Defense Production Act: How Biden is using emergency powers for green energy

He’s also tapping into the fund provided by the law to advance some of his green energy priorities, whose progress has been stalled in Congress, and is considering doing so again in an attempt to deal with the consequences of the nation’s shortage of oil refining capacity.

Support for Biden’s use of the DPA has been bipartisan in some cases, such as with his using it to boost production of critical minerals, and some lawmakers have urged him to use DPA authorities in areas he’s declined to thus far.

Here’s a look at one of Biden’s favorite laws:

What is it?

Congress passed the DPA and it was signed into law by President Harry Truman after the Korean War began in 1950.

It gave the president new authorities “to shape the domestic industrial base so that, when called upon, private industry and other entities are capable of providing the essential materials and goods needed for national defense,” according to the Congressional Research Service.

The scope of authorities has since been expanded and has been employed for responding to natural disasters and terrorist attacks.

Under the law, the president can require corporations to accept contracts for materials and services determined to promote national defense, develop loan guarantees and purchasing commitments to incentivize industry to produce more of a given good, and establish voluntary agreements with private industry, among other measures.

It also gives the president access to the Defense Production Act Fund, which the Department of Defense oversees. The fund’s fiscal year 2022 budget is $544 million.

How have other presidents used it?

Former President Donald Trump used the DPA to enable production of more personal protective equipment and ventilators during the early days of the COVID-19 pandemic.

Over time, various DPA authorities have been delegated to executives and other agencies.

The Federal Emergency Management Agency used the DPA extensively in 2017 after Hurricane Maria battered Puerto Rico to prioritize contracts for manufactured housing units, food and water, and electrical transmission.

Past administrations have used, or considered using, the DPA for energy-related purposes. Former President Barack Obama used it to produce more advanced biofuels for military and commercial use. The Trump administration also weighed using it to keep coal-fired and nuclear power plants from retiring.

“In the past, it was understood that these powers were reserved for legitimate national security concerns,” said Philip Rossetti, senior fellow in energy at the R Street Institute. “That’s been the normal use, and it’s been pretty uncontroversial. But now, the question is how broad exactly is this authority? Nobody’s tested the limits.”

How has Biden used it for energy?

Biden, who set a goal for half of all new vehicle sales to be electric models by 2030, determined March 31 that more domestic mining and processing of critical minerals, such as lithium, nickel, and cobalt for the purposes of large-capacity battery production, is “essential to the national defense.”

The presidential memorandum directed the Pentagon to oversee feasibility studies for mature mining and processing projects and to consult with other executive agencies to support mineral production.

Biden also recently invoked the DPA to increase domestic production of solar panel components and other green energy technologies, finding it necessary because industry “cannot reasonably be expected to provide the capability” for them “in a timely manner.”

The June 6 memoranda would support the production of photovoltaic modules and other products used to build solar panels, such as by helping to fund new factories, as well as the production of insulation, electric heat pumps, and transformers.

Biden’s greenhouse gas emissions targets envision a halving of emissions economywide by 2030. It also envisions “100% carbon pollution-free electricity” by 2035, which would require a massive increase in generation from renewable sources, including solar.

China, and Chinese companies operating in third countries, currently dominate the global solar supply chain, and domestic solar manufacturing cannot currently meet U.S. demand for solar products.

What are the DPA’s limits?

Of the $544 million available in the DPA fund for this fiscal year, more than $110 million, or around 20%, has been obligated, according to a government spending tracker.

Solar manufacturers in particular have noted the limits of the Defense Production Act Fund’s size in asserting that Biden’s use of the DPA isn’t a replacement for legislation implementing longer-term policies, such as tax incentives, to facilitate more manufacturing.

Solar is also competing for DPA funding against other priorities, including baby formula.

What has been the political reaction to it?

Republicans and Democrats have urged Biden to use DPA authorities for various energy-related purposes since the war in Ukraine began.

Rep. Jared Golden (D-ME) and three House GOP lawmakers asked Biden to use the DPA to increase oil production, while liberal Democrats asked him to use it for renewable energy technologies.

Sens. Joe Manchin (D-WV), Lisa Murkowski (R-AK), Jim Risch (R-ID), and Bill Cassidy (R-LA) asked Biden to use the DPA for critical minerals production, which he ultimately did.

Environmental groups were especially praiseworthy of the critical minerals and solar energy DPA uses.

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“We know that clean energy is the key to both defeating the climate crisis and securing affordable, reliable energy for every household — today, President Biden delivered for Americans on both fronts,” Evergreen Action co-founder Sam Ricketts said of the solar memorandum.

Meanwhile, some Republicans have been critical and have sought to rein in Biden’s use of the DPA.

Rep. Bob Gibbs (R-OH) introduced legislation that would amend the DPA to prevent it from being applied to solar photovoltaic modules and other solar panel inputs.