Newsom to curb offshore oil in exchange for onshore output

Gov. Gavin Newsom is seeking to impose further restrictions on California’s offshore oil industry, a setback to Sable Offshore Corp. and its controversial project off the coast of Santa Barbara County.

The legislative package Newsom is proposing would see California demand stricter testing for restarting inactive intrastate oil pipelines, according to people familiar with the negotiations, who asked not to be identified discussing private deliberations.

It would directly impact Houston-based Sable’s efforts to reactivate a pipeline that once carried crude north of Santa Barbara. The conduit was shuttered in 2015 while owned and operated by Plains All American Pipeline after a rupture spilled over 140,000 gallons, devastating the local shoreline. Sable’s shares fell as much as 37% in trading after the market closed Monday and were down as much as 14.7% in Tuesday trading.

The regulation is seen by Newsom’s office as a way to alleviate the environmental blowback from another proposal championed by the governor that would ease drilling permits California’s interior. Both proposals, which are still under negotiation, are expected to be included in legislative text this week. Onshore producers in the state include California Resources Corp., Berry Corp. and Chevron Corp.

Senator Monique Limon, who represents Santa Barbara County, said Newsom is drawing from other legislation she authored to regulate offshore oil.

“I welcome the ability to safeguard our communities from the public health, financial, and environmental impacts of pollution,” Sen. Monique Limon, who represents Santa Barbara County said.