A federal judge modified the court order governing Sable Offshore Corp.’s Santa Ynez Pipeline System to replace California’s pipeline regulator with a federal agency, allowing the company to continue transporting oil and reducing the state’s immediate authority over the pipeline restart.
U.S. District Judge Stephen V. Wilson ruled August 19, 2026, that the Pipeline and Hazardous Materials Safety Administration would replace the California Office of the State Fire Marshal as the agency administering key provisions of the federal consent decree governing Lines CA-324 and CA-325. The court also imposed approximately $1.449 million in stipulated penalties, payable to California, after finding that Sable violated the decree before it was modified.
The ruling stems from a consent decree entered after the 2015 Refugio oil spill involving the pipeline’s previous owner, Plains All American Pipeline. The decree required the operator to obtain state waivers and approval of restart plans from the Office of the State Fire Marshal before placing the pipelines back into service.
Sable acquired the pipeline system and agreed to be bound by the decree. The court determined that Sable violated the consent decree when it restarted without obtaining all required state approvals. The judge, however, denied California’s request for an injunction shutting the pipeline down, concluding that changed circumstances justified modifying the decree. Those circumstances included the change in pipeline ownership and a federal Defense Production Act order directing operation of the Santa Ynez Pipeline System.
The court also ruled that the federal Defense Production Act order prevents the California Department of Parks and Recreation from taking legal action that would stop Sable from operating the onshore pipeline in compliance with that order.
Separately, California is challenging both the federal government’s jurisdictional determination and the PHMSA’s permits. In July, California filed a legal challenge to block the pipeline restart. The state petitioned the U.S. Court of Appeals for the Ninth Circuit to invalidate a federal permit issued by the PHMSA. California also sued to block the federal order directing Sable to restart the pipeline.
California can still seek to enforce portions of the modified consent decree and is continuing separate challenges to PHMSA’s actions.
The dispute is emerging as an important test of whether the federal government can use the Defense Production Act to prevent states from enforcing environmental laws that interfere with a federally directed energy project.