234. Letter From the Manager of the Government Relations Department, Standard Oil Company of New Jersey (Finlay) to the Assistant Secretary of the Interior for Mineral Resources (Moore)1

My Dear Mr. Moore:

We have received word from London that pressures are developing in Europe for the establishment of a petroleum industry advisory group to work directly with the OECD Oil Committee2 in handling petroleum supply problems arising out of the present difficulties in the Middle East.

As I pointed out at the April 19, 1967 meeting of the OECD Petroleum Advisory Committee in Washington, the American oil companies have no legal sanction for effective collaboration in emergencies of this sort except through the Foreign Petroleum Supply Committee, which was established under Section 708 of the Defense Production Act of 1950, as amended, and which gives the participants the protection under the antitrust laws and Federal Trade Commission Act provided by that Section.

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As you know, the Foreign Petroleum Supply Committee was used as the vehicle for American industry collaboration in meeting the Suez crisis of 1956–57. A Plan of Action was drawn up on August 10, 1956 and amended on November 30, 1956 (with Attorney General approval on December 3, 1956), under which the Middle East Emergency Committee was established and authorized, within the limitations set forth in the Plan of Action, to deal with foreign agencies and foreign industry committees in meeting the emergency. Coordination across the Atlantic was effected through the dealings of the Middle East Emergency Committee with these three European industry advisory committees: first, the British-organized Oil Supply Advisory Committee (OSAC); next, the British, French and Dutch-organized Oil Emergency London Advisory Committee (OELAC); and, finally, following the closure of the Suez Canal and the IPC pipelines, the OEEC-organized OEEC Petroleum Emergency Group (OPEG). In each case, the activities of the Middle East Emergency Committee were approved by the Administrator or Director of the Voluntary Agreement Relating to Foreign Petroleum Supply and were thus brought within the protection of that agreement.

I am sure that the question of industry collaboration with the OECD will be discussed, or more likely is already being discussed, at the governmental level.3 I would, therefore, like to urge your assistance in insisting on the Foreign Petroleum Supply Committee route as the vehicle for American industry collaboration. Our lawyers frankly tell us that there is no other means, short of new Congressional legislation, that would provide the necessary antitrust clearance for effective American industry collaboration in the event that the present crisis is not eliminated through a quick political solution.

Yours very truly,

Luke W. Finlay 4
  1. Source: Department of State, E Files: Lot 71 D 84, PET 3 Orgs and Confs,OECD Oil Committee, April, May, June 1967. No classification marking. Copies were sent to Assistant Secretary of State for Economic Affairs Anthony Solomon and John Oliver.
  2. Once the Europeans activated the OECD emergency procedure, the agreements provided for the establishment of an International oil industry advisory committee which would act as the mechanism for international oil industry cooperation. See footnote 3, Document 230.
  3. Proposals for an Anglo-American company committee were not approved by the State and Interior Departments. “Existence such committee virtually certain to become known in international oil industry and through industry by governments. Knowledge on part of OECD members existence Anglo-American company organization might generate suspicion US and UK not forthcoming re capability those companies to provide petroleum Western Europe and Japan with potential danger that individual OECD members might be encouraged to take separate actions to procure greater POL supplies.” The State Department did say that such a proposal would be reconsidered later “in event OECD organization found not to function satisfactorily in the oil crisis.” (Telegram 210030 to London, June 10; National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967–69, PET 1 OECD)
  4. Printed from a copy that indicates Finlay signed the original.