as part of the “ordinary business of the federal
government.”
Policy Implications for Congress
The President has the discretion to invoke, activate, and implement DPA authorities for specific purposes,
and to determine how that process occurs. Although the DPA does provide limited congressional equities,
the President may waive most of them, with the exception of the ability to set price and wage controls
under Title I (50 U.S.C. §4514). However, Congress may enact laws, provide or deny funding, or provide
guidance to signal intent for using DPA authorities as part of a broader U.S. response to Russia’s invasion
of Ukraine.

Congressional Research Service
3
 Members may use signaling mechanisms, such as letters to the President and Executive Branch
officials; hearings; or resolutions calling for the implementation of DPA authorities to respond to
domestic energy requirements.
 Congress may also consider supplemental appropriations for DPA activities, such as expanding
U.S. production of heat pumps and other energy-efficient alternatives under Title III.
 Congress may advise, or otherwise encourage, the administration to make use of other DPA
authorities as appropriate, such as Title VII, which provides for the establishment of industry
coordination mechanisms and advisory bodies in carrying out other DPA activities.

Author Information

Heidi M. Peters
Erica A. Lee
Analyst in U.S. Defense Acquisition Policy
Analyst in Emergency Management and Disaster

Recovery

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United
States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However,
as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the
permission of the copyright holder if you wish to copy or otherwise use copyrighted material.

IN11884 · VERSION 1 · NEW