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Archive for the ‘California’ Category

Comments on brief supporting California’s challenge to the use of the DPA to restart SYU production

Posted in California, energy policy, Offshore Energy - General, pipelines, Regulation, tagged , , , , , , on September 14, 2026| 2 Comments »

Twenty Members of Congress (17 from California) filed the attached amicus brief in support of California’s challenge to the use of the Defense Production Act (DPA) to facilitate the restart of production at the Santa Ynez Unit (SYU) in the Santa Barbara Channel.

Per their filing:

“This case is not about national defense. It is about a heavily leveraged, crude oil company asking the President to transform the DPA from a statute designed to“assure the availability of domestic energy supplies for national defense needs,” 50 U.S.C. § 4502(a)(5), into a corporate rescue operation for political allies; a rescue that advances the Administration’s political preference for fossil-fuel development at the expense of all other concerns. The Department of Energy’s (“DOE”) March 13, 2026 order (the “Wright Order”) comes nowhere close to identifying a need for Sable crude oil or pipelines in the Order’s generalized invocation of California’s military presence and increased reliance on foreign crude.”

Comments:

  • The brief includes no new arguments or information.
  • Is it not disingenuous to raise concerns about Sable’s financing when these critics and their allies spent a decade blocking Exxon, one of the world’s strongest companies, from restarting SYU production? Exxon’s frustration led to the ownership transfer to Sable, even though Exxon could still be held liable for some obligations, most notably decommissioning.
  • Given the conflict-driven turmoil in the energy markets and the risk of shortages affecting military operations, how is it a stretch to issue a DPA order directing the restart of an important onshore pipeline?
  • A Federal judge for the Central District of California has already opined that the DPA is a “significant statutory grant of authority to the executive, giving the President substantial discretionary power to compel private industry, allocate resources, and incentivize domestic production for national defense.”
  • With oil prices soaring, this is a bad time to attempt to halt a 20+% increase in California oil production.
us_dis_cacd_2_26cv3396_d31306472e4249_notice_of_motion_and_motion_to_file_amicus_brief_iDownload

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California Assembly Bill 1448 – OCS production blockade

Posted in California, energy policy, Offshore Energy - General, pipelines, tagged , , , , , , , , , on September 9, 2026| Leave a Comment »

Attached is the final version of AB 1448, which is among the stack of bills awaiting Gov. Newsome’s signature. John Smith has highlighted provisions of concern.

If enacted and upheld in the courts, the bill would serve as a blockade on new Outer Continental Shelf (OCS) production. The bill would:

  • prohibit pipelines and other infrastructure located within state waters from being used to support Pacific Outer Continental Shelf (OCS) leases issued after January 1, 2026.
  • prohibit the State Lands Commission from entering into any lease authorizing new construction of oil- and gas-related infrastructure within state waters for the purpose of supporting Pacific OCS leases issued after January 1, 2026.
  • prohibit any existing leases and oil- and gas-related infrastructure located within state waters from being used to support Pacific OCS leases issued after January 1, 2026.
  • require a separate process for the approval of any lease extension that would increase the volume of oil and gas transported across state waters “including by commencing, increasing, intensifying, or restarting production” from the OCS. This would presumably include pipelines transporting Santa Ynez Unit production and production increases at other OCS facilities.

It’s hard to believe these provisions would survive legal challenges given their constraint on interstate commerce and Federal OCS activities.

On a related note, California royalty owners are actively challenging Santa Barbara County and Los Angeles proposals that would prohibit new oil and gas wells and ultimately phase out all existing production. AB 1448 would have a similar effect on OCS royalty owners – namely the citizens of the United States.

AB 1448 Ban on Infratructure useDownload

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EIA raises the Gulf’s all-time monthly production record (April 2026) to 2.123 million bopd! Sable effect evident in the Pacific.

Posted in California, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , on September 3, 2026| Leave a Comment »

Raising the bar! The EIA’s August data release (delayed until 9/2) upped the Gulf’s all-time monthly production record (April 2026) by 14,000 bopd to 2,123,000 bopd. June production settled in just below the 2 million bopd mark.

Meanwhile, Pacific production has tripled this year reflecting the Sable SYU effect. Note that Sable reported Santa Ynez Unit production of 38,000 bopd in July and 42,000 bopd for the first week in August. This should push total Pacific production for July and August to over 50,000 bopd.

EIA explains (sort of) the delay in their June data release (only 2 days late, but enough to trigger a few conspiracy theories).

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Rigs (barges) to Reactors in Long Beach?

Posted in California, energy policy, rigs-to-reefs, tagged , , , , , , on September 2, 2026| Leave a Comment »

Bluecore Energy, with the support of the Port of Long Beach, is proposing nuclear reactors on barges. The Mayor of Long Beach is all-in!

“There is no better place to launch the next generation of zero-emission maritime energy than the world’s first Green Port. Long Beach has always been where global trade meets innovation, and today we’re becoming the place where the technologies that will power the future of the maritime economy are developed.BLUECORE ENERGY’s decision to build here reflects the momentum we’re creating by bringing together clean technology, advanced manufacturing, and world-class talent to grow the industries that will define the next generation.”

The State moratorium on new nuclear plants is still in place and the California Coastal Commission has yet to be heard from.

The Federal govt (MMA) has expressed an interest in responsible nuclear power generation on the OCS. Perhaps the parties should consider that alternative.

Related opportunity: Offshore Data Centers

Platforms offshore Long Beach and Orange County

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Fish Reef Project explores the marine habitat at Platforms Ellen and Elly

Posted in California, decommissioning, energy policy, Offshore Energy - General, Regulation, rigs-to-reefs, tagged , , , , , , , , , , on September 1, 2026| 1 Comment »

Chris Goldblatt, CEO of the Fish Reef Project shared this impressive new video on the habitat beneath Platforms Ellen and Elly in the Beta Unit offshore Huntington Beach, CA. As Chris explains in the video, such valuable habitat will be needlessly lost if companies are required to remove structures down to the seafloor.

Platforms Ellen and Elly

A National Geographic article discussed the marine life beneath Eureka, the third platform in the Beta Unit:

“Every square inch is covered in marine life,” says Milton Love, biologist at the Marine Science Institute at University of California, Santa Barbara. “Sometimes there are so many fish that you can’t even see through them to the platform. It’s overwhelmingly striking.”

Jeremy Claisse, Cal Poly Pomona, called Eureka “as productive as any other marine fish habitat that has been studied around the world.”

Sea lion beneath Platform Eureka. Photo by Joel Platko

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California State Lands Commission study targets offshore pipelines

Posted in California, energy policy, Offshore Energy - General, pipelines, Regulation, tagged , , , , on August 31, 2026| Leave a Comment »

John Smith informs us that the California State Lands Commission is developing an Analysis of Impacts to Public Trust Resources and Values (APTR) for the remaining offshore oil and gas pipeline leases under its jurisdiction. See the attached slides.

The APTR will assess the risks and impacts of continued offshore pipeline use and will include additional analyses related to pipeline integrity, cultural resources, ocean and coastal uses, and economic resources.

John suspects the primary underlying purpose of this study is to build a case for terminating all offshore oil and gas production by imposing requirements that would make offshore oil and gas production uneconomic. This could be accomplished by significantly increasing lease rental and bonding requirements, imposing more stringent pipeline inspection and repair requirements, or requiring operators to shut down or replace pipelines and other aging infrastructure considered by the state to pose an unacceptable risk to the environment.  

Also, given that Platform Irene is on a terminated OCS lease and is no longer producing, John and I are wondering why the Irene pipelines are included in the APTR study.

o-g-aptr-presentationDownload

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Big win for Sable!

Posted in California, energy policy, Offshore Energy - General, pipelines, Regulation, tagged , , , , , , , on August 20, 2026| Leave a Comment »

Sable Offshore Corp. may use an emergency restart order from Energy Secretary Chris Wright as legal authority to continue transporting Santa Ynez Unit production through the onshore pipeline system.

Judge Stephen V. Wilson said the Defense Production Act (DPA) is a “significant statutory grant of authority to the executive, giving the President substantial discretionary power to compel private industry, allocate resources, and incentivize domestic production for national defense.”

The opinion also granted the Trump administration’s request to modify a federal consent decree entered in 2020 which governs the restart of the Las Flores pipeline system.

The order removes the California Office of the State Fire Marshal as the primary agency responsible for Sable’s compliance with the oil spill consent decree, and substitutes the Pipeline and Hazardous Materials Safety Administration.

Here is the 45 page decision.

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“Offshore fracking”

Posted in California, energy policy, Offshore Energy - General, Regulation, tagged , , , , , , , , on August 18, 2026| Leave a Comment »

Despite favorable environmental reviews from both the Obama and Trump Administrations, the California Coastal Commission, empowered by the Courts, voted last week to prohibit the resumption of hydraulic well stimulation at DCOR’s Platform Gilda (map above).

Of course, as is always the case offshore California, the regulatory and legal battles will continue. The Secretary of Commerce may choose to overrule the CCC, in which case further litigation is certain.

This dispute comes at a time when the CCC, which operates with extraordinary autonomy, is undergoing a performance review by Commerce. Needless to say, the Commission and its supporters are not thrilled with the oversight.

In light of the spotlight on “offshore fracking,” I wanted to draw attention to a 2019 National Academies workshop that considered this very issue. I had the opportunity to participate in this workshop and was impressed by the input from industry and govt representatives.

Key points from the workshop:

  • If wells are not completed effectively, the value of drilling is negated, and it is impossible to deliver the oil or gas production needed to make the wells economically sustainable.
  • The frac pack (as is proposed for Platform Gilda) is one of the most commonly used completion techniques worldwide.
  • A gravel pack uses sieved sand as a filter to prevent formation sand from entering the wellbore, while the frac pack combines the gravel pack with hydraulic fracturing to create wide fractures filled with sieved sand that aid in connecting the reservoir to the wellbore.
  • Frac packs can create 50- to 250-foot fractures to stimulate production in a well.
  • Well stimulation offshore, which has been in practice for decades, has far less negative impact potential than well stimulation onshore.
  • Hydraulic fracturing minimizes the number of wells needed to develop a reservoir with the result being less environmental impact potential. This completion technique allows for the development of natural resources not previously considered commercially viable.
  • Offshore California, oil and gas formations typically have low permeability, and production is dependent on natural fractures. The objective is to enhance the flow of oil and gas from the tight matrix pores into the fractures.

The workshop graphic below highlights the differences in well stimulation risks onshore vs. offshore. The graphic is a bit unfair in that the onshore risks are being effectively mitigated. The main point is that much of the onshore risk potential doesn’t exist for offshore well stimulation.

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Legal Dispute Continues to Delay Decommissioning of California OCS Platforms Hogan and Houchin (OCS Lease P-0166) – article by John Smith

Posted in California, decommissioning, Offshore Energy - General, Regulation, tagged , , , , , on August 13, 2026| Leave a Comment »

Platform Houchin, Santa Barbara Channel

This article provides information on the history of OCS Lease P-0166 and updates the decommissioning status of California OCS Platforms Hogan and Houchin which are in federal waters offshore Santa Barbara County, California. Listed below are key events in the history of the OCS Lease P-0166. More details are provided in the attachment which was prepared by John Smith who before retiring from BOEM in 2017 was actively involved in the long-running supplemental bond dispute between MMS/BOEM and Signal Hill Services, Inc., which began shortly after MMS approved the assignment of OCS Lease (P-0166) held by Phillps Petroleum Corporation (now ConocoPhillips Corp.) and two other companies to Signal Hill Services Inc. (Signal) in 1991.

Year/MonthLease Activity
1967U.S. Bureau of Land Management grants OCS Lease P-0166 to Phillips Petroleum   Corp., Continental Oil Company, and Cities Service Company.
1967 – 1968Hogan and Houchin platforms are installed.
1967 – 2010 75 wells were drilled from the platforms, the majority in 1967-1968 and 1970s. 
February 1991MMS approves assignment of the lease to Signal.
September 2019Production is terminated at platforms.
October 2020Signal relinquishes the lease to BOEM.
November 2020BSEE orders ConocoPhillips Corp. (COP) and other predecessor lessees to decommission the Hogan and Houchin platforms.
January 2021COP and other predecessor lessees file an appeal with IBLA contesting BSEE/BOEM determination they held decommissioning obligations.
February 2021IBLA grants approval of Partial Stay Agreement between BSEE/BOEM and appellants to maintain and monitor the platforms. 
November 2024Signal files for bankruptcy under Chapter 7 of the U.S. Bankruptcy Code.
2021 – 2026Monitoring, maintenance and major refurbishment of the platforms are ongoing to support safety of offshore personnel involved in well plugging and abandonment operations.

Since OCS lease P-0166 was relinquished in 2020, removal of Hogan/Houchin platforms has been stalled by a prolonged dispute over decommissioning obligations between BSEE/BOEM and predecessor OCS lessees (ConocoPhillips Corp., OXY USA Inc., Devon Energy Resources Inc.). The IBLA case has now been ongoing for more than 5 years and has the potential to set a precedent based on the arguments of the appellants who assert: 

  1. They had no accrued decommissioning obligations at the time of the 1991 assignment of the lease because pursuant to their 1961 OCS lease agreement decommissioning obligations did not accrue until the lease was relinquished, which occurred in 2020 when Signal quitclaimed the lease to BOEM. 
  2. The OCS rules changes promulgated in 1997, which stated a lessee’s decommissioning obligation “accrues to the lessee when a well is drilled, the platform or other facility is installed, or the obstruction is created.” (30 CFR   250.110), cannot be applied retroactively.
  3. The 1961 OCS lease did not include a term by which the lessee agrees to be bound by “future” OCS regulations, which later became a standard provision in OCS lease agreements.  

The IBLA case is very concerning because there is currently no financial security available to cover the costs of decommissioning the Hogan and Houchin platforms which were very conservatively estimated by BSEE to total $85 million in 2020. If the IBLA or judicial courts eventually rule COP and former lease owners did not accrue decommissioning obligations, either in whole or in part, the federal government and American taxpayers will be responsible for covering the unfunded decommissioning obligations.

History of Pacific OCS Lease P-0166 and Hogan Houchin Status 080826.docxDownload

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Informative production and sales update from Sable Offshore

Posted in California, energy policy, Offshore Energy - General, Regulation, tagged , , , , , , on August 11, 2026| Leave a Comment »

Excerpts from Sable’s quarterly report:

Production

  • An average of approximately 39 wells were online throughout the month of June 2026, representing a 50% increase over approximately 26 wells online on average in April 2026.
  • In July 2026, an average of approximately 47 wells at Platforms Harmony and Heritage were online, producing an average of approximately 721 gross barrels of oil per day per well. Sable expects to bring all 77 production wells on these two platforms online during the third quarter of 2026 and expects Platform Hondo to come online in September 2026.
  • Wireline campaign for Perforation Additions (“Perf Adds”) and producing well optimization at Platform Harmony commenced in August 2026.
  • Five completed Perf Adds forecasted to produce an incremental 600 estimated gross barrels of oil per day, each, are expected to come online at Platform Hondo along with the restart of the platform in September 2026.
  • An additional four Perf Adds at Platform Hondo forecasted to produce an incremental estimated 600 gross barrels of oil per day are planned for completion and to be brought online in early Q4 2026.

Sales

  • July 2026 preliminary oil sales estimate of approximately 38,000 gross barrels of oil per day. August 2026 oil sales average to date is approximately 42,000 gross barrels of oil per day through August 9th.
  • Due to the California regulatory environment, local refineries were not able to plan in advance for SYU first sales and ultimately were forced to displace various imported cargos in the second quarter. As a result, Sable incurred $18.5 million of non-recurring demurrage charges throughout the quarter, recognized in operational expenses.
  • The sudden supply influx of Pacific Outer Continental Shelf (“Pacific OCS”) crude has forced refiners to temporarily limit throughput of Pacific OCS crude and charge quality deducts for sulfur content and other items.
  • Starting in July 2026, Sable was temporarily constrained to a maximum of 40,000 average gross barrels of oil per day of oil sales throughput by downstream partners. We expect this short-term constraint to be alleviated starting in the back half of August.
  • California refineries are expected to adjust their crude oil supply slate starting in September 2026 to begin accepting more Pacific OCS barrels from the SYU and less imported barrels, alleviating the SYU throughput constraint altogether.
  • Sable is also in active negotiations to implement waterborne crude oil marketing solutions from existing marine terminals in the Los Angeles area in the near-term in order to improve marketing optionality.
  • Additionally, the pending acquisition of the Crimson Utilities (San Pablo Bay Pipeline) pipeline network by a third party could provide further relief and marketing optionality to California oil producers with access to the San Francisco refinery market once that pipeline potentially restarts operations.

A detailed regulatory and legal update can be found beginning on p. 13 of the Quarterly Report.

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