Foreign Relations of the United States, 1969–1976, Volume E–9, Part 1, Documents on North Africa, 1973–1976

22. Minutes of a Senior Review Group Meeting¹

Washington, August 14, 1973, 3:08–3:58 p.m.

SUBJECT

• U.S. Policy Towards Libya

PARTICIPANTS

• Chairman
• Henry A. Kissinger
• State
• William Porter
• Joseph Sisco
• James Blake
• Anthony Ross
• Defense
• William Clements
• Robert Hill
• CIA
• William Colby
• [name not declassified]
• JCS
• Adm. Thomas H. Mubarek
• V/Adm. John P. Weinel
• Treasury
• William Simon
• Gerald Nensel
• NSC
• B/Gen. Brent Scowcroft
• Richard Kennedy
• Lawrence Eagleburger
• William Quandt
• Harold Horan
• Jeanne W. Davis

SUMMARY OF CONCLUSIONS

It was agreed that:

—State would prepare a paper on the pros and cons of the various options in dealing with Libya, including the substance of a possible approach by a U.S. emissary.

—the question of reconnaisance flights would be reviewed.

Mr. Kissinger: (to Mr. Colby) May we have your briefing?

Mr. Colby briefed from the attached text.

Mr. Kissinger: (Commenting on the briefing) When you talk about the status of our representation in Libya, you’re hitting the State Department where it hurts.

Mr. Colby: [less than 1 line not declassified]

Mr. Porter: [less than 1 line not declassified] We always like to give our younger officers a chance.

Mr. Kissinger: Did you say Qadhafi is helping the Irish Republic Army?

Mr. Colby: Yes, he has sent them something.

Mr. Porter: He offered Spain his army to push the British out of Gibraltar.

Mr. Kissinger: [2 lines not declassified]

I’d like to discuss first some general issues as we did in our meeting on the Persian Gulf. Then I’d like to raise some issues concerning the oil companies which we will discuss in more detail at the SRG meeting on energy on Friday. These will obviously have to be settled in terms larger than Libya. Third, I’d like to talk about a number of concrete issues which have arisen. Let’s raise the oil company situation first, then defer discussion to Friday. The oil company incentives are just basically different from ours. I have yet to meet an oil company executive who is not an idiot politically. (to Mr. Clements) I make an exception, of course, for drillers and producers. The oil companies’ argument that their interests are identical to the national interest should be examined. They don’t seem to be able to concert their actions at all. They give in to the most outrageous demands and then just pass along the increased costs to the consumer. Once this happens in Libya, it will spread to the Persian Gulf. The companies should talk to us before they get in trouble.

I know the mythology is that any attempt by the consumer countries to get together will produce a confrontation with the producer countries. That’s a shibboleth and we should consider whether it is really true. What do we mean by confrontation? What is the price? This is a dangerous process where year by year the oil companies are driven toward a solution. Libya set the pattern for Saudi Arabia. We got involved in Saudi Arabia, then the companies chickened out.

Mr. Simon: I have a tangential question in the matter of calling on the consumer nations to consult with the producer nations and that is the Japanese bilateral approach.

Mr. Kissinger: We’ll have a discussion on the whole issue on Friday. I don’t know whether we would want an across-the-board agreement among the consumer nations or consider what the US might do unilaterally. I assume the Occidental issue is down the drain.

Mr. Porter: Yes, and Libya cut production 50% today. Amoseas will probably fold, then Oasis will. It’s an ongoing process.

Mr. Kissinger: Let’s discuss the other two issues: our general strategy and how to apply it to some concrete issues.

Mr. Porter: Our tactic has been to hang in and see what happens when Libya merges with Egypt, if it does. We did what we could for Bunker Hill, but it wasn’t much. Our problem is that we have a lack of contact with any high-level Libyans. We could send a high-level emissary over to try to get some assurances concerning our interests. The reason why the consumer nations are chicken is that the commodity is in relatively short supply.

Mr. Kissinger: If Libya hadn’t stopped production, Qadhafi would be a miserable little shiek running around in the desert. Who needs whom more in this exercise?

Mr. Porter: The consumers need Qadhafi more than he needs them.

Mr. Kissinger: As long as they are not united.

Mr. Porter: You can’t hope to get anything resembling unanimity from the consumers.

Mr. Clements: Also you must remember that, when you are talking about the European market, this is handled outside normal commercial interests. These dealings are all government-to-government.

Mr. Porter: Yes, Libya will have no problem disposing of the stuff in Europe—and to our best allies.

Mr. Clements: Right; Italy is one of the worst offenders.

Mr. Porter: We have no specific suggestions. We think the idea of the emissary is worth exploring. The Libyans want some things that they might trade off. You should know that there is not unanimity in State on the idea of an emissary. But we don’t see how to proceed because we have no access.

Mr. Kissinger: We could try to create a situation in which they would want access to us.

Mr. Porter: Interesting, but how?

Mr. Colby: Their big market is Europe.

Mr. Clements: There is one outside chance, based on my experience with and knowledge of the Algerians. The Libyans are being well coached by the Algerians. Libya’s technical and management capability is coming from the Algerians. I’ve seen this thing orchestrated over the last couple of years as various Algerians go in and out of Libya. I think you can track what’s happening in Libya to the coaching they are receiving from these young Algerian revolutionary types.

Mr. Porter: But these Algerians are doing business with us.

Mr. Clements: Precisely. Our business may not be with Libya. The Algerians need us and need us badly. I’m talking about things like marketing and capacity—things that are well beyond their capabilities. If we could talk to them, that’s the only access I know of.

Mr. Kissinger: (to Mr. Simon) What do you think?

Mr. Simon: I’m interested in the comments on Algeria. I worked with the Algerians on the LNG deal. It might be a possibility.

Mr. Porter: Are we on a good enough basis with the Algerians?

Mr. Simon: Some of us are with some of them.

Mr. Kissinger: What do we want the Libyans to do?

Mr. Porter: We should aim at stabilizing our interests in Libya. Our oil investment there is important. They should let our people in and out—we’ve taken a lot from them because we have an eye on our main interest—petroleum. I hope Bill Clements is right but I don’t have the feeling that the Algerians are ready to oblige us.

Mr. Clements: I didn’t say they were. They won’t do anything unless there is something in it for them.

Mr. Kissinger: What do you want the Libyans to do?

Mr. Porter: Petroleum is the most important element. We can reduce our presence if our major interests are stabilized. But one by one we see our interests diminished, made unprofitable or removed from our control.

Mr. Kissinger: Are they doing it by inadvertance? We want Libya to stop subverting our oil. What’s in it for them?

Mr. Porter: They want a major change in US policy in the Middle East.

Mr. Clements: The Algerians have already done this with the French.

Mr. Kissinger: We tried to drag our feet on letting El Paso in, but the oil companies were on our necks. Now they’re getting the same thing done to them in Libya.

Mr. Clements: You’re right.

Mr. Kissinger: Only two years ago they were driving us crazy when we held up approval on El Paso to avoid problems in the other Arab countries.

Mr. Porter: I suggest we staff out a proposal on what an emissary might offer in return for what we want.

Mr. Kissinger: It’s a policy question whether the country which is most directly opposed to US interests, which constantly harasses us, rates an emissary, no matter what he says. Why not send an emissary to a friend? We have two approaches: to try to isolate and punish Libya or to buy them off. (Referring to Tripoli’s 1044) I never thought I’d see a cable from our people in Tripoli that I’d agree with.

Mr. Sisco: We have three options: 1) to face up to Libya’s salami tactics by trying to work out a more cooperative relationship, through an emissary and possibly a trade deal. I think this is not the time and not the right country. I doubt if we could get a trade-off worth our while.

Mr. Porter: This is Joe’s view but it isn’t Casey’s or mine.

Mr. Sisco: 2) We could temporize and hold on by stringing it out; 3) we could really move in the direction of the Tripoli telegram and begin to apply a policy of loosening our relations with Libya, begin to take a position with regard to Qadhafi to reduce our relations and contact. We could try to get the oil companies to take a more unified, concerted posture and see what leverage we can develop to demonstrate to Qadhafi that his actions may be at the expense of his relations with the US. This only makes sense if we concert with the oil companies so that they enter into some sharing arrangement between the majors and the independents.

Mr. Kissinger: And some sharing plan with the Europeans.

Mr. Sisco: Yes; I don’t know how feasible this is. But these are three broad options. I haven’t looked at them in detail, and we haven’t really looked at the third possibility at all.

Mr. Colby: There’s a fourth option: let the Europeans worry about the place and say to hell with it.

Mr. Simon: I’d like to be tough, but I just don’t see the chips. Only 3% of our imports come from Libya. That’s inconsequential. But 25% of West Germany’s imports and 22% of Italy’s imports come from there. The Libyans could hurt us by cutting down exports to Europe which would mean a critical increase in demand.

Mr. Colby: The Europeans have a direct interest in this.

Mr. Simon: And time is on the Libyan side. They could cut them off for six months during the heating season.

Mr. Kissinger: What would we be doing that might provoke their cutting the Europeans off in the heating season?

Mr. Simon: If we took a tough stand.

Mr. Kissinger: You mean if we said we won’t sell them military equipment? They might say give us 100 F–4s or we will cut off our exports to Europe.

Mr. Clements: The biggest pain would be if the oil companies yank their people out. The Libyans have no replacement cadre of trained people. They’re not like the Algerians.

Mr. Kissinger: Wouldn’t it be in the Europeans interest to send people in?

Mr. Clements: They don’t have a large supply of that kind of technician.

Mr. Colby: They have 2800 oil company people there.

Mr. Porter: There’s nothing to prevent them from getting technicians from somewhere else.

Mr. Clements: But it would hurt them temporarily. I’m thinking of the Suez Canal situation. They could pick up people in a year or so but, in the short term, it would hurt hell out of them.

Mr. Sisco: Maybe we don’t have the chips, but we haven’t examined the chips we have. I would hate to have the Arab world see Libyan blackmail of the US pay off. I want to be sure we don’t have a few chips. The very spectre of our playing a few chips would have an effect on Sadat and Faisal. Sadats wants out of his close connection with Qadhafi.

Mr. Porter: I don’t see the chips. Libya has $3 billion in reserves. The Europeans can’t last.

Mr. Kissinger: Let the Europeans play with Libya.

Mr. Porter: I’m trying to protect our investment.

Mr. Kissinger: So the most militant Arab who has subverted regimes all over Africa and as far away as Ireland and in every respect works counter to us, gets a senior American emissary.

Mr. Porter: I don’t say a senior American emissary. We would have to approach it very carefully.

Mr. Kissinger: What level?

Mr. Porter: I don’t know. We can take it as high as we like. Ken Rush, for example.

Mr. Kissinger: For what end?

Mr. Porter: To stabilize our interests and protect the companies. We at least should be on the record as trying.

Mr. Kissinger: Every time someone starts using American money to subvert our interests, are you going to send him an Under Secretary of State? You understand I don’t underestimate the talents of Under Secretaries, or their charm.

Mr. Porter: It depends on their success. Qadhafi is not that successful. The situation is not as dangerous as implied. But oil is important and, if we can get the Europeans in too, all the better.

Mr. Kissinger: If he isn’t successful, why do it? Send the Europeans an emissary.

Mr. Porter: The Europeans will fold; they will send him technicians.

Mr. Kissinger: There must be an alternate between pulling out the technicians and sending an Under Secretary. You know he wouldn’t go empty-handed. Would he give them military equipment?

Mr. Porter: If it is the nature of the beast, we will bargain. If we don’t get what we want, we won’t play.

Mr. Kissinger: What do we want?

Mr. Porter: Some protection of the companies.

Mr. Clements: You’re talking about tens of billions of barrels of oil.

Mr. Kissinger: Most of which goes to Europe.

Mr. Clements: Yes, but there is the future. It’s $4 billion now but it will be $8 billion in a year or two.

Mr. Kissinger: But is the way to do it to give the most intransigent state the most conspicuous attention? Let’s play with Faisal or Sadat and let the Libyans stew in their juice.

Mr. Clements: What do you mean?

Mr. Kissinger: Follow our present policy and our own time-table.

Mr. Sisco: It doesn’t necessarily follow that Libya will cut production. It is not in the interest of Libya to get to the point where they are taking a cut in revenues.

Mr. Simon: You can do it for a short time.

Mr. Sisco: They will go ahead on their demand for 51% but that doesn’t mean automatically there will be less oil for the US or for Europe. The oil companies will pass the price increases along to the consumers. In fact, they may want Qadhafi to impose it on them—to be able to say they couldn’t help the price increases. One piece of leverage is that Libya wants to keep their outlets for their oil along present lines.

Mr. Clements: The governments of Europe are in on this deal. You’re not talking about independent companies. It is the governments operating through their chosen-instrument oil companies. They will just keep selling in the European market.

Mr. Kissinger: Fine.

Adm. Moorer: I was in Germany when they got the people who assassinated the Israeli athletes. A high German official said then that if Qadhafi said release them or he would cut off their oil, they would have to go along. They couldn’t tolerate chopping off 23% of their oil imports.

Mr. Kissinger: That may be true. You’re saying whatever Qadhafi demands, they will give unless they can get together. That makes Qadhafi ruler of 20 million people. If they’re willing, there is nothing we can do. We could send six emissaries out and build up their prestige, but so far we can’t even get stamps in passports.

Mr. Colby: Can we get that out of the way? Can’t we give them Arab passports? So what? Is it really a point of principle?

Mr. Porter: It’s the precedent we create for other nasty people. We can do it, of course, if we can get the Congress to agree.

Mr. Kissinger: Do I gather that all the items on this shopping list should wait until we decide on an emissary?

Mr. Porter: No.

Mr. Kissinger: Can Joe Sisco do a paper?

Mr. Porter: It’s not his area.

Mr. Kissinger: An Iliad won’t be written about America in the 1970s! Let whoever has the options in mind do a paper. Let Joe contribute.

Mr. Porter: We’ll let him see it.

Mr. Kissinger: Let Joe write his option in detail and let the other people write their options.

Mr. Sisco: We’ll staff out the three options.

Mr. Kissinger: What the package would be, what the emissary would say.

Mr. Clements: And include the fourth option.

Mr. Sisco: We might send the head of the NSC as the emissary.

Mr. Porter: He’s not in the right mood.

Mr. Kissinger: Well, if you expect to rely on charm. . . . . .

Mr. Clements: There’s always embargo.

Mr. Kissinger: We need international cooperation for that. The trouble with the consumers’ getting together is that it would lead to an Arab boycott. If the consumers could pick off one, and not multiply the outcome, but the experts say it can’t be done. I would like to see the emissary option fully staffed out—what he would say and what they would get over a period of time. I’d also like to see the Sisco option.

Mr. Sisco: Options 1 and 3 are not mutually exclusive.

Mr. Kissinger: Let’s do it—get all the departments involved.

Mr. Colby: Also could we look at the question of the reconnaissance flights. I’d like to avoid another Pueblo. These flights aren’t worth it.

Mr. Kissinger: I thought we were having a general review of recce flights.

Mr. Colby: There’s no intelligence value in these. We’re just running them to make a point.

Adm. Moorer: Yes. If we let every country draw a circle. . . . .

Mr. Colby: I agree, but don’t use an intelligence asset. Fly a regular plane.

Adm. Moorer: It’s not a CIA asset.

Mr. Colby: I know—it’s a JCS asset.

Mr. Kissinger: We’ll include this in the recce review—it will be one of the first, or the first, to be considered.

Mr. Colby: We’re not doing it for intelligence purposes.

Adm. Moorer: They haven’t reacted. If they do, they will get bagged.

Mr. Porter: Let’s put the emissary in one of those planes.

Mr. Kissinger: We will review it. If it serves no useful purpose, we will consider the political implications and might cut down on it.

1. Summary: The Senior Review Group discussed U.S. policy towards Libya.

   Source: Library of Congress, Manuscript Division, Kissinger Papers, Box TS 71, National Security Council, Committees and Panels, Senior Review Group, August 1973–October 1975. Top Secret. The meeting took place in the Situation Room at the White House. Colby’s briefing is attached but is not published. In telegram 1044 from Tripoli, August 13, Josif argued against the approval of new military equipment to Libya without the United States receiving something other than money in return. (Library of Congress, Manuscript Division, Kissinger Papers, CL 306, NSC Committees and Panels, Senior Review Group, August 1973–April 1975)