Sable Offshore Corp. cleared to continue California pipeline operations

A federal judge has ruled that Sable Offshore Corp. may continue pumping oil through pipelines along the Santa Barbara County coast, shifting regulatory oversight from the state of California to federal officials. U.S. District Judge Stephen V. Wilson ruled that a U.S. Department of Energy order, which invoked the Defense Production Act in the interest of national security, preempts conflicting state laws regarding the operation of the onshore pipeline.

The ruling modifies a 2020 court agreement that previously required state waivers from California’s Office of the State Fire Marshal before any restart. While safety standards from the previous state process remain in place, the state no longer holds the power to block the operation under the old agreement. This decision follows the restart of the decades-old operation, which had been dormant since a 2015 pipeline rupture near Refugio State Beach.

In the same ruling, Judge Wilson fined Sable Offshore Corp. nearly $1.5 million for violating a federal consent decree regarding restart regulations. Following the judicial decision, shares of Sable Offshore Corp. (SOC) saw a significant rally, rising as much as 28% during trading.