Trump’s Defense Production Act plan aims to boost diesel output, but could it help drivers?
A $150 million production plan
Trump announced Thursday that his administration would invoke the Defense Production Act to support higher gasoline and diesel production in the United States. The Energy Department said the funding is intended to raise refining output by millions of gallons per day and bring down fuel costs.
The move comes as Americans have paid an average of more than $4 per gallon for gas over the past three months. On Friday, Brent crude traded at $116 a barrel, up 2.6%, while U.S. benchmark West Texas Intermediate was around $103, up 3%.
What the law allows
Enacted in 1950, the Defense Production Act was first designed to increase supplies needed for national defense. Congress later expanded its use to cover natural hazards, terrorist attacks and other national emergencies.
The administration is using the law as part of its effort to reduce fuel prices. The Energy Department says the money will support additional refining output, though experts questioned how much that would change the current fuel supply.
Existing output exceeds demand
The United States produces about 5.3 million barrels of distillate fuel oil each day, including diesel, while domestic use is about 3.6 million barrels. Gasoline production is roughly 9.5 million barrels daily, compared with domestic consumption of 8.9 million.
The country also exports around 1.4 million barrels of diesel per day, Tom Kloza, chief energy adviser for Gulf Oil, told CBS News. He said expanding capacity would be difficult given limits facing U.S. refiners.
Benefits may take time
Patrick De Haan, a petroleum expert at GasBuddy, said in an email to CBS News, “I don't think that's really going to have any impact.” A spokesperson for the American Fuel & Petrochemical Manufacturers said the group appreciated the administration’s attention to refineries, while noting U.S. production already exceeds domestic consumption.
Kloza said use of the act could accelerate some refinery expansions or reopenings. However, bringing additional capacity online takes time, so he said the action would not deliver short-term benefits.
Key points
- The administration plans to spend $150 million to increase gasoline and diesel production.
- The Energy Department says the plan could add millions of gallons of refining output per day.
- U.S. production already exceeds domestic use for both gasoline and diesel.
- Experts said refinery constraints and the time needed to add capacity could limit near-term effects.