California gas suffers setback as judge slaps down oil giants’ claims

A federal judge dismissed Sable and Exxon’s claims that Santa Barbara County illegally “took” their property by refusing to issue permits for offshore oil production.

Chief US District Judge Dolly Gee last week sided with Santa Barbara County and the Environmental Defense Center, granting their motions to dismiss the Houston-based company’s claims.

“This ruling reinforces that compliance with environmental laws and established regulatory processes is not optional,” said Tara Rengifo, senior attorney for the Defense Center, reports the Santa Barbara News-Press.

“Santa Barbara County’s policies are intended to protect the community from oil operators who do not comply with the law, and we remain committed to ensuring those protections are upheld,” she told the news outlet.

The Sable Offshore Corp. along with ExxonMobil wants to pump oil using its offshore platforms and the Las Flores onshore pipeline –– the exact same pipeline system that was responsible for the massive Refugio Oil Spill in 2015.

In February 2024, ExxonMobil sold the entire operation — collectively known as the Santa Ynez Unit, which includes the three offshore drilling platforms, the onshore gas processing plants, and the 125-mile pipeline system — to Sable Offshore Corp. for around $625 million, the Courthourse News reported.

But the deal didn’t get Sable the operating permits because of specific laws by Santa Barbara County that requires a complete review of the new buyer’s company before approving the transfer of the operating permits from Exxon to Sable.

In December 2025, the Santa Barbara County Board of Supervisors officially denied Sable’s request to take over Exxon’s existing permits. Despite the rejection, Sable continued to pump oil, according to Courthouse News.

Sable and Exxon had sued Santa Barbara County six months prior to the denial, claiming that the county’s refusal to hand over the permits amounted to an “illegal taking” of their property. The Environmental Defense Center (EDC), a local environmental advocacy group, also stepped into the lawsuit to defend the county’s decision.

While this is a major win for the county and environmentalists, it isn’t necessarily the absolute end of the road. The judge dismissed some of the claims “with leave to amend,” giving a chance to Sable to rewrite, fix, and resubmit parts of their lawsuit.

“The next step is, do they get another chance,” Rengifo told the News-Press. “And do they get a second bite at the apple?”

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