Stop the bluster about annexation of Canada. Almost no one on either side of the border supports this. Focus instead on strengthening strategic alliances – most notably with regard to energy supply.
Both the US and Canada are energy powerhouses. Both countries are also energy underachievers relative to their potential. The more efficiently our pipelines and transmission systems can be integrated, the better that potential can be realized and the more both countries can prosper.
See the attached energy trade map to get a better understanding of our integrated energy economies.
For the reasons set forth herein, the application of the California Coastal Commission for issuance of a preliminary injunction is granted. No bond is required. The Commission shall present a written order for entry by the court.
The roller coaster ride continues. Sable Offshore’s stock price plunged in response to the latest order.
Legal/regulatory: Although lease cancellation is not a reasonable option at this time, a pause for further review of the environmental and procedural issues is justified. During the previous Administration, the regulators seemed to function primarily as cheerleaders, as evidenced by the departures (examples here and here), the BOEM/NOAA strategy document, and the promotional tweets. Also, where is the long awaited report on the turbine blade failure? How do you proceed with development before that has been released for public review?
Norwegian govt intervention: Some would argue that Empire Wind was a bad investment by Equinor (2/3 govt owned) and it would have been better to take the losses and move on.
Trade unions: Concerns about the job losses are warranted, but the long term viability of the subsidy dependent offshore wind industry is in doubt, and important industries (e.g. fishing and tourism) may be negatively impacted. Other job losses could occur if offshore wind drives up electric prices and decreases grid reliability.
Pipeline deal: The regionally important Constitution natural gas pipeline is still very much in doubt despite reports of a deal with Governor Hochul. With or without her support, climate-ultras are driving NY/New England energy policy and will, at a minimum, stall this project. Fisheries Nation was particularly blunt in criticizing fishermen being “used as a poker chip” to gain tepid support for the pipeline project.
Following the reversal of the Empire Wind decision, Green Oceans, ACK for Whales, Long Island Commercial Fishing Association, Protect Our Westport Waters, Save Greater Dowses Beach, Save Right Whales Coalition, and the Wampanoag Tribe of Gay Head/Aquinnah petitioned Secretary Burgum to halt all wind construction in New England coastal waters and begin a “complete reevaluation” of their permits under applicable federal laws. In addition to right whale and tribal cultural resources concerns, the letter cited:
HOUSTON–(BUSINESS WIRE)— Sable Offshore Corp. (“Sable,” or the “Company”)(NYSE: SOC) today announced that as of May 15, 2025, it has restarted production at the Santa Ynez Unit (“SYU”) and has begun flowing oil production to Las Flores Canyon (“LFC”). Additionally, with the completion of the Gaviota State Park anomaly repairs on the Las Flores Pipeline System (the “Onshore Pipeline”) on May 18, 2025, Sable has now completed its anomaly repair program on the Onshore Pipeline as specified by the Consent Decree, the governing document for the restart and operations of the Onshore Pipeline.
Seven of the eight sections of the Onshore Pipeline have been successfully hydrotested. Sable will complete the final hydrotest in order to meet the final operational condition to restart the Onshore Pipeline as outlined in the Consent Decree. Sable expects to fill the ~540,000 barrels of crude oil storage capacity at LFC by the middle of June 2025 and subsequently recommence oil sales in July 2025.
Production Restart
On May 15, 2025, Sable initiated the flow of oil production from six wells on Platform Harmony of the SYU to LFC at a rate of ~6,000 barrels of oil per day.
Sable has been testing wells on Platform Harmony throughout May 2025 and the well tests have performed consistently stronger than they did at the time of shut-in on May 19, 2015 when the SYU produced approximately 45,000 barrels of oil equivalent per day.
Approximately 30% of the 32 producing wells at Platform Harmony have been tested as of May 18, 2025 with the remaining Platform Harmony wells projected to be tested over the course of the next several days.
Sable expects to initiate production from the additional 44 wells on Platform Heritage and the additional 26 wells on Platform Hondo in July 2025 and August 2025, respectively.
The Santa Barbara Independent doesn’t pull any punches in this article about the once invincible California Coastal Commission. I recommend that you read the entire article, but here are some choice excerpts (emphasis added):
Lastly, it’s totally unprecedented for members of the commission to verbally eviscerate energy planners with Santa Barbara County at a public hearing for refusing to provide them requested planning documents having to do with Sable no fewer than seven times. While the county has denied this charge, no one from the county showed up for last week’s meeting to explain their actions. One commissioner termed this absence a “dereliction of duty.”
What actions and outcomes ultimately emerge from this rancor remain far from obvious. That’s in part because the political support enjoyed by the Coastal Commission — long regarded as one of California’s many “third rails” of state politics — has never been so uncertain. By “uncertain,” I mean rarely has any state agency been so reviled by such a wide swath of political players and stakeholder groups.
The question has become not so much who hates the Coastal Commission — it’s who doesn’t. Donald Trump has hated the commission since it objected to a 70-foot flagpole Trump planted on a beachfront golf course he owned back before he became president.
Elon Musk, Trump’s alter ego, sued the Coastal Commission — and lost — over the commission’s outspoken refusal to grant him the “consistency determination” he needed to increase the number of SpaceX rocket launches from Vandenberg Space Force Base from 35 to 50. Although a federal judge would rule in the commission’s favor, Governor Gavin Newsom, a noted Democrat, announced he was siding with Musk on this one.
So, what happens if Sable doesn’t pay the fine? Or keeps on working despite three cease-and-desist orders? The key question — still loudly unanswered — is what Attorney General Rob Bonta will do. Will Bonta throw his considerable heft behind the commission? He hasn’t yet. And it’s been several months. Does the governor want to pick his battles with the Trump-Musk White House for causes that enjoy more broad public support?
“The State Fire Marshal stated on February 25 — during a packed-house meeting at La Cumbre Junior High School — that he would not issue Sable authorization to restart production at the Santa Ynez Unit until all outstanding permit issues between Sable and the eight state agencies with oversight authority are resolved.“
Although Sable has a good defense against the Coastal Commission’s accusations, that statement by the Fire Marshal is ominous.
More bad news for Sable: The Center for Biological Diversity suit challenging the Federal government’s extension of the 16 Santa Ynez Unit leases is not going well. The government requested a voluntary remand of BSEE’s 2023 approval because “BSEE plans to reconsider its decision in light of Plaintiffs’ claims and conduct additional analysis, as warranted, under OCSLA and NEPA.”
In the attached decision, shared by John Smith, the judge denied the Federal government’s request. This does not bode well for the Federal government’s case going forward.
Attached is a recent Sable Offshore presentation for investors. Notably, Sable is now projecting to resume Santa Ynez Unit production in Q2 2025 (see slide below). John Smith thinks this is unrealistic, and I have to agree.
It’s tough for an offshore producer to succeed in California, but Sable is making a strong effort. Exxon must agree, because they have extended Sable’s first production deadline to 3/1/2026, which reflects a more plausible Q1 2026 restart. Additional extensions seem likely if necessary given that Exxon’s other options aren’t very attractive.
Is Germany taking energy masochism to a new level?:
MSN: “Germany is exploring levers to prevent the resumption of Nord Stream 2. The pipeline may allegedly be restarted under an agreement between the US and Russia as part of the settlement of the war in Ukraine, Bild reports.“
“According to Bild and the Financial Times, secret talks have been going on between representatives of Russia and the United States for several weeks now about American investors buying the damaged Nord Stream 2 pipeline in the Baltic Sea.“
Good questions by Swedish engineer and independent Nord Stream investigator Erik Andersson:
“Wow! Why on earth would Germany stop gas through Nord Stream 2 if the war ends and USA approves it?“
“Richard Grenel who was involved in sanctioning NSP2 in 2019 is mentioned as a player in the article. After the explosions 2022, Grenel said the first Trump admin was against NS2 but not NS1 which was delivering an acceptable amount of gas without making Germany too dependent on Russia. I wonder if the current Trump admin still think that two out of the four Nord Stream pipelines could be opened without creating a dangerous dependency on Russia?“
The Alternative für Deutschland (AfD) party, supports a Nord Stream restart. Despite the AfD’s strong second place finish in the recent national elections, the leading CDU party is trying to keep the AfD out of the governing coalition.
This will be the Board’s “first and last chance to have any influence over restarting the pipeline, and thus allowing the three offshore platforms to begin drilling again.” (Expect initial production to be from existing wells supplemented over time with new drilling, well workovers, and recompletions.)
The Board has limited authority in this matter: “The county’s legal advisors and energy planners have told the supervisors that there are no grounds to say no. It is not up to them to determine whether Sable’s liability insurance is enough to cover the costs of a reasonable worst-case oil-spill scenario; it’s only up to them to ascertain whether Sable has filed a certificate of insurance with the proper state agency.“
“All the essential questions regarding the pipeline’s safety measures are in the hands of California state agencies, headquartered in cities far away, with names so confusing that even people working there can’t tell you what the acronyms mean.” (see Regulatory fragmentation)
Interesting tidbits: “Danielson (the Sable representative) let me know that he would not be answering these questions. He was cordial, but he was not happy about a recent Independent story featuring attorney Linda Krop of the Environmental Defense Center perhaps Sable’s most implacable and formidable opponent, expounding in an unchallenged format on what a threat the pipeline still posed. Interviewing Krop was Victoria Riskin, herself a committed anti-oil advocate. Actress and Montecito resident Julia Louis-Dreyfus — of Seinfeld and Veep fame — apparently liked the article enough to send it to her social media followers.“
Below are the pros and cons of the SYU restart as cited by the Independent. (Clarification: The 10 billion bbl oil reserves number (“pros” slide) is at least an order of magnitude too high and is perhaps a typographical error. BSEE’s June 2023 data sheet (excerpt pasted at the end of this post) indicates remaining oil reserves of 190 million bbls for the 3 SYU fields. Adding the gas reserves ups the total to 243 million bbls of oil equivalent (boe). Additional reserves could likely be confirmed with new extended reach wells, but anything more than 1 billion bbls would be highly unlikely. Sable’s investor presentation (p.5) indicates 646 million bbl of Remaining Total Net Estimated Contingent Resources.)
John Smith forwarded Sable’s court filing (attached) and highlighted important text.
The Coastal Commission has asserted that anomaly repair work on Sable’s onshore pipeline, which was required by the California Fire Marshall and approved by Santa Barbara County, constitutes a violation of the Coastal Act.
Santa Barbara County had confirmed in writing that Sable’s repair work is authorized by the pipeline’s existing coastal development permits and, consistent with the County’s past practices, no new or separate Coastal Act authorization is required.
John and I believe Sable has a strong case, but you can be the judge. For the Commission and County to have such divergent opinions is rather surprising.
Among other assertions, Sable argues (par. 115) that the Coastal Commission violated the takings clause of the Fifth Amendment to the U.S. Constitution, as incorporated by the Fourteenth Amendment, which prohibits the temporary or permanent taking of private property for public use without prior, just compensation. This could lead to significant liability costs for the State.
Bud's Offshore Energy (BOE) 