Issued on behalf of Sky Quarry, Inc.
With California’s two largest refinery closures now realized, the Trump administration invokes the Defense Production Act to accelerate domestic refining capacity — and a 5,000-bpd Nevada operator finds itself in the middle of the conversation
CALGARY, AB — May 8, 2026 — Baystreet.ca News Commentary — Two Pacific-coast refineries closing inside eighteen months. A 1977-vintage greenfield record that hasn’t been broken in nearly five decades. And now, a sitting administration formally invoking the Defense Production Act to accelerate domestic refining capacity. The U.S. refining industry hasn’t seen this combination of structural supply tightening and federal policy support in living memory — and the Western U.S. fuel market may be the cleanest expression of all of it.
Key Takeaways
· The Trump administration issued Presidential Determinations on April 20, 2026 under Section 303 of the Defense Production Act of 1950, directing federal authority toward accelerating the development, manufacturing, and deployment of large-scale energy infrastructure — including domestic petroleum refining capacity — as essential to national defense and energy reliability.1
· Within 72 hours, Sky Quarry, Inc. (NASDAQ: SKYQ) — operator of the only operating refinery in the State of Nevada — issued a press release positioning itself directly within the policy framework, citing its 5,000-barrel-per-day Foreland refinery as a “scarce, fully permitted and recently upgraded asset” in a tightening Western U.S. market.2
· California’s two most significant refinery closures have now been realized: Phillips 66 closed its 139,000-bpd Wilmington refinery in Q4 2025, and Valero ceased fuel production at its 145,000-bpd Benicia refinery in late April 2026 — together removing approximately 284,000 barrels per day of West Coast capacity.3,4
· The first-quarter 2026 earnings cycle just confirmed that the operating refining business is the cleanest expression of the trade: Marathon Petroleum (NYSE: MPC) delivered Q1 2026 adjusted EPS of $1.65 against $0.75 consensus,5 Phillips 66 (NYSE: PSX) beat with $0.49 adjusted versus a forecast loss,6 and PBF Energy (NYSE: PBF) is bringing its 157,000-bpd Martinez refinery back online inside California’s tightening market.7
· For independent operators with permitted, operating capacity sitting in front of a structural Western U.S. supply gap, this is one of the more unusual federal policy backdrops domestic refining has had in decades — and it landed within weeks of Sky Quarry completing system upgrades at Foreland.8
For a sense of the size of the gap: Phillips 66 closed its 139,000-bpd Wilmington refinery in Q4 2025. Valero ceased fuel production at its 145,000-bpd Benicia refinery in late April 2026. Together, that’s approximately 284,000 barrels per day of California refining capacity removed from West Coast supply.3,4 Domestic gasoline, diesel, and jet fuel demand have not declined in proportion. Replacement capacity is functionally impossible to build — the last greenfield U.S. refinery to come online was Marathon Petroleum’s Garyville facility in 1977, and no major new refinery has been built in the United States since.9
That’s the macro backdrop the Trump administration walked into on April 20, 2026, when the White House issued a series of Presidential Determinations under Section 303 of the Defense Production Act. The Determinations frame domestic petroleum refining capacity — alongside large-scale energy infrastructure broadly — as essential to national defense and energy reliability, and direct the use of federal authorities to support and expand such activities.1
For independent refiners with permitted, operating capacity in geographically critical regions, that policy framework is unusually direct. Three days after the Determinations were published, Sky Quarry, Inc. (NASDAQ: SKYQ) — operator of the Foreland refinery, the only operating refinery in the State of Nevada — issued a press release positioning itself within the policy context. The Company described Foreland as a “scarce, fully permitted and recently upgraded asset” in a constrained Western U.S. fuel market, with approximately 5,000 barrels per day of permitted refining capacity.2
The Nevada-Only Refinery, By the Numbers
Foreland Refining Corporation, a wholly-owned Sky Quarry subsidiary, operates the Eagle Springs facility in Railroad Valley near Ely, Nevada. The refinery has been in operation for more than two decades, processes heavy crude sourced from Nevada and Utah, and produces diesel, vacuum gas oil, naphtha, and liquid paving asphalt for Western U.S. markets.10 Sky Quarry has stated that Foreland supplies fuel to “critical Nevada industries, including precious metals mining and lithium production,” and has estimated the facility’s replacement value at approximately $70 million — what the Company has framed as “high-barrier infrastructure that would be difficult to replicate today.”11
In late January 2026, Sky Quarry completed a series of system upgrades at the refinery — boiler system work, vacuum unit condenser replacements, process piping and tank repairs, and restoration of the water-oil separation system — that the Company said were intended to enhance reliability, uptime, and operational readiness ahead of regional supply changes.11 Those upgrades were completed approximately three months before Valero idled fuel production at Benicia, and roughly four months before the April 23, 2026 press release positioning Foreland against the Trump administration’s DPA framework.
The Q1 2026 Refining Cycle Confirms the Setup
Independent commentary on refining margins doesn’t always map cleanly to small-cap operators with single-refinery exposure. But the recently completed Q1 2026 earnings cycle for the larger U.S. refiners established a meaningful baseline for the margin environment Sky Quarry operates inside.
Marathon Petroleum (NYSE: MPC) reported Q1 2026 adjusted EPS of $1.65, more than double the $0.75 Wall Street consensus, with refining and marketing segment adjusted EBITDA rising to $1.4 billion from $489 million in the prior-year quarter.5 Realized refining and marketing margin came in at $17.74 per barrel, versus $13.38 a year earlier.5 Refinery utilization reached 89% across MPC’s roughly 3 million barrel-per-day system, with West Coast utilization at 92%.12
Phillips 66 (NYSE: PSX) posted Q1 2026 adjusted earnings of $200 million, or $0.49 per share, reversing a year-ago loss of $937 million. The refining segment’s realized margin improved to $10.11 per barrel from $6.81 in the prior-year quarter, and crude capacity utilization climbed to 95% from approximately 80%.6 Phillips 66 management explicitly described the refining macro as “extremely constructive over the long term,” and noted that approximately 6 million barrels per day — close to 6% of global refined products capacity — had come offline during recent geopolitical disruptions.13
PBF Energy Inc. (NYSE: PBF) is bringing its Martinez, California refinery back online — one of the more closely watched West Coast restarts in the cycle. PBF’s 2026 guidance calls for total throughput of 885,000 to 945,000 barrels per day across its system, and Q1 2026 commentary indicated the Martinez facility was in the final stages of a phased restart, with the cat feed hydrotreater and alkylation units already operational.7 The Martinez restart is being positioned to supply the California market — a market that just lost approximately 284,000 bpd of capacity through the Phillips 66 Wilmington and Valero Benicia closures.3,4
A fourth U.S.-listed refining comparable, CVR Energy, Inc. (NYSE: CVI), operates two refineries in Coffeyville, Kansas and Wynnewood, Oklahoma with combined nameplate capacity of 206,500 barrels per day. S&P Global Ratings revised CVR Energy’s outlook to stable from negative in November 2025, citing expected Group 3 2-1-1 crack spreads of approximately $22 to $24 per barrel on average into 2026, supported by steady product demand, limited new global capacity, and tighter Mid-Continent product supply.14
Capacity Comparison
| Operator | Listing | Combined Capacity | Geographic Footprint |
| Marathon Petroleum | NYSE: MPC | ~3,000,000 bpd | 13 refineries (US) |
| PBF Energy | NYSE: PBF | 885,000–945,000 bpd (2026 guidance) | 6 refineries (US, incl. Martinez restart) |
| Phillips 66 | NYSE: PSX | ~2,000,000 bpd | 10 refineries (US) |
| CVR Energy | NYSE: CVI | 206,500 bpd | 2 refineries (KS, OK) |
| Sky Quarry | NASDAQ: SKYQ | 5,000 bpd | 1 refinery (NV) |
The scale comparison is the point. Sky Quarry is meaningfully smaller than each of these peers across every operating metric, and the comparison is one of business model — vertically integrated independent operator with a permitted Nevada asset versus diversified multi-refinery majors. Market cap, leverage, throughput, and operational scope differ materially. What Sky Quarry brings to the conversation is a different proposition: the only operating refinery in a state whose fuel market just tightened materially, sitting under a federal policy framework that elevates domestic refining as a national defense priority.
The Strategic Question for Western U.S. Fuel Supply
Independent commentary on the structural setup is consistent across the larger refining peer set: U.S. refining capacity is constrained, demand has held up, and global supply cushions have thinned. What’s different about the Western U.S. specifically is the magnitude and timing of the California closures combined with the absence of replacement capacity. Phillips 66 Wilmington and Valero Benicia together represent approximately 17% of California’s refining capacity and approximately 11% of West Coast (PADD 5) capacity, per the U.S. Energy Information Administration.4
Sky Quarry’s 5,000-bpd capacity is small in national terms, but small can also mean specific. Foreland is the only operating refinery in Nevada. Its outputs feed regional industries — precious metals mining, lithium production, paving asphalt, regional diesel — that don’t disappear when California tightens. And the facility’s replacement value, the Company estimates, is approximately $70 million in a regulatory environment where new permits are functionally unavailable.11
Beyond the refinery itself, Sky Quarry has been steadily expanding the optionality around the asset. In January 2026, the Company issued a Request for Proposals to monetize approximately 7 megawatts of installed Solar Centaur Caterpillar turbine generation at its PR Spring facility near Vernal, Utah — surplus capacity following a facility redesign that reduced on-site power needs. Sky Quarry estimated delivered cost potential at approximately $0.05 per kWh.15 In late April and early May 2026, the Company issued a related RFP to monetize its approximately 180-million-barrel oil sands resource at the same PR Spring site, citing approximately $60 million in prior facility investment and an estimated $35 per-barrel production cost in prior engineering work.16 And on May 7, 2026, Sky Quarry executed a non-binding multi-party Memorandum of Understanding with Southern Energy Renewables, Inc. and DevvStream Corp. focused on fuel innovation, refinery integration, and low-carbon fuel development — including opportunities involving recycled hydrocarbons, specialty fuels, and Sustainable Aviation Fuel (SAF).17
Why This Matters for Canadian Investors
Cross-border energy capital has historically been a net exporter to U.S. refining infrastructure. Canadian crude — heavy, sour, pipeline-connected — has been the foundation of integrated refining platforms across the Mountain West for decades. What’s changed is the regulatory backdrop: the U.S. is, for the first time in living memory, formally treating domestic refining capacity as a national defense priority. For Canadian investors who already understand the cross-border energy supply chain, that policy shift creates a different lens on independent U.S. refining operators — particularly small-cap operators with strategically positioned, permitted assets in geographies that just lost meaningful capacity.
Sky Quarry’s Foreland refinery is one of the more specific expressions of that thesis. It’s small, it’s in Nevada, it’s the only operating refinery in the state, and it just happened to sit at the intersection of a federal DPA determination, a 284,000-bpd California capacity loss, and a Western U.S. mining cycle that’s running into its own fuel supply questions.
For research and additional commentary on Sky Quarry, Inc. (NASDAQ: SKYQ) and its Western U.S. refining footprint, click here to access the full investor briefing.
Frequently Asked Questions
Q: What is Sky Quarry, Inc. (NASDAQ: SKYQ)? Sky Quarry, Inc. is an integrated energy and resource recovery company headquartered in Woods Cross, Utah. It operates the Foreland Refinery (the Eagle Springs facility in Railroad Valley near Ely, Nevada) — the only operating refinery in the State of Nevada — and is advancing development of the PR Spring oil sands and waste-to-energy facility in the Uinta Basin of Utah. The Company also holds proprietary ECOSolv waste asphalt shingle recovery technology.10
Q: What are the Trump administration’s Defense Production Act Determinations on refining? On April 20, 2026, the White House issued Presidential Determinations under Section 303 of the Defense Production Act of 1950, directing federal authorities to support and accelerate the development, manufacturing, and deployment of large-scale energy infrastructure — including domestic petroleum refining capacity — as essential to national defense and energy reliability.1
Q: How much California refining capacity has been removed from the market? Approximately 284,000 barrels per day. Phillips 66 closed its 139,000-bpd Wilmington refinery in Q4 2025. Valero ceased fuel production at its 145,000-bpd Benicia refinery in late April 2026.3,4
Q: What is the last new greenfield refinery built in the United States? Marathon Petroleum’s Garyville, Louisiana refinery, which came online in 1977. No major new greenfield U.S. refinery has been built since, according to the U.S. Energy Information Administration.9
Q: Who is the CEO of Sky Quarry? Marcus Laun has served as Interim Chief Executive Officer of Sky Quarry, Inc. since September 11, 2025 (effective August 28, 2025). Mr. Laun is a co-founder of the Company and has more than 25 years of capital markets experience, including senior roles at Knight Capital Group.18
Numbered Citations
1. The White House, “Presidential Determination Pursuant to Section 303 of the Defense Production Act of 1950, as Amended, on Domestic Petroleum Production, Refining, and Logistics Capacity,” April 2026.
2. Sky Quarry Inc., “Sky Quarry Positioned to Benefit as Trump Administration Prioritizes Domestic Refining Capacity,” ACCESS Newswire, April 23, 2026.
3. U.S. Energy Information Administration, “California law and refinery closure reflect ongoing challenges for the state’s fuel market,” December 9, 2024 (covering Phillips 66 Wilmington 139,000 b/d closure).
4. U.S. Energy Information Administration, “Refinery closures present risk for higher gasoline prices on the West Coast,” July 9, 2025 (covering Wilmington 139,000 b/d, Benicia 145,000 b/d, 17% California capacity, 11% PADD 5 capacity); Argus Media, “Valero ends fuel production at Benicia refinery,” May 2026 (covering Benicia closure).
5. Marathon Petroleum Corp., “Marathon Petroleum Corp. Reports First-Quarter 2026 Results,” PR Newswire, May 5, 2026.
6. Phillips 66, “Phillips 66 Reports First-Quarter 2026 Results,” Form 8-K, April 29, 2026.
7. PBF Energy Inc., “PBF Energy Provides Update on Martinez Refinery Operations and Issues 2026 Annual Guidance Information,” PR Newswire, January 2026; PBF Energy Q1 2026 earnings call (April 30, 2026).
8. Sky Quarry Inc., “Sky Quarry Unlocks Strategic Value at 5,000 Barrels-Per-Day Foreland Refinery with Completion of High-Impact System Upgrades,” ACCESS Newswire, January 27, 2026.
9. U.S. Energy Information Administration, “When was the last refinery built in the United States?” (FAQ).
10. Sky Quarry Inc., corporate disclosures (skyquarry.com).
11. Sky Quarry Inc., “Sky Quarry Unlocks Strategic Value at 5,000 Barrels-Per-Day Foreland Refinery,” ACCESS Newswire, January 27, 2026.
12. Marathon Petroleum Corp., Q1 2026 earnings call transcript, May 5, 2026.
13. Phillips 66, Q1 2026 earnings call transcript, April 29, 2026.
14. S&P Global Ratings outlook revision on CVR Energy, November 20, 2025, as reported by Investing.com; CVR Energy, Inc. corporate disclosures (cvrenergy.com).
15. Sky Quarry Inc., “Sky Quarry Seeks Partners to Monetize Its 7 MW Power Capacity,” ACCESS Newswire, January 13, 2026.
16. Sky Quarry Inc., “Sky Quarry’s 180-Million-Barrel Oil Sands Asset Subject to RFP for Accelerated Commercialization,” ACCESS Newswire, May 4, 2026 (supersedes April 29, 2026).
17. Sky Quarry Inc., “Sky Quarry Enters Strategic Multi-Party MOU to Advance Next-Generation Fuel Technologies,” ACCESS Newswire, May 7, 2026.
18. Sky Quarry Inc., “Sky Quarry Appoints Co-Founder Marcus Laun as Interim Chief Executive Officer,” GlobeNewswire, September 11, 2025.
Article Source: Baystreet.ca
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This article was reviewed and approved on behalf of Sky Quarry, Inc. by CDMG, and further reviewed and approved by Sky Quarry Inc. directly.
Owners, employees, and agents of BAY and MIQ are not registered broker-dealers or investment advisors. The information contained in this communication is not, and should not be construed as, investment advice, an offer to sell or a solicitation of an offer to buy any security. The information contained in this communication is current at the date of publication and is provided in good faith from sources believed to be reliable, but its accuracy and completeness cannot be guaranteed. Readers should conduct their own due diligence and consult with a registered broker-dealer or financial advisor before making any investment decision.
This communication contains forward-looking statements within the meaning of applicable Canadian and U.S. securities legislation. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation: market and commodity price volatility; legal and regulatory risks; risks of being a small-capitalization company; the volatility of microcap and small-cap securities; risks associated with U.S. listing requirements; reliance on a single operating refinery; risks associated with operating in regulated U.S. energy markets; geopolitical risks; and risks of changes in U.S. federal and state energy policy. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this communication.
This article references Sky Quarry, Inc.’s announcements regarding the Trump administration’s April 20, 2026 Presidential Determinations under Section 303 of the Defense Production Act of 1950. Independent investors should not interpret any reference to those Determinations as suggesting that Sky Quarry, Inc. has been awarded, contracted with, or is the subject of any specific federal program, contract, grant, or favorable treatment under the DPA framework. Sky Quarry, Inc. has stated only that it considers itself positioned to benefit from a federal policy environment supportive of domestic refining capacity. No specific federal action has been directed at Sky Quarry, Inc. as of the date of this communication.
Comparable companies referenced in this article (Marathon Petroleum, Phillips 66, PBF Energy, and CVR Energy) are presented for context purposes only. Sky Quarry, Inc. is materially different from each of these comparables in terms of market capitalization, refining throughput, leverage, and operating scope. Past performance of any comparable does not guarantee future performance of Sky Quarry, Inc.
By reading this communication, the reader acknowledges that they have read and understand this disclaimer and the risks identified herein.
Contact: [email protected] | Sky Quarry, Inc. (NASDAQ: SKYQ) | usanewsgroup.com/skyq-landing
