- 6 -

or from arbitrary shifts of funds by the
producers.

-- To prevent an increase in our vulnerability
over the next few years, we set conservation
goals and agreed on procedures to verify
their implementation.

-- To lessen our long-term vulnerability, we
agreed on an ambitious policy to develop
new energy sources through cooperation on
individual development projects safeguarded
by a minimum price. *scarcity,*
*develop the technology to*

-- To achieve independence by the end of the
century we established a far-reaching program
of cooperation in energy research and
development.

- 10 -

All elements of our strategy are linked. And some of its basic building blocks are in place. But much remains to be done. This first ministerial meeting of the IEA faces the following urgent tasks:

-- To impose determined conservation programs before our economies begin to expand again;

-- To put into effect strong new incentives for developing alternative sources;

-- To accelerate research on long-term development of unconventional energy supplies; and

-- To prepare thoroughly for a dialogue with the

- 13 -

induced conservation, the producers will enjoy a

stronger market. Price rises and the political

manipulation of energy supply, become more likely.

We have already been warned of new price

increases. These would be economically unjustified,

for much surplus production capacity is available,

inflation is slowing, and (prices are already at

historic highs. Yet unless we put immediate impetus

behind our conservation efforts, the producers will regain

the ability to enforce increases for the immediate

future.

In January President Ford set a goal for the United States of saving 2 million barrels a day by the end of 1977. Later today the President will announce additional measures to discourage the consumption of imported oil. Together with actions

than they are now even after the recession ends.

OPEC's ability to raise prices arbitrarily will have
been checked. And we will have reduced our payments when
many billions of dollars. But if we fail, the cost
will be not only higher prices but increasing economic
and political vulnerability.

Alternative Sources

Over the longer term, our dependence on imported
oil will become irreversible unless we rapidly develop
new conventional energy sources -- oil, gas, coal,
nuclear power.

If the development of alternative sources lags,
we will grow chronically hostage to the manipulation
of price and supply by the producers which can then
take increasingly drastic forms. We will be
constantly under the threat of new inflation and

- 17 -

if current prices hold, producers imports will increase dramatically. A vast transfer of goods and services will be taking place. By the end of the decade the real additional cost of oil to our economies could be 50 billion dollars a year -- and that cost would reoccur at ever higher levels in subsequent years.

If we are at a minimum, to lessen our vulnerability, energy production from alternative sources must substantially reduce the current IEA imports of 27 million barrels per day. Three actions are needed to accomplish this:

We must remove or modify many of our governmental constraints on energy production. Energy development is encumbered everywhere by excessively restrictive legal, environmental, and regulatory limitations. Many of these reflect valid social goals; however, it could usefully

- 18 -

be reviewed or modified. We should use this organization

as a clearinghouse for ideas to remove unnecessary obstacles to alternative energy sources.

We must make sure that sufficient financing is available to assure energy development. Enormous amounts of capital will be required -- perhaps a thousand billion dollars in the next 10 years. Each country should decide the arrangements best suited to meet this requirement but we should proceed now to establish an IEA framework for project-by-project cooperation, including We can use this framework to provide joint guarantees or other financial assistance to large cooperative projects.

We must insure that our energy investments are protected against disruptive competition. For much of the Persian Gulf, production costs are only about 25 cents a barrel. Most of the major continental energy sources we are counting on -- new Alaskan North Slope oil, the U. S. Outer Continental Shelf, North Sea oil, nuclear power everywhere -- will be many times

- 19 -

[Y]

more costly to produce. Without some assured protection

against disruptive or deliberately predatory competition from
alternative sources by temporary predatory price-cutting, private
investment in alternative sources may be inhibited or abandoned.
cheap imported oil, our investors may delay or abandon

The cartel's pricing policies could thus keep using permanent investments - which are fundamental to our goal of self-state of dependence, and we would hardly have assurance that sufficiency. the price would not be raised again once our dependence was confirmed. we in have on the

This is why the IEA has agreed in principle to a minimum of a minimum price safeguard price mechanism. The minimum safeguard price is not a device for maintaining artificially high world oil prices. On the contrary, it is a device for making sure that they come down. Only if consumers develop massive new energy sources, will the oil producers lose their ability to set prices at high, artificial levels. But these sources will not be developed if producers retain the ability to thwart our energy programs by temporary, predatory price cuts. The problem can be stated as follows: Without a massive program

- 20 -

of development of alternative sources, prices will not come down. But unless a minimum safeguard price exists these alternative sources will not come into being, and the incentive for OPEC price reductions will disappear.

can help ensure that these alternative sources will be developed.

Thus we are not proposing a guaranteed price for OPEC.

If our policy succeeds, and large quantities of new energy become available, OPEC's selling price should fall below the protected level. The minimum safeguard price can be implemented in a variety of ways -- though tariffs, quotas or variable levies.

The difference between the world price and the domestic price would thus accrue to our governments in the form of import taxes and levies. In short, the minimum price mechanism can be designed not only to help lower the world price for oil, but to yield the benefits from such reduction to the industrial countries.

- 21 -

The agreed deadline for elaboration of the IEA overall
alternative sources program is July 1. We must meet it.

President Ford has asked me to underline the urgency with
which the United States approaches this task. Without clear
incentives to major new energy investments, IEA countries
can never hope to end their current excessive vulnerability.

## Nuclear Power

In the quest for greater energy self-reliance, nuclear power will be critical. By 1985 the European Community hopes that nuclear power will generate about one-quarter of its electricity; Japan a third; the U. S. perhaps a third. But there are major challenges associated with the orderly, safe and prudent introduction of this important new technology. Let me turn to them now.

In all our countries, the growth of nuclear power produces

- 22 -

both hope and anxiety. On the one hand, we recognize it as
the only potential large-scale energy substitute for the
inevitable exhaustion of supplies of oil and gas now foreseen
over by the end of this century,
for the last decades of the century. On the other hand, there
are increasing doubts that sufficient nuclear fuel will become
available. Enormous amounts of capital will be needed to build
reactors, placing severe strains on existing capital markets.
And we all know of the questions -- some of them legitimate,
some not -- raised by the public and legislators regarding the
impact of the
widespread construction of nuclear facilities.

Thus, we must move urgently and decisively within the
IEA on the following program:

-- We must ensure that needed uranium enrichment
facilities are constructed on schedule. In this regard,
the United States recognizes its responsibility to

- 23 -

providing
continue provision of nuclear fuel under long term
contract.
orders. Our policy is to bring into being -- preferably
by private industry, but by the Federal Government
if necessary, additional enrichment capacity which
will ensure adequate future supply. Negotiations are
now underway with a potential private source. These
discussions will proceed quickly, and by June 30 the
President will decide which course of action, private
or public, is in the best interests of our own country
and those abroad who rely on us, for supply. We will
then be in a position to accept long-term orders.

-- We must intensify our joint efforts to develop agreed
estimates of the future demand and supply of fuel,
including assessments of the availability of Iranian
resources.

- 24 -

-- We should jointly project the capital requirements of the nuclear sector for the next ten years and consider how our governments, individually and cooperatively, can assist in meeting these requirements.

-- We should evaluate the economic necessity, plant requirements, and safety implications of plutonium reprocessing, recycling and storage.

-- We must undertake intensive efforts to improve the safety and security of nuclear materials, equipment, and operation.

-- And finally, we should develop balanced information programs to bring perceptions of the risks and benefits of nuclear energy in line with reality.

Several of the technical issues involved are already being dealt with by the OECD's nuclear energy agency. That work

- 25 -

should of course continue.

Beyond the next decade, a central issue will be how to
create the new, non-conventional energy sources needed to
meet a growing proportion of our energy demand. It is in
developing these new sources that IEA's cooperation program
may make its most important and lasting contribution.

Research and Development

For The long-range energy future of the world depends not on
the Persian Gulf, or the North Sea, or Alaska, but on what we
do in our laboratories to make better use of conventional
newer sources and to develop more exotic sources. We, the
advanced nations have vast scientific and technical
capabilities.
resources.
Over the past year-and-a-half IEA member

countries have expanded national programs in energy research
and development. In the United States our government research

- 26 -

[Y]

and development administration

agency will spend more than two billion dollars in the fiscal

INVEST

year beginning next month. American industry will contribute

far more than that.

United States

The U.S. program emphasizes improving the efficiency
of energy generation, transportation, and use; improving
the recovery of oil and new uses of coal; and converting coal

to synthetic oil and gas. These projects are designed to

advances in

to produce major advances in energy production and use in this century.

the year

For the period beyond the year 2000, only three known

have virtually

potential sources of energy are, for all practical purposes,

potential for expansion

infinite: the breeder reactor, nuclear fusion, and solar

energy. These all have a high priority in the U. S. program.

these

The IEA program in this field reflects the conviction that
technical advance will be accelerated if we pool our efforts

through cooperative

and knowledge, and accelerate the flow of information and

ideas. We have decided to link our national research and

-27-

development programs through coordinated planning, intensified
information exchange, and by joint projects pooling our
capital, industrial skills, and technology.

The early results are promising. We have moved forward
rapidly on nine joint projects ranging from energy conservation
to nuclear power. Important programs in coal processing, while
involving substantial joint investments of money and manpower,
are about to begin.

But a sustained program of cooperation requires much
more. We have identified the existing and potential technologies
that will have a critical impact on the future. We must now
ascertain when these technologies can be implemented, what
their production potential is, and which are best suited to
large-scale joint projects.

Moreover, as our cooperation expands, projects will

- 28 -

increasingly operate at the frontier of technology. We will
all have to recognize that we cannot retain the most promising
projects solely for their own national purposes. We must
establish guidelines which take account of understandable con-
cern over the sharing of information, and the possible loss of
commercial advantage, while giving impetus to our cooperation.

Therefore, I propose that our leading research and
development officials meet in early autumn at the special
session of the Governing Board. Their goal would be to
complete the design of a joint energy research and development
program that will receive high priority in all of our national
planning policies.

## Relations with Producers

The final element of our energy strategy is the develop-
ment of a cooperative relationship with producers. There
is no escaping the fact that the producers can determine how

- 29 -

to come, and for some time the supply and price of our oil. But the consumers are by no means powerless. The decisions we make now on conservation and alternative sources will determine the size of the producer's future market, and in the future whether prices will be set by political decision or economic competition.

Yet there exists no institution or agreed framework, in which the exercise of the awesome powers both groups now have, can be subject to discussion and mutual accommodation.

Since its start, IEA has been committed to seek a new relationship with the producers which would take into account the needs and aspirations of both producers and consumers.

The solidarity we have achieved in IEA is a necessary condition for building that broader structure.

- 3-0 -

Before the preparatory conference between producers and consumers the IEA agreed on several possible areas for joint action by producers and consumers. These remain fruitful topics for dialogue.

First, we should discuss the effective management of financial recycling. Both producers and consumers have an interest in effective reinvestment of surplus funds.

Second, we can jointly examine the internal investment policies of the industrialized countries. The oil producers need productive outlets for their revenues; the industrial countries, while they welcome new investment, will want to retain control of sectors of their economies they consider essential.

Third, we can explore cooperative efforts to accelerate the development programs in producer countries. New industries can be established, combining the technology of the industrialized

- 31 -

world with the energy and capital of the producers. Fertilizer is a
promising example.

Fourth, the oil producing countries and the industrial

consuming countries share responsibility for easing the plight

of the poorest nations. International development efforts

high costs of energy have shattered the hopes of developing nations for industrialization;
have been undermined by the current economic crisis; high petrochemical costs have made needed fertilizer prohibitively expensive and compounded the difficulties of producing enough food to feed the hungry.
Hence Special efforts must be made on behalf of those most

seriously affected. The newly-rich producing nations have
an obligation to join us in this effort.

STET

that objective criteria be established for each.

In energy, for example, countries exporting or importing more than a certain volume of energy in the world market should be members. On the commission dealing with the most seriously affected countries, those with the lowest per capita income would be involved along with traditional and new aid donors.

The commission on commodities could include the principal exporters and importers of food and non-oil raw materials.

We suggest that we, in the IEA discuss these concepts and that we coordinate our contacts with the countries which attended the April meeting, as well as with France, to determine when and how the Preparatory Meeting could be reconvened.

- 36 -

## Conclusion

As already demonstrated, what can be accomplished if nations have the vision to perceive their interest and the will to act upon it. We have all made the decision to join together, and we have set ourselves important goals including broadening the pattern of cooperation already established here. We are called upon to make concrete progress; this will require renewed determination, and the readiness to look beyond the narrow focus of our own concern to the broader needs of all mankind.

We have accomplished much in a very short time.

The progress we have made in these fifteen months should give us great hope for the future. Goethe said that "the web of this world is woven of necessity and change." We stand at a point where those strands intertwine. We must not regard necessity as

-5-

-- For financial solidarity, the nations comprising the OECD agreed on a fund of $25 billion to protect against financial disruption from oil deficits or from arbitrary shifts of funds by the producers.

-- To lessen our long-term vulnerability, we agreed on an ambitious policy to develop new energy sources through cooperation on individual development projects and safeguarded by a minimum price mechanism.

-- To develop the technology to achieve independence by the end of the century, we established a far-

-13-

under the producers substantial control; it will become more
so unless we impose upon ourselves a rigorous energy program
and put immediate impetus behind our conservation efforts.

In January President Ford set a goal for the United
States of saving 2 million barrels a day by the end of 1977.
Later today the President will announce additional measures to
discourage the consumption of imported oil. Together with
actions already taken, this will bring the total estimated U.S.
savings to 1.2 million barrels a day by the end of 1976. The
President hopes that the Congress will join him in common action to
bring about the remaining savings needed to meet our goal of 2
million barrels. But should this not prove possible, he is prepared
to use the powers available to him to assure that the United States
does its part in the common conservation effort.

-16-

the current IEA imports of 25 million barrels per day. Three
actions are needed to accomplish this:

We must remove or modify many of our governmental
constraints on energy production. Energy development is
encumbered everywhere by legal, environmental and regulatory
limitations. Many of these reflect valid social goals; others could
usefully be reviewed or modified or alternative safeguards could be
devised. We should use this organization as a clearinghouse for
ideas to remove unnecessary obstacles to alternative energy sources.

-17-

to meet this requirement but we should proceed now to
establish an IEA framework for project-by-project cooper-
ation, including joint guarantees or other financial assistance
to large cooperative projects.

We must ensure that our energy investments are protected against disruptive competition. For much of the Persian Gulf, production costs are only about 25 cents a barrel. Most of the major continental energy sources — new Alaskan North Slope oil, the U.S. Outer Continental Shelf, North Sea oil, nuclear power everywhere — will be many times more costly to produce. If the cartel decides to undercut alternative sources by temporary predatory price-cutting, investment in alternative sources may be inhibited or abandoned. The cartel's pricing policies could thus keep us in a permanent state of

-18-

dependence, and we would hardly have assurance that the
price would not be raised again once our dependence was
confirmed.

This is why we in the IEA have agreed in principle on
the safeguard price mechanism. Only if consumers develop
massive new energy sources, will the oil producers lose their
ability to set prices at high, artificial levels. But these sources
will not be developed if producers retain the ability to thwart our
energy programs by temporary, predatory price cuts. A
minimum safeguard price can help ensure that these alternative
sources will be developed.

We are obviously not proposing a guaranteed price for
OPEC. On the contrary, if our policy succeeds, and as large
quantities of new energy become available, OPEC's selling
price could fall below the protected level. The minimum

-30-

the effective reinvestment of surplus funds.

Second, we should jointly examine the internal incoming investment policies of the industrialized countries. The oil producers need attractive outlets for their revenues; the industrial countries, while they welcome new investment, will want to retain control of those sectors of their economies which they consider critical.

Third, we can examine cooperative efforts to accelerate the development programs in producer countries. New industries can be established, combining the technology of the industrialized world with the energy and capital of the producers. Fertilizer is a promising example.

-31-

consuming countries share responsibility for easing the
plight of the poorest nations. International development efforts
have been undermined by the current economic crisis; high
prices of energy have shattered the hopes of developing nations
for industrialization; high petrochemical costs have made needed
fertilizer prohibitively expensive and compounded the difficulties
of producing enough food to feed the hungry. Special efforts
must be made on behalf of those most seriously affected. The
newly rich producing nations have an obligation to join us in this
effort.

And finally, there is an obvious need for a forum in
which producers and consumers can discuss the difficult
issues of oil prices and security of supply. This dialogue is not
of course a substitute for our own efforts on conservation and the

-32-

development of new supplies. But while we cannot protect these vital interests only by discussions with producers, both can benefit from a serious dialogue regarding their respective interests and objectives.

It has become clear -- as a result of the April Preparatory Meeting -- that the dialogue between the producers and consumers will not progress unless it is broadened to include the general issue of the relationship between developing and developed countries.

We in the IEA have no reason to recoil from a discussion of all the issues of concern to developing countries. I recently set forth my country's ideas on raw materials and commodities problems; I proposed that these now be addressed in the

-33-

Multilateral Trade Negotiations, in individual commodity groups, and
in the World Bank. I shall put forward further proposals at the
OECD tomorrow. I hope that these ideas as well as proposals put
forward by others can help overcome the impasse in the producer-
consumer dialogue.

The United States is prepared to have the Preparatory Meeting
reconvene in Paris in the same format as before. In order to facilitate its
work forward
progress Commissions should be created to deal with critical areas
such as energy, problems of the most seriously affected nations, and
raw materials. Each commission would cover the range of issues under
its heading: finance, investment, trade, production. The Commissions
could meet consecutively or simultaneously but without an
arbitrary deadline for concluding their work. Nor would they
supplant the already substantial work which is being done

EIGHTH DRAFT -- IEA SPEECH

Today begins a week of deliberation on the most
fundamental problems of the industrial democracies:
energy, economic and social well-being, building a new
relationship with the Third World, and ensuring the
security of our nations.

Of these, no single issue is more basic to the
purposes of the industrialized world than the challenge
of energy. For the fundamental achievements of our
economies, and the modern civilization it sustains,
have been built upon the ready availability of energy at
tolerable prices.

severe challenge to industrial civilization since the Second
World War. For a generation America, Europe and Japan
increasingly replaced their own energy production in favor
of inexpensive oil imports. In 1950 the industrialized
world imported 5 percent of its requirements. In 1960, 17
percent, it had reached 5 percent. In 1972, 39 percent.

At the Washington Energy Conference we recognized how
vulnerable we had become. The supply and price of the
central element in our economies were no longer under our
control. Our well-being and progress had become hostage to
decisions in which we could not take part. We saw that only
collective action could free our economies from excessive
dependence on imported oil and our political and social
systems from a sense of impotence. Separately we could
never create conditions for lower oil prices. Nor could
any one of us, except at exorbitant cost, defend against a
new embargo. Our security, our growth, our role in the
world was at risk.

-7-

Nothing so vividly demonstrates the cooperative
vitality of which the industrial democracies are capable
than the speed and imagination with which this agency
acted on these conclusions. Within a year, one by one,
the elements of a comprehensive program to overcome the
energy crisis have been brought into place:

-- To meet any new energy emergencies over the
short-term we committed ourselves to build
and
stocks of oil, to cut our consumption by the
same percentage in the event of an embargo and
to share available oil.

-- For financial solidarity, we agreed on a fund of
$25 billion to protect against financial
destabilization from oil deficits or from
arbitrary shifts

-19-

organization as a clearinghouse for ideas to remove
unnecessary obstacles, wherever this can rationally be done.

that sufficient is available

We must make sure availability of financing does

to assure not constrain energy development. Enormous amounts of
capital will be required -- perhaps a thousand billion
dollars in the next 10 years. Each country will decide
the arrangements best suited to meet this requirement. But

In the meantime, we should proceed to establish an
IEA framework for project-by-project cooperation. As
needed and desired, we can use this framework to provide
joint guarantees or other financial assistance to large
cooperative projects.

-20-

We must insure that if the price begins to fall, our energy investments are protected against disruptive competition from OPEC imports.

For much of the Persian Gulf, production costs are only about 25 cents a barrel. Most of the major continental energy sources we are counting on -- new Alaskan North Slope oil, the U.S. Outer Continental Shelf, new North Sea oil, nuclear power everywhere -- will be many times more costly to produce. Without some assuaged protection against disruptive or deliberately predatory competition from cheap imported oil, our investors may delay or abandon projects in these areas -- investments which are fundamental to our objective of invulnerability. This is only the case if we are goal of self-sufficiency in principle. A minimum safeguard price mechanism, on which we have agreed in principle.

The agreed deadline for elaboration of the overall alternative sources program is July 1. We must meet that deadline. President Ford has asked me to underline the urgency with which the United States approaches this task. Without clear incentives to major new energy investments, IEA countries can never hope to end their excessive vulnerability.

-24-

will be needed to build reactors, placing severe
strains on existing capital markets. And we are all know
the some of future lighterman, some ad-
conscious of questions raised by the public and
legislators regarding the widespread construction
of nuclear facilities, of all types.

We must, as a matter of urgency, move decisively
within the IEA on the following program:

-- We must ensure that needed uranium enrich-
ment facilities are constructed on schedule.

In this regard, the United States recognizes
its responsibility to continue provision of
nuclear fuel under long term orders. Our
policy is to bring into being preferably
by private industry but by the Federal
Government if necessary, additional enrich-
ment capacity which will ensure adequate

-26-

- We should also evaluate the economic necessity, plant requirements, and safety implications of plutonium reprocessing, recycling and storage.

- And finally, we should develop balanced information programs to bring perceptions of the risks and benefits of nuclear energy in line with reality. These must be reinforced by continued, intensive efforts on our part to improve the safety and security of nuclear materials, equipment, and operation.

-27-

In proposing this expanded IEA program of work in the nuclear field, I am fully aware that several of the technical issues involved are already being dealt with by the OECD's nuclear energy agency. That work should continue, the IEA should not duplicate it.

Beyond the next decade, the issue will no longer be how to achieve energy invulnerability. It will be how to create the new, non-conventional energy sources needed to meet a growing proportion of our energy demand. It is in developing these new sources that IEA's cooperation program may make its most important and lasting contribution.

-30-

concrete benefit of collaboration. Therefore, in the
TEA, we have decided to link our national research and
development programs through coordinated planning,
intensified information exchange, and—most significantly—
by joint projects, which pool our capital, industrial
skills, and technology. The early results are
promising. We have moved forward rapidly on nine
joint projects ranging from energy conservation to
nuclear power. Important programs in coal processing,
involving substantial joint investments of money and
manpower, are about to begin.

But we have a large task still in front of us if
we are to carry out a sustained program of cooperation
which requires much more,
the existing and potential technologies that will have

-31-

a critical impact on future, energy economy. Now we
must estimate when these technologies can be realized,
what their production potential is, and which are best
suited to large-scale joint projects.

Moreover, as our cooperation expands, projects
will increasingly operate at the frontier of technology.
We will all National agencies will have to recognize that they me
cannot retain the most promising projects for national
implementation. We must act now to establish guidelines
which take account of understandable concern over
the possible loss of commercial advantage, and the sharing
of proprietary information, while giving impetus to
our cooperation.

-32-

Therefore, I believe that we ~~should agree today~~ propose
that our leading research and development officials
~~should meet in early autumn at a special session of~~
the Governing Board. Their goal would be to complete
the design of a joint energy research and development
program that will receive high priority in all our
~~ies~~ of
national policy.

## Relations with Producers

The final element of our energy strategy is the
development of a cooperative relationship with pro-
ducers. There is no energy policy in the short term.
Producers and consumers hold great power
over each other. The producers can determine now and
for some time in the future the supply and price of
the consumer's oil. But the decisions we make now on conserva-
tion and alternative sources will determine how big
the size of

-33-

the producer's market will be in the future, and whether
its prices will be set by political decision or economic
competition.

Yet there exists no institution, ~~no~~ agreed frame-
work, in which the exercise of these awesome powers ~~boll groups~~
most can be subject to discussions and made ~~mutually~~ accommodation
tolerable.

Since its start, IEA has been committed to seek a
new relationship with the producers which would take
into account the needs and aspirations of both producers
and consumers. The solidarity we have achieved as
members of the IEA is a necessary condition for
building that broader structure.

-35-

new investment, they will want to retain control
of essential sectors of their economies. They consider essential

Third, we can explore possible steps to cooperate in accelerating the development programs of producer countries. New industries can be established, combining the technology of the industrialized world with the energy and capital of the producers.

Fourth, the oil producing countries and the industrial consuming countries share responsibility for easing the plight of the poorest nations. International development efforts have been undermined by the economic crisis; special efforts must be made on behalf of those most seriously affected. The newly-rich producing nations must join us in this effort.

-39-

should Membership in these commissions [ought to] be
limited, of course, if they are to be effective.

I would suggest that objective criteria be established
for each. In energy, for example, countries exporting
or importing more than a certain volume of energy in
the world market should be members. [In development issues, On the most seriously dealing with]

affected, countries representing those with the lowest per capita
income could be involved along with traditional and
new aid donors. The commission on commodities could
include the principal exporters and importers of food
and non-oil raw materials.

If you agree with these concepts, I would suggest
different concepts that we could use.
that we coordinate in the IEA our contacts with the
countries which attended the April meeting, as well as
with France, to determine when and how the Preparatory
Meeting could be reconvened.

-41-

The progress we have made in these fifteen months would give us new hope for the future. But the example of order, justice and progress which our nations have given the world since the Industrial Revolution is still alive. To sustain and extend it will require us to draw upon the ancient strengths of our common civilization, yet marry them to the needs of our time.

Goethe said that "the web of this world is woven of necessity and change." We stand at a point where those strands intertwine. We must not regard necessity as capricious nor as a reason to chance.

SIXTH DRAFT -- IFA SPEECH

TODAY BEGINS A WEEK OF DELIBERATION ON THE MOST FUNDAMENTAL PROBLEMS OF THE INDUSTRIAL DEMOCRACIES: ENERGY, ECONOMIC AND SOCIAL GROWTH, BUILDING A NEW RELATIONSHIP WITH THE THIRD WORLD, AND ENSURING THE SECURITY OF OUR NATIONS.

OF THESE, NO SINGLE ISSUE IS MORE BASIC TO THE PURPOSES OF THE INDUSTRIALIZED WORLD THAN THE CHALLENGE OF ENERGY. FOR THE FUNDAMENTAL ACHIEVEMENTS OF MODERN CIVILIZATION HAVE BEEN BUILT UPON THE READY AVAILABILITY OF ENERGY. ENERGY IS THE PILLAR OF THE ECONOMIC SYSTEM THAT SUSTAINS OUR PROSPERITY AND NURTURES OUR VALUES.

WE HAVE MADE REMARKABLE PROGRESS SINCE THE WASHINGTON ENERGY CONFERENCE MET FIFTEEN MONTHS AGO. BUT THE GREATEST CHALLENGES ARE STILL AHEAD OF US. IF

-2-

THE INDUSTRIALIZED CONSUMER NATIONS ARE TO AVOID ECONOMIC STAGNATION AND POLITICAL WEAKNESS, WE MUST MOVE TO ACCELERATE OUR COLLECTIVE ACTION.

THIS FIRST MINISTERIAL MEETING OF THE IEA COMES AT A DECISIVE JUNCTURE. THERE ARE URGENT ISSUES NOW BEFORE US. WE MUST:

- REDEDICATE OURSELVES TO ENERGY CONSERVATION;

- PROVIDE STRONG NEW INCENTIVES FOR ALTERNATIVE SOURCES;

- STRENGTHEN COOPERATIVE RESEARCH ON LONG-TERM DEVELOPMENT OF UNCONVENTIONAL ENERGY SUPPLIES; AND

- PURSUE VIGOROUSLY DIALOGUE WITH THE PRODUCERS AIMED AT A NEW EQUILIBRIUM OF ECONOMIC BENEFIT TO PRODUCING AND CONSUMING NATIONS.