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

162. Memorandum From John Renner of the National Security Council Staff to the President’s Assistant for National Security Affairs (Brzezinski)¹

Washington, September 26, 1978.

SUBJECT

• Long-term National Security Strategy on Oil Prices

On May 12 you established a task force to prepare a study on long-term policy on imported oil prices for PRC consideration. Your tasking memo is at Tab B.²

The report you requested has arrived. It is at Tab A.³ There is an executive summary. The main policy conclusions are that the US Government should:

—Establish the longer-term strategic goal of seeking to expand world productive capacity as a major foreign policy objective.⁴

—Reaffirm the policy of seeking to keep OPEC price increases as small and infrequent as possible within the limits of US influence and advisable trade-offs with other objectives.

—Review periodically US posture and tactics with respect to OPEC in the light of market developments and past success in moderating price and expanding capacity.

The next step should be a PRC meeting, which I will set up if you agree in principle. At such a meeting, we should examine the policy conclusions of the task force and attempt to reach agreement on our main policy objectives with regard to oil prices and supply.

We should also agree on a follow-up mechanism. I recommend that, near the end of the PRC meeting, you propose that an interagency working group, chaired jointly by State and Energy, review annually US posture and tactics with respect to OPEC in the light of market developments and past success in moderating price and expanding capacity. The composition of the working group should be the same as the task force that produced the present report.⁵

Recommendation

That a PRC meeting be held to review the report and determine policy objectives and follow-up.⁶

1. Source: Carter Library, National Security Affairs, Staff Material, International Economics File, Box 44, Rutherford Poats File, Chron, 9–11/78. Secret. Sent for action.
2. Printed as Document 150.
3. Not found, but see footnote 2, Document 160.
4. In his September 29 memorandum to Brzezinski analyzing the study, Odom wrote that “this kind of generalized policy,—to increase global production,—is more likely to entangle us in contradictions than to help in pursuit of our interests.” He noted that Schlesinger had “serious reservations” about the study and that it would be “interesting to smoke him out.” (Carter Library, National Security Affairs, Staff Material, International Economics File, Box 44, Rutherford Poats File, Chron, 9–11/78)
5. Under this paragraph, Renner wrote: “ZB, I’ve asked that the effects of the dollar vs. a basket on our competitive position also be added so we can look at that very important strategic issue—these other conclusions are obvious.”
6. Brzezinski did not indicate his decision on the recommendation. On September 27, the President issued Executive Order 12083 establishing an Energy Coordinating Committee “to provide for the coordination of federal energy policies” and “ensure that there is communication and coordination among Executive agencies concerning energy policy and the management of energy resources.” The committee had 23 members and included every major Cabinet officer. (Public Papers of the Presidents of the United States: Jimmy Carter, 1978, pp. 1637–1638) Carter initially doubted “the need” for such a committee, as he wrote on the June 28 memorandum that McIntyre sent to him proposing it, preferring instead to “let Schlesinger and Watson try this without a formal E.O.” (Carter Library, National Security Affairs, Staff Material, International Economics File, Box 44, Rutherford Poats File, Chron, 9–11/78) The committee’s first meeting was held on December 19. (Draft minutes; ibid., Chron, 12/14–31/78)