Trump Takes a Step Toward Invoking Emergency Powers for Offshore Drilling

The Trump administration is gearing up to use a Cold-War-era law to allow an oil and gas company to resume drilling off California’s coast, an unprecedented use of emergency power that will almost certainly face legal challenges.

President Donald Trump signed an executive order on Friday allowing the Energy Department to invoke the Defense Production Act, a 1950 law that gives the president authority to require businesses and corporations to take steps necessary to “ensure national defense preparedness.”

The order came after reporting from Bloomberg News earlier this week that the administration will use the act to create a pathway for Sable Offshore Corp, a Texas-based company that owns a dormant system of pipelines and an oil rig off the California coast, to restart offshore drilling.

This would allow Sable to circumvent California state laws, which have heavily restricted offshore drilling since a massive oil spill in 1969. The Energy Department did not immediately respond to a request for comment from NOTUS.

At least one group will try to stymie the effort in court, NOTUS has learned.

The Center for Biological Diversity confirmed that it’s looking at how it can launch a legal challenge against Trump’s use of the law.

“We’re definitely exploring all possible avenues, and we do plan to pursue all legal challenges of this illegal order that really is just another power grab for Trump,” staff attorney Talia Nimmer said.

The Defense Production Act previously has been invoked for energy production, including in 2000 to supply oil to California during an energy crisis, but those moves were limited to short periods of time.

“It’s a breathtaking attempt to expand the Defense Production Act, which has been expanding over the years a little bit but very rarely used in a context like this,” said Deborah Sivas, an environmental lawyer and the co-director of Stanford Law School’s Environmental Law Clinic.

Gas prices in the country have risen sharply amid the war in Iran, prompting the U.S. to plan to release more than 100 million barrels from its oil reserves as part of a record-breaking strategic petroleum reserve release. NOTUS reported this week that the release cannot stave off an economic crisis past mid-April, according to energy analysts.

But Sivas said that despite the conflict, granting Sable a loophole might result in a case that “could work its way up to the Supreme Court, because it’s an incredibly novel use of that statute.”

Any forthcoming lawsuits would add to a complicated legal landscape. Sable and the federal government are already facing a barrage of challenges in state and federal court over other attempts by the federal Department of Transportation and by some California state authorities to allow the company to restart drilling operations.

Judges in those cases have sided largely with the parties arguing that Sable should not be allowed to move forward with drilling.

A federal judge ruled in one case this week that the Trump administration must reveal any correspondence with Sable that preceded the DOT’s decision to federalize control over the pipeline system, arguing that the company and the administration may have acted in “bad faith” and could have ignored key safety and environmental processes.

A spokesperson for the California Department of Justice told NOTUS in a statement that the agency “cannot comment on legal strategy” but that it is “reviewing this development” and that “the Trump Administration’s desire to put oil and gas interests over our communities and a clean environment continues unabated.” California has previously filed several actions against Sable.

The administration has hinted recently that it has been planning for at least several weeks to give Sable a pathway around state regulations. Its correspondence with Sable about a potential use of the Defense Production Act started before prices rose when the United States and Israel struck Iran last month.

Sable previously sent a letter to the Trump administration asking the federal government to use the Defense Production Act to require the company to operate its offshore unit and pipeline system in California to “maximize domestic energy production.” The Justice Department issued an opinion last week in response to the letter that said a federal authorization allowing Sable to resume its activities would preempt state law and would be an appropriate use of the Defense Production Act. That opinion did not mention the war in Iran.

The company spent more than $300,000 on lobbying the federal government in 2025, according to NOTUS’ review of federal government lobbying disclosure forms. Their spending included $20,000 paid to the firm Holland & Knight during the fourth quarter of last year to lobby the White House and other targets on “project authorizations for offshore oil and gas development.” Sable did not report any federal government lobbying activities before 2025.

Sable did not respond to a request for comment.

The company’s stock saw a big jump on Wednesday afternoon after reports that the Trump administration was planning to invoke the law.

Sable bought the offshore unit and a network of pipelines, collectively called the Santa Ynez Unit, from ExxonMobil in 2024. The state shut down Santa Ynez in 2015 after a pipeline rupture spilled more than 100,000 gallons of crude oil along the Santa Barbara coast in California, but Sable has been looking to restart its operations since then.

Trump’s announcement could put safety concerns around that unit back into the spotlight.

“They’re now attempting to restart the pipeline without fixing the cathodic protection system, which is the primary means of protecting against corrosion, which was one of the main causes of the [2015] spill,” Nimmer told NOTUS.

Other pathways for drilling companies to circumvent state laws — such as using offshore tankers to keep oil production entirely in federal waters — would be pricey and difficult. NOTUS reported earlier this year that the expected costs and legal challenges have largely dimmed companies’ enthusiasm about drilling in California.

Trump invoking the Defense Production Act won’t be enough to reinvigorate oil and gas production in that part of the country because of the legal uncertainty around safety precautions and the federal government’s power, experts told NOTUS.

It’s also unclear how the move would actually affect energy prices both inside and outside the state.

The president declared a “national energy emergency” on his first day in office, which included instructions for cabinet members to suggest instances where he could invoke the Defense Production Act to allow domestic production of energy. The declaration has underpinned other moves by the administration to boost fossil fuel production and energy generation — such as keeping coal plants open past their planned retirement dates — and has also invited a host of criticism, legal challenges and skepticism about how much the initiatives are actually driving down American energy prices.

California’s oil infrastructure is “isolated” from the rest of the infrastructure in the United States, and within the state, demand for gasoline is trending downward because of a growing electric vehicle market, Sivas said. That leaves questions around whether a Sable restart will move the needle.

“I don’t know how much we flow out of this pipeline, but it just won’t be enough to make any difference in California,” Sivas said. “Some goes out to Arizona and Nevada, but otherwise it doesn’t go into the general pipeline system of the country … so it won’t really, it won’t really affect the country, and I don’t think it’ll have anything other than a marginal impact in California.”