218. Summary of Conclusions of Presidential Review Committee Meeting1
SUBJECT
- Energy Policy at the Economic Summit
PARTICIPANTS
- The President
- The Vice President
- State
- Richard Cooper, Undersecretary
- Julius Katz, Assistant Secretary
- Treasury
- Anthony Solomon, Undersecretary
- Edward Fried, U.S. Executive Director, IBRD
- Defense
- Harold Brown, Secretary
- Charles Duncan, Deputy Secretary
- Energy
- James Schlesinger, Secretary
- John Treat, Advisor
- White House
- Zbigniew Brzezinski
- Henry Owen
- OMB
- James McIntyre, Director
- Eliot Cutler, Associate Director
- DPS
- Stuart Eizenstat
- Kitty Schirmer
- CEA
- Charles Schultze, Chairman
- George Eads, Member
- NSC
- Rutherford Poats
Summary of Conclusions
The President reviewed with the listed advisers five issues regarding energy policy at the Economic Summit:
[Page 675]1. Oil Import Restraint in 1979. The President decided that we will seek agreement among the Summit nations to translate the present IEA/EEC commitment (for a reduction of oil imports equal to 5% of projected 1979 consumption) into a more understandable and credible set of individual country ceilings, to accelerate achievement of these reductions by lagging countries, and to jointly monitor performance.
2. Oil Import Restraint in 1980. The United States will seek a Summit commitment to an undefined “deeper” cut of oil imports in 1980, as compared with a rising demand curve, deferring until later expert discussion agreement on the actual import ceilings. The discussion dealt with a range of import reductions up to 500,000 b/d below the otherwise likely US import level.
3. International Allocation. We will advocate moving now into an informal system of international oil allocation, short of formally triggering the IEA/EEC system, so as to prevent competitive scrambles for scarce supplies and assure equitable treatment of all countries; we also will propose communiqué language indicating readiness to consider undefined other measures if the informal mechanism is inadequate.
4. Spot Oil Markets. As a supplement to the fundamental actions above, we will give limited support to the French proposal for action to stabilize the spot markets,2 agreeing now only to take action within each nation’s law and policy to discourage our companies from engaging in transactions on the spot markets at extraordinarily high or speculative prices; meanwhile, the legal counsel will be asked to advise the President on whether US law permits him to impose restrictions on imports of oil or refined products priced above certain levels.
5. Strategic Oil Reserve Procurement. We will propose concerted action to refrain from purchases for national oil reserves when this would put undue pressure on oil prices.
- Source: Carter Library, National Security Affairs, Staff Material, International Economics File, Box 32, Rutherford Poats File, Summit: Tokyo. Confidential. The meeting was held in the Cabinet Room of the White House.↩
- Jean-Pierre Capron of the French Ministry of Industry outlined the proposal in meetings with Department of State officials June 14–15. France recommended that the Rotterdam spot market be reorganized by: “(a) limiting the number of traders/brokers through official licensing system which would be implemented by individual countries (notably Netherlands); (b) requiring traders to publish official quotations, limiting these quotations to actual transactions; (c) creating a supervisory board under EC aegis with extensive powers of investigation, and with regulatory powers to be established over time. The system would be designed to discourage ‘daisy chains’ which artificially drive up published Rotterdam prices, create transparency, and provide a vehicle for regulating the market.” (Telegram 154557 to Paris, June 15; National Archives, RG 59, Central Foreign Policy Files, D790271–0695)↩