Foreign relations of the united states 1969–1976 volume XXXVII energy crisis, 1974–1980 department of state washington
Memorandum From the President’s Assistant for National
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- 156. Memorandum to President Carter
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155. Memorandum From the President’s Assistant for National
Security Affairs (Brzezinski) to President Carter
Washington, July 6, 1978.
Energy Issues Raised by Venezuelan President Perez
DOE and State have prepared reports on the energy issues raised
by Venezuelan President Perez on your visit to Caracas.
Below is a
brief summary of their findings:
Long-Term Supply Agreement
DOE notes that Venezuela has frequently expressed interest in a
long-term supply agreement with us. The Venezuelans see a preferen-
tial arrangement with the US as a way of obtaining a more secure mar-
ket and, if possible, higher prices than would otherwise be available. In
March, Jim Schlesinger told Venezuelan Energy Minister Hernandez
that the US was unable to separate security of supply and price, that
American oil importers would shift sources of supply in response to
price differences, and that the USG itself was sensitive on the price is-
In DOE’s view, a long-term supply agreement would only be in
our interest if it resulted in lower prices.
State underscores the US interest in assuring access to foreign oil
but stresses that we must weigh the costs as well as the benefits from
special bilateral arrangements. On balance, State concludes that, since
Venezuelan oil will flow to the US market as long as it is competitively
priced, there are probably more disadvantages than advantages in a
preferential access scheme.
Despite these negative assessments, both DOE and State believe
we should continue bilateral discussions with Venezuela on both sup-
ply and price issues. We believe this is a wise approach because of the
overall importance of our relations with Venezuela.
With respect to development of the Orinoco Tarbelt, DOE is gener-
ally skeptical about energy cooperation with Venezuela beyond a
government-to-government technical exchange program. DOE ques-
Source: Carter Library, National Security Affairs, Brzezinski Material, Country
File, Box 85, Venezuela, 1/77–12/78. Confidential. Sent for information.
See Document 146. An NSC summary condensing the two reports is attached but
See footnote 2, Document 146.
February 1977–January 1979 493
tions the desirability of supporting the development of expensive,
high-risk sources outside the US or of subsidizing private sector invest-
ment in such projects if no interest exists on commercial grounds. Our
private sector would not be interested in developing the Tarbelt into a
commercial resource unless Venezuela offered substantial new incen-
tives. However, there is still considerable hostility within Venezuela to
permitting foreign firms to develop the country’s energy resources,
and so the Venezuelans have asked the USG to play an intermediary
DOE is prepared to explore cooperative arrangements with Vene-
zuela which might range from a USG–GOV umbrella agreement to fa-
cilitate or encourage private sector participation in the development of
the Tarbelt, to a trilateral arrangement with Canada under which US af-
filiates could participate in such a scheme through PetroCan, an official
The DOE report also addresses a number of specific issues raised
by Perez. It provides an update on pending energy legislation, com-
ments on the alleged violation of our bilateral commercial agreement,
and assesses the possibility of storing residual fuel oil as part of our
strategic petroleum reserve.
We plan to respond to Perez through our Embassy in Caracas. In
the meantime, DOE will proceed with early consultations on specific
areas for government-to-government technical cooperation in the Ori-
I recognize and understand DOE and State’s reservations about
development of the Orinoco and a long-term supply agreement for
crude oil. At the same time, we cannot afford to antagonize Perez, who
has been a useful supporter of American policy in non-energy areas. It
would be a serious mistake to break off our dialogue on energy cooper-
ation prematurely. In this instance, the tone of our response may be
more important than its substance. We will, therefore, urge DOE and
State to continue their discussions with the Venezuelans in the hope
that we will eventually find some areas for fruitful and mutually bene-
Carter wrote “I agree” and initialed below this paragraph and drew an arrow
pointing to the last sentence. On July 12, Brzezinski sent a memorandum to Vance and
Schlesinger informing them that the President wanted them to continue their discussion
with the Venezuelan Government in a “positive manner with the purpose of trying to
find areas for fruitful and mutually beneficial cooperation.” (Carter Library, National Se-
curity Affairs, Staff Material, North/South File, Box 47, Pastor Country Files, Venezuela,
494 Foreign Relations, 1969–1976, Volume XXXVII
156. Memorandum to President Carter
Washington, July 7, 1978.
Cyrus R. Vance
W. Michael Blumenthal
Energy and the Summit
1. All the heads of government at Bonn will want to know whether
US oil imports will go down. They don’t care whether this happens by
legislative actions, or administrative action, or by using your existing
authority to allow domestic prices to increase gradually to world price
levels (which is probably their preferred course of action). You will re-
member that when Callaghan came in March and Fukuda in May,
both stressed their concerns on this issue; you said to Callaghan that
you would respond to these concerns at the Summit.
All believe that large US oil imports increase the US external def-
icit, weaken the dollar, and thus damage their economies. Schmidt has
said that any German expansion would only make sense if he could be
sure that it would not be offset by the currency disorders that he be-
lieves would attend US failure to limit oil imports more drastically. He
and the others also fear that continuing large US oil imports will drive
up the world price. They, their peoples, and the foreign exchange
markets have not digested the progress that has already been made by
the US; they exaggerate, moreover, the significance of COET or equiva-
lent administrative action, relative to the rest of the energy bill, in re-
ducing oil imports.
2. Our tactical situation at the Summit is made easier by the fact
that other heads of government are being asked to take action in other
areas: All want Germany and Japan to grow faster, and all want Britain
and France to be as forthcoming in MTN as the rest of us. Some of the
countries being asked to take these actions have linked them to US ac-
tion on energy. But this linkage works both ways. Other heads of gov-
ernment face the same kinds of political constraints—the Germans and
Source: Carter Library, National Security Affairs, Brzezinski Material, Trip File,
Box 14, President: Germany, 7/13–17/78. Confidential. Sent for information. Solomon in-
itialed for Blumenthal. The memorandum is typed on White House stationery.
Callaghan was in Washington March 23, Fukuda May 1–3.
February 1977–January 1979 495
Japanese on growth, and the British and French on trade—that you do
on energy. There is no reason why you should be more forthcoming or
specific in talking about energy than they are prepared to be on growth
3. At your Friday meeting with Schmidt,
you will be able to sound
out his intentions about growth—which is the key to triggering other
Summit countries’ actions. As of this date, we only know what Schmidt
said to Callaghan and in a recent Business Week interview: that he
would be willing to take expansion measures as part of a package deal.
He evidently implied the same thing at the recent Bremen EC meeting.
In Bonn last week, German officials were talking of a 12 billion DM
package (1% of GNP), which seemed to include some water, i.e., meas-
ures that would have been taken in any event.
A July 6 telegram just in from Embassy Bonn
indicates that “the
poor May economic data as well as the internal debate on tax reduc-
tions have increased the chances of a German 1979 program of fiscal
stimulus going beyond the one percent of GNP or DM 12 billion re-
cently mentioned by German officials. A larger rather than a smaller
package of tax reductions and expenditure increases may in some ways
actually be more easy to put together politically. But it is as yet far from
a sure thing, as aversion to higher public deficits remains a significant
counterbalance throughout the political spectrum.” The matter will be
decided at a German cabinet meeting twelve days after the Summit;
any resulting proposals would be put to Parliament in September.
4. One can envisage three alternative positions that Schmidt might
take in your meeting with him:
a. He may be willing to make a statement that, however general,
would clearly envisage a substantial growth package in the 1979
budget—on the order of 1% GNP. In this case, we would recommend, if
this proves necessary, a US statement on energy (Tab A)
less specific than the one you discussed recently with members of the
Congress and therefore less welcome to allies and more troubling to
foreign exchange markets, might still be sufficiently forthcoming to
meet Schmidt’s concerns and thus elicit his firm growth pledge, with-
out being unnecessarily offensive to the Congress. This statement
would also describe the progress that we have achieved to date in
According to the President’s Daily Diary, he met with Schmidt on Friday, July 14,
in Bonn. (Carter Library, Staff Office Files)
The EC Council met in Bremen July 6–7.
Telegram 12298 from Bonn, July 6. (National Archives, RG 59, Central Foreign
Policy Files, D780277–0155)
Tabs A–C are attached but not printed.
496 Foreign Relations, 1969–1976, Volume XXXVII
b. Alternatively, he may be willing to make a statement that would
pledge action in the 1979 budget but would not make clear the amount
of new growth action we could expect. In this case, we would recom-
mend that you fall back to the weaker statement at Tab B. This state-
ment, by referring explicitly to “working with Congress” and to the
possibility of “legislative action”, is weaker in its commitment to ad-
ministrative action than your April statement to the American Society
of Newspaper Editors
(Tab C). This evident difference would probably
trigger adverse comment and renewed pressure on the dollar.
c. He may be willing to make only a general policy statement on
growth, which pledges nothing. In this unlikely case we will have to
decide what to say on energy in light of other factors.
7. In choosing among options, the situation at home is relevant:
a. Political: The stronger your statement the greater the likelihood
that the Dole amendment
will be passed by a large majority. Stu Eiz-
enstat attaches a memo on these dangers. (Annex I)
whether the outcome would be affected by whether you brought back
an evident success, including important growth and trade pledges,
from the Summit?)
b. Economic: A question has been raised as to whether it would be
in the US interest in 1979 to take administrative action to restrain oil im-
ports, in view of current economic prospects. Charlie Schultze attaches
a memo indicating the pluses and minuses, and concluding that it
would still be in our interest to do so, if we can get something substan-
tial in return. (Annex II)
8. Tactics: In your conversation with Schmidt, you may want to:
a. find out what he has in mind saying and doing about growth, in
as specific terms as possible;
b. repeat your determination to act vigorously to restrain oil im-
ports; underline the difficulties you face in trying to define that deter-
mination in specific terms, if contraproductive Congressional reactions
Carter spoke on April 11 to the American Society of Newspaper Editors on his
anti-inflation policies. He stated explicitly: “If Congress does not act, then oil imports will
have to be limited by administrative action under present law.” For the full text of his
remarks, see Public Papers of the Presidents of the United States: Jimmy Carter, 1978,
In response to threats by Carter to impose “massive” oil import fees if the Senate
did not agree to his proposed tax on domestic crude oil, Senator Robert Dole (R–KS) pro-
posed an amendment to the energy bill in conference committee that would revoke ad-
ministrative authority to impose fees on oil imports. (The New York Times, June 28, 1978,
Entitled “Energy and the Summit,” dated July 7; attached but not printed.
Entitled “Economic Effects of Alternative Outcomes at the Summit;” attached but
February 1977–January 1979 497
are to be avoided; and explore how weak a statement on energy would
be sufficient to elicit his expansion decision.
After hearing Schmidt out, you may want to say that you will de-
cide what to say on energy in light of this conversation, and that your
advisers will communicate the specific language to his staff later in the
day. (He will want to know what you intend to say before the Summit
opens, since it will affect what he says on growth.)
This procedure would provide an opportunity for us to give you a
careful assessment of what he had said about his growth intentions (as-
suming he was willing to make some sort of pledge), before you made
your decision, choosing between the stronger and weaker statements at
Tabs A and B. We believe that a weaker statement, such as Stu Eizenstat
is proposing, which would do no more than defend our energy record
to date and promise to continue trying, would likely be insufficient,
and would be perceived, at home and abroad, as such a sharp back-
down from your April statement and such evidence of weakness as al-
most surely to be followed by a sharp fall-off in the dollar.
It would be understood that use of both your statement on energy
and Schmidt’s statement on growth would depend on what you found
out in the Summit about Japanese, British, and French intentions.
157. Minutes of the Bonn Economic Summit Meeting
Bonn, July 16, 1978.
[Omitted here are a list of participants and the minutes of Session
1, which began at 10:10 a.m. on July 16.]
[Omitted here is discussion unrelated to energy.]
Source: National Archives, RG 59, Executive Secretariat Files: Lot 84D241, Vance
Nodis Memcons 1978, Box 9. Secret. Drafted by Hormats. According to the President’s
Daily Diary, Session 2 of the Summit began at 3 p.m. and ended at 6 p.m. (Carter Library,
Staff Office Files) The minutes of all four sessions of the Summit are scheduled for publi-
cation in Foreign Relations, 1977–1980, volume III, Foreign Economic Policy.
498 Foreign Relations, 1969–1976, Volume XXXVII
Schmidt: Let’s go now to energy. The brackets there are taken care
of by what Carter has hinted at in his initial statement.
The US will
give us a text on energy before 6:00 p.m.
We should now move to the
substance of the energy issue.
Trudeau: We should be more specific on paragraphs 13 and 14 of
the energy chapter.
Our assistance to LDCs benefits them and the
world economy. We should make sure that part of our aid is directed at
renewable energy resources in LDCs and encourage the World Bank to
advance money for development and exploration of hydrocarbons. We
should help to find new hydrocarbons and more renewable energy re-
sources. Quite frankly, my earlier wording on this was rejected by the
Schmidt: But this is a new look at the problem.
Trudeau: I’ll provide the wording.
The participants are discussing a draft of the final joint declaration of the Summit.
In his statement during Session 1, Carter said: “Energy imports are up only 1% in 1977.
During the first five months of this year, oil imports are down by about 1 million barrels a
day. I have introduced a five-part program on energy. Three are in little dispute. A con-
ference committee has agreed on the fourth part, on natural gas. A few oil pricing ele-
ments are also agreed. As far as oil is concerned, the sum total of these agreed efforts will
reduce oil consumption by 2.3 million barrels per day by 1985. I will attempt to raise the
price of US oil to world market prices by 1980. I will check back home on these things so I
am not doing what is politically unfeasible.” Later he added: “I have a political problem
concerning oil. Previous Congresses were heavily influenced by oil producers. Now
there is an equal interest and influence by oil consumers. The big problem is to change
The U.S. contribution to the energy section of the joint declaration (paragraph 7)
reads: “Recognizing its particular responsibility in the energy field, the United States will
reduce its dependence on imported oil. The U.S. will have in place by the end of the year a
comprehensive policy framework within which this effort can be urgently carried for-
ward. By year end, measures will be in effect that will result in oil import savings of ap-
proximately 2.5 million barrels per day by 1985. In order to achieve these goals, the U.S.
will establish a strategic oil reserve of 1 billion barrels; it will increase coal production by
two-thirds; it will maintain the ratio between growth in gross national product and
growth in energy demand at or below 0.8; and its oil consumption will grow more slowly
than energy consumption.” The United States also agreed to raise the domestic price of
oil to the world level by 1980 to reduce consumption. The full text of the final joint decla-
ration issued on July 17 is printed in Public Papers of the Presidents of the United States:
, pp. 1310–1315. The section on energy comprises paragraphs 4–16.
The section on energy and LDCs became paragraphs 15 and 16. Paragraph 15
reads: “To help developing countries, we will intensify our national development assist-
ance programs in the energy field and we will develop a co-ordinated effort to bring into
use renewable energy technologies and to elaborate the details within one year. We sug-
gest that the OECD will provide the medium for co-operation with other countries.”
Paragraph 16 reads: “We stress the need for improvement and co-ordination of assistance
for developing countries in the energy field. We suggest that the World Bank explore
ways in which its activities in this field can be made increasingly responsive to the needs
of the developing countries, and to examine whether new approaches, particularly to fi-
nancing hydrocarbon exploration, would be useful.”
The Preparatory Group met in Bonn the first week of April.
February 1977–January 1979 499
Andreotti: We should add a point to indicate that we are only rec-
ommending conservation for non-productive uses. It is not wise to con-
serve if it reduces productivity. And paragraph 12
is too weak. We
should say something to the effect that we will “safeguard with the
greatest care . . .” not just say we will take into account.
Callaghan: According to our analysis, OPEC supplies are going
down steadily. We are coming soon to the point, perhaps 1985, when
the market takes over from OPEC. We feel that it is undesirable to have
prices increased over the next 12 months. But in the longer run it looks
as if the Saudis will be short of money in the 1980’s and Iran before
them. They will press for substantial increases. Should we hold prices
down and then face a big increase at that time or seek a gradual in-
crease in the price of oil in the next 3–4 years? In the future OPEC will
have a case for price increases because absorptive capacity will exceed
Schmidt: I recently discussed this with Fahd. He was concerned
with possible economic consequences of increased oil prices, which he
foresees next year. The Saudis are rather sophisticated in their under-
standing of the mechanisms of the world economy. They are aware that
the world economy will be adversely affected, depending on when and
to what degree oil prices will be increased next time. They also feel the
responsibility for managing their surpluses.
The Saudis are aware that their absorptive capacity will not in the
very near future enable them to buy as much as their export revenues.
They will have a surplus for a long time to come because of the large
gap between revenues and absorption. But they are worried that other
colleagues in the OPEC will force them to raise the price of crude earlier
and higher than they desire because of the dollar’s decline.
Fahd also strongly pointed out that the Saudis interpret Soviet
Union activity in the Horn and South Yemen as a strategic operation
with a double target. First, the Soviet Union wants to expand influence
in Africa and from there regain a foothold in the Middle East imports
[region?]. For that reason, they want great political influence in the
With respect to German interests, if war were to break out in the
Middle East, and given present attitudes in Jerusalem there is reason
for concern, countries around this table would be in a chaotic situation.
Oil would be used to press Israel through Western allies. Next time oil
will be used more massively. This concern causes a certain measure of
irritation by those countries without energy, e.g. France and Italy. This
Paragraph 12 became paragraph 14, which reads: “In energy development, the en-
vironment and human safety of the population must be safeguarded with greatest care.”
500 Foreign Relations, 1969–1976, Volume XXXVII
concern is more acute because other sources of energy, e.g. nuclear,
have been increasingly constrained by emotional reactions and public
opinion. The communique´ should emphasize the strong need to protect
the environment and population, but we need nuclear if we are not to
be at the mercy of foreign pressures. We were eager to hear what Carter
and Trudeau had to say on the nuclear issue at London.
There we put
in place the INFCE study. Yet I must say there was irritation aroused by
the US non-proliferation measures and particular comments by various
people. Is what was said at London still valid, or should we consider
that there will be difficulties in the future? If the latter, this will pose
considerable economic and strategic problems. As far as enrichment is
concerned, I do not want to be dependent on the Soviets. I can imagine
that for others the situation is very much the same. Germany places
strong emphasis on its rights under Article IV of the NPT
and will in-
sist on the defense of those rights.
Fukuda: I wholly support Chancellor Schmidt’s views on nuclear
energy. As petroleum supplies diminish, we must make provisions for
a new situation. The only way to do this is development of nuclear en-
ergy. The non-proliferation issue and peaceful pursuit of nuclear en-
ergy are separate. They should be dealt with separately.
We are in an age of uncertainty. There is no clear outlook about our
energy future. We do not know what will happen to the energy situa-
tion. We would not like the Soviet Union to have a monopoly on the
peaceful uses of nuclear energy. We need a clear outlook for the
post-petroleum era. For instance, countries reluctant to produce oil
today may produce more if they have a clearer picture of the
post-petroleum era. We should study these matters. Let us do research
in unison—not individually—and pool our wisdom and resources
I believe Carter supports my view of the importance of R&D for fu-
ture energy. This can help make the future into an age of certainty.
Coming up with alternative energy resources will help in dealing with
the rest of the world, especially OPEC.
Giscard: The prospects of nuclear fuel production are less than in
1974. In 1985 we will only have one-half of the capacity envisioned for
OECD countries in 1974. France decided last month to build new pow-
er stations for 10,000 megawatts. In 1985 our nuclear production will be
second only to the U.S. Public opinion has accepted our nuclear pro-
The G–7 Economic Summit held in London May 7–8, 1977. See Document 122.
Article IV of the Nuclear Non-Proliferation Treaty safeguards the rights of all
parties to the treaty to develop research, production, and use of nuclear energy for
peaceful purposes without discrimination and pledges all parties to facilitate the ex-
change of material and information.
February 1977–January 1979 501
gram. We still have a reserve on unused sites. We have succeeded be-
cause public opinion agrees that there should be a national source of
energy. Cooperation among us might help to bring about a better un-
derstanding of this need among all of our peoples. We might get good
results if we better explain the need for nuclear. We must all proceed in
common. I am pleased that agreement has been reached between the
U.S. and Europe on Euratom supplies. Could you confirm that supplies
Also, we should include OPEC in energy talks, particularly those
on nuclear energy.
Carter: The U.S. economy is strong and growing rapidly. We are
the world’s largest energy consumer, but we have made progress in
conservation. We have dropped from 1.46 barrels of oil per $1,000 GNP
to 1.38 barrels. We are trying to achieve a .8 ratio of energy consump-
tion to GNP growth by 1982. From 1976–77 we had an increase in oil
imports because of GNP growth and sharp drop in domestic oil pro-
duction. Since 1972 we have had a 34% increase in consumption and a
one-third increase in GNP. We have a specific problem with gasoline,
because autos are so widely used. To cut gasoline consumption we
have instituted mandatory fuel emission standards for autos, increased
the price of gas substantially and instituted a 55 mile per hour manda-
tory speed limit.
By 1985 we expect to save 2.5 million barrels per day of oil imports.
A substantial portion of this will be realized by the non-controversial
elements in the energy bill I have submitted. We want to control de-
mand at 2% per year and are working toward a two-thirds increase in
coal production. We also want to hold the ratio of growth in energy use
to less than .8%. We expect imports in 1978 and ’79 to be below 1977 in
Let me also add a point on the Saudis. We will use our influence
with them constructively and hope you will join. We do not believe
there will be a price increase until 1979 and only one in that year. We
hope that it will not be more than inflation. The Saudis and Iranians
have much investment in the U.S. The Saudis recognize that their in-
terests are intimately tied in with all of us, and particularly the U.S. I am
sending Mike Blumenthal to Saudi Arabia in the fall. We are working
closely with Venezuela and Mexico, and the PRC, to encourage addi-
tional energy production. My guess is that Helmut is correct regarding
the Soviet Union. According to our information, Soviet oil supplies
have been overestimated in the past. Soviet oil supply is less than antic-
ipated. Lately they have encouraged their friends to buy oil not from
the Soviet Union but from other sources.
On nuclear power, our position is the same as at London. All of us
will face problems unless we take action to eliminate nuclear prolifera-
502 Foreign Relations, 1969–1976, Volume XXXVII
tion. Nuclear power ought to be expanded for peaceful purposes, but
all of us ought to comply with rigid international safeguards. The U.S.
initiated the move to nuclear power. Thus, we feel we need to be con-
scientious about proliferation. We and Canada helped India to develop
nuclear power. If France and the FRG say they will not cooperate be-
cause it infringes on their sovereignty, it will be difficult for us. I strug-
gled to see that the Act did not hurt the countries involved. But there
are major domestic pressures on non-proliferation. A number of na-
tions want to reprocess spent nuclear fuel and convert it into explo-
sives. I can understand that other countries want to shift to nuclear
power, but we want to ensure that international safeguards are rigidly
applied. Our new legislation can give us a predictable policy. One pur-
pose of our legislation was to let our policy be better understood.
We have no objections if nations seek to reduce their energy de-
pendence including the use of the breeder reactor. But non-
proliferation must be respected. We have two years to continue sup-
plies under our legislation as long as negotiations are going on on non-
proliferation. There will be no cutoff during INFCE. We have supplies
and technology to provide and want to provide them where possible. It
is in the national interest to do so because we see the need for conserva-
tion and prudent use of fuels. We agree with the need for stability of
supplies of nuclear power and we realize that that did not exist a few
years ago. We will be glad to provide information if you have ques-
tions. Jerry Smith is now devoting full time to the issue of nuclear fuel
supplies and proliferation,
and he can be helpful.
Schmidt: In paragraph 9 of the communique´
could we get a state-
ment that the U.S. will prevent any interruption of fuel supplies during
INFCE and a point that existing agreements are to be respected. Could
we also have something about reprocessing?
Carter: We could put this language in. It is possible to export under
our legislation. For instance, I ruled recently that we could sell fuel to
India. We could indicate that the U.S. will avoid supply interruption
during the period of the INFCE study and will respect existing
Gerard C. Smith was the President’s special representative for non-proliferation
Paragraph 9 became paragraph 11. The part under discussion here reads: “The
President of the United States and the Prime Minister of Canada have expressed their
firm intention to continue as reliable suppliers of nuclear fuel within the framework of
effective safeguards. The President intends to use the full powers of his office to prevent
any interruption of enriched uranium supply and to ensure that existing agreements will
be respected. The Prime Minister intends that there shall be no interruption of Canadian
uranium supply on the basis of effective safeguards.”
February 1977–January 1979 503
Trudeau: I can give you the same assurances Carter gave you. I
said at London we would ship while safeguards were respected. With
Japan, we are prepared to accept the safeguards provided. We will
guarantee their shipments of technology and nuclear fuel provided
safeguards are respected. Even if the study proved breeder technology
would be necessary and useful we will also have to agree on safeguards
for the by-products of plants. If we all agree that proliferation is a
danger, we could reach agreement on safeguards. Countries can get it
from other countries, of course, and we can’t prevent that; but we can
prevent our material from being used for war. There are a lot of
non-nuclear countries. We should not be fatalistic and assume that they
will cross the threshold. We share Carter’s worry. In fact, our safeguard
system anticipated the U.S.
Giscard: With respect to the communique´, President Carter’s text
seems to be very satisfactory. However, I wonder if we can say that for
1979 and ’80 something more than we “hope”. Can it be stronger?
Schmidt: EC should include a paragraph of our own taken from
the Bremen communique´: “The EC stated the following objectives for
1985 . . .”
Regarding the question of Andreotti as to whether we should indi-
cate the importance of conservation of oil for non-productive purposes,
I believe there are ways of reducing energy use in industrial production
as well. We should not narrow the declaration down to eliminate this
Callaghan: I agree. We give grants to factories to help in conserva-
tion through better insulation.
Schmidt: Regarding paragraph 9, Carter, Trudeau, Giscard and
others spoke at length to this issue. We should amend the declaration in
two directions; adherence to existing commitments and the need for
rigid international safeguards.
I also want to point out that we subsidize our coal industry by
about fifty marks, or $25 a ton. These are huge subsidies, but necessary
given the oil situation and the fact that our coal is 1,000 meters below
the surface. This is a very heavy burden on our budget, and I hope no
one here will criticize me for such subsidies.
Regarding Andreotti’s point that the language in paragraph 12 is
too weak. Can we agree to use the language “safeguards with the
The communique´ issued at the end of the EC Council meeting on July 7 listed as
objectives the reduction of EC dependence on imported energy, the limitation of oil im-
ports into the EC, and the reduction to 0.8 of the ratio between the rate of increase in en-
ergy consumption and the rate of increase in Gross Domestic Product.
504 Foreign Relations, 1969–1976, Volume XXXVII
Regarding paragraph 13, I am in favor of strong bilateral assistance
programs to help LDCs produce energy. And I think we should de-
velop a coordinated effort to bring into use new energy technology. We
should coordinate over the next 6 months and get a report after 6
Giscard: With respect to paragraph 14 the World Bank is not the
only body which can carry out a coordinated function. I suggest that
we indicate that “we stress the need for the competent international or-
ganizations and financial institutions to provide aid to LDCs in the en-
ergy field. We further support the World Bank’s efforts . . . ” and then
use language already in the draft. We should say that we also want to
assist development and exploration of hydrocarbons. We should ask
the experts to see if they can include exploration as well.
Carter: They should report back progress to the next Summit.
Jenkins: You will report to whom?
Trudeau: Officials in our aid agencies would meet to see if we can
devote a greater part of our aid to renewable energy development and
also include training in LDCs.
Carter: I agree that there is a shortage of technology in the LDCs.
Trudeau: I agree.
Schmidt: Couldn’t we ask DAC to do a report?
Carter: My experts say that OECD is better since it can call on the
DAC and OECD energy experts. We should ask OECD to study this
and provide a report.
[Omitted here are discussion unrelated to energy and the minutes
of Sessions 3 and 4, which were held on July 17.]
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