Late last year, Congress' Office of Technology Assessment concluded that banning the sale of U.S. oil and gas technology to the Soviet Union "would be tantamount to pursuing a policy of economic warfare against the U.S.S.R."
Today, in response to the military crackdown in Poland, the Reagan administration has not only imposed such a ban but is also considering the more drastic step of trying to prevent European companies with U.S. licenses from selling pipeline equipment to the Soviets.
The aim of this tough policy would be to delay or block the construction of the Siberian natural gas pipeline, which would significantly increase West Europe's dependence on Soviet energy by 1990. European companies hope to sell the Soviets $15 billion in equipment for the project and to receive $10.7 billion in natural gas a year through the line starting in 1985.
But in the high councils of the Reagan administration the issue has emerged as a test of where top officials stand, not just on the Polish question but also on the fundamentals of Soviet-American relations.
President Nixon built a shaky domestic consensus on behalf of detente. He supported grain sales, credits, trade and a web of negotiations and discussions on subjects ranging from strategic weapons to health with the Russians.
This pro-detente political consensus became increasingly frayed during the 1970s as a result of a continued Soviet arms buildup, the invasion of Afghanistan and now the Polish crisis.
But in the Reagan administration the pipeline controversy has brought the debate over detente right into the upper reaches of the government. The Cabinet is divided on how far to go in seeking to hamper the pipeline project, and President Reagan will have to decide this, officials acknowledge.
Some senior officials favor continuing the detente process in some limited form. But others--at the Department of Defense, the National Security Council and other scattered agencies--argue that the time has come to break off economic relations with Moscow, pressure the allies to do the same and accept all-out economic warfare as a legitimate means of weakening the Soviet empire in the '80s.
The pipeline issue is a fitting test of strength for these two factions.
Energy is the economic jugular of the Soviet Union. Limiting Soviet energy exports to the West would be comparable to restricting American agricultural exports, this country's major source of foreign cash.
Soviet earnings from oil and natural gas exports in 1980 were about $17 billion, or nearly two-thirds of Moscow's total foreign exchange.
However, revenues from oil exports are expected to decline sharply, perhaps to nothing, by 1985. That is why Kremlin planners view the new 3,600-mile natural gas pipeline from western Siberia to Europe as crucial.
According to current plans, these gas sales would earn enough foreign exchange to pay off western equipment suppliers in two years, with enough cash left over to purchase western technology needed to make up for shortcomings in the Soviet economy.
U.S. officials arguing the case against western support of the pipeline say the growing East-West energy trade indirectly helps the Soviet Union build up its military power by encouraging Soviet economic growth. If the Soviet Union were not trading with the West, they contend, it would have to devote more of its own resources to butter and fewer to guns.
From an economic point of view, they add, the new pipeline would make western Europe dangerously dependent on communist-controlled energy.
After the gas starts flowing, West Germany, France, Italy, Austria and six smaller European countries would get about 30 percent of their natural gas from the Soviet Union. Some parts of West Germany, such as Bavaria, already get 80 to 90 percent of their gas from Soviet pipelines; the chemical, petrochemical and automotive industries in southern Germany depend heavily on Soviet energy.
While there is a highly flexible world oil market to which customers can turn when petroleum is cut off from one source, there is no such world market in natural gas because most of it moves through pipelines, not barrels, that bind suppliers and customers.
State Department officials have been attempting to convince the West European allies that non-Soviet energy sources--including vast, unused U.S. coal reserves, North Sea oil and untapped gas reserves off the coasts of Nigeria, Ghana and Cameroon in West Africa--offer more secure sources of supply for the future.
However, none of these arguments has persuaded the Europeans, who are pressing ahead with their pipeline plans. Last week a group of French banks announced an agreement to lend the Soviet Union an additional $140 million to finance the sale of French equipment for the pipeline. West German banks already had committed large amounts of financing at below-market interest rates.
Europeans argue that the Soviet Union has proved a more reliable oil and gas supplier during the past 20 years than the Middle East.
And they complain that the U.S. government has been insensitive to unemployment and other economic consequences in Europe if the pipeline project is curtailed. While the United States has suggested other possible sources of energy, it has not suggested other export markets for the huge equipment orders earmarked for the Soviet project.
While the Reagan administration is considering drastic measures to hinder the sale of billions of dollars of pipeline equipment by European firms licensed by U.S. companies, it has left untouched the $4.5 billion annual U.S. agricultural trade with the Soviet bloc.
European critics charge that the administration seems philosophically unable to see the two sides of East-West trade. American grain sales to the Soviet Union may enable the Kremlin to divert some resources to defense. But these same exports also strengthen the U.S. economy, provide tax revenues and indirectly free up resources for U.S. national defense.
Europeans also contend that the Soviet pipeline will diversify their sources of energy, an objective pushed by Washington since the 1973 Middle East oil boycott, and reduce the political and economic leverage that the Organization of Petroleum Exporting Countries can exert on the western alliance in case of some new Mideast crisis.
Nevertheless, the pipeline project, the largest single East-West deal in history, undeniably contains risks. The project would commit vast new western loans to the Soviet bloc at a time when Poland hovers on the brink of financial default on its loans. Moreover, the Russians would repay the principal on these loans not in cash, but in the form of natural gas still underground in Siberia. As the deal works, the actual payment on loans for pipe, equipment and services will be made to western companies and banks by the European utilities, as they receive the gas from the Russians.
Writing in Washington Quarterly magazine last fall, two employes of Chase Manhattan Bank, Miriam Karr and Roger W. Robinson Jr., warned that "Europe's eagerness to reap the benefits of economic and commercial relations with the U.S.S.R. has obscured the risks inherent in striking individual accommodations with Moscow."
However, the authors add that this "narrow approach" is related to the "absence of a consistent and clearly enunciated U.S. foreign policy in the past."
They note that efforts to coordinate the energy policy of the Atlantic Alliance have been sporadic, with the result that the alliance is seriously divided on how to proceed on the pipeline, "a major watershed event."
"If we underestimate the strength of the European economic interests, or the political lobbies which lie behind them, we risk a substantial and further erosion in our credibility concerning East-West trade policy," warns Edward A. Hewett of the Brookings Institution, one of the leading experts on the pipeline.