Statement About the Report of the Cabinet Task Force on Oil Import Control

IN MARCH of last year I created a Cabinet Task Force headed by the Secretary of Labor and including the Secretaries of State, Treasury, Defense, Interior, and Commerce, and the Director of the Office of Emergency Preparedness, to study the Federal Government's oil import policy. The Task Force Report--the first Cabinet-level study of the oil import quota system since its inception in 1959--was submitted to me by Chairman Shultz on February 9th.

Reasonable men can and will differ about the information, premises, and conclusions contained in the report. None, however, can fail to be impressed by the depth and breadth of this study. The wide response from the oil industry and other interested parties, running to 10,000 pages of testimony, is evidence of the broad interest in this endeavor. I compliment all members of the Task Force and the staff for their devoted and discerning effort. Their report substantially increases our understanding of this complex problem.

It is not surprising that the members of the Task Force did not reach unanimous agreement on a set of recommendations. The conclusions reached by the Secretary of Commerce and the Secretary of Interior differ sharply from those reached by the remaining five members of the Task Force. Among the majority there is also a divergence of views with the Secretaries of State and Defense expressing particular concern over the implications of the report's conclusions for the Nation's security and our international relations.

There are, however, areas of agreement concerning actions that can be taken immediately. All Task Force members agree on the need for a new management system to set policy for the oil import program. After considering the views set forth in the report, I am directing the Director of the Office of Emergency Preparedness to chair an interdepartmental panel which will initially include the Secretaries of State, Treasury, Defense, Interior, and Commerce, the Attorney General, and the Chairman of the Economic Advisers. While most day-to-day administrative functions will continue to be performed by the Oil Import Administration of the Department of Interior, the policy direction, coordination, and surveillance of the program will be provided by the Director of the Office of Emergency Preparedness, acting with the advice of this permanent Oil Policy Committee.

All members also agree that a unique degree of security can be afforded by moving toward an integrated North American energy market. I have directed the Department of State to continue to examine with Canada measures looking toward a freer exchange of petroleum, natural gas, and other energy resources between the two countries.

The State Department has already discussed informally with Mexico the possibility of entering into arrangements with that country on energy exchange, and I am instructing the State Department to explore more fully the possibility of reaching an agreement with Mexico to this end.

While generally agreeing with the recommendations of the majority of the Task Force, the Secretary of State indicates a concern that changes in the oil import program might provoke adverse international reactions which could have a bearing on national security. He therefore conditions his agreement on consultations with other governments before any final decisions are reached.

The Secretary of Defense also recommends that the security implications of the program proposed by the majority be brought to the attention of our allies and affected nations at the earliest possible moment.

Accordingly, I direct the Secretary of State to continue our consultations on petroleum matters with Venezuela and our other Latin American suppliers, who have proven to be secure and dependable sources of oil during the crises we have experienced since the Second World War.

The State Department will also review with producing nations of the Eastern Hemisphere and with our NATO allies and Japan the findings and recommendations of the report. I further direct the Secretary of Defense to join in these discussions when they include our NATO allies and Japan.

The Congress properly has a vital interest in this program which affects every area of our country and many facets of our economy. Committees of both the House of Representatives and the Senate have indicated interest in holding hearings on the oil import program and any recommended changes in it. I expect that much additional valuable information will result from these congressional hearings, and I direct the Oil Policy Committee to carefully review all such information.

I expect the Oil Policy Committee to consider both interim and long-term adjustments that will increase the effectiveness and enhance the equity of the oil import program. While major long-term adjustments must necessarily await the outcome of discussions with Canada, Mexico, Venezuela, and other allies and affected nations, as well as the information developed in the proposed congressional hearings, I will direct the new Committee to begin its work immediately. An Executive order for this purpose will be issued shortly.