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

355. Minutes of the Acting Secretary of State’s Principals and Regional Staff Meeting¹

Washington, June 10, 1974, 3 p.m.

[Omitted here are the Summary of Decisions and discussion unrelated to energy.]

Mr. Sisco: Tom—next steps in energy coordination.

Mr. Enders: Joe, as you know, at the last ECG meeting, which was May 2, there was a general agreement to push ahead with something which was generally described as an integrated emergency program.² Nobody had a very precise blueprint of what might be involved at that time. And the next step in energy coordination is to provide that blueprint.

The ECG meets again next Monday.³ And we have for that meeting a detailed proposal which should enable us to find out how far other countries are going to be able to follow on a U.S. lead to organize a consumers’ group. Our instinct has been all along that an emergency sharing mechanism and an emergency program were the essential elements required to define a consumers group. What we are putting forward is a rather tight arrangement which is designed to be internally self-contained, would be a balance of advantages for the countries involved in the ECG. And it would not be an arrangement to share American oil in return for an agreement by the Europeans and the Japanese that there should be a consumer grouping.

There would be three main elements in the proposal. One of them is a stockpiling target for all countries, including the United States, with the understanding, however, that that target could be met by other forms of standby supplies, such as standby oil production and fuel switching, and additional conservation measures, some flexibility on that.

• Secondly, there would be a package of emergency demand constraints enabling all countries to live with a short-fall of oil. This would be pre-positioned, pre-negotiated and pre-positioned.
• Thirdly, there would be a mechanism for sharing available oil in the case of an emergency on the basis of the constraints implied by the stockpiling and by the emergency demand undertakings.

The way this is structured, only in the most extreme emergency, that is to say with almost all of OPEC production out, would the United States be called on to share any of its domestic production with the Europeans.

Now, this proposal, which would also protect us against a selective embargo—drafted to protect us against a selective embargo, as well as protect the group against a general embargo—is tight. It may be more than the Europeans can undertake. We still have to get full interagency agreement on it, with the chief problem likely to be OMB, which has yet to accept fully the notion that there should be an integrated emergency package.

We have an inter-agency meeting on this tomorrow and expect to be able to get out the paper to the other members of the group ad referendum by tomorrow night.⁴

Mr. Sisco: How do you—and maybe Art might want to comment on this as well—Art, how do you relate this, if you do at all, to this whole EC-Arab dialogue? And what did you find in Europe in terms of whether they think this whole energy conference approach of our own is dead, in limbo, we have eased off as a result of the disengagement agreement, we are not as worried about the embargo, we are going ahead on bilateral agreements with Saudi Arabia. What do you find?

Mr. Hartman: Well, I think the more senior levels think that we have eased off. The technicians, I think, who are aware that something is coming along, and it might be proposed at the next meeting, are waiting to see what that is. And I sense that people are more interested now in consumer cooperation, if not an actual consumer group that stays in being. None of them are very interested in getting into a negotiation, at least a group negotiation. And they all think that the new French Government is going to change its position and be very interested in at least aligning its policy with the consumer group.

Mr. Sisco: Look at Schmidt—again, I mentioned it at the small meeting this morning—look at that telegram reporting Schmidt’s conversation with Marty.⁵ This to me said this man is talking along the lines we have been talking. I don’t mean in the real formal sense, but certainly the thrust.

Mr. Lord: He always has.

Mr. Hartman: He is reporting also that Giscard⁶ thinks along the same lines. I think that they are interested. I think they have some question marks in their minds, as to whether or not the package like the one that Tom is talking about is in fact going to get not just U.S. executive branch concurrence, but congressional concurrence, if it has any real obligations in it.

Mr. Sisco: Strangely enough, the very fact that the pressure has been lessened as a result of our disengagement agreement, as a result of the fact that nobody thinks that an embargo is going to be reapplied in the foreseeable future, may very well get these Europeans among other things to sit down and look at this in a little more of a depoliticized context and under less pressure.

Mr. Enders: But is this the right time?

Mr. Lord: Have we put numbers in this proposal?

Mr. Enders: We haven’t made a decision as to whether—whether we get agency clearance on that. But secondly, whether it makes tactical sense to put the numbers in at this time. But the principles will be there, and they are tightly drawn.

Mr. Sisco: Tom, for my education, send it along. I would like to read it.

[Omitted here is discussion unrelated to energy.]

1. Source: National Archives, RG 59, Transcripts of Secretary of State Kissinger’s Staff Meetings, 1973–1977, Box 718, Secretary’s Staff Meetings, 6/74. Secret. According to an attached list, the following people attended: Sisco, Brown, Sonnenfeldt, Lord, Maw, Kubisch, Stearns, Hartman, Sober, Enders, Anderson, Hyland, and Easum.
2. See Document 352.
3. June 17. The ECG met in Brussels June 17–18. Reports on the meeting, at which an ad hoc working group was set up to consider the U.S. proposal for an integrated emergency program, are in telegrams 4228 and 4283 from Brussels, June 18. (National Archives, RG 59, Central Foreign Policy Files)
4. The paper has not been found. A preliminary version of the U.S. proposal was transmitted in telgram 124240 to the EC capitals, June 12. (Ibid.)
5. Ambassador Martin J. Hillenbrand. Telegram 9084 from Bonn, June 7, reported on the Ambassador’s meeting with Chancellor Helmut Schmidt. (Ibid.)
6. Valéry Giscard d’Estaing, President of France.