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(Bloomberg) — Sable Offshore Corp. is seeking the Trump administration’s help to jumpstart a California oil project stalled by red tape.
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The Houston-based company’s effort to tap hundred of millions of barrels of crude off the coast of Santa Barbara have been stymied by state regulators’ opposition to reopening pipelines that funnel the crude to refineries.
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If state approval isn’t forthcoming soon, Sable is prepared to go all-in on a plan to use tanker ships to haul the crude away to other markets, said Chief Executive Officer Jim Flores.
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It’s “absolutely on Trump’s agenda,” Flores said in an interview. He urged state leaders to consider the potential impact on consumers and the state’s fuel supplies if that oil goes overseas instead of to local refineries. “California has an opportunity to make sure California consumers come first.”
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Trump’s National Energy Dominance Council led by Interior Secretary Doug Burgum and Energy Secretary Chris Wright has been apprised of Sable’s dilemma and is engaged in discussions with the company.
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Californians already shoulder some of the highest pump prices in the nation because of stiff environmental rules, bespoke fuel formulations and high taxes. The situation is set to get even more dire in coming months amid refinery shutdowns that will tighten local gasoline and diesel production, and spur increased fuel imports.
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California Governor Gavin Newsom and the Trump administration have been in open conflict about everything from education to tariffs to immigration. But despite Newsom’s recent rapprochement with the oil industry, Sable has been left out of that embrace.
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Newsom’s office declined to comment aside from referencing a Sept. 12 summary of regulatory measures involving Sable’s pipelines.
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The Santa Ynez Unit, as the cluster of offshore oil fields is known, was in a state of suspended animation after a Plains All American pipeline burst in 2015, staining beaches and alarming regulators and environmentalists. Sable acquired the assets from Exxon Mobil Corp. last year, and restarted oil production on the 10-year anniversary of the spill in May. But the onshore pipe network that feeds crude to refineries hasn’t yet been permitted to reopen.
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The Interior Department declined to comment beyond referring to a July statement lauding the temporary restart.
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Environmental groups have decried Sable’s proposed pipeline restart and a broader push by Newsom to spur more oil drilling in the state.
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“Sable should spend less time looking for help from the Trump administration and more time respecting California laws,” said Julie Teel Simmonds, senior counsel for the Center for Biological Diversity. The proposal to use ships to haul away crude seems “like a deliberate attempt to evade state oversight.”