Foreign relations of the united states 1969–1976 volume XXXVII energy crisis, 1974–1980 department of state washington
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- Gerald R. Ford
Paper Prepared in the Department of the Navy
VULNERABILITY OF OIL FIELD FACILITIES—IMPACT ON
Attempting to get at the facts of this issue is like an emotional court
case where prosecution and defense lawyers drag in “expert” wit-
nesses who attempt to make the case for each side couched in scientific
Shortly after Secretary Kissinger was quoted in Business Week sug-
gesting intervention in the case of strangulation,
a series of articles ap-
peared in which “experts” were quoted either making the case that the
facilities were highly vulnerable, or that they were not. Ambassador
Akins prepared a controversial paper
arguing it would be impossible
to seize the installations without major sabotage that would put Saudi
fields out of operation for “years.” He introduced his paper stating one
would have to be criminally insane to even contemplate such seizure. It
is rumored that this comment was taken as a personal slap at SecState,
and that it was one of the reasons Akins was fired.
It is a fact that the main 30-inch line of the tapline that carries Saudi
oil to Lebanese ports was blown in the early 1970s by unknown sab-
oteurs. One thousand feet were taken out by the explosion and resul-
tant fire, and it took three months to get the pipeline back in operation.
It was suspected that either Palestinian fedayeen did the job to warn the
SAG to resume payoffs it had terminated, or by the Iraqis to pressure
the SAG to settle outstanding border disputes. The story never got
much publicity, and was never resolved—but the tapline does run
above ground for much of its length, and this incident proved it can be
82, Saudi Arabia. Unclassified. Attached to this paper is a note from Rear Admiral Staser
Holcomb to Schlesinger that reads: “You asked about an oil ‘chokepoint’ in Saudi Arabia
. . . it must be the Straits of Hormuz, to which you referred. It is not as vulnerable to
blockage as was suggested, according to the Navy. Point is that the ‘tapline’ piping sys-
tem could serve as an alternate . . . and also more vulnerable. The 4/27 NSC Staff tasking
bears on the question. Tab D.” The “4/27 NSC Staff tasking” refers to this paper. It is un-
known if the White House received this paper.
See Document 30.
Enclosure to Document 52.
208 Foreign Relations, 1969–1976, Volume XXXVII
The Library of Congress did a study for Hamilton Subcommittee
on Investigations of the House Committee on International Relations in
August 1975 which concluded (NESA reference copy attached):
—The United States could easily defeat OPEC Armed Forces to
seize oil fields and facilities, but preserving installations intact would
be a chancy proposition under ideal conditions.
—Saboteurs could wreak havoc before adequate forces could seize
control. Although the pipelines are somewhat vulnerable, the oil wells
themselves and pumping stations are far more vulnerable, and are scat-
tered over a core area of 10,000 square miles.
—Once seized and restored, constant security against sabotage
would require two to four divisions with proportionate support on
land, sea, and in the air.
—Soviet intervention is possible through a variety of scenarios
from aerial mining of the Straits of Hormuz, to positioning ground
forces as a counter force.
The Library of Congress Study concluded: “Success would largely
depend on two prerequisites:
—Slight damage to key installations.
—Soviet abstinence from armed intervention.
“Since neither essential could be assured, military operations to
rescue the United States (much less its key allies) from an air-tight
OPEC embargo would combine high costs with high risks wherever we
focused our efforts. This country would so deplete its strategic reserves
that little would be left for contingencies elsewhere. Prospects would
be poor, with plights of far-reaching political, economic, social, psycho-
logical, and perhaps military consequence the penalty for failure.”
The Navy is of the opinion that the Strait of Homuz, though a nat-
ural choke point, is not highly vulnerable to interdiction in that the
channel is sufficiently wide and deep to accept the sinkage of one or
more tankers without impeding the traffic flow. In addition, Iran and
Oman control this Strait and have repeatedly stated their intentions to
The study, “Oil Fields as Military Objectives: A Feasibility Study,” August 21, is
attached but not printed.
A CIA paper, “Middle East Pipelines and Choke Points,” undated, is also at-
tached. It highlighted the three pipelines that “would become vital in the event that the
key choke points in seaborne delivery were blocked for whatever reason,” including the
Strait of Hormuz and the Shatt-al-Arab “from which all Iraqi crude and much Iranian
consortium crude leave the Persian Gulf.” The three pipelines were TAPLINE, TIPLINE,
which carried crude from Eilat, Israel, on the Gulf of Aqaba to Ashkellon, Israel on the
Mediterranean, and the pipeline that linked Iraq’s Kirkuk oil fields to the Mediterranean
via Tripoli, Lebanon and Banias, Syria.
April 1975–October 1975 209
Letter From President Ford to West German Chancellor
Washington, April 29, 1975.
Dear Mr. Chancellor:
I agree with the conviction expressed in your April 21 letter
the meetings of experts of industralized countries have been extremely
useful and that it is now time to begin arrangements for discussions
with representatives from the major producer countries. We would, of
course, want to make clear from the beginning that this producer-
consumer meeting of experts was completely private and that gov-
ernments would not necessarily be bound by its results.
Your talk with Minister Ansari should help clarify the subjects
which could be fruitfully discussed at such a gathering and elicit Iran’s
suggestions concerning countries that might be represented. Perhaps
after you see the Minister, we should have further contact to coordinate
final preparations for the meeting, including the definitive list of partic-
ipants. George Shultz would continue to represent the United States.
For our part, we are convinced, especially in the wake of the abor-
tive preparatory meeting in Paris, that the industralized countries must
continue to strengthen their cooperative efforts on conservation, finan-
cial solidarity and substitution of domestic for imported energy. In my
view, it is only through such unity of purpose and action by the major
consumers that any discussions, private or governmental, with the pro-
ducers can be productive.
Gerald R. Ford
Source: Ford Library, National Security Adviser, Presidential Correspondence
with Foreign Leaders, Box 2, Germany (FRG)—Chancellor Schmidt (1). No classification
marking. At the bottom of the page is a handwritten note: “Original letter sent to Sonnen-
feldt to deliver to German Embassy, 4/29/75.”
Schmidt’s letter is ibid., NSC Europe, Canada, and Ocean Affairs Staff: Conve-
nience Files, Box 69, May–June 1975, European Trip, NATO Summit (1).
210 Foreign Relations, 1969–1976, Volume XXXVII
Minutes of the Secretary of State’s Staff Meeting
Washington, May 1, 1975, 8:13–9 a.m.
[Omitted here is discussion unrelated to energy.]
Secretary Kissinger: Tom, do you want to say something about the
countries—Japan and Sweden—both—took this week. The alternative
sources and conservation policy showed some signs of withdrawal
symptoms after the failure of the prep.con. The other countries, how-
ever, took quite firmly and directly the line that we must now go ahead
and make sure that we implement the substantive policies that we have
adopted in the past and that we keep the goal of a producer-consumer
dialogue perhaps also—if possible, a consumer-producer meeting—
and at the forefront of the organization try to develop a new means of
achieving it, but recognizing that this is going to be much more difficult
in the future.
They would be looking, of course, very carefully to see what
success the United States has in putting across its own energy program.
Assuming that we have some, I think it will hold all right.
Much of the next month will be spent in preparations for the Min-
isterial. There was very strong sentiment towards trying to deal with
the raw materials-energy link by having the OECD take the lead in the
raw-materials issue—allowing, eventually, for a separate conference,
or series of conferences, on raw materials, first, rather than the link of a
raw materials-energy conference.
Secretary Kissinger: Whose sentiment was that? Yours?
Mr. Enders: I joined it, but it was basically others.
Secretary Kissinger: Like who—Luxembourg? (Laughter.) Whom
did you line up your support to? (Laughter.)
Mr. Eagleburger: Liechtenstein. (Laughter.)
Secretary Kissinger: I just don’t believe that it’s going to go that
way. I think the Europeans are going to edge up, step by step, towards
linking them one way or the other.
Mr. Enders: Well, this—
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 April 28–29; see footnote 11, Document 56.
April 1975–October 1975 211
Secretary Kissinger: They have a compulsive fear of confrontation
and, therefore, thinking that the producers, say, will cause a confronta-
tion—in their mind sooner or later produce one.
Mr. Enders: Well, this was not a proposal which I made or led. In
fact, it was by the Europeans. And I think it gives us something to go
Mr. Hartman: That was not the experience of that last conference.
They were tougher than we were. I think it will last; but it was a pretty
good performance at the last meeting, I think. Don’t you? (Addresses
Secretary Kissinger: Yes, but it won’t last.
Mr. Robinson: Germany has apparently reversed their position, or
appears to be reversing their position a hundred-eighty degrees on that
Secretary Kissinger: That’s exactly right. That’s my view. And so
will the others.
Mr. Enders: That may be, Mr. Secretary, but I don’t think we
should predict now and write them off, it seems to me—
Secretary Kissinger: I don’t think we should write them off. But I
think we should take a position that’s realistic and that meets our objec-
tives, instead of being the only ones left screaming for energy when
they’re all going the other way. All the more so, when they have never
understood what we have to gain at an energy conference. And we’re
against the energy conference, to begin with. It would be sort of absurd
for us to sort of wind up as the last defense of an energy conference that
everybody else has abandoned. (Laughter.)
Mr. Enders: It was very clear at the IEA meeting that nobody there
wanted to have an energy conference. As a matter of politics, they
thought they had to be all for it and would continue to work in that
Secretary Kissinger: Like the European Security Conference. For
years everyone has just said it was a matter of politics, and suddenly
they were stuck with it.
Mr. Enders: There was no early action or movement in this direc-
tion, other than in the case of Japanese.
Secretary Kissinger: We’ve got to get a strategy that we can sus-
tain, and we haven’t got it now. What happens if the OECD people put
it into raw materials and OECD and Treasury insists on putting it into
the Five or Ten?
Mr. Enders: Do both.
Secretary Kissinger: What?
Mr. Enders: Do both.
212 Foreign Relations, 1969–1976, Volume XXXVII
Secretary Kissinger: But what will happen, in effect?
Mr. Enders: Both will do. Both will do it.
Secretary Kissinger: Both will do it?
Mr. Hartman: 20 has the less developed countries in there. If you
turn that into a debate, you won’t get anything.
The main thing I think the less developed countries have to decide
is what kind of proposals they want to have.
Mr. Robinson: We feel very strongly about the OECD as a vehicle
for bringing in the Industrialized Nations. Simon feels equally strongly,
maybe more. We’ll have a paper outlining the issues.
Secretary Kissinger: O.K. Well, thank you.
(Whereupon at 9:00 a.m., the Secretary’s Staff Meeting was
Paper Prepared in the Department of State
INTERNATIONAL ENERGY POLICY
I. The International Energy Program—Overview
Our principal policy objective vis-a`-vis the other major oil im-
porting countries continues to be the construction of a comprehensive
framework of cooperation on energy. This effort is designed:
—to establish under US leadership a political and economic counter-
rejuvenating consumer country confidence in their
ability to respond to the energy crisis and limiting the corrosive impact
Source: Ford Library, National Security Council, Institutional Files, Box 112, Inter-
national Economic Policy Review. Confidential. The Department of State submitted this
paper for the International Economic Policy Review meeting, which took place May 2–3
at the Old Executive Office Building. Secretary of the Treasury Simon chaired the
meeting, and the paper was prepared for the May 2, 11:15 a.m., session, “Energy: Interna-
tional Economic Implications.” The Departments of the Treasury, Defense, and Agricul-
ture, as well as the Federal Energy Administration and the Office of Management and
Budget also contributed papers, all of which are ibid.
April 1975–October 1975 213
of the crisis on our overall relationship with other industrialized coun-
—to accelerate the impact of market forces on both supply and demand
and thereby weaken OPEC’s ability to maintain high prices over the
Our efforts in the ECG and later in the IEA have concentrated on
(1) the establishment of an institutional framework for cooperation and
the establishment of an emergency arrangement, and (2) the creation of
a program of long-term cooperation in conservation and accelerated
development of new energy.
A. Emergency Program: The first of these tasks is largely completed.
The International Energy Agency is firmly in place, and the emergency
program is in the final stages of implementation. The emergency pro-
gram is designed to limit in the short-term the political and economic
vulnerability we face as a result of excessive dependence on imported
oil. It offers three major benefits:
—political unity: countries are committed in advance to share oil
with any one country which is the target of a selective embargo;
—limitation of economic damage: prepositioned demand restraint
programs and emergency supplies greatly enhance our collective
ability to withstand the economic impact of an embargo; and
—strategic, diplomatic and military freedom of action: countries that
are better protected against the political and economic disruption of an
embargo thereby also are better protected against the potential military
and diplomatic impact of an embargo, and are better able to retain their
overall strategic freedom of action.
B. Long-Term Cooperation: By itself, however, the emergency pro-
gram would have only limited validity over the medium-term. The IEA
countries have recognized explicitly that a permanent solution to the
problem of vulnerability can only be achieved by reducing dependence
on imported oil.
On the demand side, we have achieved agreement on a 2 MMBD
target for reduced consumption of imported oil by the end of 1975. Sim-
ilar targets will be set for future years. While specific country quotas
were not assigned for 1975, the US share of the overall target is the
1 MMBD saving established in the President’s program. This is roughly
proportional to the US share of total IEA consumption.
On March 20, the IEA Governing Board reached agreement in
principle on a coordinated system of cooperation in the accelerated de-
velopment of new energy supplies.
As now agreed, this system will
See Document 48.
214 Foreign Relations, 1969–1976, Volume XXXVII
—The pooling of national R & D efforts on a project by project
—Cooperation in providing specific incentives to investors in high
cost energy sources on a project by project basis; and
—Agreement to stimulate and safeguard investment in conven-
tional nuclear and fossil fuel sources through a commitment not to
allow imported oil to be sold domestically at less than a common
The first two of these elements, while of potentially major impor-
tance, are relatively non-controversial. Joint R & D efforts will not only
provide a highly visible vehicle for concrete cooperation but will also
offer significant rationalization of costs. The second tier of cooperation
would permit countries to share in the costs and benefits of synthetic
fuels production and could, in some cases, be a natural follow-on to
R & D cooperation. This element in the overall system is of particular
importance to those IEA countries with little or no indigenous energy
potential (outside nuclear) and who see political and economic value in
having the possibility of access to development of tarsands, shale, coal,
C. Minimum Safeguard Price: This is the key element in the overall
system. Under this agreement, countries would agree for a fixed period
of years not to allow imported oil to be sold domestically at less than a
common, pre-agreed price. This price will be set at a level high enough
to stimulate and safeguard investment in the bulk of conventional nu-
clear and fossil fuel sources.
The minimum safeguard agreement, together with the
other elements of the overall system is now being elaborated in an IEA
working group. The IEA Governing Board is scheduled to review the
working group’s report and take decisions on all aspects of the pro-
gram by July 1, 1975.
The major issues to be addressed in the USG and the IEA in elabo-
rating the minimum safeguard agreement include:
1) Level—The March 20 discussion specified that the safeguard
price aimed at stimulating and protecting investment in the bulk of con-
The IEA working group is now elaborating a rough
analysis of the various amounts of new energy (North Sea and North
Slope oil, conventional coal, nuclear, etc.) estimated to be available at
various price levels. (FEA is supplying up-dated cost estimates for the
In the final analysis, however, the range of choice is not likely to be
very wide. There is general agreement that the level should not be so
low as to be trivial. On the other hand, there are strong political impera-
tives in all countries (including the U.S.) against setting a very high
April 1975–October 1975 215
2) Mechanisms: The March 20 agreement specifies that countries
would be free to use measures of their own choice to mention
[maintain?] the safeguard price, e.g. tariff, variable levy, quota, etc. The
IEA Working Group is analyzing the trade and general economic im-
plications of various measures with a view toward drawing up an
agreed list from which countries could choose.
3) Timing: We will have to decide prior to July 1 whether we want
to push for the prompt establishment of a maximum safeguard com-
mitment, including the fixing of the level, or whether we would prefer
to establish a standby commitment, leaving countries to establish the
necessary mechanism only if the price actually breaks. There may be
some argument for a standby type agreement, on the grounds that
mechanisms, level, etc. can better be chosen when the medium-term
market outlook clarifies.
On the other hand, the effectiveness of the safeguard price as a
stimulus to investment would be weakened if the commitment to pro-
vide protection against imported oil is not explicit. Also, it would be
considerably more difficult to obtain agreement in the future on a level
sufficiently high to limit the risk of our giving a “free ride” to the Euro-
peans and Japanese if the world price begins to decline.
4) Legislative requirements: The type of agreement we seek will
probably require specific Congressional authorization. (The Executive
may in fact have adequate statutory power to maintain a safeguard
price, but Congress clearly expects the opportunity to review the pro-
gram in detail.) Title IX of the Energy Independence Act
vide adequate legislative authority. The timing and strategy of a con-
certed push for this legislation will have to be carefully assessed over
the next few months.
III. Relations with Oil Producers: Over the past year, we have con-
centrated on intensified bilateral contracts with key producer gov-
ernments. Our principal objective has been to maximize our political
and economic leverage by increasing the vested interests of these coun-
tries in strong bilateral ties with the U.S.
Until recently, we have been in a holding pattern on a multilateral
dialogue, arguing successfully that consumer solidarity was an essen-
tial pre-condition to any multilateral producer/consumer dialogue.
With the completion of the overall framework of consumer cooperation
in March, we agreed to move to a preparatory meeting to lay the
ground for a formal producer/consumer conference.
A. Prepcon: The preparatory meeting of April 7–15 reached an im-
passe over the basic issue of the scope of the formal conference. The US,
See footnote 3, Document 33.
216 Foreign Relations, 1969–1976, Volume XXXVII
EC, and Japan maintained that the conference should be centered on
energy, covering as well a number of issues directly and indirectly re-
lated to energy. The seven OPEC/LDC delegations, acting as a single
bloc, insisted that the conference must give equal treatment to other
raw materials and problems of economic development as well as
The two most significant conclusions to be drawn from the experi-
ence of the preparatory meeting are:
1) OPEC (particularly the more radical elements such as Algeria,
Venezuela, and Libya) has little interest in discussing energy and will
use the LDC issue to deflect such discussions. Thus, the strong OPEC/
LDC alliance will make it very difficult to engage in an effective multi-
lateral dialogue on energy, even agreement on our part to move for-
ward simultaneously on other raw materials and development might
not guarantee a substantive dialogue on energy.
2) Our efforts to achieve consumer solidarity have paid off. The
consumers maintained an impressive unity at the prepcon. But there
continues a strong desire among consumers for some sort of dialogue
with producers, and unless we can devise some sort of multilateral
mechanism for such contracts we risk seeing other consumers show
new interest in the bilateral route.
B. Where Next: With the failure of the prepcon, the multilateral dia-
logue is at least temporarily checked. We will of course continue on the
bilateral track and may find that our position with some of the key pro-
ducers such as Iran and Saudi Arabia has been enhanced as a result of
the failure of the prepcon. These producers have a real interest in dis-
cussing investment issues, for example, while the Algerians and Vene-
zuelans are not going to acquire a significant stake in the industrialized
However, we must also address the question of producer/
consumer relations within the context of our objectives with other con-
sumers. While other IEA countries supported the US, EC, and Japanese
decision to hold fast to the notion of an energy-centered conference
which was the major reason for the failure of the prepcon, the failure of
the prepcon does leave a major gap in the IEA program. Therefore,
there may be considerable pressure in the IEA to move forward directly
in the establishment of a dialogue with producers, although the pro-
ducers will reject this. More likely, we can expect pressure to agree to
reconvene the prepcon, even at the price of agreeing to a much broader
conference agenda than we were previously willing to accept.
We plan to pursue two parallel courses to meet this situation:
1. Isolation of Raw Materials Question—We will continue to stress
willingness to participate in an energy centered conference. We will
quietly resist reconvening the prepcon in the near future. We will use
April 1975–October 1975 217
this time to move forward with our internal reassessment of raw mate-
rials policy, concerting our views with other industrialized countries in
the OECD and with the more responsible members of the OPEC at the
right time. We will then attempt to place the raw materials issue on a
separate track, and then return to the question of a producer/consumer
conference focused on energy-related matters. If coordinated bilateral
discussions with key producers indicate an energy-centered conference
can be held, we could proceed with a second try at it.
2. Coordination and Targeting of Bilaterals through the IEA—In order
to satisfy IEA demands for a more active role vis-a`-vis the producers,
we will propose a process of closer IEA coordination of bilateral con-
tracts with producers. We could attempt to agree on a common set of
objectives and modalities for bilateral policies in selected areas of the
producer/consumer relationship. Two possibly promising areas for
such an approach are accelerated industrialization of producer country
economies and aid to the MSA’s.
This approach would have several advantages:
—it would give internal political content to the IEA position in the
—if properly structured, it need not restrict US flexibility in bilat-
eral relations with key producers; and
—it would help to ensure that the failure of the prepcon does not
cause a loss of IEA political momentum in other areas such as
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