Sable Offshore Jumps 37.5% on DOJ Ruling Potentially Overriding State Pipeline Ban
Sable Offshore shares leapt 37.51% after the DOJ’s Office of Legal Counsel confirmed that presidential orders under the Defense Production Act can preempt California laws blocking its Las Flores pipeline. The ruling raises prospects for full resumption of oil and gas shipments from the Santa Ynez Unit.
1. DOJ Legal Opinion
Assistant Attorney General T. Elliot Gaiser issued an opinion stating that presidential directives under the Defense Production Act carry the force of federal law under the Supremacy Clause, and can expressly or conflictually preempt California statutes impeding Sable Offshore’s pipeline operations.
2. Market Reaction
Following the legal opinion, Sable Offshore stock surged 37.51% to close at $13.88, marking its fifth consecutive day of gains and reflecting renewed investor optimism over the potential restart of oil and gas flows.
3. Operations Background
Sable Offshore acquired the Santa Ynez Unit in 2015 but was ordered to shut its Las Flores onshore pipeline for a decade after a major oil spill. Although production resumed offshore in May, pipeline transport remains halted pending court approval of federal preemption.