Truly amazing that the CCC thinks it is appropriate to call a NYSE publicly traded company a 'fly by night oil company'
Everyone is used to this type of rhetoric but this is from a regulatory agency. Not from a politician or an activist group. It is beyond acceptable and their needs to be legal and financial repercussions for anyone involved in signing off on this statement. This was an ethical breach by the CCC that should not be overlooked. Completely unprofessional and I'm going to guess violated multiple laws and ethics policies. Regulatory bodies have legitimacy for calling balls and strikes. Once they cross the line into advocacy we all have a major problem. CCC crossed the line with this statement.
That said, anyone investing has to understand, Sable is attempting to breach a firewall that many forces in the state of California believe should not and can not be breached. I think our host has approached this issue logically and with respect for the letter of the law. But this is bigger than Sable and law be damned if powerful groups have their way. We are dealing with zealots. They have no fear of a multibillion dollar judgement years from now. Taxpayers will have no choice but to fund this negligence when/if the bill comes due.
That's my biggest callout from this post. You are assuming rational actors that care about costing taxpayers billions if they lose at some federal trial years from now. Not their money they are gambling with.
My position: Dumped at $32+, was surprised I could get out but it appears everyone waited for the hearing. Would love to get back in but right now I need a price in the teens. Too many indicators of darker political forces at play. Just my take. Best of luck to Sable and their investors. Going to watch for now.
Also, the best advocacy you can do for Sable is not buying shares but calling your politicians and writing your local newspapers.
"the Las Flores Pipeline System is unusually dangerous given its inherent design flaws"
"the Las Flores Canyon onshore facilities that processed oil and gas from the SYU were Santa Barbara County’s largest source of greenhouse gas emissions. (Teel Decl. ¶ 14, Ex. 14 at p. 195.) It contributed 55 percent of Santa Barbara County’s total greenhouse gas emissions. (Id.) "
"Cal Fire had an affirmative duty to conduct CEQA review for the Project when it issued the State Waivers."
What local judge will sign off on this?
Going to need to go Federal and get Trump Admin support is my guess.
Things to consider
1) How long would a CEQA Review take and is it even possible to get approval?
2) How long would it take to design and implement a new pipeline? Could temp approval be predicated on a promise of a new pipeline?
Biggest problem
"According to the terms of the acquisition, if production of oil and gas does not restart from SYU by January 1, 2026, the assets revert to ExxonMobil Corporation. (Ibid.)"
At some point this dragging out becomes a win for Exxon politically and long term financially. The environmentalist might actually be wise to give Newsom a win here and let him claim he restarted oil production with Sable. But of course Newsome is always up for sale to the highest bidder so who knows which play benefits him the most nationally.
Like I said, this is bigger than Sable. But would love to hear counters to the plaintiffs claims. Only read their side of the argument. But on its face this seems very bad.
I just went onto someone else's podcast to talk SOC that will be out soon (should be later this week or early next week). I'll write an update that will be up tomorrow morning.
Id love to hear your thoughts on the lease renewal Sable will have to obtain for the 3 mile stretch of water covered by the SLC ( State Lands Commission) and if that lease renewal is in jeopardy due to CCC permits or political activism.
State Lands is on the Consent Decree, so if they want to pull a stunt at this stage, I think it would end poorly for them (and quickly) because the Consent Decree is Sable's trump card.
Thanks for sharing your thoughts Brian. I am still amazed that we can buy this here at the much upgraded valuation from last year. I should take Judd's work and bring it up to date.
As you say, we are on the goal line and the defenders have decided to call a time out.
That was something I remember talking about several months ago when some investors were wondering if they would be able to have the onshore operations ready for restart before the Exxon deadline.
In theory, they could park a tanker by the platforms and transport the oil that way, but the chances of that happening at this stage are next to zero in my opinion.
It does prevent them from doing normal maintenance on the pipeline. What type of normal maintenance is typically needed in the next 12 months that they can’t do until this is resolved ?
It's highly unlikely that the pipelines would require maintenance work that quickly in my opinion. They just finished repairs and hydrotesting, so I would guess years before further maintenance is required.
There could be some standard regulations that say you need to go look at this valve in the ground every 6 months or something and they wouldn’t be able to do that
They have to inspect the pipeline on annual basis, but from my understanding that won't require any excavation. They will just run an inspection tool through the pipe to see if there are any anomalies.
1.) I see that the CCC includes "restoration" as part of the development permit they want sable to apply for. So the sky is the limit on how many additional blades of grass they want sable to say need to be planted in order to get approval. This inevitable additional work has not been completed yet, so it may undercut sable's argument. 2.) The OSFM stated publicly at the Junior High town hall, out on youtube, that he would not grant his approval until all other permits were obtained. Of course, half of everything people say is untrue 3.) I find discouraged to see in this article that the Federal Consent decree specifically anticipates that local permits may be needed. At a cursory level, that sounds bad. And talking about timely ...... the CCC says some work can't be performed during the rainy season and other work cannot be done during the nesting season, and they need 90 days to approve anything, and who knows how long to inspect, so this is on track for Force Majeure (war between sable and california). It could take 9 iterations of apply/review for sable to be allowed to plant 10 blades of grass.
With all due respect, most government employees run from controversy. I read that option and you are right. However I would be surprised if he has the courage to do it.
Truly amazing that the CCC thinks it is appropriate to call a NYSE publicly traded company a 'fly by night oil company'
Everyone is used to this type of rhetoric but this is from a regulatory agency. Not from a politician or an activist group. It is beyond acceptable and their needs to be legal and financial repercussions for anyone involved in signing off on this statement. This was an ethical breach by the CCC that should not be overlooked. Completely unprofessional and I'm going to guess violated multiple laws and ethics policies. Regulatory bodies have legitimacy for calling balls and strikes. Once they cross the line into advocacy we all have a major problem. CCC crossed the line with this statement.
That said, anyone investing has to understand, Sable is attempting to breach a firewall that many forces in the state of California believe should not and can not be breached. I think our host has approached this issue logically and with respect for the letter of the law. But this is bigger than Sable and law be damned if powerful groups have their way. We are dealing with zealots. They have no fear of a multibillion dollar judgement years from now. Taxpayers will have no choice but to fund this negligence when/if the bill comes due.
That's my biggest callout from this post. You are assuming rational actors that care about costing taxpayers billions if they lose at some federal trial years from now. Not their money they are gambling with.
My position: Dumped at $32+, was surprised I could get out but it appears everyone waited for the hearing. Would love to get back in but right now I need a price in the teens. Too many indicators of darker political forces at play. Just my take. Best of luck to Sable and their investors. Going to watch for now.
Also, the best advocacy you can do for Sable is not buying shares but calling your politicians and writing your local newspapers.
They are pulling out all the stops...
"the Las Flores Pipeline System is unusually dangerous given its inherent design flaws"
"the Las Flores Canyon onshore facilities that processed oil and gas from the SYU were Santa Barbara County’s largest source of greenhouse gas emissions. (Teel Decl. ¶ 14, Ex. 14 at p. 195.) It contributed 55 percent of Santa Barbara County’s total greenhouse gas emissions. (Id.) "
"Cal Fire had an affirmative duty to conduct CEQA review for the Project when it issued the State Waivers."
What local judge will sign off on this?
Going to need to go Federal and get Trump Admin support is my guess.
Things to consider
1) How long would a CEQA Review take and is it even possible to get approval?
2) How long would it take to design and implement a new pipeline? Could temp approval be predicated on a promise of a new pipeline?
Biggest problem
"According to the terms of the acquisition, if production of oil and gas does not restart from SYU by January 1, 2026, the assets revert to ExxonMobil Corporation. (Ibid.)"
At some point this dragging out becomes a win for Exxon politically and long term financially. The environmentalist might actually be wise to give Newsom a win here and let him claim he restarted oil production with Sable. But of course Newsome is always up for sale to the highest bidder so who knows which play benefits him the most nationally.
Like I said, this is bigger than Sable. But would love to hear counters to the plaintiffs claims. Only read their side of the argument. But on its face this seems very bad.
I just went onto someone else's podcast to talk SOC that will be out soon (should be later this week or early next week). I'll write an update that will be up tomorrow morning.
Id love to hear your thoughts on the lease renewal Sable will have to obtain for the 3 mile stretch of water covered by the SLC ( State Lands Commission) and if that lease renewal is in jeopardy due to CCC permits or political activism.
State Lands is on the Consent Decree, so if they want to pull a stunt at this stage, I think it would end poorly for them (and quickly) because the Consent Decree is Sable's trump card.
Good to know
Thanks for sharing your thoughts Brian. I am still amazed that we can buy this here at the much upgraded valuation from last year. I should take Judd's work and bring it up to date.
As you say, we are on the goal line and the defenders have decided to call a time out.
Is there a scenario where Sable can produce oil and ship it off without using the pipelines, hence circumventing all of this?
That was something I remember talking about several months ago when some investors were wondering if they would be able to have the onshore operations ready for restart before the Exxon deadline.
In theory, they could park a tanker by the platforms and transport the oil that way, but the chances of that happening at this stage are next to zero in my opinion.
Agreed, very unlikely. Just thinking about absolutely worst case scenario. Would be nice to work out the economics of that.
Let’s hope for OSFM green light soon.
It does prevent them from doing normal maintenance on the pipeline. What type of normal maintenance is typically needed in the next 12 months that they can’t do until this is resolved ?
It's highly unlikely that the pipelines would require maintenance work that quickly in my opinion. They just finished repairs and hydrotesting, so I would guess years before further maintenance is required.
There could be some standard regulations that say you need to go look at this valve in the ground every 6 months or something and they wouldn’t be able to do that
They have to inspect the pipeline on annual basis, but from my understanding that won't require any excavation. They will just run an inspection tool through the pipe to see if there are any anomalies.
1.) I see that the CCC includes "restoration" as part of the development permit they want sable to apply for. So the sky is the limit on how many additional blades of grass they want sable to say need to be planted in order to get approval. This inevitable additional work has not been completed yet, so it may undercut sable's argument. 2.) The OSFM stated publicly at the Junior High town hall, out on youtube, that he would not grant his approval until all other permits were obtained. Of course, half of everything people say is untrue 3.) I find discouraged to see in this article that the Federal Consent decree specifically anticipates that local permits may be needed. At a cursory level, that sounds bad. And talking about timely ...... the CCC says some work can't be performed during the rainy season and other work cannot be done during the nesting season, and they need 90 days to approve anything, and who knows how long to inspect, so this is on track for Force Majeure (war between sable and california). It could take 9 iterations of apply/review for sable to be allowed to plant 10 blades of grass.
I would be surprised if the Fire Marshal signs off on anything with the injunction in effect. He has the perfect excuse to wait.
You might want to reread the post.
Not sure what you mean? I don’t see the fire marshal wanting to get in the middle of something with an injunction.
Start with the Option A section. OSFM decision has nothing to do with court drama.
With all due respect, most government employees run from controversy. I read that option and you are right. However I would be surprised if he has the courage to do it.
Then he’s going to be choosing to open his department up to billions in liability via lawsuit from sable. This takes a lot of courage as well
Maybe. Or he will say the injunction stops everything. I would say it could go either way.