Nevada Governor Joe Lombardo has warned that proposed changes to California’s climate program could disrupt fuel supplies across the West, underscoring how heavily Nevada and other neighboring states depend on California’s shrinking refining network.
In an open letter to California Governor Gavin Newsom, Lombardo expressed concerns about the California Air Resources Board’s (CARB) draft Cap-and-Invest regulation, stating it may have significant implications for fuel supply stability across the Western United States.
Lombardo noted that “Nevada is structurally dependent on California’s refining system” and warned that “a significant portion of the gasoline, diesel, and jet fuel consumed in Nevada originates from California refineries.” He emphasized there is no readily available alternative supply network capable of replacing California’s production at scale. “As a result,” Lombardo added, “policy decisions that materially affect refinery operations in your state directly and immediately impact fuel availability, pricing, and economic stability in Nevada.”
The dispute follows the California Air Resources Board’s advancement of proposed 2026 amendments to its program, formerly known as Cap-and-Trade, with a public hearing scheduled for May 28. CARB states that Cap-and-Invest is central to California’s strategy for cutting greenhouse gas emissions.
Lombardo criticized the draft rule for “introducing substantial new compliance costs and operational uncertainty for refiners already operating in one of the most tightly regulated environments in the country.” He noted that at a time when several California refineries have closed or announced conversions away from petroleum refining, additional cost pressures could accelerate further capacity reductions. “Even a single additional closure would have outsized effects on regional supply,” he wrote.
Lombardo also warned Nevada lacks the means to compensate for lost California output: “Nevada does not have the infrastructure to quickly replace lost California refining capacity.” He added that increased reliance on marine imports would expose the state and residents to international supply disruptions, port congestion, weather events, and geopolitical instability. “The geographic isolation of the West Coast fuel market makes it uniquely vulnerable to shortages and price volatility when refining capacity tightens.”
The warning comes as gasoline prices remain elevated in the region, with AAA reporting California’s average regular gasoline price at $5.336 per gallon Wednesday compared to $4.363 in Nevada and a national average of $3.578. Lombardo framed the issue as an economic and security concern, stating fuel security is “a matter of public safety and national security.” He highlighted that Nevada hosts military sites, emergency response operations, and major tourism and freight corridors dependent on steady fuel deliveries.
Lombardo urged Newsom’s administration to “carefully evaluate the regional consequences of the draft Cap-and-Invest regulation before final adoption,” adding: “My request is straightforward: any major policy change that could alter refinery economics in California must account for the real-world consequences to neighboring states that depend on that infrastructure.” He concluded, “Fuel affordability and availability are foundational to economic stability, interstate commerce, and national security across the Southwest. Given additional tension in the Middle East, the situation is particularly pressing.”
