Trump Administration Invokes Emergency Powers To Restart Oil Operations Off California Coast

Energy Secretary Chris Wright on Friday took action to hit back at two of the Trump administration’s top antagonists: Oil supply disruptions brought on by the war in Iran and California Gov. Gavin Newsom.

Wright issued an order paving the way for a company operating off the California coast to restart an oil pipeline that state officials have kept offline since 2015. The Energy Department framed it as a way to ease reliance on oil imports through the Strait of Hormuz, a key waterway for oil tanker traffic that the war has choked off.

“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 department wrote in its announcement. Wright said in a statement that the move would “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's directive invoked the Defense Production Act, a 1950 law that gives the president broad powers over domestic industry in the interest of national defense. President Donald Trump signed an executive order earlier Friday that delegated some of his authority under the law to the energy secretary, opening the door to Wright’s move.

Newsom was quick to push back against the Trump administration’s justification.

“Donald Trump started a war, admitted it would spike gas prices nationwide, told Americans it was a small price to pay, and now he's using this crisis of his own making to attempt what he’s wanted to do for years: open California’s coast for his oil industry friends so they can poison our beaches,” Newsom said in a statement. He called the attempt to restart the pipeline illegal and said that it “wouldn’t lower prices by a cent” due to the fact that oil prices are set on the global marketplace.

In overriding California's authority over a pipeline system that connects a trio of offshore platforms to the California coast, Wright is also bringing the full powers of the federal government to bear against California in an escalating conflict over whether oil producers should be allowed to expand drilling off the Golden State coast.

The pipeline owner, Texas-based Sable Offshore Corp., appealed last year to Trump’s National Energy Dominance Council for help securing federal permits to transport its oil to market in a bid to get around state regulators, who had raised environmental concerns.

Bringing Sable’s oil to market won’t come close to making up for the supply disruptions caused by the war in Iran, according to Ryan Cummings, chief of staff of the Stanford Institute for Economic Policy Research.

While the nearby oil will provide a more profitable supply to Golden State refiners, “we shouldn’t expect that to really flow through to consumers in any meaningful way in California, and certainly not in the United States,” Cummings said.

California Attorney General Rob Bonta has already sued the U.S. Transportation Department over its December move to assert jurisdiction over Sable's pipelines. Wright's order sets the stage for more legal clashes between California and the White House.

“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. “The Trump administration and Sable are defying multiple court orders, and we will see them back in court.”

Wright’s directive is a lifeline for Sable, a company whose stock price had plummeted at the end of last year amid the barrage of regulatory setbacks. Its share value rose significantly after a Department of Justice opinion last week signaled that the company might benefit from a presidential intervention. Company representatives didn't immediately respond to a request for comment.

Sable’s pipeline system has been shut down since it was responsible for a major 2015 oil spill in Santa Barbara County, while owned by a different company. Sable purchased the three offshore platforms, the pipelines and an onshore processing facility in 2024 and has been working to restart the operation ever since.

But the company has run afoul of state and local agencies in the process. The California Coastal Commission fined the company $18 million, accusing it of defying orders to stop work on its pipeline. California Attorney General Rob Bonta sued Sable in October alleging water discharge violations, and the Santa Barbara County District Attorney filed criminal charges against the company in September alleging environmental violations.

In December, the U.S. Transportation Department’s Pipeline and Hazardous Materials Safety Administration wrested oversight of Sable’s pipelines from the California Fire Marshal and approved the company’s restart plan. California Attorney General Rob Bonta then sued the federal pipeline regulator, challenging the move in a case that remains ongoing.

A California judge last month ruled that Sable still needed a waiver from the state fire marshal before restarting the pipeline, citing a federal consent decree in the wake of the 2015 spill.