NATIONAL SECURITY POLICY


to the United States and its Allies. The military and economic costs
of regaining even a portion of these resources, -should that become
essential, would be enormous. The military and diplomatic measures
needed to hold that area, should its oil be vital to the entire war
effort, would be most difficult to implement and uncertain to succeed.
  The Department of Defense appreciates that measures necessary
to insure independence of Middle East oil present difficult political,
diplomatic, and economic problems and will become increasingly costly
in future years. These measures, therefore, must be studied thoroughly,
coordinated carefully, and justified completely. Such action would
result in a National Petroleum Program.
  Subsequent to the ISG determination (December 1949), discussions
were held between the Under Secretary of Defense Stephen Early,
Secretary of the Interior Oscar Chapman, Under Secretary of State
James E. Webb, and Assistant Secretary of Commerce Thomas C.
Blaisdell, Jr. It was agreed then that Secretary Chapman be made
Chairman of ,a Working Group which would report to the National
Security Council in the development of a National Petroleum Policy.
However, no :further meetings were called by the Dept. of Interior to
discuss this policy.
  Based on preliminary guidance as to the requirements of the U.S.,
Allied and Associated Powers provided by the Joint Chiefs of Staff
for a war commencing in 1954, it appears that, in the geographic areas
,which would be available to such powers, an overall shortage in re-
fining capacity of approximately 11/½ million barrels per day and
in
crude production of 1/2 million barrels per day will exist at the outbreak
of a major war.
  The Joint Chiefs of Staff have consistently stated that a National
Petroleum Program is necessary. Further, the present international
situation has become increasingly acute, and at the same time, increased
requirements of the Western Powers have made the problem even more
immediate than it appeared when discussions on this program began
in 1948.
  The Department of Defense believes that a National Petroleum Pro-
gram should be developed after careful analysis which should include,
among other things, the relative economic costs of insuring adequacy
of petroleum in the continental United States, now, in time of future
emergency, and in a postwar period, as against the military costs of
insuring its availability in the Middle East. This analysis and program
will provide the Department of Defense with guidance it requires for
strategic planning -and development of military forces and budget.
It is understood that the effects of implementing any particular phase
of the program must be weighed against the strategic requirements
before decision is made which might have a significant economic or


491