A federal judge has dismissed legal claims brought by Sable Offshore Corp. and ExxonMobil, which alleged that Santa Barbara County illegally "took" their property by refusing to issue permits for offshore oil production. Chief U.S. District Judge Dolly Gee ruled in favor of the county and the Environmental Defense Center, granting their motions to dismiss the lawsuit.
Legal Dispute Over Permits
Sable Offshore Corp. acquired the Santa Ynez Unit, including offshore platforms and the Las Flores onshore pipeline, from ExxonMobil in early 2024 for approximately $625 million. The acquisition included three offshore drilling platforms, onshore gas processing plants, and a 125-mile pipeline system. However, the transfer of operating permits from ExxonMobil to Sable was contingent upon a review of Sable's company by Santa Barbara County, according to local regulations.
In December 2025, the Santa Barbara County Board of Supervisors officially denied Sable's request to assume Exxon's existing permits. Despite this denial, Sable reportedly continued to pump oil from its Las Flores Canyon facility. In response, Sable and ExxonMobil filed a lawsuit against the county six months prior to the permit denial, asserting that the county's refusal to transfer the permits constituted an "illegal taking" of their property.
The Environmental Defense Center intervened in the lawsuit to support the county's decision. Tara Rengifo, senior attorney for the Defense Center, stated that the ruling "reinforces that compliance with environmental laws and established regulatory processes is not optional." She added that Santa Barbara County's policies are designed to protect the community from oil operators who do not adhere to the law, and the center remains committed to upholding these protections.
Judge's Ruling and Future Implications
Judge Gee's decision to dismiss the claims is considered a significant victory for Santa Barbara County and environmental advocates. However, the ruling was made "with leave to amend," meaning Sable has the opportunity to revise and resubmit parts of its lawsuit. This provision allows Sable a chance to potentially re-argue its case, leaving the ultimate resolution of the dispute still pending.
The Santa Ynez Unit's operations utilize the same pipeline system that was involved in the 2015 Refugio Oil Spill, a major environmental incident that led to significant cleanup efforts and legal repercussions. The continued operation and permitting of these facilities remain a point of contention between the oil industry and environmental protection groups in the region.