Texas firm fined $18 million for oil work on California coast

Santa Barbara, California – In an action cheered by state environmentalists, the California Coastal Commission voted to pass a Texas-based oil company that restored oil production along Gaviota by failing to obtain the necessary permits and reviews.

After hours of public comment, the commission found on Thursday that Sable Offshore Corp. had violated the California Coastal Act for months and could repair and upgrade oil pipelines near Santa Barbara without the commission's approval.

In addition to a fine of $18 million, the commissioner ordered the company to stop all pipeline development and restore land that suffered environmental damage.

“The Coastal Law is law, the law … is made through the vote of the people,” said Commissioner Meaghan Harmon. “In a very practical sense, Sable’s rejection is a subversion of the will of the people of California.”

The decision marks an escalation of showdown between coastal authorities and sable officials, who claim the commission has surpassed its powers. The same is true of this action when the Trump administration actively encourages oil and gas production to contrast California’s clean energy and climate-focused goals.

Sable insists it has received necessary work approvals for Santa Barbara County and that approval of the commission is only necessary when pipeline infrastructure first proposed decades ago.

It is unclear how the Houston-based company will respond to the committee's actions.

“Sable is considering all options regarding its compliance with these orders,” said Steve Rusch, Sable vice president of environmental and government affairs. “We have the right to disagree with the Commission's decision and seek independent clarification.”

Eventually, the matter may eventually appear in court. In February, Sable sued the Coastal Commission for claims it lacked the power to monitor its work.

On Thursday, Ruchi called the commission’s request part of a “arbitrary licensing process” and said the company had been working with coastal commission staff for months to address their concerns. However, Rush said his company is “committed to restarting project operations in a safe and effective way.”

The commissioners voted unanimously by issuing a stop order (which would stop working until the committee approved and the damaged land was restored. However, the commission voted 9-2 for the fine, the largest expropriation ever.

The hearing attracted hundreds of people, including Sable employees and supporters, as well as dozens of environmentalists, many wearing “not-enabled sable” T-shirts.

“We are at a critical crossroads,” said Maureen Ellenberger, president of the Santa Barbara and Ventura chapter of Sierra Club. “In the 1970s, Californians fought to protect our coastal areas – 50 years later, we were still fighting. The California coast shouldn’t be sold.”

Students at Santa Barbara High School lined up to speak at a hearing from the California Coastal Commission to consider sanctions on the Texas-based oil company in an attempt to restart drilling on the Santa Barbara coast.

(Michael Owen Baker / The Times)

At one point, 20 Santa Barbara middle school students streamed back to back testifying, some of which barely reached the microphone. “None of us should be here right now – we should all be at school, but we are here because we are here,” said Ethan Maday, 14, a ninth-grader who helped organize his classmates to the committee hearing.

Santa Barbara has long been an environmentally friendly community, partly due to the history of major oil spills in the area. The largest leak occurred in 1969, releasing an estimated 3 million gallons of oil and inspiring multiple environmental protection laws.

Sable hopes to reactivate the so-called Santa Ynez unit, a collection of three offshore oil platforms in federal waters. Hondo, Harmony and Heritage platforms are all connected to the Las Flores plumbing system and associated processing facilities.

It was in 2015 that the oil network suffered a huge spill when the Santa Ynez unit was owned by another company. A leak occurred when a corrosive pipe broke and released an estimated 140,000 gallons of crude oil near Redgio State Beach. Sable's current work is designed to repair and upgrade these lines.

During Thursday's hearing, Sable supporters insisted that the upgrade would make the pipeline network more reliable than ever.

Mai Lindsey, a contractor who works on Sable's leak detection system, said she found how the committee claimed it was “unfair” in its work.

“Are you doing this in the lane?” Lindsey asked.

She said people need to understand that considering how technology in her industry has changed dramatically, focusing on leaks that were previously no longer relevant: “We learn and improve,” she said.

Steve Balkcom, a Sable contractor who lives in Orange County, said he has worked on the pipeline for forty years and he undoubtedly will be the safest. He disputed with the attitude of being “not in my backyard”.

“I know the pipeline can be safe,” Balkcombe said.

Sable believes it can perform corrosion repair work under the original 1980s license. The company believes such licenses are still of great significance as its work is only about repairing and maintaining existing pipelines, not building new infrastructure.

The Coastal Commission rejected the idea on Thursday. Several photos of Sable's ongoing pipeline work are shown, and the committee's law enforcement chief Lisa Haage said Sable's work is “wide-ranging in terms of scale and resources that impact”.

The committee staff also believed that the current work was far from the original permit, noting that the latest requirement for the state fire marshal's authorization was a new standard for coping with corrosive trends in pipelines.

“They not only work in sensitive habitats, but do not have adequate environmental protection, but are at risk for sensitive species and refuse to comply with orders sent to them to resolve these issues,” Haage said at the hearing.

However, in a defense statement, Sable said the project would “strengthen the environmental and safety requirements than any other pipeline in the state.”

Carpinteria resident Jessica Norris held a sign in the overflow room during a California Coastal Commission hearing.

(Michael Owen Baker / The Times)

According to investors, when the St. Ines unit is fully online, it is estimated that it could generate 28,000 barrels of oil per day, while generating $5 million in new taxes and another 300 jobs per year for the county. Sable is expected to restart offshore oil production in the second quarter of this year, but the company acknowledges that there are still some regulatory and oversight barriers.

Most notably, its reboot plan still has to be approved by the state fire marshal, although several other parts are also being reviewed by other state agencies, including the State Parks and the State Water Resources Control Board.

The commissioner thanked the community for their comments Thursday, including those from Sable employees, Harmon called “the hard-working person” and was not responsible for any violations of coastal conduct.

“Coastal development allows jobs to be safe,” Harmon said. “They not only make our environment safer … they are safer for people who work in this job.”

She urged Sable to work with the committee.

“We can have a good salary job and we can protect and protect our shores,” Harmon said.

But some environmentalists say Thursday's findings should further question Sable's larger projects.

“How do we trust this company to be responsible, safe or comply with any regulations or laws?” Alex Katz, executive director of the Santa Barbara-based Environmental Defense Center, said in a statement. “California can’t afford another disaster on our coast.”