Foreign relations of the united states 1969–1976 volume XXXVII energy crisis, 1974–1980 department of state washington
Memorandum From Henry Owen of the National Security
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- 226. Memorandum From Henry Owen of the National Security Council Staff to President Carter
- 227. Telegram From the Mission to the Organization for Economic Cooperation and Development to the Department of State
225. Memorandum From Henry Owen of the National Security
Council Staff to President Carter
Washington, July 9, 1979.
Saudi Arabian Decision
The Saudi decision to increase production could, if maintained, go
far to right the present imbalance between supply and demand. That
decision owes something to the letter that you sent the Saudi gov-
ernment before Tokyo saying what you hoped to accomplish at the
and to what Dick Cooper
(who visited there after Tokyo) says was the Saudis’ pleasure at what
the Summit actually achieved. Bob Strauss also had a feeling that To-
kyo was a factor in the Saudi decision. This leads me to the following
1. We should claim some credit in the US for this decision, indi-
cating that it is partly a result of your success at Tokyo in activating en-
ergy conservation and production as the Saudis have long urged. The
Saudi decision would not have been made if Tokyo had failed.
2. We should underline to our own people the lesson: Efforts by
the industrial countries to reduce oil demand can pay off; further ef-
forts are needed if the temporary Saudi decision is to be extended.
3. We should make clear to the Saudis that we understand the mes-
sage they have sent us. The best way to do this is to press ahead with
effective Tokyo follow-up—not just in the US but in cooperation with
the other main industrial countries, and make sure that this is known to
the Saudis and other OPEC countries. And we should continue, in our
public statements, to single out moderate OPEC countries for praise, as
you did at Tokyo, and avoid indiscriminate attacks on all Arab or
In these different ways, we can build on the Saudi decision to
create a healthy awareness in both the US and Saudi Arabia that sen-
sible energy policies by both sides can be mutually reinforcing. This
awareness will make each side more likely to do the right thing—and
should earn the Administration some credit at home for having fol-
lowed sensible policies at Tokyo to this end.
Source: Carter Library, National Security Affairs, Brzezinski Material, Country
File, Box 67, Saudi Arabia, 4–7/79. Confidential. Sent for information. Brzezinski wrote
“Agree,” and initialed at the top of the page.
See Document 220.
See footnote 3, Document 220.
718 Foreign Relations, 1969–1976, Volume XXXVII
226. Memorandum From Henry Owen of the National Security
Council Staff to President Carter
Washington, July 12, 1979.
1979 and 1980 Import Ceilings
I strongly support the recommendations that you announce a
lower US import level for 1979 and 1980 than we pledged at Tokyo.
The question I get from newspapermen, businessmen, and others
to whom I report about the Summit is why we chose an 8.5 million im-
port target for 1979 and 1980, since it is more than we are likely to im-
port in either year. (I do not get this question about an 8.5 million goal
Your speech’s impact in this country and abroad would be en-
hanced by announcing a lower ceiling.
The dollar would be strength-
ened. It would be one of the few parts of the speech that has not been
foreshadowed in the press.
This action would be consistent with your phone statement to Gis-
that you will announce more stringent import meas-
ures than you agreed at Tokyo.
This action would also give us a basis for urging other countries to
exceed their Tokyo pledges. This effect would be the more welcome
since CIA estimates that the total of the Summit imports pledged at To-
Source: Carter Library, Staff Office Files, Domestic Policy Staff, Box 324, Eizenstat,
World Crude Oil Market. No classification marking. Sent for information. Attached to the
memorandum is a July 12 note from Owen to Eizenstat that reads: “Curt Hessler tells me
you’re considering this. If you recommend it to the President, I’d be grateful if you’d let
him know I strongly agree with you—either by sending him the attached or by incorpo-
rating my views in your memo.”
Carter delivered his speech on “Energy and National Goals” to the nation on July
15, and the next day spoke in Kansas City, Missouri, to discuss the “energy problem” and
his program to deal with it. For the text of both addresses, see Public Papers of the Presi-
dents of the United States: Jimmy Carter, 1979
, pp. 1235–1247. On July 16, the Department of
State sent a telegram to all diplomatic posts with guidance to use in orally conveying the
“most salient points” of the speech, which was well received internationally, and the en-
ergy announcements of the following day. The telegram reads in part: “The major theme
is that the U.S. requires an unparalleled peacetime investment of money, natural re-
sources, and application of technology to achieve two goals: first, never again to import
more oil than it did in 1977. We will keep imports at or below these levels through conser-
vation and use of domestic energy resources. Second, by 1990, the United States must cut
the amount of oil it now imports in half.” (Telegram 183760 to all diplomatic posts, July
16; National Archives, RG 59, Central Foreign Policy Files, D790321–0125)
Not found. Carter talked to Giscard on the telephone from 5:17 to 5:28 p.m. (Carter
Library, Staff Office Files, President’s Daily Diary)
January 1979–January 1981 719
kyo for 1982 and later years could easily exceed oil imports available to
the Summit countries in those years.
This move would also be pleasing to the Saudis. It would show
that we are willing to go that extra mile in response to their recent pro-
The chances of their extending that decision beyond
the initial six months would thus be increased.
See Document 223. In an August 1 letter to Carter, King Khalid wrote that Carter’s
“historic program for solving the energy problem” set an example to be followed by the
rest of the world regarding the policy of energy production and consumption. He added:
“My government has exerted its utmost efforts to lessen the effects of the crisis and to re-
duce its undesirable results, and it has achieved a far-reaching success in that direction.”
(Telegram 5676 from Jidda, August 2; National Archives, RG 59, Central Foreign Policy
227. Telegram From the Mission to the Organization for
Economic Cooperation and Development to the Department
Paris, July 27, 1979, 2234Z.
24069. For Under Secretary Cooper, Assistant Secretary Katz, DAS
Calingaert and EUR/RPE for Beaudry. Dept. also pass White House for
Ambassador Henry Owen. Dept. also pass DOE/IA for Assistant Sec.
Bergold. Subject: France and the IEA. Ref: (A) Paris 23158; (B) Paris
22903; (C) Brussels 12762.
1. (C—entire text).
Source: National Archives, RG 59, Central Foreign Policy Files, D790346–0118.
Confidential; Noforn; Exdis. Repeated to Brussels for USEC and Ambassador Hinton.
In telegram 23158 from Paris, July 19, the Embassy reported: “French Elyse´e offi-
cial told Dutch official this week we will see IEA ‘crumbling away’ and a group formed at
Ministerial and official levels to cooperate on energy.” (Ibid., D790329–0637) Telegram
22903 from Paris, July 18, detailed a meeting between the Embassy’s Economic Minister
and the French Foreign Ministry’s Economic Director, at which the two discussed
France’s views on IEA membership and its suggestion for a meeting of Energy Ministers
from the countries that had attended the Tokyo Economic Summit. (Ibid., D790324–0709)
In telegram 12762 from Brussels, July 15, the Embassy informed the Department that, in a
private conversation with a New York Times reporter, French Foreign Minister Jean
Franc¸ois-Poncet remarked that France wanted to have a closer relationship with the IEA.
He also said that “while France could not join, it might be possible to reconstitute organi-
zation to permit French participation.” (Ibid., D790324–0135)
720 Foreign Relations, 1969–1976, Volume XXXVII
2. Summary: The established IEA/French interactions through the
Community are now being tested anew by the sequence of events fol-
lowing the Iran revolution. Specifically, the need to coordinate Tokyo
Summit decisions of the Seven with those of other OECD member
countries raises new institutional questions and may require some
changes in existing OECD procedures for energy policy cooperation.
This message explores alternative options available to us under the as-
sumption that the U.S. objective is that of achieving the most effective
coordination possible of OECD member country energy policies and
actions, including those of the French, without derogating from the
central role of the IEA. In evaluating these options in terms of the objec-
tive, we looked for minimum modifications in current operations
which would both be effective in carrying out Summit directives and
keep open the option of an eventual French participation in the IEA or
its equivalent. We conclude that (A) the existing indirect French rela-
tionship with the IEA works satisfactorily in most activities, particu-
larly oil-sharing; (B) meetings outside the IEA context related to Tokyo
Summit directives would not be damaging to IEA’s central role pro-
vided they are ad hoc, draw on IEA Secretariat assistance, stick closely
to the monitoring role and do not become institutionalized through re-
peated meetings; (C) providing statutory restraints can be resolved, a
successor organization to IEA is feasible, and (D) we should await a
clear expression of French interest in joining an IEA successor and then
proceed only with the understanding that the new organization would
retain all of the basic IEA organizational attributes, particularly its rules
on procedure and voting. We believe it important that we avoid placing
ourselves in a bad negotiating position by prematurely offering pro-
posals to the French before they expose their basic position. End
I. Background and Present Situation
3. The International Energy Agency (IEA) has, since its founding in
late 1974, carried out our basic objectives in a satisfactory manner and
has served as an effective coordinating mechanism of participating
country policies in the current crisis. French non-membership has
created no major operational problems. French energy policies have
been closely coordinated with the IEA through the Community and, to
a lesser extent, through the OECD Committee on Energy Policy (CEP).
(A recent example of the effectiveness of such coordination is the
prompt French adherence, through the EC, to the IEA Governing Board
March decision to cut back imports 5 percent this year.)
provide IEA statistics through regular OECD channels, although with
lags on some data.
See footnote 6, Document 192.
January 1979–January 1981 721
4. Even on emergency sharing, French participation in the EC shar-
ing system provides an informational and operational link which
places them effectively within the IEA system, though again with some
lags. They would participate immediately in allocations should an EC
country trigger the sharing mechanism. Selective triggering by a
non-EC participating country would also involve France, although sec-
ondarily, as supplies are reduced among the other eight EC countries.
A general emergency would affect France in the same way, except
more quickly. In either case, the delay would be relatively brief since it
is unlikely that the EC partners would permit France to continue for
long to import oil at normal levels while they are on reduced
5. The French could help IEA operations more than at present if
they allowed their oil companies to become members of the Industry
Advisory Board, assist statistical compilation, and ease coordination
between the EC and IEA oil sharing systems. They could also bring
French coal companies more fully into operational activities by permit-
ting French executives to join the Coal Industry Advisory Board and to
participate in R&D and conservation activities. These could all be done
on a pragmatic basis without prejudice to France’s position toward the
6. Even though the indirect French/IEA interrelationship works
operationally, the organizational untidiness may have some negative
political and psychological effects. The most important of these may be
the impression that OECD countries lack unity on energy issues. On the
other hand, the French have contended that their basic support of the
substance of IEA policies, while remaining outside the organization,
has softened the IEA/OPEC confrontation.
7. The public image of the IEA within participating countries suf-
fers somewhat from confusion over the French role. EC procedures and
Tokyo Summit follow-ons are also complicated by lack of a fully-
shared international forum for energy policy coordination.
8. Ideally, an expanded IEA (or its equivalent) including France
would be the best instrument for OECD energy coordination in the
present situation, but recent signals from the French provide an uncer-
tain if not negative picture (reftels). While the tea leaves may be read
differently, our view of their configuration is that: (A) for political and
psychological reasons, the French like their position as an inside out-
sider, where they share in major energy decisions by OECD countries
and yet are free to criticize them both at home and abroad; (B) their oc-
casional suggestions that they may be prepared to cooperate more di-
rectly with the IEA or join a re-named equivalent may just be feelers to
see how far we and other IEA members are prepared to go to meet their
yet unspecified desires or, equally likely, could represent uncertainties
722 Foreign Relations, 1969–1976, Volume XXXVII
or differences of view within the French Government on how best to
achieve energy coordination without sacrifice to the basic French posi-
tion on the IEA, and (C) whatever their ultimate position, they are pre-
pared to continue their indirect relationship with the IEA, while pro-
ceeding to look for other means whereby they can more directly
influence Western energy policies—e.g., post-Summit Energy Minis-
ters meetings or “steering groups” inside or outside the OECD.
9. In sum, the present situation confronts us with the following
problems and uncertainties:
—The IEA, without France, has worked well operationally but
leaves an impression of disunity among OECD countries on energy
policy and direction.
—Coordinating Tokyo Summit directives is complicated by lack of
a central forum to which all Summit participants belong.
—Ideally, an expanded or renamed IEA, including France, would
resolve these problems.
—The French have given no consistent signs that they are pre-
pared seriously to consider joining a renamed IEA but have indicated
they will continue their indirect participation.
10. The following options include only those which would operate
mainly within the OECD context and contribute to improved coordina-
tion, with greater or lesser derogation of IEA’s present role.
A. The Status Quo
Retain the IEA as principal coordinator of OECD country energy
policies and actions, with French indirect participation through the EC.
—maintains our objectives for IEA
—keeps pressure on French to join IEA eventually.
—complicates coordination somewhat
—leaves France free to criticize
—risks placing post-Summit cooperation outside the OECD
B. Status Quo Plus OECD Council Working Groups
Maintain basic IEA role but, for post-Summit coordination, estab-
lish one or more working or “steering” groups responsible to the
OECD Council with specific mandates for Summit follow-on—e.g.,
January 1979–January 1981 723
overall coordination, monitoring. Organizationally similar to McPhail
with membership open to all OECD countries.
—provides forum for all Summit members to coordinate with
—if Secretariat support provided by combined energy staff,
linkage with IEA is maintained.
—derogates from central role of IEA
—adds another layer to coordinating mechanism
—doesn’t resolve disunity question because of low visibility.
C. Upgrade the CEP
Maintain IEA operational functions but make the CEP the locus for
major policy discussions, subsequently to be ratified by the IEA Gov-
erning Board, including coordination of Summit follow-ons.
—permits France direct participation in policy making
—provides full-membership forum for post-Summit coordination
—gives visibility to OECD unity.
—severely damages IEA role and image
—may raise legal questions with respect to the IEA Charter (1974
Agreement on an International Energy Program)
—slows down the decision-making process by application of
OECD rules of procedure and consensus as against IEA rules, espe-
cially majority voting on all but new commitments
—could require time-consuming duplicate agendas by CEP and
IEA Governing Board.
D. Status Quo Plus Ad Hoc Summit Coordinating Groups
Retain the IEA coordinating role, with French indirect participa-
tion through the Community, while coordinating Tokyo Summit direc-
tives through a limited number of ad hoc meetings outside a direct
OECD framework of Energy Ministers or their delegates from Summit
countries, possibly including several smaller OECD countries, plus EC
Commission and EC Council Presidency and OECD Secretariat repre-
sentation (e.g. IEA Executive Director Lantzke in his capacity as Energy
Counselor to the OECD Secretary General).
In 1978, the OECD Council established a Working Party, headed by D.S. McPhail,
to assist developing countries with renewable energy sources.
724 Foreign Relations, 1969–1976, Volume XXXVII
—retains IEA’s central role
—establishes a non-institutionalized mechanism for overall
Summit coordination with an informal link to IEA
—does not compromise the longer range objective of an IEA equiv-
alent with French membership.
—though highly visible (e.g. Ministerial meetings), doesn’t fully
remove impression of lack of unity
—provides risks of splitting OECD ranks between Summit and
E. IEA Successor Organization—Renaming
We propose two alternatives, though more are possible. The first is
simply replacing IEA with a new equivalent. Both alternatives must
meet the statutory requirements of present IEA members. The succes-
sor organization should also be modeled closely on the 1974 Agree-
ment on an International Energy Program and on OECD Council Direc-
tive C(74)203, establishing the IEA and authorizing rules and voting
procedures different from those applying to the OECD generally, a vi-
tal distinction which has been a key element in IEA’s effectiveness. This
first alternative of a new IEA equivalent would operate exactly as the
IEA does now, only with a new name and with French membership.
—provide a single forum for energy policy coordination
—give a highly visible symbol of OECD unity on energy matters
—get the French to share in the payment of that which they now
—no clear evidence France would join an organization so transpar-
ently the same as the one it has resisted for five years
—should France become a member, we have no assurance that it
would be any less difficult than when outside the organization—we
may simply be transferring contentious debate from the EC to the new
—legal issues may require new statutory authorities for member
F. IEA Successor Organization—OECD Energy Council
Same basic requirements as in Option E. Establish an OECD En-
ergy Council of approximate equivalence to the OECD Council with,
however, the same basic structure and procedures as the present IEA.
The IEA Governing Board would in effect become the Energy Council.
January 1979–January 1981 725
—provide a single forum for energy policy coordination
—dramatically display the importance given by OECD countries
to energy issues
—likely to be more attractive to the French than a re-named IEA
—secures a French financial contribution.
—no clear evidence the French would join
—French could be contentious if they did join
—legal issues may require new statutory authorities for member
—the OECD Charter may have to be amended
—the OECD Secretary General may resist this apparent infringe-
ment on his authority.
III. Conclusions and Recommendations
11. Given (A) present uncertainties about French attitudes toward
direct participation in the IEA or a successor organization, (B) the need
to preserve the valuable role being played by the IEA, (C) the require-
ments for closer coordination with the French on Summit follow-ons
and energy policies generally, and (D) weighing the pros and cons of
the various options cited, Option D is the most realistic course of action
as present policy while we examine the feasibility of either Options E, F
or some further variation. In this regard, we should be particularly
careful to avoid becoming the petitioner vis-a`-vis the French by prema-
turely offering them a proposal before we have a better appraisal of
what they really want. This would tactically put us in a disadvanta-
geous negotiating position and, perhaps, force compromises we do not
want. In our view, the disadvantages of the present situation are not of
sufficient magnitude as to warrant such a risky strategy.
12. Specifically, we believe we should: (A) continue to support the
IEA as the central energy policy coordinating institution; (B) encourage
the French to maintain and improve their indirect participation in IEA
and to stop sniping at it; (C) indicate willingness to discuss with the
French any serious proposals they wish to make on joining the IEA or a
successor organization, provided that statutory problems are resolv-
able and the French are prepared to accept a structure approximately
equivalent to that of the IEA, and (D) make clear that meetings of Sum-
mit country representatives within or outside the OECD framework
must not be institutionalized or otherwise derogate from the IEA role.
Regarding (D), we feel that, given non-Summit sensitivities and our
shared commitment to the IEA, the frequency of such Summit country
meetings will be a key aspect: the more frequent these meetings, the
greater the impression of institutionalization and the more divisive the
effect within the IEA.
726 Foreign Relations, 1969–1976, Volume XXXVII
13. Ambassador Salzman actively participated in the drafting of
this message and approved it prior to his departure on leave.
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