Federal judge allows Sable Offshore to continue California pipeline operations
A federal judge on Aug. 19 ruled that Sable Offshore Corp.'s Santa Ynez Pipeline System (SYPS) can continue operating under federal oversight, affirming federal regulatory authority over the pipeline system offshore Santa Barbara.
The case stems from a March order issued by the Trump administration under the Defense Production Act (DPA), directing the pipeline's reopening to support West Coast crude oil supplies and national security objectives. The order transferred regulatory authority over the pipeline and related assets to the US Pipeline and Hazardous Materials Safety Administration (PHMSA), which authorized its restart. California regulators, which had blocked operations following a 2015 pipeline rupture that released about 2,500 bbl of crude oil, sued to prevent the line from reflowing.
Sable sought to restore operations in 2024 after acquiring the assets from ExxonMobil Corp. The effort faced opposition from the California Office of the State Fire Marshal (OSFM)—the state’s regulator of the line—in addition to other state regulators and environmental and community groups. Plains All American Pipeline LP owned and operated the pipeline at the time of the 2015 Refugio oil spill and sold the assets to ExxonMobil in 2022.
US District Judge Stephen V. Wilson of the Central District of California wrote that the DPA order "pre-empts the enforcement of any state law that conflicts with Sable's ability to operate the onshore pipeline."
The ruling provides a detailed judicial examination of the Defense Production Act's application to an energy infrastructure dispute involving competing federal and state regulatory authority.
Despite affirming the jurisdictional shift, Wilson also ordered Sable to pay $1.5 million for violating a federal consent decree. Through its acquisition of the assets, Sable assumed obligations under the decree, including management and reporting requirements and provisions requiring state waivers before restarting operations.
"Sable has violated the express provisions of the consent decree, without justification," Wilson wrote.
The judge said California's proposed injunction “is not the proper remedy.” For one, he said, “the consent decree has been modified to replace OSFM as the regulatory authority with PHMSA, and the pre-restart requirements of the State Waivers are no longer applicable. Nor, too, are OSFM's approval of a Restart Plan or authorization. PHMSA, the current regulator, has authorized Sable to restart the pipeline. Therefore, Sable is no longer in violation of the Consent Decree, and proactive, injunctive relief is inappropriate,” Wilson wrote. “Rather, the appropriate penalty for Sable’s violations is dictated by the consent decree."
Sable resumed transporting crude oil from the Santa Ynez Unit (SYU) through SYPS in March under the DPA order. The order and company statements indicate gross oil throughput is expected to reach about 50,000 b/d following ramp-up. Current production from six wells is estimated at about 6,000 b/d. SYPS has capacity of up to 200,000 b/d.
About the Author
Cathy Landry
Washington Correspondent
Cathy Landry has worked over 20 years as a journalist, including 17 years as an energy reporter with Platts News Service (now S&P Global) in Washington and London.
She has served as a wire-service reporter, general news and sports reporter for local newspapers and a feature writer for association and company publications.
Cathy has deep public policy experience, having worked 15 years in Washington energy circles.
She earned a master’s degree in government from The Johns Hopkins University and studied newspaper journalism and psychology at Syracuse University.