Trump admin invokes Defense Production Act, directs oil company to restart California operations
The Trump administration invoked the Defense Production Act to order an oil company to restart shuttered offshore operations in California, saying the move is necessary to address oil supply disruption risks and reduce reliance on foreign crude.
Energy Secretary Chris Wright on Friday directed Sable Offshore Corp., an oil and gas company headquartered in Houston, to restore operations at the Santa Ynez Unit and the Santa Ynez Pipeline System off the coast of Santa Barbara, according to a statement from the Department of Energy (DOE).
The order prioritizes restarting oil production and pipeline capacity to move crude through the Las Flores Pipeline System to Pentland Station, a key inland hub for transporting offshore oil to refineries, and into interstate pipelines.
"California once supplied nearly 40 percent of U.S. oil production, but decades of radical state policies targeting reliable energy sources have driven a decline in domestic output while fuel demand remains among the highest in the nation," the DOE said. "Today, more than 60 percent of the oil refined in California comes from overseas, with a significant share traveling through the Strait of Hormuz—presenting serious national security threats."
The agency said Sable’s facility can produce about 50,000 barrels of oil per day, roughly a 15% increase in California’s in-state oil production, and could replace about 1.5 million barrels of foreign crude each month.
"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," Wright said in a statement.
The directive, issued under authorities delegated through the Defense Production Act and related executive orders, also seeks to ensure that oil produced off California’s coast can more efficiently reach domestic refineries.
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California Gov. Gavin Newsom condemned the order Friday, calling the Trump administration’s use of the Defense Production Act "reckless and illegal" and pledging to fight the directive.
His office argued that restarting the Sable Offshore pipeline would have little effect on global oil prices, citing estimates that its output would represent roughly 0.05% of total oil production.
The governor also pointed to the pipeline’s history, noting that a 2015 spill near Refugio State Beach released more than 140,000 gallons of crude oil and caused widespread environmental and economic damage along the Santa Barbara coast.
"California will not stand by while the Trump administration attempts to sacrifice our coastal communities, our environment, and our $51 billion coastal economy," Newsom said in a statement. "The Trump administration and Sable are defying multiple court orders, and we will see them back in court."