White House Considers Defense Production Act to Boost Oil Refining Capacity, Sources Say

The White House is weighing the use of the Defense Production Act (DPA) to expand U.S. oil refining capacity, according to two sources familiar with the discussions. The move comes as the administration seeks ways to counter high fuel prices and insulate the country from global crude oil supply disruptions ahead of the November midterm elections.

Discussions with Refiners

The proposal was reportedly raised during a recent meeting between President Donald Trump and executives from nearly a dozen U.S. refining companies. According to the sources, White House officials explored how federal support, potentially through the DPA, could be used to add domestic capacity. No final decisions have been made.

Refining executives at the meeting suggested that federal funds would be more effective if directed toward expanding or improving the efficiency of existing plants. They argued that financing a new refinery would be significantly more expensive and would take years to complete.

In a statement, White House spokeswoman Taylor Rogers said, “Expanding that capacity is a top priority for the President and his energy team, who are evaluating concrete options to increase our refining capacity through regulatory reform, faster permitting, and additional investment."

Market Pressures and Context

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The consideration of the DPA, a law typically reserved for national emergencies, highlights the pressure on the administration as fuel prices remain elevated. The national average for diesel has recently climbed above $6 a gallon for the first time.

This pressure is compounded by the fact that U.S. refiners are already operating at near-maximum levels. According to the latest data, refinery utilization has reached 98%, leaving little room to increase output with current infrastructure. U.S. refining capacity has also seen a net decline over the past decade as less profitable facilities have closed.

A Potential Test Case

The administration's push to expand domestic refining is part of a broader energy strategy. A proposed new refinery in Brownsville, Texas, by America First Refining could serve as a test case. The planned 168,000-barrel-per-day facility was announced by President Trump in March as the first new U.S. refinery in nearly 50 years.

It remains unclear if this project would receive DPA funding. The project is backed by India’s Reliance Industries and has reported ties to the president's family and administration, according to company disclosures.