BOTTOM LINE UP FRONT: The United States has lost significant refining capacity in recent years, weakening our system’s capacity to respond to extreme weather, equipment failures, or global shocks that disrupt fuel production. Americans feel the consequences of the nation’s strained fuel system every time they fill their tanks, heat their houses, buy a plane ticket, or buy goods delivered by truck. Given these realities, lawmakers should revise policies that disincentivize refining capacity and raise consumer costs unnecessarily, like the federal Renewable Fuel Standard (RFS).
KEY POINTS:
-
Since 2019, the United States has lost over 1.4 million barrels per day of net capacity, and refinery closures could remove hundreds of thousands of additional barrels per day from the system. More than 10 refineries have closed over the past decade.
-
Overly costly policies, such as the federal RFS have contributed to these closures.
-
Refineries are operating at or near their limits. In Q3 2026, U.S. refineries operated at an average utilization rate of 96.3%, compared to a rate of 94.7% over the same period in 2025 and 91.9% in 2024.
-
Geographical imbalance creates risk. The U.S. Northeast lost nearly 70% of its refining capacity over the past two decades, equivalent to more than 1.5 million barrels of fuel per day. On the West Coast, California’s refining capacity is has fallen 23% between 2019 and 2026.
DEEP DIVE:
Refineries turn crude oil into gasoline, diesel, jet fuel, and other products that power the economy and keep America moving. Producing more crude oil alone cannot solve fuel supply challenges. Crude has to be refined into the products that consumers and businesses use.
Declining refining capacity, combined with burdensome federal regulations like the Renewable Fuel Standard (RFS), leaves consumers more exposed to supply disruptions and higher prices.
What is Refining Capacity
Refining capacity is defined as the amount of crude oil that refineries can process into finished fuels every day. A robust domestic refining system helps:
-
Keep fuel supplies reliable
-
Limit the effects of refinery outages and severe weather
-
Preserve competition in fuel markets
-
Protect consumers from supply-driven price spikes
While the United States is a net energy exporter, crude oil production alone cannot keep cars, trucks, planes, and equipment running. Americans need facilities and workers that transform crude oil into usable fuel. Without sufficient refining capacity, abundant crude oil does not necessarily translate into abundant gasoline, diesel, or jet fuel.
America’s Refining Capacity Has Been Decreasing
Since 2019, the United States has lost over 1.4 million barrels per day of net capacity, and refinery closures could remove hundreds of thousands of additional barrels per day from the system. More than 10 refineries have closed over the past decade. Despite these closures, refiners continue to produce more gasoline and diesel than the country demands. However, combined with increasing regulatory burdens and ongoing policy uncertainty, these closures have made it more difficult to maintain and expand domestic refining capacity to respond to global supply shocks.
This matters because refineries are operating at or near their limits. In Q3 2026, U.S. refineries operated at an average utilization rate of 96.3%, compared to a rate of 94.7% over the same period in 2025 and 91.9% in 2024. As a result, every refinery matters more to the domestic energy supply, and each closure reduces flexibility in the system. Supplies can tighten faster, and consumers face price volatility.
Regional Gaps Leave Fuel Supplies Exposed
The issue is not just whether America has enough refining capacity, but whether that capacity exists in the right places to keep fuel affordable and supplies secure nationwide.
More than half of U.S. refining capacity is concentrated in the Gulf Coast, leaving the West Coast and Northeast reliant on only a handful of refineries. As a result, these regions remain dependent on fuel imports from other regions or overseas, which can increase transportation costs and expose consumers to disruptions in global fuel markets.
Estimates have found that the Northeast has lost nearly 70% of its refining capacity over the past two decades, equivalent to more than 1.5 million barrels per day of fuel production. On the West Coast, California’s refining capacity is projected to fall 23% between 2019 and 2026.
That regional imbalance matters. The Gulf Coast produces more fuel than the region consumes and serves as a major source of U.S. refined-product exports, while the East and West Coasts remain more dependent on imported fuel. Infrastructure and geographic constraints mean surplus Gulf Coast fuel cannot always be easily or economically redirected to those markets.
This geographical concentration creates risk. A disruption in a critical region, such as a hurricane along the Gulf Coast, could ripple across the country, tightening fuel supplies in regions that depend on Gulf Coast production and putting upward pressure on wholesale and retail prices. Likewise, the loss of refining capacity on the East or West Coast can increase those regions’ dependence on supplies traveling longer distances from domestic or foreign refineries.
What This Means at the Pump
Gasoline and diesel prices are impacted by many factors, but two realities are becoming increasingly difficult to ignore:
-
America has less refining capacity than it did just a few years ago.
-
That capacity is heavily concentrated geographically, leaving some regions more dependent on imported fuel
-
Federal compliance costs, including regulations like the RFS, continue to raise fuel production costs.
Together, these challenges leave fuel markets more vulnerable to supply disruptions and consumers facing higher prices at the pump. Congress should strengthen domestic refining capacity and enact meaningful reforms to the RFS, which recent estimates suggest adds 30 to 40 cents per gallon at the pump.
At a time when American families are looking for relief from high energy costs, policymakers should pursue solutions that increase refining capacity, strengthen energy security, and bring down prices.
