Facing mounting legal troubles and regulatory hurdles, the Texas-based firm trying to restart offshore oil production along Santa Barbara’s coast is now considering a plan that would keep its controversial project entirely in federal waters — a move that appears to avoid further California oversight.
Sable Offshore Corp. announced Monday that it has started to pursue an option that would utilize an “offshore floating and treatment vessel” to treat and transport crude oil, instead of relying on a network of pipelines for which the company still needs some key approvals to operate.
The pivot would mark a major shift in Sable’s push to bring the pipelines back online. The lines have sat idle since 2015, when a corroded section ruptured near Refugio State Beach, creating one of the state’s worst oil spills. State officials and local environmentalists have repeatedly raised concerns about the pipes’ capacity to run safely, as well as the process the company has taken to try to fast track their revitalization over the last year.
Sable’s announcement comes roughly a week after Santa Barbara County prosecutors filed criminal charges against the company, alleging it knowingly violated state environmental laws while completing pipeline repairs, and months after the California Coastal Commission found that the company failed to adhere to the state’s Coastal Act despite repeated warnings, and fined them $18 million.
Sable continues to contend it has followed all necessary protocols and met all legal requirements. Both issues remain tied up in court.
Sable notes that use of a floating treatment vessel would dramatically extend the project’s timeline and likely increase costs for the company, which has already reported funding difficulties after repeated setbacks. Switching to a floating vessel to treat and transport the oil produced offshore would push back a potential start for oil sales by at least a year, to the end of 2026, the company estimated.
The company still says that it could begin oil sales by the end of this year if California regulators OK the pipeline restart. Sable reported it is still pursuing that option “in parallel” with the floating vessel.
But the remaining approvals face uncertainty, especially after California officials targeted offshore projects in a legislative package that could complicate the Sable pipeline project.
In a letter to the U.S. Department of the Interior this week requesting “expedited support” for its floating vessel plan, Sable said the new state law is “creating barriers which necessitate our need for an alternative offshore solution.”
It also pointed out that its project “aligned with President’s Trump’s directive” to increase U.S. energy production, mostly through a renewed focus on oil.
In its announcement, the company also appeared to threaten what this move could mean for California, which has been hurting for gasoline as more and more refineries close. Sable said switching to the floating vessel method for treatment and transport would give the company the freedom to “to market its production outside of the state of California.” It’s not clear, however, if this would be any different for how the company could market oil processed onshore.
Sable is working to restart the Santa Ynez Unit, a complex of three offshore platforms in federal waters, as well as onshore processing facilities and pipelines — all of which have remained shuttered since the 2015 spill. The operation was owned by a different company at the time.
While the floating vessel would provide a workaround for the onshore processing facilities and pipelines under California oversight, some environmental groups and state officials worry the plan would only expand the footprint of a company they say has failed to operate responsibly.
“Sable’s dangerous pivot to a floating processing plant appears to be a ‘hail Mary’ from a company that, for good reason, has failed to win necessary approvals at the state and local levels,” said Alex Katz, executive director of the Environmental Defense Center, a Santa Barbara-based nonprofit that has been one of Sable’s most vocal opponents. “It should be abundantly clear that this is not a company we can trust to operate safely or responsibly, especially when we are talking about the risk of another environmental disaster on the California coast.”
State Sen. Monique Limón (D-Santa Barbara), who spearheaded the legislation focused on increasing offshore regulations, agreed.
“In the time Sable Offshore has owned the pipeline, they’ve broken the law, shirked multiple cease and desist orders, and have yet to pay the $18 million fine for defying stop work orders,” Limón said in a statement. “Whether they intend to use the Las Flores [onshore] pipeline or proceed with offshore storage and treating vessels, the threat surrounding public health and well-being is still present.”
Offshore oil vessels are less common than pipelines, according to industry experts say, and some have been associated with large oil spills.
Andrew Lipow, president of Houston-based consulting firm Lipow Oil Associates, said the large vessels are typically used in operations where installing pipelines doesn’t make sense.
“These are not uncommon,” Lipow said. “You do it in areas of the world where you simply don’t have the pipelines infrastructure.”
He said it may not be as economical as utilizing a pipeline — especially with one already in place — but said the price of oil could make up for that, depending on the details of a specific project and the market.
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