Judge denies Sable Offshore’s lawsuit seeking damages against Coastal Commission ...Middle East

SANTA BARBARA COUNTY, Calif. (KEYT) – On Wednesday, Sable Offshore's request to be awarded financial damages against the Coastal Commission were denied by the Santa Barbara County Superior Court and the Houston-based company has already vowed to appeal the ruling.

In February, Sable Offshore filed a lawsuit against the state regulator for issuing a series of notices and orders that temporarily halted pipeline work along the Gaviota Coast necessary to restart oil production.

The company is seeking approximately $347 million in damages as well declaratory relief.

A tentative ruling from the Santa Barbara County Superior Court came out Tuesday and in response, the Chairman and CEO of Sable Offshore, Jim Flores, said, "Although the tentative ruling is disappointing, it has no impact on Sable’s business strategy of either resuming petroleum transportation through the Las Flores Pipeline System or selling its Santa Ynez Unit production through an OS&T. California has an opportunity to authorize the resumption of petroleum transportation through the Las Flores Pipeline System per its obligations in the Federal Consent Decree and lower gasoline prices for California residents. Sable is very concerned about the state’s crumbling energy complex. California’s economy will face dire consequences if refineries continue to close due to the lack of domestic production, which should be a major concern for the bondholders of the State of California. The Las Flores Pipeline System offers a California-based solution benefitting workers, state and local government revenues and the environment that can almost immediately serve to reverse this trend."

At the end of September, Sable Offshore submitted official paperwork to restart oil production with the California Office of State Fire Marshal and an 8-K filing with the U.S. Securities and Exchange Commission detailed an alternative plan that would remove the oversight of state regulators.

The alternative plan involves using offshore vessels (OS&T) to transport crude oil from offshore platforms in federal waters to a potential out-of-state destination.

According to the complaint, Sable Offshore and its subsidiary, Pacific Pipeline Company, are required by federal law to schedule evaluation and remediation within 180 days for, "all anomalous condition in [any] pipeline".

On Sep. 27, 2024, the California Coastal Commission issued a Notice of Violation to Sable Offshore - which purchased pipelines, offshore platforms, and the Las Flores Canyon production facility from ExxonMobil early last year - regarding its work on pipelines without securing the proper permits.

A second notice from the California Coastal Commission stopped all construction work along the Gaviota Coast.

"The Coastal Commission’s issuance of the NOV[Notice of Violation]s and EDCDO [Executive Director Cease and Desist Order] prohibits Plaintiffs’ [Sable Offshore] compliance with federal law requiring Plaintiffs to promptly make anomaly repairs and conduct span remediation maintenance activities at the Pipelines as necessary to protect human health and the environment without prior compensation in violation of Article I, Section 19 of the California Constitution and the Takings Clause of the Fifth Amendment of the United States Constitution, as incorporated by the Fourteenth Amendment," argued the February complaint.

The Coastal Commission has the legal authority under state law, through Sections 30821 and 30821.3 of the California Coastal Act, to issue administrative penalties, to issue cease and desist orders, seek injunctive relief, and levy civil fines against non-compliant companies and organizations within the coastal zone.

The state regulator eventually levied almost $15 million in fines against Sable Offshore.

Sable Offshore announced that it had restarted oil production from offshore platforms on May 19 and on May 27, Sable Offshore confirmed in an 8K filing with the U.S. Securities and Exchange Commission that all hydrotesting for both Lines 324 and 325 had been completed which was the final operational condition necessary before requesting to restart their use for onshore transportation of crude oil with the Office of State Fire Marshal.

One of those pipelines, Line 324, was formerly known as Line 901 which ruptured and caused the 2015 Refugio Oil Spill which impacted 150 miles of California coastline, destroying thousands of acres of shoreline habitats.

Sable Offshore is facing additional legal issues regarding its attempts to restart oil production including:

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