Trump Orders California Pipeline Restart Amid Iran War

President Trump ordered Sable Offshore Corp. to restart its Santa Ynez Unit and pipeline off Southern California on Friday, invoking emergency powers under the Defense Production Act. The move aims to address supply disruption risks caused by rising gas prices amid the ongoing war with Iran.

The Santa Ynez Unit includes three rigs in federal waters, offshore and onshore pipelines, and the Las Flores Canyon Processing Facility. According to officials, this facility can produce about 50,000 barrels of oil per day, replacing nearly 1.5 million barrels of foreign crude each month.

Energy Secretary Chris Wright stated that the Trump Administration remains committed to putting all Americans and their energy security first. He criticized some state leaders for not adhering to these principles, which he said could have potentially disastrous consequences for residents and national security. The order is intended to strengthen America’s oil supply and restore a pipeline system vital to national security and defense.

California Governor Gavin Newsom condemned the move, calling it an attempt to illegally restart a pipeline whose operators are facing criminal charges and prohibited by multiple court orders from restarting. Newsom pledged that California will not stand by while the Trump administration attempts to sacrifice coastal communities, the environment, and the state's $51 billion coastal economy.

In January, California sued the federal government for approving Sable’s plans to restart pipelines along the coast. Democratic state Attorney General Rob Bonta said at the time that the state oversees the pipelines through Santa Barbara and Kern counties and that the federal government has no right to usurp California's regulatory authority.

Oil pumping operations are expected to begin imminently off the coast of California after President Trump issued an executive order Friday. Officials for Sable Offshore Corp. informed local fire officials of their intent to resume pumping operations within 24 hours, a standard protocol for industrial activities involving hazardous materials pipelines.

An industry source with direct knowledge about the Santa Ynez offshore platforms and pipeline near Santa Barbara said the president’s order will have a significant impact on California’s oil supply. It would add about 10% to the state’s crude oil production, though it may take time for consumers to notice a drop in gas prices at the pump.

California consistently has the highest gasoline prices in the nation, often more than $2 per gallon above the national average due to the state’s declining in-state production and reliance on imported crude. The Santa Ynez offshore oil platform and pipeline were shuttered in 2015 after a spill released thousands of barrels of crude into the Pacific Ocean.

Gov. Gavin Newsom accused Trump of manipulating the war in Iran and a global crisis around surging gas prices to open California’s coast for his oil industry friends so they can poison our beaches. The governor said he intends to take the Trump administration to court to block the executive order. Steve Hilton, a former Fox News host who is running for governor, applauded the administration’s move and said the state should go much further in expanding oil and gas production.

Gas prices in California reached $5.42 per gallon on Friday, significantly higher than the national average of $3.63. The conflict in Iran has caused jet fuel prices in Los Angeles to soar 47% in just two weeks. California's unique gasoline blend and lack of pipeline access make it heavily reliant on energy imports from Asia that are being disrupted by the closure of the Strait of Hormuz.

The state's economy, which grew at a robust 3.8% annualized rate in the fourth quarter, is facing increased inflationary pressures due to higher fuel costs. The logistics industry, particularly truckers reliant on diesel fuel, is feeling immediate impacts. Diesel prices have risen to $6.21 per gallon, up from $5.04 a month earlier.

The agricultural industry in California, the largest in the nation, is also sensitive to diesel cost increases due to its reliance on large equipment for farming operations. Additionally, higher natural gas costs are expected to increase fertilizer prices further straining farmers already dealing with trade tariffs and retaliatory actions from longtime trading partners.