US President Joe Biden is set invoke the use of Title III of the Korean War-era Defense Production Act (DPA) to ramp up US production of minerals for electric vehicles and utility-grade energy storage batteries as the latest salvo in the ongoing economic battle with Russia.
According to a White House fact sheet released earlier today, “The President will issue a directive, authorizing the use of the Defense Production Act to secure American production of critical materials to bolster our clean energy economy by reducing our reliance on China and other countries for the minerals and materials that will power our clean energy future … Specifically, the fact sheet continues, “the DPA will be authorized to support the production and processing of minerals and materials used for large capacity batteries – such as lithium, nickel, cobalt, graphite, and manganese – and the Department of Defense will implement this authority using strong environmental, labor, community, and tribal consultation standards.”
The move is intended to further reduce demand for Russian oil and fossil fuels and undermine Vladimir Putin’s ability to wage an ongoing war in Ukraine, where the Russian military has already faced heavier-than-expected losses against Ukrainian guerillas.
About the Defense Production Act
The FEMA website explains the Defense Production Act [of 1950] as, “the primary source of Presidential authorities to expedite and expand the supply of materials and services from the US industrial base needed to promote the national defense.
Title III, ‘Expansion of Productive Capacity and Supply,’ also provides for, “various financial measures, such as loans, loan guarantees, purchases, and purchase commitments, to improve, expand, and maintain domestic production capabilities needed to support national defense and homeland security procurement requirements.”
All of this goes back to the sweeping war powers granted to President Truman during World War II, which saw car companies converted to making airplanes, bombers, Jeeps (of course), and even tanks. History.com has a great summary of the passing of the Defense Production Act here, with even more great WWII-era photos like the one above. It’s definitely worth a click on its own, but t TL;DR version is that the government is allowed to force private companies to prioritize certain Federal contracts, especially those pertaining to ‘national defense.’ And it looks like, as of now, that includes the production of electric vehicles – which is awesome!
Our own Steve Hanley first predicted this move a few days ago, and I, for one, am glad it’s come to pass. What about you guys? Is this a good move for Joe Biden, especially ahead of a mid-term election where some pundits believe the Democratic party will take a beating? Scroll on down to the comments and let us know what you think!
Sources: The White House; FEMA.
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