President Donald Trump may soon announce plans to open California waters to oil drilling. This move could lead to the first federal oil lease sales in the Pacific Ocean since 1984.
Meanwhile, Sable Offshore Corp., attempting to restart oil production off the Santa Barbara coast, faces mounting challenges. The Santa Barbara County Board of Supervisors recently indicated it might deny permit transfers necessary for Sable to proceed. This follows the company’s acquisition of ExxonMobil’s Santa Ynez Unit in 2024, intended to revive drilling.
The board’s decision comes after a 2-2 vote in February, appealed by environmental groups. Sable sued the county, claiming unlawful withholding of permits, and a federal judge ordered a re-vote. The company is embroiled in legal issues, including a leaked call suggesting insider information was shared with select investors, which influenced one supervisor against Sable.
Supervisor Steve Lavagnino expressed concerns over recent charges against Sable, stating, “Without spilling a drop, Sable has damaged the industry’s reputation.” The Santa Ynez Unit was involved in a major oil spill in 2015, causing over 450,000 gallons of oil to leak near Refugio State Beach.
In October, Sable lost a significant court battle with the California Coastal Commission and was fined $18 million for unauthorized pipeline repairs. The company argues its activities were covered by existing permits, but the ruling upheld the commission’s orders. The Santa Barbara district attorney filed 21 criminal charges against Sable in September for environmental damages.
State Attorney General Rob Bonta brought civil charges for claimed unauthorized waste discharges into waterways. Additionally, shareholders sued Sable’s executives, alleging harm through premature operational restart claims. The State Lands Commission criticized Sable for announcing production resumption without proper approvals.
The California State Fire Marshal issued a waiver in December 2024 for the pipeline restart, but environmental groups sued, claiming the plans didn’t address corrosion issues. Sable’s request to restart production was rejected by the fire marshal until repairs are complete.
Sable is considering an offshore storage and treating vessel strategy to bypass state pipeline rules, utilizing tankers for oil transport from federal waters. They sought expedited permitting from Interior and Energy departments, citing ties and potential federal support.
The departments didn’t comment on Sable’s strategy, which may include federal funding. Sable’s stocks fell following insider trading allegations and a fundraising announcement to repay an Exxon loan.
Analysts suggest the company’s shipping strategy, though aligning with Trump’s policies, may face legal challenges and financial hurdles due to low oil prices. Drilling offshore California has been restricted since a 1969 spill, with limited active rigs remaining.
Federal waters off California might reopen for lease sales under new plans, but interest is uncertain due to low oil prices and smaller reserves compared to areas like the Gulf of Mexico. Sable, holding significant Pacific reserves, would still need federal compliance and state cooperation for development.
“Sable can’t just wave its wand and have offshore oil processing approved,” said Julie Teel Simmonds of the Center for Biological Diversity, emphasizing the necessity of state involvement despite potential federal support.
Original Story at insideclimatenews.org