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Trump Administration Orders Restart of Santa Ynez Pipeline
DOT Secretary Duffy Cites Safety Oversight and Domestic Energy Supply Goals
Key Takeaways:
- The Trump administration ordered the restart of California’s shuttered Santa Ynez Pipeline System with PHMSA safety oversight disclosed April 13.
- Officials say the line could deliver 60,000 barrels a day or 1.5 million monthly to lower fuel prices and cut reliance on foreign crude.
- Under a March 13 executive order, the energy secretary directed Sable Offshore to restore operations and route offshore California crude to domestic refineries.
The Trump administration ordered the restart of the shuttered Santa Ynez Pipeline System in California with a projected monthly output of 1.5 million barrels to lower motor fuel prices.
Transportation Secretary Sean Duffy revealed April 13 that officials from the Pipeline and Hazardous Materials Safety Administration visited the pipeline site to oversee safety operations.
“PHMSA is doing its part to ensure this pipeline is operating safely so Sable Offshore Corp. can continue unleashing American energy and drive down prices at the pump,” .
60,000 Barrels a Day
The pipeline off the coast of Santa Barbara is forecast to yield 60,000 barrels of oil daily to lower motor fuel prices in California while reducing dependence on foreign crude.
This new influx of domestic crude on the West Coast stems from President Donald Trump’s executive order issued March 13.
Now the secretary of energy can direct certain national defense resource .
“We’re helping to keep the oil flowing into California and keep access to reliable and safe, affordable energy,” said Paul Roberti, PHMSA administrator. “Now under Secretary Duffy’s leadership, we are delivering on President Trump’s energy dominance agenda.”
(US Department of Transportation via YouTube)
The new executive order, Adjusting Certain Delegations Under the Defense Production Act, amended one from March 2012, limiting some national defense production decisions to the president and specific executive agency heads, such as the secretary of commerce.
Consequently, Energy Secretary Chris Wright the same day directed Sable Offshore Corp. of the Santa Ynez Unit and Santa Ynez Pipeline System. The Houston-based firm is an independent oil and gas company.
According to the Department of Energy, the Trump administration’s actions will prioritize pipeline transportation capacity for crude produced offshore of California to flow through the Las Flores Pipeline System to Pentland Station and into interstate pipelines.
Domestic Refineries
DOE said this development enables American energy to more efficiently reach domestic refineries while “reducing California’s reliance on foreign oil vulnerable to geopolitical disruption.”
The agency explained that California differs from other states since it is “largely disconnected from interstate crude pipelines that move American oil to refineries across the United States.”
The state once supplied almost 40% of all U.S. petroleum production, but more than half of the oil refined there is from foreign sources. A significant share travels through the Strait of Hormuz — “presenting serious national security threats,” DOE noted.
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Wright. (Andrei Pungovschi via Bloomberg)
Jim Flores, Sable Offshore CEO and chair, on March 30 announced oil sales to Chevron through the Santa Ynez Pipeline System.
“In doing so, we are providing American oil from American soil through an American pipeline to an American refinery for American consumers and the United States military,” .
Improvements in PHMSA
This year, the federal government focused on improving energy pipelines nationally through PHMSA.
The Department of Transportation unveiled $98 million to invest in America’s aging pipeline infrastructure. Grants are to increase the safety and efficiency of high-risk, actively leaking or leak-prone natural gas distribution infrastructure.
Money can help city- and community-owned utilities of existing gas distribution pipeline infrastructure.
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Roberti noted March 13 that modernizing U.S. gas distribution pipelines will save lives and protect America’s energy future.
“We look forward to working with local communities to minimize leaks, prevent accidents and help make families’ energy bills a little more affordable,” he said.
$606 Million in Annualized Savings
On Jan. 12, Duffy expected to improve safety and result in some $606 million in annualized cost savings.
“These common-sense changes will make day-to-day life more affordable for American families while continuing to maintain the highest levels of safety,” Duffy said then.
The first rule updates PHMSA regulations for gas transmission lines to reflect more than 50 years of safety and technological improvements.
Modeled after a successful PHMSA permit program, the changes enable pipeline operators to avoid unneeded pipe replacements and pressure reductions by using modern, risk-based practices.
PHMSA estimates the rule will save operators $461 million annually and cut maintenance-related emissions by 1.3 billion cubic feet annually.
The second rule updates PHMSA’s Hazardous Materials Regulations and lowers cargo-tank fuel transportation costs.
It allows newer technologies for tank inspections and restores a long-standing exemption from placarding requirements for certain fuel shipments. PHMSA estimates these changes will save $145.3 million per year.
