VERSAILLE SUMMIT DRAFT BRIEFING PAPERS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP10M02313R000100750008-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 9
• Document Creation Date: December 22, 2016
• Document Release Date: February 10, 2012
• Sequence Number: 8
• Publication Date: April 27, 1982
• Content Type: MEMO

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Memorandum for.
27
1LR,2,
SUBJECT: Versaille Summit
Draft Briefing Papers
Per instructions from
, we have passed our comments on
the attached briefing papers directly
to the Department of Energy. We have
also attached a memo for Tom Cormack
detailing the substance of our
comments.
STAT
STAT
STAT
Director,
DDI
DDI Reg.
D/OGI
OGI/ED
OGI/ED/M
OGI
Office of Global Issues
OGI/EDI I(26 Apr 82)
STAT
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26 April 1982
MEMORANDUM FOR : Thomas B. Cor ma ck
Executive Secretary
F ROM
Director, Office of Global Issues
STAT
Versailles Summit: Presidential Draft
Briefing papers
1. We have passed our comments on the attached bri,,?fing
papers directly to the Department of Energy. We had no major
substantive problems with any of the drafts, but provided the
following comments.
2. U. S. Supply Developments: The first Point-Counterpoint
under the Key Points section refers to the 1978/79 doubling of
world oil prices. These price increases actually took place in
the 1979/80 time frame.
3. Stockpiling: No comments
4. Oil Price Trends/Outlook: The second paragraph leaves
the mistaken impression that oil prices are expected to continue
their downward spiral no matter what happens to the economy. Ne
suggested that the second sentence in this paragraph be revis d
to read something like: "The US position is that the upturn in
economic performance beginning later this ,y i unl ik ly to
generate upward price pressures." Similarly the r fereence to an
"essentially irreversible trend toward lower oil consumption" is
a Counterpoint left the impression that consumption will never
rise above current depressed levels. We recommended that this
phrase be struck From the text.
5. Natural Gas -- Prici n and Supplies: No con~rnents.
6. Nuclear Energy: The first sentence under the Essential
Facts section points toward the cancellation of some 90 nuclear
reactors in the United States. Our records show only about 50
reactors have been cancelled. The first sentence in the next
paragraph points to the problems experienced by the nuclear
industry in other. Western countries. We suggested it would be
worth pointing out that despite these problems, no plants have
been cancelled. Finally, we recommended the addition of another
talking point dealing with the question of nuclear waste disposal
since most OECD countries are waiting for the United States to
take the lead in this area.
STAT
STAT
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Office of the
I)EPUTY DIRECTOR FOR INTFLLIGENCE
April 23, I932
NOTE FOR: Eta/OGI
Bob would like you to respond directly to
Carol Lee by 1200 hours on 26 April
concerning the attached request from the DOE.
You should also prepare a memo to Torn Corrnack
by COB of that date detailing what Yoo passed
on to Energy. Thanks.
STAT
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' trtment D.C. r
5
coNFiliwfidL
WMANI 1Q* Unto I Chase
X41'3
D.par m.nt of Treasury
Thom H. Coreaak
kooa 7813
CIA
Hsnry Nsu
9o01R 9 2
building
Old n ecutive office building
Irwhe George or P URaipal a sistant for
Interbat Affairs
6901tcTe Viratilles'Hu it: Clearance of Draft Hris!iny
Pape. for President's briefing Book for
Jun. 4..6, 982
directly to mV staff person coordinating our contrtbuti4n (Carol 6os
262-6383).
Attached for your aq ncy's clearance are papers on kegs elne,ngy
-L*oue. b for the- Presidents i.f inv boo* *w, the
ViBrasil ?s Suitt, lease provide your co .nts by Nook. April 26.
CONFIDENTIAL
Vnc1alsaf i?d
W ?.
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New a ?cutive building
Office
Steve (error
Rocs 23S
Alon arson
R 136
DepsrOSnt of State
John laugh
Novo 862
Dsgar want of Coenaerce
Ro"ritorter
ROM 35
Old 8 ecutive Off too
STAT
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i U.S. SUPPLY OEVELOP14ENTS
1.?
"CISION in 4~y ill lotr 1 g Mr e f to the imedi ate d$O$troI of . oil
-polity a*ocated by this Adtiaistra~tiori~p~rt: the free-market appr'o h to ,
APR IS 1982
The mitt" r se of u I S "tro l euft k t .
.Owcostral of on
and rev
U$. oil co nnumption 00 o
aAs Is...w.. II t _/e
? ", "-wm 1wr -elarwts 14 _ U.S. oil aerket result we froze it
oil prices ip 197$/79 -ather than the decontrol decision._ ,
u
ue+nts per 9atlon.
ne
WOW barro l s per did ? previously +t iatt+fad of du l In l,nq . pp~ o ;
? w barrel a ~sol i exppcteO and world oil prle~es fell by
prices 6y a-o
t 14
for OPEC 911 and l
the decontrol dais
1 of the Eftitlaoents Program eliminated "'Was f*-
I impart t p encouraged domestic oil 00 oration *1d
ierorts. MIUltin
from ---
g
er world oil ------ ?. ? ^?..+wOWN to {o?
prig.
on. Most foreign vowel nwe99> str ly
?
~iwcq 1 oil y W1. U -S. oil drilling activity has besis $t . an all t
1'oh* pry on eaa fi
d t1
1nt~-The oil i -, .AT-,,,-,- 1-1 1 1 J aux
pr'lca increases In" 1970/79 created a h1 181 motive*
melon. Oil dec. ro1 released `first-
producers to see actual bricht_ potential by al wr ng ~nsu
wa
i
d but the "Admieistre.
0"f Tore ful eve to trot ei 1
~
*Mh11 a dreeontro l may have he l -.d increase conventional all prat law
r oil prices are flowing down investment in U.S. synthetic fuels.
p= ces raoaal prevail in the future.
re
dn a clearly stated abJecti gif allolri
aarkai s to work eli.inat~d
doubt about the possibility of futurro tP" centrals
and allows producers to invest now in drilling and production act1 4ty tai
that Yr?s _a-v4.+ i
i t" PrU idoot Cartier deserves a lot oc
d
_.The 991tap r ' MAI.A "tr t ivn decontrol dec i s l n only speeded up ' tt was ail.
will uncle lay from thatCarter Administration.
?"L+ er' prices coupled with ' ?
eta t?sts of synthetic Beal Also. the
is fuels CoTpoMation s .4 p
d
hf latloa are 1 4nO the t d VW' ei set! iepror ,N? later"t
ro
a,a
WON with loan
to Iprarentees and program
i ~t lc fuels deve l nt so that i f world of l
fvturt, private ndustry can' r idl a uric rise in the
a- y xpand synthet it fuels production ,aisi seeded.
John Stan 1ey.Mi1ier/-P .
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STOCKPILIDhIC
I!+
r 1.
Oka Vhlterd t t&Att s has sa
hastied
*
p
on nurssrouo ocoas
os that
risaaxy reliance on market tomes together with high 115.31s of ..
itirstaic Dt0 k? tot discretionary national use are t10pst lice
$or deal4ng with tu, re oil supply disruptions of wbah rtear propciort
~
TM UI4ted a*at" b remained strongly opposed to any! 00mal ato
I rprdoan arranqeasn coordination, such as that propp t i by Ita] ;,
.s c, ulnae f to eeu >r the effects of minor supply die Rion. .
Tb> v seine vountrie, have attempted to link discussion iacre~#~ p
Wo levele with a of stock use, and in the past ooated
at$2 s$ng flexible urge stocks to reduce pressive on the market is,'
t
ions.
minor Supply disrup
lees TAW &C for the A" 1 Ministerial in May. While we coat, o to
yurt high levels, of oil stocks we remain strongly, ad to
iii mission which vo 1d link stock levels and stock us
YII. Tsll~iag aPoint
we hope to disoou r a further stock uss -init tat ive>t: Mi tlr>Ir ssa~rr E ?
meeting, the United States successfully eliminated the stock issue
issues to a" of th IRA subgroups for further conside tion, whir. !
de .a,StIVA 0000 "St l1y iron lEA support for remanding' U' stock i . '
lit' this 'P &*UAY- 16 ~Abti.ny of the TEA Governing soar l; 1 t#ts U.S.
stock management ini these situations.
ell price leevelso onetheless there is no system Whirr 6ftcesaes, 6
;OW 1tel tively minor oil disruptions can. hMions*q rnves i tvidual countries supply pasitioha' far oVrrr.
.'.s. 2. n, ' The
reliance an the war
Stocks for discreti
dealing with oil di
prrrep-or t ions . Forms
the effective ,opera
find technical, reSsa
effectively in a sal
sharing system
a.a a. .tea s ?~ s7 an4~rrr~ryLaMII ?ZRi.JRL Q ' Th P!} i7IP,
,fie -bey the r sources of private oil stocks for
individbar-l;
country , and yet be j below the level that would trigger ! the
l
.6. has continuously stressed th t'1 sexy
at together with high levels of $t Ogie
nary national use are the best m*a of
ruptions of either sub-trigger or rgsnoy
interventionist mechanisms interir;.with
Lon of the market and for a varit legal!
a would be impossible to establish aderti
-trigger environment.
by national governtOnto as they see fit.
rleoatrity stooks ?hu d be available for use on a discr *Mary basis )
whatever action is uagea -tecessary. However, emege !hoed other
Gount.e into I t is impossible to anticipate the ~p*etal
ebarac or33's't i of in oil supply disruption. Therefba # .,we
Must build vernmee it emergency oil stocks to supplemae tc;private,
luppliee and be pre Bred at the time of a supply inter ' ptlon to
consult closely wit industry and other governments an ii~oo take
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An4 f! 4 .
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IL PRICE TRENDS/OUTLOOK
APR 11 *2
? A Ali doclin in world crude oil and refined prcldvot
prices.
The outlook fcr oil prices in the future
fI.' ' tAC ~
The we;ld oil market has been extremely weak in 1962. Oil
canw?*ption ha6 tinusd its stoop decline which began in
3,979. at thq- a time, oil exporting countries havh been
prodw rw o than they could sell. The resulting
over-apply hO t pressure on prices, forcing oil producers
either to give,,a icisl and/or unofficial price auto as most
Dots-dpRJC swap OPEC oil exporters have done, or to cut
production as OP did beginning April 1, 1982.
The decline in oi'l prices can be attributed to both t long-
term, Isss+snti,a 1yj irreversible trend toward a more efficient
ut3liw~ation oi' a rgy and non-oil alternatives and a a~yy~~Rplical
r
dow
t
in th
n
u
n
e is pSrtormance iA the idti+llid
nuaruuse sovntxLim, The 1.$. position is that the upturn pe~pooac.ic
~
.....,...,
al esaetiveo rn3ah as 00 01 and nuclasr.\ in the abee>of
an unexpected eu ly disruption, there" should be lit or
no Upward pressure on real oil prices' for the next sivrral
years.
i
drev a fiaiency and grater use of sa
_4 bpi ing later this year is unlikely 'masse
u txen owl from (WEC's past overpricing quo" ,
end Q'. Q . toward lover oil osasuwseptioe +ti
III. TALKING POINTS
proper incentives' to continue to became more effie tin
their use of ener and to use alternatives to oiliZus fl {?'"
perpetuating an a son Tally irreversible trend toward
lower oil consumpo ion. This process will also recsi*o+a
boost from Ad*ini tr on policies to stimulate soon~y
recovery which w 11 also encourage new energy-sfficlout
capital Lnvestmen a.
Point: Low econo$ic activity has been prisparily re Ibis
7-CF-The decline i a oil consumption, and as a result, when the
economic reoovery,``arrives oil consumption will incroepo,
renewing upward pressure on prices.
Counts int: Pat overpricing of oil by OPEC and this
A fttt ori's inforcoment of market forces thro s
decontrol of crud oil prices and deregulation of thp; tt.i.
oil industry have been the driving forces behind the; trend
toward greater of iciency in energy useage and uses Pt
alternatives to o 1 in the U.8. This Administration's
market-oriented policies will offer American consuwusra the
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9. ICSuz
GAS - PRICING AND SUPPLINS
APR 1I
Uer'equlbticn oaf U.S. wellhead natural gas prices.
? European dependence on Soviet gas imports.
IT.-
II. ZSSENTIAL PA S
The European C pity is concerned about the U.S. coaeeeitm ent
to the aoralera ed decontrol of domestic natural gas prices.
They fear that ontinued controls will increase U.S. demand
and reduce prod ati
o
Tw rAAA &t -..
by the deoist+n !to defer legislation to accelerattee nattuuraitggaas
deregulation. I
ve heavily
on internatioaa]; gas markets Thi e U.S. to draw mo
and force th
+...? o` wow ais 6w UV M$ mane
tp. Soviet natural tSur ncssase
opeans ate con,siderLOV; the
possibility o! other increscent of Soviet gas in tb*l late
1900's or early 1990'0. The U.S. position is to eroouroge the
SUr ssns to dgIop sltern,stive souro es, especially new
Norwrgtiap gag o 110S. The U.S. would like to d.uQasttate
that th seouct.k~ provided by alternative sources outweighs
the additional ecbst .
11t. LJ~L cl, No
of t: Tho U.S' Administration appears to haw rropidered
s aomnita~ent U.S.
proceed with accelerated deregulation of
natural gas prices.
~tej to an extremely heavy legislative Calendar,
*ze Qed tb defer introduction of legislation to modify
and Improve the or in which the Natural Gas Policy Act
achieves derequllction of the wellhead price of natural gas.
We
remain firmly, committed to the principle of introducing
market
marketlforces to;our energy markets, including the pricing of
gas +
?0iii is Natural c$s from the Soviet Union provides Europe with
? asoaaably Pori d source of energy to use in the re4uation
of dependence on Middle East oil.
Co inn, I estimating the cost of gas, Europe must
n er' . e Mai, in terms of their own security, of depend-
ence on the Sevi t Union. More consideration must be given
to the dowel ogs t of '.cure sources of gas supply such as
gas from Norway. 1
jF
4
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I
NUCLEAR ENERGY
1. ISSUE
An W2
Stronq support ron Summit leaders of co* ercial nuclear
lnergy Rs an altorna ewe to reliance on insecure oil would
halt alleviate some Pf the problems associated with insteased
si oar onowly two. One major public concern is waste
management which could be specifically addressed in the
context of Increased international technical cooperation.
I1
J
y nanetisl
problesesr 3) burden regulations and licensing delays] and
4) failure to rsdegva sly resolve the waste management issue.
o ngl'aleatr ndustry has experlenaed cancellatt , of
i'9Mlit iO oacdsrs. The Ilia or Ud_ V& soww wU for
robleas
d
rata of growth of ,el ctricity demand, 21 unlit fir ilo"e
em ae ntr#.es, with the eveantinn of irsn .
Most technical super s would agree that the technology cagy for such
disposal in a safe nner is in hand, but the political and in-
stituti*nal decision necessary to implement it have not been
suds. Given this si nation, nuclear energy prospects in these
countries would and btadly be enhanced and confidence renewed
if Heads of State ma a strong statement in support of Woole-
..~. s.........i.. -...a _-----
i i.aossgri y for iii i7-477,11. o t e same reason
s'
0 part
44 "
culor* all Western ntries have some degree of a publ
ic per-
goptian problem asso sated with high-level waste des 1
nded some action to resolve the
eibtj
p
a
oonccern about was$.e. In the latter regard the Heads of State
could ask the OECD Nuclear Energy Agency (NEA) to assess the
feasibility of a ioit international waste management project.
A a _ e.
{wa{,auya`a awzeaive u.~anas on insecure oil and gas sources,
s?s fiance may press for a stronger pro-nuclear
statemtaf ~
Po nts it is i tent that all energy sources, ingiwd- i*
ins nuc ear eneraw. tPo"t-114amA ..w~~.. _ r
Points In View of widespread public concern over the nu-
clear was a issue this OECD/NBA should be asked to assess the
feasibility of an international waste management project.
stale that would hav -e r--ujn;`" "w ?
public impact have been unsucces;sful.
Poi s We su rt a Summit mandate to the High-Level
$onitor ng Group to *vote special attention to nuclear
energy issues over tfis next two or three years.
i
Response Saw' Eurnre-n countries ray suggest try t thi
s
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