Page:Ford, Kissinger - August 17, 1974(Gerald Ford Library)(1552754).pdf/1

File scanned from the National Security Adviser's Memoranda of Conversation Collection at the Gerald R. Ford Presidential Library

On the energy situation, we have to find a way to break the cartel. We can't do it without cooperation with the other consumers. It is intolerable that countries of 40 million can blackmail 800 million people in the industrial world.

We have to get into position carefully so we don't get out ahead and our allies don't move in to pick up the pieces and get an economic advantage. That was the purpose of the Washington Energy Conference. We are getting the IEP by the end of September. It is effective only against a selective embargo and it creates a framework for communication. The Europeans probably think we should use it only passively.

Simon wants a confrontation with the Shah. He thinks the Saudis would reduce prices if the Shah would go along. I doubt the Saudis want to get out in front. Also the Saudis belong to the most feckless and gutless of the Arabs. They have maneuvered skillfully. I think they are trying to tell us -- they said they would have an auction -- it will never come off. They won't tell us they can live with lower prices but they won't fight for them. They would be jumped on by the radicals if they got in front.