Nevada relies nearly entirely on transportation fuels from California, leaving Nevada motorists vulnerable to surging gas prices in the Golden State.
California supplies roughly 88 percent of Nevada’s transportation fuel, the remainder comes from Utah.
Two recent major refinery closures, a Phillips 66 refinery in Los Angeles and a Valero Energy refinery in Benicia, represent about a 17 percent reduction in California’s ability to refine crude oil into gasoline, diesel and jet fuel.
These two refinery closures leave just six operating refineries left in California. Four decades ago, more than 40 refineries operated in the state.
Currently, California has two refineries in the Bay Area, Chevron’s Richmond refinery and PBF Energy’s Martinez refinery. The other four are in Southern California – Chevron’s El Segundo refinery, Marathon’s Los Angeles refinery, PBF Energy’s Torrance refinery and Valero’s Wilmington refinery.
Chevron, which operates two of the largest California refineries, is considering ceasing production.
Gas prices soared in California in response to the refinery closures in February, surging 40 cents in just two weeks.
California gas prices are the highest in the nation at $4.81. That’s $1.56 above the national average of $3.25. Because of its dependence on California fuel, Nevada’s price per gallon was $3.88 (on March 5 – includes Iran conflict spike).
California has aggressively targeted the oil industry, including creating an independent watchdog to monitor oil companies for “price gouging”; passing an electric vehicle mandate to eliminate the sale of new, gasoline-powered cars; and authorizing state energy regulators to require refineries to maintain a minimum inventory of fuel.
As a result of refinery closures, California must import more gasoline at higher cost from abroad. California’s refined fuel imports have increased by more than 30% since 2019. The top sources are Canada, South Korea, Japan, India – and the Bahamas.
California doesn’t get its gasoline from the energy-rich Gulf Coast where 55% of U.S. refining capacity is located because the state lacks pipelines to the region.
Nevada has major fuel challenges.
The Silver State will feel the impact of California’s refinery closures, including price hikes at the pump. Some experts are forecasting price spikes as high as $8 per gallon – others are projecting more modest increases under $1.50 per gallon.
Nevada doesn’t have any significant crude oil reserves. In 2024, the state only produced about 170,000 barrels – literally a drop in the bucket compared to U.S. production of 14 million barrels per day.
Nevada’s sole crude oil refinery in Nye County only produces asphalt for roads. The state also has limited 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 Nevada vulnerable to supply disruptions from California.
Gov. Joe Lombardo has repeatedly raised concerns about Nevada’s fuel insecurity. Lombardo has formed a Fuel Resiliency Committee to address the state’s current and emerging fuel challenges.
One major solution being pushed is more pipelines.
Nevada currently relies on three major pipelines: Kinder Morgan’s CALNEV Pipeline from Los Angeles to Las Vegas, which supplies nearly 90 percent of Southern Nevada’s fuel. Sinclair’s UNEV Pipeline runs from Salt Lake City, Utah, to Las Vegas. A third pipeline, Kinder Morgan’s SFPP North Line from the Bay Area, fuels the Reno area.
In 2019, the fuel line between the Bay Area and Reno was shut down as wildfires burned in California. In 2023, the pipeline between Los Angeles and Las Vegas was temporarily shut down.
Sinclair is evaluating expansion of its UNEV Pipeline from Utah to Las Vegas also includes a new lateral line from Utah to Reno. Phillips 66 and Kinder Morgan have plans for a new 1,300-mile pipeline from Texas that would supply gasoline to California, Arizona and Nevada.
These pipeline expansion projects, if constructed into Nevada, would take three to four years to complete.
E-mail Jim Hartman at [email protected].