In October, Phillips 66 produced its final barrel of fuel at its Los Angeles facility, citing regulatory pressure, rising costs, and declining gasoline demand in California. Valero Energy also announced plans to close its oil refinery near San Francisco by April, citing similar reasons.
Together, the two facilities represent about 17% of California’s capacity to refine crude oil into gasoline, diesel, jet fuel, and other petroleum products.
Nevada — which imports about 86% of its transportation fuels from California — will likely feel the impacts of those closures, including price hikes at the pump, say industry experts.
Nevada’s Fuel Resiliency Committee, which had its first meeting last week, was proposed by Republican Gov. Joe Lombardo to help address the state’s current and emerging fuel challenges. And there are many.
For one, Nevada doesn’t have any significant crude oil reserves. In 2024, the state only produced about 170,000 barrels — a literal drop in the barrel compared to U.S. production of nearly 14 million barrels per day.
Nevada also has only one crude oil refinery located in Nye County, which is limited to producing asphalt for roads. Additionally, Nevada doesn’t have the capacity to store large quantities of fuel in cases of emergency like California does.
As a result, Nevada relies almost entirely on imported transportation fuels from California, leaving the state vulnerable to supply disruptions from the neighboring state.
Nevada isn’t alone. California refineries supply more than one-third of transportation fuel in the neighboring state of Arizona, which also doesn’t have significant oil reserves or a single crude oil refinery.
In general, California and the West Coast is geographically isolated from other refining centers, notably the Gulf Coast where 55% of U.S. refining capacity is located, according to the U.S. Energy Information Administration. That makes it difficult for Nevada to draw supply from other regions.
Miranda Hoover, the state executive for the Energy and Convenience Association of Nevada, said it’s clear Nevada will need to diversify its fuel supply sources to build resiliency. Hoover said she has been working with Lombardo on fuel affordability for the past four years and is now serving as a non-voting member for the Nevada Fuel Resiliency Committee.
“We’ve done a lot of research on if it would even be possible or plausible for Nevada to have its own refinery. Unfortunately, the simple answer is no,” said Hoover, whose trade association represents fuel distributors, transporters, and gas stations. “Nevada doesn’t have any of the right crude oil that could even be put into the refinery.”
The subcommittee will be tasked with conducting assessments of Nevada’s current and projected fuel supply, exploring options to expand infrastructure, assessing the state’s vulnerabilities, and strengthening emergency responses. The committee expects to submit its recommended policies in September. Part of those recommendations will likely include plans to expand permitting and addressing barriers to infrastructure projects, said Hoover.
One major solution that is being pushed on the committee is more pipelines.
Nevada relies on three major pipelines: Kinder Morgan’s CALNEV pipeline which supplies 90% of Southern Nevada’s fuel, H.F. Sinclair’s UNEV Pipeline which pipes about 15% of Nevada’s total fuel from Utah, and Kinder Morgan’s SFPP North Line from California which fuels the Reno area.
Representatives for several fuel companies with tentative plans to expand pipelines into Nevada, including H.F. Sinclair and Phillips 66, serve as non voting members on the Fuel Resiliency Committee.
In October, HF Sinclair announced that it was evaluating an expansion of its UNEV Pipeline from Utah that could increase capacity into Las Vegas by about 35,000 barrels a day by moving more fuel from the Rockies into Nevada. That plan would also include a new lateral line from Utah to Reno — which has a single pipeline for its gasoline and diesel supply.
That same month, Phillips 66 and Kinder Morgan announced they were accepting shipper commitments for their Western Gateway Pipeline, a 1,300 mile pipeline from Texas that would supply gasoline to California, Arizona and Nevada. If built, the pipeline would be the first to pipe refined fuels to California from outside the state.
During the committee’s first meeting, Hoover said several fuel companies gave updates about potential infrastructure projects that could expand Nevada’s supply of refined fuels.
“To truly be resilient, we must diversify. That means we can’t have just one new pipeline coming into Las Vegas. It’s probably going to be two and or three multiple projects or infrastructure improvements that are going to really create not only short term solutions, but also long term solutions,” Hoover said.
Brett Compston, administrator of the Nevada Office of Emergency Management and Homeland Security and chair of the committee, highlighted that the committee was created under the Nevada Department of Homeland Security because the state’s reliance on California fuel is impacting the state’s military bases.
“Right now, one of the things I worry about or we worry about for the emergency management and the homeland security side is disruption to critical infrastructure, in this case, fuel,” said Compston, during the committee hearing last week.
In 2023, Gov. Joe Lombardo declared a state of emergency when Kinder Morgan’s CALNEV pipeline, which serves Nellis and Edwards Air Force bases and McCarran International Airport, was temporarily shut down because of a California wildfire.
Earlier this year, wildfires in California also caused widespread power outages, shutting down two pipelines that send fuel to Nevada and Arizona.
The infrastructure plans to expand pipelines into Nevada would likely take years, if constructed at all. HF Sinclair’s UNEV Pipeline expansion wouldn’t be complete until 2028, while Phillips 66 and Kinder Morgan’s Western Gateway Pipeline would be completed in 2029.
Gaps in fuel resiliency, and the years it could take to address them, is especially concerning for rural and northern Nevada, said state Sen. Robin Titus, who serves as a voting member on the committee.
“I think we raised more questions than we had answers the other day,” Titus said of the first committee meeting.
Last year, Titus sponsored Senate Bill 505 to establish an Energy Independence Task Force to explore alternatives to relying on California fuel, but the bill never got a hearing.
Titus said she hopes the Fuel Resiliency Committee can explore more immediate solutions, including expanding storage capacity in the state to mitigate moments of fuel volatility. In the long-term, Nevada will need to move away from depending almost entirely on California fuel, Titus said.
“What they do in California impacts us here. Many of us in rural areas can’t get across the state in an electric car. There’s no public transportation or anything out here, so we’re reliant on our cars to get places. Our needs are different, and so we want to make sure that we aren’t dependent on what happens in California,” Titus said.
This story first appeared in the Nevada Current. Read the original here.
