Court Victory: Sable Offshore Triumphs in Oil Pipelines Case
A recent ruling by the Ninth Circuit Court of Appeal marked a significant moment for Sable Offshore in its ongoing legal battle over oil pipelines. On December 31, 2024, a two-judge panel denied an emergency appeal from environmental groups seeking to stop a federal agency’s permit allowing Sable to resume operations on its pipeline.
Details of the Ruling
The court’s decision came just days after the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a restart permit on December 22. The judges provided no detailed reasoning in their ruling but scheduled a follow-up court date for January 26, 2025, to further discuss the case.
Background of Legal Disputes
The legal issues surrounding Sable Offshore began following a significant 2015 oil spill that released 142,000 gallons of oil into the ocean. This spill led to the closure of a pipeline previously operated by Exxon near Refugio.
Congressmember Salud Carbajal requested information from PHMSA about current operations, but encountered a lack of clarity. Meanwhile, local officials, including County Supervisor Laura Capps, reported that production had yet to resume at Sable’s facilities.
Market Response
The ruling was interpreted positively by investors, resulting in a bump in Sable’s stock prices. This reflects the ongoing struggle between environmental concerns and the push for increased oil production in California.
Policy Changes and Regulatory Oversight
In December 2024, PHMSA changed its position concerning the 120-mile pipeline, transitioning it from state to federal oversight. This marked a notable shift from a 2016 decision that previously categorized the pipeline as “intrastate,” thus under state jurisdiction.
PHMSA’s recent actions were backed by an executive order issued by President Donald Trump in January 2025. The order claimed a national energy emergency and supported new offshore oil production.
Environmental and Economic Fallout
Opponents, including the Environmental Defense Center, argue that the emergency declaration is politically motivated. They claim it overlooks record levels of U.S. oil production and the trends favoring more sustainable energy sources.
In California, the state’s oil production has steadily declined, contributing to economic uncertainties and potential crises in refinery and pipeline capacities. Governor Newsom has also expressed concerns over rising gas prices and has moved to expedite oil development in Kern County.
Projected Developments
Despite the progress from federal agencies, Sable Offshore faces further legal hurdles. The recent legislation enacted in California requires additional coastal development permits if production does not resume by a specific deadline. Sable argues that recent repairs do not necessitate such permits, a point that is hotly contested.
The path forward remains complicated for Sable Offshore as it navigates both legal and environmental challenges, while stakeholders await further developments leading up to the expedited court date set for January 26, 2025.
