Sable Offshore Wins Court Battle over Oil Pipelines

[Updated: Fri., Jan. 2, 2025, 3:30pm]

A two-judge panel from the Ninth Circuit Court of Appeal rejected an emergency appeal filed by Sable Offshore’s environmental opponents — led by the Environmental Defense Center and the Center for Biological Diversity — to block the restart permit the federal agency overseeing pipeline safety gave Sable on December 22. The December 31 court ruling was terse, offering no insights as to how the judges arrived at their conclusion or what weight they had given the myriad of opposing arguments filed by the litigating parties involved. But the dispute is far from over. 

The judges set an expedited court date — January 26— to allow the opposing sides to better hash out the underlying issues now in contention. In the meantime, however, what actually is happening on the ground at Sable’s Santa Ynez Unit — and whether the company is now pumping and producing oil — remains the subject of dueling anecdotal accounts but no confirmed facts. 

Some observers claim they have seen gas flare and smoke emanating from what until two years ago was Exxon’s major oil and gas plant near Refugio. The plant has been dormant for more than 10 years because of the corroded pipeline that in 2015 resulted in 142,000 gallons of oil to pollute the ocean and coastline.

When Congressmember Salud Carbajal sought information from the federal agency now assigned direct oversight — the Pipeline and Hazardous Materials Safety Administration (PHMSA) — he was unable to get any information for his efforts. 

County Supervisor Laura Capps stated that she had been informed by the county fire chief on Thursday that there was no production taking place. Furthermore, the chief said, there was an agreement with Sable to provide 24-hour advance warning. (The County Board of Supervisors will meet in closed session on Monday to discuss its ongoing litigation with Sable.)

The court ruling — however tentative — was seen by the stock market as a major victory by Sable supporters, and the company’s stock prices surged. 

Earlier in December, PHMSA administrators announced that the 120-mile stretch of pipeline owned by Sable Offshore would now fall under federal jurisdiction and regulatory oversight. That marked a massive policy change because in May 2016 that same agency had signed a written document announcing that the pipeline fell within the State Fire Marshal’s regulatory oversight and that it was no longer a matter of federal concern. 

At that time, PHMSA officials had concluded the pipeline was strictly an “intrastate” pipeline — which, translated into plain English, means it falls within the boundaries of just one state. But this past month, PHMSA officials reversed course and have now determined that the pipeline now qualifies as an “interstate” pipeline, meaning that it extends beyond the boundaries of one state. 

One day later — on December 23 — PHMSA then issued an emergency start-up permit to the company. In so doing, the federal agency cited an executive order issued by President Donald Trump in January 2025 declaring there to be a national energy emergency. Trump has been adamant about his support for new — or, in this case, renewed — offshore oil production; it’s part of his campaign for what he calls “energy domination.” 

The emergency startup order, PHMSA attorneys argued, was consistent with the president’s executive order. EDC attorney Linda Krop countered in her legal filings that Trump’s energy emergency was an egregiously exaggerated political fiction that’s belied by the fact that the United States has posted record oil production levels this year and multiple years prior. 

In California, however, the picture is more complicated; state oil production has declined steadily due in large measure to the growing popularity of EVs and more fuel-efficient hybrids, with foreign imports providing a growing share of the market. 

In Sacramento, even Governor Newsom has expressed concern that the state’s drop in production might trigger a crisis in refinery and pipeline capacity, which in turn could result in higher prices at the pump. The economic and political consequences of this could be serious, particularly if Newsom should run for president. As a result, Newsom brokered a last-minute deal in Sacramento this summer to expedite wholesale oil development throughout Kern County with a one-size-fits-all environmental analysis. 

Sable and its supporters argue that the Kern County bill is too little, too late and insist California’s pinch points can be alleviated only by renewed production of the Santa Ynez Unit. They talk about California posing a national security crisis for the military installations on its coast. 

Krop et al. argued that PHMSA’s decision to effectively usurp control from the Office of the State Fire Marshal was on its face illegal. In the wake of the 2015 Refugio pipeline spill, PHMSA and the EPA signed what’s known as a “consent decree” with the multiple state agencies that have some regulatory oversight over pipelines running along the coast. 

That consent decree — which, until recently, was accepted as a fact by Sable — explicitly stated the State Fire Marshal had the exclusive authority to restart the pipeline. For PHMSA to push through such a complete about face, Krop argued that there are administrative hurdles the agency must first clear. In this case, she argued, these requirements were summarily ignored. 

The bill Newsom got approved to allow more aggressive drilling in Kern County also contained language that created serious heartburn for Sable Offshore. State Assemblymember Gregg Hart got language included that would require a coastal development permit for Sable’s new and repaired pipeline if the company had not secured a restart permit by January 1 of this year. (Sable has insisted that its repair work is exempt from coastal development permit requirements, and this has been the subject of intense dispute and litigation with the California Coastal Commission.) 

Sable’s hopes that the Fire Marshal would issue such a permit by January 1 were dashed on October 22 when the Fire Marshal notified the company that its repair work to date did not meet the necessary specifications for certain types of corrosion control. The company objected, claiming this was a late hit by the Fire Marshal, who — Sable alleged — was raising new issues at the last minute. Had Sable sought to comply with the Fire Marshal’s concerns, there would have been little chance the company could have done so before the January 1 deadline. According to EDC attorney Krop, the whole reason for PHMSA’s last-minute intervention was to save Sable from the new state legislation that went into effect the first of the year.