252. Memorandum From David Elliott of the National Security Council Staff to Jan Lodal of the National Security Council Staff1

  • SUBJECT
    • International Cooperation in Energy R&D as an Energy Initiative

The following may be useful for inclusion in your energy initiative package.2

[Page 708]

In the normal scheme of things we can expect increasing international cooperation in energy R&D, particularly in the application of technology to the development of alternate or new energy sources. This expansion will be a natural consequence of the greater activity in this field: the new U.S. commitment ($10 billion over the next 5 years with knowledgeable betting that the figure will grow) and some presumed growth of energy R&D in Europe and Japan in response to the same imperative that is driving us. If, however, we accelerate the evolution of this cooperation we might derive some immediate political benefit as well as moving ourselves more quickly toward greater energy self-sufficiency by capitalizing on R&D abroad. More specifically, I would see the advantages and disadvantages as follows, with the advantages strongly prevailing.

Advantages

1.
National programs supplemented by bilateral and multilateral R&D cooperation can be expected to advance the rate of new developments faster than wholely independent activity at the same level of effort (high energy physics is a good example of this type of synergism).
2.
Europe and Japan traditionally are more deliberate (slow) than we in undertaking new or expanded technical programs, even when they recognize the inevitability and benefit involved. We can help to trigger their commitment by encouraging some cooperative work, as was the case in the post-Apollo space agreement.
3.
Cooperation in energy R&D may be about as much as can be achieved in terms of immediate collective action by Europe and Japan in facing the energy problem. But, even if they are prepared to act in concert in other energy areas, the R&D cooperation would still be a very useful adjunct to a broader energy initiative.
4.
A cooperative agreement seeking alternative energy sources would be a signal to OAPEC—perhaps not a very threatening signal in immediate terms, but one which may contain significant longer term implications.

Disadvantages

1.
If a cooperative effort is carried out which exceeds the stage of information exchange, i.e., where R&D is conducted jointly and intimately, we may face the usual problems of possible recriminations over poor performance on one side or the other, and disputes over intellectual and commercial rights as technologies successfully evolve.
2.
Our own program will lose some flexibility, i.e., inhibit our ability to stop unpromising or overly expensive projects and to start up substitutes.
3.
If the Europeans and Japan subsequently prove unable to devote the necessary new resources to energy R&D, then the U.S. accelerated [Page 709]program will pull away leaving little behind for meaningful cooperation.
4.
If cooperation fails to progress past the paper agreement stage, the failure will become evident to knowledgeable observers within a couple of years and any accrued political advantage will be lost and the “helpless giants” syndrome accentuated.

Considerations in Achieving Cooperation with Maximum Advantage

The primary issue in obtaining significant cooperation is the ability of Europe and Japan to commit to a mutual, sizeable, expanded energy R&D program. Their attitudes toward such an undertaking depend on their perception of the longer range implications of the current situation, but the indications show a strong and growing interest abroad in joint energy R&D. (The FRG, for example, plans to initiate talks with the U.S. on this subject after the first of the year.)

Governor Love’s staff, State, and we see a cooperative program as being advantageous, having few substantive negative attributes, and certainly worth the effort to attempt to achieve it. Some exploratory work abroad could (and should) commence immediately. A small push by HAK during his European trip of the general idea and concept would be most helpful in bringing the right level of European attention to the issue and would give a fast start to exploratory talks.

Some specific considerations relating to obtaining and implementing a cooperative agreement advantageously are:

1.
The agreement should be multilateral, starting with western European nations, but readily admitting Japan. (Many separate bilateral agreements dealing with technical cooperation are not only lengthy to conclude but would certainly lack the same political impact as a collective commitment.) In implementing a cooperation arrangement, we should encourage the governments and their technology ministries to deal with us collectively through a single organizational entity—this has recently proved a flexible and successful mechanism in our space cooperation with the Europeans.
2.
It would be sensible to select four or five major projects, rather than a larger number of small projects, to give focus and public awareness to the activity. (More projects than this may stress European willingness to open their purses.) For reasons of R&D efficiency, individual projects may not be strongly multilateral, but the collection of projects would aim to engage all of the participating nations substantially. Also, the individual projects should involve a significant and identifiable European part, since there is concern abroad that in arrangements of this nature the U.S. might submerge and overwhelm the European contribution.
3.
The cooperative agreement should be concluded at a high political level (possibly at the European summit meeting) to give the necessary commitment, impetus, and attention. (Also, without this type of commitment the European technology bureaucracy would find it almost impossibly difficult to alter priorities or extract significant new funds.)
4.
Although a general cooperative agreement could be concluded and appropriate projects identified later, it would be better to attempt to specify at least one or two projects at the inception. Intensive homework and exploratory discussions with some interested countries (e.g., UK, France and FRG) should lead to a delineation of good candidates. (A recently completed interagency report3 of cooperative opportunities, suggests 18 areas of possible cooperation, with 6 being of higher priority. The report, though not exhaustive, clearly indicates that energy R&D contains numerous promising areas for international work.)
5.
The necessity of a substantial funding commitment should be made quite explicit from the beginning—a meaningful, vigorous program cannot be based on a relabeling of on-going work. New funds, perhaps on the order of $200–500 million per year, will be needed on the European side. There already is a nuclear program in Europe of some magnitude, and building from this base ought not to be too difficult. The non-nuclear area is much smaller and will, relative to its present size, need to be significantly expanded.
6.
State feels that the energy R&D activity of OECD is not the appropriate base from which the new cooperation should grow, nor certainly should it be considered as a substitute for a major new U.S.-Europe-Japan undertaking. The OECD work is more usefully oriented toward surveying and inventorying member states energy R&D work—its actual research effort is entirely nuclear and at a modest level ($10 million/year). We should not, however, rule out OECD as a coordinating mechanism.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 321, Subject Files, Energy Crisis, Nov 73–Feb 74. Confidential.
  2. Presumably a reference to material being prepared for upcoming OECD meetings, during which Donaldson met with Simonet on December 11 to discuss OECD proposals for dealing with the oil situation. (Telegram 7183 from USEC Brussels, December 11; ibid., RG 59, Central Foreign Policy Files)
  3. Not found.