Foreign Relations of the United States, 1951, National Security Affairs; Foreign Economic Policy, Volume I

S/S–NSC Files, Lot 63 D 351, NSC 97 Series¹

Memorandum by Mr. Walter N. Walmsley, Jr., Alternate Department of State Representative on the Senior Staff of the National Security Council²

top secret

[Washington,] November 29, 1951.

Subject: Relative Cost of Insuring Availability of Certain Middle East Oil Facilities or of Offsetting Their Loss

The NSC Senior Staff completed consideration on November 27 of an interim report to the Council on a national petroleum program.³ This report is intended to inform the Council of such measures as have been or are being taken by the competent agencies, within existing policies, to prepare for fueling a major war effort, and to make interim recommendations of policies designed for the same purpose where policy decisions or legislation are required.

This report stems from NSC Staff consideration over the past several months of two PAD reports on “World-Wide Demand and Supply of Petroleum in Event of a Major War” dated July 20, 1951, and on “Tanker Transportation Supplement”, dated September 25, 1951.⁴ These reports together with another one on refining, and the contributions of the pertinent agencies and the industry, will serve as the basis on which the OPM by Presidential directive will draft a national petroleum program.

The intimate relationship between oil requirements of the free world and the regional Middle East policies the NSC Staff is now studying, has been continually stressed in the Staff. However, the impracticability of calculating and comparing the military cost in blood and treasure and the financial and economic cost of replacing Middle East production and refining facilities has only just now been recognized. The following agreement of the Senior Staff on November 27 represents its recognition of this situation, and is quoted for your information:

“Agreed that, in connection with but not necessarily as a part of the Mediterranean and Middle East project,⁵ the Department of Defense should prepare a study of the cost of the military effort in terms of feasibility, time and material, and the forces required to ensure the continued availability of oil from the Bahrein-Qatar-Saudi Arabia area, and the Office of Defense Mobilization should prepare a study of the economic cost in terms of feasibility, time and material required to offset the loss of oil from that area.”

1. Master set of National Security Council documentation, 1947–1961, retired by the Executive Secretariat of the Department of State (S/S).
2. This memorandum was directed to George C. McGhee, Assistant Secretary of State for Near Eastern, South Asian, and African Affairs; Willard L. Thorp. Assistant Secretary of State for Economic Affairs; and Paul H. Nitze, Director of the Policy Planning Staff.
3. The paper under reference is NSC 97/1, “A National Petroleum Program,” a report to the National Security Council by Executive Secretary James S. Lay, Jr., November 27, 1951. For text of NSC 97/1, amended and approved as 97/2, December 13. 1951, see p. 978.
4. Neither printed.
5. In 1952, the project under reference produced reports in the NSC 129 series, “U.S. Objectives and Policies With Respect to the Arab States and Israel.” Documentation regarding that series will be treated in a subsequent volume in the Foreign Relations series.