SIG-IEP REVIEW OF PUBLIC INFORMATION STRATEGY FOR EAST-WEST ECONOMIC WORK PROGRAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-01156R000200220006-6
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 21
• Document Creation Date: December 22, 2016
• Document Release Date: September 7, 2010
• Sequence Number: 6
• Publication Date: July 19, 1983
• Content Type: MEMO

83-12110
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} S/S~H332153
MEMORANDUM FOR MR. DAVID E. PICKFORD
DEPARTMENT OF THE TREASURY
Attached is a Public Information Strategy high-
lighting the results of the East-West Economic Work
Program... Under Secretary Wallis, in his capacity as
Coordinator of the East-West Economic Work Program,
has asked that this document be reviewed by the SIG-IEP
and then-transmitted to the Special Planning Group (SPG)
for consideration as part of ?heir public diplomacy
effort. -
Charles Hill
Executive Secretary
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.. ~ 1,t~11' i t~[.
Public Information Strategy for Highlighting
Results of East-West Economic Work Program
Introduction
With the completion of the first phase of the East-West
economics work program initiated last Fall, it is useful to
pull together and document the results accomplished by this
process. ..This paper is designed to serve as a resource
document, with agreed-upon substantive themes, for public
presentation of the results and contributions of the study and
work programs, including speeches, articles; interviews, etc.
The attached tabs present the unclassified source documents
from which the themes below were taken. __
Objectives _-. _
_.
- Provide background on the overall reorientation (late
1970s - present) of Hestern policies toward East-West
economic relations
- Describe the circumstances surrounding the imposition
of expanded sanctions relating to the Soviet natural gas
pipeline as well as the lifting of those sanctions.
-.Highlight outcome and contribution of study and work
program thus far and show wisdom of action to lift pipeline
sanctions
- Emphasize the collective nature of the effort toy'
analyze the security implicat~.ona of Ea>c-West economic
'relations -
1. Overall reorientation of Westezc. attitudes toward East-
West economic relations
In the early 197Os, economics was a key part of the overall
thaw in East-West relations. Lenient Western credit terms and
a large increase in the level of trade resulted in_benefits for
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both aides--but with particular value for the East. Toward the
end of the 1970a, and particularly after 1979, the massive
Soviet military buildup as well ae their adventurism and
military aggression demonstrated that detente -- with its
incontestible economic benefits for the Soviets -- was no
barrier at all when they saw opportunities to advance their
strategic position.
As the Soviata demonstrated that their fundamental values
-- -
=and"policies had-not changed.-Western governments.--.with the - --
-U.S. acting most quickly -- began to discuss and reevaluate
their economic, political and security zelationahips with the
'East. -(A chronology of recent events in the area of_East-Pleat
economics is contained at Tab 1)- Following the-Soviet invasion
of Afghanistan; the-Carter Administration held discussions in
eazly_1980 at the Ministerial-level with our NATO allies on the
=most appropriate economic responses to this blatant-act of
military aggression. Af the Ottawa Economic Summit meeting the
following-year,-President Reagan proposed a fundamental-ze-
evaluation of East-West economic relations to the assembled
.heads of state and government. The discussions at Ottawa _
culminated in a communique statement on East-Heat economic
relations linking this area to Westera political and security
objectives -- the first such reference to result from an
economic summit since the first meeting in 1975 (Ottawa
statement contained at Tab 2).
'Following the Ottawa meeting, Under Secretary Rashish _ _-
undertook a mission to Europe. in the Fall of 1981 to reem-
phasize President Reagan's concerns over-the wisdom of as-
stating the Soviets with construction of-the Siberiar~ natural-
gas"gigelf ne and to cast further sight on al-ternative sources
of energy: = It was President Reagan's strong preference to
avoid unilateral U.S. actions in this area if at all possible.
Then Soviet-inspired imposition of mzztial law in Poland in
..December, 1981, gave further impetus to the ongoing seorien--:
tation' o? Weatezn policies. -The U.S. and its allies imposed
'economic sanctions on Poland, while the U.S., acting an its
~
oriri, imposed restrictions on shipments of oil and gas ex-
traction and transmission equipment by American firms.
Under Secretary Buckley's mission to Europe in April, 1982,
underscored U.S. concern over Western supplies of oil and gas
equipment to the Soviets. In addition, the Buckley mission
-began a series of discussions on the interest-rates-and credit
- terms applicable to trade with the Soviets.._ Subsequently, _a_
decision was taken in the contezt of the Export Credit Arrange-
ment to reclassify the Soviets and other countries with com-
parable levels of GDP into the "relatively rich" category that
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requires stiffer terms. (Details are pzavided below in Section
7.) At Versailles in June, 1982, allied leaders again discus-
sed East-West economic relations and included a statement on
this subject in their communique (included as Tab 2). This
issue proved to be a contentious one, however, and following
the meeting it became clear that there were significant
differences in interpretation among allied leaders.
2. Im osition of Extended Sanctions on Oil and Gas E ui ment
June
Following Versailles Presidentr Reagan, observing that there
had bean no movement on fundamental issues by the Poles or the
Soviets; extended-the sanctions on-oil and. gas_equip_ment to
subsidiaries of V:S:-firms and'to-licensees of U.$. techiiol-
ogy. .Although the President.would have preferre3 not to impose
unilateral sanctions, hie overriding priority was_ to demon-
strate U:S: resolve in the face of the continued brutality and
suppression of human rights in-Poland.
The extension of the oil and gas sanctions provoked severe
protests-from our allies. At an informal meeting of NATO
Foreign Ministers at La Sapiniere in Quebec, Canada, in the
Fall of 1982 an intensified series of discussions on East-West
economic relations was initiated. By November, a broad con-
sensus within this group had emerged on the nature of the
economic relationship with the East, io assist Western
governments in defining the specific implications of that
consensus, and as a further basis for cooperation in this area,
the U.S. and its par#ners agreed to undertake a work program
consisting of a series of studies of-this subject, coupled with
renewed"impetus to various negotiations already underway., The
tangible results of that program.are now becoming available. .__
To-under~coze his belief in the effectiveness of a collective
approach and show his confidence that a further convergence of
views would occur as a result of the studies and discussions
that were starting, the President in November lifted the: oil
and gas sarictioris. -- - - ~ -
3: `Outcomes' airrd~ Accomplishments of" the 1982=83 ~~eQr-k. p=ogram.
The details of-the intensified program of analyses. and
discussions of East-West economics was agreed by all concerned
governments in December, 1982, and was conducted in the.
following institutions:
- NATOz Overall security implications of East-West
economic relations-
CONFIDENTIAL
 - CoCom: Improved surveillance and control over
Western exports with strategic or military impli-
cations
- OECD: East-17est Financial relations and credit
terms; problems stemming from Eastern nations' cen-
tralized control of trade
OECD/IEA: Vulnerabilities from undue energy
dependence; encouragement of alternative energy
sources -
_ 3._ Wozk Program Results: Overall-Security Implications of
East-West Economic_Relations ~ -
In NATO, the Economic Committee undertook an extensive
"" study of the security implications-of Basi-West economic:
relations. The Committee's. work was used by the NATO-country
Foreign Ministers as the basis for their discussion of the
topic during their meeting, June 9-10. -
- - - - ` " - -
-. .The. U:S._and_iis-partners recognize that their trade and
financial relationships with the Soviet Union must be con-
sistent with our shared security interests. These interests
include the transfer of strategic technology, dependency
relationships, and other dealings that contribute. to the
military capabilities of the Soviet Union. While mutually
beneficial trade based on commercially Bound terms contributes
to constructive relations, we must remain vigilant to .avoid
...further use by the USSR of some trade relations to enhance its
military strength. We realize that, in our economic relations
_with the Soviets, we must avoid undue dependence or piefe;en-
tial treatment. (June 1983 NATO Communique; Comparison with
5. Work Program Results a- Coordinating controls over the
CoCom, the Coordinating Committee. fo~_Multilateral-Export ~_
. Contiols, coordinates the Western-effoi~o-pievent-the-trans- _'
fer of strategic technology to,the East. .While CoCom-has been
zeaeonably effective overall, we recoynize that the Warsaw Pact =
has obtained valuable equipment_and_te_chnology by circumventing
" controls in various ways.
To strengthen the multilateral CoCom system and make .it as
effective as possible, the U.S. and its partners have recently _:-.:;
taken a number of significant actionss ".
CONFIDENTIAL
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- In January, 1982, at President Reagan's initiative,
we held a CoCom High Level Meeting -- the first such
meeting in many years. Since then, the organization
has been carrying out the recommendations of that
meeting to strengthen the effectiveness of the
organization and the national control systems.
- In April, 1983,_a_.second High-Lead Meet#ng was
held, at which progress toward the conclusions reached
at the earlier meeting was assessed. Special emphasis
was .also placed on improvem_enta-in the_~oordination_
-----:between-stember governments in atrenythening national
licensinc,~-and enforcement methods. This was particu-
-. ;laxly important since CoCom itself has no-independent
_ --_ _control-system and must. :depend on the national en-
_ _ _forcement_efforts of-the fifteen member--states.- -
At both meetings, member governments acknowledged the need
to adapt CoCom controls to keep pace with technological
developments. Accordingly, CoCom has. been meetirsg on a con- -
tinuoua basis to upgrade and strengthen the embargo lists.
Member governments have also agreed to study whether their
security interests require controls on certain categories of
high technology that are not now controlled.
Details of both High Level Meetings and of ongoing CoCom
activities are confidential. HoHever,-the U.S. is extremely .
pleased with the outcome of the most recent meeting and the-
progress to date. .The decisions taken at the meeting~ag well
as subsequent actions confirm that thr allies are prepared to
work with.us toward assuring that high:techrz~logy trade with
the East does not undermine Western security.
6. Work Program Results: Enerav Aependence
- The-U.S. and-its partners have agreed that they should
avoid undue dependence on_any one sonree_for--energy,supplies:'~=
Such__dependence-on-one sonrce=conkd potentially enable it to
exercise monopoly power and exert political pressures. Conse-
quently, the U.S. and_its-partners have agreed to move ahead
expeditiously with the development of alternative Norwegian and
North American energy resources and strengthen the ability of
the West to manage any disruption of energy supply.
Sn undertaking the recent study of energy requirements and
security, the U.S._and its partners examined the present and
projecEed energy supply+ and demand situations, assessed the
CONFIDENTiAI
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energy vulnerability of individual nations by each type of
fuel, and identified those policies that could enhance energy
security. One of the key findings of this analysis was that,
although an interruption in the supply of oil remains the major
risk, rapidly growing imports of natural gas from non-OECD
sources pose a significant challenge -- one that is most
acutely felt in Europe.
The study-of_energy requirements shows that there will -
probably be-a_.gap:_between contracted supply and anticipated
demand for gas-in-the-1990x. If this gap is f-iiled-by-the---_-__
Soviet Union,.-already ~a large and low-cost supplier,-dependence -
on this source would reach potentially very serious-=Ievels.-_.In
.this event. Europe would not be able to cope with an extended
interruption of-natural gas without widespread and drsruptive--
cuts in supplies to consumers.-- _ ~ ~ - -- --
dependence on a single supplier, the U.S. and itc partners com-
mitted themselves to avoid undue dependence and to emphasize
the development of secure alternatives indigenous to the OECD
area ~:_In_pazticu_lar-, the U.S: and its partners committed=-----
themselves to: - - "
- Encourage their companies to begin negotiations as
soon as possible on deliveries from the Norwegian
Troll field or from North American gas resources. The
_goal is to make. supplies available at prices-comps-
titive with other fuels in"the mid-1990x. ---- _
- Take those actions necessary to strengthen their -_
ability to deal with a supply:intezzuption. -Such
actions vary depending on a nati?n'e situation, but
include increased gas storage facilities, contingency
programs to restrain demand, improved fuel-switching
capabilities,- a flexible grid structure, more flexible
-supply contracts,. and greater Burge capability..
.implementing these measures. The U.SJ arid'itr '- --
partners will also .assess periodically whether gas
supplies.-from-any one source are large enough to .cause
The agreements that have been reached enhance the energy
security_of the_U.S. and its partners. We now have for the
first time a cohsrent framework for examining energy security
isaues'_on a continuing basis: We are pleased with the-progress
that we have made and we believe that we have come a=long way
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since the 1981 Ottawa Summit when Bzesident Reagan first sug-
gested the need to examine energy security issues. (Extracts
from IEA conclusions at TaD 5)
7. Work Program Results: East-West Trade and Financial
Relations
In the OECD, the U.S. and its partners recently completed
the first phase of a thorough economic analysis of trade and
financial relations with the Soviet Unioa and its East European
.allies: The-analysis_concluded_that East-West trade-had not
developecT asr_rapidly as once expected.-_and that in.relative-
terms it=is- of marginal?importance to ths-West., Western gains-
f-rom-this- trade have- been. disappointing-.- Eastern nations,- - _-
after financing more than half-of-ii,rir increased=level,. of
imports-in--the- late 1970s by borrowing. have- in some -cases been
unable to meet their debt obligations despite a sharp cut in
_their imports.
The-main reason=for the above trends seems to lie in the
nature of the economic system in the-East, which makes it
difficult for-these-countries to make effective use of im---
ported _capital- equipment and technology, and. La produce -goods
which-are competitive on Western markets. The U.B. and its
partners concluded that in East-West economic relations.
governments should exercise financial prudence without granting
preferential treatment. In general, these relations should be
guided by the indications of the market.
_ -,_ _. - -
- -- - - ? _
in the area of credits for export financing, the U.S and
its partners agreed that it was not sensible to give-the
Soviets the same concessionary interest zate8 that aretgiven to
developing countries.- Since Ju h+,.--1982, the minimum interest
rate applicable-to direct government provided credit-to the:
Soviets and other rich countries-is i2.4t, nearly two per--
centage points above the current U.S. prime rate. The U.S: and
its partners are continuing work to extend and strengthen this
Finally;--the-U:3.--and-its"_partners are working ?to improve
our statistics~on=trade-.flews-and_foreigtr indebtedness,-so that
the data with which we work with-will be-more--current and-,will
be based on-common definitions and understandings. (Relevant..
sections of OECD Ministerial Declarations included at Tab 4)
8. Implementation of the Findings
The commitments made in-CoCom and in the OECD's export
czedif consensus arrangement azecrecognized by all;as-governing
specific actions of participating countries. However,?none
of the organizations within which these analyses were performed
is a supra-national body whose recommendations are legally
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binding on member states. Indeed, such a rigid arrangement
would be antithetical to the spirit of our alliances and
friendships with other democratic countries. Rather, in
performing these studies and carrying out the results of nego-
tiations, members have concurred in the validity, relevance,
and importance of the findings that were reached and will take
the conclusions of the analyses strongly into account when
formulating their national policies in these areas. In
addition, IEA members have specifically directed that regular
-Feviews-of-.country-,energy policies~give-special attention to
.gas dependence and-nlternative issues in light of the
principles adopted-in-the policy conclusions. - -- -
g_ Ongoing. Efforts'
Work with our._allies and partners in analyzing our economic
relations with the East is an ongoing process in which we are
seeking to heighten awareness of the security and economic
policy dimensions of East-West economic relations. Beyond the
development of a specific set of conclusions, we wanted to
start a process..that~-would provide informed analyses for the
-use of policy-makers----Happily.-thi"s expectation has-been bonne
out, and work will be continuing in-the ozganizatioris involved
in the initial series of analyses:
- CoCom will be analyzing whether members' security
__ _ interests require controls on additional high tech-
- nology items and reviewing means by which it can _
-- strengthen national licensing and enforcement - ?-
- NATO will be performing additional anayses of.-the
__ security .implications of East-West economic ielationa
-from which=-its members can draw-in formulating na-
tional policies. As stated in its recent commu- _-
enhance its military strength.
occur in dealing with the state trading-"countries of
the East,. and will also put into place an ongoing
review process for the careful examination of other
pzobems in East-West economic relations. OECD will
also continue its work on monitoring trade and in-
debtedness data.
' --OECD and IEA will also give specifiT attention to~ ?
energy dependence in their country-by-country re=
views, and they will also continue to promote in-
terest in Norwegian and North American energy sources.
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We believe that this effort has been helpful in enhancing
Western security, and that the results of the work program
justify the President's confidence in lifting the sanctions and
pursuing a collective approach. In this regard, at Williams-
burg, the Summit leaders noted with approval the progress made
in these discussions and urged that work go forward in the
appropriate locations.
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 Tab 1 - Chronology of Recent Events in the Area of
East-West Economics
_.
Tab 2 - Economic Summit Statements on East-West
- - Economics
Tab 3 - NATO Communique Statements on Esst-West -
Economics
Tab 4 - Relevant Sections of OECD Ministerial Declarations
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- - ----~. --- ?~cLCAL cventE a the Area
of East-West Economic Relations
January -- Ministerial level discussions with NATO allies
on appropriate economic responses to Soviet invasion
of Afghanistan
July -- Ottawa Summit Meeting; First mention of East-West
economic relations in a Summit Communique
October -- Rashish mission uudertakea to reemphasize
----_- - J'residant=.Reagan a concern over European assist*,nce fn
eonstruction of Siberian natural gas pipeline
-?- - December-=---Dec2azatiori of Martial Law in Poland
January -- U.S. and allies imn?ce ,:_:~_~
shipments of oil and gas extractionlandetransmission
equipment
April -- Buckley mission conducted to begin discusions
of interest rates and credit terms, as well as to
underscore U.S, concerns on pipeline
June -- Versailles Summit meeting; communique statement
on East-West economic relations acompanied by discord
over interpretation
June -- U.S. extends sanctions on energy equipment to
U.S. subsidaries and licensees
September -- Meeting at La Sapiniere, Quebec, to develop
consensus approach to East-West economic relations
November -- Key Western nations reach broad consensus -
on East-West economic relations; agreement to start or
accelerate analyses and discussions on aspects of Phis
subject; President lifts pipeline sanctions
December -- Agreement among all NATO and OECD countries on
elements of work program
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 April-June -- Major elements of East-West economic work
program completed: CoCom High-level meeting, IEA,
OECD, and NA40 ministerial endorsement of communique
statements; decisions made to continue work
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Economic Summit Statements on East-West
Economic ReIabions
Rambouillet, 1975
10. {7e look to an orderly and fruitfu; increase in our
economic relations with socialist countries as azz important
element in progre~a ir. detente, and in World economic growth.
Puerto Rico, 1976 - -
He discussed East/Nest economic zelatiorrs. We welcomed in
this context. the steady growth of East/West trade and expressed
the hope that ecorronic relations between East and West-would
procalpcommerciallbasisntiWe agreedothatfthzscprocess warzante
our careful examination as well as efforts nn our part to
ensure that these economic ties enhance overall-East/West
relationships.
3ti. We also reviewed the significance of East-West
economic relations for our political and security interests.
We recognized that there is a complex Bala:ice of political and
economic interests and risks in these relations. We concluded
that consultations arid, where appropriate, coordination are
necessary to ensure that, in the field of East-West relations,
our economic policies continue to be compatible with our
political and security objectives.
Versailles, 1y8~ -
We agree to pursue a prudent and diversified economic
approach to the U.S.S.R. and Eastern Europe, consistent with
our political and security interests. This includes actions in
three key areas. First, following international discussions in
January, our representatives will work together to improve the
international system for controlling exports of strategic goods
to these countries and national arrangements for the enforce-
ment of Becuzity controls. Second, we will exchange informa-
tion in the OECD on all aspects of our economic, commercial and
financial relations with the Soviet Union and Eastern Europe.
Third, taking into account existing economic and financial con-
 siderations, we have agreed to handle cautiously financial
relations with the U.S.S.R. and other Eastern European coun-
tries, in such a way as to ensure that they are conducted on a
sound economic basis, including also tt~e need for commercial
pzudence.in limiting export credits. The development of
economic and financial relations will be subject to periodic
ex-post review.
Williamsburg, 1983 - _
(9) East-West economic relations should be compatible with
our security interests. We take note with approval of the work
of the-multilateral organizations which have in recent months --
analyzed and drawn conclusions regarding the key aspects of
East-West economic relations. Ws encourage continuing work by
these organizations,-as appropriate.
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Tab 3
NATO Communique Statements on East West
Economic Relations
January, .1982
14. In the current situation in Poland, economic. relations
with Poland and the Soviet Union are bound to be affected.
Soviet actions towards Poland make it necessary for the Allies
to examine-the-course of future economic and commercial rela-
tions with the Soviet Union. Recognizing that each of the
Allies will--act in accordance with its own situation and laws,
they will examine measures which could .involve arrangements
regarding imports from~the Soviet Union, maritime agreements,
air services agreements, the size of Soviet commercial repre-
sentation and the conditions surrounding export credits(;).
16. In addition to agreeing to consult on steps to be
taken in the near future, the Allies will also reflect on
longer-term East-West economic relations, particularly energy,
agricultural commodities and other goods, and the export of
technology, in light of the changed situation and of the need
to protect their competitive position in the field of military
and technological capabilities (*).
May, 1982
12. Economic exchanges have an important role in the
development of a stable Easi-West relationship. The Allies
reaffirm their intention which they expressed in their
declaration of 11th January 1982 to review East-West economic
relations, bearing in mind the need for such relations to be _
mut::ally advantageous and to take full account of security
considerations, particularly in the technological, economic and
financial areas, including export credits. In particular, they
acknowledged the dangers involved in transfer of militarily
relevant technology to the Warsaw r-act countrie~.-
June, 1982 ("Bonn Declaration")
F. Our purpose is to ensure economic and social stability
for our countries, which will strengthen our joint capacity to
safeguard our security. Sensitive to the effects of each
country's policies on others, we attach the greatest importance
to the curbing of inflation and a return to sustained growth
` Thq Greek delegation has reserved its position on these
paragraphs __
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and to high levels of employment. While noting the important
part which our economic relations with the Warsaw Pact coun-
tries play in the development of a stable East-West relation-
ship, we will approach those relations in a prudent and
diversified manner consistent with our political and security
interests. Economic relations should be conducted on the basis
of a balanced advantage for both sides. We undertake to manage
financial relations with the Warsaw Pact countries on a sound
economic basis, including commercial prudence also in the
granting of export credits..- We agree to exchange_infosmation
in the approp=late fora.nn:-a11_aspects:o# our economic, com-
mercial and financial relations--with-Warcaw-Pact countries.
December _1982 _ _
15. :-The Allies recognize that mutually advantageous trade
with the East on commercially sound terms contributes to con-
structive"East-West relations:--At the same time'they_agtee
that bilatera~_economic-and trade relations with t}ie Soviet
Union and Eastern Europe must also be-consistent with their---_
broad security concerns which include the avoidance of con-
tributing to Soviet military _.strength. Studies are underway or
will soon be undertaken on several aspects of East-West eco-
nomic relations and Ministers will consider these issues again,
on the basis of these studies, at their next meeting (1).
15. The linisters note that since:theiz last meeting .
several aspects of East-West economic-relations have been --
studied including the security implications of these~re-
lations. Trade conducted on the-basis of commercially .sound
terms and mutual advantage, that avoida.prefezential treat-
ment of the Soviet Union, contributes to constructive East-West
relations. At the same time, bilateral economic relations with
the Soviet Union and the courtrias ~,f E~c>~e~.. Euro
e mu
t
-
p
s
re
_
maim consistent with broad Allied security concerns. These - "_
include
idi
_avo
ng _dependence on the Soviet Union, or contribu-
ting to Soviet military capablitie6. Thus, development of
Western energy resources should be encouraged
In order t
'
.
o
avoid further-use by the Soviet Union of soae'forms of trade to _
enhance its military strength, the Allies will-remain vigilant
in their continuing review of the security aspects of East-West
econmic relations. This work will assist Allied governments in
the conduct of their policies in this field. (1)
(1) Greece recalled.its position on various aspects _o? this? "---
paragraph. _
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Tab 4
May, 1982 .
44. Ministers recognized the value of different aspects of
the work of the Organization on East-West economic relations,
and agreed that their interrelations should be considered
further within the Organization.
22.__ Pollowing a decision taken by Ministers last year, the
Organization has carried out a thorough economic analysis of
the evolution of trade and financial relations with the USSR
and other Eastern European countries. Ministers noted that -
these relations have, with some exceptions, evolved in a._leaa--
d~rnamic waX-Shan those with -more market-oriented economies and
not met earlier. expectations. =- `= ' - -~- - - --
-- 23. This purely economic analysis demon6tiates that
East-West-bade and credit 'f lows should be guided by the
indications of the market:-- In~the light-of these-indications,
Governments should. exercise financial prudence without grant-
ing preferential treatment. Ministers recognized, moreover,
that practices connected with the state-trading System of
centrally planned economies can create problems which need to
be kept under close examination within the Organization. Mose
generally,they agreed that, in. the light of changing circum-
stances, the Organization should continue to review East-West
 IEA Stateaent on Gas Security
9. Ministers agreed that gas has an important role to play
in reducing dependence on imported oil. They also agreed, how-
ever, on the importance of avoiding the development of situ-
ations in which imports of gas could weaken zatt-er than
strengthen the energy supply security and thus the overall
economic stability of Member countries. They noted the poten-
tial risks associated with high levels of dependence on single
supplier countries. Ministers stressed the importance of ex-
peditious development of indigenous OECD energy resources. _
ted
-
-
They no
that
exi
sting contracts are currently insufficient
to cover expected gas demand-by-the nid=1490s.-and.-agreed that-
in f~Yling-this--gap -steps- should be taken to ensure_~hat_ no=one
producer is-in~a position to exercise,monopoly power over OECD
and IElk countries= To obtain the advantages of .increased .use
of gas an an acceptably secdie_basis, they agreed ghat:. ----
=- their countries would seek to avoid undue dependence on
any one-source of gas imports and to obtain future gas
supplies from secure sources, with emphasis on indigenous
OECD sources. Additional supplies-from-other sources would
_ --be obtained from as diverse sources as possible?_taking.___
into account supply structures, the share of gas-in energy
balances, and the geographical situation of individual
countries. In assessing the full costs of gas supply
sources, gas companies and, as appropriate, governments
_will-consider security factors; _-
- _ - their Governments would either encourage gas companies-
--~ and other undertakings concerned to taxe or take themselves
-- -the-necessary and appropriate cost-effective measures
suited to each country's situation to strengthen their
ability to deal with supply disruptions; these measures
could include increased gas storage facilities, contingency
demand restraint programs, improved fuel-switching capabil-
ities accompanied by adeguatc dta.^k? o`, c?il or other alter-
i
nat
ve fuels, a more flexible grid structure, greater
flexibility of contracts, more surge-capacity, measures to
accelerate infra-OECD trade on short notice through standby`
contracts for supplies. in a djsruption, and interruptible
contracts with consumers;
- action should be taken to develop at economic cost indi-
genous gas resources, particularly in North America and the
North Sea, which show promise of alleviating overall or
particular pressures on energy imports;
 Approved For Release 2011/01/31 :CIA-RDP85-011568000200220006-6
- concerned member governments noting the potential for
further development of North American gas resources and
noting that part of the Norwegian Troll field nay be de-
clared commercial by 1984, would encourage their companies
to begin negotiations on deliveries from these sources as
soon as possible, with a view to making supplies available
at prices competitive with other fuels in the mid-1990s;
-'- trade-barriers--and-other-barrierQ=which could-delay_ ~- .-
--development-b#--indigenous gas resources should be avoided
or reduced-
` - their`governments--+ould encouz?!ge tt*e companies concerned `-
to undertake feasibility studies, if appropriate in-cooper-_
.ation with member governments, to determine the economic,
engineering, technical and financial factors. relevant to.
possible imports-from a variety of non-OECD sources; `
- governments within one region where there is scope for
effective coopezatiort should invite gas companies operating
irr their jurisdictions to-address and negotiate on a com-
mercial basis cooperative arrangements to meet a disruption
of supplies to any one country or to the region as a whole;
- special attention should be given in the annual country
review process in various international organizations to
the future pattern of--gas supplies, to the progress on the
development and implementation of security measures, and to
whether gas imports into the OECD from any single source
constitute such-a proportion of total supplies as-to give
rise to concern about the timely development of indigenous
resources and ?~he vulnerability of supplies, either for an
individual Member country or-collectively;
- in considering the degree of vulnerability, relevant.
factors include the -share of impc;st3 in te>La1 gas - -_
consumption ahd_ in-total primary- energy require~ents,- the
supplies, secforal distribution, stocks-and fuel=switching -
poasibilities; -- - -
- an in-depth exchange of views about this question would
take place within the normal review process whenever con-
sidered necessary. To allow a full assessment of its -
energy situation, the country concerned shall inform the
other member states if it plane major changes in its energy
policy or gas supply pattern which are significant in the
context of development of indigenous OECD resources and
vulnerability of gas supplies; -?~
 Ministers expressed the view that special attention should
be given in relevant international organizations to the gas im-
port situation of individual countries and regions. IEA
Ministers instructed the Governing Board to keep this issue
under continuing reivew.