Foreign Relations of the United States, 1948, The Western Hemisphere, Volume IX

810.6363/4–1448

The Acting Secretary of State to Diplomatic Representatives in the American Republics

confidential

Washington , April 14, 1948.

Subject: Consideration of Western Hemisphere Petroleum Supply Problem by the Inter-American Defense Board

The Acting Secretary of State encloses for the information of the Embassy certain papers on petroleum showing the consideration that has been given to the petroleum problem of the Western Hemisphere by the Inter-American Defense Board. The papers were made available to the Department by the U.S. Delegation to the Inter-American Defense Board.

The State–Army–Navy–Air Force Coordinating Committee has approved a paper which recommended that every American Embassy in the Western Hemisphere, the Inter-American Defense Board, and all joint defense boards involving the United States and other American States be informed concerning the petroleum supply problem of the hemisphere, especially as regards its security aspects. Enclosure 1 contains the paper which the United States Delegation presented to the Inter-American Defense Board in accordance with the SANACC recommendation. Enclosure 2 indicates the action which the Board has taken.

These enclosures, together with the circular airgram dated February 17, 1948¹ on the general petroleum situation, will bring the Embassy up-to-date on the hemisphere petroleum problem both with respect to its peacetime and security aspects.

[Enclosure 1]

Appendix I of IADB Minutes of February 24, 1948

restricted

necessity for developing additional supplies of oil in the western hemisphere for hemispheric defense

The provision of adequate supplies of oil for the defense of the Western Hemisphere is one of the most important and difficult problems facing the American nations today.

The result of World War II was a tremendous drain on United States petroleum resources. We completely used up 1 million barrels a day of reserve productive capacity which was available to us at the beginning of the war. During the war, United States average production of crude petroleum increased from 3,606,157 barrels per day to 4,871,099 barrel per day. Since the war, worldwide demand for petroleum has increased to the unprecedented figure of 9,000,000 barrels per day of which 5,600,000 barrels per day or 62% is currently being provided from United States resources.

Between 1939 (prewar) and 1947 (postwar) the relative increase or decrease in proved reserves and daily production of Western Hemisphere countries is as follows: (See Enclosure I)²

	Proved Resources (bbls.)		Daily Production
United States	Increased	4,577,000,000	Increased	1,616,600	B/D
Mexico	Increased	300,000,000	Increased	37,500	“
Venezuela	Increased	5,500,000,000	Increased	622,000	“
Colombia	Increased	100,000,000	Increased	3,000	“
Peru	Decreased	50,000,000	Decreased	2,000	“
Brazil	Increased	5,000,000	Increased	300,000	“
Argentina Chile	Increased	25,000,000	Increased	8,000	“

This means that the United States is expending its non-replaceable petroleum resources at a rate vastly greater than that of any other country or any other oil producing area in the world. What effect is this going to have upon our planning for cooperative defense of the Western Hemisphere?

We know that the world peacetime demand is increasing each year. We can safely assume that normal peacetime demand for petroleum is going to increase year by year. We must remember that with each year that passes the increasing use of diesel fuel for railroads, heating oil for homes, tractor fuel for food production and gasoline for trucks and cars is shifting the balance of civilian usage so that loss of it can be classified as non-essential. For this reason, the demand for petroleum products to provide the minimum essential civilian economy will unquestionably be greater than ever before.

We think our planning will reveal that a great number of complicated machines, using vast quantities of petroleum, will be required for the most effective defense of our Hemisphere. Probably our petroleum requirements will be substantially greater than those of World War II. The petroleum demand for ground and Naval forces should be roughly proportionate to that of World War II but not so for the air forces. Jet powered counterparts of World War II fighter planes and bombers use from three to five times as much fuel per hour as the World War II planes. It is entirely probable that we may require more aviation gasoline alone than was required by the entire military establishment in World War II.

When all of the probable requirements for petroleum are added together we have a tremendous figure, in the vicinity of nine to ten million barrels per day. The consequent problem of supply staggers the imagination. What can we do to solve this problem?

According to the best estimates of military and industrial planners, it will not be possible to supply nine to ten million barrels per day from presently known Hemisphere sources. The apparent shortage appears to be in the neighborhood of two to three million barrels per day. All American nations must take coordinated action to help make up this deficit.

In the United States, studies are presently under way by industry planners to appraise the practicability of building up a synthetic petroleum industry, large enough to overcome the deficit indicated above. Studies thus far indicate that because of the enormous amounts of material which must go into synthetic plants, the development of a synthetic petroleum industry adequate to meet our needs would make the present shortage of steel for all purposes, including petroleum development, much more acute.

Geologists consider that there are large quantities of natural petroleum still undiscovered and undeveloped in the Western Hemisphere. The United States is making intensive efforts to develop such resources within its own borders. If all Western Hemisphere nations do likewise we can very probably develop sufficient petroleum resources within our Hemisphere to meet our maximum planning requirements. However, resolutions by the Bogotá Conference looking toward the development of these resources will not be enough. It will be necessary to push through to final completion actual and concrete measures to make this resource development a matter of accomplishment. Many American States have requested military equipment and other facilities in order to effectuate their share of the hemispheric defense program. Nearly all of this equipment is oil consuming. The United States does not have the resources to provide petroleum products to maintain this equipment in action.

It is therefore imperative that every American nation take those measures necessary to bring about a development of its petroleum resources so that each can assume its full share of responsibility should it become necessary to implement our planning for defense of our-Hemisphere.

[Enclosure 2]

Inter-American Defense Board—3077; Appendix 1 of Plenary Session 133, 16 March 1948

confidential

Resolution XXVI

petroleum in the defense of the western hemisphere

Whereas:

A. The principles set forth in the Act of Chapultepec and in the Inter-American Treaty of Reciprocal Assistance³ establish the bases on which the common defense of the Western Hemisphere is to be founded;

B. It is understood that preparedness in peacetime is an insurance against the consequences of war;

C. Such preparation, in order to be efficient, must be on a collective basis, and coordinated among all the nations of the Western Hemisphere;

D. The availability of petroleum in war is of primary importance for success in military operations;

E. The present crisis in petroleum in the American Hemisphere does not assure the petroleum resources necessary for Hemisphere defense; and

F. The development in production from new sources of petroleum, to the point of satisfying the required needs, demands relatively long periods of time;

The Inter-American Defense Board in its Plenary Session 133, 16 March 1948,

Resolves:

1. To place on record the vital importance of petroleum resources in the common defense of the Western Hemisphere;

2. To record the fact that the present production of petroleum in the American Hemisphere is already insufficient to meet the needs of the military, and that it is, accordingly, absolutely necessary to establish, at the earliest possible moment, measures to resolve the crisis;

3. To recommend to the Governments of the American Republics that they adopt, with the urgency they deem necessary, the following measures to procure the petroleum required by the common defense of the Western Hemisphere:

a) To increase, as much as possible, the present production of petroleum.

b) To intensify the study of the petroleum potential reserve and the planning for its development.

c) To put into effect measures to obtain production from new sources of petroleum.

d) To encourage the establishment of refineries, stocks of petroleum, and means of transportation.

e) To adopt adequate measures for the conservation of petroleum in every phase of national life.

f) To consider, in an inter-American conference, agreements leading to the establishment of inter-American cooperation in the development of petroleum production, distribution, mutual economic, technical, and industrial aid, and other measures to assure obtaining the petroleum necessary for the defense of the Western Hemisphere, and for the further development of the nations themselves.

M. B. Ridgway

Lieutenant General, USA Chairman

[Here follows an explanatory statement.]

1. Not printed.
2. Enclosure I (an attached table showing the increase in proven petroleum reserves for 1939 to 1947), not printed.
3. Department of State Treaties and Other International Acts Series (TIAS) 1543, or 60 Stat. 1831, and TIAS 1838, or 21 UNTS 77, respectively.