WASHINGTON (AP) — Facing higher oil prices after Russia’s invasion of Ukraine, President Joe Biden is looking at invoking the Defense Production Act this week to increase the mining of critical minerals for the batteries used in electric vehicles.
That’s according to a person familiar with the White House plans who insisted on anonymity to discuss the likely policy move.
Greater federal support for alternatives to fossil fuels would reduce the leverage of Russian President Vladimir Putin and others on matters of U.S. national and economic security, though it reflects a long-term play rather than an immediate response to the economic damage caused by the war.
Biden’s likely order employing the Defense Production Act would provide a meaningful financial incentive to develop a domestic supply chain for electric vehicles and enable the shift away from gasoline-fueled autos.
Putin’s assault on Ukraine began more than a month ago, rattling global energy markets for petroleum and natural gas in ways that would likely hurt growth worldwide. U.S. crude oil was trading at more than $107 a barrel on Wednesday morning, up from nearly $60 a year ago as inflation has emerged as a persistent threat.
The Democratic president is looking at invoking Title III of the 1950 Defense Production Act, which would provide the government with economic authorities to address industrial shortfalls. Mining companies could access money under the law for production of minerals including lithium, nickel, graphite, cobalt and manganese.
The government would not be issuing loans or directly purchasing minerals. The funding would instead cover feasibility studies, production at current operations and modernizing safety standards and production.