The Trump administration has signed an executive order to resume oil drilling operations off the southern California coast, citing national energy security.
The order, which invokes a Cold War-era Defense Production Act, will be prove controversial despite the potential to bring down gas prices, which are now highest in America.
Gov. Gavin Newsom also flagged the state would challenge the order in the courts.
Secretary of Energy Chris Wright is now permitted to take actions under the Defense Production Act.
California’s price for a regular gallon hit an average of $5.416 on Friday.
That’s far above the national average of $3.60.
Drivers pay a “California premium” loaded with higher than average state excise and sales taxes, as well hefty fees for climate programs unique to the state.
The state also requires an eco-friendly more costly fuel blend designed to prevent pollution.
Last week, oil giant Chevron warned in a doomsday letter to California Gov. Gavin Newsom that the state will face economic collapse under his “misguided” climate policies.
State lawmakers also warned that Newsom’s green agenda risks sending the price of gas above $8 a gallon — potentially returning drivers to fuel rationing not seen since the 1970s.
The new Trump move aims to restart oil production at a cluster of offshore platforms run by Sable Offshore (SOC.N).
It follows the decision to temporarily drop sanctions against Russian oil, which hit $103 a barrel on Friday.
Sable has to restart work at the Santa Ynez unit and Santa Ynez pipeline “to address supply disruption risks caused by California policies that have left the region and U.S. military forces dependent on foreign oil,” the Energy Department said in a statement.
The Energy Department said Sable’s facility could produce approximately 50,000 barrels of oil per day.
”The Trump Administration remains committed to putting all Americans and their energy security first,” Wright said.
“Unfortunately, some state leaders have not adhered to those same principles, with potentially disastrous consequences not just for their residents, but also our national security.”
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Sable Offshore did not immediately respond to a request for comment.
Sable’s shares prices jumped as much as 34% on the news, Bloomberg reported. The company’s shares have seen sharp swings and multiple trading halts in the last year.
The Trump admin’s move to tackle gas prices comes ahead of the November midterm elections, which will be decided on cost of living.
The Santa Ynez unit and Santa Ynez pipeline system have been points of contention in California.
The Santa Ynez offshore platforms were shut down in 2015 after an oil spill, but the company has since restarted production at one of them.
A state judge last year ruled against the Houston, Texas-based company’s request to lift a cease and desist order on repairs it had made to an onshore pipeline system.
In January, the California attorney general said the state was suing the Trump administration for asserting federal authority over two state pipelines and permitting Sable to restart pumping oil through them.
“Donald Trump started a war, admitted it would spike gas prices nationwide, and told Americans it was a small price to pay,” Gavin Newsom said.
”Now he’s using this crisis of his own making to attempt what he’s wanted to do for years: open California’s coast for his oil industry friends so they can poison our beaches.
”This wouldn’t lower prices by a cent. This is an attempt to illegally restart a pipeline whose operators are facing criminal charges and prohibited by multiple court orders from restarting.
”California will not stand by while the Trump administration attempts to sacrifice our coastal communities, our environment, and our $51 billion coastal economy.
”The Trump administration and Sable are defying multiple court orders, and we will see them back in court.”
Democrat congressmember Salud Carbajal, released a statement denouncing the action.
“President Trump is using the war in Iran as a pretext to override the will of Santa Barbara County residents and the State of California.
”The reality is that restarting the Sable project would produce nowhere near enough oil to lower the skyrocketing gas prices families are facing.
”His reckless war is causing immense damage, and jamming the Sable project through is a hollow solution.”
