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

338. Memorandum From Charles A. Cooper of the National Security Council Staff to Secretary of State Kissinger¹

Washington, March 15, 1974.

• SUBJECT
  • Memorandum for Peter M. Flanigan Regarding Policy Announcements at Feb 11 Washington Energy Conference

Peter Flanigan has written you (Tab B)² to express his concern that certain of the policy proposals made at the Washington Energy Conference were not carefully considered and might damage U.S. economic interests. In particular, Mr. Flanigan states:

• • the proposal to share U.S. domestic oil in times of emergency might lead to substantial reductions in oil available to U.S. consumers, and it would be very difficult, if not impossible, to get the necessary authority to do this from the Congress;
• • the proposal to share centrifuge uranium enrichment technology threatens to undermine a long-established and painfully-constructed policy to move uranium enrichment from the sphere of public monopoly to that of private enterprise because the sharing proposal may reinforce existing uncertainty regarding U.S. Government intentions in the nuclear area.

Finally, Mr. Flanigan notes that the frenzied environment that preceded the Conference allowed these proposals to go through without full consideration at a senior policy level.

The points raised by Flanigan regarding emergency oil sharing and enriched uranium are essentially right if taken in isolation, but we plan to handle these issues in ways which will overcome these problems. Oil sharing by the U.S. which included U.S. domestic oil would have reduced U.S. domestic consumption noticeably last fall; it also does not currently appear that Congress would allow the export of U.S. domestic oil (prohibitions on exports are contained in the Alaska Pipeline Bill and Emergency Petroleum Allocation Bill). Regarding the sharing of enriched uranium technology, private industry has indicated that the uncertainty inherent in government offers to share its technology with foreign parties undermines U.S. industry attempts to attract private financing.

In response to the Flanigan memorandum, the following points may be made:

• • The realization that not all parties were consulted in a timely fashion prior to the Washington Energy Conference has led to the creation of the International Energy Review Group and the IERG Working Group under Charles Cooper.
• • The IERG Working Group has agreed that sharing of domestic U.S. oil, as narrowly conceived in the OECD papers, is the wrong approach, and instead we should suggest tying oil sharing into a larger energy burdensharing scheme that promises much more for U.S. interests.
• • The proposal to share U.S. technology in centrifuge enrichment is predicated and articulated on this being done through private channels. Hopefully, this will preserve (even encourage) the role of private industry, and alleviate a number of their concerns regarding government intentions.

Recommendation

That you sign the attached (Tab A)³ memorandum to Mr. Flanigan incorporating the above points.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 251, Agency Files, National Energy Office, Vol. III, Aug 73. Secret. Sent for action.
2. Attached but not printed is a March 5 memorandum from Flanigan to Kissinger.
3. Attached but not printed at Tab A is Kissinger’s March 25 signed response to Flanigan, incorporating the points made by Cooper.