The Department of Justice issued a sweeping 22-page legal opinion this Thursday asserting that the Defense Production Act empowers President Donald Trump or his Secretary of Energy to approve Sable Offshore’s plans to restart offshore oil production in Santa Barbara County at what’s known as the Santa Ynez Unit, preempting regulatory requirements imposed by numerous state agencies and a federal decree issued in 2020 giving the Office of the State Fire Marshal the last word when it comes to restarting Sable’s corrosion-prone pipeline.
The opinion was written by T. Elliot Gaiser, Assistant Attorney General with the Office of Legal Counsel, in response to complaints charged by Sable Offshore, whose officers claim that the State Fire Marshal, the state legislature, and other state agencies have collectively acted to impede Sable from starting production at what Gainer termed the “largest known offshore oil field in the United States.” Gainer acknowledged he had not independently verified the accuracy of Sable’s complaints, but for the purpose of his opinion, he wrote, “We accept the veracity of the factual statements set forth in Sable’s letter.”
Sable has complained that the Fire Marshal has unreasonably withheld the approvals necessary to allow the company to restart its pipeline — which sprung a major leak in 2015, releasing 142,000 gallons of oil along the Gaviota Coast. The company also complained that the Fire Marshal has changed the rules and requirements relating to pipeline repairs required before restart authorization would be granted.
Gainer asserted an expansive interpretation of the Defense Production Act, claiming that the president himself did not have to activate the Defense Production Act. Members of his executive team — such as the Secretary of Energy — could do so. More expansively still, he asserted that no emergency need actually exist for the bill to be invoked, just that one could exist if the act were not acted upon.
To the extent any state laws or regulations conflict with this invocation, Gainer said, federal authority trumps state power. Anyone acting in furtherance of any executive order authorized by the Defense Production Act, he stated, would be immune from any liability, even, he stated, for criminal conduct.
The Defense Production Act was designed to concentrate executive authority in the person of the president to keep the wheels of industry spinning. It was most famously deployed by President Harry Truman to end a strike by steel workers during the Korean War.
Trump himself declared a national energy emergency almost the day he was first sworn in to his second term. In this executive action, Trump asserted, “Insufficient energy production, transportation, refining, and generation constitutes an unusual and extraordinary threat to our Nation’s economy, national security, and foreign policy.” While nothing in the Gainer’s opinion mentioned the war with Iran or any oil shortages that will trigger, these national security concerns have been raised by Sable many times.
Gainer noted that a federal consent of 2020 — dictating under what terms and conditions Sable’s highly corroded pipeline could be deemed safe to restart — specifically designated the Office of the State Fire Marshal as the entity empowered to clear the pipeline for restart.
While Gainer’s memo clearly outlines a legal rationale by which the federal government could preempt what would otherwise be California’s sovereign authority, no one — not Donald J. Trump, not his Secretary of Energy — have yet acted to invoke the Defense Production Act on Sable’s behalf. Still, the stock market responded to the legal opinion with a sharp increase in Sable’s stock value.
Just a week before, Santa Barbara County Superior Court Judge Donna Geck ruled against Sable by upholding an injunction that barred the company from resuming production until it could first demonstrate it had secured all the necessary permits from the many state agencies with some regulatory oversight. Sable argued that the federal pipeline safety administration had already preempted the Fire Marshal, asserting that all jurisdictional say-so over restart now resided with the Pipeline and Hazardous Materials Safety Administration and no longer with the State Fire Marshal. This change also came in response to a request by Sable. The state Attorney General and the Fire Marshal have both contested this federal preemption. This matter, Judge Geck opined, would have to be resolved by a panel of federal judges later this summer, when the matter is scheduled to be heard. In the meantime, she ruled, the Fire Marshal still had the last word.
According to a spokesperson for the Fire Marshal, the Fire Marshal’s office is still reviewing the Department of Justice opinion. Likewise, Linda Krop, chief counsel for the Environmental Defense Center, the law firm bird dogging Sable’s efforts to restart the pipeline, said she was still reviewing her legal options.
“The stakes are huge,” she said. “This would allow the feds to ignore any and all the environmental protections and all the health and safety protections imposed by the state to approve this project.”
Most outrageous, she said, was that the federal government is poised to tell the State Parks Department what it has to do on its own property. Sable needs an easement from State Parks to make repairs on a four-mile stretch of pipeline that runs through a state park along the Gaviota Coast. State Parks has demanded more information from Sable before rendering a decision.
If this morphs into a major jurisdictional showdown between the state and federal governments over Sable Offshore, the state’s Attorney General Rob Bonta would play a major role. While Bonta has been consulted, he has yet to issue a statement.
State Assemblymember Gregg Hart — who has passed legislation to require Sable secure a coastal development permit from the California Coastal Commission — said he’d heard that Bonta’s office was looking into it.
“Nothing happens fast,” he cautioned. “I fully expect this new illegal move from the Trump Administration will be met with another state lawsuit to protect California’s ability to protect our precious coastal environment.”
State Senator Monique Limón stated — through her press spokesperson Olivia Wilson — “This latest opinion by the Department of Justice on superseding state law through the implementation of the Defense Production Act is yet another attempt for this administration to drill along our coastline despite bipartisan opposition.” She added, “This overreach can and will have serious implications throughout the state. Offshore oil drilling has bipartisan opposition because Californians have lived the consequences and impacts when things go wrong. California will continue to fight this overreach in the courtroom.”
