[Page 633]

201. Memorandum of Conversation1

SUBJECT

  • Tokyo Economic Summit with Under Secretary Cooper at 5:00 p.m.—April 23, 1979, The Secretary’s Office

PARTICIPANTS

  • [See Distribution]2

Mr. Bergold opened the meeting by noting he would be leaving the next day along with Mr. Poats and Mr. Rosen for Tokyo to discuss the preparations for the June Economic Summit. Mr. Poats then noted that the NSC had not sought formal interagency clearances of the various initiatives outlined in the attached NSC draft paper,3 wanting to encourage the development of “fresh ideas.” The participants then reviewed the various options outlined by Mr. Poats.

Oil Import Target—Secretary Schlesinger indicated either of the two approaches outlined in the NSC paper4 was acceptable, but preferred to substitute the phrase “traditional exporters of oil” for “OPEC” to avoid a confrontational tone. He also suggested that the Summit or the IEA propose a comprehensive study of the advantages of rationalizing world refinery utilization, with a view towards increasing gasoline production and minimizing the production of boiler fuels, which are more easily substitutable.

Coal—Participants agreed that a coal initiative and creation of an International Coal Advisory Board were highly desirable.

Nuclear Safety—Secretary Schlesinger stressed the need to make a positive statement about the need for nuclear power as an alternative to [Page 634]imported oil, while simultaneously pushing for expanded IAEA work on nuclear safety.

LDC Energy Development5Mr. Poats discounted this initiative as unlikely to succeed.

Energy RD&D—All participants agreed that there is a clear need for financial support of technologies which are ready for commercialization. Mr. O’Leary stated his strong support for the initiative developed by the Treasury Department. Mr. Deutch stressed the need to distinguish between research (capability) and demonstration (capacity). He stated that no new institutions are needed for international cooperation in research; bilateral agreements and the IEA provide the necessary frameworks. Mr. Deutch agreed that new financing efforts to support demonstration facilities were warranted, but stressed the need to remain flexible on the institutional approach. Secretary Schlesinger agreed that a financing initiative should be explored.

Renewable Energy Development in LDCs—Mr. Poats described this initiative as a “reaffirmation” of the work already underway. Mr. Deutch and Mr. Rosen agreed that more emphasis should be given in national R&D programs to the development of appropriate technologies for the LDCs. Mr. Owen opined that there was an urgent need for improved coordination of bilateral programs and noted a World Bank meeting on this issue has been scheduled for June. Mr. Cooper observed that the development of “a coordinated global program” for LDC cooperation was a laudable goal, but that previous multilateral efforts had failed.

Investment Targets—Mr. Poats described this initiative as of limited merit and primarily an effort to respond to a Japanese suggestion. Secretary Schlesinger noted that the U.S. has little to fear since our record on the federal R&D budget is excellent and will continue to be so; he suggested the idea be further explored.

DISTRIBUTION

  • Department of State
  • Richard Cooper, Under Secretary for Economic Affairs
  • Julius Katz, Assistant Secretary, Economic and Business Affairs
  • Gerald Rosen, Director, Office of Fuels and Energy
  • National Security Council
  • Ambassador Henry Owen, Special Representative of the President for Economic Summits
  • Rutherford Poats, Senior Staff Member
  • Department of Energy
  • James R. Schlesinger, Secretary of Energy
  • John F. O’Leary, Deputy Secretary of Energy
  • Harry E. Bergold, Jr., Assistant Secretary for International Affairs
  • John Deutch, Assistant Secretary for Energy Technology
  • Les Goldman, Principal Deputy Assistant Secretary for Policy and Evaluation
  • John Treat, Director, Office of Producing Nations International Affairs
  1. Source: Department of Energy, Executive Secretariat Files, Job #8824, International Affairs: 1/79–6/79. Confidential. Drafted by John E. Treat who initialed at the bottom of the last page.
  2. Brackets in the original. The list is at the end of the memorandum of conversation.
  3. The April 19 draft, sent to Naohiro Amaya, chairman of the multilateral group drafting the energy issues paper for the Summit, is attached but not printed. According to the drafters, “These suggestions have not been fully reviewed and approved within the US Government and thus do not at this time constitute US proposals for Summit action.” Regarding the Amaya group, see Document 197.
  4. The first approach, under the heading “Oil Imports and Prices,” delineated that the G–7 seek to preclude further oil price increases by reducing demand for oil through individual and cooperative action. The second approach added that the G–7 should reaffirm the commitment of the seven heads of government to reduce oil imports by 5 percent in 1979 before looking beyond that year. It also noted that, regardless of the “recovery of Iranian oil production,” there would “continue to be a need to ease demand and price pressures on the world oil market.”
  5. The fourth heading of the NSC draft paper was “Immediate Development of LDC Hydrocarbon Resources.” The last part of this section reads: “The heads of government expressed satisfaction with the positive response of the World Bank to their request at the Bonn Summit for expansion of the Bank’s assistance to oil, gas and coal exploration and development in developing nations. They agreed that additional measures may be required to encourage the risk-taking participation of private foreign companies in energy exploration and production in developing nations and expressed readiness to consider support of sound private or public initiatives to assure greater reliability of agreements and contracts in this field.”