69. Minutes of the Secretary of State’s Staff Meeting1
[Omitted here is discussion unrelated to energy.]
Mr. Enders: We have, I think, a pretty difficult situation in the IEA,2 Mr. Secretary. We managed to make some headway on the alternative sources policy. But I think the real concern is whether there’s going to be enough headway over the next six months to keep the organization moving. And I’ll be submitting to you a couple of letters to the British and the Germans on this subject.3
Secretary Kissinger: Yes. I’ll talk to the President about it on the basis of your cable.4 That doesn’t propose any course of action, but I told him what is happening. What’s the reason for the slowdown?
Mr. Enders: Well, one is we’re up against real problems. For example, the Japanese have got to come up with five million dollars to build up stocks from 60 to 90 days.
The alternative sources thing is very expensive. There’s a lot of opposition from the oil countries, as there is here.
The other thing is that we have particular problems in Italy and Japan. The Italians want to be bought off. They want foreign financing for their nuclear program. And I think that it will be in our commercial—and I believe in our political—interest to be responsive to that at [Page 243] the right time, because they’ll need to show movement towards independence.
The Japanese, basically—they’re in the position they’ve been in since the very start. They want it both ways. They want good relations with the producers. They don’t want to have a domestic energy policy even less than some of the others. They’d like to kind of wait this one out. On the other hand, they’re responsive to group pressure. So we’ve got to orchestrate a circumstance in which the Japanese don’t have the guts to stand up to it.
Secretary Kissinger: Yes, but what do we ask in these letters?
Mr. Enders: Well, the letters simply suggest, (1), indicate to the British and the Germans, that unless we speed the thing up and make—
Secretary Kissinger: Will you give me a more detailed paper on exactly what the issues are so that I can raise it when I see Schmidt?5 But I have to know what I’m asking them to do rather than speed the thing up—
Mr. Enders: Yes.
Secretary Kissinger: —and what, concretely, do we want them to do?
Mr. Enders: Well, what we want them to do is to support us for going to an overall package deal.
Secretary Kissinger: But can you put it on paper, what an overall package deal is?
Mr. Enders: Yes.
[Omitted here is discussion unrelated to energy.]
- Source: National Archives, RG 59, Transcripts of Secretary of State Kissinger’s Staff Meetings, Lot 78D443, Box 3, Secretary’s Staff Meetings. Secret. Kissinger presided over the meeting, which was attended by all the principal officers of the Department or their designated alternates. A table of contents and list of attendees are not printed.↩
- The IEA Governing Board met in Paris June 30–July 2. The highlights of the sessions are in telegram 17267 from USOECD Paris, July 3. (Ibid., Central Foreign Policy Files, D750231–0004) The decisions reached by the Governing Board on long-term cooperation, as printed in a Secretariat paper, are in telegram 17238 from USOECD Paris, July 2. (Ibid., D750229–0987) The Governing Board’s working paper on “considerations for resuming the producer-consumer dialogue” is in telegram 158819 to Algiers and other posts, July 4. (Ibid., D750232–1177)↩
- Not found.↩
- On July 2, Enders reported to Kissinger on the IEA Governing Board meetings. At the end of the telegram, Enders concluded: “My strategy is to try to maneuver the IEA into a straight up or down vote on all the substantive issues by year-end, in the hope the Japanese and Italians won’t have the guts to break ranks. If OPEC is bloody-minded and puts the price up a lot in September, this approach has a fair chance of succeeding. But to make it work we have to be seen to be ready to break out of all new IEA commitments and go it alone. I am prepared to take that position because IEA will be a paper organization unless it does make progress in these fields; it will be so perceived (that is already a danger, and failure to meet our July 1 deadline for alternative sources doesn’t help), and thus of less utility to us than heretofore.” (Telegram 17130 from USOECD Paris; National Archives, RG 59, Central Foreign Policy Files, P840125–2606)↩
- The paper was not found. Ford, Kissinger, and Scowcroft met with Schmidt in Bonn on July 27. According to the memorandum of conversation, July 27, the Chancellor said: “We would react negatively in Europe to a confrontation with OPEC. If oil prices go up, it eventually benefits the U.S. and the Soviet Union who are rich in raw materials. But there is no chance for Europe, who could not stand a confrontation. They need stable prices and assured supply.” Kissinger and Schmidt agreed that they should try to split the OPEC nations as well as the “poor non-oil countries” from OPEC. (Ford Library, National Security Adviser, Memoranda of Conversations, Box 14) At another meeting on July 28, Schmidt said that he and Giscard wanted to propose that “the OPEC discussion be kept in the Foreign Ministries and not be scattered among the different ministries.” He also recommended that “the invitations for the dialogue” go out before the next OPEC meeting to “show that something was being done and give the Saudis an argument for trying to postpone a price rise, at least until the year end.” (Ibid.)↩