How about reduced demand from people aware of climate change? Less demand for fossil fuels could disrupt investment and hence production.

I have to say, I'm not too thrilled with this kind of theorizing. It's very easy to find some feedback loops, identify some possibly relevant concepts, draw some diagrams, and then try to flesh them out with with examples.

But somehow in all of this, the very real, very concrete and very bloody history of primarily (but not exclusively Western) gov't, corporate and military efforts controlling third world resources get bleached into abstractions that somehow miss the point.

Take my "hero", Dick Cheney. Although I do not know exactly what went on at his Energy Task Force meetings, we do know there were maps of the Iraqi oil fields. Here we already see a first class mind at work -- one focused on the issues at hand. And specific actions were taken in the wake of those meetings.

Now of course I don't think every concrete analysis need be nailed down into war plans. But somehow, it should at least orient us in the wars (maybe the war) that are (is) step-by-step enveloping us.

I suppose you mean sahrawi or saharaoui when you talk about Morocco's conflict?
(or are sawaharis a different population?)

Another GFL1 example in oil and gas is Bolivia. Currently intensifying problems are in part over distribution of income from selling gas to Brazil and Argentina. Gas fields are located in eastern provinces (called departments) that want greater autonomy, including greater control over gas and income from gas. National government wants to keep control and fund programs for the entire population of Bolivia.

Within these feedback loops is what I would call the 'co-dependence dilemma'. Saudi princes need the western economy to be vibrant enough to produce racehorses and Bentleys for themselves as well as groceries for the ordinary folks. A particularly telling example in the next few years could be China running short on coal. Within a decade only Australia and the US will have the coal export capacity but as the commentator suggests this may not be enough to keep the Chinese economy going. So commences the downward spiral but then again less CO2 emissions. The alternative is to manufacture locally or consume less which of course will be resisted by the big business lobby and their captive politicians.

One thing I think thats missing is that these feedback loops are used to further political agendas.
This tying between feedback loops at the political and economic level is in my opinion what really fans the fire so to speak. If they existed in isolation or were handled in a reasonable manner the existence of positive feedback is not in of itself cause for alarm. They would serve in a enlightened world as firm guides for policy and political changes to defuse them.

Instead almost all the interaction worsens the situation and tends to drive the feedback loops. Generally driven complex exponential process result in chaos in complex systems.

Regarding the motion chart,

For those unfamiliar with google's motion charts I reccomend setting Size to Net Liquid Exports; The horizontal and vertical axises to 'Uneven economic development along group lines' or 'Legacy of group grievance or group paranoia' or 'Failed State Index'; and Colour to Factionalization (a combination of the two group metrics.) Then drag the scroll bar accross to toggle between 2006-2007-2008. A larger clearer version is available through the spreadsheet link https://spreadsheets.google.com/pub?key=pDRvnAzyW__gCP0hE54X_WQ.

What should become clear is that most of the world's oil exports come from countries where disenfranchised groups, antagonistic to the State, are present...

GFL n+1:
Most of our present day productive oil facilities, not to mention the new findings giving us the hope of postponing production decline (e.g. the colourful part of http://upload.wikimedia.org/wikipedia/en/7/7d/OilMegaProjForecast.png) are located in particularly challenging environments, requiring substantial investment to develop and maintain. The low hanging fruits of easy oil have mostly gone. Given the first economic shocks and the developing crisis, many of these projects may turn out be too painful to keep -- even without military conflicts. This may lead to a faster depletion curve leaving some portion of the difficult oil eventually buried for ever -- or what's even worse, leaving us e.g. with several deserted oil spouting holes on the ocean floors...

Jeff, I think you were pedagogically right to list nation/state conflict first because, as you said, "it may be least understood". All too many people find it difficult (if not impossible) to appreciate any measure of what's right than what the state and the formal law say it is.

I appreciate that you used "nation" as a catch-all for all groups, but I wonder if class shouldn't be more emphasized, since many of these examples, international and domestic, involve fictional abstractions like "the economy" (national or global) used to elide the fact that such things as resource grabs are done to benefit a small elite at the expense of the non-rich majority.
An example we see in America today is the mania for drilling, which will have negligible effects on imports and price (and even those not for many years). The lie is that it would benefit "America", when it would really just be profitable for a handful of companies and bought politicians, while for the rest it would only increase their inevitable travails by obstructing and delaying the decisions which should be taken now to invest in movement beyond fossil fuels. (Not to mention the threat of environmental catastrophe and despoliation of public property like ANWAR.)
The examples could be compounded, in many non-energy areas.

I just tend to agree with Marx that national, religious etc. conflict is usually at least inextricably interwound with, if not really just the facade for, class conflict, and I wish that analyses like this more often took this into account.

Having said all that, I'll go back to "states" to comment on another example of broad, basically fictional abstraction, vs. concrete cui bono realities.
Regarding the New Mercantilism, in discussing its second feedback loop you refer to its "less optimal allocation of energy resources than market allocation".
I'm inclined to disbelieve in "the market" allocating anything, as opposed to what was always a more or less disguised mercantilism. Anyone can take aggregate data which does not reflect any reality in particular and use it to advocate or defend a self-seeking policy, whether the perception is zero-sum or not.

So my point is, to me China (i.e. its elite) seeking bilateral oil deals is the same as America (again, the economic elite) invading Iraq to help secure the oil of the Mideast in general which is the same as the administration's general domestic looting (including the general oil/gas leasing and drilling push). These are all examples of a power elite seeking to grab from others to further aggrandize itself, and using various ideological abstractions to cover up this otherwise naked Hobbesian fact.

I wrote all this just to offer another way of looking at these issues, another way of seeing them all as interlinked.
Indeed, many of these GFLs seem to me more like subspecies of GFL1 than species in their own right.

I'll make one other comment, on GFLs 2 & 8.
It's amazing how offended Americans get over this - that oil producers might actually have priorities other than feeding America's oil addiction. I often hear things like "social spending" in producer nations disparaged. Don't they know - they're not supposed to be investing in, say, health care infrastructure. They're supposed to invest only in exploration!

Of course, this idea of gauging the benefits of pumping oil now vs. any detriments or opportunity costs and concerns for the future, seems to have almost zero constituency in America.
Indeed, regarding offshore drilling, I've sometimes heard a domestic variation on the how-dare-you-have-any-priority-other-than-drilling notion, with politicians from the likes of Kansas calling coastal states selfish for being concerned about their tourism industries and the ecological integrity of their coasts.
How dare you not do all you can to feed Kansas' addiction!

Now for some light on the TNK-BP Affair:
BP's Russian defeat a market victory
By John Helmer

MOSCOW - If anyone needed convincing, the paper that BP, formerly known as British Petroleum, signed on Thursday with Mikhail Fridman and his Russian shareholding partners proves that defying the law of gravity is unlikely to succeed for long; even if the world's weakest prime minister, Gordon Brown, and his disloyal foreign minister, David Miliband, have tried to stake their short-term political careers on it; and even if the Financial Times of London has tried to make the inevitable fall appear to be a masterly exercise in BP negotiating skill.

In the middle of 17th century Paris, Savinien Cyrano de Bergerac (that's the real one, not the 19th century stage character), wrote a fantasy about a voyage to the moon. He described several

contrivances to get there, in addition to his own. One, which reportedly delivered the biblical prophet Elijah, involved a large magnetic ball and an iron chariot. To propel the latter into the sky, and thence to the orbit of the moon, the prophet tossed the ball into the air so that the magnetic force would draw the chariot after it. He was obliged to keep catching and tossing to sustain the upward momentum. When it was within gravitational range of the moon, the magnetic ball was tossed downward, and then upward again, to break the speed of the chariot's fall.

Russia isn't the moon. But BP has been trying a variant of the magnetic-ball-and-chariot to hang onto the 23% of its global oil reserves located there, 25% of its current oil production, and a comparable amount of its market capitalization. Rarely has so much value in global energy resource depended on such a theory of motion. Robert Dudley, chief executive of TNK-BP - the 50/50 joint venture BP has operated for five years with Fridman, Len Blavatnik and Victor Vekselberg - has also been using several quaint contrivances to defy the laws of gravity.

Dudley was found out, having tried to negotiate secretly with Russia's Gazprom the sale and purchase of the 50% stake in TNK-BP owned by the Russian trio - collectively known as AAR, reflecting the names of their holdings, Alfa, Access and Renova.

Dudley, BP chairman Peter Sutherland and chief executive Tony Hayward may have thought their proposed deal had the blessing of Gazprom's chairman at the time, Dmitry Medvedev, and Gazprom's chief lawyer, Konstantin Chuichenko. By the time the latter duo had moved into the Kremlin in May, Medvedev as president, Chuichenko as head of the president's Main Control Department, Dudley and his masters had also convinced their contacts in Downing Street and in the British Secret Intelligence Service that their scheme was a test of strength between, on the one side, Prime Minister Vladimir Putin and his deputy, Igor Sechin, who are usually in charge of such matters, and on the other, the new Russian president. Sechin is also chairman of the board of Russia's leading oil company, Rosneft.

Fridman identified the folly of foreign companies playing Russian politics against Russians, claiming publicly that Dudley's secret not only violated the terms on which he worked as chief executive, that is he should report to both sets of shareholders on the TNK-BP board. It also violated the elementary rules of Russian politics - there are no secrets, and there are no one-sided deals.

According to the Financial Times, Russian media reports and public statements by BP and AAR, the agreement between Hayward and Fridman - if it sticks - requires Dudley to be ousted by December 1. This was the first and principal demand of the Russians throughout the public conflict, since BP's hapless Gazprom deal was uncovered at the start of the year, and Medvedev lined up with Putin and Sechin to repudiate it.

Alastair Graham, head of BP Russian Investments, had told the FT six weeks ago that the campaign against Dudley was "a smokescreen for [the Russian] attempts to seize control of TNK-BP". In fact, BP had been trying to take control of TNK-BP from AAR.

If you believe the British company, you can declare the reported new deal a victory for BP. According to the FT, the agreement is BP's victory because it
preserves its 50% stake in TNK-BP after a struggle with its local partners that focused attention on the rights of foreign investors in Russia. The memorandum of understanding (MoU), agreed this week by BP's board, follows a long-running dispute over BP's most important international venture ... The outline agreement, steered by Tony Hayward, BP's chief executive, and chairman Peter Sutherland, was reached after fears that BP's interest in TNK-BP could be at risk because of its fight with its Russian oligarch partners. BP's control of TNK-BP had also come under pressure from multiple investigations by the Russian authorities into its labor practices. Under the deal, the 50-50 equity split of the partnership would remain unchanged.
In a briefing on the agreement he signed, Hayward claimed, "The outline deal announced today, provided the details can be agreed in good faith, is an acceptable compromise." Sechin announced: "We are pleased that the conflict has been settled and the parties to the negotiations have reached an agreement on the shareholder level without involving third parties, including the state. This sends the right single to the entire market."

If you are the Russian shareholders, you see the outcome positively, but not in the way the British side has reported. According to the press reports, the replacement for Dudley, and new chief executive officer of TNK-BP, must be independent of BP, and his powers will be substantially reduced from Dudley's prior mandate - a big loss for the men who sit on St James Square, BP's headquarters in London.

Other reported provisions indicate that the holding company for the joint venture will now have three independent directors and four each for BP and TNK-BP. But the affiliated and subsidiary companies will remain at parity between the Russian shareholders and BP. BP thus loses operational control. In addition to Dudley, its key financial and operational executives have already resigned, and more than half of its secondees on the TNK-BP payroll have lost their Russian visas and been reassigned.

The MoU between BP and AAR allows for an initial public offering (IPO) of up to 20% of shares in TNK-BP's assets, to be issued in a year or two. This allows both sides to sell into the market, and it means two things - TNK-BP's share price goes up in anticipation; Gazprom and Rosneft, the two state Russian energy companies, will consider what they would like to do. The current freefloat is only 5%. A larger freefloat ought to lift the market cap of TNK-BP - another plus for the Russian shareholders, compared with the status quo ante. Predictably, TNK-BP's share price jumped 8% in Thursday's trading.

AAR had been clear from the beginning that Dudley's plot had been to oust them from their shareholding at a discount to the value BP placed on TNK-BP's assets in its own capitalization. An independent audit by DeGolyer and MacNaughton confirmed last year that TNK-BP's total proved reserves were 8.225 billion barrels of oil equivalent, applying US methodology on a life of field basis. BP says its reserve figure is 17.8 billion barrels, and includes in the count its share of TNK-BP.

That makes TNK-BP's reserves 23% of the BP total. If you were imaginative, and applied that proportion of BP's market capitalization (at the time the conflict broke into the open) of 105 billion pounds sterling (US$213 billion) to value TNK-BP, you might figure that TNK-BP should be worth $53 billion. And that should indicate that a half share of TNK-BP, held by AAR, should be valued at $27 billion.

But in June, the market cap of TNK-BP as a whole was just $35 billion; the half share $17.5 billion. The fight, which BP and its supporters portrayed in the London press as a defense of foreign investment rights in Russia against local predators, was in reality about the $10 billion difference between the two prices, and the much bigger difference BP has calculated that might accrue to BP's reserve balance if Fridman and his associates were replaced as the TNK-BP partner with Gazprom, and its enormous reserves.
Today's share prices reflect the fall of oil in global markets, a worldwide contraction in economic growth prospects, a slowdown in Russian growth rates, the dwindling of the pound, and the rise of the dollar. BP is currently worth 94.8 billion pounds. BP's share price fell 1% on the Russian agreement; TNK-BP's rose 8% on the news, making the company's market cap currently $27.4 billion.

The trajectory of TNK-BP's share had been rising through much of the six-month conflict - but not from Dudley's or BP's magnetic pull. So long as the Moscow market judged that AAR stood the better chance of winning the contest for operational control of the company, TNK-BP became more valuable, and BP less so. A clever arbitrageur should have been betting on the widening spread between the two share prices. That in turn has meant that no one in the market believed what they were reading in the bulletins issued from St James Square to the dutiful FT.

That is to say, the Russian investment community has believed that TNK-BP will be worth more if BP loses its battle than if it wins.

And so it will be. By trying to fight Fridman behind the arras, Dudley, Hayward and Sutherland, at their own expense, are going to enrich their adversaries. By trying to play Medvedev and Chuichenko off against Putin and Sechin, they have substantially increased the likelihood that the IPO price for a 20% stake in TNK-BP will be considerably higher than Fridman's sale target, and that a Russian state company may enter the shareholding to assure firm Russian control of the oil reserves.

BP has been forced to give up the lucrative scheme in which it paid its executives through TNK-BP revenues. But it preserves what counts at St James Square - the market cap of BP, the BP share price, and the bonuses Sutherland, Hayward and their associates earn, so long as the Russian reserves continue to be booked on BP's ledger.

A minor footnote to the conflict is likely to be buried by the MoU. However, it tells more about BP's tactics and intentions than the company should have allowed to be known.

On June 30, as part of what the FT reported as tit-for-tat by the British against legal action by the Russians, BP issued a London lawsuit, informing the court and BP's shareholders that for at least 15 months their company had a legal claim to 8.5 billion rubles

(US$366 million), payable by the Russian shareholders of TNK-BP.

On request, BP has produced a copy of the Short Claim filed by Linklaters at the High Court. It is captioned BP Russian Investments Ltd versus Alfa Petroleum Holdings Ltd and OGIP Ventures Ltd, both of London. BP declines to say if it has served the claim on the defendants, nor whether it has filed in court the fuller Particulars of Claim. The amount of the claim, including the court filing fee but not legal costs and interest, is "the US dollar equivalent of rubles 8,462,102,278.92". Michael Bennett is the Linklaters solicitor who signed the claim on BP's behalf.

In a single page, however, BP and its lawyer revealed details of BP's relationship with TNK-BP and AAR, which BP shareholders had not been alerted to before - and which BP may now wish it had not exposed at all.

The legal basis of the claim is that in 2003, when BP acquired a 50% share of Tyumen Oil Company (TNK) - then owned by Fridman, Vekselberg and Blavatnik - the Russian shareholders signed an agreement to indemnify BP in the event that the Russian government, prosecutors or tax agency filed claims against TNK for the period prior to BP's deal. BP officials were reluctant at the time, and subsequently, to admit to the existence of this and related indemnities, and for two good reasons: BP did not want a public demonstration of how little it trusted its new Russian partners in TNK-BP; nor would it acknowledge how probable it thought TNK was liable for heavy back-tax claims from the Russian government.

Clause 4 of what is called the Tax Deed of Covenant, dated August 29, 2003, is now identified as the operative provision by which BP is now demanding the money it says was paid out of its share of TNK-BP's profit in either 2006 or 2007. The Claim Form doesn't provide details of the tax levies on TNK-BP. Asked what these were, BP spokesman David Nicholas referred to BP's annual report for 2006.

This says that on October 23, 2006, tax audits of TNK-BP group companies for 2002 and 2003 resulted in "a payment by TNK-BP of approximately $1.4 billion in settlement of those claims". There is no reference to how much of this amount was paid out of BP's share of TNK-BP monies, and thus subject to repayment by TNK-BP to BP. All BP admitted to its shareholders was that "at the present time, BP believes that its provisions are adequate for its share of any liabilities arising from these and other outstanding tax decisions not covered by the indemnities provided by our co-venturers ..."

This language appears to refer to tax liabilities BP might have to pay the Russian authorities, after the 2003 transaction was completed. It omits to disclose to shareholders that BP and TNK-BP had apparently agreed at the board of directors, and with chief executive Dudley, that no money, out of the $1.4 billion tax paid in 2006, would be owing to BP.

BP refuses to explain why it has apparently changed its mind - and so recently. Nicholas told Asia Times Online: "We consider the correspondence between BP and the defendants and the contents of this correspondence to be confidential. We have filed our claim with the High Court and you now have a copy of the claim form. The details of this claim will be fully examined when the case comes to court. We don't intend to make further comment on it."

The Claim Form reveals that BP's first letter of demand for payment was sent to the Russian shareholders on March 19, 2007. But the amount claimed in that letter by BP is reported in the court document to have been 3.4 billion rubles. Further letters of demand followed, BP says, on August 1, December 24, and May 9, 2008. BP then makes an unusual admission: on May 22, BP received a letter from the defendants, the Russian shareholders of TNK, in which they acknowledged "that each Defendant was liable to pay 50% of Roubles 1,835,147,027.73 in respect of the sum of Roubles 3,402,745,865.00 claimed by the Claimant in the aforesaid letter dated 19 March 2007".

Read that carefully again - BP admits that in its letter-writing campaign from March of 2007 to May of 2008, its demand was for 3.4 billion rubles (about $147 million at today's exchange rate); and that the Russian shareholders had agreed to pay it all.

Notwithstanding, just 38 days after receiving this payment undertaking, BP filed suit for an amount that is exactly two and a half times larger. BP was asked to explain why it sued so soon after the Russians agreed to pay on May 22; and why the amount of the claim had jumped skyward. Spokesman Nicholas refused to say.

Can there have been an agreement in 2006 between the BP and Russians on the board and in the senior management of TNK-BP not to reimburse BP, and not to invoke the indemnities? Then, through 2007, when BP was dispatching its letter claims, was there an understanding with the Russians that they would be obliged to reimburse BP for considerably less than BP is now demanding?

The difference between what BP told the Russian shareholders it was willing to accept in March 2007 and what it sued for nine weeks ago is almost 5.1 billion rubles (about $218 million at June 30). In retrospect, this appears to be a sum Dudley, the BP representatives on the TNK-BP board, Graham of BP Russian Investments, and the BP board were all willing to sacrifice - without issuing a notice to shareholders. Perhaps a year ago, this was a sacrifice they judged prudent to maintain amity between the BP and Russian shareholders.

But once the BP plot to oust AAR had been exposed, the appearance of amity was shot, and the stock markets turned against BP, the English tried to protect their stake, keeping Dudley in place, with a writ worth $218 million more than both sides had agreed to accept and pay in May. In the old-fashioned sense in which Cyrano de Bergerac meant the word, this was lunacy. Hayward's signature on the agreement of September 4 certifies it. In a commonsense world, lunatics will also be defeated in the end.

Brown and Miliband face the same fate.

John Helmer has been a Moscow-based correspondent since 1989, specializing in the coverage of Russian business.