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

314. Memorandum of Conversation¹

San Clemente, February 9, 1974, 10:35 a.m.

• PARTICIPANTS
  • President Nixon
  • Henry A. Kissinger, Assistant to the President for National Security Affairs
  • George Shultz, Secretary of the Treasury
  • William Simon, Administrator, Federal Energy Office
  • Maj. Gen. Brent Scowcroft, Deputy Assistant to the President for National Security Affairs

• SUBJECT
  • Washington Energy Conference

The President: I want to thank all of you for the work on the conference. We face serious problems in handling the conference. We may be forced to a position where the Europeans go into business for themselves or where it looks like confrontation with the producers. I hope not—although it is a confrontation, it would not be a good public position.

The Europeans, especially the French, are playing a lousy game. The British are in trouble, so it’s easy out to kick the United States around. The Foreign Ministers basically represent their governments, some Finance Ministers, some Mineral Resources Ministers. At the technical level, there is no feeling of confrontation.

The Foreign Ministers want to cooperate in the military field, and some in the financial field, but on energy and the Arabs they want to kick us around.

In our private talks, we need to say I am pro-Europe. But in Congress there is a dangerous attitude: If Europe wants to go it alone, we will. This is true in several areas. This would be a bigger disaster for the Europeans than for us.

Don’t get a feeling of bitterness or confrontation with the Europeans, but they must know they can’t have it both ways.

Kissinger: This is a well prepared conference and there is unanimity among us. Our strategy is unified.

We don’t want anything from the Europeans except to contribute to a cooperative world, a multilateral approach. I will give them an overall pitch in the morning, Bill Simon will give the supply situation in the afternoon.

The President: Give the press something after each session so we get something positive on TV.

Kissinger: We will put an analysis of the situation before them—[more] comprehensive than any of them can do. It will show that the problem is manageable if we work together. If not, we will suffer the least. We can make the best deals bilaterally and we are really self-sufficient.

Simon: The situation is moving fast. This development about them having a meeting with the Arabs two days after the conference² is very dangerous.

Kissinger: Today I got a copy of this agenda and it’s scary. This means the Europeans will add their weight to the Arabs in negotiations we have to carry.

Simon: So how do we position ourselves—with the Japanese and Canadians, etc.?

Kissinger: The present posture is we get nothing—what we propose is in the tradition of Atlantic cooperation.

The President: What are we proposing?

Kissinger: An international task force to deal with consumer restraints, R & D, conservation, preparations now, and then a consumer-producer conference.

A second meeting will be held and then within 90 days with the producers.

The President: What do the producers want?

Kissinger: The producers would get regularity of investment and long-term planning for development.

Half of the objections from the producers have been generated by the Europeans.

I saw the Algerian oil minister. He said: Our oil won’t be as valuable after Project Independence.”³ He wants assurance of investment over the long-term.

Simon: He needs access to capital.

Shultz: The tricky thing is to bring out that oil now is not more valuable than oil in the ground. For example, if you think oil in ten years will be $10, the price now must be $8.50.

The price is going down.

The President: Why?

Shultz: The price. People respond to price.

Kissinger: If the Arabs restore production, we predict a slight surplus.

The President: Looking at the long run in the U.S.—20 years—no question that coal, nuclear power, and shale will be competitive.

Simon: It’s competitive now.

The President: We’ve got to show them that oil in ten years will be less valuable than now, so don’t keep it in the ground. I told the Saudi Ambassador we want to keep buying oil in ten years—otherwise they would think we were planning to freeze them out.

Kissinger: We’ve got to show Project Independence is not our form of unilateralism.

The President: We want to show that Project Independence is not our way of saying we will go it alone.

Kissinger: Also to the extent that we reduce foreign purchases, we are easing the market for Europeans, and our offer for technical cooperation and sharing in an emergency is cooperative in nature.

Shultz: What should we tell the Europeans about their Arab conference? We have this great meeting and then they go off on another track.

The President: I think you and Bill can talk to the technical types and talk turkey to them—they don’t have to posture like the Foreign Ministers. Tell them they can’t do this and expect us to hold our military role in Europe—Congress won’t let us.

If they keep going into business for themselves, it will lead to the U.S. turning against Europe and opening their weak states to the Soviet Union. That is not in their own interest.

We are acting in their interest.

Kissinger: That won’t do it any more. If we say we are committed but Congress will force us, they won’t buy it.

The President: But you know we shield the Europeans from the Soviet Union and China.

Kissinger: Right now if a war started in Europe, within five days, we would be in a nuclear war. If we started pulling our forces out, the argument has been that Europe would go neutralist. If they are going that way anyway, we could leave the trip wire and go nuclear like we would have to anyway. Our forces give Europe the security to bitch at us.

The Europeans are now picking at Japan in spite of us—led by France and others too weak to resist. We agreed with the Chinese not to compete in Japan—and now the Europeans are.

Shultz and Simon should talk—because the Foreign Ministers are idiots, except for Home. Moro, Scheel, Jobert—they’re all bad.

In France there will be a popular front within five years. That will drag Italy the same way or there’ll be a right wing coup.

The President: That depends on the guts of the Italian military.

Kissinger: And who our Ambassador is.

The President: Volpe⁴ will do what he is told. We are agreed—it’s only a matter of tactics.

Kissinger: Yes.

The President: What can the Europeans do for Japan? They won’t open their markets—the Japanese would kill them. There is another reason for our agreement with the Chinese on Japan—the Chinese are afraid of them. We frequently focus on the wrong thing. Roosevelt at Yalta thought it was a choice of the UN or gobbling up Poland.

Our China policy succeeds because they need us. What the Europeans must understand is that the whole world will fall apart if we withdraw from Europe or Japan.

Kissinger: The Japanese at this conference will not be anti-American. The real problem is spitefulness of the Europeans. The Europeans are not united in the monetary field and Shultz can deal with them separately.

The President: The biggest thing we can get from the conference is private talks with the delegations. We have to talk in sorrow rather than anger if they continue—because I have been fighting a lonely battle to maintain our defenses in Europe: The President will have to reevaluate his policies—and there is strong support in the U.S. for such a reevaluation.

Kissinger: We should be harder on the Europeans than the Japanese. The President: The Chinese are so clever you never know whether they are lying or not. The Soviet Union is not so good.

Kissinger: The Soviet Union spent $5 billion in the Middle East and Sadat and Asad don’t want us to tell the Soviet Union anything.

The President: Do you really want us to tell the Europeans we lead or else?

Kissinger: I am an Atlanticist. But if we don’t take tough action, we will lose the pro-American people in Europe, because they can’t point out the bad consequences of anti-American actions.

The President: But can we follow through on our threat?

Kissinger: We’ve got to define the question. We keep forces there so they won’t go neutralist. If we withdraw half our troops, how will they behave differently? I don’t suggest troop withdrawal now, but honestly we don’t need all these forces.

The President: We have such a lousy strategy that a trip wire is probably as good as anything. What might happen in five-to-ten years is a President might have to ask if he might risk Atlanta for Bonn.

Kissinger: Europe is organizing overall on an anti-American basis.

The President: They can have Africa—we will take South Africa and get out of the UN. Why does State hate South Africa?

Kissinger: I have abolished the Political Science division in State.

The President: I noticed the Lamizana group.⁵ They can hardly wait for The New York Times editorial—like in Greece.

Kissinger: Look at Amin. He used to be ours and the Kenyans bought him.

The President: The problem with Amin is not something he ate but someone he ate. I feel sorry for the Africans, but it will take a long time.

I am sure the Europeans will try to give us the shaft everywhere, but we must concentrate on the critical areas.

Simon: I am even stronger than Henry. I don’t think we can change the Europeans—they will call for the Arab meeting.

The President: What do we say?

Kissinger: Nothing publicly, but tell them if they insist on going it alone, we will.

The President: We must get this across. These are reasonable men—it’s the press and leftist leaders who can’t stand up to it.

Shultz: It will be a gay conference.

Kissinger: If we hold this position, we will be okay.

The President: George, we get back to linkage. A healthy U.S.-European relationship, is the best way to keep the Soviet Union and China in line.

Simon: I agree, but we have to shock the Europeans.

Kissinger: The last thing we want is a rupture. But now we are putting a bandaid on a cancer. We have tried and they have kicked us.

The President: Can we go to Europe in April?

Kissinger: Yes, if we stay on this course. We have never failed by being strong.

The President: Who would be at the NATO meeting? Foreign Ministers?

Kissinger: No, if the heads of government don’t come, you can’t.

The President: If Pompidou doesn’t, we should hold a meeting in London.

Kissinger: It makes sense because NATO really started in London.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 1028, Presidential/HAK Memcons, Memcons, Jan 1974–Feb 1974. Secret; Nodis. The meeting took place in the Western White House at San Clemente. In the February 9 Talking Points prepared for the President for this meeting, Kissinger stated that to avoid “ruinous competition” among consumers and to improve the U.S. bargaining position, “we need to demonstrate that the energy crisis is manageable through multilateral cooperation and to create a continuing obligation on the part of consumers to cooperate in restraining demand and developing new sources of energy.” (Memorandum from Kissinger, February 9; ibid., NSC Files, Box 321, Subject Files, Energy Crisis, Nov 73–Feb 74)
2. According to telegram 1815 from London, February 8, the February 6–7 EC Political Directors’ meeting approved an EC political dialogue with 19 Arab governments. The EC Foreign Ministers were expected to approve a report on such cooperation at their February 14–15 meeting. (National Archives, RG 59, Central Foreign Policy Files)
3. Kissinger met with Abdesselam on February 8 at 7:45 p.m. (Memorandum of conversation, February 8; ibid., Nixon Presidential Materials, NSC Files, Box 1028, Presidential/HAK Memcons, Memcons, 1 Jan–28 Feb 1974) Their meeting is summarized in telegram 29047 to Algiers, February 23; ibid., RG 59, Central Foreign Policy Files. For Project Independence, see Document 237.
4. Ambassador to Italy John A. Volpe.
5. On February 8, General Aboubakar Sangoule Lamizana dissolved the National Assembly and suspended the constitution of Burkina Faso.