[Air permit under Clean Air Act] The EPA has delegated authority to administer the Clean Air Act to the Santa Barbara County Air Pollution Control District (SBCAPCD). To get an air permit Sable has to qualify under both the federal requirements and the SBCAPCD Rules which impose stricter requirements. Even worse, the decision of the SBCAPCD is a "discretionary decision" of a California state agency and that triggers a CEQA assessment which considers every environmental issue, not just air quality.
However, if the SBCAPCD says no or starts taking into account considerations irrelevant to air quality (CEQA assessment), the EPA could potentially revoke the delegation of authority it made to the SBCAPCD, consider the application itself and potentially grant the air permit without a CEQA assessment (the EPA is not a California state agency). The second half of Section 55.1 of the Clean Air Act Regulations, which deals with OCS air regulations, states as follows: "In implementing, enforcing and revising this rule and in delegating authority hereunder, the Administrator [of the EPA] will ensure that there is a rational relationship to the attainment and maintenance of Federal and State air quality standards and the requirements of Part C of title I, and ***** that the rule is not used for the purpose of preventing exploration and development of the OCS.******" California expressly bans offshore drilling in state waters and Grok says that they are the only state that has attempted to piggyback a full environmental assessment (CEQA) on the delegation under the Clean Air Act to administer air quality. Gavin Newsom also said, "Dead on arrival." when the Trump administration announced possibly auctioning new leases offshore California, which suggests that California intends to use air permits to block new activity in OCS federal waters. That likely offends the portion of Section 55.1 set out above - using the rule for the purpose of preventing exploration and development.
Assuming the EPA can and does take back authority to administer the Clean Air Act, the EPA would still have to ensure that Sable complies with the local SBCAPCD Rules (in addition to the federal rules), which I think will require the use of BACT on the OS&T (adds to cost but probably manageable), but the SBCAPCD Rules should permit offsets for the idling/closure of the onshore facilities. The SBCAPCD treats the SYU, the LFC processing facilities and the POPCO gas plant as a single stationary source (confirmed by William Sarraf, Engineering Supervisor at SBCAPCD). I think that permits the emission reductions from closing the onshore facilities to be applied against the emission increases from the OS&T, BUT I AM NOT AN EXPERT on the SBCAPCD Rules. The OS&T should be part of the single stationary source as it would be added to the SYU. Flores claimed on the Hunterbrook call that Sable would be within their air permits, which I assumed to mean the onshore offsets will exceed the OS&T increases. Of course, Flores may not have been entirely truthful.
If the decision is left to the SBCAPCD, the process is almost certain to take years and ultimately result in the application being denied because the need for the SBCAPCD to make a "discretionary decision" will trigger a CEQA assessment.
The only hope of getting an air permit if an OS&T is installed at the SYU would appear to be the EPA revoking the delegation of authority to the SBCAPCD. I don't know how long that would take and there would be immediate litigation challenging the decision of the EPA of course.
Is anyone aware of any further impediments to Sable getting an air permit for the OS&T if added to the SYU? Grok thinks that this is the most difficult permit for Sable to get even with very robust federal support and that it may be impossible.
I asked the SBCAPCD Engineering supervisor if there was an existing air permit with respect to the original OS&T that was still valid. He said the following: "In response to your last question about existing permits, Exxon operated an OS&T from1981 to 1994. Santa Barbara County APCD did not receive delegation of the OCS Air Regulations, which provided the authority to permit and regulate sources on the OCS, until 1994. By the time the delegation was granted in 1994, Exxon had already decided to cease OS&T operations and transition to onshore processing of oil. As such, a District permit was never issued for the original OS&T, but a District permit would be required before installation and operation of a new OS&T." So Sable is not grandfathered somehow, or at least the SBCAPCD does not think Sable is.
I welcome any comments on the above. I am not certain of any of it.
[DOE loan guarantee timing] Grok suggested that the DOE could provide a loan guarantee on the basis of a conditional BOEM approval and a Commerce Secretary public statement that he will likely override a CCC objection to adding an OS&T unless the current pipeline solution is allowed by Cali agencies on reasonable terms. The Energy Dominance Financing program under the DOE seems the likeliest avenue for a federal loan guarantee. An October 28 interim final order made changes to regs that get rid of a lot of environmental restrictions and push for energy production. Note that Grok thought a loan guarantee may be possible despite the lack of a Clean Air Permit and I am not so confident of that.
[CZMA consistency] Sable cannot successfully appeal an objection from the CCC on the CZMA issue without going through both the CCC assessment process and then, after the CCC objects, the formal appeal process, each of which will take months. The CCC objected to Option A of the Exxon 1982 DPP (increasing the capacity of what then was the existing OS&T) and the Commerce Secretary held the appeal in abeyance in 1984 while Exxon and the various Cali agencies negotiated the current setup with onshore processing. In the Commerce Secretary's 1984 decision he stated that he would resume consideration of the appeal if it turned out that Option B was not an alternative to Option A because Exxon could not get permits for Option B or the permit conditions were unreasonable. Grok says the current Commerce Secretary cannot resume that appeal now because it was dismissed after the current onshore arrangement was agreed to, plus it is now 40 years later and there are new environmental rules that must be considered, Sable's updated DPP proposes a project that is not identical to Option A of the 1982 DPP and so on. However, Grok says the Commerce Secretary could publicly state that based on the earlier appeal process he intends to overturn any CCC objection after the appeal process is complete unless there is some compelling new basis for not doing so or the current onshore pipeline solution is allowed to be used on a reasonable basis.
I've hammered on Grok and would welcome comments on what Grok reported. Please be gentle, I am just the messenger. Grok says that BOEM can issue an approval of the updated DPP conditional on (i) Sable successfully resolving the CZMA coastal consistency issue and (ii) Sable obtaining an air permit under the Clean Air Act. The BOEM assessment requires approvals from other federal agencies but my understanding is that the most time-consuming step is the NEPA assessment. Given the Trump Administration push for faster NEPA assessments, the national energy emergency and the full EIS that was prepared after Exxon applied for its 1982 DPP with Option A (increasing capacity of OS&T, which is very similar to what Sable is proposing), Grok says that the NEPA assessment is likely to require only an EA, not a full EIS, and it should take place on a highly expedited basis. Can anyone confirm that BOEM will provide conditional approvals?
[Air permit under Clean Air Act] The EPA has delegated authority to administer the Clean Air Act to the Santa Barbara County Air Pollution Control District (SBCAPCD). To get an air permit Sable has to qualify under both the federal requirements and the SBCAPCD Rules which impose stricter requirements. Even worse, the decision of the SBCAPCD is a "discretionary decision" of a California state agency and that triggers a CEQA assessment which considers every environmental issue, not just air quality.
However, if the SBCAPCD says no or starts taking into account considerations irrelevant to air quality (CEQA assessment), the EPA could potentially revoke the delegation of authority it made to the SBCAPCD, consider the application itself and potentially grant the air permit without a CEQA assessment (the EPA is not a California state agency). The second half of Section 55.1 of the Clean Air Act Regulations, which deals with OCS air regulations, states as follows: "In implementing, enforcing and revising this rule and in delegating authority hereunder, the Administrator [of the EPA] will ensure that there is a rational relationship to the attainment and maintenance of Federal and State air quality standards and the requirements of Part C of title I, and ***** that the rule is not used for the purpose of preventing exploration and development of the OCS.******" California expressly bans offshore drilling in state waters and Grok says that they are the only state that has attempted to piggyback a full environmental assessment (CEQA) on the delegation under the Clean Air Act to administer air quality. Gavin Newsom also said, "Dead on arrival." when the Trump administration announced possibly auctioning new leases offshore California, which suggests that California intends to use air permits to block new activity in OCS federal waters. That likely offends the portion of Section 55.1 set out above - using the rule for the purpose of preventing exploration and development.
Assuming the EPA can and does take back authority to administer the Clean Air Act, the EPA would still have to ensure that Sable complies with the local SBCAPCD Rules (in addition to the federal rules), which I think will require the use of BACT on the OS&T (adds to cost but probably manageable), but the SBCAPCD Rules should permit offsets for the idling/closure of the onshore facilities. The SBCAPCD treats the SYU, the LFC processing facilities and the POPCO gas plant as a single stationary source (confirmed by William Sarraf, Engineering Supervisor at SBCAPCD). I think that permits the emission reductions from closing the onshore facilities to be applied against the emission increases from the OS&T, BUT I AM NOT AN EXPERT on the SBCAPCD Rules. The OS&T should be part of the single stationary source as it would be added to the SYU. Flores claimed on the Hunterbrook call that Sable would be within their air permits, which I assumed to mean the onshore offsets will exceed the OS&T increases. Of course, Flores may not have been entirely truthful.
If the decision is left to the SBCAPCD, the process is almost certain to take years and ultimately result in the application being denied because the need for the SBCAPCD to make a "discretionary decision" will trigger a CEQA assessment.
The only hope of getting an air permit if an OS&T is installed at the SYU would appear to be the EPA revoking the delegation of authority to the SBCAPCD. I don't know how long that would take and there would be immediate litigation challenging the decision of the EPA of course.
Is anyone aware of any further impediments to Sable getting an air permit for the OS&T if added to the SYU? Grok thinks that this is the most difficult permit for Sable to get even with very robust federal support and that it may be impossible.
I asked the SBCAPCD Engineering supervisor if there was an existing air permit with respect to the original OS&T that was still valid. He said the following: "In response to your last question about existing permits, Exxon operated an OS&T from1981 to 1994. Santa Barbara County APCD did not receive delegation of the OCS Air Regulations, which provided the authority to permit and regulate sources on the OCS, until 1994. By the time the delegation was granted in 1994, Exxon had already decided to cease OS&T operations and transition to onshore processing of oil. As such, a District permit was never issued for the original OS&T, but a District permit would be required before installation and operation of a new OS&T." So Sable is not grandfathered somehow, or at least the SBCAPCD does not think Sable is.
I welcome any comments on the above. I am not certain of any of it.
Run it through ChatGPT.
Every scenario you listed is impossible to achieve before they run out of money.
It’s very simple.
[DOE loan guarantee timing] Grok suggested that the DOE could provide a loan guarantee on the basis of a conditional BOEM approval and a Commerce Secretary public statement that he will likely override a CCC objection to adding an OS&T unless the current pipeline solution is allowed by Cali agencies on reasonable terms. The Energy Dominance Financing program under the DOE seems the likeliest avenue for a federal loan guarantee. An October 28 interim final order made changes to regs that get rid of a lot of environmental restrictions and push for energy production. Note that Grok thought a loan guarantee may be possible despite the lack of a Clean Air Permit and I am not so confident of that.
[CZMA consistency] Sable cannot successfully appeal an objection from the CCC on the CZMA issue without going through both the CCC assessment process and then, after the CCC objects, the formal appeal process, each of which will take months. The CCC objected to Option A of the Exxon 1982 DPP (increasing the capacity of what then was the existing OS&T) and the Commerce Secretary held the appeal in abeyance in 1984 while Exxon and the various Cali agencies negotiated the current setup with onshore processing. In the Commerce Secretary's 1984 decision he stated that he would resume consideration of the appeal if it turned out that Option B was not an alternative to Option A because Exxon could not get permits for Option B or the permit conditions were unreasonable. Grok says the current Commerce Secretary cannot resume that appeal now because it was dismissed after the current onshore arrangement was agreed to, plus it is now 40 years later and there are new environmental rules that must be considered, Sable's updated DPP proposes a project that is not identical to Option A of the 1982 DPP and so on. However, Grok says the Commerce Secretary could publicly state that based on the earlier appeal process he intends to overturn any CCC objection after the appeal process is complete unless there is some compelling new basis for not doing so or the current onshore pipeline solution is allowed to be used on a reasonable basis.
I've hammered on Grok and would welcome comments on what Grok reported. Please be gentle, I am just the messenger. Grok says that BOEM can issue an approval of the updated DPP conditional on (i) Sable successfully resolving the CZMA coastal consistency issue and (ii) Sable obtaining an air permit under the Clean Air Act. The BOEM assessment requires approvals from other federal agencies but my understanding is that the most time-consuming step is the NEPA assessment. Given the Trump Administration push for faster NEPA assessments, the national energy emergency and the full EIS that was prepared after Exxon applied for its 1982 DPP with Option A (increasing capacity of OS&T, which is very similar to what Sable is proposing), Grok says that the NEPA assessment is likely to require only an EA, not a full EIS, and it should take place on a highly expedited basis. Can anyone confirm that BOEM will provide conditional approvals?