California Just Protected Its Coast by Fining a Texas Oil Company $18 Million

Updated 4:28 p.m. Thursday

The California Coastal Commission voted Thursday to fine a Texas-based oil company $18.2 million for what officials say is unpermitted construction on a dormant offshore drilling operation, a landmark decision that could affect future coastal oil projects in the state.

“If you want to go out and try to supersede the people of the state of California, we’re going to stand up for ourselves,” said Justin Cummings, chair of the commission. “I believe this action will demonstrate to folks that we take these matters extremely seriously.”

At issue is oil company Sable Offshore’s intent to resurrect oil production off the Gaviota Coast on the so-called Santa Ynez Unit, nearly a decade after a section of corroded pipe ruptured there, spilling more than 100,000 gallons of oil in the waters off Santa Barbara County.

Over the past year, Sable began restoring the pipelines responsible for the 2015 spill — which occurred under different ownership — over demands from the Coastal Commission to halt construction.

The area where the company would eventually pump oil once again is within federal waters. However, to get the oil back onshore, the company must send it through a pipeline jutting through state waters and onto land, which is why the commission is involved.

In a report issued ahead of Thursday’s hearing in Santa Barbara, the commission staff recommended a $14.9 million administrative penalty against Sable, a cease and desist order to halt construction activity until the company complies with permitting laws and a restoration order to remedy negative environmental impacts from the work.

At the hearing, the commission passed all staff recommendations but raised the fine to the maximum amount. If the company aligns itself with its permitting process, it will reduce the fine back to the original amount.

“Sable’s refusal to comply is a refusal to follow the law; their refusal, in a very real sense, is a subversion of the will of the people of the state of California,” said Commissioner Meagan Harmon, who represents the south central coast.

“I don’t think anyone wants to stop repairs that are going to keep us safe, but they have to be done in the right way,” she added.

At Thursday’s hearing in Santa Barbara, opponents to the staff findings were given the first opportunity to address the commission. A number of people and Sable staff defended the company’s reputation, bringing “well-paying jobs” to the region and described the commission’s decision as unnecessary jurisdictional overreach.

“How much of our taxpayer dollars are going to be continued to be wasted by the commission staff fighting the very local agencies that they delegated jurisdiction to?” said Trent Fontenot with Sable. “This continuing power grab must stop and stop wasting taxpayer money.”

Hannah Beth-Jackson, former state senator for the Santa Barbara area who witnessed the 2015 oil spill, urged the commission to punish Sable for its “arrogance” to continue work without commission permission.

“This pipeline is significantly corroded,” she said. “All of these efforts that we’ve heard about remind me of the expression that you can’t put lipstick on a pig. This pipeline is a problem.”

Dozens of supporters of the commission’s decision packed the hearing, including students from Santa Barbara Middle School. Ninth grader Gus Larsen called Sable’s willingness to “gamble another huge oil spill disgusting.”

“Don’t just think about the money,” he said. “Think about the fish, the animals and think about the children, who might never get to see the beauty of Santa Barbara. Think about us.”

Sable officials said in a statement that the company is “dedicated to restarting project operations in a safe and efficient manner.” They added that “no California business should be forced to go through a protracted and arbitrary permitting process when it already has valid permits for the work it performed.”

‘They’ll only stop if a court makes them’

During an overflowing town hall to discuss the pipeline construction in mid-March, Cassidy Teufel, deputy director of the Coastal Commission, said the work is “very problematic” and occurred during bird nesting season as well as the breeding season for federally endangered species like steelhead salmon.

The commission alleged Sable started the work without its approval, refused to apply for a coastal development permit and ignored demands to stop its work — including two cease and desist orders in November and February.

“This is the first time in the agency’s history that we have had a party blatantly ignore a cease and desist order like this and refuse to submit a permanent application,” Teufel said. “Sable’s representatives have told us they’ll only stop if a court makes them.”

Teufel said the commission is working with the California attorney general’s office “to move in that direction.” He said the situation is complicated because the Santa Barbara County Planning Department’s position is that the “work is covered by a permit issued nearly 40 years ago,” though the commission disputes that claim.

Hundreds of people crowded the town hall, including at least one celebrity.

“I can smell a rat, and this project is a rat,” Santa Barbara resident and actor Julia Louis-Dreyfus said at the town hall. “If I violated a stop-work order on my own property, I would get arrested. But these guys from Texas get a pass?”

In its March 28 report, the commission staff alleges (PDF) that the company’s onshore and offshore activities violate the California Coastal Act and “have adversely impacted, and continue to adversely impact, coastal resources.”

In a letter sent Friday to the commission and posted on the company’s website, Sable officials said they “vehemently” disagree with the commission’s report.

“Work on these existing facilities is substantially identical to work that has taken place here for the past 30 years, without a need for new Coastal Act authorizations,” Steve Rusch, vice president of environmental and governmental affairs, said in a statement. “Commission staff continues to exaggerate the project’s impacts.”

‘No one is above the law’

For many along the Central Coast, the 2015 spill had worrying parallels to another offshore oil disaster nearly five decades earlier. That 1969 Santa Barbara oil spill helped to ignite the modern environmental movement — leading to the first Earth Day — and create the California Coastal Act (PDF).

Scientists and environmentalists say they worry that resurrecting oil production could result in another spill that harms life and livelihoods on the coast.

Linda Krop, chief counsel for the Environmental Defense Center, would like the state to take swift enforcement action against Sable to send a message that “no one is above the law.” She insists any movement on the project must include environmental review and formal public input.

“If Sable is allowed to violate the law and these orders, what message does that send to every other business in California?” Krop said. “If restarted, this would be the largest oil project in California and the biggest threat to the California coast.”

Dave Valentine, professor of microbiology and geochemistry at UC Santa Barbara, said there have been four significant oil spills in the region over the last seven decades and that renewing the oil wells could establish production for nearly a century near critical habitats and beloved beaches.

“It’s not an ideal situation, especially if something goes wrong,” Valentine said. “The idea that production is going to resume and suddenly there’s going to be large volumes of oil flowing through this pipeline again is very concerning.”

Thursday’s vote could also have implications for the Coastal Commission’s authority over the state’s coastline at a time when the Trump administration is planning to open federal waters to more oil and gas production.

“How well the Coastal Commission is able to push back and control the coastline in the interest of California is going to be important,” said Ronald Tjeerdema, an environmental toxicologist at UC Davis who has studied oil spills for more than three decades.

“If the commission can’t and the feds just sort of run over them, then that’s going to set a precedent that will impact California in the future and probably other coastal states where they’re looking to drill.”