SIBERIAN PIPELINE

Created: 7/9/1981

OCR scan of the original document, errors are possible

Hie timtam CMal

9 July 1WI

fitWMrirXM TOR: Ths President

The Vice President Secretory of State Secretary of tlic Treasury Secretary of Defense Serrelary of Censnerce Secreury of Energy Director, Office of

end Rudgct United States Trade Represent.)live Assivum to the Pre,1iie*it for

FRO*!:

SUBJECT:

irrlty Affairs Cl-jirvn, .Vint Chiefs of Staff

Willfaa J. Casey Slbericii Pipeline

The attached has been prepared for jpttr inforwtion In connection with the MSC neeting thU .if'nrnnon.

APPROVED TOR KLEASE

The.pipelloe willfuture Soviet ecooo-tc growth and fidlltitcMilitary buildup which the West (especially tlie US) will have to countar. (Tab AJ Thi* probably .rill be the most compelling argument to the Europeans.

It, would replace their current hard currency earnings from oil which seen likely to dry up during the second half of. The Siberian pipeline would thuseduction of the hard currency they have to spend froa the current levelillionillion aad enhance the Soviet ability to extend their influence over other countries.

The Soviet gas will cover lessercent of European energy requirements and Is not needed to cover Increasesuropean energy demand. Desand projections are being lowered greatly because of energy conservation and alternative, ofteo cheaper.supplies of gas and other energy sources will be available. The argunent that the pipeline would increase the security and tbe price of energy supply by diversifying sources and reducing dependence on the insecure Persian Gulfeak.

Theillion of annual Western exports for the pipeline would add lessercent to the foreign trade of the Alliance. To the extent that these increaenu to western energy and trade enable the Soviets to win tain or increase their military capability, the United States, carryingercent of the COCOM defense burden, would bear the brunt of responding.

illion European Investment would be better spent on alternative schemes to ensure Allied energy security. Sane combination of Aeerican and Australian coal, Norwegian and British gas frcai the North Sea, and Western capability to produce synthetic gas can satisfy the Western European needs which the Siberian pipeline Is intended to meet. (Tab B)

Original document.

---

---