60. Telegram From the Embassy in the Netherlands to the Department of State1

4000. Subj: Potential European Energy Problem. Ref: Hague 3724.2 From Ambassador Middendorf.

1.
During Oct 18–19 visit to Reforger II exercises I had opportunity for extensive discussion on energy problem with NATO SecGen Brosio, German DefMin Schmidt, General Goodpaster, and Neths Chrm. of Joint Chiefs, Admiral Van Den Wall Bake. I had traveled with latter and, following our discussion on plane, he suggested meeting with others which he set up after dinner Oct 18. During dinner, Schmidt told me that he had not been aware previously of possible energy crisis and would ask EconMin Schiller to make complete study of FRG’s needs and sources in this field.
2.
In subsequent meeting I pointed out extent of Europe’s dependence on oil from ME and North Africa, areas which were becoming increasingly hostile to Western interests under Soviet encouragement. Estimated 79 percent of Europe’s oil came in 1969 from that area while another 7 percent came from EE. This dependence on these uncertain areas of supply would be greater by 1980; by that time other potential suppliers like Venezuela, Nigeria, and Alaska will be committed to other purchasers, principally US and Japan. Indigenous sources (North Sea oil, natural gas, and nuclear power) would not come near satisfying Europe’s demand. Tanker shortage for next two years means Europe will be operating on narrow margin, even if weather is mild and there is no interruption of supply for political reasons. Soviet activity in area is ominous; they have increased their sphere of influence in areas fronting on Mediterranean which have easy access to Europe. Likely their next efforts would be against oil rich countries of Persian Gulf—including Iran, Saudi Arabia, and Kuwait—which have estimated 60 percent of world’s known reserves, value of which exceeds annual GNP of Europe.
3.
Brosio said he not certain whose problem it was: oil companies? US? NATO’s? I replied all had interest and some responsibility but seemed to me it mainly Europe’s problem. Heating of their homes and running their factories and military machines depended on getting oil. If hostile power controlled, or even influenced distribution, of this oil [Page 135]would there not be insidious danger that Europe could be blackmailed into neutrality? Van Den Wall Bake commented that if choice were between closing down factories or leaving NATO, he would fear for NATO.
4.
When pressed by Brosio for recommendation, I said I [was] not authorized speak for USG in this matter. On personal basis I suggested that first thing Europeans might do is agree they had problem. Brosio and Goodpaster agreed, but stressed need to hold this in confidence for fear that any official sign of European concern would only stimulate hostile forces to up the ante. Perhaps, I added, there would be opportunity here for large development program for ME and North Africa, based on both public and private funds. Europe might make friends in area which it has somewhat neglected since 1957. There could be several levels on which problem was approached, extending from foreign aid through technicians to covert activities.
5.
Brosio said he could see there was potential problem of great magnitude. It had never been discussed in quite this way in NATO. He promised raise it at next discussion on Mediterranean, but it was problem that went beyond NATO. Occurred to him might best be handled by small group of countries such as US, UK, Germany, Netherlands and perhaps Italy. In any case he would discuss matter with Ambassador Ellsworth and would see me when he was in The Hague for North Atlantic Assembly meeting next month.
6.
Comment: If we do not have one, might be useful to produce new NIE on subject of European vulnerability in energy field.
7.
Dept please pass USMission NATO and AmEmbassy Bonn.3
Bovey
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 697, Country Files, Europe, The Netherlands, Vol. I. Secret; Exdis.
  2. Not found.
  3. A note indicates the telegram was not passed to USNATO or Bonn.