Foreign Relations of the United States, 1952–1954, General: Economic and Political Matters, Volume I, Part 2

S/S–NSC files, lot 63 D 351, NSC 97 Series

Paper Prepared by the Planning Board of the National Security Council¹

top secret
NSC 97/4

Washington, July 7, 1953.

A National Petroleum Program

planning board recommendations with respect to nsc 97/3

I. Based on Recommendations in ODM Progress Report on NSC 97/3, dated June 30, 1953, which took into account Comments by Civilian Consultants on NSC 97/3

1. Para. 8–a. Expansion of Alkylate Capacity.

Confirm the course of action for the acceleration of efforts to obtain expansion by private industry by December 1, 1954, of 30,000 B/D aviation alkylate capacity.

2. Para. 8–b. Stockpiling of a Mobilization Reserve of Aviation Gasoline.

a. Confirm the course of action set out in para. 8-b for the stockpile of a sufficient mobilization reserve of aviation gasoline to meet wartime deficits from D–Day to the date when production will meet demand.

b. Note that the Department of Defense contemplates purchasing in FY 1954, for the account of the stockpile program, a minimum of 4 million barrels of aviation gasoline.

c. Pending a report by the Secretary of Defense, not later than September 1, 1953, on military requirements and supply, defer determination of the need for further stockpile purchases of aviation gasoline, including the question of treating peacetime safety and operating stocks, and stocks in transit, as part of the stockpile.

3. Para. 8– c. Creation of a Tanker Reserve of 175 T–2 Equivalents.

a. Approve, as a general objective, the provision of a mobilization reserve of 175 T–2 equivalent laid-up tankers in order to meet initial wartime deficits and to create a tanker shipbuilding base capable of expansion to meet wartime needs, with the understanding that the quantitative limits of such objective shall again be reviewed not later than December 31, 1953, and annually thereafter, and that the implementation of specific programs in aid of such objective, except as hereinbelow provided in subparagraph b, shall be subject to the further consideration and action by the Council.

b. Approve the immediate implementation, including the submission to Congress of a request for necessary authority and funds, of a trade-in and build program to result in the construction in the United States of about 20 new tankers (not exceeding 40 T–2 equivalents) capable of a sustained sea speed, loaded, of approximately 18 knots.^*

c. Direct immediate study, in consultation with industry, of the feasibility and cost of a program for the lay-up of tankers (57 in number) now owned by the government and operated by MSTS and the construction by private industry of new tankers equal in T–2 equivalents to the ships laid up and capable of a sustained sea speed, loaded, of not less than 18 knots, in return for a long-term MSTS charter party.^*

d. Direct the immediate further review, in consultation with industry, of the feasibility and cost of implementing with oil companies or independent tanker operators, a trade-in and build program to supplement the program provided for in subparagraph a, with a specification for a sustained sea speed, loaded, of approximately 18 knots.^*

e. Direct the immediate review of loss factors, and mobilization requirements, for tankers, in the light of projected sustained sea speeds, loaded, in excess of 16 knots.

4. Para. 8–d. Methods of Producing Liquid Fuels.

Approve the course of action for continued research in, and development of, methods of producing liquid fuels from non-conventional sources; specifically, the continuation of the applicable Bureau of Mines program.

5. Para. 8–e. Elk Hills Pipeline Hook-up.

Approve the course of action for the expansion of an existing privately-owned pipeline to the Los Angeles area in order to insure that the potential production of the Elk Hills Naval Reserve will be available in the event of war.

6. Para. 8– f. Imports from Western Hemisphere.²

Approve the course of action to resist further restrictions on imports of petroleum and natural gas from the Western Hemisphere in order to assure maximum development and wartime availability of Western Hemisphere resources, with the understanding that the Secretary of the Interior in coordination with the Secretary of State and the Director of the Office of Defense Mobilization, will give continued scrutiny to the volume of Western Hemisphere imports, with particular relation to any significant adverse effect on the development of domestic resources.

II. Based on Comments on NSC 97/3 by Civilian Consultants (Excluding Comments taken into account above)

7. Para. 7. Development of Resources in Conjunction with Allies.

Explore further with our Allies ways and means of developing, particularly in the Western Hemisphere, increased petroleum resources for wartime use, with special reference to the dispersal of available resources and facilities within the Western Hemisphere.

8. Para. 8–a. Review of Aviation Gasoline Requirements.

Review annually the requirements for aviation gasoline (and related needs for alkylate capacity) with special reference (a) to the effect on such requirements of the increasing use of jet aircraft and the eventual decline in military use of the reciprocating engine, and (b) the possible greater use for non-combat tasks of lower octane fuels, where such substitution will not involve loss of efficiency.

1. In addition to the recommendations printed here, NSC 97/4 consists of a cover sheet; a memorandum by Gleason indicating that the report had been prepared pursuant to the NSC directives at the May 27 meeting (see p. 981) and was intended to supersede paragraph 8 of NSC 97/3, p. 965, if adopted; a table of contents; a financial appendix; and the Progress Report, June 30, 1953, described in footnote 3, p. 987.
2. The Director of the Office of Defense Mobilization proposes, on the basis of present information, while awaiting confirmation from the Acting Secretary of Defense, that in paras. 3–b, c and d the tanker speed should be “18.5 knots” rather than “approximately 18 knots” or “not less than 18 knots”. [Footnote in the source text.]
3. The Director of the Office of Defense Mobilization proposes, on the basis of present information, while awaiting confirmation from the Acting Secretary of Defense, that in paras. 3–b, c and d the tanker speed should be “18.5 knots” rather than “approximately 18 knots” or “not less than 18 knots”. [Footnote in the source text.]
4. The Director of the Office of Defense Mobilization proposes, on the basis of present information, while awaiting confirmation from the Acting Secretary of Defense, that in paras. 3–b, c and d the tanker speed should be “18.5 knots” rather than “approximately 18 knots” or “not less than 18 knots”. [Footnote in the source text.]

2. A handwritten notation in the margin next to this paragraph indicates that the Department of State desired changes in the text of the paragraph. The Department of State version of paragraph 6 reads as follows:

   “Approve the course of action to resist further restrictions on imports of petroleum and natural gas from the Western Hemisphere in order to assure maximum development and wartime availability of Western Hemisphere resources, with the understanding that the Secretary of the Interior in coordination with the Secretary of State, Secretary of Defense, the Attorney General and the Director of the Office of Defense Mobilization, will give continued scrutiny to the volume of imports, with particular relation to any significant adverse effect on the development of domestic resources and on U.S. foreign policy objectives with respect to the producing countries concerned.”