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

125. Telegram From the Department of State to the Embassy in Switzerland¹

Washington, June 17, 1977, 1908Z.

141244. Subject: CIEC;² Energy Policy after CIEC; Continuing Energy Consultation. Ref: Bern 2578.³

1) When replying to Jolles’ questions posed reftel re energy policy in wake of CIEC, you should make the following points.

2) The US is now reassessing, in the light of the recently concluded CIEC, the advisability of continuing to seek an on-going energy dialogue between producers and consumers. We intend to consult fully with other industrialized countries on this before deciding whether to continue to pursue an on-going energy dialogue, and if so, the tactical considerations of how and in what forum it should be pursued. (The June 27–28 meeting of the IEA Governing Board⁴ should provide an initial opportunity for such consultations.) We also believe that low-key consultations with some major oil-importing LDCs, and perhaps key producing countries, on these questions would be beneficial.

3) While it may or may not be advisable to continue seeking an on-going energy dialogue, industrialized countries should realize that such a dialogue does not hold the key to reducing the strain on available oil supplies now forecast for early 1980’s and the concomitant upward pressure on the oil price. The only effective solution to this problem lies in action by consuming countries to reduce dependence on imported oil. (In fact, action to reduce dependence is a key to a successful dialogue with producers.) For industrialized countries this entails conservation and to increase production of alternative conventional and non-conventional energy sources. For consuming developing countries it mainly entails efforts—assisted through the cooperation program outlined at CIEC—to increase exploration for and development of indigenous energy resources.

4) Our interest in and support of the IEA is undiminished. It remains, in our view, the principal vehicle for industrialized country energy cooperation. We believe the reduced dependence program now in final stages of preparation in the IEA to be a key step in our collective progress toward that goal.

Vance

1. Source: National Archives, RG 59, Central Foreign Policy Files, D770218–1059. Confidential. Drafted by Milam; cleared in EUR/RPE, EB/ORF/FSE, the White House, Treasury Department, and FEA; and approved by Bosworth. Repeated to Ankara, Athens, Bonn, Brussels for the Embassy and USEEC, Canberra, Dublin, Copenhagen, Helsinki, Lisbon, London, Luxembourg, Madrid, Paris for the Embassy and USOECD, Oslo, Ottawa, Reykjavik, Rome, Stockholm, The Hague, Tokyo, Vienna, and Wellington.
2. The final CIEC Ministerial meeting was held in Paris May 30–June 3. While the countries representing the Northern and Southern Hemispheres “reached agreement on a number of issues” regarding the CIEC’s four areas—energy, raw materials, development, and financial affairs—a “lack of agreement on on-going energy consultation process” signified a “gap” in the overall package. (Telegram 16350 from Paris, June 3; ibid., D770198–0487) Telegram 16351 from Paris, June 3, transmitted the CIEC’s final communiqué. (Ibid., D770206–0274) Telegram 17849 from Paris, June 16, contains an informal paper by the IEA Secretariat on the implications of the CIEC meeting’s outcome for the Agency. (Ibid., D770215–0780)
3. In telegram 2578 from Bern, June 8, Ambassador Davis reported that Swiss State Secretary for Foreign Economic Affairs Paul R. Jolles had expressed concern over the failure of the CIEC to achieve “any continuing dialogue on energy questions with the producing countries.” Consequently, Davis requested information on how the United States envisioned the future role of the IEA and, more generally, on the future of U.S. foreign energy policy. (Ibid., D770204–0022)
4. At the June 27–28 meeting, the Governing Board agreed to forward for Ministerial approval a draft decision “encompassing a group oil import objective for 1985 of 26 MMBD, endorsement of a set of 12 principles for energy policy, and strengthened national review procedures designed, inter alia, to monitor progress toward achievement of the group objective.” The Governing Board’s endorsement of the 12 principles represented a “firm political commitment” but was “not legally binding.” (Telegram 19301 from Paris, July 1; ibid., D770252–0903)