Sable Offshore Corp. Continues Legal Battle with California

Sable Offshore Corp. is standing firm in its legal confrontation with California, especially after a significant court ruling didn’t go its way. The Houston-based energy company, it seems, is considering escalating its challenge all the way to the state Supreme Court while still carrying out oil transport through the Santa Barbara pipeline.

This declaration came shortly after California’s Second District Court of Appeal sided with the California Coastal Commission, reinforcing a previous ruling regarding necessary pipeline repairs.

“We’re disappointed with the Court of Appeals’ decision,” stated Sable’s attorney, Jeffrey Dinzer, mentioning that there are “significant issues” that remain before a final ruling can be made on the Coastal Commission’s cease-and-desist order and associated fines.

The ongoing conflict has its roots in events that stretch back more than ten years, revolving around the question of whether Sable can utilize outdated permits to repair and restart the pipeline, which has been inactive since the disastrous Refugio oil spill in 2015.

This issue dates back to 1986 when a coastal development permit was granted for the Santa Ynez Pipeline System. This system was designed to connect offshore oil platforms to processing facilities and refineries located outside the immediate area.

The pipeline effectively ceased operations in May 2015 after Pipeline 324 was damaged, leading to one of California’s most infamous environmental catastrophes.

Following several ownership transitions over the years, Sable acquired the pipeline assets in 2024, planning to kickstart oil production from its Santa Ynez unit.

Through its subsidiary, Pacific Pipeline Company, Sable has initiated significant repairs and upgrades. These efforts include replacing certain pipes and adding additional safety features.

The California Coastal Commission, however, argues that this work amounts to new development, necessitating fresh state approvals instead of leaning on permits that are nearly four decades old. The agency issued cease-and-desist orders in late 2024 and early 2025, followed by an $18 million fine for allegedly proceeding with work in defiance of regulatory directives.

Sable challenged these measures in the court, claiming denial of due process and asserting that the repairs fell under the scope of existing permits.

Yet, on June 21, the Court of Appeals dismissed those claims, supporting the injunction sought by the Coastal Commission, which represented a substantial win for the regulators in this intense dispute.

Even with this setback, Dinzer emphasized that oil production and transportation efforts are still in motion.

“Oil production from federally leased offshore platforms will persist, just as the flow of oil through pipelines to Kern County and eventually to El Segundo, where Chevron is buying,” he remarked.

He also contended that the appellate court’s decision shouldn’t be viewed as a final verdict in broader discussions.

Dinzer explained, “This case pertains only to the commission’s cease-and-desist order concerning pre-existing repair issues. That work was completed nearly a year ago.” The attorney clarified that the Coastal Commission’s enforcement actions are still in their early stages, and Sable plans to challenge the underlying basis for both the cease-and-desist order and the imposed penalties.

The company is weighing various legal strategies moving forward.

“There are several paths available,” Dinzer noted. “One is appealing to the California Supreme Court. Another is seeking a rehearing in the Court of Appeals.”

Additionally, Sable could return to the trial court to continue addressing the Coastal Commission’s initial case before potentially filing another appeal later.

Future court cases in both state and federal courts are also on Sable’s radar.

Dinzer pointed out, “There are numerous cases underway, including several in the Central District of California, and one in the Ninth Circuit. A lot of pivotal matters are pending resolution in different courts.” He expressed optimism about prevailing in these cases, particularly since the federal government has intervened, contesting California’s attempts to halt their operations.

The legal tussle is not just about Sable’s specific situation; it reflects a broader clash between California’s rigorous environmental regulations and the push for increased domestic energy production.

Currently, Sable is dealing with more than half a dozen lawsuits related to the pipeline restart. While state regulators celebrated a significant ruling in the appeals court, the company remains resolutely determined to continue supplying oil and pursuing its legal agenda.