357. Memorandum From the Chairman of the Petroleum Study Committee (McDermott) to President Kennedy0

I am pleased to submit a Report based upon a comprehensive study of petroleum requirements and supplies in relation to national security objectives, undertaken in accordance with your directive issued December 2, 1961.1

The Conclusions and Recommendations of the attached Report are the result of extensive study by the Committee and its Task Force group and the report has been signed on behalf of all participating departments.

At the request of the Department of Interior, I have been asked to report to you their opinion that the conclusions relating to costs and benefits are potentially misleading. Interior contends that “while estimates purportedly covering costs to the economy are included in the report, the counter-balancing benefits which flow from the maintenance of the petroleum industry in its present state of health were not reduced to comparable terms.” The Interior member also states “that existing legislation and delegations vest the Director of the Office of Emergency Planning with adequate authority to deal with the security aspects of the petroleum problem and that, in consequence, the recommendation in the [Page 800]report dealing with coordination of interagency activities is unnecessary and could lead to future difficulty in assessing responsibility for development and coordination of petroleum policy within the Executive Branch.”

Except for this comment by the Department of Interior, the attached Report has the unanimous support of all participating departmental members, the Committee’s advisers and observers.

Respectfully,

Edward A. McDermott

Attachment2

Report by the Petroleum Study Committee to President Kennedy

INTRODUCTION

To the President:

On December 2, 1961, in connection with proposals to amend Proclamation 3279, governing the allocation of oil import quotas, by press release (Tab A, attached) you announced

”. . . that a comprehensive study of petroleum requirements and supplies in relation to national security objectives will be undertaken under the leadership of the Director of the Office of Emergency Planning, to be completed by mid-1962.”

This assignment was organized as an inter-agency study under the Chairmanship of the Director of the Office of Emergency Planning, with equal participation by the Departments of State, Treasury, Defense, Justice, Interior, Commerce, and Labor. Representatives of the Bureau of the Budget and the Council of Economic Advisers, and the Deputy Special Assistant to the President for National Security Affairs served as advisers, and Representatives of the Central Intelligence Agency and the Federal Power Commission participated as observers.

[Page 801]

In the course of this study, public hearings were not held. A press release, issued on February 16, 1962 (Tab B, attached)3 advised industry and the public of the scope of the projected study, its objectives, and of the opportunity to submit written position papers. Further notification to this effect was published in the Federal Register on February 24, 1962.4 In response to these public announcements, thirty-two (32) written submissions were received by the Office of Emergency Planning from various segments of the petroleum industry. Each of these documents received full and careful consideration by the Committee and its Task Force group, and a large volume of intra-Governmental information relating to the questions involved, and materials submitted in connection with other petroleum studies, were considered.

This assigned study has now been completed and we submit the following conclusions and recommendations.3

Respectfully,

  • Edward A. McDermottChairman
    Petroleum Study Committee
  • Philip H. Trezise
    Department of State
  • James A. Reed
    Department of the Treasury
  • Paul H. Riley
    Department of Defense
  • Nicholas deB. Katzenbach
    Department of Justice
  • John A. Carver, Jr.
    Department of the Interior
  • William B. Dale
    Department of Commerce
  • W. Willard Wirtz
    Department of Labor
  1. Source: Kennedy Library, National Security Files, Kaysen Series, Economic Policy, Oil Policy. No classification marking. A September 5 covering memorandum from McDermott to Kaysen transmitted the report and noted with appreciation Kaysen’s contribution to the study.
  2. Document 344.
  3. For Official Use Only.
  4. Not printed.
  5. 27 Federal Register 1779.
  6. Not printed.