Nevada Governor Lombardo Warns California’s Newsom: Anti-Oil Policies Risk Fuel Crisis for Western States

In a pointed letter sent yesterday to California Governor Gavin Newsom, Nevada Governor Joe Lombardo highlighted the perilous impact of California’s stringent environmental regulations on regional fuel supplies.

Lombardo’s missive comes amid escalating concerns that the California Air Resources Board’s (CARB) proposed amendments to the Cap-and-Invest program could accelerate the exodus of refineries from the Golden State, threatening energy stability for neighboring states like Nevada. 

The Cap-and-Invest program, designed to curb greenhouse gas emissions by imposing caps and requiring “polluters” to purchase allowances, has drawn sharp criticism from the oil industry and lawmakers alike. 

Refiners argue that the updates would heap billions in additional costs, potentially hiking gas prices by over a dollar per gallon and forcing refinery closures. This follows warnings from major players like Chevron and Marathon Petroleum, who have cautioned that such policies could drive in-state refining capacity to zero, leading to widespread shutdowns, fuel shortages, and economic fallout. 

Lombardo emphasized Nevada’s heavy reliance on California’s infrastructure, noting that his state imports about 88% of its transportation fuels—gasoline, diesel, and jet fuel—from California via pipelines like the CALNEV line connecting Southern California refineries to Las Vegas.  

With tensions in the Middle East adding pressure to global oil markets, the Nevada governor urged Newsom to intervene and direct CARB to reconsider the regional ramifications of these changes.

“While Nevada has limited oil production of its own, it is almost entirely dependent on California’s refining capacity. 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. Given additional tension in the Middle East, the situation is particularly pressing”, wrote Governor Lombardo.  

This isn’t the first time California’s aggressive climate agenda has sparked interstate friction. Energy companies have repeatedly sounded alarms that policies like reformulated gasoline requirements and emission caps are making operations untenable, prompting refiners to exit or consider exiting the state. 

Earlier this year, in an offensive move underscoring the ripple effects of California’s radical and punitive energy policies, Governor Lombardo announced appointments to the newly established Fuel Resiliency Committee. This statewide advisory body aims to bolster Nevada’s preparedness and response to potential fuel supply disruptions and anticipated price spikes originating from California.

A recent report warned that shutting down key oil pipelines could have cascading effects across California and beyond, exacerbating supply issues in the Southwest. Even some Democratic lawmakers in California, who initially supported the program’s expansion, have joined the chorus calling for a rethink, citing risks to energy markets and affordability for low-income consumers. 

New:
Several California Assembly Democrats urge CARB to go back to drawing board on cap & invest proposal for fuels, gas and electricity.

“It is now evident that California’s regulatory environment has driven out actors necessary for an affordable energy consumer market.” pic.twitter.com/5O4ULZ8zXW

— Ashley Zavala (@ZavalaA) March 10, 2026

Gas prices in California have already spiked overnight to an average of $5.29 per gallon, with ripple effects felt in Nevada and Arizona. In Nevada, gas prices have surged over 60 cents in one month due to regional supply issues and geopolitical tensions.

Critics argue that Newsom’s “adversarial” stance toward the energy sector not only jeopardizes jobs—potentially over half a million—but also national security, given California’s role in supplying fuel to 41 military bases.