A California appeals court has dealt a major blow to efforts to restart offshore oil production, ruling that state regulators have the authority to block repair work on a critical pipeline network in Santa Barbara County.

The California Second District Court of Appeals upheld an injunction obtained by the California Coastal Commission against Houston-based Sable Offshore Corp.

The court ruled the agency acted within its powers when it issued cease-and-desist orders targeting infrastructure work along the Gaviota Coast.

At the center of the high-stakes legal fight is a pipeline network, consisting of lines CA-324 and CA-325. The infrastructure serves as the vital link connecting offshore oil platforms in the Santa Ynez Unit to processing facilities and out-of-region refineries.

The line has a fraught history. In 2015, Pipeline 324—then owned by Plains All American Pipeline—ruptured, causing the catastrophic Refugio oil spill.

The system sat inactive through a subsequent transfer to ExxonMobil, before Sable acquired the asset in 2024 with plans to bring production back online.

Sable argues that its subsidiary, Pacific Pipeline Co., is legally authorized to repair and operate the lines under coastal development permits originally issued in 1986.

The company maintains that its recent work—including replacing pipe sections and installing safety valves—constitutes standard repairs covered by those original permits. Sable even began transporting oil through the network for sale earlier this year.

However, the Coastal Commission maintains that the extensive work requires entirely new regulatory approvals. The commission issued cease-and-desist orders in November 2024 and February 2025, later fining Sable $18 million for continuing construction.

Sable challenged the enforcement, claiming a lack of due process, but the appellate court rejected the argument, stating Sable received a "full and fair opportunity" to argue its case.

The ruling comes at a tense time for energy markets, as international conflict and state environmental policies have driven gas prices higher.

While Sable maintains its operations are lawful, Coastal Commission Executive Director Kate Huckelbridge warned that violations are ongoing, leaving the door open for further penalties as additional lawsuits remain pending.