I felt the earth move under my feet T A W A K O N I. not a bad thing?

Investment Analysis Clubs Macro Economic Trends and Risks
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T A W A K O N I

Peter lays out how California will experience much higher prices than say Texas or Louisiana for oil products.

A few steps to get us there.

  1. California now produces about 350k barrels of oil and consumes about 1.4 million barrels of oil per day. Most of the difference comes from the Middle East as there are no pipelines across the Rockies.

  2. Some oil fields in the Middle East can be shut in and then restarted in 90 days. The most, about 10 million barrels a day that are shut in or will be shut in very soon, take a year or more to restart. In other words, if the Straight was opened today and all was normal today, we would be short 10 million barrels a day of oil for another year.

For context. The last ships that left the Gulf for California will be unloading this week and there are no more ships after that.

I am thinking that Texas is going to make a ton of money off of this. But not just Texas. The railroads and tanker truckers, Oklahoma, Colorado. (Colorado has some marginal shale oil fields that will probably be expanded and restarted. North Dakota will also see a lot of activity.

If the scale and time lines for restarting production of
oil extend to two years, this is a visibility problem for the oil companies, then they might even consider high capital costs projects offshore. A really good question to be asking petroleum engineers familiar with the Middle East oil fields how long it will really take to restart the Middle East oil fields.

At the same time, policy makers in many countries may (MAY) decide to move to solar plus batteries and EVs in a big way. This puts CATL and BYD in the drivers seat. This would lead to permanent demand destruction in the areas that currently import oil from the Middle East.

This last thing is why I have a growing suspicion that we are at the end of the world as we know it, and why I am not particularly distressed about it.

Cheers
Qazulihht

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As a Southern Californian familiar with this ongoing long-term (not coming) energy issue, for a quick response I used Freespoke AI, asking: WHAT OIL RIGS OFFSHORE SOUTHERN CALIFORNIA HAVE BEEN REACTIVATED AND PROVIDING OIL FOR SOUTHERN CALIFORNIA FEW REFINERS?

https://freespoke.com/search/web?q=WHAT+OIL+RIGS+OFFSHORE+SOUTHERN+CALIFORNIA+HAVE+BEEN+REACTIVATED+AND+PROVIDING+OIL+FOR+SOUTHERN+CALIFORNIA+FEW++REFINERS&asid=cac628866762481ba2f730043f05d21a&lchid=1a212cba4037448b9ea6df05038eac6a

Consensus

Reactivated Oil Rigs Offshore Southern California

Sable Offshore Corporation, a Houston-based company, has restarted oil production from the Santa Ynez Unit off the coast of Santa Barbara, California. This unit includes offshore oil rigs in federal waters and a pipeline network that runs along the Santa Barbara County coast and inland to the Las Flores Canyon Processing Facility. Production had been offline for a decade following a major oil spill in 2015. Sable Offshore plans to sell 50,000 barrels of oil per day, anticipating sales to begin by April 1.

Sable Offshore has indicated that two additional oil rigs, Platform Heritage and Platform Hondo, are expected to resume operations soon. The oil extracted from these platforms, which are in federal waters, will be transported via the Santa Ynez pipeline from the Santa Barbara area to the Central Valley and refined at one of Chevron’s California refineries, specifically the El Segundo location.

Perspectives

  • Support for Reactivating Offshore Oil Production

    • The Trump administration, through Energy Secretary Chris Wright, invoked the Defense Production Act to order Sable Offshore Corp. to restart operations at the Santa Ynez Unit. This decision was aimed at addressing supply risks caused by California policies that have led to the region’s dependence on foreign oil.

    • The restart of offshore oil production is intended to stabilize gas prices in California, especially given global crude oil price unpredictability due to the war in the Middle East.

    • Sable Offshore’s CEO, Jim Flores, stated that increasing domestic crude oil supply into the California market by approximately 17% prioritizes California consumers and provides energy security to the state.

  • Opposition to Reactivating Offshore Oil Production

    • California leaders and environmental groups strongly oppose the restart of offshore drilling due to concerns about environmental dangers, particularly given the area’s history of major oil spills in 1969 and 2015.

    • California’s Attorney General Rob Bonta has filed a lawsuit against the Trump administration, asserting that the federal government illegally claimed oversight and granted approvals for oil rig pipelines, usurping California’s regulatory authority.

    • The California State Lands Commission and the California Coastal Commission have expressed opposition, with the latter ordering Sable to stop work and levying an $18 million fine for failing to obtain necessary permits and reviews.

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I also asked: How many refineries in California have been shut down and reduction from peak supply?

California Refinery Closures and Capacity Reduction

California has seen a significant reduction in the number of operational oil refineries over several decades. In 1982, there were 43 refineries in California. This number decreased to 23 in 2000, and by early 2026, the state had 12 operating facilities. It is projected that this number will further drop to 11 by the end of 2026, and potentially to seven by the end of 2026.

Recent and planned closures include the Phillips 66 refinery in Los Angeles, which was preparing to close by the end of October 2025 and shuttered at the end of 2025. Valero also announced the closure of its Benicia refinery by April 2026. These two closures represent a combined loss of approximately 17% to 17.5% of California’s total in-state refining capacity, impacting the state’s fuel supply and the West Coast. This reduction accounts for 284,000 barrels per day of total capacity.

The state’s oil production has also experienced a substantial decline, with in-state oil production falling by 69% from its peak in 1985 to a historic low in 2023. California now produces about 20% of the crude oil it consumes, with over 65% coming from foreign sources. The closure of these refineries is expected to have an impact on gasoline prices and the overall energy landscape in the state.

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For those interested, here’s Sable Offshore news release on 05/19/2025:

https://sableoffshore.com/news/news-details/2025/Sable-Offshore-Corp–Reports-Restart-of-Oil-Production-at-the-Santa-Ynez-Unit-and-Anticipated-Oil-Sales-from-the-Las-Flores-Pipeline-System-in-July-2025/default.aspx

HOUSTON–(BUSINESS WIRE)-- Sable Offshore Corp. (“Sable,” or the “Company”)(NYSE: SOC) today announced that as of May 15, 2025, it has restarted production at the Santa Ynez Unit (“SYU”) and has begun flowing oil production to Las Flores Canyon (“LFC”). Additionally, with the completion of the Gaviota State Park anomaly repairs on the Las Flores Pipeline System (the “Onshore Pipeline”) on May 18, 2025, Sable has now completed its anomaly repair program on the Onshore Pipeline as specified by the Consent Decree, the governing document for the restart and operations of the Onshore Pipeline.

Seven of the eight sections of the Onshore Pipeline have been successfully hydrotested. Sable will complete the final hydrotest in order to meet the final operational condition to restart the Onshore Pipeline as outlined in the Consent Decree. Sable expects to fill the ~540,000 barrels of crude oil storage capacity at LFC by the middle of June 2025 and subsequently recommence oil sales in July 2025.

Production Restart

  • On May 15, 2025, Sable initiated the flow of oil production from six wells on Platform Harmony of the SYU to LFC at a rate of ~6,000 barrels of oil per day.

  • Sable has been testing wells on Platform Harmony throughout May 2025 and the well tests have performed consistently stronger than they did at the time of shut-in on May 19, 2015 when the SYU produced approximately 45,000 barrels of oil equivalent per day.

  • Approximately 30% of the 32 producing wells at Platform Harmony have been tested as of May 18, 2025 with the remaining Platform Harmony wells projected to be tested over the course of the next several days.

  • Sable expects to initiate production from the additional 44 wells on Platform Heritage and the additional 26 wells on Platform Hondo in July 2025 and August 2025, respectively.

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Here’s the latest update from Google AI:

AI Overview

Houston-based Sable Offshore Corp. restarted oil production and sales at the Santa Ynez Unit off Santa Barbara on March 29, 2026, producing over 1 million barrels and targeting ~50,000 barrels per day (bpd). The restart was triggered by a DOE directive under the Defense Production Act, following a 2015 spill. This action is causing intense legal battles with California state officials and environmental groups.

  • Production Status: Operations have resumed at Platform Heritage and Harmony, with plans for Hondo in June 2026.

  • Legal Conflict: Despite the federal directive, a Santa Barbara Superior Court has upheld a preliminary injunction (as of April 17, 2026) forbidding the pipeline operations.

  • Company Strategy: Sable, led by CEO Jim Flores, is moving oil through the pipelines despite state opposition, arguing the move ensures energy security.

  • Lawsuits: Sable is suing Santa Barbara County for over $100 million in damages for permit delays.

  • Production Details: As of April 20, 2026, over 40 wells were active, producing an average of ~750 bpd per well, with about 1 million barrels already produced.

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Regards,

Ray

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I am both appalled AND supportive of reopening the Santa Barbara channel wells and pipelines.

I know the facilities well, I spent a huge part of my time from 1967 (got driver’s license) through to 2000 (moved to Europe) surfing and sailing the waters, and was deeply involved in the absurd politics around the multiple shut downs. Phillips, Chevron, and a number of other corporate players have habitually knowingly violated state and federal laws and regulations, and if I were God-Emperor I would make have made them PAY big time for their abominations.

Actually slowing and then reversing GCC is extremely important, but irrational war dancing on dead issues merely wastes credibility, economic clout, and opportunities to cut actually useful deals, like taking a % of the income from mutually agreed pumping to fund further clean-up of past evils and new monitoring as well as funding new far cleaner energy sources.

The USA needs to turn away from its current deadly addictions to enraged self-righteousness and satanic greed.

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One other thing that hurts California, they require their own “special blend” of gasoline not used anywhere else. So it depends if places want to go to that effort for one customer.

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