California’s Sable Pipeline Suit Tests ‘Energy Emergency’ Reach

California’s legal challenge to the Trump administration’s restart of Sable Offshore Corp.'s pipeline opens a new front in a battle over whether federal agencies can override traditional state powers under broad executive order directives.

The case over the Las Flores pipeline in Santa Barbara, Calif., sets up a potential administrative law dispute that’s taking shape after the US Supreme Court’s 2024 Loper Bright Enterprises v. Raimondo decision, which gutted judicial deference to federal agencies’ interpretations of ambiguous laws. But perhaps more important is the question of whether a federal agency can rely on a broad presidential emergency declaration to upend longstanding procedures.

The administration says a compliance waiver provision in the Pipeline Safety Act was activated under President Donald Trump‘s “National Energy Emergency” executive order, authorizing the restart of an offshore drilling system that’s remained dormant since a major oil spill in 2015.

California Attorney General Rob Bonta (D) begs to differ.

He says the federal Pipeline and Hazardous Materials Safety Administration unlawfully classified the facilities as “interstate” assets under the PSA, as the pipeline sits fully within the state’s jurisdiction.

Bonta hopes to succeed where environmental groups failed after the US Court of Appeals for the Ninth Circuit denied their bid to halt PHMSA’s federal emergency special permit.

With the state now wading into the fray, legal observers anticipate that the courts will settle the broader issue of whether the federal government can effectively waive safety measures based on an interpretation of federal law coupled with a broad emergency determination.

“You see state attorney generals all over the country pushing back out of a globalized concern of the over extension of federal authority,” said Erin Ryan, an associate dean of Florida State University College of Law’s environmental program.

“This is a way of trying to enforce the principles of federalism by making sure that there is at least a robust conversation about the limits of federal authority,” she said.

PHMSA didn’t respond to requests for comment.

Emergency Question

Opponents say Sable never fixed the pipeline that ruptured in the St. Refugio oil spill more than a decade ago, despite the repairs being a term of a consent decree issued in the wake of the disaster. Instead, they say the company is rushing the operation without addressing the structural faults that caused the disaster.

While the company resumed drilling on the offshore platforms last year, the oil is barred from flowing to the Las Flores processing facility under a state court’s preliminary injunction and the company’s inability to obtain approvals from the Office of the State Fire Marshal and the California Coastal Commission.

Sable then sought an emergency special permit after its plans to restart the pipeline system stalled.

Scholars say Loper Bright opens a window for California to question whether Trump’s reason for declaring a domestic energy emergency—"insufficient energy production"—warrants such a permit.

The PSA directs PHMSA to issue one when “necessary to address an actual or impending emergency involving pipeline transportation, including an emergency caused by a natural or man made disaster.”

PHMSA’s implementing regulations offer examples of disasters that can significantly disrupt fuel supply, including hurricanes, floods, acts of terrorism, and biological outbreaks.

For Sable’s emergency special permit, however, the agency said regional energy demands and risk mitigation for potential fuel shortages necessitate waiving compliance with a PSA mandate for pipeline corrosion “along a longitudinal seam” to be fixed within 180 days of discovery.

“This reasoning is not consistent with the statute, and after Loper Bright we’re not going to see a court defer to the agency here,” said Sara Gosman, a professor at the University of Arkansas School of Law.

“I don’t think there’s any reason to think that a court would defer to the President’s executive order about what an emergency might mean,” she said.

Emergency special permits are rare, and the question remains why Sable needed this kind of compliance waiver so quickly, without the normal public notice or comment period, Gosman said.

The White House National Energy Dominance Council executive director said the presidential advisory body is “working with” Sable, adding the council previously helped with permitting issues from California.

“What this is, is a form of regulatory relief,” which “wasn’t really what the process was meant to do,” Gosman said.

“LEPA supports PHMSA’s use of its statutory authority during emergencies to facilitate energy movement in ways consistent with pipeline safety, as the law requires,” Andy Black, president and CEO of the Liquid Energy Pipeline Association, said in a statement.

Matter of Interpretation

PHMSA officials “are contravening what is the normal interpretive policy” for determining whether a pipeline is considered inter- or intrastate under the PSA, Ryan said.

As a general rule PHMSA relies on the existence of a Federal Energy Regulatory Committee tariff to confirm that a facility engages in interstate commerce. FERC tariffs operate as legal documents detailing rates, terms, and conditions of service for public utilities and oil and natural gas pipelines.

The granted approval, which relies on the energy executive order, waives compliance from the PSA’s FERC tariff requirement, as the one covering Las Flores has expired.

PHMSA said state-based hurdles are preempted by federal authorizations in the emergency permit notice letter the agency sent to Sable last year. Because the pipeline originates on the Outer Continental Shelf, the system automatically comes under federal oversight, the agency said.

The administration is invoking interstate commerce to classify the pipeline as a federal issue, “arguing that this is between a place in a state and outside that state,” said Hannah Wiseman, a professor at the Penn State Dickinson Law.

“They are claiming this under their interpretational authority, as opposed to the actual language of the Pipeline Safety Act,” she said.

The language of the law only assigns PHMSA jurisdiction over oil operations that run outside or between state lines, but here the agency is arguing the pipeline’s start point is on the OCS, not at the onshore processing facility, she said.