Court backs California Coastal Commission in fight over offshore oil operation

Los Angeles Times

4 days ago

Just days after a Texas oil firm shocked California environmentalists and regulators by announcing the resumption of offshore oil production along the Santa Barbara County coast, a court has ordered the company to cease further construction or repairs until they obtain official approvals.
For months, Sable Offshore Corp. has denied the California Coastal Commission's authority to oversee and approve upgrades to a network of oil pipelines that were shuttered after a major 2015 spill.
The company argues that it doesn't need any new permits because it is only repairing and maintaining existing pipelines — as opposed to constructing a new line — meaning the Coastal Commission doesn't have a say in the matter. Sable sued the commission in February, claiming overreach of its authority.
But on Wednesday, Santa Barbara County Superior Court Judge Thomas Anderle sided with the Coastal Commission and ordered Sable to abide by a preliminary injunction, upholding a cease and desist order commissioners issued in April. That action requires Sable to stop any further coastal work until the company obtains necessary permits from the Coastal Commission or the ongoing lawsuit is settled.
'The Commission has presented credible evidence of violation of the Coastal Act,' Anderle wrote in his ruling. Landscape grading and other pipeline work Sable performed 'fall squarely within the definition of 'development' in the Coastal Act,' he found.
Sable insists that it is still operating within original permits from the 1980s. The commission disagrees however, and has ordered the company to seek new permits.
'It's a significant win not only for the Coastal Commission, but for the environment, for the state, for the people and, frankly, the rule of law,' said Alex Helperin, assistant chief counsel for the Coastal Commission.
'We've never seen someone just completely ignore one of our orders before. ... This is unprecedented for us and [the judge's ruling is] a really important indication of the rule of law and the idea that our orders have to be taken seriously.'
Although commission officials have hailed the judge's decision as a victory, it remains unclear how it will impact the oil operation. Sable has already finished much —if not all — of the work commissioners have protested.
Still, Sable officials say they plan to appeal the judge's ruling.
'We look forward to overturning today's decision, though it has no bearing on Sable's plans to recommence oil sales by July,' read a statement from Steve Rusch, Sable's vice president of environmental and governmental affairs. 'Sable will continue to aggressively defend our vested rights to pursue low carbon California oil and natural gas sorely needed to stabilize supply and lower consumer gasoline prices.'
In April, the California Coastal Commission found that Sable had repeatedly violated the Coastal Act by repairing and upgrading oil pipelines without necessary permits or approvals. The company was fined $18 million, issued a cease and desist order and directed to restore areas that saw environmental damage.
Sable has ignored those findings, and filed the lawsuit against the the commission.
The preliminary injunction issued Wednesday doesn't resolve that case, but may be an indication of how the court may lean in a final decision — which is likely still months, if not years, away.
Sable outraged environmentalists and officials last week when it announced that it had resumed oil production at one of its offshore platforms — located in federal waters — at a rate of about 6,000 barrels a day, with plans to quickly increase extraction. The company said the oil is being sent to the onshore Las Flores Canyon processing facility for storage, but was clear that full use of the onshore pipelines had yet to begin.
But among those who were taken aback by the announcement was Lt. Governor Eleni Kounalakis, who serves as chair of the California State Lands Commission and has oversight of offshore oil pipelines. Sable was required to update the State Lands Commission on any oil flow and failed to do so, she said.
'Sable's failure to clearly and timely communicate these activities to the commission undermines trust of Sable's motives, demonstrates a lack of understanding of the significant concerns held by many regarding the resumption of activities, and raises serious questions about Sable's willingness to be a transparent operator,' Kounalakis wrote in a May 23 letter to Sable that was reviewed by The Times.
Kounalakis also accused the company of misleading the public. She said that lands commission staff told her that the new oil flows were the result of well-testing procedures required by the Bureau of Safety and Environmental Enforcement prior to restart.
'These activities do not constitute a resumption of commercial production or a full restart ... Characterizing testing activities as a restart of operations is not only misleading but also highly inappropriate — particularly given that Sable has not obtained the necessary regulatory approvals to fully resume operations,' she wrote.
She said that the company needs to resolve all pending legal challenges and regulatory requirements before any attempt to fully restart commercial operations in order to remain in compliance with its offshore pipeline leases.
Sheri Pemberton, a spokesperson for the commission, said Sable has not yet responded to the lieutenant governor's letter.
Sable representatives did not respond to questions about the letter or the concerns raised by the State Lands Commission chair.
Environmental activists argued that the judge's ruling and Kounalakis' letter further demonstrate that Sable cannot be trusted to safely run an operation that previously failed.
'This just shows, again, that this is not a company we can trust to follow the law in California or responsibly operate equipment that already caused one of the worst spills in our state history,' said Alex Katz, the executive director of the Environmental Defense Center.