The Defense Production Act (DPA) has evolved into a powerful federal tool for addressing energy‑related emergencies, supply chain disruptions, and industrial capacity constraints. While historically associated with military procurement, Congress has expanded the DPA over time to support energy production, emergency preparedness and other civilian priorities.
For refinery operators and fuel producers, understanding how the DPA could be applied is increasingly important. Recent federal actions suggest a growing willingness to use the DPA across the hydrocarbon value chain during perceived energy or national security emergencies.
This Q&A outlines how the DPA intersects with refinery operations, highlights recent developments and what energy companies should be prepared to navigate.
Key Takeaway: The DPA gives the federal government broad authority to direct refinery output, prioritize fuel production, provide investment support and coordinate industry response during national energy emergencies. This has significant legal and operational implications for energy companies.
Can the Defense Production Act Be Used Against Oil and Gas Refineries?
Yes. The DPA provides broad authority that can reach across the energy sector, including oil and gas refineries as well as producers of other transportation and strategic fuels.
Because refineries are a core component of the nation’s critical energy infrastructure they fall squarely within the categories of enterprises that could be directed or supported through DPA authorities. Depending on how an emergency is defined, this scope could extend beyond traditional petroleum refining to include facilities producing aviation fuels, renewable fuels, or other strategically important energy products.
What Precedent Exists for Using the DPA in the Oil and Gas Sector?
The government routinely utilizes the DPA to procure bulk fuel, including jet fuel and diesel, to meet the military’s requirements. Unrelated to any government contract, in March 2026, amid escalating geopolitical tensions linked to the Iran conflict, the Trump administration invoked the DPA citing energy supply security concerns. As part of that action, the administration purported to authorize steps to override certain state regulatory barriers in order to restart oil and gas operations associated with Sable Offshore Corp. in California.
That action is significant for energy companies for two reasons. First, it demonstrates the administration’s willingness to extend DPA authority beyond traditional defense manufacturing into upstream and midstream energy operations. Second, the validity of the action is actively being litigated. California has sued, arguing that the administration fabricated an emergency, exceeded its statutory authority under the DPA and unlawfully preempted state environmental law.
While the legality of that invocation and the limits of the DPA’s authority remain unresolved, the episode underscores the potential breadth, and controversy, surrounding DPA use in the fossil fuel supply chain.
What Does DPA Title I (Priorities and Allocations) Affect Refinery Operations?
Title I (Priorities and Allocations) gives the federal government authority to direct the performance and prioritization of contracts and to allocate materials necessary for national defense or emergency response.
For refineries, Title I directives could include requirements to:
- Accept and prioritize government contracts over commercial arrangements
- Adjust production slates to emphasize specific fuels such as jet fuel, diesel or military‑grade products
- Comply with allocation orders affecting crude oil, hydrogen, catalysts or other critical inputs
- Maintain operational continuity even where market conditions or maintenance planning might otherwise suggest reduced runs
In practice, this could result in disruptions to commercial output planning, procurement challenges as suppliers adjust deliveries to comply with allocation orders and reduced operational flexibility under mandated production priorities.
How Could DPA Title III Affect Refinery Investment and Capacity?
Title III authorizes the federal government to financially support capacity expansion, modernization and critical supply chain resilience in sectors deemed vital to national security.
If refinery capacity or specific fuel streams are identified as strategic priorities, the federal government could use Title III authorities to:
- Finance modernization, debottlenecking or process‑safety enhancements
- Support capacity expansions for targeted products such as aviation or emergency‑response fuels
- Encourage regional redundancy to reduce geographic concentration risks
For some refiners, Title III support could present new demand through contracts or investment opportunities by helping to close financing gaps for capital‑intensive projects, though such support would likely come with federal oversight and performance obligations tied to national security objectives.
How Is the Defense Production Act Used During National Energy Emergencies?
The US Department of Energy (DOE) has recently formalized its use of the DPA during declared energy emergencies, including through voluntary agreements under DPA §708. Since 2025, DOE has been developing these mechanisms pursuant to a Presidential declaration of a national energy emergency.
These voluntary agreements allow participating companies to engage in coordinated planning related to production, inventory management and distribution.
For refiners, participation could involve:
- Joint planning with federal agencies on production and distribution strategies
- Sharing operational or logistical data with DOE or other agencies
- Pre‑established commitments regarding minimum production or supply levels during crises
These tools signal a more proactive and coordinated federal–industry approach to managing energy disruptions.
Does the Defense Production Act Provide Antitrust Immunity for Energy Companies?
Yes, in certain circumstances. Title VII of the DPA provides antitrust immunity for conduct undertaken pursuant to approved §708 voluntary agreements.
This means that refiners participating in coordinated federal-industry planning, such as joint production scheduling or distribution coordination, may engage in activities that would ordinarily raise antitrust concerns without incurring liability, provided the activity is authorized under an approved agreement and supervised by the relevant federal agency.
Companies considering participation should consult counsel to understand the scope and conditions of that immunity before entering any such arrangement.
What Legal and Policy Issues Should Refineries Consider if the DPA Is Invoked?
Recent DPA actions highlight several legal and policy considerations for refinery operators, including:
- Uncertainty around federal preemption of state environmental, permitting or operational restrictions
- Tension between federal directives and ongoing state enforcement or litigation
- Implications for worker safety and labor law compliance during compelled operations
- Legal and commercial exposure arising from compliance with directives that may later be challenged in court
While the DPA provides sweeping authority, its invocation, particularly in contested circumstances, can create legal uncertainty that refiners should factor into operational and risk‑management planning.
Conclusion
The Defense Production Act has not historically been a primary mechanism for directing refinery operations. However, recent federal actions involving the broader petroleum sector suggest that may be changing.
With its expansive authorities spanning production priorities, state preemption, resource allocation, investment incentives and antitrust‑protected coordination, the DPA is increasingly positioned as a consequential tool during energy disruptions. As energy security challenges evolve, refiners should anticipate heightened federal engagement and prepare both operationally and legally to respond to potential DPA directives.
