Nevada's only operating refinery is in talks with regional crude oil suppliers to ramp up local production to shield the state from California's volatile fuel market, the company said in a statement last week.
"Nevada is one of the most import-dependent fuel markets in the country," said Sky Quarry Inc. CEO Marcus Laun. "If two of the largest California refineries serving the Western region close permanently and global oil prices spike above $110 a barrel, the question of where refined product comes from - and who controls local supply - becomes urgent. We own the only refinery in Nevada, and that is a strategically significant position."
Sky Quarry owns and operates the 5,000 b/d Foreland refinery located in Railroad Valley on the East side of Nevada, producing diesel, vacuum gas oil (VGO), naphtha, and liquid paving asphalt from crude oil sourced from Nevada and Utah, serving the regional fuel market across Nevada and parts of the broader Intermountain West.
Given the state's extremely limited domestic supply, Nevada relies heavily on California to provide nearly 90% of its fuel, according to AAA data.
This dependence leaves Nevadans susceptible to California's nation-high gasoline prices as California's refining capacity has declined sharply, following the closure of Phillips 66's 147,000 b/d Wilmington facility near Los Angeles last year along with Valero shutting the doors at its 149,000 b/d Benicia plant in Northern California later this year.
Michael Mische, associate professor at the University of Southern California's Marshall School of Business, estimated the combined refinery closures will reduce California's in-state production by 8 million to 10 million gal/day.
California lawmakers intend to makeup the loss in production by leaning more on imported material, raising concerns as the U.S.-Israeli war against Iran has caused historic crude oil prices amid global supply challenges.
"The West Coast fuel supply chain is being stressed from multiple directions at the same time," said Laun. "California may be losing roughly 290,000 barrels a day of refining capacity just as global crude prices are hitting multi-year highs. That is a challenging equation for any market that depends on California for refined product - particularly Nevada."
Nevada officials have raised concerns with California lawmakers over the state's fuel policies and reliance on imports, stating they are the reason behind neighboring states' rising gasoline prices.
"Nevada does not have the infrastructure to quickly replace lost California refining capacity," Nevada Gov. Joe Lombardo wrote in a letter last month to California Gov. Gavin Newsom regarding proposed changes to California's Cap-and-Invest Program.
"Increased reliance on marine imports would expose our state and residents to international supply disruptions, port congestion, weather events, and geopolitical instability. Such reliance would also increase costs and reduce supply predictability," Lombardo added.
In a separate September 2024 bipartisan letter, Lombardo and Arizona Gov. Katie Hobbs urged Gov. Newsom not to pass the refiner minimum inventory bill.
"It is evident that increased regulatory burdens on refiners and forced supply shortages will result in higher costs for consumers in all of our states," the letter states.
The Energy Information Administration estimates Nevada's 2023 petroleum consumption rate at roughly 57 million bbl, averaging about 156,000 b/d.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
-- Reporting by Sydnee Novak, sbeach@opisnet.com; Editing by Bayan Raji, braji@opisnet.com
(END) Dow Jones Newswires
April 08, 2026 14:21 ET (18:21 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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