$150 Million to Support U.S. Refining as Trump Invokes Defense Production Act
Key Facts
On October 22, 2026, U.S. President Donald Trump issued a memorandum under Section 303 of the Defense Production Act, determining that domestic oil production, refining and logistics are essential to national defense. The decision establishes a federal basis for supporting capabilities across the oil supply chain, from exploration and production to refining. The Energy Department announced the same day a plan to provide up to $150 million in funding under Title III of the act. The department said the support is aimed at oil production, storage and logistics at U.S. refineries. The funding is part of a stated effort to strengthen domestic fuel supplies, with the department expecting refinery output to increase by millions of gallons a day.
The memorandum's scope covers exploration and production, gathering and transportation pipelines, storage and marine terminals, as well as refining and oil production. The support therefore covers multiple stages in the movement of oil from production sites to processing and distribution facilities. The memorandum determined that these domestic capabilities are needed to meet national defense requirements. It said constrained financing, long implementation timelines, permitting and infrastructure obstacles, and supply chain constraints hinder the timely provision of the required capabilities. The administration linked these obstacles to the need for presidential intervention to support projects.
Trump authorized the Secretary of War to implement the decision, including making purchases, entering into commitments and using the financial tools needed for projects, and directed him to publish the memorandum in the Federal Register. The mechanism permits the use of purchases, purchase commitments and financial support to develop production capabilities. The memorandum described these tools as the most practical, fastest and most cost-effective alternative for meeting the need. It also waived the requirements in Sections 303(a)(1) through 303(a)(6), citing the declared national emergency. The memorandum does not require companies to increase production; it focuses on support and financing tools directed at projects.
The Energy Department said the funding would be used in partnership with the private sector to support existing energy infrastructure. The department expects it to boost production of gasoline, diesel, jet fuel and other petroleum products. It estimated refinery output could rise by millions of gallons a day, without specifying the increase for each product in its announcement. The department said expanding domestic production would strengthen U.S. fuel supplies and help lower prices for households and businesses. Lower prices are a stated department goal, while the production increase in the announcement remains an expected outcome of the funding.
The memorandum follows a similar presidential determination issued on April 20, 2026, concerning domestic oil production, refining and logistics, which at the time was directed to the Secretary of Energy. In the new decision, implementation was assigned to the Secretary of War, while the Energy Department was tasked with managing the refinery funding plan. The memorandum says petroleum fuels power the armed forces, the industrial base and critical infrastructure. It warned that supply disruptions could put U.S. defense capabilities at risk. The decision relies on this security rationale to justify support for oil production, refining, transportation and storage capabilities.
The White House memorandum did not name specific projects eligible for funding, while the Energy Department said the project selection process is still under way. Secretary Chris Wright said the beneficiaries would be announced "in the near future." The announcement also said the funding would support existing infrastructure in partnership with the private sector. The decision followed discussions within the administration about using the law to expand refining capacity, Reuters reported. The agency said Trump had directed Vice President J.D. Vance the previous week to expand capacity at a Texas refinery owned by Delek US Holdings.
Against this backdrop, U.S. crude oil production averaged about 13.6 million barrels a day in 2025, according to Reuters, making the United States the world's largest producer. But the new memorandum focuses on expanding domestic capabilities and easing obstacles to projects, and does not set a quantitative crude production target. Reuters also reported that crude and diesel prices have risen since the U.S.-Israeli attack on Iran in late February, as global energy shipments have been affected. The implementation plan leaves details of the projects and the funding allocated to each subject to the outcome of the ongoing selection process. The Energy Department is expected to announce the selected projects later, the department said when it announced the funding.