INTELLIGENCE BRIEF KOSYGIN NOTES FUEL PROBLEMS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A002100250001-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 7
• Document Creation Date: December 12, 2016
• Document Release Date: June 24, 2002
• Sequence Number: 1
• Publication Date: December 1, 1964
• Content Type: BRIEF

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INTELLIGENCE BRIEF
CIA/R:R CB 64-79
December 1964
Copy No.
KOSYGIN NOTES FUEL PROBLEMS
DIRECTORATE OF INTELLIGENCE
Office of Research and Reports
CONFIDENTIAL
GROUP 1
Excluded from automatic
downgrading and
declassification
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This material contains information al ecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Sees., 793 and 794, the trans-
mission or revelation of which in any nanner
to an unauthorized person is prohibited by law.
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KOSYGIN NOTES FUEL PROBLEMS
In his speech of 9 December 1964, Kosygin drew attention to certain
fuel supply problems in the past and anticipated their continuance in 1965. 1/
The problems noted pertain principally to the effective distribution of
fuels rather than to the total available supply. The national production
of fuels in the USSR continues to provide adequate supplies for the domestic
economy as well as growing surpluses of petroleum and coal for export.
However, the European USSR, with its concentration of energy-intensive
industries, historically has been energy-deficient, in terms of local pro-
duction, and the USSR has been faced over the years with the problem of
balancing the movement of the required supplies of energy (including
electric power) into this area.
Kosygin reasoned that certain difficulties had arisen in the fuel
balance because quotas for output of coal and gas under the Seven Year
Plan (1959-65) were not being met while consuming sectors of the
economy continued to grow according to plan. Under these conditions
it might be expected that exports of all forms of energy would be cut
back. On the contrary, exports of all fuels have continued to increase
regularly,** and net exports of crude oil-:'-"* in 1963 accounted for more
than 24 percent of domestic output compared with only 13 percent in
1958. Similarly, net exports of coal (and coke) have continued to increase,
Coal has lagged badly behind the annual levels of output established
by the original Seven Year Plan, and cumulative output during 1959-64
will be roughly 230 million metric tons less than the original schedule.
Similarly, there has been difficulty in meeting annual goals for output
of gas, to the extent that the goal for 1965 has been revised downward
by 15 percent. Failure to meet goals for output of gas may be attributed
in large part to the failure to prepare consumers.
** In contrast, the original Seven Year Plan called for only modest
increases in the export of oil -- to about 33 million metric tons in 1965 --
and for a decline of 20 percent in the export of coal. Z/ In actuality the
original goal for 1965 for oil exports was achieved in 1960, and exports
of coal, rather than declining since 1958, have continued to increase
from year to year.
:; ** For this calculation, exports of petroleum products are expressed
in terms of crude oil equivalents (1 ton of crude oil is equal to 0. 92 ton
of petroleum products).
C-O-N-F-I-D-E-N- T-I-A-L
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C-O-N- F-I-D-E-N- T-I-A- L
representing more than 4 percent of output in 1963 compared with less
than 2 percent in 1958. There is little doubt, however, that the continua-
tion of these exports is motivated by the urgent need to enlarge the
earnings of foreign exchange.
Earlier this year the Soviet press carried considerable comment
regarding the increasing deficiency of energy in the European USSR.
This flurry of publicity apparently was occasioned by the competition
among the coal, electric power, and oil interests for their "proper"
share of limited investment funds. Each argued that the mounting
energy problem in the European USSR could best be resolved only
through priority expansion of its own industry in the eastern regions
of the country. Generally, however, short-ages of fuel are more local
in nature, caused by transportation difficulties and/or peak demands
during the harvest and winter seasons.
C-O-N-F-I
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