38. Memorandum From David R. Young of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)1

    • Oil Import Policy Meeting with Flanigan and Harlow—January 12, 1970

The question discussed was how to handle the Report prepared by the Cabinet Task Force chaired by Secretary Shultz. All three participants agreed that the Report was well done.

Flanigan—Politically our main problem is that we said that the Report would be made public and five of the seven signatories to it say that the present system is indefensible.

Flanigan then suggested that the Report did not go far enough in at least two respects:

What happens after 1985, i.e., the Report projections go only to 1980. This means that the U.S. will have to depend on the Middle East after 1985.
What happens to our domestic economy if the recommendations of the Report are implemented? (The main problem here is that the new program would diminish domestic exploration.)

Flanigan added that the Secretary of Commerce’s report2 is opposed to the Report made by Secretary Shultz.

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Harlow—The Report has very serious implications with regard to the security of the NATO countries. 80% of the oil reserves of the world are in the Middle East and that if these are cut off, the impact on NATO would be devastating.

Kissinger—It looks like there are two possibilities:

A short war, in which Middle East oil would be lost for a period which would be short enough to be covered by storage facilities, and
A sustained cut-off by Russian interdiction in which case we would be cut off indefinitely.

Kissinger—Asked whether Shultz would push the Report.

Flanigan—Answered that Shultz said that he had hoped to have a unanimous Report but that he was pleased to have the Report in. Flanigan did not think Shultz would meddle or become an advocate of the Report.

Kissinger—Is there any great need to act on the Report this year? Could it not be deferred until next year?

Two possible means for deferring action were then discussed:

Throw to Congress. Let them have hearings, etc., on the Report. (Harlow pointed out that we would not be able to control the selection of the committee. Flanigan thought that Ford and Mansfield would name producers and McCormack and Scott would name consumers.)
Have the President accept the Report as a good Report but state that we would like to have it considered from the point of view of our security and the security of the NATO countries and Japan.

Kissinger—Option 2 would have the benefit of putting the President in the position of not being against the Report while, at the same time, allowing him time and room to maneuver.

(Kissinger thought that Laird would support this position along the lines that, in the interests of national security, consultations and/or studies with NATO and Japan should be pursued before any final decision on the Report is made. He felt that Laird would agree that our position vis-à-vis Middle East oil was of critical importance to the security of the NATO countries.)

All three parties seemed to agree that the second option was preferable.

Harlow again emphasized the vulnerability of NATO to the cutoff of oil in the Middle East and that it would be very bad (and Kissinger agreed) to put the President in the position of appearing as if he were not concerned about NATO’s vulnerability in this area. On the question of storage brought up by Harlow, Kissinger said that the NATO nations should be allowed to make their own decision on storage.

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Conclusion: The tentative conclusion seemed to be that the President should act on the Report as a good statement, but that he shouldn’t go beyond this until the foreign policy implications are studied further, particularly with regard to the NATO countries and Japan. This would allow the President to make the Report public without endorsing its recommendations or being put in the position of being against it.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 367, Subject Files, Oil 1970. Secret; Eyes Only.
  2. An apparent reference to either the Minority Report (Document 34) or to one of two earlier December 1969 critiques of the Task Force report. In a lengthy, undated memorandum to the President, Stans noted his strong opposition to the analyses and conclusions of the Task Force and his desire that Nixon reject it outright. (National Archives, RG 174, Records of Secretary of Labor George P. Shultz, 1969–1970, Subject Files, Box 63, Cabinet Committee on Oil Imports) In a December 5, 1969, memorandum to Shultz, Stans explained why the introduction of a tariff to control the flow of oil was an undesirable course of action. (Ibid., Box 179, Separate Reports on the Oil Import Question, Stans Comments)