Trump seeks to tap California offshore oil
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A woman uses her phone to record an airstrike on an oil depot in Tehran on March 7. Photo: Sasan/Middle East Images/AFP via Getty Images
President Trump on Friday invoked a Cold War-era law in a bid to boost oil production off Southern California's coast and meet demand in the wake of the Iran war.
Why it matters: The president's signing of an executive order allowing use of the Defense Production Act shows he's trying to employ a variety of tools to try to tamp down the oil price shocks set off by the war.
- It also sets up another confrontation with California Gov. Gavin Newsom (D), a potential 2028 presidential candidate and one of Trump's most persistent critics.
Driving the news: The use of the Defense Production Act would preempt state laws and speed permitting for Sable Offshore Corp., a Houston company that has sought to restart production from California offshore platforms.
- California regulators have objected to Sable's plans to reopen the so-called Santa Ynez complex of pipelines needed to funnel the crude to area refineries.
- In February 2024, Sable acquired the Santa Ynez Unit assets from ExxonMobil and took over operations of the Las Flores Pipeline system from the previous operator.
- The Santa Ynez Unit consists of three offshore oil platforms that produce crude oil and natural gas off the coast of Santa Barbara, along with an onshore processing facility.
Reality check: Sable has estimated it could quickly pump 45,000 to 55,000 barrels per day of crude once restarted, with production climbing as high as 60,000 barrels per day by the end of the decade.
- That's a tiny fraction of the estimated 20 million barrels a day currently affected by closure of the Strait of Hormuz.
- The company faces a criminal prosecution by a local district attorney, a federal securities inquiry, two court injunctions and findings by county officials of a pattern of noncompliance, CalMatters reported last month.
The other side: Newsom spokesman Anthony Martinez, reacting to earlier news reports about the announcement, on Wednesday labeled it "a political stunt that would contribute 0.05% to crude oil production and do nothing to lower prices."
- "If Trump thinks he can override California law and an existing federal court order with the stroke of his pen, we look forward to hearing what that federal court he's defying has to say," he said.
- Environmental groups have opposed the pipeline's restart due to a 2015 rupture that caused a spill of 100,000 gallons of crude oil.
