when you drive along the coast highway in California you can drive by huge cuts of that material, it is very easy to find and to carve.
Unclemac, do you think the OP's piece was carved? Or is the shape some natural strangeness?
Well, since he still hasn't ID'ed the material I have refrained from stating my opinion, but I will now.
It looks like Steatite and most likely is a piece off of something larger that they then grooved. For what purpose, who knows. I see quite a few pieces of re-purposed Steatite in California collections. This I know for a fact because I have seen them, just like the ones in this link. Your theory has never been proven by anyone. Show your proof.
The link is blocked here at work - but I would go with steatite.
As for the purpose I can think of a couple. It looks to be worn as it would be if something flexible was wrapped partially around it and pulled hard. But that doesn't mean I'm anywhere close. Possible use as a burnishing tool to smooth out twisted sinew cordage or leather lacing?
Did we establish where it was found? Cordage can be/was made out of all sorta of natural fibers and materials - some courser than others. Cedar inner bark and yucca fibers take some work to prepare. And dried sinew has to be wetted out and softened. That piece would work VERY well in the palm to pull sinew taught when wrapping a stone or metal head to a wood shaft.
Just a WAG - but I don't think it's a natural piece, fossil or formation.