Oil companies operating off the California coast could soon be permitted to leave retired offshore drilling platforms on the ocean floor instead of spending hundreds of millions of dollars removing them.
Such a policy would represent a significant shift in California’s treatment of aging oil platforms. Every structure taken out of service in the state has previously been completely dismantled and removed.
The possible change traces back to a little-noticed provision in a September executive order that largely focused on recreational fishing.
Under the directive, President Trump instructed the Department of the Interior to create a federal program allowing decommissioned oil platforms to remain underwater as artificial reefs.
The administration is now weighing an even broader policy.
A regulation expected in 2027 would make “toppling in place” the standard method for decommissioning offshore platforms.
Instead of dismantling a structure and transporting it to shore, crews would tip over all or most of the platform and leave it on the seabed.
The approach has been used in the Gulf of Mexico, but it would be unprecedented in the Pacific waters off California.
There are currently 23 oil platforms in federally controlled waters off the state, including eight in various stages of decommissioning. Four additional platforms sit in state waters.
The proposal could carry major financial consequences for the oil industry, which has benefited from several Trump administration initiatives designed to increase domestic production.
Federal estimates indicate that completely removing some of the largest offshore platforms could cost more than $200 million apiece.
Critics say leaving the structures underwater would allow oil companies to avoid significant cleanup and removal costs.
“Decommissioning via topple in place would be a huge windfall for oil companies in comparison to full removal, allowing them to avoid hundreds of millions of dollars in expenses as well as complex engineering and contracting problems,” Robert Collier, an oil industry consultant who highlighted the proposal in his Substack publication, Offshore California, told the LA Times.
The proposal comes as the White House moves to open parts of the Pacific Ocean to new offshore oil leasing for the first time in more than 40 years.
The administration is also pursuing expanded leasing opportunities in Alaska and the Gulf of Mexico.
Although environmental critics view the plan as another benefit for oil producers, some marine scientists believe certain platforms could provide valuable habitat if left underwater.
Milton Love, a research biologist at UC Santa Barbara, told the LA Times that offshore drilling platforms often become thriving ecosystems for marine life during the decades they operate.
“They happen to be living next to a piece of steel, and you’re going to kill them for that? I just don’t think that’s right,” Love said.
The debate comes as an offshore oil company operating near Santa Barbara confronts a financial crisis, adding to questions about the future of California’s offshore drilling industry.
Houston-based Sable Offshore Corp., which resumed pumping oil from its Santa Barbara platforms in March, saw its stock fall to a record low on Nov. 9 after warning investors that it could soon run out of cash.
Shares plunged as much as 60.5% to 76 cents before partially recovering, Reuters reported.
In a filing with the Securities and Exchange Commission, Sable said there was “substantial doubt” about its ability to continue operating after its main customer, Chevron, stopped buying its crude in early October while conducting maintenance on refinery storage tanks.
The disruption forced Sable to reduce production to keep its own storage facilities from reaching capacity, leaving the company without enough revenue to cover upcoming financial obligations.
Sable has since started selling oil to three other Los Angeles-area refineries and is pursuing additional sources of cash, including the sale of stored crude and new financing.
The company’s operations have also become the focus of a contentious legal dispute between California and the Trump administration.
In March, U.S. Energy Secretary Chris Wright used the Defense Production Act to give priority to transporting oil from Sable’s offshore operations, citing national security interests.
California filed a lawsuit seeking to overturn the order, while environmental organizations and 20 other states later joined the legal challenge.
Opponents have voiced particular concern over Sable’s use of a pipeline that ruptured in 2015 after suffering extensive corrosion, causing a major oil spill near Refugio State Beach.
“We’re facing an unprecedented situation where the federal government is brazenly undermining laws, court orders, and even state property rights for the benefit of one oil company,” Maggie Hall, deputy chief counsel at the Environmental Defense Center, said in an Oct. 22 statement.
