The U.S. military plans to buy millions of drones in the coming years as it adapts to modern warfare. There is a problem: It doesn’t have the materials to make these drones go boom.

A chronic shortage of explosives threatens the Pentagon’s agenda to replenish weapons stockpiles and arm troops with the unmanned systems that have come to define conflicts. The country’s domestic supply has withered since World War II, leaving a small number of deteriorated and overburdened suppliers, an industrial base frozen in the 1940s. Imports are increasingly hard to come by.

It is a gnawing problem, more so with the war in Ukraine consuming much of Europe’s supply and the war with Iran eating up what little stock the U.S. has available. The shortage has further complicated U.S. efforts to prepare for a potential conflict with China by restocking reserves and becoming more self-reliant for all parts of the weapons-supply chain.

Explosives are part of the category of energetics, energy-releasing chemical compounds that also include propellants and other incendiaries—the stuff that makes weapons go farther and faster, and hit their targets with a bigger bang. They are also used for mining, oil drilling, construction and other industries. They are essential to the Trump administration’s agenda to onshore critical-minerals production.

“It doesn’t matter what kind of conflict it is, whether it is big or small—energetics are at the center of every weapons system that the military has, and that’s where the urgency of the problem comes from,” said Tyler Hacker, a fellow at Center for Strategic and Budgetary Assessments.

At a range just over an hour outside of Houston, a new company recently was testing a powerful explosive, a novel concoction its makers said is 30% more powerful than what the military is packing onto drones today. Engineers from Odin Energetics placed the explosive material on pedestals and remotely detonated them with an echoing bang, emitting a quick burst of flames followed by clouds of smoke.

More energy-dense explosives like this one promise to increase the damage inflicted by smaller weapons. They can also allow a drone to wipe out a target even if its aim is slightly askew, Odin executives said.

Drone Dominance is the Pentagon’s $1.1 billion initiative to amass an arsenal of low-cost drones by the end of 2027. Of the 60,000 attack drones the program recently committed to buying, virtually all are designed to carry explosives, a department official said.

For decades, the military has used smaller numbers of expensive weapons systems that were fired infrequently, even in training. The focus was on surgical strikes, using a limited number of munitions. Attack drones, in contrast, often operate in large numbers designed to overwhelm defenses.

“There’s this whole new way of warfare that was never budgeted for from a manufacturing perspective,” said Brian Davis, co-founder of Odin.

The energetics crisis has been decades in the making. The U.S. rapidly built up a domestic supply during World War II. Following the widespread closures of government-owned plants in the 1990s, the entire production of the powerful explosives HMX and RDX came from a single supplier, Holston Army Ammunition Plant. The 84-year-old plant makes about 3% of what it did during peak production in 1944, according to Hacker’s research, and it has been beset by explosions and pollution violations. There is a one- to two-year wait for products coming out of Holston, said industry experts.

BAE Systems, the defense contractor that operates Holston, referred questions to the Army.

The Pentagon is now looking to surge its energetics supply, but the pace is slow. In March, the Army announced a $903 million research facility in Kentucky that will aim to boost production of HMX and RDX before 2031. The Pentagon launched a new office dedicated to energetics production and created a panel tasked with doubling the nation’s supply of key weapons, including the explosives that power them.

That has created an opening for venture capital and startups to step in. Odin Energetics is a joint venture, announced this month, between Solugen, a chemicals company in which billionaire Peter Thiel’s Founders Fund is the largest investor, and Kraken Kinetics, a bootstrapped startup that builds the warheads, fusing and other parts required to strap a bomb to a drone. The two companies committed $115 million to get Odin started.

“We are not suddenly in an energetics crisis. We have actually been in an energetics crisis for 20 years,” said Davis, who is chief executive of Kraken Kinetics.

The company does its production in modular factories that can be built in six months and set up wherever the weapons are needed, which could be battlefields, military bases or test sites. That is a response to another problem that has bedeviled the explosives industry: Nobody wants a bomb factory in their backyard.

For decades, older factories have suffered explosions and other safety incidents that have killed workers and taken plants offline for months. Odin’s on-demand manufacturing eliminates much of the risk that comes with storing bulk quantities of flammable substances, executives said. The precursor chemicals, which are only as flammable as sugar, are transported from Solugen to Odin using standard trucks, said Sean Hunt, co-founder of Solugen and Odin. Only after those “boring white powders” are sent to Odin do they undergo the chemical reaction that creates the explosive.

The Office of Strategic Capital, a Pentagon lending office, has had conversations with Odin about possible funding, company executives said. The Army, which is looking at bringing energetics production onto its bases, is in discussions with Odin about providing the service with advanced explosives. Odin said it can start supplying the military in small quantities next year.

Odin said it currently has the ability to produce close to a 10th of the roughly 11 million pounds of HMX and RDX explosives Holston produces in a year.

Holston got a boost with a $1 billion modernization investment from the Army, which owns the plant, but the timeline for the upgrades has slipped from 2025 to 2029 or beyond. Army spokeswoman Ellen Lovett said the timeline shifted to ensure safety and technical standards were being met, and the service is proceeding with safety and other improvements.

For now, there are few other options. Explosives that used to come from European suppliers are now being rerouted to Ukraine, or nations are holding on to them for their own rearming efforts. The U.S. at one time purchased ingredients for energetics from Russia and China, but many of those exports have been restricted.