ties that holds them in our camp. To relieve the demands on us we have, it is true, sanctioned a few barter deals between them and the Middle East. But if they were ever to achieve total independence from us in oil, and thus dependence on the West, it would surely be a matter of time, and a short time, before East Germany, Poland, Czechoslovakia, Hungary, and even Romania slipped into the grasp of the capitalist camp. Not to mention Cuba.
CONCLUSION . ...
Marshal Kozlov looked up and checked the wall clock. Eleven o’clock. The ceremony out at the airport would be about to begin. He had chosen not to go. He had no intention of dancing attendance on Americans. He stretched, rose, and walked back to the window carrying the Kaminsky oil report with him. It was still classified Top Secret and Kozlov knew now he would have to continue to give it that designation. It was far too explosive to be bandied about the General Staff building.
In an earlier age any staff officer who had written as candidly as Kaminsky would have measured his career in microns, but Ivan Kozlov, though a diehard traditionalist in almost every area, had never penalized frankness. It was about the only thing he appreciated in the General Secretary; even though he could not abide the man’s newfangled ideas for giving television sets to the peasants and washing machines to housewives, he had to admit you could speak your mind to Mikhail Gorbachev without getting a one-way ticket to Yakutsk.
The report had come as a shock to him. He had known things in the economy were not working any better since the introduction of perestroika —the restructuring—than before, but as a soldier he had spent his life locked into the military hierarchy, and the military had always had first call on resources, materiel, and technology, enabling them to occupy the only area in Soviet life where quality control could be practiced. The fact that civilians’ hair dryers were lethal and their shoes leaked was not his problem. And now here was a crisis from which not even the military could be exempt. He knew the sting in the tail came in the report’s conclusion. Standing by the window he resumed reading.
CONCLUSION . The prospects that face us are only four and they are all extremely bleak.
1. We can continue our own oil production at present levels in the certainty that we are going to run out in eight years maximum, and then enter the global oil market as a buyer. We would do so at the worst possible moment, just as global oil prices start their remorseless and inevitable climb to impossible levels. To purchase under these conditions even part of our oil needs would use up our entire reserves of hard currency and Siberian gold and diamond earnings.
Nor could we ease our position with barter deals. Over 55 percent of the world’s oil lies in five Middle East countries whose domestic requirements are tiny in relation to their resources, and it is they who will soon rule the roost again. Unfortunately, apart from arms and some raw materials, our Soviet goods have no attraction for the Middle East, so we will not get barter deals for our oil needs. We will have to pay in cold hard cash, and we cannot.
Finally there is the strategic hazard of being dependent on any outside source for our oil, and even more so when one considers the character and historical behavior of the five Middle East states involved.
2. We could repair and update our existing oil production facilities to achieve a higher efficiency and thus lower our consumption without loss of benefit. Our production facilities are obsolete, in general disrepair, and our recovery potential from major reservoirs constantly damaged through excessive daily extraction. We would have to redesign all our extraction fields, refineries, and pipe infrastructure to spin out our oil for an extra decade. We would have to start now, and the resources needed would be astronomical.
3. We could put all our effort