The War Is Why Washington Must Build — and Why It Can't Afford To

When the administration invoked the Defense Production Act in April to force a domestic energy buildout, it named the obstacle in its own words.

Petroleum fuels the Nation’s Armed Forces, industrial base, and crucial infrastructure. Without immediate Federal action, United States defense capabilities will remain vulnerable to disruption. — Donald Trump

The tell is inside the document. Every condition the order cites is a product of the war the administration chose to fight — and the war is the one thing the order cannot fix. Start with the money. The cost of borrowing for any energy project is at a two-decade peak because of the war. Thirty-year Treasury yields reached 5.29% in August, the highest since 2007, as investors bet the Middle East crisis would keep inflation high and central banks tight ^[1]. The government's own financing program now has to borrow into the market the war made expensive. Then the builders. The companies that would do the building are not building. Chevron's chief executive was explicit.

It is early into this conflict to be making big changes. — Mike Wirth

Permian producers told the Dallas Fed they are holding back because of extreme price volatility and an unpredictable policy environment ^[2]. Chevron and ConocoPhillips each cut Lower 48 spending by 10%, Occidental cut Permian spending by 20%, all while crude sits above $100 ^[3]. The uncertainty the war creates is freezing the investment energy independence requires. Then the ledger. The war is also consuming the money the government-backed alternative would need. A $500 billion defense increase ^[4], a $120 billion monthly deficit ^[5], and a $200 billion war funding request to Congress ^[6] — the same $200 billion earmarked for the Energy Dominance Financing program ^[7]. The same number sits on both sides of the ledger. So the administration is substituting government financing for the private capital that will not come. The DPA has now been invoked twice in six months for two different things the war touched — energy in April, munitions in June ^[8] — and a third invocation is under consideration this week for oil refining, with diesel above $6 a gallon and refineries running at 98% ^[9]. The refining case is the concrete test: the proposed Brownsville refinery, with Donald Trump Jr. as a minority investor, would channel government-backed financing to a politically connected project the private market will not fund ^[9]. The engine is self-reinforcing. The war must persist to justify the intervention, and the intervention cannot work while the war persists. The barriers the DPA cites are the war's products, and the war is the administration's choice.