A Free-Market Energy Blog

Obama's Quiet Executive Order: Reaffirming and Expanding Federal Powers

By Dave Harbour -- April 18, 2012

“The authority of the President … to require acceptance and priority performance of contracts or orders (other than contracts of employment) to promote the national defense over performance of any other contracts or orders, and to allocate materials, services, and facilities as deemed necessary or appropriate to promote the national defense, is delegated to the following agency heads … [including] the Secretary of Energy with respect to all forms of energy.”

In preparing a list for MasterResource of federal energy policy reforms to free Alaska, and thus bolster America’s economy, I came across an Executive Order (E.O.) signed by the President last month with little or no fanfare. His new authority empowers him, in certain circumstances, to assume control over the energy industry—along with the rest of the economy.

Such executive branch power puts Congress and the courts in an inferior position. It also creates a new anti-production risk in addition to current federal policy regarding lease sales; ocean policy; ANWR; OCS; and arbitrary and capricious application of the Endangered Species, Clean Water and Clean Air acts.

‘National Defense Resources Preparedness’

How many of our readers knew that on March 16, 2012, one month ago, the President signed an Executive Order (E.O.)— giving himself access to dictatorial powers — under the guise of ‘national defense’ under authority of Defense Production Act of 1950. These powers will potentially control the means of production–including energy production.

We are suspicious of White House motives because if this E.O. were necessary and its objectives noble, we would have been treated to a transparent, presidential announcement and/or press conference. Pardon us for being suspicious as well of main stream media complicity, due to a deafening silence coming from the Fourth Estate.

This recent action could really be referred to as an update of E.O. 11858 executed on May 7, 1975. The president authorizes himself to take almost complete control of the country using national defense or even the peacetime preparation for national defense as an excuse for assuming dictatorial powers (See Sec. 102. Policy. The United States must have an industrial and technological base capable of meeting national defense requirements and capable of contributing to the technological superiority of its national defense equipment in peacetime and in times of national emergency.)

The E.O. goes on under Sec. 103. General Functions to direct,

Executive departments and agencies (agencies) responsible for plans and programs relating to national defense (as defined in section 801(j) of this order), or for resources and services needed to support such plans and programs…to (a) identify requirements for the full spectrum of emergencies, including essential military and civilian demand; (b) assess on an ongoing basis the capability of the domestic industrial and technological base to satisfy requirements in peacetime and times of national emergency, specifically evaluating the availability of the most critical resource and production sources, including subcontractors and suppliers, materials, skilled labor, and professional and technical personnel; (c) be prepared, in the event of a potential threat to the security of the United States, to take actions necessary to ensure the availability of adequate resources and production capability, including services and critical technology, for national defense requirements….

The President doesn’t have to wait for the Congress to declare a national emergency. He can deem an emergency to exist or state in the preamble to a forthcoming E.O. that, while the country does not face an actual, imminent national security threat, (in our words) “we must prepare for one and I, accordingly, herewith assume control of all transportation facilities, food stores and supplies, energy production and the nation’s health care systems.”

The heads of agencies will become heads of massive central planning and enforcement efforts, such as those that existed in previous authoritarian societies.

Meet Your Masters

The principle players in controlling the new American economy and its parts and enforcing this new ‘rule by agency’, shall be the Departments of Homeland Security (National Defense); Commerce (Means of production and manufacturing base, and all other materials, services, and facilities, including construction materials); the Secretary of Agriculture (food resources, food resource facilities, livestock resources, veterinary resources, plant health resources, and the domestic distribution of farm equipment and commercial fertilizer); the Secretary of Energy (controlling public and private energy activity?); the Secretary of Health and Human Services (health resources, making ObamaCare a moot point?); the Secretary of Transportation (all forms of civil transportation, whether publicly or privately owned?); the Secretary of Defense (water resources–meaning that some of its military functions will fall under Homeland Security? )

The above agencies “shall plan for and issue regulations to prioritize and allocate resources and establish standards and procedures by which the authority shall be used to promote the national defense, under both emergency and non-emergency conditions.”

If agencies disagree over which should exercise what control (the U.S. Military and CIA come to mind here), “then the issue shall be referred to the President through the Assistant to the President and National Security Advisor and the Assistant to the President for Homeland Security and Counterterrorism.”

The free market enters indentured servitude to federal agencies, as

“…the Secretary of the resource department that made the finding may use the authority of section 101(a) of the Act, 50 U.S.C. App. 2071(a), to control the general distribution of any material (including applicable services) in the civilian market.

If agencies run short of cash, no problem, no need to bother Congress. Just guarantee a loan and charge it to the next generation with approval of the Secretary of Treasury:

Sec. 302. Loans. To reduce current or projected shortfalls of resources, critical technology items, or materials essential for the national defense, the head of each agency engaged in procurement for the national defense is delegated the authority of the President under section 302 of the Act, 50 U.S.C. App. 2092, to make loans there under. Terms and conditions of loans under this authority shall be determined in consultation with the Secretary of the Treasury and the Director of OMB.

And if readers weren’t completely sure that the intent of the President’s E.O. is to be able to confiscate their property, note Sec. 308.

Government-Owned Equipment. The head of each agency engaged in procurement for the national defense is delegated the authority of the President under section 303(e) of the Act, 50 U.S.C. App. 2093(e), to: (a) procure and install additional equipment, facilities, processes, or improvements to plants, factories, and other industrial facilities owned by the Federal Government and to procure and install Government owned equipment in plants, factories, or other industrial facilities owned by private persons; (b) provide for the modification or expansion of privately owned facilities, including the modification or improvement of production processes, when taking actions under sections 301, 302, or 303 of the Act, 50 U.S.C. App. 2091, 2092, 2093….

We believe that were this E.O. something defensible, the White House would have announced its presence. We believe that the White House would not have gone to the trouble to construct a way in wartime or peace to have total control of America without Congressional assent, unless it intended to execute. We believe the White House is now positioned to announce that because of some upcoming news item, ‘significant justification exists for activating the E.O. effectively, then, the country will be secured under a dictatorship.

The energy industry and Alaska’s resources will play an important role in the rise of the ‘New America”. It is not hard to imagine government-controlled oil and gas, hard mineral mining, and timber and fishing activity–and with a vengeance.

Politics Unhinged

National coverage could make this E.O. power grab a wedge issue in the Obama-Romney race. In any case, concerned citizens should not underestimate this Commander-in-Chief’s creative use of the E.O., particularly one that might declare that, “due to national security concerns, the national elections in November have been postponed until November of 2013.”

In this Brave New World, no federal initiative from this point forward should be dismissed as “too extreme, anti-American, or impossible.”


This piece was taken from a commentary produced this week by Northern Gas Pipelines publisher Dave Harbour. Harbour is former Chairman of the Regulatory Commission of Alaska and a Commissioner Emeritus of the National Association of Regulatory Utility Commissioners. A former Chairman of the Alaska Council on Economic Education, he is also former Chairman of the Anchorage Chamber of Commerce and former President of the American Bald Eagle Foundation.


  1. Nick K  

    To say that this EO gives the President new powers he didn’t already have is false. Here’s a Snopes link which explains the changes this order makes to the orders it supersedes:

    (From Hot Air) “The original EO dealing with national defense resources preparedness was issued in 1939 (EO 8248) according to the National Archives. It has been superseded a number of times, starting in 1951 by nearly every President through Bill Clinton, and amended twice by George W. Bush.”


    If you’re concerned about this order, you really need to be concerned about every EO on the topic, starting in 1939. But be aware, this concern has nothing to do with the current president.


  2. Harry Dale Huffman  

    Read that quote at the beginning of this article more carefully:

    “The authority of the President … to require acceptance and priority performance of contracts … to promote the national defense over performance of any other contracts … , is delegated to the following agency heads ….”

    This is not the President giving himself a new power, it is the President delegating (improperly?) that power to “agency heads”. Now, if the President does not in fact enjoy such a power himself, then his order is, in the end, illegal, and everyone should be so informed, and the situation properly confronted. But if that power DOES reside with the President, then there is the further legal question whether he can in fact DELEGATE such a power to agency heads, carte blanche, and the further question of competent leadership, whether he SHOULD delegate such power, carte blanche and ahead of any particular situation involving national defense.

    Who, then, is empowered to DEFINE when the national defense is involved in a situation–the agency heads? Surely that would be an incompetent shirking of Presidential responsibility (if the power is his), or a usurpation of congressional power (if the power is congress’s). No matter how I look at it, President Obama is at the very least dangerously incompetent, and at worst, a traitor to the U.S. Constitution and our highest laws (if only by surreptitiously and implicitly defining the current situation–vis a vis “energy policy” in general, and “climate change policy” in particular, for example?–as necessarily involving national defense).

    If he is, by some insane chance, re-elected, he may still be impeached by such careless use of national defense powers. Clearly, in my view he should be impeached, particularly as this seems to be just the latest in a long line of dictatorial and wanton usurpations or delegations, by this President, of federal powers, whether executive, legislative or judicial.

    In short, this executive order is tantamount to a declaration of war, and the question is, war against who–and can the President declare war, even (or especially) surreptitiously, behind the backs of the American people and Congress? Although I am just one man, an individual citizen, I deny the President, or his delegates, that power.


  3. Tom Tanton  

    While the current EO excludes ‘contracts of employment’ that’s likely just a temporary gift to the union bosses, and conscription will come next. Oh goody, I’ll likely get to work building wind turbines as my re-education.


  4. Kermit  

    I’m not a fan of Snopes as a source of credibility, but it is a good start to find at least partial truth.

    The EO is pretty much identical to the same on issued by Clinton.

    FYI, there have been a lot of manufacturing facilities built with government dollars especially during WWII in the refining sector and assembly line sector. Most of the automobile assembly plants used up into the 1980’s were built for assembly of weapons of WWII.

    In the late 1980’s during the demolition of a foundry (which made railcar sideframes and bolsters for the wheels) a GSA inspector arrived unannounced for his “annual” check on a section of the main building (which had been used to make tank turrets during the Korean Conflict) to find it gone. He shook his head and walked away. That section of building was already being sheared up to be loaded in gondola railcars for transport to a steel mill for remelting.


  5. Dave Harbour  

    Harry restates our concerns a little more strongly than we proposed, but he helpfully discusses reasonable use of delegation of authority.

    Tom raised the subject of employment. Space limitations precluded our addressing every issue in this EO, but we note that the EO creates in Sec. 501, a National Defense Executive Reserve supervised by the Secretary of Homeland Security and implemented by, “the head of any agency.” Sec. 601 of the EO gives the Secretary of Labor “in coordination with the Secretary of Defense”, the right to assist the Director of Selective Service in, “development of policies regulating the induction and deferment of persons for duty in the armed forces.”

    Nick is correct that this recent EO is an updated version of previous EO(s), which we acknowledged in our commentary. However, EO 8248, which he cites as the orgin of the current EO was a rather simple, brief directive as to how the Executive Branch is organized within its existing jurisdiction. It gives deference to Congress. It does not provide a blueprint for how to expand Executive Branch jurisdiction over the Nation’s public and private natural resources, health care, transportation, general services, etc. functions throughout the country in peacetime. It addresses , “the event of a national emergency or threat of a national emergency”. The current version refers to activating the EO powers, “in peacetime and in times of national emergency.”

    The older version does not contemplate being able to recruit from the private sector a corps of executives as well as blue collar workers who would be exempt from selective service (implying we would no longer have a volunteer armed forces).

    These are some of the reasons we need not be concerned about EO 8248 and why every American should be concerned about the broad extension of authority this president takes with this order.

    Finally, we question the President’s intent because of the process used to quietly update executive powers in this EO. We said, “If the President wanted to allay the concerns arising from a plain reading of the E.O., he need only hold a press conference and explain 1) why this E.O. does not in fact enable the assumption of dictatorial powers, or 2) why this E.O. is intended to and can only be used to coordinate America’s assets in the event of a true national emergency — supported and funded by Congress. We would happily report on such a press conference.

    Absent such a revelation, we should remain vigilant.”

    We thank the readers for their enlightening comments and this opportunity to respond.


  6. Eddie Devere  

    Nick K, your analysis is right on. The power of the Executive branch has been a lot stronger than the other branches since ~1930. (Woodrow Wilson in the Teens was still a relatively weak President compared with modern Presidents.)

    Dave Harbour, I’m not sure if your goals are political (because of the up-coming election), but this article is completely one-sided. The article seems like a lot of fear-mongering about your opinion of what President Obama might due.

    I would focus your energy and attention on attacking specific concrete policies that President Obama has implemented. Such as “Cash-for’Clunkers”…in which the government paid people to destroy their vehicles (in particular, destroy their engines) and to buy new vehicles. I bought a new vehicle during this time period and specific did not do the Cash-for-Clunkers deal because I didn’t want the engine of my decently good, old car destroyed.
    There’s so many examples of poor public policy that we don’t need to fear-monger about future policies. (And too be fair, there were some really bad public policies during the previous administration. I’m not sure which Presidency I dislike more: Bush Jr or Obama.)


  7. Lionell Griffith  

    A government that thinks it has the right to abolish individual right to life, liberty, and property in order to defend itself is not worth defending. The reason being is that the ONLY purpose of having a government is to defend individual rights from violation from within and without. To violate those rights is to abandon all claim of legitimacy. The government may, for a time, have the physical power to violate rights but it cannot long avoid the consequences of doing so: the dissolution of a civil society.


  8. John Smith  

    2012 & Olduvai theory, Peak Oil, Peak Coal, Peak everything. Forgive me if I’m a tad nervous about an EO specifically targeting resources. On the other hand Olduvai theory is not really theory. It’s a statement of fact written by an Electrical engineer (Phd) and in it he specifcally predicts (long before the movie and the other 2012 crap) that 2012 would be the start of the downhill slide to oblivion. If we assume Olduvai is accurate to within a few years then what do you expect the Government of the day to do? (Don’t wiki Olduvai. They will have you believe that a glass of water lasts forever)


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