711.6/3–2151

Memorandum by Mr. Nester C. Ortiz, Petroleum Policy Staff, to the Acting Chief of the Petroleum Policy Staff (Moline)

Subject: PAD1 given responsibility by ODM for formulating National Petroleum Program and National Petroleum Policy.

1. In a letter of last week (March 12–16), excerpts of which were read to me, addressed by ODM (General Lucius Clay)2 to Secretary Chapman, PAD was given the primary responsibility for establishing a Foreign Petroleum Program and National Petroleum Policy. This letter is in response to a previous letter by Secretary Chapman to Mr. Wilson, dated around the first of the year,3 which sought to explain why little progress had been made in the formulation of a [Page 969] National Petroleum Program, a matter which had long been under consideration by various Government agencies and had resulted in a rather sharp exchange of correspondence involving the Department of Defense, the National Security Resources Board, and the Department of Interior, some of which was exchanged on a Cabinet level.

PAD (Ballou)4 stated they understood that the immediate responsibility given to them by this letter was to present proposals to ODM for dealing with estimates of crude and refinery losses anticipated with the outbreak of an all-out war, and measures which might be taken to overcome such losses, including consideration of development programs for increasing Canadian and Venezuelan crude production, as well as measures for resolving problems related to off-shore U.S. petroleum development.

Among other things, the letter stated that ODM would undertake to coordinate PAD’s plans and suggestions with those of other Government departments, adding that a program should be presented to the National Security Council for the coordination of U.S. and allied interests relating to petroleum.

2. Last week representatives of PAD (George Ballou and Carroll Fentress)5 met informally with ODM representatives (Vincent Rock6 and Shaw Livermore7) to sound out the possibility of establishing a Foreign Petroleum Committee, with the suggestion that it might properly lie within the scope of authority of ODM’s Committee on Foreign Supplies and Requirements.8 The ODM representatives stated they would take the matter under advisement, including the possibility [Page 970] of establishing this Foreign Petroleum Committee as an “independent” group, which would look to the ODM Committee for guidance on basic policy decisions or to arbitrate irreconcilable differences which may arise between the agency representatives with respect to foreign petroleum development.

  1. The Petroleum Administration for Defense was created under the Defense Production Act of 1950 (Public Law 774; 64 Stat. 798) by the Secretary of the Interior on October 3, 1950. Its functions included the development and execution of policies and programs for meeting military, governmental, industrial, and civilian requirements for petroleum and gas.
  2. Gen. Lucius D. Clay, Special Assistant to the Director, Office of Defense Mobilization.
  3. Not printed.
  4. George T. Ballou, Director, Foreign Refining Division, Petroleum Administration for Defense.
  5. Carroll D. Fentress, Special Assistant to the Deputy Administrator, Petroleum Administration for Defense.
  6. Vincent P. Rock, Assistant Executive Secretary, Office of Defense Mobilization.
  7. Shaw Livermore, Staff Director for Committee on Foreign Supplies and Requirements, Economic Cooperation Administration.
  8. The ODM’s Committee on Foreign Supplies and Requirements was created by the Director of the Office of Defense Mobilization on January 19, 1951. Its general purpose was to improve the coordination and effectiveness of Federal policies and programs relating to foreign supplies and requirements. Its membership was drawn from the Department of State, Department of Treasury, Department of Defense, Department of the Interior, Department of Agriculture, Department of Commerce, Department of Labor, Economic Cooperation Administration, Defense Production Administration, General Services Administration, and Mr. W. Averell Harriman, Special Assistant to the President. Mr. Wilson specifically charged the committee with the following responsibilities: to advise him on problems relating to economic aspects of foreign requirements; to formulate guidance for United States representatives abroad regarding policies, plans, and programs of the Director of the Office of Defense Mobilization; to review for Mr. Wilson such proposed legislation, Executive Orders, and administrative orders and regulations relating to economic aspects of foreign requirements; and to formulate for the Director of Defense Mobilization policies and programs which would employ the economic resources of the United States for the purpose of obtaining strategic needs from foreign sources.

    For information on the creation of the Foreign Petroleum Committee, see footnote 5, supra.