b' Association InformationWESTERN STATES BRACE for Fuel Price Surge Amid California Refinery Closurescontinuedbegan Tier 3 production in 2019) andthese refineries to efficiently handle U.S. shale oil would HF Sinclair, which produced gasolinerequire massive capital investments and could take years below Tier 3 sulfur limits by 2021.to implement, which is why imported crude still plays a Silver Eagle has long produced key role in U.S. refining operationseven as domestic low-sulfur gasoline. While these fuelsproduction breaks records.dont match Californias specialized California Reformulated Gasoline (CaRFG) standards, the regions Why Not JustTier 3 production illustrates an existing foundation fora potential unified Western fuel standardoffering a Build More Refineries?compromise between Californias strict requirements With U.S. oil productionand broader regional realities. surging projected to reach13.4 million barrels per day in 2025many wonder why refinery capac-U.S. Refining Landscape ity isnt keeping pace. The answer is The United States currently complex and rooted in economics, has 132 operating oil refineriespermitting challenges, and long-term with a combined processing demand uncertainty. (Source: U.S. capacity of approximately 18.4Energy Information Administration)million barrels per day (Source: U.S. Energy Information Adminis- Building a new full-scale refinery is an expensive andtration). From a 42-gallon barreltime-consuming endeavor, often costing upwards ofof crude oil, refineries typically$10 billion and taking 7 to 10 years to permit andproduce about 19-20 gallons ofconstruct. In the current policy environment, particularly motor gasoline and 11-13 gallons of distillate fuel (mostlywith tightening emissions standards and climate-related fi-diesel fuel), along with 3-4 gallons of jet fuel.nancial risks, few investors are willing to take that gamble. Most major energy companies instead focus on expanding Refineries are primarily clusteredexisting facilities or converting aging refineries into renew-along the Gulf Coast, particularly inable diesel or biofuel plants.Texas and Louisiana, which host the nations largest refining centers. TheThe last large-scale refinery built in the U.S. waslargest refinery in the United StatesMarathons Garyville, Louisiana refinery in 1977. is the Marathon Galveston BaySince then, no comparable facility has come online. While Refinery in Texas City, Texas, withsmaller specialty or modular refineries have been added a capacity of approximately 631,000in recent decades, total national capacity has plateaued or barrels per day. Some of the oldest continuously operatingdeclined, especially after pandemic-era closures.refineries include the Chevron Richmond Refinery inCalifornia (operational since 1902) and the Phillips 66 Ferndale Refinery in Washington (since 1954). ConclusionWhile the U.S. is now a net exporter of petroleumAs the Western U.S. prepares for these closures, the region products, the refining sector still imports nearly 40% offaces a critical inflection point: how to reconcile environ-its crude oil feedstock. Thats because most U.S. produc- mental ambition with the real-world demands of energy tion consists of light crude, whereas many Americanproduction and consumption.refineries, especially older Gulf Coast facilities, were originally designed to process heavier crude. Re-tooling S8 www.wpma.com / Summer 2025'