Sable Wins Federal Nod to Restart California Pipeline

A federal regulator approved the restart of Sable Offshore Corp.’s contested California oil pipeline that leaked 3,000 barrels of crude along the Santa Barbara coastline a decade ago.

Sable’s shares rose about 30 percent Tuesday after it said its plan was signed off on by the Department of Transportation’s Pipeline and Hazardous Materials and Safety Administration. The move follows last week’s determination by the regulator that portions of the key oil conduit, the Las Flores Pipeline System, is under the domain of the federal government and not California. State environmental groups are poised to push back. 

Houston-based oil driller Sable Offshore Corp. has been trying to restart production at a cluster of offshore drilling rigs in a state prone to energy supply crunches, but has been hamstrung by local opposition. Sable acquired the assets from Exxon Mobil Corp. last year, but the onshore pipe network that feeds crude to refineries hasn’t yet been permitted to reopen. 

The development comes amid a bigger clash between local and federal officials over how to supply energy in the US. President Donald Trump’s administration is actively boosting crude oil production through deregulation and is proposing to open new areas off the coasts of Florida, Alaska and California to crude drilling. California residents and environmental groups, on the other hand, are fiercely protective of their ecosystems, and are seeking to avoid a repeat of the 2015 Refugio spill which coated beaches in oil, dented tourism, and killed scores of birds and marine mammals.

In the letter, PHMSA approved the restart of lines CA-324 and CA-325, conduits built in the 1980s that transport offshore oil once it has reached land from pump stations on the California coast to destinations further inland. Line CA-324, previously known as line 901, was responsible for the 2015 Refugio oil spill under its previous operator, Plains All American.

“This pipeline was shut down because it was spewing oil into the ocean and onto our beaches, killing wildlife, disrupting the fishing, tourism and recreation jobs that are critical to our coastal economy and way of life,” said Monique Limón, the incoming California Senate leader. “It is clear this reclassification is yet another attempt by this administration to circumvent state law, putting millions of Californians at risk.”

Limón, who also represents the district that includes Santa Barbara, is working with state agencies and Governor Gavin Newsom to ensure the state’s laws are followed to prevent another oil spill, she said. 

Sable did not respond to a request for comment. 

Oil and gas groups, including the nation’s largest trade group, The American Petroleum Institute, have previously hailed Trump’s plans for offshore crude drilling. Meanwhile, professional golfer Phil Mickelson has touted Sable’s plans and continues to do so even after allegations by Hunterbrook Media that Sable executives selectively disclosed information to investors, including Mickelson.

The Center for Biological Diversity is poised to challenge Sable’s plans. The nonprofit group is skeptical of the federal pipeline regulator’s determination that the onshore pipelines are interstate, therefore subject to federal control, senior counsel for the group’s oceans program Julie Teel Simmonds said. 

The Center for Biological Diversity will consider all legal options if PHMSA tries to issue what are known as special permits without the typically lengthy public participation and environmental review, she said. 

A federal consent decree following the 2015 Refugio oils spill is in place and the federal regulator’s determination that it oversees the pipelines does not change that, Simmonds said. The decree specifies that state waivers are required from California’s Office of the State Fire Marshall, the agency that PHMSA is seeking to oust, alongside other agencies like California State Parks.

The Fire Marshall was notified on Dec. 17 by PHMSA that the federal agency would assume regulatory control over Sable’s pipelines. Newsom’s administration is reviewing PHMSA’s determination and evaluating next steps, California Natural Resources Agency Deputy Secretary for Communications Agency Daniel Villaseñor said.