Foreign Relations of the United States, 1961–1963, Volume IX, Foreign Economic Policy

362. Letter From President Kennedy to Secretary of the Interior Udall⁰

Washington, November 19, 1962.

Dear Mr. Secretary: My review of the interagency study of petroleum supplies and requirements in relation to national security objectives has now been completed.¹ I request that you take the following actions:

1. Initiate discussions immediately with the Interstate Oil Compact Commission, looking toward the formation of a working group to consider objectively the problems involved in updating the state laws and regulations as they apply to the production of petroleum. It has become apparent that elements of state regulatory systems are seriously out of date, and have served to retard the progress of the petroleum industry. I am informed that the Commission has already begun discussions of some of the weaknesses of these systems. It is appropriate that the Federal Government join in these discussions which have a significant potential for improving the fundamental strength of our economy.

2. Provide assistance to the Secretary of State in discussing with the Government of Canada the coordination of United States and Canadian petroleum policy in relation to North American security objectives.

3. Develop and submit to me by no later than November 23, appropriate changes to Proclamation 3279 of March 10, 1959,² which would accomplish the following:

Assure that the level of imports from all areas into Districts I-IV, of crude oil, unfinished oils, and products other than residual fuel oil to be used as fuel, will bear the same relationship to domestic production of liquid hydrocarbons as that which existed in 1961. This maximum level will include overland exempt imports.

Continue the gradual phasing out of allocations based on historical imports of crude and unfinished oils in Districts I-IV and permit, as appropriate, the more rapid phasing out of historical allocations granted on the basis of imports now governed by the overland exemption.

Provide that the sliding scale for determining allocations to refiners on the “input” basis include special provision for small business.

The present method of establishing allocations for District V and Puerto Rico should remain unchanged but, in addition to your other responsibilities for petroleum policy within the Executive Branch, I request that you make a special effort to encourage the use of domestic production, including production from Districts I-IV, in District V.

Sincerely yours,

John F. Kennedy³

0. Source: Kennedy Library, National Security Files, Kaysen Series, Economic Policy, Oil Policy. No classification marking. A cover memorandum to Kaysen, et al., from Kenneth R. Hansen, Assistant Director of the Bureau of the Budget, November 16, states that this is a revised proposed letter to be sent to Udall on November 19 and that it will not be published. Hansen asked for comments by close of business, November 16.
1. The interagency study has not been further identified.
2. Reference is to the proclamation by President Eisenhower, “Adjusting Imports of Petroleum and Petroleum Products into the United States,” and through licenses issued by the Secretary of the Interior. (73 Stat. c26)
3. Printed from a copy that bears this typed signature.