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Archive for the ‘Regulation’ Category

More suspense for Sable watchers – 9th Circuit decision on Sable pipeline restart will be delayed by months.

Posted in California, energy policy, Offshore Energy - General, pipelines, Regulation, tagged , , , , , on October 6, 2026| Leave a Comment »

The U.S. Court of Appeals for the Ninth Circuit has not yet ruled on the merits of the challenge to PHMSA’s assertion of exclusive Federal jurisdiction over Sable Offshore Corp.’s Las Flores (Santa Ynez) pipeline segments (CA-324 and CA-325) or related restart approvals. A three-judge panel ordered additional briefing after a status conference, and a decision is expected to take months.

The 9th Circuit panel held a video status conference on 10/5/2026, and consolidated petitions from the Environmental Defense Center (and other groups) and the State of California. The panel ordered further briefing rather than issuing an immediate decision on the core jurisdictional question—whether the onshore pipeline segments engage in “interstate commerce” under the Pipeline Safety Act (making them subject to exclusive PHMSA authority rather than California’s Office of the State Fire Marshal).

Concise background summary from Grok: PHMSA reclassified the pipelines as interstate in late 2025 (asserting jurisdiction because they transport crude from Outer Continental Shelf platforms through California to a Kern County terminal, with arguments that onshore processing does not break the flow of interstate commerce). This enabled restart approvals and special permits (initially emergency, later a longer-term one) that environmental groups and California challenge as unlawful, preemptive of state authority, and deficient under the Pipeline Safety Act, NEPA, and ESA. Sable restarted operations earlier in 2026 amid related litigation (including Defense Production Act issues and consent-decree matters in district court). The Ninth Circuit cases are Environmental Defense Center et al. v. PHMSA (No. 25-8059) and the consolidated California petition (originally No. 26-508 / related Nos.).

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Comments on the proposed revisions to the Arctic drilling regulations

Posted in Alaska, drilling, energy policy, Offshore Energy - General, Regulation, well control incidents, tagged , , , , , , on October 5, 2026| Leave a Comment »

Comments on the proposed “Revisions to the Requirements for Exploratory Drilling on the Arctic Outer Continental Shelf” are due today.

My submission (one page) is attached. Main points:

  • Removing the same-season-relief-well (SSRW) requirements is an essential precursor to the renewal of arctic drilling activity. The SSRW provisions make Arctic operations cost prohibitive while at the same time increasing safety and environmental risks.
  • The potential risks and benefits of a subsea isolation device (SSID) should be assessed on a case-by-case basis considering water depth, temperature related BOP failure risks, wellhead integration, ice and vessel traffic exposure, and other factors.
  • As is the case for floating drilling operations anywhere, the focus in the Arctic should be on well design, integrity, and control, including carefully verifying casing and cement integrity, ensuring complete barrier redundancy, and having standby capping and containment capability.
Arctic drilling (1)Download

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Sable production update and related news

Posted in California, energy policy, Offshore Energy - General, Regulation, tagged , , , , , on October 2, 2026| Leave a Comment »

Sable’s update includes production and sales information, but nothing about the pipeline anomalies. Summary:

  • Platform Hondo modernization and operational commissioning are complete. (Hondo is the last of the 3 platforms to come online.)
  • Sable anticipates Federal (MMA) approval of the Platform Hondo instrumentation, control, and safety commissioning this month.
  • Each of Hondo’s 9 perforation additions (Perf Adds) are expected to add ~600 barrels of oil per day to the base well production at a cost of approximately $800,000 per operation.
  • Completing the Los Flores Canyon (LFC) operational and facility upgrades ahead of the restart of Platform Hondo is expected to allow the flow of all SYU wells, maintain continuous operations and reduce downtime in Q4 2026.
  • Sable’s preliminary estimate of oil sales during the months of July and August is approximately 32 thousand gross barrels of oil per day averaged over the two months, with September oil sales volumes expected to be approximately 34 thousand gross barrels of oil per day.
  • Sable is working with midstream and downstream partners to alleviate third party sales constraints experienced in the second half of August and September 2026. (This is presumably why July/Aug sales were lower than previously forecast.)
  • Nominations to Sable’s crude purchaser are expected to increase to an average of 38 thousand gross barrels of oil per day in October 2026. An October 2026 estimated exit rate of approximately 45 thousand bopd prior to the expected addition of Hondo volumes.
  • Sable expects increasing oil sales rates after this month.

Also Sable related:

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Santa Ynez Unit litigation too complex for AI 😉

Posted in California, Offshore Energy - General, Regulation, tagged , , , , , on September 30, 2026| Leave a Comment »

I asked two AI wizards if they could tell me the total number of lawsuits filed against Sable Offshore or the Federal govt regarding the restart and transport of production from the Santa Ynez Unit. One said the total fluctuates as new petitions are filed and consolidated. (Duh! 😉)

Grok gave it a good shot, qualifying the answer as appropriate:

“There is no single official or comprehensive public tally of every lawsuit ever filed on this topic. As of late September 2026, reporting describes roughly a dozen active/related lawsuits tied to the Santa Ynez Unit (SYU) pipelines and restart; many more have been filed overall (some resolved, consolidated, or mooted).” (Reasonable answer.)

The most recent Court filing is by a group of NGOs challenging PHMSA’s June 25, 2026, order granting a “Special Permit” to Sable Offshore. The Special Permit, which is the subject of a number of lawsuits pertinent to the restart of Santa Ynez Unit production, applies to onshore pipeline segments CA-324 and CA-325. The pipeline originates at Las Flores Canyon in Santa Barbara County and terminates at Pentland Station in Kern County (map above).

In brief, the petitioners claim that the Special Permit and related documents were issued in excess of PHMSA’s statutory jurisdiction and authority and were issued unlawfully, and that PHMSA’s conclusions are arbitrary, capricious, and an abuse of discretion. Petitioners also challenge FWS’s concurrence with PHMSA’s determination that its order(s) will not likely adversely affect endangered species.

Here is a link to the complete Court filing, courtesy of Politico. For those who are following these matters, the PHMSA permit and related documents are included as exhibits. This compilation is helpful.

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Setback for carbon disposal industry, victory for taxpayers

Posted in CCS, energy policy, Regulation, tagged , , , , , , , , , on September 29, 2026| Leave a Comment »

Kudos to EPA for their Notice (attached) informing that carbon capture and sequestration (CCS) doesn’t meet the Clean Air Act’s definition of “best system of emissions reduction” (BSER). This common sense determination is a setback for companies chasing the generous 45Q tax credits that their lobbyists succeeded in retaining and enhancing in the One Big Beautiful Bill (table below).

Per the Notice: “EPA is finalizing the determination that 90 percent CCS is not the BSER for existing long-term coal-fired steam generating units because 90 percent CCS has not been adequately demonstrated, the costs of 90 percent CCS are not reasonable, and the associated degree of emission limitation is not achievable.”

EPA further determined “that previous projects that failed to achieve 90 percent CCS were not a sufficient basis to conclude the technology has been adequately demonstrated. Additionally, the carbon dioxide (CO2) capture, pipeline, and sequestration infrastructure necessary to implement 90 percent CCS for the fleet of existing coal-fired steam generating units does not currently exist and would need to be broadly deployed.“

EPA sensibly concludes (p. 58969) that the 45Q tax credit should NOT be accounted for when evaluating the reasonableness of the costs of the BSER. The carbon disposal industry has discounted the risks and overstated the benefits of CCS in their pursuit of those tax benefits, on which that industry is dependent.

Meanwhile. the Texas Railroad Commission by a 2-1 vote just approved a major carbon disposal project despite strong local opposition. The Rose Project will dispose of 53 million metric tons of carbon dioxide ($4.5 billion in tax credits).

Extension of the carbon disposal industry to Federal offshore waters appears to have failed. Only 7 of the 163 OCS oil and gas leases wrongfully acquired by Exxon and Repsol for carbon disposal purposes remain in effect. Those 7 leases will probably be relinquished before they expire in 2027.

199 oil and gas leases were wrongfully acquired for carbon disposal purposes. at Sales, 257, 259, and 261. Those blocks (red and blue) are adjacent to Texas waters. Only 7 of those leases remain in effect.
2026-19071Download

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Santa Ynez Unit pipeline anomalies

Posted in California, pipelines, Regulation, tagged , , , , , , , , , on September 23, 2026| 2 Comments »

Inline inspections identified anomalies at multiple points in Segment 324 of Sable’s onshore pipeline. Sable is conducting validation digs.(Noozhawk image).

Sable Offshore has asked Santa Barbara County for approval to conduct exploratory digs to check anomalies at seven points along onshore Segment 324 of the Santa Ynez Unit pipeline system. This 10.86 mile segment runs from the Los Flores Canyon Processing Facility to the Gaviota Pump Station (map below).

According to the Emergency Special Permit issued by PHMSA, Sable is required to conduct in-line inspections (ILIs) with metal loss tools every 6 months for the first 2 years of operation.

Where metal loss is identified, immediate repair is required if the remaining strength of pipe shows a predicted failure pressure <1.39 times the maximum operating pressure (MOP).

Where direct field examinations indicate pipe wall loss of 40% or more, permanent repairs are required.

Comments:

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Santa Barbara: South County Supervisors deny North County property rights

Posted in California, drilling, energy policy, Regulation, tagged , , , , , , , on September 18, 2026| Leave a Comment »

District Boundaries
Oil Wells

As expected, the Santa Barbara County Board of Supervisors voted 3-2 to ban new onshore oil and gas drilling. This is another example of the South County (Districts 1-3) majority voting to deny the rights of North County (Districts 4 and 5) property owners and workers. Keep in mind that oil has been produced in the County for more than 130 years.

Attached is a concise, powerful comment letter submitted to the Board by Californians for Property Rights. Excerpt (emphasis added):

“Property rights are key to our nation’s prosperity, and these rights have been shown to be foundational to building prosperity around the world. However, for Americans, these rights are not only integral to our economy but also, and even more importantly, to our Constitution.
Oil and gas mineral and royalty interests are private property. Minerals cannot be moved when government changes the rules. Their value depends upon the ability to access and responsibly produce them, and a government prohibition can effectively eliminate that value.
These impacts reach real families. Mineral and royalty income supports farmers, ranchers, retirees, small businesses, and other property owners. For some agricultural families, it helps keep working farms and ranches economically viable and in family ownership.”

Related constitutionality issues:

  • In July, the National Assoc. of Royalty Owners sent the Board a legal opinion challenging the constitutionality of such ordinances. NARO also sent a comment letter to the Board prior to their vote.
  • A suit filed by John and Melinda Morgan, who inherited the mineral rights to two parcels in the Cat Canyon Field (District 4). argues that a similar provision in CA Senate Bill 1137 amounts to an unconstitutional taking of their property.
  • California AB 1448 would limit the property rights of Federal lessees and deprive royalty owners – most notably the citizens of the United States – of revenue.
Public Comment – Californians for Property RightsDownload

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Following up on the Keathley Canyon Block 828 bid rejection

Posted in Offshore Energy - General, Regulation, Gulf of Mexico, energy policy, tagged , , , , , , on September 16, 2026| Leave a Comment »

The Buckskin field (LLOG) is located in Keathley Canyon blocks 785, 828, 829, 830, 871, and 872 in 6,800 ft (2,073 m) of water. The KC 828 lease expired last year and LLOG’s bid for that block at the BBG2 sale was rejected. That bid rejection has been appealed.

As suspected, the rejection of LLOG’s Sale BBG2 bid for Keathley Canyon Block 828 has been appealed. This is an interesting case because KC 828 is part of LLOG’s Buckskin field. The block had been previously leased, but that lease expired on 9/3/2025.

We assume the lease expired due to inactivity given that the last well reached total depth more than a year prior to the expiration date. LLOG wanted to reacquire the lease back, but BOEM’s valuation was 20 times higher than LLOG’s bid. It’s also interesting that no other company submitted a bid. Did no one want a lease in an established field? BOEM valued this block far higher than any other block in the sale.

LLOG’s letter of appeal is not publicly available. Below is the summary blurb from the Serial Register Page:

By letter dated May 27, 2026, LLOG Exploration Offshore, L.L.C. appealed the  Bureau of Ocean Energy Management’s (BOEM) decision for OCS-G 38173, covering all of Block 828, Keathley Canyon. LLOG Exploration Offshore, L.L.C.  is requesting reconsideration of the rejection decision. The Adjudication Section received the written request and statement of reasons within the 15 days of the rejection decision, on May 28, 2026.

According to the applicable regulation, the BOEM/MMA Director is the deciding officer and the decision is not subject to appeal to the Interior Board of Land Appeals. The rejection seems rather straightforward under BOEM’s bid evaluation policies, but perhaps there is much more to the story.

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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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On 9/11, recalling recent judicial and programmatic decisions that favored higher oil prices and threatened national security

Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged , , , , , on September 11, 2026| Leave a Comment »

Two particularly troubling examples of decisions that threatened long-term US offshore production and national security, and endorsed higher oil prices:

Sale 257 court ruling: In 2022, a Federal judge ruled in favor of higher oil prices. In response to an OCS Sale 257 lawsuit, the judge agreed with the NGO plaintiffs that BOEM failed to consider the “positive” effect that higher prices (the logical result of lower production) would have on reducing demand. In particular, the plaintiffs asserted that BOEM failed to consider the effect that reduced production (and higher prices) would have on foreign consumption and the associated GHG emissions.

The judge not only decided in favor of the plaintiffs, but ruled that BOEM’s omission was so serious that the lease sale had to be vacated. The judge’s decision was subsequently overturned by legislative action.

OCS Leasing Policy: The official leasing policy, as articulated in the 2024-2029 OCS Leasing Program (published 9/2023), was to phase out oil and gas production:

The long-term nature of OCS oil and gas development, such that production on a lease may not begin for a decade or more after lease issuance and can continue for decades, makes consideration of net-zero pathways relevant to the Secretary’s determinations on how the National OCS Program best meets the Nation’s energy needs. (p. 6, 2024-2029 Leasing Program)

The Leasing Program prioritized “net-zero pathways” over cost and national security considerations. The clear objective was to prevent new production. Absent legislative action, we would have had a 5 year leasing plan with no lease sales!

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