We noted earlier this year that the Canadian government is holding out the threat of selling the Alberta tar sands oil to China through the Northern Gateway pipeline that Enbridge Inc hopes to build to the British Columbia coast as a stratagem to pressure the US for rapid approval of TransCanada's Keystone XL pipeline, which would export that same oil to stateside refineries as far south as Texas. In January, President Barack Obama denied a permit (for the time being) to the main trunk that would bring the oil down from Canada (to Republican outrage). But in March, he announced he would approve construction of the southern leg, from Cushing, Okla., to the Texas coast—a move blasted by enviros as a betrayal and (natch) by Republicans as inadequate. (LAT, March 22; see map from the Washington Post) The southern leg is, of course, contingent on the northern leg, thus establishing greater pressure for it. Now, as work commences on the southern leg, it emerges that Enbridge, in addition to fighting Canada's own enviros to win approval of the Northern Gateway, is quietly but rapidly expanding its own pipeline network south of the 49th parallel. Is this bet-hedging—keeping access to US markets in case Canada's greens prevail over the Northern Gateway? Or are Enbridge and TransCanada throwing each other a wink—divvying up the US market between them while cultivating the "China card" to lubricate access to that market? We recall the famous admonition of Calouste Gulbenkian, the Armenian oilman who brokered the post-World War I carve-up of the Middle East among US and European companies: "Oilmen are like cats; you can never tell from the sound of them whether they are fighting or making love." Exhibit A, from the LA Times, Aug. 16:

On Aug. 15—not coincidentally, the 67th anniversary of Japan's surrender in World War II—a group of Chinese activists who had sailed from Hong Kong landed on Uotsurijima, one of the contested Senkaku Islands, and were promptly arrested by Japanese Coast Guard troops and Okinawa prefectural police. They succeeded in planting a Chinese flag on the island before five were arrested; another two managed to return to their fishing vessel and escaped. Japanese authorities say they will determine whether the detained men, now being held in Okinawa, will be prosecuted or deported back to Hong Kong. This was the first such incident since March 2004. But since 2009, the Hong Kong government has on six occasions stopped protest vessels from going to the contested islands. (Daily Yomiuri, Aug. 16; Xinhua, Japan Times, Asahi Shimbun, Aug. 16

It hasn't won the merest fraction of the coverage enjoyed by the London Olympics, but last week's massive Chevron oil refinery fire in Richmond, Calif., sent hundreds of people rushing to hospitals, darkened the skies over East Bay, and has gasoline prices headed back up towards $4 a gallon. AP notes this "was just the latest pollution incident at the facility that records show has increasingly violated air quality rules over the past five years. The refinery is one of three such facilities near San Francisco that rank among the state's top 10 emitters of toxic chemicals, according to the US Environmental Protection Agency's Toxic Release Inventory. Chevron's Richmond refinery...has been cited by San Francisco Bay area regulators for violating air regulations 93 times in the past five years."

China's move to set up a military garrison at Sansha on disputed Yongxing Island (also known as Woody Island) in the Xisha chain (claimed by the Philippines as the Paracels), along with creating a city administration for the island which has heretofore had few permanent inhabitants, is escalating tensions in the South China Sea (or, as Manila has it, the West Philippine Sea)—the key theater in Washington's new cold war with Beijing. On Aug. 4, Beijing summoned a senior US diplomat, the embassy's deputy chief of mission Robert Wang, over State Department criticism of the move. State Department spokesman Patrick Ventrell said in a statement the day before that the US is "concerned by the increase in tensions in the West Philippine Sea and [we] are monitoring the situation closely."

Ecuador will use the pipeline that links Peru's northern Amazon oil zone to the Pacific coast to transport crude under a deal reached this week. Quito's Non-Renewable Natural Resources Minister Wilson Pastor hailed the bi-national accord as "true energy integration, in which two countries, Ecuador and Peru, are joining forces and needs." He said Ecuador will pay a fee of $10 per barrel of crude extracted from the southern zone of the Ecuadoran Amazon. A 100-kilometer feeder pipeline will be built from Ecuador's border to the Oleoducto NorPeruano, which runs to Bayovar port in Puira region. The deal could facilitate a major industrial thrust into Ecuador's southern Amazonian region. Most of Ecuador's exported oil currently comes from the northern part of its Amazon region, via the SOTE and OCP pipelines. (EFE, Aug. 9; RPP, Aug. 8; A Barrel Full website)

South Sudan and Sudan announced Aug. 4 they have reached a deal over the south's use of Khartoum's oil pipelines and distribution of oil revenues—potentially ending a dispute that prompted South Sudan to shut down its oil production in January and nearly led to war. Under the deal reached at talks in Addis Ababa, South Sudan will pay $9.48 per barrel to use one of Sudan's pipelines to export crude, and $11 to use a second leading to a refinery before reaching a sea terminal. Khartoum had originally demanded $36 per barrel.

Gunmen attacked two ships off the coast of Nigeria's oil-rich southern delta Aug. 4, killing two naval troops protecting the vessels and seizing four foreign workers before fleeing.  Six naval troops were aboard the vessel, which belongs to the Sea Truck oil services company. The Nigerian navy has dispatched boats and a helicopter to the area. Sporadic attacks on oil infrastructure in the Niger Delta have continued despite a 2009 amnesty for militant groups. (AP, Radio Netherlands, Aug. 4)

A federal court in Brazil on Aug. 1 ordered Chevron and drilling company Transocean to suspend all oil drilling in the country within 30 days in the wake of two oil spills off the coast of Rio de Janeiro. A judge for Brazil's Regional Federal Court of the Second Region ruled that each company must pay 500 million reals, or $244 million, for every day that they do not comply with the suspension. In November, a Chevron appraisal well leaked 155,000 gallons of oil. In March, oil started leaking again from the well and Chevron suspended production in that oil field. In its ruling, the court rationalized that two oil spills in the span of four months demonstrated that Chevron and Transocean cannot operate the wells safely. Chevron plans to appeal the ruling, saying that it complied with all applicable laws and industry standards.