Sable Offshore Corp. is vowing to continue its legal battle with California regulators, signaling a potential appeal to the state Supreme Court following a recent setback in the Second District Court of Appeal. The ruling upheld a lower court decision favoring the California Coastal Commission regarding pipeline repair work.
"Sable is disappointed by the ruling of the Court of Appeal," said company attorney Jeffrey Dintzer, who indicated that "significant issues" remain unresolved concerning the Coastal Commission's cease-and-desist orders and financial penalties. Despite the ruling, Dintzer affirmed that oil production and transportation operations continue without interruption.
"With respect to the production of oil from the federally leased offshore platforms, that will continue, as will the flow of oil through the pipeline to Kern County and ultimately to El Segundo, where it is being purchased by Chevron," he stated.
The dispute centers on the company's efforts to repair and restart pipelines that were shut down after the 2015 Refugio oil spill. Sable acquired the pipeline assets in 2024 with plans to resume domestic oil production from the Santa Ynez Unit. The company, through its subsidiary Pacific Pipeline Company, undertook repairs and upgrades, including pipe replacement and the installation of additional safety equipment.
The California Coastal Commission, however, contended that this work constituted new development requiring fresh state approvals, rather than repairs permissible under permits issued in 1986 for the Santa Ynez pipeline system. The agency issued cease-and-desist orders in late 2024 and early 2025, subsequently imposing an $18 million penalty for alleged continued work despite regulatory directives.
Sable challenged these actions, arguing a denial of due process and asserting that the repairs were authorized by existing permits. On June 21, the Court of Appeal rejected these arguments and upheld an injunction sought by the Coastal Commission.
Dintzer emphasized that the appellate court's decision does not represent the final resolution of the broader dispute. He noted that the current court case pertains specifically to the commission's cease-and-desist order related to completed repairs. The Coastal Commission's enforcement case, he added, is still in its early stages, with Sable intending to conduct discovery and challenge the basis of the orders and penalties.
Sable is exploring multiple legal avenues, including a potential rehearing in the Court of Appeal or an appeal to the California Supreme Court. The company may also return to the trial court to litigate the Coastal Commission's underlying case. Dintzer expressed optimism about prevailing in other pending lawsuits in state and federal courts, particularly citing arguments that federal government actions preempt California's regulatory authority over federally regulated energy infrastructure.
This confrontation highlights the ongoing tension between California's environmental policies and efforts to expand domestic energy production. Sable Offshore remains involved in more than a half-dozen lawsuits and enforcement actions related to the pipeline restart.