Asad, finally, agreed that I could brief the press that the talks had been “constructive” — another big boost in the Arab world for the Egyptian agreement. On the way to the airport I summed up to Khaddam what I would say to the media:
I will express my thanks for your hospitality. I will say that I talked with President Asad for over four hours. We reviewed both bilateral relations and above all the prospects for peace in the Middle East. With respect to the Middle East, we discussed disengagement as well as a lasting settlement, which must be our ultimate goal and to which the US has promised to give support. The talks were very useful, very constructive and in my judgment contributed to Syrian-US relations and to peace in the Middle East. President Asad gave me his ideas on the problem of disengagement as well as on the problem of a lasting peace, and we will study them carefully as we continue our efforts.
Khaddam replied: “If asked, I will say I have nothing to add. Which means I support what you have said.”
Which also meant that I had a Syrian go-ahead for a step-by-step approach on the Golan Heights.
Unfortunately, I had no such go-ahead from Israel. Late on Sunday I flew to Israel to ease pressures on Sadat by hinting at our readiness to undertake a Syrian shuttle. In a lounge at Ben-Gurion Airport I explained our ideas to Allon and other members of the Israeli negotiating team (minus Dayan, who could not be raised on short notice or, more likely, had enough domestic criticism without involving himself in Syrian negotiations.) The Israelis, still exhausted from the grueling labor of finishing the Egyptian agreement, were not eager to begin wrestling with the much more difficult and emotional Golan problem. They noted Asad’s proposals, but without cabinet approval they were not even in a position to quibble, since that implied a negotiation was going on. They pressed for the list of the POWs, with respect to which in turn I could not go beyond what Asad had told me. We settled for a Delphic announcement implying that negotiations were in progress while enabling my Israeli counterparts to avoid a firm commitment:
I brought some ideas on disengagement from Syria to the Israeli Government. The Israeli Government will now study these ideas and after consideration by the Cabinet, will give us its views and we will then see what follows.
With respect to Jordan, the Israeli negotiators were even more opaque. They listened attentively to my summary of Hussein’s proposals; they asked perceptive questions. But none of my interlocutors was prepared to mortgage his prospects in the new cabinet by risking the veto of the National Religious Party that was the certain penalty for agreeing to discuss any withdrawal, however trivial, from any part of the West Bank, even from Jericho.
Finally at 8:30 P.M. on Sunday, January 20, after ten dramatic days in the Middle East, we headed home. The evening departure provoked a near-rebellion among the traveling press, who had visited three countries in one day, had had to file from each, and now faced a fourteen-hour plane trip unrelieved, as in my case, by a bed to stretch out on. But I had no choice. An impatient President was waiting for me, eager to begin Congressional briefings and to savor the rare experience of a positive event.
Washington at Last
AT 4:30 A.M. Monday, January 21, we were back in Washington after a short stop at Heathrow Airport to brief Sir Alec Douglas-Home. From the plane I had sent messages to the key Arab leaders and several NATO allies. I gave each a summary of the various stops I had made since leaving Egypt. Asad and Hussein were, of course, especially interested in Israel’s reaction to their proposals. I told Hussein that I had passed along his “interest in establishing a Jordanian-Israeli working group in the Geneva framework” and had “let them know that I will want to go into this in some detail with them later this week.” To Asad I wrote:
[D]uring my stop in Israel enroute back to Washington Sunday evening, I transmitted your proposal on the disengagement of forces to the Israeli Government. The Israelis told me they would be working on a reply, and, as soon as I hear from them, I will be in further touch with you.
It was not much, but it kept up contacts and it eased the pressure on Sadat.
I found Nixon elated; he had had little enough to encourage him in recent weeks. He was extraordinarily proud that even in the midst of domestic crisis his Administration had managed to play the decisive role in turning the Middle East toward peace. He gave an incisive briefing to the Congressional leaders, whose obsession was to probe for some “secret commitments” — as if American involvement could result only from some hidden document, not from strategic realities, and as if our failure to involve ourselves would not have had far more serious consequences. Buoyed by the widespread public acclaim, the Congressional leaders, at least, dropped almost entirely the sour tone of their Watergate discussions with the President, even if they could not in the end bring themselves — except, ironically enough, J. William Fulbright — to express the unconditional approbation that Nixon sought and, in my view, deserved.
The next day, January 22,1 held a news conference covering familiar ground: the terms of the agreement, the assurances passed between the parties. Once more I had to address the issue of “secret” American commitments. A significant part of the news conference was consumed by the affair of the yeoman in my office under whose shadow the trip had started. I had had no time to study the subtleties of the case or prepare for the inquisitional assault of the media, now battle-tested by Watergate. Had I known that an investigation of the Anderson leaks was going on? Was I aware of the investigation being conducted by David Young, one of the “Plumbers,” who had once been an assistant of mine? The drift of the questions was becoming clear. The insinuation was that if I knew that much, I had to be implicated in most of the “Plumbers” activities — rather a non sequitur. There were a few more questions of a similar nature. They were not intended maliciously; this is what made them so pernicious. What they showed was the narrowness of the ledge on which all of us were walking. Authority was clearly diminishing; no success could for long reverse the trend; we were in a poor position to endure prolonged international crises.
But this was no more than to confirm the familiar. America in the winter of 1973–1974 was not a happy place. It was ridden with suspicion, bitterness, cynicism. A taste for sensational revelations had developed, much of it unhappily too justified, some of it pursued almost for its own sake. And it was not hard to understand why this should be so. Confidence is a precious commodity. Once plundered, it must grow again organically; it cannot be restored simply by an act of will or on the claim of national security.
And yet if we had built well, the course of events would demonstrate that we had turned a corner in the Middle East. With luck, a peace process would move forward in defiance of all obstacles. Something in this sad period might be remembered with pride. We might not be the leaders who made the final peace; but we would always take satisfaction if someday it could be truly said, it all started here.
* * *
I. The journalists who accompanied me on most of my travels included Richard Valeriani of NBC; Marvin Kalb or Bernard Kalb of CBS; Ted Koppel or Barrie Dunsmore of ABC; Jerrold Schecter of Time; Bruce van Voorst of Newsweek; Barry Schweid of AP; Jim Anderson of Group W News; Richard Growald or Wilbur Landrey of UPI; Lars-Erik Nelson of Reuters; Bernard Gwertzman of the New York Times; Marilyn Berger or Murrey Marder of the Washington Post; Jeremiah O’Leary of the Washington Star; Stan Carter of the New York Daily News; John Wallach of the Hearst newspapers; John MacLean of the Chicago Tribune; Darius Jhabvala of the Boston Globe; Oswald Johnston of the Los Angeles Times; Robert Keatley of the Wall Street Journal; Charlotte Saikowski or Dana Adams Schmidt of the Christian Science Monitor; and Marie Koenig or William Sprague of USIA.4
II. Sadat’s concept was largely reflected in the final disengagement map. See p. 839.
III. The Israeli negotiating team was usually headed by Prime Minister Golda Meir, though on this occasion she was home recuperating and Deputy Prime Minister Yigal Allon presided. He was accompanied by Foreign Minister
Abba Eban, Defense Minister Moshe Dayan, Ambassador Simcha Dinitz, Chief of Staff General David Elazar, Director General of the Prime Minister’s Office Mordechai Gazit, Director General of the Foreign Ministry Avraham Kidron, Deputy Director General of the Foreign Ministry Ephraim Evron, and Dayan’s aide Colonel Aryeh Bar-On. On the American side I was assisted by Under Secretary of State–designate Joseph J. Sisco, Ambassador at Large Ellsworth Bunker, State Department Legal Adviser Carlyle E. Maw, US Ambassador to Israel Kenneth Keating, Deputy Assistant Secretary of State Alfred L. Atherton, Jr., NSC Senior Staff member Harold H. Saunders, and NSC staff member Peter W. Rodman.
IV. There was some debate in America about whether reopening the Suez Canal was more to the advantage of the Soviet Union, given its otherwise circuitous routes to the Indian Ocean. The consensus in the US government was that this was far outweighed by the strategic setback to the Soviets in Egypt’s turn toward peace and toward the West.
V. The text of the basic disengagement agreement is in the backnotes.5
VI. The “United States proposal” signed by President Sadat and Prime Minister Meir is in the backnotes.6
XIX
The Energy Crisis
The Years of Complacency
I RETURNED to Washington in exultation. But rare are the crises that lend themselves to dramatic revolutions. Usually change appears in the guise of the commonplace, not as a catharsis but as a series of technical decisions. So it was with the energy crisis, which now reclaimed us.
It began dramatically enough in 1973, and altered irrevocably the world as it had grown up in the postwar period. The seemingly inexorable rise in prosperity was abruptly reversed. Simultaneously, inflation ran like a forest fire through the industrialized countries and recession left millions unemployed. The poorer countries without oil plunged into deeper depression and unredeemable debt, while the oil producers suddenly had more money than they could possibly spend. Their vast, mobile cash balances played havoc with currencies as they moved among capitals for reasons economic or political. Transcending even the economic revolution was the emergence of oil as a weapon of political blackmail. The industrial democracies saw imposed on them not only an economic upheaval but fundamental changes in their social cohesion and political life.
But the remedy proved prolonged; the effects of these convulsions continue to this day. Our economic system has not yet recovered; the political and social consequences are still playing themselves out.
How could a transformation of such a profound and far-reaching nature come so suddenly upon us? Much of it is clearer in retrospect, for the seeds and the signals of dramatic change were there. The oil revolution was of a pattern with many historical revolutions. They were inevitable but their inevitability is obvious only after the fact. It is almost impossible for historians to understand how in advance of some of history’s great revolutions it was often not even realized that a change was about to take place. Lulled by the illusion of permanence, the soon-to-be victims treated as fleeting aberrations warnings that posterity now sees as self-evident. And therefore dikes that could have been strengthened to hold back the flood were left unattended until they suddenly burst and the torrents engulfed those who had never suspected danger.
Richard Nixon came into office in a world economy that treated cheap oil as natural and excess production capacity as the main economic problem. If we worried at all about the political dimension, it was how to satisfy insistent oil-producing countries who competed for the favor of access to our market and offered foreign policy benefits in exchange. At the end of the Sixties the United States imported only around 20 percent of its oil needs. We coasted on the assumption that we had large untapped domestic reserves. New discoveries on the North Slope of Alaska promised vast supplies. We possessed oil shale in abundance, which we thought could be quickly exploited if shortages should cause the price to rise.I The so-called Texas Railroad Commission, which decided the level of American production, set output well below capacity in order to maintain a domestic price of $3.30 a barrel — more than one dollar a barrel above the world price — to encourage domestic exploration and drilling. Oil imports were regulated through a system established by President Eisenhower in 1959, setting strict quotas for imports.
In this way, the United States had a decisive influence over the world price of oil. If the price of foreign oil went up beyond what we thought desirable, we could increase our production, restrict our imports, and force our foreign suppliers onto world markets. Or, if we really wanted to make a point, produce more American oil and sell it abroad. The Mideast oil producers therefore had an incentive to keep prices low. The Organization of Petroleum Exporting Countries (OPEC), formed in 1960,II was not perceived as a serious cartel. Conventional wisdom was that the oil producers could not force the price up by restricting production because the necessary cutback would have to be so steep as to bankrupt them before it would affect the industrial democracies. The fiasco of the Arab oil embargo of 1967, which collapsed in the face of uninterrupted Iranian, increased American, and other Western Hemisphere production, seemed to confirm this.
Nothing was further from Nixon’s mind than an energy crisis when on March 25, 1969, he created a Cabinet Task Force on Oil Import Control to review the quota system. The Task Force was chaired by the Secretary of Labor, George P. Shultz, and included the Secretaries of State, Defense, Treasury, Interior, and Commerce, the Director of the Office of Emergency Preparedness, and other officials as observers. White House responsibility was vested in Assistant to the President Peter M. Flanigan, a financial expert. My office had no operational role; at most, it maintained a watching brief on any significant national security aspect that might emerge — considered an unlikely contingency.
The Task Force deliberated for a year, took 10,000 pages of testimony, and in February 1970 came up with a 400-page report whose principal recommendation was to replace the import quotas by a system of tariffs. Foreign producers would be free to compete in our market subject only to the customs duty. By letting the market operate, the effect of the tariff system would be some downward pressure on the domestic price of oil; the government would get out of the business of allocating imports. But the tariffs could always be raised if imports became excessive; the level of our imports was treated as essentially a domestic American decision with respect to which we had great flexibility.
The never-never land of national policymaking of 1970 is shown by the report’s estimates that even at prevailing prices the United States would be importing only 27 percent of its oil requirements by 1980 and that no substantial rise in the world price was foreseeable over the next decade.1 (In fact, by the late 1970s we were importing nearly 50 percent of our oil and the world price had increased more than tenfold.) The Task Force’s bow to national security consisted of urging that preference continue to be given to Western Hemisphere oil so that dependence on Middle East supplies could be limited to 10 percent of our total imports. (By 1979 it was in fact over 40 percent.)
The domestic agencies of our government, which had responsibility for our oil policy, objected to more foreign competition. The Secretaries of Interior and Commerce and the Chairman of the Federal Power Commission filed a minority report asserting that the proposed tariff program would drive the domestic price of oil down to around $2.50 per barrel, undermine incentives for domestic production, and thereby create an undue dependence on imported oil within ten years. (The minority also rejected the idea of emergency storage as “not economically sensible.”) As it turned out, Nixon — for political reasons — sided with the minority and retained the oil import quota system, thereby opting for lower imports and slightly higher prices. With some adjustments the quota system continued for three more years, amid debates that at this reading seem as ancient as the dinosaur.
My office did not participate in these debates. It was neither consulted nor even informed about the key decisions. I am not suggesting that the decisions would have been better had I been invo
lved; I had no expertise on the subject. I mention the fact only to demonstrate to what extent energy was considered a domestic, not a foreign, issue. What foreign policy arguments over oil took place during those first Nixon years concerned allocations within the American import ceiling. The producers, not the consumers, appeared as the supplicants, as OPEC countries jockeyed for a favored position in our market. Our relations with Iran were a case in point. Later on, it was sometimes claimed that the Nixon Administration’s policy toward the Shah was influenced by our desire to increase his revenues so that he could buy additional military hardware. This is a reversal of the truth. The Shah’s perennial complaint was that we were not buying enough Iranian oil. When he visited Washington to attend President Eisenhower’s funeral in March 1969,1 paid a courtesy call on him at the Iranian Embassy. He used the occasion to offer to help us establish a petroleum stockpile by filling our salt domes, thus protecting against interruption of oil supplies in a major war. To this end he would sell us one million barrels a day for ten years at the amazing bargain price of $1.00 a barrel.
I turned the Shah’s suggestion over to our government’s oil experts, who rejected it out of hand. An increase in Iran’s quota was possible only at the expense of Saudi Arabia and other friendly Persian Gulf countries. There was also the insurmountable problem that the United States government was not in the business of purchasing oil except for military needs, many of which were met from Saudi Arabia. The rest of the oil was purchased by private companies; strong governmental intervention would have been required to force a shift from traditional suppliers. The companies would have had to reduce liftings somewhere else to satisfy the Shah — unless we were prepared to risk a drop in prices by adding imports from Iran to the existing quotas. I was selected to convey the bad news to His Imperial Majesty. (As oil prices later shot up and demand grew with no apparent limits, the Shah, despite his reputation as a secular ruler, must have thanked Providence for our rejection of an arrangement so breathtakingly advantageous to us.)
Years of Upheaval Page 126