A California appeals court has delivered a major setback to efforts to bring more domestic oil production back online, siding with state regulators in a high-stakes fight over a key pipeline network that connects offshore platforms in Santa Barbara County to refineries outside the region.

The California Second District Court of Appeal this week upheld an injunction obtained by the California Coastal Commission against Sable Offshore Corp., ruling the agency acted within its authority when it issued cease-and-desist orders targeting pipeline work along the Gaviota Coast.

It comes amid heightened focus on energy supplies as war with Iran and California’s anti-oil policies have helped drive gas prices through the roof, putting a spotlight on efforts to expand US production rather than restrict it.

For Sable, the ruling marks the latest chapter in a battle over infrastructure the company says it is legally authorized to repair and operate.

The dispute traces back decades.

In 1986, coastal development permits were issued for the pipeline system that now sits at the center of the fight.

One of those lines, Pipeline 324, later became notorious after rupturing in 2015 and causing the Refugio oil spill.

At the time of the spill, the pipeline was owned by Plains All American Pipeline. 

The asset was later transferred to ExxonMobil before being acquired by Houston-based Sable Offshore in 2024.

When Sable purchased the system, the pipeline remained inactive because repairs were needed and court-mandated approvals had been imposed in the aftermath of the spill.

Seeking to restart production from the Santa Ynez Unit, Sable began work on the pipeline network.

According to the company, crews were performing repair activities covered under existing permits, including replacing sections of pipeline, installing safety valves and carrying out other upgrades.

The California Coastal Commission disagreed.

In November 2024, the commission issued a cease-and-desist order after determining Sable was conducting construction work in the Gaviota Coast area.

Regulators maintained the company needed additional approvals despite Sable’s position that the work fell under permits originally issued nearly four decades earlier.

A second cease-and-desist order followed in February 2025.

The conflict escalated further when the commission slapped Sable with an $18 million fine for continuing construction activities.

Sable challenged the enforcement actions in court, arguing in part that it had not received proper due process during earlier proceedings.

The appeals court rejected that claim, finding the lower court “afforded Sable a full and fair opportunity to propound its case.”

The pipelines at the center of the dispute, CA-324 and CA-325, connect offshore oil platforms and processing facilities in Santa Barbara County with refineries outside the area, making them a critical link in efforts to restart production.

Even as legal battles continued, Sable began transporting oil for sale through the pipelines earlier this year.

The company has maintained that Pacific Pipeline Company, its subsidiary, “continues to lawfully operate through its existing coastal development permits which were issued in 1986.”

The Coastal Commission and Sable both declined to comment on the latest ruling.