Sky Quarry, Nevada's only refinery operator, noted Nevada's multiple oil and gas leasing and drilling approvals from the federal government as progress toward in-state crude oil production on Tuesday, citing its 5,000 b/d refinery as a "logistical advantage" for the state.
In a news release, Sky Quarry highlighted a flurry of oil and gas leases completed by the Bureau of Land Management in the first half of 2026, which included over 15 parcels of land spanning 30,168 acres in the state. The company also noted two "significant" federal and state approved oil exploration wells in Railroad Valley and North Diamond Valley, describing the projects as "important steps toward accessing Nevada's petroleum potential."
Sky Quarry's 5,000-b/d Foreland refinery is located in Railroad Valley on the east side of Nevada, where it produces diesel, vacuum gas oil, naphtha and liquid paving asphalt from crude oil sourced from Nevada and Utah. The company announced beginning refining operations in June, anticipating a production restart in July, OPIS previously reported.
Sky Quarry has consistently progressed in developing the Foreland refinery, which has historically experienced little crude oil production. In April, the refiner said it was exploring avenues to secure crude oil from federal lands with roughly 1.4 billion bbl of "technically recoverable" oil resources based on research from the 2025 U.S. Geological Survey, OPIS previously reported.
"The USGS assessment demonstrates that Nevada possesses a potentially significant domestic oil resource, while the recent lease sales and drilling permits show that operators are taking tangible steps to evaluate that potential," Sky Quarry CEO Marcus Laun said in the Tuesday release. "Nevada has the geological resource, an established petroleum-producing region and, through Foreland, an in-state refinery that we believe can provide a natural market for successful new production."
With potential crude oil development near the refinery, the company said its logistical advantage would be "economically attractive" since crude is typically delivered to the facility by truck from large distances outside Nevada, creating transportation costs that add to the total cost of delivered feedstock.
"The economics of a crude oil purchase are based not simply on the price at the wellhead, but on the total cost of delivering that barrel to the refinery," Laun said. "A Nevada barrel located close to Foreland could be especially attractive because reduced transportation expense can improve the economics for both the producer and the refinery."
With new crude oil purchases, the company believes it could increase regional producers, diversify Foreland's supply and sustain higher utilization with the state's refining infrastructure.
Specifically with the North Diamond Valley project, Sky Quarry said there could be interest to "evaluate petroleum opportunities outside Nevada's principal historical producing area."
Ultimately, the company said the federal approvals could open a path toward less dependence on California, which provides nearly 90% of Nevada's fuel products, according to AAA.
"Successful exploration could provide additional geological information, attract investment and encourage further oil and gas development in the state," the company said in the Tuesday release. "This activity is extremely positive at a time when Nevada is operating in an extremely tight supply situation caused by the reduction in refining capacity in California."
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