West Coast Refinery Closures Intensify Nevada Fuel Supply Concerns

The U.S. Energy Information Administration reports that the closure of the Phillips 66 refinery in Los Angeles and the winding down of Valero’s Benicia facility have removed a significant portion of PADD 5 refining capacity. This shift directly impacts Nevada, which historically imports approximately 86% of its motor fuel from California, leaving it vulnerable to supply disruptions and price volatility. In response, Governor Joe Lombardo established the Fuel Resiliency Committee in late 2025 to coordinate with industry leaders on long-term infrastructure and supply stability.

Amidst this regional tightening, Sky Quarry Inc. has restarted the Eagle Springs Refinery near Ely, Nevada. Following $300,000 in upgrades, the facility aims to reach a nameplate capacity of 5,000 barrels per day. While this represents a fraction of total regional demand, the company is positioning itself as a strategic local supplier. Concurrently, major refiners including Valero, Marathon Petroleum, PBF Energy, and HF Sinclair have reported strong second-quarter earnings, reflecting high margins for those with operational capacity. HF Sinclair is also exploring a pipeline expansion that could eventually move 150,000 barrels per day into western markets, including an initial phase targeting 35,000 barrels to better connect Rockies supply to Nevada.