The Energy Department says its Defense Production Act order shores up West Coast fuel supplies and military readiness; California, three Democratic senators and environmental groups are asking the Ninth Circuit to block it.
The fight over a Santa Barbara County oil pipeline that ruptured in 2015 has become a test of how far a 1950 defense law can reach, and members of the Senate Environment and Public Works Committee are now weighing in.
At issue is a March 13 order from Energy Secretary Chris Wright that invoked the Defense Production Act to direct Houston-based Sable Offshore Corp. to restore the Santa Ynez Unit, three offshore platforms, and the onshore pipeline system that runs from Las Flores Canyon to Pentland Station in Kern County. California sued ten days later. A federal judge in Los Angeles refused in August to halt the order, and the state’s appeal, California v. Wright, is now before the U.S. Court of Appeals for the Ninth Circuit.
This month the appeal drew two sets of friend-of-the-court briefs on California’s side: one led by Sen. Sheldon Whitehouse of Rhode Island, the committee’s ranking Democrat, with California Sens. Alex Padilla and Adam Schiff and Rep. Salud Carbajal, whose district includes the pipeline; and one from a coalition of Central Coast and national environmental groups.
The administration’s case
The Energy Department has framed the order as a national-security measure. In its March 13 announcement, the department said it was acting “to address supply disruption risks caused by California policies that have left the region and U.S. military forces dependent on foreign oil.” It said the Santa Ynez system could produce about 50,000 barrels a day, roughly a 15 percent increase in California’s in-state output, and replace nearly 1.5 million barrels of foreign crude a month. It noted that more than 60 percent of the oil refined in California comes from overseas and that the state is largely cut off from interstate crude pipelines.
“The Trump Administration remains committed to putting all Americans and their energy security first,” Mr. Wright said at the time. “Today’s order will strengthen America’s oil supply and restore a pipeline system vital to our national security and defense, ensuring that West Coast military installations have the reliable energy critical to military readiness.”
When U.S. District Judge Stephen V. Wilson denied California’s request for a preliminary injunction on Aug. 19, the Justice Department said the ruling vindicated that judgment. In an Aug. 21 statement, the department said the pipeline moves more than one million barrels of domestic crude a month and is “essential to maintaining stable fuel supplies for more than 32 U.S. military installations across the West Coast.”
“This ruling upholds decisive federal action to protect national security by restarting the flow of 50,000 barrels of oil per day when the stability of America’s energy supply is threatened,” said Adam Gustafson, a principal deputy assistant attorney general.
Sable has said it is following a lawful federal directive. The company resumed oil flow on March 14, and its chief executive, Jim Flores, said in a company release that the company was “putting California consumers first by increasing domestic supply of crude oil into the California market by approximately 17%.” He added, “We look forward to working closely with the Department of Energy in fully complying with the DPA and working with the Trump administration to take all necessary steps to deliver the energy necessary for the security and defense of the country.”
California’s challenge
Attorney General Rob Bonta’s lawsuit, filed March 23 in the Central District of California, argues that the order unlawfully overrides state law, a Santa Barbara County Superior Court injunction and a 2020 federal consent decree that governs the lines, known as CA-324 and CA-325. The suit raises claims under the Administrative Procedure Act, the Tenth Amendment and the separation of powers. Line CA-324 was the source of the 2015 Refugio spill, which released about 140,000 gallons of crude onto the Gaviota Coast.
“California has seen first-hand the devastating environmental and public health impacts of these pipelines rupturing, and there are court-ordered legal requirements in place to ensure that it doesn’t happen again,” Mr. Bonta said when he filed the case.
Judge Wilson found that the Defense Production Act gives the executive branch “substantial discretionary power,” and he denied the injunction. He also shifted oversight of the consent decree from the State Fire Marshal to the federal Pipeline and Hazardous Materials Safety Administration. California filed its opening appellate brief on Oct. 2. In court papers, the state has argued that Sable’s expected 50,000 barrels a day would add only “a fraction of a percent” to the domestic market, Bloomberg Law reported.
The senators’ brief
The lawmakers’ brief, announced in a release from the committee’s Democratic minority, urges the Ninth Circuit to reverse Judge Wilson and grant the injunction. It contends that the department “relies on vague national defense justifications of questionable relevance for the Order but fails to articulate why Sable’s crude-oil production and operation … are ‘necessary’ for national defense,” and that “Sable does not produce the type of refined products that the military purchases.”
Mr. Padilla sits on both the Environment and Public Works Committee and the Senate Energy and Natural Resources Committee, which oversees the Energy Department, and Mr. Schiff is also a member of Environment and Public Works. The brief was co-signed by Sen. Tammy Duckworth of Illinois and 11 other California House Democrats, including Northern California Reps. Zoe Lofgren, John Garamendi, Jimmy Panetta and Mike Thompson. The minority release, noting that the project was led by a Trump donor, also accuses the department of intervening “to rescue a favored political ally from financial ruin.”
The Inquirer found no public statement on the brief from the committee’s Republican majority, led by Chairwoman Shelley Moore Capito of West Virginia. Spokespeople for the committee’s majority and minority, the Energy Department’s press office and Sable’s investor-relations office did not respond to requests for comment.
The environmental groups
The second brief, filed by Earthjustice on behalf of the Environmental Defense Center, the Center for Biological Diversity, Get Oil Out!, Santa Barbara Channelkeeper, the Santa Barbara County Action Network, the Sierra Club and the Wishtoyo Foundation, argues that the Defense Production Act does not support the order and that the order is subject to court review under the Administrative Procedure Act. KCLU reported on the filing Oct. 22, the day the groups announced it.
Asked about the case, Alex Katz, the Environmental Defense Center’s executive director, wrote in an email to The Inquirer: “I’m responding to your message about the Sable story. Here’s our press release about the DPA lawsuit. The arguments are summarized below and there’s a quote here from our Deputy Chief Counsel.”
In that release, Maggie Hall, the center’s deputy chief counsel, said: “We’re facing an unprecedented situation where the federal government is brazenly undermining laws, court orders, and even state property rights for the benefit of one oil company. If Secretary Wright’s order stands, federal officials could override the law in any state to benefit oil drillers, data centers, mining interests, or any other company if they claim to be acting for national security reasons. Here on the Central Coast, allowing Sable to operate a failed oil pipeline outside of state laws and judicial oversight puts our entire region at risk of another disaster.”
What comes next
The Defense Production Act case is one of several over the pipeline. A separate set of petitions in the Ninth Circuit challenges the pipeline safety agency’s decision to treat the onshore lines as interstate, which would put them under federal rather than state oversight; a panel there ordered additional briefing before ruling. Sable has also sued California State Parks in a related dispute.
The outcome could reach beyond Santa Barbara County. The Justice Department’s Office of Legal Counsel concluded in a March 3 opinion that a Defense Production Act order can preempt state law, and the Ninth Circuit’s ruling could be among the first appellate tests of that reasoning for an energy project a state had kept offline. For California, the immediate question is whether oil keeps moving along the Gaviota Coast while the courts decide.
Rosalind Achterberg covers the Senate Environment and Public Works and Energy and Natural Resources committees, from permitting and water law to nominations and the federal lands that cover nearly half of California, for the Inquirer’s Energy & Environment desk. More from Rosalind Achterberg
