194. Memorandum From the Under Secretary of State for Political Affairs (Porter) to Secretary of State Rogers1

SRG Meeting on NSSM 174: International Aspects of Energy

Henry Kissinger yesterday afternoon held an SRG meeting to discuss the international aspects of the energy problem.2 In addition to the regular SRG members, Governor Love and Bill Simon from Treasury participated. Willis Armstrong and I represented the Department.

There was general agreement that there should be a major national effort to expand domestic supplies of energy, sufficient to reverse our [Page 534]increasing dependence on Arab oil by 1980. Without this, imports from all sources could account, by the early 80s, for more than half of total US consumption.

There was also agreement that present activities are insufficient to accomplish this. Nuclear technology will provide a long-term solution but will have little effect on the situation before the mid-80s at the earliest. A shift back to coal for electric power is technically feasible in the near term—plenty of coal is available—but entails massive environmental problems. The two Presidential energy messages of April and June3 have emphasized the right actions and funds are in sight for research and development in coal and oil shale. Governor Love is organizing his approach to all this work, but it will be some time before effective new measures can be taken.

The Governor said that a major conservation program would be needed to reduce the growth in consumption if the trend in imports were to be reversed.

As for our public posture, I said that the United States needed to take a more positive, confident stance to convince foreign producers that we were determined to solve this problem through a strong national program in this decade. If producer governments became convinced of this—which they are not today—it would influence their attitudes and demands during the next three to five years, the critical period during which there was little we could do, aside from conservation measures, to limit the growth of imports.

In the course of the meeting, Henry Kissinger expressed reservations on a mission to producing countries, such as the proposed investment advisory mission to Saudi Arabia,4 until our ideas have been further clarified. Kissinger also questioned our policy in favor of multilateral R&D in energy with other consuming countries. He felt we should look closely at the question of whether sharing our technology was justified and how joint R&D could be used as an incentive to tie [Page 535]other industrialized countries more closely to us. It was also observed that the U.S. has something to learn from other countries.

Toward the close of the meeting, there was considerable discussion of the possible usefulness of an approach by the USG to the governments of producer countries with a view to achieving bilateral arrangements for the supply of petroleum to the U.S. on a long-term basis. Mr. Kissinger requested that a working group produce a paper discussing the pros and cons of such arrangements for consideration at a mid-September meeting on energy.5

In view of the sensitive aspects of this matter (bilateral arrangements), Mr. Kissinger said the next meeting would be limited to principals.

William J. Porter
  1. Source: National Archives, RG 59, S/SNSC Files: Lot 80 D 212, NSSM 174. Secret; Exdis. Drafted by Claus W. Ruser (S/PC) and concurred in by Armstrong.
  2. Handwritten (but basically indecipherable) minutes of the meeting are ibid., Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–113, Senior Review Group, SRG Minutes (Originals) 1972–1973. Other information on the meeting include the Talking Points prepared for Kissinger, an August 16 memorandum from Odeen to Kissinger providing a listing of additional issues Kissinger might want to cover in the meeting, and a CIA brief prepared for the meeting. (Ibid., Box H–68, Senior Review Group Meetings, SRG Meeting, Energy NSSM 174 8/16/73)
  3. See Document 177.
  4. In an August 13 memorandum to Kissinger, Shultz recommended that Simon head an economic mission to Saudi Arabia and other Arabian peninsula oil-producing states to discuss increased oil production, and to promote U.S. exports and bilateral investments. (National Archives, Nixon Presidential Materials, NSC Files, Box 630, Country Files, Middle East, Saudi Arabia, Vol. IV) On September 4, Kissinger replied that the Senior Review Group had decided at the August 16 meeting “that our approach to oil consumer and producer countries should be carefully reviewed. When this review is completed and a general strategy has been adopted, we will be prepared to address the question of an economic mission to Saudi Arabia and approve Deputy Secretary Simon’s trip.” (Ibid.)
  5. Document 208.