FOREIGN RELATIONS, 1950, VOLUME I


of Defense Mobilization to-develop a national petroleum program
leading to the complete supply of Allied requirements, for considera-
tion by the National Security Council.
                                                JAMES S. LAY, JR.

                            [Annex 11
 The Acting Secretary of Defense (Lovett) to the Executive Secretary
              of the National Security ouncil (Lay)

TOP SECRET                        WASHINGTON, December 27, 1950.
  DEAR MR. LAY: In December 1948, the Secretary of Defense sub-
mitted a proposed National Petroleum  Program to the National
Security Resources Board (NSRB) requesting that the program, as
proposed by the National Military Establishment, be considered by
the NSRB and that appropriate action be taken with other govern-
ment departments and agencies to implement a national oil policy.
The immediate need for the formulation and implementation of a
coordinated petroleum program was recognized by several depart-
ments of the government. The Foreign Petroleum Policy was under
consideration by the State Department, and a National Oil Policy
for the U.S. was under consideration by the National Petroleum
Council, advisers to the Secretary of the Interior. These were in addi-
tion to the National Petroleum Program which had been coordinated
and approved by the Military Establishment.
  The National Security Resources Board advised the National
Military Establishment that it would prepare a program incorporat-
ing the programs and policy recommendations of the State Depart-
ment, Interior Department, and the National Military Establishment.
This action was taken and submitted to the Interdepartmental Staff
Group (JSG) for approval prior to submission to the NSRB. In
June, 1949, the Secretary of Defense was advised by the Acting Chair-
man of NSRB that negotiations by the various departments in the
ISG did not result in mutual agreement among the agencies concerned
as to the necessity for a petroleum policy. It was further determined
that no recommendation to the President on petroleum policy or the
coordination thereof was necessary at that time, however, the repre-
sentatives of the National Military Establishment did not agree to
this determination. It had been determined, however, by the ISG that
certain reference papers concerning the coordination of the U.S. Petro-
leum Policy which had been submitted, should be made available for
reference purposes to the petroleum staffs of the various interested
departments and agencies.
  In the event of a major war in the future, there would be immi-
nent danger that the Middle East sources of petroleum would be lost


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