Sable Offshore Corp. pipeline regulatory dispute

A federal judge has ruled that Sable Offshore Corp. may continue operating the Santa Ynez Pipeline system along the California coast, citing federal authority over state restrictions. The U.S. District Court for the Central District of California affirmed that a federal emergency order issued under the Defense Production Act takes precedence over California state laws. This order, issued by Energy Secretary Chris Wright, designated the pipeline as critical infrastructure to ensure national energy security.

The ruling modifies a 2020 court agreement that previously required state waivers from California’s Office of the State Fire Marshal. While safety standards remain in place, the state no longer holds the power to block operations under the previous agreement. The pipeline, which transports crude oil from offshore wells near Santa Barbara to refineries, had been inactive since a 2015 rupture.

In addition to allowing operations, Judge Stephen V. 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. experienced a significant rally, rising as much as 28% during trading.