Two weeks ago, I told you all how California's Court of Appeals for the Ninth Circuit had partially denied the environmental groups' lawsuit against the government in the long-running Sable Oil Company effort to reopen its Santa Ynez offshore drilling operation, including the pipeline they had up and running from the rebuilt platform to their Los Flores Canyon terminal.
...As for the Sable Offshore scrum, the Court of Appeals for the Ninth Circuit yesterday partially dismissed the environmental groups' lawsuit and left the Los Flores pipeline's federal designation intact.
What didn't get settled was what the state could do about the portion of a now-federal pipeline running through state waters. But it's progress in the right direction.
Last week, the Trump administration's astute wielding of the Defense Production Act bore fruit yet again as a judge from the same court denied California's attempt to block the emergency restart of the pipeline.
A federal judge last week allowed the Trump administration to bypass local regulators and restart an oil pipeline, a decision attorneys say could create a legal opening for favored energy projects to move ahead with little scrutiny.
The US District Court for the Central District of California on Aug. 19 denied California’s bid to block an emergency restart order for Sable Offshore Corp.'s pipeline in Santa Barbara. Energy Secretary Chris Wright issued the Defense Production Act order in March after state regulators refused to grant the necessary permits.
Judge Stephen V. Wilson ruled the DPA grants the administration “substantial discretionary power,” including the authority to preempt state environmental regulations.
Determined to cut their pinched nostrils off to spite their faces, crazed enviro-loonies wailed that 'there was no evidence' it was an 'emergency' and that the judge had never bothered to demand documentation proving it was.
WAAH
And, using language that everyone who remembers Barack Obama's profound and dismissive lie, 'You can't drill your way out of this,' will find chilling, one of the reasons the state cited to kill the pipeline was that the volume, compared to what the state needs, was minuscule.
SO WHY BOTHER
...In court filings, California has noted Sable’s maximum expected gross oil rate of 50,000 barrels per day would contribute “a fraction of a percent” to the domestic energy market.
Always, this is the way with them.
One can never start anywhere, because a 'start' is never sufficient. The bottom of the bucket covered at long last is never seen as the means to a full bucket, just as a bucket that isn't completely full. It is a failure and waste of effort.
Ergo, nothing ever gets done, and they can claim, 'See? Unsolvable.'
But that 50,000 bbls a day will flow now, in spite of them, and it becomes what they are truly concerned about - the first chink in their once-impermeable green weenie armor. The impenetrable shield they built to surround the state and nearly brought it to ruin now has a tiny puncture through which the hated spice will flow.
God forbid someone else gets similar ideas with the maelstrom of trouble and scrutiny the Trump administration is bringing down on the coastal elites' heads, just as their oleaginous governor exits, stage right, for brighter lights, leaving them floundering without a champion. Becerra is an inarticulate machine mushroom and no match for two more years of the Trump administration. Should Hilton win, if there were a miracle, the jig would be completely up.
It could well be in any event if new research from the terrific fellows who have stayed knee-deep in California's fossil fuel woes, Ronald Stein and Mike Ariza, holds true. The impact of what CA has done to itself is already starting to reach beyond those demented borders, leeching into and affecting some of the rest of the country's own energy security.
This is the kind of situation where whatever California's lunacy brought on them could well be shared with those of us who had nothing to do with it.
California is running out of refineries—and running out of time
...With the recent closures of the Valero and Phillips refineries that processed crude oil and the 2023 conversions of Marathon in Martinez and Phillips 66 in Rodeo that are no longer running crude oil, just renewable diesel, California’s remaining six refineries that process crude oil do not have the capacity to produce all that California demands of 58 million gallons of transportation fuel DAILY :
- 11 million gallons/day for Jet fuel for the State’s 16 primary major military air bases and installations, and 9 international airports.
- 10 million gallons/day for Diesel for the State’s trucking and construction industries.
- 37 million gallons/day for Gasoline for the State’s more than 36 million vehicles.
...California policies have reduced the state to six operational crude-oil refineries, forcing it to import 14 to 15 million of the 37 million gallons of gasoline it consumes each day, primarily from Asian countries.
I've left out the discussion of what they call 'bunker fuel' for ships at the three major ports in the state, which rank among the country's busiest. That's over 5 million metric tons a year that need to be met, too.
So, as you can see, the state already imports almost half of the gasoline it uses every day.
President Trump's Jones Act waiver has allowed foreign carriers to transport desperately needed jet fuel from Gulf of America ports like Houston to Long Beach.
In one unbelievable anecdote, Asian jet fuel shipments (the predominant supply origin) expected in CA suddenly dried up thanks to the Iranian conflict. Southwest Airlines took matters into their own hands to ensure they would have go-juice for operations in the state.
- The Petroleum Administration for Defense Districts PADD 5 (West Coast) jet fuel inventories normally track between 9 – 11 million barrels on hand. By April 2026, inventories were at 2.6 million and dropping. This was the lowest inventory for that time in more than 23 Years. Then on April 2, 2026, South Korea, California’s largest supplier of jet fuel, announced that they were suspending jet fuel exports. With this announcement and the fact that PADD 5 inventories were getting near historic lows, Southwest Airlines took unprecedented action. Southwest chartered a tanker flagged under the Marshall Islands to transport 306,389 barrels of jet fuel from the Valero Pasadena dock in Houston to berths in Los Angeles and Long Beach. In addition to Southwest Airlines’ unprecedented action, in the last 3 ½ months foreign-flagged tankers have transported more jet fuel from PADD 1 and PADD 3 to California than the state has received in the last 36 YEARS COMBINED
As the authors point out, this is all on California, and Jones Act waivers and a resolution for the Iranian situation will not relieve what ails the state. The fuels that now must be imported because of the state's war on refineries and the industry are already at untenable levels.
...The root cause of refineries hemorrhaging out of the state is California state policies. National policy “band aids” cannot provide the long-term solution to a California-sponsored hemorrhaging of the in-state refineries needed to manufacture the transportation fuel demands within the state.
With those recent refinery closures of the Phillips in Wilmington and Valero in Benicia and previous conversions of Marathon in Martinez and Phillips 66 in Rodeo that are no longer processing crude oil, just renewable diesel, California must now rely on the importation of transportation fuels that cannot be made in the State, 40% for gasoline demand and 35% for jet fuel and diesel demand.
One little kink in the supply chain could spell immediate disaster for the state.
The problem with the relief that the Jones Act is providing for California is the strain it's putting on refining capabilities that were already going almost full bore in the Gulf. Maintenance is being deferred to get California fuel mixes to the state, and reserves are being drained to refine for additional supply.
This cannot continue, as it imperils the rest of the country.
To help California, Gulf refineries bumped up their production rates from a normal of 95-96% to near 98% of capacity. Some refineries also deferred their scheduled 1st and 2nd quarter maintenance shutdowns known as turnarounds to keep production online. Despite the slight increase in refinery rates, most of the fuel that has been supplied to California has come from Petroleum Administration Defense District 1 (PADD 1) from the Gulf Coast and PADD 3 from the East Coast. In essence, California policies have caused the state to tap into other national military reserves. Refineries deferring their scheduled turnarounds is hazardous. Turnarounds are scheduled for a reason. Every day of delay further increases the possibility of extended downtimes due to equipment fouling or uncontrolled shutdowns due to equipment failure.
What is the state doing in the face of looming catastrophic supply shocks and the simple math of not being able to supply what is needed?
Legislating more punitive measures against the remaining refiners.
Those companies have signaled they have finally had enough.
...Governor Newsom has received three letters from Chevron, Marathon, and PBF, owners of six of the remaining seven refineries in the state. All three letters state that if California refuses to negotiate with them on the newly proposed Cap and Invest amendments that were drafted by the California Air Resources Board (CARB), then they will seriously consider shuttering their operations and leaving the state like Valero did.
You know Gavin Newsom wants nothing to do with this. He just wants to slide out quietly, pretending he's wrapped in a warm glow.
The authors want Trump to invoke the Defense Production Act [fixed!] and protect the refineries that are left.
...California is not proactively supporting the reanimating of the closed Valero Refinery in Benicia or the closed Phillips Refinery in Wilmington. In addition, the California government is not making the necessary policy changes to avert the hemorrhaging loss of one or more of the remaining California Refineries.
We strongly encourage the President to immediately invoke the Defense Production Act (DPA) of 1950, which is a United States federal law that gives the President emergency powers to control domestic industries and private businesses. It ensures the nation has enough industrial resources and supplies for national defense, energy infrastructure, and major emergencies.
Somebody had better do something.
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