Travis Fisher and Dominik Lett
On January 20, his first day back in office, President Trump declared a national energy emergency through an executive order aimed at drastically increasing domestic energy production and building additional infrastructure. While framed as a response to energy supply challenges, this order highlights the dangers of normalizing emergency governance, where temporary, rarely-used powers become regular tools to make long-term policy decisions. Trump’s actions risk repeating some of the same presidential overreaches of the Biden era, which relied heavily on the executive branch to reshape energy policy.
What’s in the Order?
The executive order endows federal agencies with sweeping emergency powers to fast-track energy infrastructure projects and bypass environmental regulations, including by invoking the Defense Production Act (DPA) and eminent domain. The stated goal is to address “inadequate energy supply and infrastructure,” which the administration blames on policies from prior administrations. Although we are sympathetic to the Trump administration’s problem statement, fighting executive overreach with more of the same is a losing strategy in the long run.
A key provision of the order is its invocation of the DPA, a wartime authority that empowers the president to regulate and subsidize “critical materials and goods” needed for national defense. As former Senate Banking Committee Chairman Phil Gramm (R‑TX) once said, “The Defense Production Act is probably the most powerful and potentially dangerous piece of American law. It gives the president extraordinary powers.” Under Trump’s order, the DPA could be used to commandeer energy resources by forcing private businesses to accept certain contracts, blocking mergers and acquisitions, and even directly subsidizing energy projects. These actions, while intended to bolster energy infrastructure, would lead to wasteful government spending and distortions in energy markets, shifting substantial costs onto taxpayers.
Additionally, the order empowers agencies to investigate exercising eminent domain “to facilitate the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources.” This could accelerate the construction of pipelines, refineries, and transmission lines. But it comes at the cost of individual property rights that are foundational to free markets, prosperity, and liberty. Moreover, eminent domain invites political corruption, where public funds may be intentionally directed to help some private corporate energy interests over others.
As one example, could the Trump administration order the construction of a natural gas pipeline through the state of New York—which has long rejected hydrocarbon infrastructure projects—into energy-starved New England? Possibly. Section 4 of the executive order specifically mentions the Clean Water Act, which is the legal authority used by the state of New York to reject pipeline projects.
Another example that should strike fear into the heart of electricity market participants is the prospect of using Section 202c of the Federal Power Act to keep power plants running despite regulatory restrictions under the Clean Air Act. That authority is vested with the Department of Energy and has been used sparingly in cases of clear emergencies but could be applied—we think erroneously and in bad faith—in a blanket fashion at the national level.
The Broader Cost of Emergency Governance
Trump’s national energy emergency is part of a troubling pattern in modern governance: an increasing reliance on emergency powers to justify large-scale policy shifts. Since Congress passed the National Emergencies Act of 1976, the US has seen a steady rise in the rule by emergency, with more than forty emergencies ongoing today. These emergencies, originally intended to address immediate and unforeseen crises, now persist for decades, becoming entrenched features of federal policy with significant fiscal costs.
Trump’s energy emergency continues this trend, using emergency authorities to bypass congressional approval. Tools like the DPA and eminent domain concentrate immense power in the executive branch, enabling rapid spending on infrastructure projects without rigorous cost-benefit analysis or oversight.
This growing reliance on emergency declarations also fuels a political pendulum effect, with each administration invoking emergency powers to advance ideologically opposed agendas. President Biden faced calls to declare a climate emergency to restrict fossil fuel production, while Trump’s energy emergency prioritizes a fossil fuel-driven infrastructure boom (the companion executive order Unleashing American Energy urges “particular attention to oil, natural gas, coal, hydropower, biofuels, critical minerals, and nuclear energy resources”). These tit-for-tat declarations distort the market and bypass constitutional checks and balances.
While energy security is a valid concern in the current policy environment, the use of emergency declarations as a workaround for congressional deliberation deepens political polarization and sets a bad precedent for future administrations. What’s to stop the next Democratic administration from one-upping these executive orders as Trump has done immediately on the heels of the Biden administration?
The lesson here is simple. Centralized planning—whether through a leftist subsidy for climate security or a conservative emergency mandate for energy security—undermines the innovation and efficiency that free markets provide.
A Better Path Forward
To address energy security responsibly, the administration must work with Congress to pursue durable, market-oriented reforms that balance immediate needs with long-term goals by embracing markets. The new Republican trifecta must repeal the Inflation Reduction Act’s massive energy subsidy program, for example, but suspending offshore wind leasing via executive action is a poor substitute for subsidy reform and reinforces the Biden team’s brinksmanship in banning offshore oil and gas leases.
Only an open, competitive energy market, free from the shifting political priorities of executive or other power, will best serve Americans over the long term. So long as the government is involved in making energy policy, it should follow principles of transparency, cost discipline, and democratic accountability—all things that the emergency order runs counter to.
Trying to build cost-effective, long-lived American energy infrastructure under a set of rules that change every four years is absurd. A political regime of emergency authority ping pong is a game no one wins. If we want the energy sector to thrive, we need a policy environment where markets determine outcomes rather than top-down mandates or fleeting political whims.