Sable Offshore is attempting to restart the same pipeline that caused the Refugio Oil Spill in 2015. | Credit: Paul Wellman File Photo
Sable Offshore oil believes the federal Pipeline and Hazardous Materials Safety Administration (PHMSA) , not the California Fire Marshal, should have jurisdiction over the company’s onshore pipeline.
I once had the same opinion as Sable. Their pipeline is, by definition, an interstate line because it carries OCS production. Then I read Appendix D of the court approved Consent Decree that was executed following the 2015 Refugio pipeline spill. That Decree is quite clear regarding regulatory jurisdiction, and would have to be overturned to transfer authority to PHMSA.
The full Consent Decree is attached. Pasted below is an excerpt from Appendix D:
The press release and full program are linked. It looks like the most recent leaks were accurate. See the maps below with the locations and dates. This will stir the pot!
Attached is John Smith’s comprehensive summary of lawsuits related to Sable Offshore’s attempts to restart Santa Ynez Unit production.
If you are keeping score, there are 10 separate cases including a class action lawsuit filed by investors. New legal battles are sure to follow given Sable’s OS&T strategy. Per John:
“The combined legal challenges, injunctions, and restraining orders have significantly delayed Sable’s restart plans and prompted the company to pursue an Offshore Storage and Treatment Vessel (OS&T) strategy, which was utilized to process SYU production in federal waters from 1981 – 1994, and transport oil to markets using tankers.“
A leaked Dept. of the Interior (DOI) document will likely have little in common with the Draft Proposed Program (DPP, step 2 above). The DPP decisions will be made by the President, not by DOI staffers or managers.
According to media reports, the leaked document includes lease sales offshore New England, the Carolina’s and California. Unless the President revokes his own 2020 withdrawals, the Carolina’s are off-limits until 2032. Ditto for the Eastern Gulf within 125 miles from Florida. (See the map below.)
Including North Atlantic and offshore California in the DPP would unleash a firestorm of opposition. In the case of the North Atlantic, the acreage may not be sufficiently prospective to justify the fight.
To the extent that marine sanctuary determinations do not preclude California offshore leasing, the litigation and legislative battles probably would. In the unlikely event that a sale could be held, who would bid? Who wants to be the next Sable?
The Beaufort Sea is the most likely frontier area to be included in the DPP given plans to open ANWR, operational history, resource potential, and State support.
Assuming the South Atlantic withdrawal could be partially lifted, a small, targeted lease sale would be of great interest to petroleum geologists and could have significant economic and national security implications. The late Paul Post, the foremost expert on the petroleum geology of the US Atlantic, saw great potential in the paleo deep- and ultra-deepwater areas. He advocated exploration concepts proven successful in analogous West African and South American settings where massive discoveries have been made. Samuel Epstein, another prominent petroleum geologist, also believes the deepwater Atlantic has great resource potential.
Finally, the extent of the Florida buffer needs to be considered given the high resource potential of the Eastern Gulf. Be it 75, 100, or 125 miles, leasing beyond that buffer should be a priority.
John notes that Exxon’s March 26 contractual deadline for Sable to have the SYU up and running is fast approaching. What will Exxon do in the likely event that Sable fails to meet that deadline? Does Exxon want to re-enter the SYU legal and regulatory quagmire?
The SYU’s 500+ million barrels of oil, 3 deepwater platforms, and onshore processing facilities are an enormous prize, but is that prize attainable?
Meanwhile, the latest skirmish between Sable and the Office of the State Fire Marshal (OFSM) pertains to metal loss anomalies and inspection tool tolerances. The dispute is summarized in the linked filing.
Sable contends that the Fire Marshal’s letter contradicts guidance from OSFM staff and provides examples. Sable goes a step further at the end of their response by calling for the FIre Marshal to coordinate better with the experts on his staff:
“We respectfully request that, given this background, you coordinate further with the expert team at OSFM and revisit the statements in your October 22nd letter.”
It’s not looking good for a quick resolution of these issues.
Phil also believes SYU production would reduce natural seepage: “UCSB and State Lands Commission studies (Quigley, Luyendyk, Hornafius, Peltonen, and others) have shown that when oil production is active, reservoir pressure is reduced and natural seepage declines by up to 50%. That means: •Cleaner beaches (less tar and oil) •Cleaner ocean surface (fewer sheens) •Healthier marine life with reduced chronic stress“
Note that those studies are specific to Platform Holly and the Coal Oil Point area. To the best of my knowledge, no studies have associated SYU production with a reduction in natural seepage.
While Platform Holly may be a negative spillage facility (i.e. Holly’s seep reduction may significantly exceed the platform’s production spillage), this type of seepage reduction has not been demonstrated at other platforms. Decisions on offshore exploration and development should be driven by the economic, energy security, and environmental benefits. To the extent that production reduces natural seepage, all the better. However, seepage reduction is not a primary reason for producing offshore oil and gas.
Option 1 (use of existing onshore infrastructure) is preferable from cost, air emissions, spill risk, State and local revenue, and regional energy supply standpoints. This is the only option that makes sense despite the enormous permitting challenges.
Option 2 (floating processing facility and tankers) would literally be an “in your face” act of defiance given the coastal visibility of the offshore facilities. Supporters of this option should be aware that there was no Coastal Zone Management Act when Exxon produced from Platform Hondo (the only SYU platform at the time) to the Offshore Storage and Treatment (OS&T) vessel in the 1980s. An EIS would not favor this option, and the California Coastal Commission would surely rule that this option was inconsistent with their CZM plan. The Secretary of Commerce could overrule the Commission’s decision, but legal objections to the override would seem to have a good chance of success.
The only reasonable path forward is to do the right thing and continue to pursue the State pipeline/onshore approvals. Although these approvals are substantively warranted, more litigation is probably inevitable. It will be far better to defend a good project (option 1) than a contrived workaround (option 2).
Those of us who were involved with OCS oil and gas operations in the 1970s remember the heated battles between Exxon and Santa Barbara County that led to the installation of the infamous Offshore Storage & Treatment (OS&T) facility in Federal waters. This was the first floating production, storage, and offloading facility (FPSO) in US waters by 3 decades!
In light of Sable’s difficult (bordering on impossible) onshore permitting challenges, the company resurrected the OS&T option in a recent presentation to investors (pertinent slide pasted above). The extent to which this is purely a tactical maneuver remains to be seen, but this option would be very difficult to execute, even with a supportive Federal regulatory environment.
Gov. Newsom and Danish Foreign Minister Lars Løkke Rasmussen
As is the case for most MOUs, the attached 8/22/2025 agreement between California and Denmark is long on promotion and short on substance. No funds are obligated and there are no work commitments.
The MOU made sense for Gov. Newsom in that he strengthened his green credentials by aligning with the country that is the spiritual leader for climate activists.
The benefits for Denmark were unclear, but the risks should have been apparent. The White House is fundamentally opposed to the climate and energy objectives identified in the MOU. Ørsted (50.1% govt owned) and other Danish business interests are very much dependent on decisions made by the US Federal govt.
Work on Ørsted’s Revolution Wind project has been halted by Interior Secretary Burgum. His decision is being challenged in court, but no matter what the outcome, offshore wind development will be difficult for Ørsted and other foreign companies going forward. The Secretary has broad regulatory authority under the OCS Lands Act, under which there is no such thing as “a fully permitted project.”
Meanwhile, California’s green status has taken a hit with the passage of S 237, which pragmatically authorizes new onshore drilling.
Lastly, as the chart below illustrates, Orsted’s problems didn’t begin in 2025.
Bud's Offshore Energy (BOE) 