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

315. Memorandum of Conversation¹

Washington, February 10, 1974, 8 a.m.

• SUBJECT
  • Energy Conference

• PARTICIPANTS
  • British
    • Sir Alec Douglas-Home, Foreign Minister
    • British Chargé Richard A. Sykes
    • Sir Jack Rampton, Permanent Secretary, Department of Energy
    • Sir Oliver Wright, Undersecretary, Foreign Office
  • US
    • The Secretary
    • William H. Donaldson, Under Secretary for Security Assistance
    • Helmut Sonnenfeldt, Counselor
    • Arthur A. Hartman, Assistant Secretary for European Affairs

Secretary: You were asking about where we stand in the Middle East. We hope very much to have the Israeli POW problem out of the way by the end of the week so that we can get on with disengagement talks between the Syrians and Israelis. We have talked about the possibility of holding those discussions at Kilometer 101 or possibly in Geneva but the real problem is that the Syrians are just more difficult to deal with than Sadat. Of course, I can’t rule out both parties asking me to take a hand but I am not pushing that one.

Sir Alec: I want you to know how very much we have admired the way you have handled the situation and our strong desire for your continued success. I am personally unhappy that you apparently feel some of our recent considerations of approaches to the Arabs have not helped. You know these fellows just turned up in Copenhagen and we could not refuse to see them, but I want you to know that we will handle that situation with great care.² There are some lower level suggestions for studies on technical problems but we will keep you informed as the situation develops.

Secretary: Let me emphasize what my real concerns are. It seems to me this whole idea of an EC-Arab conference³ is symptomatic of the general problem that we have had with the EC. Here is a proposal for a major initiative with all the Arab States—an initiative that is bound to have political repercussions on what we are trying to do to achieve a political settlement and there was no consultation with us. No Member Government of the EC came to us and said “Is this idea going to affect your negotiations in any way?”

Sir Alec: But nothing has been started. We haven’t begun anything.

Secretary: But I understand that you are going to have a Ministerial meeting as soon as you leave the Energy Conference Thursday⁴ in Bonn. This will be the major item on the agenda. We may be faced with the situation that the Energy Conference is aborted and then the Nine can offer and make extensive preparations for a meeting between the EC Foreign Ministers and the Arabs. I just wanted you to know that any getting together of all the Arab States—moderates and radicals—would have most unfortunate consequences. It is bound to lead the radicals to make extreme statements which will be very difficult for the moderates to resist. This will immediately lead to pressures on the European leaders to endorse every point on the Arab radicals’ program. Second, they will link all the issues together and this is bound to have a negative effect on our political negotiations. Sadat has told us that the only way to deal with this situation is piece by piece. First we start with disengagement on the Egyptian side. Then we talk disengagement with the Syrians. Then Sadat will feel strong enough to move on to territorial problems. Then we get the Syrians and Jordanians to talk about territory and only then do we get to the tougher issues like Palestinians and Jerusalem. If you go ahead with this EC initiative it is bound to upset things and then we will have to go in and pick up the pieces.

Sir Alec: There is no special deal planned here. There are no agreed concrete ideas which have been taken up with the Ministers. I can assure you of that.

Wright: We have been taking our time on this. We saw the Arab Ministers in Copenhagen and we have been developing, both in Brussels and among the Political Directors, some ideas about how we should respond to initiatives of the Arab Ministers. We had thought that perhaps we could delay matters further by having the Chairman of the Council talk to some of the Ambassadors from Arab States, and see what they have in mind.

Sir Alec: We are really now at the stage of seeing what content there might be in any arrangements we negotiate with the Arabs. You can see that there is a squeeze here with the Arabs and the Israelis trying to put pressure on us.

Secretary: If you go ahead we will have to make publicly clear again, as we did last fall, that we will not be squeezed by pressure on Europe. We have no choice in this matter.

Sir Alec: This is also something that maybe we could talk about to the Secretary-General of the Arab League.

Secretary: I want to stress to you again what my concern is. We have no problem with Europe having long-term relations with countries of the Middle East but move now in this manner cuts across the strategy of achieving partial settlement and also raises the question of whether Europe is moving into an adversary position against the US.

Sir Alec: I can assure you that this thing won’t fly on Thursday. A Foreign Ministers’ conference is months off.

Secretary: Let me give you some general thoughts. When we suggested earlier that we rethink our relationships, we were thinking in terms of the necessity of a world structure which would play down regional and national conflicts. People have magnified the problem because for years they had the Atlantic Declaration but what we were looking for was some means to create a framework within which our relations would take place in the future, recognizing that the underlying basis for our relationship has certainly changed over the past 25 years. But we still have many things that we want to do; we still face many common challenges.

It is not that we are against a dialogue between the European Community and the Arab nations. We are in favor of that but we must work together in parallel on these matters.

Sir Alec: We had been discussing this thing for many weeks now and I would like Oliver to tell you where it stands.

Wright: You’ll recall that when the Arab Ministers came and we did not know they were coming to the meeting of Ministers in Copenhagen on December 18, they put the question to us what kind of a relationship did we want to have with the Arab States and they indicated that they wish to see a more cooperative relationship between Europe and the Arab world. Then on February 14 we will indicate that we will be able to answer the Arabs in the first instance. There are some specific questions and we must answer them.

Secretary: It is just suicidal for us to get into a bilateral competition. If Europe moves to institutionalize bilateral frameworks and to avoid any multilateral cooperation with us there is going to be a competition which is bound to affect our relations in other fields.

Sir Alec: The question is how should we keep in contact. Should we use existing machinery or should there be other machinery that allows us to keep in touch so that we can take the steam out of some of these issues.

Secretary: Jobert is trying to move the whole thing in a different direction. First, he says that this is a maneuver in order to establish American leadership. Second, he is looking to establish a mandate which would prevent the establishment of a continuing body. Third, he told me that he is prepared to stay the rest of the day but not beyond that. Let’s be clear about this issue. I tried to draw attention to this in my Pilgrim speech.⁵ The United States perhaps has the biggest reason for trying to make a contribution to a cooperative solution to this energy problem. We don’t see any real way to approach the problem in isolation and yet we have perhaps the least economic reason for pursuing cooperative plans. Look at the Atlantic relationship. We don’t seem to have been able to succeed in anything. We are trying to find some body in which we can address these issues. It never occurred to us that we would get down into a jurisdictional and legal fight over words. In effect, what everyone seems to be saying is “How little can we get away with?”

Sir Alec: The difficulty is that there can be no European unity without France. We must build on a solid Franco-German relationship and we have to pull France along in order to achieve these goals and in the end this is going to be in your long-term interest.

Secretary: The point is that the way that the Community is presently constituted France determines what EC policy is. The real question is how do you isolate France so that they can see some sense.

Sir Alec: If that is possible then we should move in that direction.

Secretary: On the substance of the problem we all ought to be doing what makes sense. We ought to be establishing some kind of machinery which will enable us to prepare common positions among the consumers. We need this. Second, thirty million producers seem to have gotten together and established their own position. They have a cartel. Why should they be able to order around the eight hundred million consumers? Why should we assume that the consumers shouldn’t talk together? The important countries in the area are Iran and Saudi Arabia. Both of them are completely dependent on American political support. Why shouldn’t Europe want to use this American political power in the energy field? What we have here is an opportunity for a moral demonstration of what the West can do when it wants to get together and how it cannot be pushed around. We have to have a perception that it is a common problem and that we must work for common solutions. We are in a position now where we must get together, politically, economically, and technically; we must have cooperation in some kind of international system. If we go in a bilateral direction, we can certainly drive everyone else to the wall. Jobert is childish in thinking he can have an independent policy in this area. In Iraq he tried to make all kinds of overtures. What we need is the machinery to get at the facts and to prepare ourselves for whatever the eventualities might be.

Sir Alec: I agree with you that we certainly ought to rule out any sort of bilateralism.

Secretary: That’s right.

Sir Alec: We ought to think about something like the GATT where the consumers have some rights as well. After all they must jointly affect the prices.

Secretary: There are seven topics that we ought to be discussing. We ought to analyze and collate the information we have on the short-term energy situation. Once we do that task, then we ought to look at what measures we ought to be taking in common as consumers. And then we ought to look at the next step which is the preparation of the consumer-producer meeting. Perhaps at our next conference we ought to invite some of the LDCs to be present.

Sir Alec: That sounds fine to us and I assume you are going to have these meetings at a high level, something with Donaldson in the chair for you?

Secretary: Yes, and we don’t have to have the next meeting here. What we need is practical machinery. Donaldson and Simon will get together at the next stage and discuss what our plans are.

Rampton: We ought to continue looking at this problem through a series of meetings and hold open the question of whether we have another conference of consumers. We will probably need it.

Secretary: Yes, we can later decide whether the next conference is necessary.

Donaldson: What we need to do is to work out a strategy to deal with the producer-consumer relationship.

Secretary: We need continuing work and preparation for the next conference. We can finesse whether or not there will be need for another consumers’ meeting. But what we want is real cooperation. If that is going to be impossible, we want to know it and we want to know it now. That’s what it really comes down to.

Sir Alec: We are going to make our choices. This is the general case of the difficulties that we have been having with Jobert. We will try to make our peace with him, but in the end we are going to have to choose whether or not we go ahead with the cooperative program.

Secretary: It will be a real blow to Atlantic relations if we are not able to handle this particular situation in a cooperative way. In a strange way, the Watergate affair seems to be holding back many of the sources in this country which would normally be anti-Atlantic and which would attack the President on the Alliance. They are not blaming him now but just as soon as Watergate passes, you can be sure that these people are going to return to the attack.

Sir Alec: I think if we can get agreement here Jobert will come along.

Secretary: The main question here is will the Eight stand up strong enough and not give in to France. Then perhaps the French will come along.

Sir Alec: We may have to overrule France in this case.

Secretary: We don’t want to reach a point where the French can agree because we’ve watered the whole thing down and it amounts to nothing. That would be worse than a disgrace. The French have already managed to kill the original idea which was to get together a consumer group that would really be a continuing body and it would work its way through the two conferences.

Sir Alec: But the Eight have accepted the idea now that we need to have careful preparatory work.

Secretary: The French may accept some of this but the idea of having another conference is important; but we will not push it now.

Sir Alec: We ought to be moving ahead and try to shorten the period of preparation. I think six weeks ought to be enough.

Wright: What they seem to want is to kill off the proposal in the next preparatory stage.

Sonnenfeldt: If we get the work done in the working group, we will prove the validity of this whole process.

Secretary: We don’t have any interest in the machinery as such. What we think we have to do is to get some work done.

Sir Alec: We can get a lot of this work done in international bodies. There is plenty to be done. In addition to that, we need a group that will keep things going and make sure that our preparations are moving ahead. The best thing to do is to have people highly placed in governments to sit on this group or a high-level group at Ministerial level.

Secretary: We think we can have some of the work done in the OECD, some of the things that have to do with energy, R and D, consumer restraint, etc. Jobert told me that the French are not objecting to the fact that they can receive some technological information from us and they are not objecting to the proposal of having oil sharing. What they object to is the principle and the principle is that this initiative was taken under US leadership.

Sir Alec: We have to play the game with the French and try to bring them along.

Sonnenfeldt: We have been playing this game for five years.

Secretary: That’s right and, as my staff well knows, I have insisted for the last five years that there be nothing done against the French. We have tried to work with the French all this time. It was a very painful experience for me to have to leave the Kennedy Administration in the sixties because I thought that they were trying to go against De Gaulle. It has been an extremely painful realization.

Sir Alec: In the end they will agree. The main thing is that we have to bring them along. They are the only ones who have taken an intellectual look at defense problems. They have a perverse foreign policy. We have just got to convince them that this is a worthwhile effort. If the Eight stay solid, then we can bring them along.

Rampton: In the follow-up, we ought to appeal to the French in their natural interest in order to bring them along. In the past, the Germans have been subservient to the French, but now they, too, are turning. They are coming to the point of agreeing that it is very dangerous to follow the French not only in terms of Europe, but also on Atlantic issues.

Secretary: Why did the French try to warn the Syrians that they should not take part in a partial solution in the Middle East, but insist upon a global solution? The people in the area, and particularly Sadat, have told us that it is only possible to move ahead piecemeal in this situation. It was a totally mischievous speech and then we have to pick up the pieces. If war starts, France isn’t going to have to take any responsibility. If Gromyko were to come out with a statement like this, it would be cause for fighting. We certainly wouldn’t go on with détente.

Sir Alec: I think it’s worth the effort to try to bring the French along. I think we can overrule them.

Secretary: We will certainly try, but if we fail, there is going to be great risk to the Atlantic Alliance; and, furthermore, it’s going to have a tremendous impact on the producers which is going to be unfortunate.

Sir Alec: We will try.

Secretary: Should I preside at this meeting? It doesn’t necessarily have to be me.

Sonnenfedlt: We have to recognize that most of the work up to now has been done here.

Secretary: I would think that Europe would see it in its interest to have an embryonic consumer group. It would make the producers think more carefully about the future.

Sykes: We have to be careful how this is played publicly though.

Secretary: Everyone seems to watch the public situation. They all seem to be afraid of what Yamani might say or think. When I visited King Faisal, Yamani was yards away from the King. In fact, he was only half a yard from the door. He was never present in any of my political discussions with the Saudi leadership. I don’t think it’s important what Yamani says. Everybody criticized me when I wouldn’t take any steps to counteract the Schlesinger statement about the possibility of using military force.⁶ Our Ambassador in Saudi Arabia then cabled me and said “Please, can I use it once more; I think it’s having some effect here.” The Arabs have been trying to blackmail the West. We somehow have to get the consumers together to resist this pressure.

Sir Alec: But we don’t want a confrontation.

Secretary: That’s right. We want a completely conciliatory stand. We want to show that there is a mutuality of interest.

Sir Alec: Scheel will be sitting in for us and speaking for the Community.

Secretary: I plan to open the meeting and then Shultz and others and perhaps Simon will talk about the energy situation and the financial question.

Sir Alec: I think Scheel will speak for us all; and then maybe after the Japanese and Canadians say something, we can get down to work.

Secretary: We can have a general discussion and then get into the main issue by mid-afternoon and talk about how we are going to deal with the follow-up. I propose that we begin this discussion right after lunch.

Sir Alec: Before the lunch, I will intervene and pick up some of these basic points.

Secretary: Shultz will speak about the financial impact and Simon will speak about the energy situation for about 20 minutes.

Sonnenfeldt: I think you should take a look at our draft.

Sir Alec: Maybe we can marry the two.

Secretary: We have to finish by late tomorrow. I understand that you have to leave by tomorrow to get to your next meeting. We can get into the detailed analysis and the follow-up. But we do need some machinery for following up.

The breakfast broke up at 9:05.

1. Source: Library of Congress, Manuscript Division, Kissinger Papers, Box CL 145, Geopolitical Files, Great Britain, Chron Files, Jan–Feb 1974. Secret; Nodis. Drafted by Hartman. The top of the first page of the document is marked “GSS Sensitive—Misc.” The breakfast meeting took place in the Secretary’s Dining Room.
2. A delegation of four Arab Foreign Ministers attended the EC Summit meeting in Copenhagen December 15–16, 1973, to urge the Europeans to play a larger role in the peace process, including applying pressure on Israel, in return for increased oil shipments. (Telegrams 3185 and 3194 from Copenhagen, December 15 and 16; National Archives, RG 59, Central Foreign Policy Files)
3. See footnote 2, Document 314.
4. February 14.
5. See Document 264.
6. See Document 244.