Foreign Relations of the United States, 1964–1968, Volume XXXIV, Energy Diplomacy and Global Issues

249. Telegram From the Department of State to the Embassy in Germany¹

Washington, June 24, 1967, 3:12 p.m.

215890. BUSEC; CEDTO; NATUS. Subject: Oil Emergency Actions. Ref: Bonn 15093,² Bonn 15121,³ Paris 20659.⁴

1. In answer to your question (para 5 Bonn 15121) we continue think it important you and other key Embassies maintain contact and continue exchange views with host govts as appropriate on oil situation and steps to meet it, but we do not think it desirable for you now to urge them further to take specific line of action in OECD.

2. OECD Council decision has again been postponed, apparently due in large part to German Del’s lack of instructions.⁵ Council decision now scheduled for June 27. We are reviewing position for June 27 meeting. As stated State 212280,⁶ we want to avoid position of demandeur, and we do not, therefore, intend put pressure on FRG or others to take actions we believe in their best interests. Evolving situation may well bring them to conclusion establishment oil industry committee is warranted. Unfortunately, loss of time in reaching conclusion could become significant factor.

3. US Foreign Petroleum Supply Cte has presented proposed plan of action to Secretary of Interior. Plan cannot become effective, and companies cannot legally participate in joint activities either within US or with Europeans, until plan approved by Interior, Office of Emergency Planning and Attorney General.

4. These approvals have not yet been given. Approval requires that each approving agency be persuaded that necessity exists for concerted action in order to prevent adverse effect on US national defense interests. Interior’s June 10 determination of emergency is not sufficient by itself.⁷

5. Since Europe and Japan, but not US, are directly threatened with supply shortage, their assessment that emergency exists is good supporting evidence for finding that our defense interests are adversely affected. This does not mean US is not involved. We clearly are, because (a) directly affected countries are our allies whose economic health is of major concern to US; (b) US companies supply Europe/Japan; and (c) traditional sources for part of US oil imports have been cut off.

6. We therefore have not said and do not intend say US will not help meet European/Japanese supply problem. We expect cut in US imports from Eastern Hemisphere and perhaps Venezuela will make substantial increased quantities of oil available if they are necessary, and further, the US production will if necessary be increased to permit exports.

7. Question of apportionment is premature, as Europeans have recognized to the point of insistence. Supply of oil to Europe at this moment is primarily function of tanker availabilities rather than oil at shipping points. In fact, production of oil has been slowed by unavailability of tankers to carry it.

8. Thus, rather than trying tackle very difficult and complex apportionment problem now, when it premature, we (like Europeans) believe present focus our activities should be immediate problems of (a) getting best possible (i.e., industry) assessment of current situation, and (b) if, as we believe, assessment shows necessity of using limited tanker capacity with maximum efficiency, establishment as soon as possible of mechanism to do so.

9. We assume US oil companies will make great effort to meet European supply needs regardless of OECD action. However, there is no physical means of doing so if necessary tankers do not exist, and maximum efficiency in tanker use requires organized approach that we think can best be accomplished through OECD industry advisory group.

Katzenbach

1. Source: National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967–69, PET 3 OECD. Confidential; Priority. Drafted by Rogers (EUR/RPE), cleared by Oliver (E/FSE), Crowley (EUR/GER), Enders (M), Patman (L/E), Moore (Interior), and Solomon. Repeated to Brussels, The Hague, London, Paris, Rome, and Tokyo.
2. Dated June 22. (Ibid., PET 3 OECD)
3. Document 248.
4. Dated June 25. (National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967–69, PET 15 OECD)
5. Ambassador Trezise at the OECD reported that the Germans were awaiting the outcome of negotiations in Libya. (Memorandum of telephone conversation between Trezise and Stephen H. Rogers (EUR/RPM), June 19; Department of State, E Files: Lot 71 D 84, PET 3 ORGS & CONFS, OECD Oil Committee)
6. Document 245.
7. See footnote 3, Document 235.