WASHINGTON (AP) — Faced with rising oil prices after Russia invaded Ukraine, President Joe Biden plans to invoke the Defense Production Act this week to increase the extraction of critical minerals. for batteries used in electric vehicles.
That’s according to a person familiar with White House plans who insisted on anonymity to discuss the likely policy decision.
Increased federal support for fossil fuel alternatives would reduce the influence of Russian President Vladimir Putin and others on U.S. national security and economic issues, though it reflects a long-term game rather than a response immediately to the economic damage caused by the war.
Biden’s likely order using the Defense Production Act would provide a significant financial incentive to develop a national supply chain for electric vehicles and enable the move away from gas-powered cars.
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Putin’s assault on Ukraine began more than a month ago, rattling global energy markets for oil and natural gas in ways that would likely hurt global growth. U.S. crude oil was trading above $107 a barrel on Wednesday morning, down from nearly $60 a year ago, as inflation emerged as a lingering threat.
The Democratic president is considering invoking Title III of the Defense Production Act of 1950, which would give the government economic powers to address industrial shortages. Mining companies could access funds under the law for the production of minerals including lithium, nickel, graphite, cobalt and manganese.
The government would not provide loans or buy minerals directly. Instead, the funding would cover feasibility studies, production at current operations, and upgrades to safety standards and production.