Treasury Secretary William Simon may have supplied the specific circumstances that Secretary of State Henry A. Kissinger omitted when he said in a Business Week interview earlier this month that the U.S. would not rule out the use of force to secure Middle East oil sources. In a secret Jan. 14 memorandum to Congress, made public today, Simon said that any sudden curtailment of American oil supplies by more than one million barrels a day would “clearly threaten to impair our national security” and “decisive action is essential.”
Kissinger had said in his interview that military force would not be ruled out in extreme circumstances such as a cut-off of oil that threatened the “strangulation” of American industry. He said at the same time that the U.S. would not consider force as a means of bringing down the price of oil. President Ford, after several days of hedging, publicly supported Kissinger’s statement but insisted that the Secretary had made it in reply to “a very hypothetical question.”
During his press conference on Tuesday, Ford again defended Kissinger’s view and said, “If a country is being strangled, that country has the right to protect itself against death.” When asked whether another Arab oil embargo would be “strangulation,” the President affirmed, “not of the kind in 1973.”
Simon’s memorandum, however, was far less hypothetical and much more pointed. “A recurrence of the 2.4 million barrels per day reduction which occurred during the (1973) OPEC embargo would have a prompt, substantial impact on our economic well-being and, considering the close relation between this nation’s economic welfare and our national security, would clearly threaten to impair our national security.” Simon said.
“In the event of a world-wide political or military crisis, it is not improbable that a more complete interruption of the flow of imported petroleum would occur. In that event, the total U.S. production of about 11 million barrels a day might well be insufficient to supply adequately a war-time economy, even after mandatory conservation measures are imposed,” the memo continued. “As a result, the national security would not merely be threatened, but could be immediately, directly and adversely affected.”
HIGH OIL PRICE SIMILAR TO CURTAILMENT
The Treasury Secretary went on to warn that the high price of oil would have virtually the same effects as a curtailment of supply. “The price at which oil imports are now purchased causes a massive payment outflow to other countries. The inevitable result of such an outflow is to reduce the flexibility and viability of our foreign policy objectives. For this reason, therefore, a payments outflow poses a more intangible but just as real, threat to the security of the United States as the threat of petroleum supply interruption. On both grounds decisive action is essential.”
Simon said that his investigation found that crude oil and its principal derivatives and related products derived from natural gas and coal tar “are being imported into the United States in such quantities as to threaten to impair national security. I find further that the foregoing are being imported into the United States under such circumstances as to threaten to impair the national security.”
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