LOS ANGELES (KEYT) – A federal judge has upheld portions of an existing court order governing oil pipeline use locally and penalized Sable Offshore for violations of the agreement, but modified the court order to allow continued oil production operations and federal instead of state oversight.
"Sable has violated the express provisions of the Consent Decree, without justification," explained U.S. District Court Judge Stephen Wilson in this week's ruling. "However, the injunction proposed by California is not the proper remedy here. For one, as of this Order, the Consent Decree has been modified to replace OSFM [California Office of State Fire Marshal] as the regulatory authority with PHMSA [U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration], and the pre-restart requirements of the State Waivers are no longer applicable. Nor, too, are OSFM's approval of a Restart Plan or authorization. PHMSA, the current regulator, has authorized Sable to restart the pipeline. Therefore, Sable is no longer in violation of the Consent Decree, and proactive, injunctive relief is inappropriate. Rather, the appropriate penalty for Sable’s violations is dictated by the Consent Decree."
In 2024, Sable secured a loan from ExxonMobil to fund the purchase of local oil production infrastructure that is collectively referred to as the Santa Ynez Unit.
After the purchase of the Santa Ynez Unit, shuttered since a massive oil spill from a ruptured pipeline in 2015, Sable Offshore was attempting to restart the system which required it to comply with the conditions of a federal court order agreed to by the previous owner of the pipelines at the time of the spill, Plains All American Pipeline.
"Plaintiffs United States of America, the State of California, and several California agencies—including the Department of Parks and Recreation and the Office of the State Fire Marshal— sued Defendant Plains [All American Pipeline] to enforce federal pipeline safety laws and punish violations of the federal Clean Water Act and Oil Spill Prevention and Response Act, along with violations of state laws controlling water pollution and pipeline safety under California's Government, Water, and Fish and Game Codes," explained Wednesday's federal court order. "Complaint, ECF No. 1. U.S. v. Plains culminated in a consent decree, signed by the parties and additional federal agencies, including the Pipeline and Hazardous Materials Safety Administration."
"Plains [All American Pipeline] was required by injunction to commit to certain management plans and reporting requirements and forbidden from restarting operation of either CA-324 or CA-325 without first applying for and receiving 'State Waivers' from California's Department of Forestry and Fire Protection's Office of the State Fire Marshal ('OSFM') and then submitting and receiving OSFM's approval for its 'Restart Plans'," detailed U.S. District Judge Wilson. "In other words, the federal government and PHMSA [Pipeline and Hazardous Materials Safety Administration], the federal agency, agreed to be bound by this Court's order that approval of the California state regulator was required before the Onshore Pipeline might be returned to operation."
In September of last year, Sable Offshore submitted a Request for Approval of Restart Plans to the California Office of State Fire Marshal in accordance with the consent decree agreed to by the previous operator.
The state safety regulator found that there were still outstanding steps required before approving restart the following month.
Instead of conducting the requested safety actions, Sable Offshore instead informed investors in December of last year that it had determined that pipelines connecting the onshore oil processing plant on the Gaviota Coast to Pentland Station in Kern County are technically interstate pipelines under the Pipeline Safety Act and requested that federal regulators take over its restart plans.
Despite the court order and location of the pipelines, the Department of Transportation agreed with Sable Offshore's assessment and promptly asserted its authority over restart plans in mid-December.
On March 13 of this year, the Trump Administration announced that it had forced Sable Offshore, a Houston-based energy company, to restart oil production, including the use of the onshore pipelines.
While the agreement in federal court required state regulators to manage restart plans at the Santa Ynez Unit, Secretary of Energy Chris Wright argued that the federal government forced the restart of oil production under the authority of the Defense Production Act of 1950 and the authority to do so was delegated to the Energy Secretary by Executive Order 13603 "National Defense Resources Preparedness" -skirting federal, state, and local regulatory authority- for national security purposes.
"Sable petitioned the executive branch of the United States government for relief, which came in two primary forms. First, PHMSA [Pipeline and Hazardous Materials Safety Administration] conducted inspections and determined that the Onshore Pipeline was part of an 'interstate' pipeline facility subject to PHMSA's exclusive jurisdiction," detailed U.S. District Judge Wilson. Second, on March 13, 2026, empowered by Executive Order 14156—which declared a 'National Energy Emergency,' and encouraged domestic energy production, particularly on the west coast—under delegated authority of theDefense Production Act, United States Energy Secretary Chris Wright issued the Pipeline CapacityPrioritization and Allocation Order (the 'DPA Order'), which, expressly ordered Sable to restart theOnshore Pipeline."
Sable Offshore shared with investors that it had resumed production of hydrocarbons from Platform Harmony the day after the announcement and would ramp up to full production from platforms Harmony and Heritage by the end of the same month.
The shallower Platform Hondo is expected to join its sister platforms at full production this year shared Sable.
The unilateral actions by the Trump Administration did not go unnoticed by environmental groups nor state regulators and multiple parties filed several lawsuits to halt the restart.
"However, on or about March 14, 2026, the Onshore Pipeline, which had now been acquired bySable, restarted—without the approval required by the Consent Decree," noted the federal judge in this week's ruling. "As a result, California is now challenging Sable's decision to restart the Onshore Pipeline, both as a violation of the Consent Decree and on other grounds."
California Attorney General Bonta filed multiple lawsuits in federal court, arguing that orders issued by federal regulators about restarting oil pipelines including taking over exclusive regulatory authority of restart plans on Dec. 17, issuing an approval of restart plans on Dec. 22, and granting an Emergency Special Permit to restart pipelines on Dec. 24, were all unlawful.
"The pipeline operator [Sable Offshore] then relied on the [U.S. Secretary of Energy] Wright Order, and a contemporaneous opinion from the U.S. Department of Justice's Office of Legal Counsel, to argue that any state laws or existing court orders standing in the way of restart could be ignored and set aside," detailed one of multiple lawsuits filed by California's Attorney General in response to the forced restart. "The very next day, on March 14, 2026, the pipeline operator restarted pumping oil through pipelines despite an outstanding preliminary injunction in state court, despite not having necessary permits from either the state or the federal government for pipeline operation, despite still not having approval from several state agencies, and despite not having a current or valid easement to keep or utilize the segment of its pipeline crossing California state property."
Disputes over the process forcing a restart resulted in the Trump Administration filing to have the Justice Department step in to defend Sable Offshore against the multiple court cases connected to the restart process at the Santa Ynez Unit which were consolidated in this week's ruling in federal court.
"These related cases all consider issues relevant to the legality and consequences of actions byDefendants Sable Offshore Corporation and its subsidiary Pacific Pipeline Company (collectively,'Sable') to restart the flow of oil through two previously discontinued pipelines," opened this week's federal court order. "Restart of those pipelines had been committed to the supervision of this Court under the terms of a consent decree, entered as the final judgment of the Court on October 14, 2020. US. v. Plains, ECF No. 33."
Ultimately, Judge Wilson found that Sable's and the Trump Administration's arguments that the Houston-based energy company should not bound by the consent decree to be unfounded and declined to terminate the entire court agreement.
"Sable took over ownership of the assets governed by the Consent Decree (the OnshorePipeline) and agreed contractually to be bound by the terms of the Consent Decree in its operation," noted the federal judge. "The Consent Decree had anticipated exactly such a circumstance and purports to be binding on a successor such as Sable. Moreover, Sable is the exclusive operator of the pipeline and has stepped into exactly the role that Plains had played with respect to the pipeline at the time the Consent Decree was issued."
"Defendants must both comply with the Consent Decree for five years and three months and also have satisfied each requirement of the Consent Decree to the full extent it may be satisfied," added U.S. District Judge Wilson this week. "[T]he record shows some requirements of the Consent Decree have not been satisfied by Defendants because, under the chosen path for restart, the Consent Decree required restart plan approval by OSFM, which Defendants never obtained. Therefore, wholesale termination of the Consent Decree would not be proper at this time."
This week's ruling was not a total loss for Sable Offshore and the Trump Administration though for two key reasons.
"[T]he Court has the intrinsic, equitable power to modify the terms of a consent decree in certain situations," noted the Central District Judge. "The Court identifies two changed circumstances that, together, are significant enough to warrant modification of the Consent Decree: (1) the change in ownership of the pipeline and (2) the national energy emergency and resulting DPA Order."
While U.S. District Judge Wilson noted the authority of the Trump Administration to force a restart due to a publicly stated national energy emergency, his ruling did not interpret the veracity of those goals, only the risk that any form of delay could pose.
"Developing national security interests and a coordinated federal effort to harness regional energyresources constitute changed circumstances sufficient to justify modifying a consent decree to shift regulatory authority from the state to the federal level. Such a transfer helps avoid conflicts involving state courts and agencies and limits the ability of state agencies to unilaterally frustrate abiding federal interests," U.S. District Judge Wilson explained. "When, as here, a directive based on a clear and present national security interest is in the balance, such discord risks dangerous delay. Therefore, the Consent Decree is hereby modified to transfer supervising regulatory authority over the Onshore Pipeline to PHMSA, streamlining the regulatory regime by consolidating it under federal authority, at least during this period of national emergency."
The broad authority excercised by the Trump Administration regarding a domestic energy crisis do not match the same Administration's recent actions including cutting billions in energy investments, potentially outside of its legal authority, rescinding over 3.5 million acres of offshore waters leased for energy generation and cutting deals to terminate offshore wind leases for projects on both coasts, and even spending billions dollars to halt plans to build offshore wind farms, an action that is now subject to a Congressional inquiry and multiple Freedom of Information Act requests by Your News Channel author.
Notably, the state of California argued an additional issue regarding the use of national security to circumvent a federal court order and state law.
"[T]he Court briefly addresses an argument asserted by California on this issue: that the national energy emergency and DPA Order cannot constitute changed circumstances because they represent unilateral actions of the executive. California argues that the federal government may not citeits own unilateral actions as changed circumstances to justify modifying a consent decree," noted this week's order. "Here, the federal government is not a Defendant [as in prior cited cases] but a Plaintiff, who, unlike the government in Flores [Flores v. Rosen of 2020], is trying to take on more regulatory authority, rather than avoid it. The fact that Sable's arguments align with the federal government's does not change the outcome."
While the federal court did not find legal issue with the agreement in Sable's and the Trump Administration's interests in restarting oil production, elected officials have.
a Congressional inquiry was launched late last month alleging financial ties between Sable Offshore's leadership and President Trump's campaigns.
"Executives at Sable have directly contributed to President Trump's campaigns...contributed over $300,000 to Super PACs like Right to Rise USA and Senate Leadership Fund which made contributions to President Trump’s 2016 and 2024 campaigns. Additionally, Gregory Patrinely, Executive Vice President and CFO of Sable, contributed thousands of dollars to Trump-aligned committees in 2020 and 2024," stated a letter from members of Congress to Sable Offshore's CEO. "During his campaign, President Trump promised to reverse environmental rules for your industry in exchange for $1 billion in donations. It is difficult to avoid the inference that actions like the use of DPA [Defense Production Act] to overcome state laws on behalf of an oil producer represents a fulfillment of that 'pay to play' promise."
Additionally, the resumption of oil sales from the Santa Ynez Unit also has a notable impact on who will own the entire system going forward Your News Channel found.
Court documents show that Sable Offshore initially secured a $622,000,000 loan from ExxonMobil to fund the purchase of the Santa Ynez Unit directly from the oil giant.
The line of credit had an important condition.
Ownership of the Santa Ynez Unit would revert back to ExxonMobil unless oil from the Santa Ynez Unit under Sable's management enters the market.
Sable stated in a press release after the forced restart that it made its first sales of oil from the Santa Ynez Unit to private oil giant Chevron at an expected gross oil rate of 50,000 barrels of oil per day and therefore, retain ownership of the Santa Ynez Unit going forward.
That change in ownership directly facilitated by a forced restart from the Trump Administration was something noted in one of Attorney General Bonta's lawsuits, "Sable was and remains undercapitalized. As a condition of the acquisition, if Sable did not restart production by January 1, 2026, ExxonMobil had the right of reversion."
While this week's federal court order did not directly address the substantial material benefit awarded to Sable Offshore by the Trump Administration, it did note that pre-start safety requirements in the original consent decree were rendered moot by the forced restart, but post-restart safety requirements detailed in the consent decree are still required.
"Now that the pipeline has been successfully restarted, any pre-restart requirements are moot. However, the tailoring considered by the Court is to incorporate every post-restart regulatory requirement dictated by the State Waivers as substantive requirements of the Consent Decree, enforceable against Sable for the duration of its term," explained U.S. District Court Judge Wilson. "As far as the Court can discern, the only substantive post-restart requirement in the State Waiver that was approved by PHMSA but nonetheless does not appear in the Emergency Special Permit is that Sable must comply with the standards set by the California Elder Pipeline Safety Act."
U.S. District Judge Wilson added that, "The Court here clarifies that it is not mandating compliance with California law and regulations as enforced by California agencies but rather incorporating the substantive requirements of those laws and regulations among the other terms of the Consent Decree to be enforced by PHMSA. These now incorporated substantive standards will therefore still apply, and PHMSA will be responsible for enforcing them, regardless of whether the pipeline is determined to be 'intrastate' or 'interstate' for the purposes of the Pipeline Safety Act, an issue not decided by the Court here."
While state regulators were removed from their role in enforcing the modified court order this week, Sable is still required to share biannual reports about the status of its compliance and if the state finds that Sable is not in compliance, "it can vindicate its interest before this Court through a motion toenforce the Consent Decree" noted U.S. District Judge Wilson.
Additionally, the Justice Department issued a slip opinion before the forced restart that included a notably broad interpretation of the Defense Production Act's extension of liability protection for organizations forced to produce national security assets.
Sable asserted that interpretation before U.S. District Judge Wilson during court proceedings leading up to this week's order.
"According to Sable's interpretation [of Section 707 of the Defense Production Act], this immunity from 'damages or penalties' extends to penalties issued for noncompliance with the Consent Decree. In other words, Sable understands the statute to mean that the Defense Production Act allows the executive, through unilateral action, to immunize a private party from compliance with an order of a federal court. It does not...there is no reasonable interpretation by which the provision can be interpreted to provide immunization to liability for violation of a federal court order."
U.S. District Court Judge Wilson concluded this week's ruling stating,"[T]he Court hereby: (1) MODIFIES the Consent Decree in US v. Plains to terminate the ongoing requirements for Plains, substitute PHMSA for OSFM, and incorporate by reference the requirements of the State Waivers, including the substance of some California state law; (2) ENFORCES the Consent Decree by imposing on Sable a penalty of $1.449 million; (3) DECLARES that the Defense Production Act, through Secretary Wright's allocation order, bars California's Department of Parks and Recreation from bringing legal action to prevent Sable from complying with the DPA Order by operating the Onshore Pipeline; and (4) REMANDS Biodiversity to Santa Barbara Superior Court."
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