Federal Judge Signals Skepticism of Sable Challenge to Santa Barbara Permit Transfer Denial
Sable Offshore Corp. and ExxonMobil suffered a setback in their effort to overturn Santa Barbara County’s decision to deny the transfer of operating permits for offshore facilities from ExxonMobil to Sable Offshore Corp.
In a tentative ruling reported by Courthouse News, U.S. District Judge Dolly Gee dismissed claims that the December 2025 decision by the Santa Barbara County Board of Supervisors to deny the permit transfer violated the Takings Clause of the U.S. and California constitutions and was preempted by federal and state law.
On December 15, 2025, the Santa Barbara County Board of Supervisors voted 3-1 to deny the transfer of operating permits from ExxonMobil to Sable Offshore Corp. The final development permits covered the Santa Ynez Unit, a gas plant, and the Las Flores Pipelines. The transfer of permits was a key step in restarting the Santa Ynez Unit, which has been shut since the 2015 Refugio oil spill.
In this latest development, according to Courthouse News, Judge Gee took under submission both Santa Barbara County’s motion to dismiss and a separate motion filed by environmental organizations challenging the companies’ federal preemption claims. The claims are separate from Sable’s pending petition seeking a writ directing Santa Barbara County to transfer the permits, which remains before the court.
Sable argued that Sable purchased the assets from ExxonMobil for approximately $600 million with the expectation that the permit transfers would be an administrative action rather than a discretionary review. According to Sable, the county improperly treated the transaction as though the permits disappeared upon the sale, effectively requiring a new permitting process.
Santa Barbara County responded that its ordinance gives the county authority to evaluate whether a proposed operator can comply with permit conditions and local regulations before approving a transfer.
County attorneys cited Sable’s alleged history of regulatory disputes, including claims that the company performed work without required approvals, failed to provide required notifications, and did not submit certain zoning clearance applications before undertaking pipeline repairs. According to the county, these issues supported the Board of Supervisors’ conclusion that Sable was not a qualified operator.
Sable, however, maintains that the county’s stated reasons were pretextual and that several supervisors opposed restarting offshore oil production regardless of the company’s qualifications. The company alleges that county officials directed planning staff to identify grounds for denying the transfer in order to prevent the restart.