Conversation 694-003

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I see a big map over there.

Yeah, it's a great big one.

Let me come to a couple of points where I've got all the maps.

What do you have on the side?

Well, here's the situation, Mr. President.

We put the one-on-two statement over there under the guidelines 30 days, but because of the size of the thing, and because of the hell that's been raised, and because of another little gimmick in it, and that is that the court is requiring us to take 15 days before a permit is issued, and given that much lead time, that we just arbitrarily took 45 days, and that pretty well...

I guess the point I'm getting at is, could you delay the report until after the election?

No, sir, it's already over there.

It's public knowledge.

And so, what does that mean?

Well, it's the 102 statement.

It's the environmental impact.

It's a decision therefore.

Let me state it.

I'm just trying to think.

I know about the department.

I'm not talking about what we do.

There are no other reports involved, Mr. Craig.

Well, then what happens now?

Well, the thing that happens now is that if we decide to issue the Trans-Alaska pipeline card or permit, we give the court a 14-day notice or 15-day notice.

And then at the end of 15 days, we...

Presumably, we wait for the judge to schedule it here, because we are now enjoying it.

We can't actually issue the ballot.

Well, what I'm getting at is that you have to bite the bullet now.

We can bite the bullet, but... Do you have to?

No, sir, we don't have to.

We can stall a little bit.

If you're getting at whether we should stall or not up through the elections, I think there's great danger in doing that.

For many reasons.

I can go through this little exercise here in about five minutes that will, I think, point out some of the dangers.

One of the things there are, Mr. President, is that you understand, I mean, as far as what we do, we'll take your recommendation.

Well, let me say a couple of things that I think I want you to have in mind.

There's something in here that is to the effect that this will put in through Canada Helps Internationally.

Forget it.

I don't care one damn about the Canadians.

In fact, I want to screw this to Trudeau when I'm up there.

Now, of course, if we do, we'll do it, but the Canadian thing is not in our interest.

For other reasons, we don't want to do it with the Canadians.

Well, the point is that, from a political standpoint, if you wage jobs in Alaska against what environmentalists in Los Angeles are going to think about the Alaska pipeline, it's a loser, it's a bird in the hand, or against maybe George Bush.

But on the other hand, I do know that

That's for the political staff.

Now, as to what we do is concerned, I'd rather remember Adam.

It seems to me it's quite clear you have to go through Alaska.

Well, the other thing, you don't think with that circuit court that people can win, right?

Sir, I think I'll say that again.

You say we have to go through Alaska versus Alabama.

Yeah, we can.

Well, not necessarily.

No, sir.

That's what I want to talk about here.

Go ahead.

Well, you've hit the issue.

I know you think he's a politician.

I mean, let's not kill ourselves.

Now, Alaska's just one little state.

Jobs are one thing, and what people are going to do because they're concerned about the wildlife in Alaska, and what people are going to do with the environment down here is something else.

Very quickly, sir.

Here are the pipelines that now cross the border.

There's one here that goes from Maine to Montreal and handles about 500,000 barrels a day.

There's one that goes from Edmond into the Midwest that now has been looped and enlarged and is handling about 1.3 million barrels a day.

There's a fraction of 1,000 barrels a day going through from

The tar sand gets to this area, not the tar sand there, but the Edmonton area into Montana.

That's a Husky oil pipe.

Then there is a Trans Mountain pipeline that has a capacity now of about 200,000 barrels a day going from Edmonton to Seattle.

The thing is that the Canadians are jumping the gun a little bit here.

I don't want you to get up there and get forced into any kind of a situation where the press and everything else...

jumps on us and makes the situation with the environmentalists any worse than it might be.

That's the whole issue.

If you go through Alaska, I mean Canada, about the only way you can do it that I can see it is to work out an international corporation, one-third, one-third, one-third, one-third the Canadian government, one-third the oil companies, and one-third the American government.

Price tag on that is about $1.7 billion for each participant in that.

But this has a lot of long-range advantages for us in that it gives us an opportunity here to spread out at any given time in order to put this oil in any mix that we want, either into the Midwestern marketplace or into the West Coast marketplace, and it does have some complications here in getting into Southern California.

The other thing that it does, it avoids the spasming route.

You've read the memorandum.

It avoids the maritime aspects of this thing.

We have not taken into consideration the strike aspect.

I think that actually seems to me the case you make for the Canadian thing is a very good one.

I'm not going to say that.

The question is when you do it.

Well, that's right.

My personal feeling is that these three electrical bolts are a little bit in jeopardy anyway, and it's touch and go, and you've got steam in the seat.

I think that my personal feeling today is based on the fact that we've got 57,000, 52,000, and you've got 6,000 communications here at the White House.

Urging us not to do this would indicate that we've got some pluses here, but I don't know any way, Mr. President, both of us are...

I've made a lot of political judgments in our time.

I guess some have been right and some have been wrong.

In short term, there will be a tremendous screen here, but what we have done here in terms of this job thing is not to say, considering this, we have capitalized the difference and there will be a lot of jobs involved.

Building this pipeline also has a lot of very risky things for Alaska.

It builds its employment up, and then all of a sudden it cuts out, because it doesn't take anybody.

The big area, the 2,500 jobs it takes to develop this oil field in here, that's all stealing the package, of course.

And about 20% of the pipe that's in the package is going this way.

I think it would probably be pretty rough on him, yes sir.

I'm not sure he's going to elect him either, but it would certainly be in better shape.

I don't think there's any question about it.

Because Alaska's got about 15% unemployment.

Well, it's going to be worse than that, sir, if we go over the pipeline, because what's going to happen is that all these people are going to be, these drifter people and construction people are all going to be coming in there, and they're going to be, it's going to be a boom or bust situation in any way you figure.

You've got about, oh, we figure somewhere in the neighborhood of 400 or 500 jobs in the fishery down here that are probably long-term to be jeopardized by.

This thing, but that's not too important.

The big thing is whether we should want to take an initiative, whether you want to take an initiative to say the international thing is ruled out.

Well, sooner or later though, Mr. President, somebody's going to have to address themselves to a North American oil policy.

And we're going to have to have, we're using 15 million barrels a day.

Now in 1985 we're going to have to use 30 million barrels a day.

A lot of it's coming from Canada.

One of the other things is they want to develop the gas potential in this area.

In my opinion, we'll get another gas pipeline much quicker if we go this route.

In fact, we might be able to build them simultaneously at least part of the way.

There are large gas reserves in this part of Canada.

Most of Canada's undeveloped oil reserves, they think, are in this area here.

So this doesn't mean as much as this gas area here.

It probably got a year's difference in time on the screen.

If you figure we're going to the Supreme Court, it'll take us about a year.

If you figure we're going to do this, it's going to take us about two years to restructure.

I don't know how long it would take the Canadian government to act.

This would have to be an act of Congress, too, because we're going to participate in it in a financial structure such as a...

uh three-way corporation or an international corporation i think the canadians are a little optimistic on being able to raise a billion seven anymore i i don't know but that's because the thing is this mcdonald's coming down there he blew off from the press this morning again in the oil daily that says of course that they're willing to participate in any kind of reasonable thing they don't want these ships off their coast and all that of course he's making some political hay out there out of that i really uh my feeling is uh uh that

that rather than get trapped by them and get all these people from every single metropolitan area across the country, is that some kind of editorial against this Alaskan pipeline.

If we're going to move on the thing, let's let Richard Nixon get the credit for it.

Let's let it be our vision.

Let's let it be our big gesture that, boy, we're going to tie in the natural resources of the great cotton and all that.

We're out ahead of the action.

And you're in a heck of a good position on that.

Your feeling basically is, just so I don't forget last minute,

No, sir, I think we've got to go, you can't forget Alaska, but I'm not so sure that this pipeline is a solution.

No, it is at the moment.

I couldn't tell you any reasonable alternative plan that would keep those three electoral votes.

And on the other hand, if this thing is good, and we can work up some other things, and get them some land.

I've got this thing now where if I can get this land board going up there, that Jack Martin's going to be chairman of, if he can go along, we can start giving the Alaskans some land.

We've owned 98% of it all these years, yeah.

And if we can let them draw down maybe as much as 35, 40 million acres of land, and they can get some homesteading going, and that kind of thing,

And begin to develop maybe some hard rock minerals in some of these areas where they're getting some raleigh.

I think so.

But I think that we are hurting pretty badly in the Alaskan boat on the Native Claimantsville.

And I don't think we're going to fully recover from it.

The Native Claimantsville?

The Native Claimantsville, that's the one where we set aside the 80 million acres of land.

Well, that was supposed to help us.

It'll help us with the Native, but the trouble is the Native don't control the boat up there.

Hva er det?

Hva er det du gjør?

well we did it because we pretty well got trapped in let me tell you something sir this thing helped us a great deal across the country yeah and uh i uh this uh this may claim bill don't look at the media on that one i dragged my feet for quite a while but uh that's gone that's over the damn probably an argument the one thing we never could have gotten a decent land title up there and that's one of the reasons we did we felt that had to be done in order to get these carters yeah

And I think perhaps it turned out to be a good thing.

The whole thing all sounded here is whether you want to, whether you want to substantively discuss this question in this off-line line in Canada, or whether you don't.

And if you do, what political ramifications of it are.

That's what it really gets down to.

If I was alone on the island,

I would try to work out a program to recoup the loss of the oil companies to the tune of about $60 million in here, which would recoup their investment losses, and add up probably another $30 million.

They put quite a bit.

I'd put about $30 million in the capital structure that would handle the movement of the pipe.

In other words, I would buy the pipe for this thing, FOB, where it is.

It's in Fairbanks, it's in Valdez, and it's in Trudeau Bay.

And that gets you down to about here.

And the quality of the pipe that you need for the rest of this weight can be lighter because it's not subjected to permafrost.

I don't know what it means to... We've never been able to measure this environmental vote.

We've been able to measure what they can do in the courts.

No way I can tell you everything.

But I've told you before, it's the third issue.

It's after the war, after jobs, it's the third issue.

I don't know whether George's people or anybody can research that and tell us whether that's right or wrong.

That's the way we kind of structure it.

But I would hate...

It would just kill my soul if you got up there and ate me.

They came up with this idea and scooped you on.

And that's what I don't want to have happen.

If there's any way, I would hope it wouldn't come up.

One of the things we've actually to do, which I think is a good gesture, and a good thing, is we are based on the side of a park right there.

We have selected this area of very high quality for park purposes.

This could be the first great international park in the world, and that's right.

We'll give you something to talk about later.

Yes, sir.

I'm sure I hear it.

Right there.

The other thing is that they will do, that's again the wildlife range, our wildlife range is there.

They say if we will give them right away, put the gas line down through here on the edge over there, they will add an equal amount to the present wildlife range in Canada.

Which would be a thing, we'd have a good Mexican standoff with all the wildlife people in the country.

And they would like that.

Everybody would like us to go through here as far as the Midwestern congressmen are concerned, I think.

And we have a problem here as to what we're going to do to service the rest of Region 5.

There are no significant pipelines north and south in the California mountains.

There's one, there's a butt line that comes off this one and goes down into Arkansas there.

The maritime system, I don't know how you feel about it and how much the strikes have affected it.

We have been unable to tell.

But all of this movement depends entirely on maritime.

One of the things we've got going for us is that this does increase our merchant marine capability because those are all drones that have chips.

Well, here you actually, you're recommending the other one, aren't you, the Canadian one?

May I make a couple of comments, Mr. President?

Sure.

With regard to your concern, Roger, that the Canadians will discuss it during the President's visit to Ottawa, the Minister was in the seat today, and he made it very clear that he would not expect that they would be in a position to discuss either...

That would, to a doubt extent, pass the election, and at that point, if this alternative seems to be an attractive one, we won't jeopardize the political situation in Alaska, and we could at that point go down and take the alternative course.

Finally, with regard to the gas pipeline.

Today's paper announced, and I've had a chance to check, that there is already a proposal that contracts have been signed for putting a gas pipeline down in McKenzie Delta into the Midwest.

Well, this morning's copy of the oil table said it was imminent.

It didn't make it out of the river, so a couple of days before, three Germans said they had entered into it.

But my concern is, let's just look at the political side of this.

Let's assume we stall this thing through the election.

Let's assume we do that.

One thing, that move is the last thing.

The court's going to tell us.

Yeah, but that's the only thing he's got going.

That's the only thing he's got going for you up there.

Of course, it's probably going to be stalled through the election anyhow.

We can do it.

You can lose it anyway.

Because they don't understand that.

They can't understand the courts.

So it's going to last for something.

What does it do in the rest of the country?

If the courts are doing it, the environmentalists are beating Nixon.

and i don't like that i'd like us to get a position of leadership and a positive position i'd like to have i'd like to have nixon come out on the front end of the program whatever it is as a leader on the thing and he has recognized a need for a north american oil policy and after all the studies

This is the way we're going to go, and sure, you're going to have to call Bob Anderson in here, you're going to have to placate him, but if we can pick up their piece of their law some way in this thing, I think we'll be all right.

I just hate to see the president get behind it, and be behind the issue, because you've got something rolling so well with the challenge.

And I don't think that the rank-and-file people...

have a real understanding of this sort of national feeling that's growing up in Canada.

Oh, I know.

I don't think they have it.

I think in Canada they may, but over here they don't.

I don't think our borders affect them.

I realize that.

And then you're going to go to Russia, and the thing is rolling so well, and this is a big thing, and this seems to be the thing that got left.

It beat us down here in the Gulf, in one instance.

Where was that?

Well, we had a sale, sir, in the Gulf of Mexico, and the courts had joined us because we had to comply.

Yeah, because they said we had to comply with the procedures of NEPA, and we were going to reschedule the sale across Jordan, I guess, in revenues.

I don't know what we anticipate, but they're pretty big.

A million and a half dollars should be saved.

I don't know.

I've thought about this thing so much since the president, and I'm probably the last guy in the world to think about it.

I realize I've got to make the gut decision somewhere.

But I think what John Whitaker had a good idea on out there is that we ought to...

We ought not let him.

We ought to all get together.

Maybe Peter Flanagan and I ought to see him at the same time.

He's having lunch here with John and me.

Why don't you come to that lunch?

That would be a courtesy call.

I'm not sure.

Over.

It really is a tough question, and this is an awful bad thing for us to bring a tough question in here without getting it right.

I feel very bad about that, I really do.

But I didn't want you going up to Canada without knowing what our thing was.

I don't believe we want to even think in terms.

We've got 45 days here where we don't have to do anything.

And I don't think we ought to do anything, but I don't want to get tricked where the Canadians come out

The heroes with the American environment, let me say this, if we're going to do it, we might as well, I mean, when I say with regard to the Canadian side, we have other things that we have to play with that, but if we're going to do it, we might as well do it then.

Well, that's the point.

That's why I want to bring it over here.

It's fine.

If we're going to do it, I don't know whether you could possibly get it ready by that time.

Well, we've got to see the color of their money.

There's no way I think you can do this without it.

Possibly not with that Canadian position.

I don't even see the color of ours.

And that's the point.

You're looking at a billion and seven hundred million probably to be expended over a period of time from, I would say, the latter part of the first of the year, 1974, up through, I would think, about 1977.

It takes about two and a half, three years.

This gets the oil on the screen for the very good.

Doesn't have McDonald's saying he's coming down for the purpose of discussing wealth?

He just said that today.

He had a press conference up there.

He said, I want to come down and meet with the Secretary of the Interior and talk to him about Canadian participation, financial participation in a pipeline venture that could be as much as five billion dollars.

The venture could be as much as five billion dollars.

Now, I don't know.

The trouble is this fellow McDonald's doesn't have a very...

For it doesn't talk, I don't think, from a very strong franchisor basis.

He's a minister of energy.

I've got a whole big dossier on him, but he's a young fellow that's out trying to make a little political dust.

He was minister of defense.

And his deputy, Jack Austin, is highly regarded by the government there.

He's very competent.

Well, I figure what I'm going to do then...

Let's take it once, let's take it out of the White House, and have a meeting in your office, and you attend it there.

I don't want it here.

I don't want anything with oil, or, you know, tied to this thing at this point.

I think that's a good point.

I'd rather have you, you know, and you invite people that you, you know, have the others there, but I don't want them coming here.

Sure, yes, sir.

And we have our restaurant, and you're the environmentalist, and all that sort of thing.

I probably can't...

Try to build a dam, or sell some oilies, or something like that.

No, I understand.

I think we've got a lot of good arguments there.

Maybe the pipeline across Alaska isn't a good idea.

Certainly the argument about the effects of tankers, the strikes on tankers, the maritime thing being like this, of course it wouldn't have changed.

You can't really make sense of it.

But there is something to be said with our, with the Canadians, to do something with them to get at it.

And if they want to, I just can't imagine a country where people can never get that kind of money.

There's one other aspect to it, Mr. President, I think, and we have no way to put a handle on this.

To make this pipeline go, and Canadians are going to want to demand about a third action, in other words, if they find oil in this area, and there is some oil in it, and there is a lot of gas in this area, we know that.

To make this common carrier pay out, there's going to have to be some Canadian product in it.

And I believe that we would have a better handle on getting that Canadian product into the American marketplace if that pipeline existed.

And we're in the short rows as far as oil and gas are concerned in the Middle Ages.

Here's what I would like to say, since he is your opposite number, let's pull him out of there over to your department, and then the White House people can meet there with you, you know, and discuss the whole thing.

But I don't want him to come here where he thinks he's talking to the president, basically, about it, which of course he does when he's here at the White House.

See what I mean?

Oh, yes, sir.

And then after a while, maybe we can come up with a recommendation.

We've got time, I think we're in good shape, to study this and to give a gradual consideration.

And we're going to think that, I don't know why, but it hasn't leaked out.

We've done the work we've done, it hasn't leaked out at all.

The only thing that's been said is that we have nothing.

Only the report, though, is an environmental impact statement.

But the fact that we've been considerate,

Ourselves, this Canadian alternative, has not been done.

It probably will, because everybody will speculate on the fact that this fellow was down here, and he said he's coming here to talk.

I'm going to have to respond to him, but we'll figure out how to do that with no trouble.

The way you should handle it, of course, is that, well, we discussed various things with the Canadians, and they are interested in this, and we're talking about it, and so forth and so on.

Yes, sir, no question.

He's been very fuzzy on us.

Oh, yes.

Unless it gets to the point where they can do something.

Well, the thing about it is, if we don't have an option, unless they are able to get in, right?

That is correct.

So we better find out.

This is true.

The thing we want to do is protect your claim, right?

And you go to Canada.

That's the whole purpose of this meeting here today.

I think you can talk to them about what is the situation, what are you prepared to do, or is there something you want to discuss, and that sort of thing.

Try to get the deal down as well as you can.

I don't know when I go to Canada.

I mean, we haven't got much to talk about at all, so I'll just let it go.

Well, Eli will bring us up, you see, and the point about it is, I think you can say, well, let's get your Minister of Energy and our Secretary of Interior to see what mutual ground there is, and you can get it out, you can get it out of that thing, but if he comes up and makes a lot of noise in the press up there, he suggests to the President of the United States to just be an alternate route,

Then, the environmentalists in this country, and I don't know how big they are, but the people who are on the other side of the fence say, well, hell, President, we need to talk about that, you see, and I don't want to get you in that position.

Mr. President, could I?

Sure.

Going back two or three years, it seems to me we always felt that the McKenzie Valley pipeline made more sense.

And we did have some early discussions with the Canadians.

And the hang-up with them was, as I remember, not so much the money, but the arrangement about the security of the oil.

That if the oil, so to speak, came through Canada, and there was some sort of Middle Eastern oil crisis of some sort, then would they siphon that oil off and hold it hostage against American oil on the east coast of Canada?

That is essentially the price that drives the structure, which we were trying to work out.

That is one of the things you are trying to work out now, as I understand it, the guarantee, and then from Canadian I hope they aren't going to raise the price.

And so, in a sense, in the background, is the notion that we wanted them to make this kind of an agreement, and they wouldn't do it.

Now, if they're going to be more forthcoming about that,

That changes the situation quite a lot, and I think there's never been any question about it.

That's got to get an answer, but you've got to put that price, that guarantee to them.

Of course, they already have it.

The other thing, the way Trudeau has taken common here, I don't know, maybe the Canadians think they can host it, but I don't know.

I think that trying to push the agreement that we couldn't get out of the Mondo is telling us to go to hell.

That's a good deal from our standpoint.

If they think that pushing the agreement on us that we tried to get before that they wouldn't talk about is telling us to go to hell, well, that's weird.

That's a good thing from our standpoint.

The other point has to do with Alaska and the...

It seems to me the problem for the Alaskans is...

that they had, they thought, this gigantic oil and gas field, which is much bigger than is currently estimated on that, from all the reports that we have, and which exploration has slowed way down and not stopped.

Why?

Because right now nobody knows how to get it out of there.

And so they have this great...

Bananza, which they can't do anything about.

From a long-term standpoint, I'll just interrupt you.

The Alaskans are much better off to find a good way to get the oil out of there.

And then they make their money out of the royalties, right?

I don't think this damn thing is a one-shot deal.

Here's the question.

There's a button right there after the money.

This is boom and bust.

And there they got raised.

And I always thought that building was a pipeline.

It's like a great highway or something.

It is just like a highway over some country.

Once it's gone, people leave.

They leave for a while.

At least they got the boom out of it then.

They want that cluster one.

They want to roll these plushies over.

The boom for the job.

Really, let's forget the Alaskan politics.

I'm afraid there isn't.

I had to raise it, because I knew that it would be raised by others if it wasn't.

You know, Rog, several people have talked to us about it.

All students will be down on our throats like the way this is.

Well, we might as well work out something for him.

I don't know what you can do.

On the other hand, he could still make a deal.

There are not many people up there that are...

I'm going to be awful hard-pressed

And we're going to have to get very defensive, delay this decision beyond the election, unless we've got it done for us by the courts.

And I think if there was really any kind of a viable offer by the Canadians as far as that, we could restudy that.

And perhaps something new would actually... You have a situation here from a political standpoint, Roger, that is very important, and that's Gravel, who was a wild man.

And so you've got to be damn sure on this one.

That's why I don't want it in the White House, for about 100 reasons.

But I've got to keep it the hell out of here, so that he doesn't say that we're the ones that took those jobs away from the Canadians.

Oh, yes, sir.

Let's get it over here to where it belongs.

I don't think we're anywhere near this decision yet, because of the very questions that George raises.

But... Do I understand in the way you mean it?

You'll negotiate passively with them.

If they come up with some ideas, then you'll kind of... What's your proposition?

We've gone to you before.

All companies have gone to you before.

What is your proposition?

We know what we want you to do is this.

I think you should all meet together.

I'm talking about how they sort of let it pick off one after another, because I don't know how these guys operate.

You all do.

He'll run over here to Pete, and he'll run over to you, and then he'll come back and say, well, this and that.

This is a very complicated deal.

Each of you raise your questions, and then get your nails down.

That's what I think.

Then the final analysis is probably like that.

See, you and he are opposite numbers.

And he'll say, of course, in our show, here, you never know, he may have more authority than you think.

He may.

He's been Minister of Defense.

He's probably a fellow of some sort.

I think he is.

I think...

I don't think Trudeau would have come back down there if he was...

If he was...

Well, let's just have the meetings with it.

You're familiar with what the alternatives are.

We will... Sure.

Let me see if you're informed.

Let me tell you what I feel about it.

First, looking at the whole thing, the best thing to do if the Canadians will go is to build it down there.

Anybody can see that.

So you go to the Midwest, you go to the Far West, and all the rest.

Looking at it also from the...

It's not really the best thing to do.

The other reason it's the best thing to do, leaving out whether the environmentalists are going to help or hurt, I don't know.

I mean, they might hurt, they might help, but I don't think that's an easy account.

But I do know this, if we need the oil, as apparently everybody thinks we do, from that place up there, we've got to get it down there some way.

My view is that the environmentalists will be strong enough

The delay, the delay, the delay, and screw it up in Alaska.

I thought, I don't think they'll ever get through with the Circuit Court of Appeals like it is.

And not even knowing what will happen in the Supreme Court, because even though we've got four that I've appointed, you never know where those guys are on fire.

So many nuts about that environment.

Terrible.

We didn't ask them about that.

They may be all right on busting, but they may be wrong on that environment.

So my point is, whether they're right or wrong is immaterial.

The strongest point in your case, Raj, is the practical one that you just got to make, is that much as we love to put it through Alaska to satisfy our Alaskan friends, that court's going to kill it.

And aren't you agree?

I don't know about the plan and so forth.

Maybe it takes long.

Well, maybe it can come down there, but...

If you get the Canadians to play, it's a good deal.

And we have a little international benefit from the Canadians.

We won't get it back from them.

But doing something with them is a bad idea.

You might downstream get more oil and gas from them, politically.

George is quite familiar with this thing.

As a matter of fact, I was learning to suggest that when you have a meeting, you stay out of it.

I don't think you need to bother with it because you are handling the rest.

But I think George might, unless you want to be aware in case it comes up, but George might sit in on this because he was also sort of involved in it.

And what you say about pulling another oil industry?

What I'd like to do with George, too, is to sit down and talk about the structure of an international corporation in which there was a third party.

In this case, it would be a third party.

Well, people call those things people.

People present.

The primary purpose of McDonald's coming down was not the pipeline, but was to pick up oil.

A discussion that's been going on for a year and a half, which has to do with the national security aspects of our oil arrangements with Canada.

And he wanted to come down and see Dave Lincoln and me meet with the State Department people, those three groups having discussed this national security matter.

And to that end, I had asked him...

and his deputy and the head of their energy board coming at lunchtime.

No problem with that.

And just not talk pipeline at all.

That's a separate problem.

Right.

If you've been discussing that, that should be discussed as a different matter.

That has to do with the guarantee of a supply at a certain price.

It has to do with their taking care of the east of Canada, because they've been reporting cheap oil, should they be cut off.

I'd separate the two problems.

You can see him on that, because that's a different one.

But then I think on this one, let's leave it over here.

The only reason we are somewhat together is because obviously any sort of pipeline of this common character of this nature would have to be closely aligned to some sort of oil guarantees and oil policy of the North American continental nature.

He talked about one of the things

is that we've got 1,300,000 barrels of oil flowing down this pipeline now across the border, a lot of it going back into Canada, and then we've got 500,000 barrels today going across here, and Montreal from Maine.

So I think, let me suggest this, because if George has the time, I don't know whether he can get away with trying to get a welder or a farm crew and all the other things, but we can...

But if George hasn't the time, I'd like for him to, because of his years later on the oil import thing, if you could invite him, Pete, to sit down on your thing, would you do that?

I think you should.

You have George sitting on here.

Would you do that, George?

Just what you're getting at, but I mean, just because you were, and it might be well for somebody to go back and read that report.

You discussed all this, didn't you?

We went through it very early, this thing.

The picture that Roger brought up, we just really considered it.

The idea of the pipeline to Canada, I mean, I said I had to raise the other thing, because the devil's at it, and I figured Roger would raise it himself, and he didn't.

I think it does too, but don't get the idea, sir, at this point in time that I'm hard down on doing this.

Unless it was really favorably politically, I'm too much of a political animal.

I'll make a short-term game against the risk in this unless I really know more about it than we do.

Oh, sure, well, I'd say let's find out.

Yes, but if they're going to pony up the money, and if we're going to get some other scores and the rest of the thing, that's fine.

But we've got to find out very damn fast what they're going to do.

I don't think they'll tell you.

And very quietly.

Yeah, you have to get hit over the head like crazy.

I don't know if there's any way to do it.

Well, our problem is,

Problem there is this, that he's talking already.

I suppose, Roger, I have a problem that somebody's going to go out and say that the administration is discussing with the Canadians an alternate to the Alaska pipeline.

Well, that's exactly what I would say, too.

I think we might as well get it out on the table.

We've met with them.

It's very complicated.

We're open to any propositions.

I've said that all along.

We're going to see what they have in mind.

Well, it's already on the table.

Now, let's talk about that.

If you would just simply put it out there.

I think it has to.

He's putting it out.

He's going to have a press conference as soon as he leaves the building.

Now, you know you can start right off with that, but I would like to...

No, we just say that if Canadians are coming up with a proposition, we want to see it.

And then they'll say, what are we going to do?

We're enjoying it already, doing this here.

We've got a long court battle ahead of us.

We have to have an option.

Why do you say you're looking at the options?

That's what I said.

I said in Fairbanks at a news conference, and in Athens at a news conference, at the time we went up there to see the emperor.

I said that it was in the last act that I was going to continually review all the alternatives.

Let me suggest this in a minute.

Other people haven't got a better idea.

I think, first of all, it's out already.

I think you all agree he's coming down to see Pete and you.

Right.

The second point is, since that's the case, I wouldn't be a bit, I don't even, I don't think John can keep it quiet, because he's obviously a yanker, and I'm really not interested.

But what I think you could say, but what I think, simply say, yes, we're meeting with the Canadians, and we're discussing a number of problems having to do with oil, I mean, our problems,

But, as far as this pipeline is concerned, we obviously are only discussing at the preliminary stage the options that might be open to us, having in mind the problems that might arise in the event that the environmental problems kill the other one.

And that's something we have to do.

Even beyond that, as I understand it in your environmental statement, you have to show that you've considered all the other options very carefully.

Well, this is what, brushing one of them off, that's very good.

You're going to say that your environmental law, like my choir, you say that my problem is on that one, you already said it, I've already said it, and now you've already decided for the elastic pipeline.

We know we have made no decisions, sir, but we have said it.

No, I don't know that you announced it.

No, I don't think you said it.

No, we haven't.

But what about George's point, though, is that your environmental statement is supposed to say that you've considered all other options?

We've considered them all with the knowledge we had.

And then you decided against going all through Canada, right?

We decided that we didn't have the authority to go any further with one.

Well, then you can say that under the great environmentalists that you are, that you've looked at all this problem.

Our venture, Mr. Fred,

I think you can get off that wicker by doing what George has said.

The law requires you to explore this, and now we have a new option to open it up, and you've got to explore it.

But my problem is with present court cases before us, if I do that...

The judge is going to say, well, I just read in the paper that Morton is talking to McDonald about an alternate route through Canada.

Therefore, the NEPA Act has not been fully complied with, and then we will recycle the whole thing.

Then this becomes a draft statement, and we have to recycle the whole thing again, go out to comments and more public hearing.

But what is the judge going to say, Rod, if the Canadian fellow goes back to Canada?

Oh, that's it.

Well, gee, I tried to raise it with those characters down there in the United States, and they wouldn't give me the time of day.

Oh, I know, but that's the kind of crap we have around.

It's just as if you've got to brace this fella to be a little quiet about this thing and make a try-out.

Oh, then he thinks that he's got the edge on it.

Well, what do you mean, John?

Well, I'm with Raj that if you open the question...

If he says he's exploring that route, by implication, that means he doesn't have enough facts to make a decision, therefore he shouldn't be before the judge yet.

And you're trapped, and there's something against you right off the bat.

It's a morass, it really is.

I think you've got to brace the guy to secrecy, you've got to find out, try to do that, find out quickly if they've got the money to play the game, and if they don't, if they've got a good public out, not to go that way.

If they do have the money, I think you should go that way.

That's it.

There's another problem here, Mr. President, is that the oil has cost the oil companies something over a billion dollars a day.

They've won the pipe.

They're building the ship.

They're under contract.

They want to bring the oil down here.

All they're saying is, please, U.S. government, give us our permit.

It's their dough and their oil and their ships, and we're kind of, we've got to get them in bed with us.

They have set the date that they don't want to do this other thing.

Yeah, they'll have to do it, maybe because of the amount of money involved, and Roger's suggesting that be taken care of by the Canadian government and the U.S. government.

And the delay, if you could...

Overcome both those hurdles, they might very well play, but some are going to have to be taken into account.

Oh, I know it, I know it.

Their lawyers, though, are fearful of this case.

The Alaska lawyer came in to see me, and I think what you have to do, you've got some outstanding men, of course, the head of Atlantic Richfield, and

I just, they got the biggest investment, and I think you just get them in, and have Frank talk about the damn thing.

Right, but early, early.

Don't let him read it in the paper.

He should be brought in very early, and say, look, we're just looking at options here.

But in any event, whatever the option is that you've decided,

The oil companies will be compensated for their, whatever they've done.

You've got to do that.

You can't let those oil companies lose their shirt for what they've already put up.

Well, they're not going to lose their shirt, because remember that they're big investments right here.

The pipe's going to be used.

There's nothing in here that can't be moved.

We're talking about...

We're talking about a cost here of a total of about 5 billion.

A little less, 4.27.

We're talking about one point.

The other thing is it's cheaper for them to do this.

The estimate today, sir, lets the tankers to go to here at 2.9 billion dollars.

With the tankers, the capital investment, I know the tankers, as Peter said, don't get on the oil company balance sheet, but the total asset investment

I think we're all set to start to talk to them in the hand.

We have to do whatever is necessary.

But let's have as little adverse thought as we can.

Let's say this guy may not be shooting blanks.

I don't think he'd be rushing down here to talk about that.

Well, these other things you want to talk to, the thing he said, talking about his thing, and then I think what you ought to do, though, is to be sure that you don't pick us off, and you should all get together in a room and talk about the other thing.

Don't you think so?

Let's talk about this thing, because this is big.

For them, well, actually, it's big for us.

It's what Canada ought to be doing.

It's a hell of a thing for them.

They need some investment of their own.

I think so.

We're going to need the oil.

It looks like it's about 12% of our oil base requirement of 1981, 2, 3, and 4.

Well, I have to talk to the advertising company.

I'll get the map out of your way here.

They'll carry it out for you.

Get on your big horse now.

All right.

Out there in Gallup.

Over those wildlife trails.

That's where you want to keep all those wildlife.

You want to drive the horse.

I'll show you.

All right.

Good luck with that.

God, you need to be sold.

I know you're dry all the time.

Ha, ha, ha.

I hope you're right.

Good luck.