Foreign Relations of the United States, 1969–1976, Volume XXXVI, Energy Crisis, 1969–1974

221. Minutes of Washington Special Actions Group Meeting¹

Washington, October 19, 1973, 10:04–10:57 a.m.

• SUBJECT
  • Middle East

• PARTICIPANTS
  • Chairman: Henry A. Kissinger
  • State:
    • Kenneth Rush
    • Joseph Sisco
  • Defense:
    • William P. Clements, Jr.
    • Robert C. Hill
  • JCS:
    • Adm. Thomas H. Moorer
    • Vice Adm. John P. Weinel
  • CIA:
    • William Colby
    • Sam Hoskinson
  • Assistant to the President for Energy Policy:
    • Gov. John Love
    • Charles DiBona
  • NSC Staff:
    • Gen. Brent Scowcroft
    • William Quandt
    • Jeanne W. Davis

SUMMARY OF CONCLUSIONS

It was agreed that:

1) Governor Love, with State, Defense and the NSC Staff, will turn the draft Presidential speech on the oil program into a message to the Congress;

[Omitted here is discussion unrelated to oil.]

3) CIA will prepare a paper on the impact of an oil cut-off—where it will start showing up and when;²

4) State will prepare a paper today on possible oil talks with the OECD;³

5) we will agree to Prime Minister Heath’s request for US–UK talks on Middle East oil next week;⁴

[Omitted here is discussion unrelated to oil.]

Secretary Kissinger: (to Gov. Love) Do we have any oil business today?

Gov. Love: I was asked to come to the meeting. I would like to say that I consider the Arab oil moves relatively moderate. We need to do these things we’re proposing anyway. It’s just a matter of timing, but I don’t believe it is the right time yet.

Secretary Kissinger: We’ll go with the program as soon as a cease-fire is concluded. What do you all think?

Mr. Clements: I agree.

Secretary Kissinger: Let’s aim for the end of next week.⁵

Mr. Sisco: If you think we will get a ceasefire within the week, then the end of next week would be fine. If we conclude that the fighting will be much more protracted, we might consider going with the oil program before next Friday.⁶ If we get a ceasefire by next week, that will help ease the Saudi position.

Gov. Love: Even after a ceasefire, if the negotiations are protracted, the Arab use of oil as a pressure point may continue or increase.

Mr. Sisco: That argues for the timing Henry (Kissinger) suggests. It would help deflate the pressure.

Secretary Kissinger: There will either be a ceasefire, in which case we want to be ready for the post-ceasefire period, or there won’t be a ceasefire and we will need it for our diplomacy.

Gen. Love: I’m going to Canada on Tuesday⁷ to talk to them.

Secretary Kissinger: Once we have a program ready for Presidential announcement, how do we trigger it? Can we do it as a message to Congress if the President doesn’t want to make a speech?

Mr. Sisco: A message would be better than a speech. It obviously involves Congressional action.

Secretary Kissinger: Have we at State gone over the speech?

Mr. Sisco: In draft.

Mr. Colby: The immediate impact of the cut-back will not be very large. But the longer term impact will be greater and will place a greater degree of power in Arab hands down over the years. It will only affect 1% of US consumption.

Mr. DiBona: It depends on whether the Europeans cut back their exports to us. If they do, it will mean 3–4% of the US consumption, but only 1–2% if you’re just talking about Arab shipments.

Secretary Kissinger: At what point will it affect the Europeans?

Gov. Love: It already has. They’re 1–2 million barrels per day down to the Europeans already.

Mr. Clements: They’re off 12–14%.

Mr. Colby: European consumption is 15 million barrels a day, 11 million of which comes from the Arabs. That’s 72%. They have already chewed into that by the 2 million barrel a day cut.

Gov. Love: If there are further European export controls, we will have less import and our shortfall will be even greater than already anticipated.

Mr. DiBona: The Italians and Spaniards have already cut back exports. But I have talked to some European Community people and, as long as the EC doesn’t act, they think they can move around it.

Mr. Sisco: I think the Secretary needs a paper which will analyze in depth the impact and implications of our moving with the oil program quickly. Both the practical impact and the effect on our diplomacy. Also, the impact of waiting to move with the program, both as to the time lag and the effect on the diplomacy.

Gov. Love: It’s just a matter of good policy to use the crisis to do what we have to do domestically anyhow.

Secretary Kissinger: We have to do it. The only question is timing.

Mr. Sisco: It should be a message to the Congress so as to get the thing as far down the line as possible.

Mr. Clements: Regardless of timing, it can only help the negotiating track. These are must steps—it’s just a question of how soon. The problem will only get worse.

Secretary Kissinger: John (Love), could you, working with Bill Clements and State, turn your draft Presidential speech into a message to the Congress over the weekend? We may want to go with it early next week.

Gov. Love: Yes.

Secretary Kissinger: Get State and the NSC Staff involved. You’ve done a great job.

(Governor Love and Mr. DiBona left the meeting.)

[Omitted here is discussion unrelated to oil.]

Secretary Kissinger: Let’s go back to oil. Could CIA give me a paper on the impact of a cut-off—when it will start showing up and where.

Mr. Rush: How much storage do they have?

Mr. Colby: The Europeans have about 60 days.

Mr. Rush: I mean the Arab states. They’ll still be shipping out of their storage.

Mr. Colby: We’re talking about actual tanker movements.

Mr. Clements: This is an extremely complicated picture. You can’t reach quick judgments. The Europeans are already affected. That two million barrels a day curtailed out of the Eastern Mediterranean is a European supply factor. They have already started conserving their oil. The effect will be almost immediate. When one end cuts off production or shipments, the other end starts conserving its supply.

Secretary Kissinger: I want to know what the situation is. I want a judgment as to when the pressure will start building up on us. When are the Europeans going to come screaming to us?

Mr. Colby: They have already cut their exports.

Secretary Kissinger: I have no preconceived idea about this. But we need a forecast—a range of how and when it will happen. Bill (Clements), would you help CIA on this?

Mr. Clements: I’ll talk with Bill Colby. It’s already started.

Mr. Sisco: My visceral reaction is that we may want to go with Governor Love’s oil program on Monday or Tuesday.⁸

Secretary Kissinger: I haven’t read the draft statement yet. Someone in State and Bill Quandt look at it and give me a one-page analysis. (to Scowcroft) Get our Program Analysis people on it, too.

Mr. Clements: When you read in the papers that the major oil companies are advising their clients that there will be a shortage, they are talking about refined products from Europe.

Mr. Rush: The Europeans will start conserving anyway.

Adm. Moorer: The pipelines into the Eastern Mediterranean at Sidon and Latakia are practically stopped.

Mr. Clements: That’s where the loss is, but it’s a damned tough message to get across.

Secretary Kissinger: I want some estimate of what this does to the Europeans. (to Rush) Also, I understand (Under Secretary of State) Casey is going to the OECD. He can’t fly blind. Any talk about sharing will come out with something of maximum benefit to the Europeans. We want something of maximum benefit to the US.

Mr. Rush: Casey may not go to the meeting; we’re thinking of sending someone else.

Secretary Kissinger: Whoever it is, we have to know what he will say. Let’s get a paper today on what he thinks he will be doing.

Mr. Clements: Sharing only goes from us to them.

Secretary Kissinger: As long as they are screwing us in the Middle East, we shouldn’t go around financing them. Also, (British Prime Minister) Heath wants some US–UK talks on Middle East oil. He wants to send someone over this week. We’d better let him do it. Who would talk to them?

Mr. Rush: Bill Casey and I.

Secretary Kissinger: Good; but we have to know what we’re saying.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–117, Washington Special Action Group, WSAG Minutes (Originals), 10/2/73–7/22/74. Top Secret; Sensitive; Codeword. The meeting occurred in the White House Situation Room. The minutes are printed in full in Foreign Relations, 1969–1976, volume XXV, Arab-Israeli Crisis and War, 1973, Document 208.
2. Document 223.
3. Knubel summarized the State Department paper in a memorandum to Kissinger, October 19. Knubel noted that “the simple arithmetic of emergency allocation is that we are net contributors to any sharing arrangements under a general boycott because the United States is less dependent on Middle East oil than either Europe or Japan.” Knubel stated that “U.S. willingness to join in an emergency oil allocation arrangement would be the primary issue at the emergency OECD” scheduled for October 24. (National Archives, Nixon Presidential Materials, NSC Files, Box 251, Agency Files, National Energy Office, Vol. III) The OECD Oil Committee meeting occurred October 25–26; see footnote 2, Document 220.
4. Nixon informed Heath on October 19 that U.K. representatives should meet with William Casey in Washington. (Ford Library, National Security Adviser, Scowcroft Daily Work Files, Box 5, Chronological File A, October 16–20, 1973) The meeting occurred on November 5; see footnote 3, Document 235.
5. Approximately October 25 or 26.
6. October 26.
7. A U.S. delegation led by Love met with a Canadian delegation led by MacDonald October 23 in Ottawa. The October 23 memorandum of conversation is in the National Archives, RG 59, Central Files 1970–73, PET 12–3 US. For a discussion of the meeting, see Documents 222 and 226.
8. October 22 and 23.