“Exxon spinoff Sable Offshore faces seven barriers to restart its pipeline, idled since a major oil spill in 2015. One of those approvals needs to come from the California Coastal Commission, which Sable CEO Jim Flores criticized for its “Teflon” “eco-Nazi attitude” in a leaked call recording newly obtained by Hunterbrook. Because of these barriers — and despite Trump Administration intervention — Sable’s project, originally scheduled to go online in Jan 2024, may never sell oil. At least not under the ownership of Sable ($SOC), which is quickly running out of cash.“
Exxon’s options per Hunterbrook:
The Exxon purchase agreement gives Exxon a free reassignment option: If Sable fails to “restart production” by Mar. 31, Exxon can demand reassignment of the assets within 180 days, “without reimbursement of any Purchaser costs or expenditures.”
In other words: Exxon can just take back the asset. For free.
And if Sable’s regulatory pathway is really just delayed, not denied — as Sable claims — that may be a more appealing proposition for Exxon than it once was.
Or, perhaps, Exxon will decide to retire the project, recognizing the Sisyphean path to production. (Exxon already took a $2.5 billion write-down as part of exiting offshore operations in California.)
“The Santa Barbara Channel has been dubbed the Galápagos of North America” ~ Maggie Hall, Environmental Defense Center attorney. (comments: 1. clever branding ala calling ANWR “America’s Serengeti!;” 2. no natural oil seeps in the Galapagos Islands; 3. 130 years of oil production history in the Channel)
Sable opponents organize entertaining rallies featuring famous celebrities:
Ted Danson Jane FondaJulia-Louis Dreyfus
Meanwhile, Sable has some starpower of its own with strong public support from golfer Phil Mickelson.
Senior Federal officials and key agencies are outspoken Sable supporters:
“Only in California! Newsom is blocking oil production off California’s coast from reaching their own refineries, driving gasoline prices even higher for Californians! Now, this oil production will have to be shipped elsewhere, lowering gas prices for other areas— just not for California! This is the opposite of common sense!” ~ Energy Secretary Chris Wright
BSEE declared victory 6 months ago: “This is a significant achievement for the Interior Department and aligns with the Administration’s Energy Dominance initiative, as it successfully resumed production in just five months.”
Perhaps most entertaining are the exchanges on X between Sable bulls and short-sellers. A few examples are embedded below:
Listen Lassy, you could take your signing bonus and have $10 million in cash right now. But that’s short term thinking. Once Big Daddy Trump gets the regulations fixed Sable stock will be worth 50, 60, maybe even 100x that. We’ll be sipping Coffee for Wellness on our yachts in… pic.twitter.com/H2le8c0otE
Good luck but this stock & company are train wrecks. I live close to pipeline so state, local opposition to a restart remains steadfast. Here’s latest news, do your homework.https://t.co/ZfKSKwwrcW
Unsurprisingly, President Trump was not particularly pleased with Darren Woods’ “uninvestable” quote, the main media takeaway from Friday’s meeting on redevelopment of Venezuela’s oil and gas resources.
Exxon CEO Darren Woods: “If we look at the legal and commercial constructs and frameworks in place today in Venezuela — today, it’s uninvestable.”
The response from President Trump: “I didn’t like Exxon’s response,” Trump said to reporters on Air Force One as he departed West Palm Beach, Florida. “They’re playing too cute.” He told reporters he was inclined to deny Exxon any role in rebuilding Venezuela’s oil industry.
If Exxon is now in the President’s doghouse, what does this mean for the Santa Ynez Unit, an Exxon orphan that was adopted by Sable Offshore? Given Sable’s financial challenges, the SYU may soon be returning to Exxon.
Regardless of ownership, an SYU production restart faces strong opposition in California and is fully dependent on an assertive and supportive Federal government. Meanwhile, an injunction on SYU production remains in place, and despite rumors to the contrary, Sable confirms they are complying with that order.
The Commission’s letter to PHMSA is attached (click on pages to enlarge). The CCC asserts the right, pursuant to the Coastal Zone Management Act, to review Sable’s restart/special permit application and further asserts that PHMSA’s special permit should be stayed pending their review.
The Commission also raises NEPA and Consent Decree compliance issues, and implies that PHMSA’s designation of the pipeline as “interstate” is subject to consistency review.
$SOC Field Update: Hydro-testing finalized this morning. System has officially transitioned to Line Fill. Nitrogen displacement by crude is underway. Expecting first oil at Pentland early-mid Jan. The operational window is now locked.
$SOC: Ninth Circuit order grants leave to intervene, but denies the request to stay PHMSA’s Dec. 22 Restart Plan approval and Dec. 23 Emergency Special Permit. Case is expedited and goes on the next available calendar. Briefing: opening Jan. 26, 2026; answering Feb. 17;… pic.twitter.com/YdGeVMu6cI
All eyes are on the 9th Circuit. No injunction yet. Will the Court intervene to block Sable?
No evidence of intervention by the State.
Does Sable restart production tomorrow?
Traders on edge. Bulls are feeling optimistic. See X post below. 😉
Spend my barrel, parked in a harbor ‘Neath the platform spotlight Pump it up tight, let the oil start flowin’ A little crude movin’ on a federal green light Fits my life, oh so right My Sable Offshore Delight— Victory II (@VictoryII1) December 30, 2025
Attached are PHMSA’s Christmas week Emergency Special Permit and Permit Analysis document. Is the path clear to restart SYU production before New Year’s day?
Three excerpts from the first attachment are pasted below. The last paragraph on p. 2 succinctly explains PHMSA’a emergency permit:
PHMSA was able to assume jurisdiction from the State because the pipeline transports Federal OCS oil and is thus inherently interstate. The perceived problem with a PHMSA takeover had been the court approved Consent Decree that was executed following the 2015 Refugio pipeline spill. That Decree specifies that the State Fire Marshal must approve a restart of the pipeline. The first paragraph on p. 2 of the permit explains PHMSA’s position that the Consent Decree has been superseded.
The provision pasted below (p. 4 of the permit) seems contradictory in that it stipulates compliance with the Consent Decree. However, PHMSA apparently sees no contradiction in that references to the Fire Marshal (OSFM) should now be read as references to PHMSA. PHMSA presumably included this provision to reaffirm the need to comply with the technical requirements in the Decree.
The second attachment is PHMSA’s analysis of the special permit. Note that the permit expires in 60 days. Public notice and opportunity for comment would be required for a renewal.
Environmental organizations reacted quickly to the PHMSA permit, filing an emergency motion in the 9th circuit (third attachment). Observations:
Impressive effort given the time crunch. The PHMSA permit was issued on 12/23, just 3 days prior to the court filing. No Christmas break for those folks!
If you wonder why the petition was filed with the 9th Circuit (seemed convenient given the 9th Circuit’s reputation), a filing at the Circuit level is required for appeals of PHMSA orders.
Petitioners strongest argument: Sable is not entitled to emergency relief, as there is no real emergency. PHMSA asserts that EO 14156, which declared a National Energy Emergency, supports the emergency permit.
The petitioners environmental doom prediction is not compelling. PHMSA’s position is that the mitigations they are imposing (reduced operating pressure, inline inspections, testing and sampling, etc) provide protection equal to or greater than than the corrosion remediation requirement that is being waived.
The petitioners asked the Court for relief no later than 12/26. That date has passed. Will there be a ruling today?
Barring an injunction, odds are that Sable restarts production prior to New Year’s Day, when a requirement (SB 237) for a new Coastal Development Plan, takes effect.
The anticipated State-Federal jurisdictional battle over Sable’s Las Flores Canyon Pipeline is on! See the attached letter from the Pipeline and Hazardous Materials Safety Administration (PHMSA) declaring that the pipeline is under Federal jurisdiction.
The major hurdle for PHMSA/Sable is thecourt approved Consent Decree that was executed following the 2015 Refugio pipeline spill. The Decree, which designates the California Fire Marshal as the sole regulator for the pipeline, is not mentioned in the PHMSA letter. Needless to say, another major legal battle looms.
Excerpt from the PHMSA letter:
PHMSA’s evaluation of the Las Flores Pipeline confirms that it transports crude oil from the OCS to an onshore processing facility at Las Flores Canyon and continues the transportation of crude oil from Las Flores Canyon to Pentland, California. Consistent with Appendix A, the Las Flores Pipeline is an interstate pipeline. As portions of the Las Flores Pipeline were previously considered to be intrastate and regulated by OSFM, PHMSA is notifying OSFM that the Las Flores Pipeline is subject to the regulatory oversight of PHMSA.
The pipeline spill just north of Refugio State Beach on May 19, 2015, coated miles of shoreline and marine habitat, and dolphins, elephant seals, sea lions, pelicans and other birds. | Santa Barbara Independent
We can scream all we want (with some justification) about the California Coastal Commission, Santa Barbara County, and intractable environmental organizations, but the Santa Ynez Unit would still be producing today were it not for an ugly, preventable pipeline spill.
At approximately 10:55 a.m. Pacific Daylight Time (PDT) on May 19, 2015, the Plains Pipeline, LP (Plains), Line 901 pipeline in Santa Barbara County, CA, ruptured, resulting in the release of approximately 2,934 barrels (bbl) of heavy crude oil. An estimated 500 bbl of crude oil entered the Pacific Ocean.
1) Ineffective protection against external corrosion of the pipeline The condition of the pipeline’s coating and insulation system fostered an environment that led to the external corrosion. The pipeline’s cathodic protection (CP) system was not effective in preventing corrosion from occurring beneath the pipeline’s coating/insulation system. 2) Failure by Plains to detect and mitigate the corrosion The in-line inspection (ILI) tool and subsequent analysis of ILI data did not characterize the extent and depth of the external corrosion accurately. 3) Lack of timely detection of and response to the rupture The pipeline supervisory control and data acquisition (SCADA) system did not have safety-related alarms established at values sufficient to alert the control room staff to the release at this location. Control room staff did not detect the abnormal conditions in regards to the release as they occurred. This resulted in a delayed shutdown of the pipeline. The pipeline controller restarted the Line 901 pipeline after the release occurred. The pipeline’s leak detection system lacked instrumentation and associated calculations to monitor line pack (the total volume of liquid present in a pipeline section) along all portions of the pipeline when it was operating or shut down. Control room staff training lacked formalized and succinct requirements, including emergency shutdown and leak detection system functions such as alarms.
Plains Pipeline was the responsible party, but that doesn’t absolve the companies that were dependent on Plains to transport their production. Given the organized opposition that emerged following the Santa Barbara blowout in 1969 (the result of a reckless well plan), the integrity of that pipeline was critical to their business strategy and they should have exercised some oversight.
Offshore disasters have had enormous consequences for the oil and gas industry in terms of lost opportunities. Think about this: prior to the Macondo blowout, the Obama administration had proposed an oil and gas lease sale in the Atlantic and the Florida Senate was holding hearings about leasing in Florida State waters. Such lease sales are now completely out of the question.
Regulations and standards are not enough. We need open discussion about incidents, large and small, and a willingness to be critical of the responsible parties.
Bud's Offshore Energy (BOE) 