217. Memorandum From the Staff Director of the Petroleum Logistics Division, Department of Defense (Cotulla), to the Regional Director, Near East, South Asia, and Africa, of the Office of the Assistant Secretary of Defense for International Security Affairs (Wagner)1

SUBJECT

  • Plans for actions to supply the Free World’s Petroleum Requirements if Middle East Oil is denied

As a result of your question on this subject, the matter was discussed with the Office of Oil and Gas, Department of the Interior.

That department coordinates Federal petroleum policies and is responsible for (1) contact with the petroleum industry; (2) priorities and allocation of petroleum; (3) preparedness measures on petroleum.

In general, no detailed plans have been prepared. It is impractical to do so since the situation is not static. It is visualized that when old sources are not available, orders will be placed on new sources through commercial channels. Arrangements will be made for tanker transportation as is done now. Individual companies will increase production commensurate with their capability and the demands placed on them. The demand for tankers would probably [Page 597] cause tanker operators to buy the ships currently in the Maritime Reserve Fleet. Each nation would impose rationing as necessary to keep consumption in line with available supplies.

It is anticipated that Interior would probably set up an organization (similar to the Petroleum Administration for Defense of the Korea period) under the authority of Executive Order 10480 to handle the problems of production, refining and rationing.

The Office of Defense Mobilization would probably be requested to declare an “emergency” in order to give the Foreign Petroleum Supply Committee “anti-trust immunity” so that concerted action by the member companies under the Voluntary Agreement could be arranged to solve the problems that arise. Similar action was taken to handle the “Abadan” crisis. The FPSC would prepare a “plan of action” to cover production and distribution outside the United States. Their plan would be in coordination with the British Petroleum Advisory Committee in order to cover the entire free world situation. The plan would be submitted to the Interior Department for review and approval.

Coordination with French and Dutch petroleum groups would probably be handled through NATO’s Petroleum Planning Committee.

It should be realized that the above is a quick summary of the situation.

L.E. Cotulla
Brigadier General, USA
  1. Source: Department of State, OF Files: Lot 59 D 578, Middle East Petroleum. Confidential. On April 27, Roger Kirk, in the Office of Reports and Operations in the Executive Secretariat, sent this memorandum to Monteagle Stearns, in the Office of Near Eastern, South Asian, and African Affairs, for George v. Allen and Rountree.