California Senate Bill 237, the compromise oil legislation supported by Gov. Newsom, Assembly Speaker Rivas, and Senate President McGuire, opens up Kern Co. drilling in exchange for pipeline safety measures that will doom the Santa Ynez Unit (SYU) if Sable fails to restart production by Jan. 1.
Particularly intriguing is the the list (below) of SB 237 supporters and opponents. The Western States Petroleum Assoc. (WSPA), is aligned with the unions for onshore drilling and against the SYU. Note that Exxon is a prominent WSPA members! Exxon assigned the SYU to Sable and is on the hook for massive decommissioning costs if production is not resumed. Perhaps Exxon has a backup plan for the SYU?
Also note that all of the environmental groups are aligned against SB 237. Compromise is not in their playbook.
John Smith’s highlighted summary of SB 237 is attached. Here is the provision that would seem to doom Sable:
Clarifies in the Coastal Act that development associated with the repair, reactivation, or maintenance of an oil pipeline that has been idled, inactive, or out of service for five years or more requires a new CDP, as provided.
REGISTERED SUPPORT / OPPOSITION: Support Associated Builders and Contractors of California Berry Petroleum Company, LLC California Conference of Carpenters California Independent Petroleum Association California Resources Corporation and Subsidiaries California state Pipe Trades Council California State Association of Electrical Workers City of Bakersfield Consumer Watchdog County of Kern State Building & Construction Trades Council of California Western States Petroleum Association
Opposition Asian Pacific Environmental Network Action California Environmental Justice Alliance Action California Environmental Voters Campaign for a Safe and Healthy California
Center for Biological Diversity Center on Race, Poverty & the Environment Central California Environmental Justice Network Clean Water Action Climate First: Replacing Oil & Gas Communities for a Better Environment Earthjustice Leadership Council for Justice and Accountability Physicians for Social Responsibility Los Angeles
Sables’ share price sank on Tuesday following reports from Bloomberg and others that Governor Newsom is proposing new restrictions on California’s offshore oil industry. With Sable Offshore as a primary target, stricter requirements for restarting inactive intrastate oil pipelines would be imposed. β’
This could trigger yet another legal battle or increase the complexity of those that are ongoing. The onshore pipeline, now owned by Sable Offshore, was originally classified as an interstate pipeline under Federal jurisdiction. However, following the 2015 Refugio oil spill, it was reclassified as an intrastate pipeline via a 2016 letter of understanding signed by representatives of the Federal Office of Pipeline Safety (DOT-PHMSA) and the Office of the State Fire Marshal (pertinent text pasted below).
Given that the Sable pipeline will carry OCS production, it would seem to fundamentally be an interstate line (Federal jurisdiction), as it was when owned by Plains. Could DOT reverse the 2016 letter agreement? That is conjecture for the attorneys and courts to consider.
Meanwhile, below is an upbeat Sable video on the pipeline!