Foreign Relations of the United States, 1969–1976, Volume XXXVII, Energy Crisis, 1974–1980

120. Telegram From the Department of State to Selected Diplomatic Posts¹

Washington, March 28, 1977, 2224Z.

68642. Subject: CIEC; April 7 Vertical G–8 Meeting on Energy.

1) Please pass the following messsage from Energy Commission co-chairman Stephen W. Bosworth to host government officials responsible for work in the CIEC Energy Commission.

2) “As you know, the G–8 will hold a horizontal coordinating meeting on April 6. I would like to have a G–8 energy meeting the following day.

3) The purpose of our April 7 meeting would be to review the major issues and areas of agreement and disagreement between the two sides in the Energy Commission. I intend to use schematic paper² prepared by the US and discussed at the February 28 meeting of the Burrows group³ to facilitate our discussions. This schematic paper largely embraces the substance of the papers on supply, price and cooperation sent to us by the Swiss, Japanese, and EC.

4) I do not think it useful at this meeting to try to agree on specific language for the final CIEC document. Our past experience in CIEC suggests that the G–19 will regard any new document we put on the table as a new G–8 negotiating position and they will counter with a reiteration of their original positions of October and November. Moreover, we see little utility in trying to agree among ourselves on precise language since this language in the final communiqué will have to result from the negotiations between the two sides.

5) Consequently, I want to use the April 7 meeting to ensure that we have G–8 agreement on the substance of the issues. It is important that we single out areas where we believe a compromise can be reached with the G–19 and those where the gap between the two sides appears unbridgeable. It would be the task of the G–8 negotiators in the contact groups and/or the Energy Commission to ensure that the final negotiated language reflects an agreed substantive position. I think we should focus particularly on the issues cited below; other delegations may wish to raise additional points for discussion:

—The communiqué must recognize the importance of an adequate supply of energy to the growing world economy. What degree of specificity should we insist on regarding the responsibilities of the oil exporting countries to provide this supply?

—The transition period is an important concept in relation to a general undertaking to decrease reliance on oil and gas. Are we agreed that there should be some explicit reference to this transition period being smooth, orderly, and progressive (or similar language that conveys the same idea)?

—Can we accept more than general language on the timeframe relating to the depletability of oil and gas and the need to increase reliance on alternative sources of energy?

—What degree of emphasis do we want on the role of private capital in energy development in oil importing LDCs and the need for an improvement in their investment climate?

—Are we prepared to recommend increased public financing for LDC energy development? In what form?

—The issue in the supply section about future uncertainty in energy supply and demand and the need to cooperate to reduce the uncertainty was designed to flag a later recommendation for a continuing energy dialogue. Do we need the reference to uncertainty in Part I to support the dialogue idea? Conversely, should we introduce the idea of on-going consultation in this part?

—What is the best tactical means to seek G–19 acceptance of the on-going energy dialogue? Should it be removed from Part III and placed in a separate Part IV?

—On the price issue, should the impact of prices on the world economy and the need for this to be a factor in the considerations of future oil prices be a basic G–8 position? Are we prepared to go further than did the Japanese paper on prices on the issue of purchasing power? How far are we willing to go to meet the G–19 view that the price of alternate energy sources should be the standard by which oil prices are determined? Would it be better to hold firm to all our positions on price (as put forward in the Japanese paper) and seek anodyne language on prices in the final communiqué?

—How hard should we push the IEI if OPEC countries continue to resist it? If non-oil LDCs support it?

—Should language on R&D cooperation in the communiqué be general or should we seek specific reference to the possibility of non-IEA members participating in IEA R&D projects?

6) We also need to discuss on April 7 tactics for the work in the contact groups. One key question is whether it would be preferable for the contact groups to resume work on their highly bracketed and unofficial texts of November or begin again on the basis of the earlier papers of the G–8 and G–19 that were discussed in the Energy Commission between September and November. Another is whether or not we should refuse to treat issues that are not primarily energy specific (e.g. BOP financing, industrialization issues, etc.) in the Energy Commission portion of the communiqué. A third is whether we should refuse to accept any reference to Law of the Sea issues in CIEC.

Christopher

1. Source: National Archives, RG 59, Central Foreign Policy Files, D770106–0652. Limited Official Use; Priority. Drafted by Creekmore and William B. Milam (EB/ORF/FSE), cleared in FEA and the Commerce and Treasury Departments, and approved by Bosworth. Sent to Canberra, Ottawa, Tokyo, Madrid, Stockholm, Bern, London, Paris, Bonn, Rome, Dublin, Copenhagen, Brussels, The Hague, and Luxembourg. Repeated Priority to USOECD Paris and to USEC Brussels.
2. See Document 122.
3. The IEA Ad Hoc Group on International Energy Relations was led by R.A. Burrows, Assistant Under Secretary in the British Foreign Office. No record of the February 28 meeting has been found.