44. Telegram From the Department of State to the Embassy in Japan1
40604. Subject: IEA Agreement on Alternative Sources.
1. Request you deliver the following letter from President Ford to Prime Minister Miki.
2. Begin text. Dear Mr. Prime Minister: Our two governments are now working with the other members of the International Energy Agency to complete an overall framework of consumer country cooperation on financial solidarity, energy conservation and the accelerated development of new energy supplies. We have already reached agreements on the first two of these. We must now complete our overall cooperative efforts with basic understandings on our approach to accelerated development.
As I see it, our common policy on accelerated development should fulfill the following requirements. It should assure rapid development of available energy opportunities in the consuming countries without giving investors a wholly risk-free opportunity. It should allow for the diversity in energy opportunities among the consuming countries, while recognizing that all consuming countries will benefit equally [Page 151] from the market impact of increased production of energy by any one of them. And it should create a basis on which stable economic and political relationships can be negotiated with the producing countries.
At my request, Secretary Kissinger has advanced a set of proposals for consumer cooperation on accelerated development. These proposals include a commitment by members of the International Energy Agency to provide protection against future price uncertainty for investors in conventional nuclear and fossil fuels in our countries, either by a common floor price or tariff; an agreement setting forth the general terms and conditions under which member countries could participate in each other’s programs to develop synthetic fuels and other higher cost energy sources; and a similar agreement under which two or more member countries could pool their energy research and development efforts in specific areas and projects.
Within this framework, it should be possible to assure an equitable balance of cost and benefits among participating countries. Countries with large fossil fuel potential would achieve greater self-sufficiency, but would have to assume the larger share of the investment burden. Countries whose principal domestic energy opportunity is increased nuclear power would obtain the balance of payments and fiscal benefit of lower oil pices as investment in other parts of the IEA resulted in lower world prices. We would all agree not to increase our consumption of imported oil if prices fell.
I understand that countries such as Japan, which have relatively little domestic potential to develop fossil fuels, might be concerned over the need to assure that they would have access to the new energy supplies produced in other IEA countries under such a framework of cooperation. We understand this concern and believe that in an effort to strengthen our overall cooperative framework, we should examine the merits of possible undertakings regarding access to supply and to markets for energy produced within our countries.
I am optimistic that we will be able to make substantial progress in this area within the next few weeks and thus that we will be in a position to hold a preparatory meeting by the end of March for the formal dialogue with the oil producing countries. Clearly, we will not be able to reach detailed agreement on all aspects of our cooperation in accelerated development by the end of March.
However, I believe we must reach a firm understanding on the basic elements and principles of our overall approach on accelerated development before beginning discussions with the producers. We cannot hope to achieve agreement with producers on the elements of a long-term equilibrium of interests between us unless we as consumers have firmly established our own common measures of cooperation in this important area of our overall cooperative effort.
[Page 152]I would like to take this opportunity to convey to you personally my appreciation for the positive contribution Japan is making to the work of the International Energy Agency and your very constructive role in our joint effort to resolve the energy crisis. Sincerely, Gerald R. Ford. End text. 2
3. You should raise in low key manner that it might be worthwhile to have bilateral discussions on this subject before the next meeting of the Governing Board of the IEA and inquire whether Prime Minister Miki believes that it would be useful for senior US officials to travel to Tokyo for this purpose early next month. US representatives would be Assistant Secretaries Enders and Parsky, FEA Assistant Administrator Conant.3
- Source: Ford Library, National Security Adviser, Presidential Country Files for East Asia and the Pacific, Box 8, Japan—State Department Telegrams from SECSTATE–NODIS (6). Confidential; Immediate; Nodis. Drafted by Enders, cleared in FEA and by Parsky, and approved by Kissinger.↩
- A similar letter was sent to Schmidt on February 22. (Telegram 40613 to Bonn; ibid., Presidential Country Files for Europe and Canada, Box 6, Germany—State Department Telegrams from SECSTATE–NODIS (2))↩
- On February 24, Deputy Chief of Mission Thomas P. Shoesmith delivered Ford’s letter to Vice Foreign Minister Togo, who assured him that he would convey it “promptly” to the Prime Minister. (Telegram 2364 from Tokyo; ibid., Presidential Country Files for East Asia and the Pacific, Box 8, Japan—State Department Telegrams, To SECSTATE–NODIS (4)) Miki replied on March 4 and, raising the issue of the IEA, wrote: “In the Agency’s formulation and the implementation of the specific cooperative measures for this purpose, full consideration should be given to the situation of those countries which have little energy sources to develop within their own countries and that care should be taken to present those measures in a least confrontational manner in relation to the oil producing countries.” (Telegram 2828 from Tokyo, March 5; ibid., Presidential Correspondence with Foreign Leaders, Box 2, Japan—Prime Minister Miki (1))↩