Feds Approve Sable Offshore Pipeline Restart

The Pipeline and Hazardous Materials Safety Administration (PHMSA) has authorized Sable Offshore to restart its two onshore pipelines. This decision follows a long-standing regulatory conflict regarding safety and repair standards. The pipelines, located along the Gaviota Coast, were shut down after a significant leak in May 2015 caused environmental havoc.

Pipelines and Regulatory Battles

Sable Offshore, based in Houston, faced considerable scrutiny from state agencies concerning its repair activities on the corroded pipelines. In particular, the Office of the State Fire Marshal had been responsible for overseeing safety regulations. This agency expressed concerns that Sable’s repairs did not meet required safety margins.

• 2015: Major leak occurred, leading to the shutdown of production.
• 2016: State Fire Marshal assigned oversight responsibilities.
• December 22, 2022: PHMSA issued the restart authorization.

Federal vs. State Oversight

The recent decision by PHMSA comes just after a shift in regulatory authority, stripping the State Fire Marshal of its oversight role. This change appeared to favor Sable Offshore, as the federal agency responded positively to the company’s request for regulatory clarity and support.

Sable Offshore executive Steve Rusch commented on the situation but did not confirm whether production had resumed. Meanwhile, officials from the County of Santa Barbara and the State of California remained unaware of any production activities resuming.

Political and Environmental Concerns

State Senator Monique Limón has voiced her opposition to the pipeline’s restart without thorough safety evaluations. She stressed the environmental risks this decision poses, highlighting previous oil spills that harmed wildlife and local economies.

Additionally, sources indicate that the California Attorney General’s office is considering the implications of this decision. Any legal action may revolve around a 2020 consent decree which stipulated that state authority was necessary for a restart.

Legal Challenges Ahead

Linda Krop, lead attorney for the Environmental Defense Center, criticized PHMSA’s approval as unlawful, asserting that it contradicts existing legal agreements. She aims to rally support from various government entities to protect environmental standards and rights.

The County Counsel’s office is currently evaluating potential legal strategies, although significant challenges remain, especially regarding property rights linked to the pipelines.

Investor Sentiment

Investors are responding cautiously to the news of the pipeline restart approval. While Sable’s stock price increased from $8 to over $10 per share, many believe there is underlying skepticism about the approval’s implications. The anticipated positive impact on stock values has not materialized as expected.

In summary, the restart of Sable Offshore’s pipelines marks a crucial moment in an ongoing struggle between federal oversight, state authority, and environmental protection efforts. The regulatory landscape continues to evolve, with potential legal battles looming on the horizon.