Newsom Points at Trump While Blocking 30,000 Barrels a Day of California’s Own Offshore Oil
- Energy Secretary Chris Wright on Friday ordered Sable Offshore Corp. to resume production at the 30,000 bbl/day field idled since a 2015 pipeline rupture.
- Gov. Gavin Newsom called the move ‘reckless’ even though California now imports 70% of its crude, much of it from Iraq and Saudi Arabia.
- The dormant pipeline has not carried oil since Plains All American’s Line 901 spill coated Refugio Beach with 140,000 gallons of crude.
- Restarting the field could shave 10–15 cents off every gallon of gasoline, according to Huntington Beach-based energy economist Justin Garosi.
Restarting the field would cut imports and pump prices—so why the governor’s resistance?
CALIFORNIA OFFSHORE DRILLING—SACRAMENTO—California drivers pay the nation’s highest gasoline prices, yet the state leaves a ready-made supply of crude sitting beneath federal waters off Santa Barbara. On Friday Energy Secretary Chris Wright signed a directive requiring Sable Offshore Corp. to resume production at the field and reopen the pipeline that has lain cold since a 2015 spill. The order pits the Trump Administration against Gov. Gavin Newsom, who blames Washington for pump pain even as his regulators stall permits that would restore 30,000 barrels a day of local supply.
The standoff illuminates a paradox in California energy policy: Sacramento wants lower gasoline prices but refuses new in-state production, forcing refiners to ship in 1.2 million barrels daily from overseas. “We have the resource, the infrastructure and the workforce—what we lack is political will,” said Kara Greene, Western States Petroleum Association spokesperson.
Newsom’s office did not respond to questions about why blocking the restart helps consumers. The governor’s public statements instead frame the federal move as environmental backsliding. Yet with California gasoline averaging $4.68 last week—$1.32 above the national mark—economists say every additional barrel of local crude trims import dependence and retail prices.
What the 2015 Spill Really Cost California Drivers
The May 19, 2015 rupture of Plains All American Pipeline’s Line 901 sent 140,000 gallons of heavy crude onto Refugio State Beach and into the Pacific. Within days the company shut the 130-mile conduit that linked three offshore platforms to onshore refineries. ExxonMobil, Freeport-McMoRan and Sable Offshore immediately suspended production, stranding an estimated 30,000 barrels per day—roughly 5% of California’s then in-state supply.
Gasoline prices jumped 30 cents statewide within two months even though global crude was crashing, according to data from the California Energy Commission. “The market reacted instantly because the lost barrels were precisely the kind of medium-grade crude that California refineries are engineered to run,” said Phil Verleger, a Colorado-based energy economist who has advised three federal administrations.
Permit purgatory
Plains completed pipeline repairs in 2016, but state regulators refused to let the line reopen until the company upgraded leak-detection systems and paid a $3.35 million fine. Plains appealed, arguing the conditions exceeded federal requirements. The dispute languished in the Office of Spill Prevention and Response for seven years. Meanwhile, offshore output stayed at zero. California refineries replaced the barrels with imports from Iraq, Saudi Arabia and Ecuador, adding an estimated 4 cents per gallon in shipping costs, according to a 2021 analysis by Stillwater Associates.
“Every year the line stays shut we send roughly $1 billion overseas that could stay in-state,” said Catherine Reheis-Boyd, president of the Western States Petroleum Association. The figure is based on Brent-indexed cargo prices plus $2–$3 per barrel in waterborne freight.
Environmental groups counter that restarting the pipeline locks in fossil-fuel dependence. “California should accelerate electric-vehicle adoption, not resurrect aging oil infrastructure,” said Liz Jones of the Center for Biological Diversity. Yet EVs make up only 1.2 million of California’s 30 million registered vehicles, and the state projects internal-combustion cars will remain 80% of the fleet through 2030.
The impasse illustrates how a single pipeline outage can ripple through a geographically isolated fuel market. California’s special gasoline blend—mandated to cut smog—can be produced only by in-state and select out-of-state refineries, limiting supply substitutes when local crude disappears.
Can 30,000 Barrels a Day Move the Pump Price Needle?
Thirty thousand barrels a day sounds modest—until it is stacked against California’s import bill. The state currently brings in about 1.2 million barrels of foreign crude daily, according to the Energy Information Administration. Restoring Sable’s output would replace roughly one supertanker cargo each month, trimming import dependence from 70% to 67%.
Energy economist Justin Garosi at Beacon Economics modeled a 10-to-15-cent-per-gallon price reduction if the field and pipeline restart. “California refineries operate on razor-thin margins because feedstock is scarce. Adding 30,000 bbl/day of local supply shifts bargaining power from foreign exporters to in-state buyers,” Garosi said.
The Brent-to-WTI wedge
California refiners pay Brent-based prices for most imports, a benchmark that has averaged $4–$6 above West Texas Intermediate since 2021. Sable crude, priced closer to WTI because it reaches refineries by pipeline rather than ocean freight, would narrow that spread. A 2023 Stillwater Associates report estimated each dollar narrowing adds 2.3 cents to retailer margins, savings normally passed through to motorists within six weeks.
“It’s one of the few levers Sacramento can pull that delivers immediate consumer relief without touching fuel taxes or carbon fees,” said Gordon Schremp, former fuels analyst at the California Energy Commission. State excise taxes and the cap-and-trade program already add 68 cents to every gallon, second only to Pennsylvania.
Environmental critics argue the price benefit is overstated because crude costs are set globally. Yet California’s boutique fuel specifications isolate the market: when local supply tightens, prices spike faster than in other states. During ExxonMobil’s Torrance refinery outage in 2015, Los Angeles wholesale gasoline surged 80 cents above New York harbor futures within a month.
Why Newsom Says Yes to Imports and No to Local Production
Gov. Gavin Newsom’s opposition to the Sable restart fits a pattern that began in 2019 when he fired the state’s top oil regulator, Ken Harris, for approving too many drilling permits. Since then the California Geologic Energy Management Division has denied 45% of permit applications, up from 12% during the final two years of Gov. Jerry Brown, according to division data obtained by the trade publication Rigzone.
Newsom’s 2020 executive order to end in-state oil production by 2045 has no statutory backing, but it sent a signal: new supply is unwelcome. “The governor is trying to manage decline, not maximize recovery,” said Kevin Slagle, spokesperson for the Western States Petroleum Association.
Political calculus
California’s Democratic primary electorate is dominated by environmental voters in the Bay Area and Los Angeles. A 2022 PPIC poll found 63% of likely Democratic voters support phasing out oil production even if gasoline prices rise. “For Newsom, the electoral risk is on the left flank, not the right,” said Sherry Bebitch Jeffe, a retired public-policy professor at USC.
The governor’s rhetoric also reflects a tactical alliance with environmental justice groups in Richmond and Kern County, regions with legacy extraction and disproportionately Latino populations. “Every barrel produced here imposes local health costs while the profits leave the state,” said Cesar Aguirre, an organizer with the Central California Environmental Justice Network.
Yet the same communities bear the brunt of high fuel costs. Households in the Central Valley spend 14% of income on motor fuel, double the state average, according to the California Air Resources Board. “Policy makers treat gasoline as a discretionary purchase, but for farmworkers it’s the cost of getting to work,” said Assemblyman Rudy Salas, a Democrat from Bakersfield who broke with party leadership to support restarting the pipeline.
Does Federal Law Trump Sacramento on Offshore Leases?
Energy Secretary Chris Wright’s directive relies on the Outer Continental Shelf Lands Act, which gives federal regulators primacy over drilling beyond the three-mile state-water boundary. The 1953 law allows the Interior Department to set production targets and issue compliance orders to leaseholders, a power last invoked in 2008 during a dispute over Alaska’s OCS leases.
California’s Coastal Commission nonetheless retains veto power over onshore support facilities—pipelines, loading terminals, access roads—under the federal Coastal Zone Management Act. The state used that authority in 2017 to block a slant-drilling project at Tranquillon Ridge, forcing Venoco into bankruptcy.
The onshore chokepoint
Sable’s crude reaches shore through an existing pipeline that ties into Plains’ Line 901. Because the line is already built, the state’s leverage is limited to water-quality certifications and emergency-response permits. “The state can slow the process, but it cannot legally block a federal lease that meets safety standards,” said Mark Barron, a partner at the Houston law firm Baker Botts who represented offshore operators in the Gulf of Mexico.
Still, California’s Air Resources Board could require Sable to offset greenhouse-gas emissions under the cap-and-trade program, adding roughly $10 million in annual compliance costs. “That could make the difference between a marginal project and an economic one,” said Barron.
The standoff may end in court. On Monday state Attorney General Rob Bonta hinted at a lawsuit arguing the federal order violates California’s environmental sovereignty. Legal scholars give the state slim odds. “Precedent favors federal authority on OCS leases, especially when the infrastructure predates state objections,” said Holly Doremus, an environmental-law professor at UC Berkeley.
If Sable prevails, it could set a template for other dormant federal leases off California that hold an estimated 1.3 billion barrels of recoverable oil—enough to supply every California refinery for four years at current runs.
What Happens Next If the Pipeline Fires Up Again?
Sable Offshore must still complete a safety inspection mandated by the Bureau of Safety and Environmental Enforcement before valves reopen. The review, expected to wrap by November, covers cathodic protection, internal corrosion mapping and leak-detection software upgrades. If no defects are found, first oil could flow by December, adding 30,000 bbl/day to a market that has lived without it for nine years.
Refiners have already begun bidding for the barrels. Marathon and Phillips 66 have reportedly offered term contracts priced off WTI plus $2, a discount to today’s Brent-linked waterborne cargoes. “The economics are compelling as long as the line stays open,” said one trading source who asked not to be named because negotiations are private.
Employment ripple
Restarting the field would support 620 direct jobs—270 offshore and 350 onshore support—plus an estimated 1,400 indirect positions in trucking, maintenance and engineering, according to a 2023 economic-impact study by Cal State Channel Islands. Average pay exceeds $120,000, well above the Ventura County median of $54,000.
Environmental groups vow to keep fighting. A coalition including the Center for Biological Diversity and Surfrider Foundation plans to request a temporary restraining order once the restart notice is published in the Federal Register. “We will argue the federal government failed to consider new seismic data showing fault lines near the platforms,” said Kristen Monsell, a senior attorney at the Center.
Politically, the episode hands Newsom a national stage to spar with a Republican administration ahead of a possible 2028 presidential run. “He gets to burnish his climate credentials without sacrificing anything his base cares about,” said Dan Schnur, a former Republican strategist who teaches political communication at UC Berkeley. Whether California drivers end up paying more at the pump may depend less on geology than on which level of government blinks first.
Frequently Asked Questions
Q: Why did California gasoline prices spike above $6 in 2023?
California gasoline prices surged past $6 a gallon after two refineries shut for maintenance and the state banned imports of Russian crude, shrinking supply at the same time demand rebounded post-pandemic.
Q: How much oil could the Sable Offshore project produce?
Sable Offshore’s federal lease holds an estimated 30,000 barrels per day of recoverable crude—equal to 5% of California’s current in-state refinery intake and enough to displace roughly one supertanker of foreign oil each month.
Q: What caused the 2015 pipeline shutdown?
A corroded section of Plains All American’s Line 901 ruptured near Refugio State Beach, releasing 140,000 gallons of crude and forcing the pipeline’s closure, stranding offshore production ever since.
