“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.
Sable’s stock soared on Thursday following a favorable Santa Barbara County decision (letter pasted below).
Sable’s path is still rocky. Decommissioning specialist John Smith notes that “Sable faces a number of permitting obstacles not to mention litigation by the Environmental Defense Center and others who are committed to trying to stop the SYU restart. The next hurdle will be a Feb 25 Santa Barbara County hearing on an appeal of the ownership transfer from XOM to Sable. And we should not overlook the OCS related litigation on ownership transfer, SYU Development and Production Plan updates, and Court ordered prohibition on fracking absent a Fracking EIS and consultation.”
The County’s letter is pasted below. Note the diverse responsibilities of this SBC division: Energy, Minerals, Compliance & Cannabis 😀
Germany’s national elections are on 23 FEB. The Alternative für Deutschland (AfD) party, which has gained strength in the polls, supports a Nord Stream restart.
–Denmark’s energy agency granted Nord Stream AG permission to conduct preservation work on the Nord Stream 2 gas pipeline in the Baltic Sea (Reuters). One of the two Nordstream 2 lines is undamaged.
-An Equinor executive stated on February 5, 2025, that the Nord Stream 1 pipeline is “permanently destroyed.”
-The Swiss canton of Zug extended the moratorium on debt restructuring for Nord Stream AG until May 9. The moratorium is seen as a way for the German government to preserve its influence over the future of the pipeline. If the company is liquidated, investors, including the German state-owned energy firm Uniper, would lose control over the pipeline and the considerable funds invested by German taxpayers in its construction.
A senior administration official who is familiar with the executive actions and authorized to brief Fox News Digital said Trump on day one will end “Catch and Release;” pause all offshore wind leases; terminate the electric vehicle mandate; abolish the Green New Deal; withdraw from the Paris Climate Accord; and take several major steps to assert presidential control over the federal bureaucracy.
The senior official told Fox News Digital that the energy executive order deals with “every single energy policy,” andaddresses liquid natural gas, ports, fracking, pipelines, permitting and more, while also terminating President Biden polices he said “have constrained U.S. energy supply.”
Just when we were settling on Der Spiegel’s account of the Nord Stream sabotage, Michael Kobs provides reasons for skepticism. Are the detailed revelations in Der Spiegel part of a coordinated effort to relieve governments of any responsibility and glorify the destruction of economically important pipelines?
“Since the German arrest warrant for a participant in the Nord Stream terrorist attack, efforts have also increased in Germany to portray the terrorist attack as a “legitimate” or even “admirable” war effort. However, the greatest effort is to relieve the burden on state actors. And so, since recently, the alleged perpetrators seem to be chatting without reservation, spreading out every little detail in front of journalists, and putting every (already revealed) fact in the “right” non-governmental light.” ~Michael Kobs
Meanwhile, independent journalist Jeffrey Brodsky continues to delve deeply into Nord Stream issues. A recent interesting and detailed piece refutes assertions that Gazprom and Russia somehow benefited from the Nord Stream attack. Mr. Brodsky provides evidence to the contrary concluding that the destruction of the pipelines has contributed significantly to Gazprom’s financial problems. He noted that:
Gazprom announced a loss of $6.9 billion for 2023, marking its first annual loss in more than two decades.
Nord Stream 1 supplied EU nations with a whopping 35% of all Russian gas imports.
Gazprom contributed $80 million of Russia’s $407 million in Federal govt revenues in 2022, and was a source of revenue that Russia would not want to jeopardize.
Unsurprisingly, the “experts” and politicians who argued that the Nord Stream sabotage would benefit Gazprom and Russia have failed to modify or correct their assertions. Mr. Brodsky concludes his detailed analysis as follows:
“However, despite the numerous facts that have emerged since the attack, the damage caused to Russia and Gazprom by the sabotage remains willfully ignored. Politicians and experts who claimed that the sabotage would be beneficial to Russia or Gazprom financially, legally or geopolitically seem to have merely skimmed the first chapters of the Nord Stream story. So far, almost none of them have publicly corrected themselves after hastily familiarizing themselves with its complex plot. But since the perpetrator of the sabotage has not yet been unmasked, they still have the opportunity to pre-order the unfinished sequel to the book. Perhaps it will end up being an international bestseller. ~ Jeffrey Brodsky
American businessman Stephen Lynch wants to acquire the Swiss company that controls the Nord Stream 2 pipeline.
From his investment firm’s website: Over the last twenty years, Mr. Lynch has acquired and managed distressed assets in Eastern Europe, Central Asia, Russia, and Ukraine. He specializes in securing cross-border collaboration on transactions and settlements around special situations and corporate conflicts. Lynch is a life member of the Council on Foreign Relations.
Lynch has worked closely with the US Department of The Treasury’s Office of Foreign Assets Control (OFAC) to acquire and de-Russify important industrial assets in U.S. partner nations.
With regard to Nord Stream: “The bottom line is this: This is a once-in-a-generation opportunity for American and European control over European energy supply for the rest of the fossil-fuel era,” Lynch told the Wall Street Journal.
Nord Stream 2 bankruptcy proceedings are scheduled to begin in January.
A “US official” told the Washington Post that a Nord Stream revival is not in the US interest right now. However, a resumption of the flow of Nord Stream gas could be a significant consideration in talks to end the Ukraine – Russian war. Also, in light of economic and energy supply challenges, there is growing German interest in restoring ties with Russia.
This appears to be a serious initiative on the part of Mr. Lynch that should not be discounted.
Bud's Offshore Energy (BOE) 