Biden invoked the Defense Production Act to boost clean energy. Here’s why.
By Kevin Purdy
On Monday, President Joe Biden signed an executive order aimed at increasing clean energy production and manufacturing in the United States.
The big story here is that the Biden administration will give the solar industry a two-year break from tariffs that were threatening to grind the entire industry to a halt. According to Rystad Energy, 64% of new solar projects were in jeopardy due to the Commerce Department’s investigation and threat of tariffs.
For the foreseeable future, that will no longer be the case. The executive order frees up the solar industry to move ahead with its projects, and it’s a highly visible sign of Biden’s commitment to clean energy (they are, after all, very shiny).
But solar tariffs are just one part of humanity’s climate challenge—and only one of five memos issued by the White House Monday. Biden also invoked Cold-War-era production powers to move forward the markets for insulation, heat pumps, fuel cell equipment, and transformers and other grid-boosting gear.
In doing so, the president made this remarkable statement: “Electric heat pumps are industrial resources, materials, or critical technology items essential to the national defense.”
Remove the legal and lawmaking bits, and the president is saying it: heat pumps are national defense. And they are, in a few different fields of battle.
Heat pumps for peace
Environmentalist and author Bill McKibben has been saying this for a while now: install heat pumps, defeat Russia. “If you want to stand with the brave people of Ukraine, you need to find a way to stand against oil and gas,” McKibben wrote in the Guardian back in February.
In Heat Pumps for Peace and Freedom, McKibben called for shipping U.S.-made heat pumps to Europe, where homes running on heating oil and natural gas could swap them in and shut off the gas pipe. Whether or not that happens, the U.S. building out its capacity for producing heat pumps—and the related building insulation and electrical gear that improve them—could stave off future petro-state aggression.
In his article, McKibben argued that the Biden administration should invoke the Defense Production Act to achieve this goal. On Monday, Biden announced that he would do just that.
What is the Defense Production Act?
According to legal expert Shayan Karbassi, the modern Defense Production Act has three main sections, allowing the president and his departments to:
- Require businesses to accept and prioritize government contracts for materials that are “scarce” and “essential” to national defense
- Use government funds to entice production, and even install manufacturing equipment if needed
- Allow temporary agreements with producers that could otherwise spell trouble under antitrust or contract law
The Defense Production Act (DPA) has a name that evokes factories full of patriots turning out weapons, but it’s used routinely for non-conflict purposes. The Department of Energy invoked it to send natural gas to California to avoid blackouts in early 2001. The U.S. Army Corps of Engineers utilized it to prioritize contracts related to Hurricane Katrina damage in 2005. And the Federal Emergency Management Agency (FEMA) used it to send housing, food, water, and electrical supplies to Puerto Rico in 2017.
The most commonly used aspect of the DPA demands that companies produce items required by the government ahead of any other client. That’s why the Defense Department leans on the DPA roughly 300,000 times per year (though we can’t really find out how it gets used for military orders). An agency can also issue loans to buy equipment, and closely manage the distribution of any goods produced. Mostly, the DPA allows the government to skip its typically glacial bidding and contracting systems.
In the early days of the COVID-19 pandemic, President Trump, despite making statements against “nationalizing,” used the DPA to compel auto makers to produce a theoretically unlimited number of ventilators. Ford, GM, and other manufacturers were later contracted for 187,000 ventilators, and eventually delivered 80,000.
Similarly, the Trump administration started off on a strict DPA footing with the 3M company, demanding it ramp up production of medical-grade N95 masks and stop exporting outside the U.S. 3M balked, saying a U.S-only focus would cause deaths and backlash. A deal was eventually reached, with exports restored, but millions of U.S. masks produced as a top priority.
Biden used the DPA almost immediately after he became president, placing priority orders for masks, testing kits, and vaccine-related materials, such as dry ice. He later invoked it to compel more vaccines, fire hose materials for California, and, just weeks ago, import baby formula.
Why clean energy is a real defense need
It’s unclear exactly what scale of production Biden’s clean energy DPA demands might create, or how the products will be deployed. But every step up in solar and clean comfort tech has a huge impact.
Home heating and cooling causes about 12% of the country’s emissions. If a heat pump was installed in every home, and the country could run those more energy-efficient homes on a renewable grid, emissions would be cut by 600 million tons per year. Given that the U.S. Department of Defense has declared climate change a national security threat, accelerating heat pump adoption is already a matter of national defense.
Domestic technology production—whether heat pumps, batteries, or transformers—also has real defense implications. In May 2020, President Trump signed an executive order that called for “Securing the U.S. Bulk-Power System.” Around that time, the government seized a 250-ton Chinese-made transformer bound for Colorado, citing concerns about foreign access. Months later, a Commerce Department report stated the U.S. was nearly completely dependent on “foreign sources for material critical to the manufacture of transformers.”
But nobody thinks the U.S. can truly go it alone when it comes to clean energy tech, and the case for intervention has been building for a while now. In February, the Department of Energy (DOE) launched a new Office of Manufacturing and Energy Supply Chains, and issued reports on the need for a comprehensive strategy for a clean energy transition, including a revamped industrial base.
So while it might seem odd to see a president citing national defense to boost solar panels, heat pumps, insulation, and transformers, it makes more sense than ever. We need a secure, robust electric grid sending clean power to everybody, and it was taking too long for the market and bureaucrats to figure out how. Clean power is security, and we should prioritize it.