A Korean War-era law enacted to ensure domestic firms could adequately supply the U.S. military has become a piggy bank of sorts for a range of industrial needs, including energy projects favored by the Trump administration and GOP lawmakers.

The money is coming from a $1 billion pot Republicans set aside for purchases using authorities under the Defense Production Act of 1950 as part of their massive budget reconciliation package enacted in July 2025.

The latest $42 million cash infusion, announced Monday, is intended to help complete work on the long-stalled Constitution Pipeline to run natural gas from Pennsylvania to New York, where state officials have opposed it.

But building the 125-mile pipeline is a key aspect of the Trump administration’s energy plans and is backed by local Rep. Mike Lawler, R-N.Y., a Trump ally in a swing district facing a tough midterm race. Lawler joined Energy Secretary Chris Wright and Interior Secretary Doug Burgum at a natural gas power plant in Dover, N.Y., for the announcement.

“Utility rates are up 58 percent under New York’s disastrous energy policies,” Lawler said. “We need to approve the Constitution Pipeline to get gas here to this critical power plant and across New England and the region.” 

Cait Conley, the Democrat running to replace Lawler, has advocated for expansion of renewable energy projects to bring costs down, as well as “greater accountability” from utilities. Inside Elections with Nathan L. Gonzales rates the Lawler-Conley race a Toss-up.

A few days prior, the Energy Department said it would use the 1950 law’s authorities to provide up to $50 million toward a two-year project expected to add some 290 megawatts of transmission capacity for Virginia and West Virginia customers of Appalachian Power, a subsidiary of Ohio-based American Electric Power.

Rep. John McGuire, R-Va., was on hand along with Wright for the Lynchburg, Va., announcement, along with local officials and power company executives. Appalachian Power said it expects to receive $40 million to upgrade 14 miles of transmission lines in the Lynchburg area.

Democratic former Rep. Tom Perriello is challenging McGuire for the 5th District seat; Inside Elections pegs McGuire as potentially vulnerable, though still rates the seat as likely to stay Republican next month.

Also last week, Vice President JD Vance announced the use of Defense Production Act authorities to expand the capacity of a Delek US Holdings oil refinery in Tyler, Texas. The administration hasn’t yet detailed a specific funding amount or detailed plan, but Vance said delivering more fuel would help lower consumer transportation costs and help supply the military as well.

Vance was campaigning on behalf of GOP Senate candidate Ken Paxton, who’s trying to fend off a tough challenge from Democrat James Talarico to keep the open seat in the red column. Inside Elections calls the race to succeed outgoing Sen. John Cornyn, R-Texas — whom Paxton defeated in the primary — a Toss-up.

The recent announcements follow earlier DOE moves to set aside up to $425 million to upgrade 13 coal-fired power plants in various states, as well as up to $75 million for a coal export terminal project in Oakland, Calif.  

“By investing in both coal generation and critical export infrastructure … the Energy Department is strengthening U.S. energy security, reinforcing strategic supply chains, and advancing American energy dominance,” Wright said in June.

Unwritten direction

Republicans on the Senate Banking and House Financial Services panels, which have jurisdiction over Defense Production Act funds, wrote the $1 billion appropriation into the 2025 budget package, to remain available until Sept. 30, 2027.

No further direction was written into the statute to avoid running afoul of budget rules, but the White House and GOP lawmakers backed the funding with fossil fuel-related energy projects in mind. DOE announcements about tapping the fund have said the money was appropriated in last year’s law “for energy-related projects deemed critical to national security.”

An executive order signed by President Donald Trump in March extended authority to Wright to provide financial incentives to industry to boost energy production on a fast-tracked basis. In September, the president signed an executive order extending similar authorities to Burgum. 

Following the DOE executive order, Trump issued a series of “presidential determinations” outlining specific needs related to the Defense Production Act. One such finding in April justified tapping the funds because “ensuring sufficient natural gas and liquefied natural gas … capacity is critical to sustaining United States defense operations and ensuring allied energy security.”

That determination, which DOE cited in the Constitution Pipeline announcement, marked natural gas and LNG capacity, as well as transmission, processing, storage and other related elements as “critical infrastructure” needed for national defense, making them eligible for DPA funds. 

A separate presidential determination cited for the Appalachian Power project names “grid infrastructure” and components including “transformers, transmission lines and conductors” and more as “essential to the national defense.”

National security meets price concerns

The project selections have frequently included references to both “energy security” and a desire to reduce energy costs — both issues that have plagued the White House amid rapidly expanding energy demands and rising prices. Inflation and utility bills, in particular, have posed a major challenge to Republicans on the campaign trail ahead of the midterms. 

Wright said the latest funding announcement for the Constitution Pipeline would help expand the reach of natural gas — an abundant fuel in the U.S. that he said was hampered by a “lack of pipeline infrastructure.” 

The project is expected to fuel about 3 million homes in the region, according to its developer, Tulsa-Okla.-based The Williams Cos. The natural gas giant says in a fact sheet that delivering Marcellus Shale supplies from Pennsylvania to the Northeast will lower electric bills that can run as much as 55 percent higher than those of Keystone State consumers.

New York state regulators and environmental activists oppose the Constitution Pipeline, arguing it would result in destructive forest clearing and damage to sensitive ecosystems, health risks from increased fracking, and displacement of renewable power sources that could lower electric bills.

Funding the pipeline and other fossil fuel projects isn’t the only novel use of a law originally intended for wartime purposes.

During the COVID-19 pandemic under the first Trump as well as Biden administrations, Congress provided $11 billion in Defense Production Act funding for purchases of protective equipment, vaccine materials, testing kits, ventilators and more.

In 2023, the Biden administration Defense Department tapped DPA funds from a variety of sources, including Democrats’ 2022 budget reconciliation law known as the Inflation Reduction Act, to expand mining and production of materials necessary for national security needs, like lithium, nickel, graphite and aluminum.