Key facts
- The White House is considering using the Defense Production Act to expand U.S. oil refining capacity.
- American refineries are operating at 98% capacity.
- National average diesel prices have exceeded $6 per gallon.
- Refiners suggested federal funds should focus on expanding existing plants or improving efficiency.
- The Defense Production Act has never been used to add refining capacity.
- A new 168,000-bpd refinery planned for Brownsville, Texas, is a potential test case.
The White House is exploring the use of the Defense Production Act (DPA) to increase U.S. oil refining capacity, driven by concerns over global crude supply disruptions and elevated diesel prices. Refiners met with administration officials to discuss how federal support could be best utilized, suggesting funds would be more effective for improving efficiency or expanding existing plants rather than building new ones. The DPA grants the president authority to provide financial assistance and direct industrial resources toward materials and capacity deemed essential for national defense. President Trump previously issued a determination in April authorizing the use of the act to boost domestic petroleum production, refining, and logistics capacity. U.S. refineries are currently operating at approximately 98% utilization, near maximum capacity, with diesel inventories 13% below their five-year average and prices exceeding $6 per gallon. Global refining capacity has decreased due to plant closures, while significant capacity remains offline in Asia, the Middle East, and Russia. A proposed new 168,000-bpd refinery by America First Refining in Brownsville, Texas, announced in March as the first new U.S. refinery in nearly 50 years, is being considered as a potential test case for DPA funding.