The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. The Middle East leads the news this Labor Day. Iraq suspended the air lift of more Western hostages, President Bush returned to the White House to prepare for his upcoming summit with Soviet Leader Gorbachev, aid workers in Jordan warned of more food riots among refugees stranded by the crisis. We'll have details in a moment. Jim.

MR. LEHRER: On the Newshour tonight, we get four views of the Sunday summit, what it says about the new U.S.-Soviet relationship and the chances of a solution to the crisis in the Middle East [FOCUS - CRISIS SUMMIT], then come two reports [FOCUS - FLOW CONTROL] on how the crisis is playing among oil people in Saudi Arabia and Texas, a conversation [CONVERSATION] with Sen. Sam Nunn, chairman of the Senate Armed Services Committee, and a Roger Rosenblatt essay about burden sharing [ESSAY - SHARING THE BURDEN]. NEWS SUMMARY

MR. MacNeil: Iraq today backed off its promise to allow more air lifts of Western hostages out of Baghdad. French and British planes had been given permission to fly to Baghdad, but that permission was revoked today. Iraq insisted the Britons be taken out on Iraqi Airways planes. Western diplomats in Baghdad were working on such a plan today. We have a report from Baghdad by Brent Sadler of Independent Television News.

MR. SADLER: The plan to evacuate British women and children on chartered Iraqi Airways jets was formulated By European ambassadors. They want to move hundreds of foreigners, including the British dependents, from Kuwait to Iraq and onto London in the coming days. It follows Iraq's cancellation of a French mercy flight and a ban on all foreign airlines to Baghdad.

HAROLD WALKER, British Ambassador to Iraq: As soon as you think you've got something going, a regulation or a feature of the situation changes. It's just one more disappointment.

MR. SADLER: As part of Iraqi psychological pressure against sanctions, a group of school children were sent around European embassies earlier. Their olive branches and slogans were carefully arranged by their pro-Iraqi parents.

MOTHER: We ask you to withdraw your army and your fleet and let us have our milk, food and medicine.

MR. SADLER: It is a sign that sanctions are hurting. The feeling here tonight is that Europe will go for a land bridge of people between Kuwait and Baghdad which could start tomorrow, but the families will need exit visas and face many delays.

MR. MacNeil: This evening, Britain said 500 of its women and children in Kuwait would be put on buses to Baghdad. Britain's Virgin Atlantic Airlines said it will send one of its planes to Amman, Jordan, to pick up about 150 British, European, and American hostages. It will also bring food, blankets, and medical supplies at the request of King Hussein. Twenty-two Western hostages made it out of Iraq today on an Iraqi Airways flight to Jordan. They included eight Americans. Jim.

MR. LEHRER: President Bush ended his Maine vacation today. He returned to Washington tonight to begin preparing for next Sunday's summit with Soviet President Gorbachev. The Persian Gulf crisis is expected to dominate the agenda at their Helsinki, Finland, meeting. A top Soviet official came to the defense today of the U.S. build up in the Gulf. Foreign Ministry Spokesman Gennadi Gerasimov said in Moscow the United States was invited by Saudi Arabia to protect against possible aggression from Iraq. He said the Americans appeared their not on their own initiative, but they were provoked into it by Iraqi actions. His remarks contradicted those of the Warsaw Pact's commander in chief. Last week, he criticized the U.S. build up as a threat to the world military balance.

MR. MacNeil: On the diplomatic front, U.N. Sec. Gen. Perez DeCuellar met with officials in Paris today. He was also scheduled to meet with Jordan's King Hussein. The U.N. chief said his talks with Iraq's foreign minister over the weekend were disappointing. Egypt's President, Hosni Mubarak, met with a group of American Senators and Congressmen today for 90 minutes in Alexandria. He told them he thought sanctions would force Iraq to withdraw from Kuwait.

MR. LEHRER: There were new grim reports today about Asian refugees from Iraq and Kuwait. Thousands were said on the verge of death from starvation and exposure at refugee camps in Jordan. Relief workers said the forty to sixty thousand refugees have begun to fight among themselves and predicted rioting could break out soon. They are from Bangladesh, India, Pakistan, the Philippines, and Thailand, but cannot return home until their governments agree to pay for transportation and to repatriate them. Iraq's foreign minister said today foreign nationals in Iraq were facing food shortages. He gave that message to the president of the International Red Cross at a meeting in Baghdad. He called for nations with citizens in Iraq to send food supplies. He said Iraq could not be responsible for what happened to the foreigners as a result of shortages. Yesterday a spokesman for Iraq's information ministries said measures were being taken to cope with the international blockade. He said Iraqis were determined to live off local products and resist the embargo. FOCUS - CRISIS SUMMIT

MR. LEHRER: Now the upcoming summit in Helsinki, Finland. Presidents Bush and Gorbachev are to talk for at least five hours about how they might diffuse the crisis in the Persian Gulf, among other things. We get four perspectives on expectations, possibilities, and motivations. Michael Beschloss is a presidential historian and author of books on Presidents Franklin Roosevelt, Eisenhower, and Kennedy, and is working on another about the relationship between Mikhail Gorbachev and George Bush. Dimitri Simes is the Soviet board director of the Soviet Studies Program at the Carnegie Endowment for International Peace. Mark Katz is a scholar of Soviet policy in the Middle East at George Mason University in Virginia. He's the author of "Russia and Arabia". Vitaly Korotich is editor in chief of a Moscow based news weekly and a deputy in the Supreme Soviet, his country's parliament. He's currently on leave as a fellow at the Gannett Center for Media Studies at Columbia University in New York City. Mr. Beschloss, could this summit be an important event in the playing out of the Middle East crisis?

MICHAEL BESCHLOSS, Historian: I think it could perhaps in terms of it being the dog that didn't bark. You know, Jim, we look back to the other MidEast wars in 1956 and '67, and 1973. There's always been this great specter, of course, of an American-Soviet confrontation that might lead to a nuclear war. Thankfully, that is not true in 1990 now that the cold war is essentially ended, but what there is a specter of is perhaps light appearing between the positions of the United States and the Soviet Union. I think what President Bush wants to do publicly is make sure that there is not a growing difference between the two governments. I think privately he would like to solicit Soviet help in things like intelligence and covert action cooperation.

MR. LEHRER: But Dimitri Simes, do these two men, no matter what they agree on, do they have the power to end the crisis in the Middle East?

DIMITRI SIMES, Soviet Affairs Analyst: The United States has the power to end the crisis by using military force. The Soviet Union is no longer a super power. The Soviet Union does not want to be a super power. President Gorbachev has difficulty sending Soviet soldiers to Armenia without provoking riots. You would not expect them to send Soviet soldiers to the Persian Gulf. Gorbachev is not going to mediate. President Bush said that much. And of course, the Soviets take no position to make a financial contribution. So I think it is damage limitation on President Bush's part. He does not want Gorbachev, he does not want the Soviet Union to become obstructionists. He wants to hold the line against Iraq to make clear that everybody understands it is not the United States against Iraq, it is the world against Iraq, but this is symbolism, not substance.

MR. LEHRER: Do you agree, symbolism not substance, Mr. Katz?

MARK KATZ, Soviet Affairs Analyst: I think it's more than symbolism actually. I think it's important at this Bush-Gorbachev meeting to demonstrate to Saddam Hussein that he cannot take advantage of any differences between the U.S. and the U.S.S.R. in this crisis. I think that these remarks this past week by the Warsaw commander in chief may have given him the notion that there is some daylight between the U.S. and the U.S.S.R. that he can take advantage of. The statement by Shevardnadze, the summit meeting I think can work to show him that there's no maneuvering room between the U.S. and U.S.S.R. that he can take advantage of.

MR. LEHRER: And would you think that all of that has been worked out in advance, that Mr. Bush knows when he goes to that meeting in Helsinki that he and Gorbachev are going to be able to stand arm in arm when it's all over and say, hey we agree, there is no daylight, to use Mr. Beschloss' term?

MR. KATZ: Well, I can't say for sure, but I don't think the meeting would be taking place if there was some doubt about the issue.

MR. LEHRER: You don't think that the possibility of daylight is causing the meeting in other words?

MR. KATZ: I think that the meeting is useful for both Gorbachev and for Bush because I think that Gorbachev needs to be seen as being consulted by President Bush, as being a partner. He might not be a super power, as Dimitri Simes says, but he's not being ignored, he's not being cut out, America's not taking actions without reference to the Soviet Union. I think that also it's important for Bush to have Gorbachev on board, that this will signal continuing cooperation in the U.N. Security Council. After all, if it was not for this U.N. Security Council cooperation, we would not be having a kind of embargo against Iraq that we had seen. If this had occurred in the past, even if the Soviet Union had cut off weapons to Iraq, but the cold war still existed, America would be in a much more difficult position to try to impose sanctions against Iraq. It would not be able to do so under the U.N. So I think that keeping Gorbachev is highly important for the primarily U.S. effort that's taking place.

MR. LEHRER: But Mr. Korotich, from the Soviet Union's point of view, from Gorbachev's point of view, what is there to be gained from this summit meeting with Mr. Bush?

VITALY KOROTICH, Journalist: Of course, Gorbachev knows his points of view better, but I agree that it's really great because for the first time after the Second World War we are allies, and we always have a lot of explanations why we never support something, what is supported by the main part of humanity. Now all human, about which we are talking so many, we start to support them and we are allies in face of humanity against the cruel aggressor. For me, it's kind of repentance for us for Afghanistan, for Czechoslovakia, for many things when we were not right. Now it's principle thing and morally it's very important for our changes for our perestroika.

MR. LEHRER: Mr. Korotich, what would you say to those who say, well, now look, here's what happened, the United States had two allies in the Middle East, Kuwait and Saudi Arabia, who were in trouble and the United States came to their help, the Soviet Union had an ally in the Middle East, Iraq, and the Soviet Union turned their back on them, what do you say to that?

MR. KOROTICH: I think we had Iraq as ally but it means that this country would destroy its obligation by our pact of friendship and now I think that we will stand on one leg, only on one Arabian league. Youstand there on both legs, on Israeli and on Arab leg. Now you show that you can be here as saviors. Now we must show that we can support order there and we work with you as allies because now we understand that danger to one of our countries is danger to both of them and I believe that it's a good lesson for others.

MR. LEHRER: Dimitri Simes, how do you explain the Soviet position on Iraq, say forget it fellows, we were your allies but not anymore, bum?

MR. SIMES: Well, I think as Mr. Korotich said, tyrants like Saddam Hussein are very unpopular these days with the Soviet opinion. Second, if you look at the economic relationship between Iraq and the Soviet Union it was not as advantageous to Moscow as many people here believe. Iraq actually borrowed a lot of money from the Soviet Union and is not in a good position to pay back. Then as Mr. Korotich said, the Soviet Union feels isolated in the region when the Soviet Union is allied only with most radical Arab regimes and is not on good terms with Israel and moderate Arabs. But let me say something else. We have to appreciate that this conflict is not only about principles and of course what Mr. Korotich said was like music.

MR. LEHRER: Hear that, Mr. Korotich?

MR. SIMES: It is also capabilities and the Soviet Union simply does not have the same interest as far as the Persian Gulf oil is concerned as the United States and the Soviet Union does not have the same power projection capabilities as the United States so the United States is acting and the Soviet Union is allowing the United States to act. That is very important to what Mark has said, but we have to appreciate that what the Soviets are doing, they're stopping being an obstacle, they're not obstructionists, but the job can be done only by the United States.

MR. LEHRER: But what then, Mr. Beschloss, would Gorbachev get out of this kind of -- in other words, he's not been an obstructionist, he's getting a lot of good musical PR, I guess, to put two terms together, but what else does he get out of this?

MR. BESCHLOSS: Well, just as sometimes paranoids have enemies, sometimes political leaders really do believe what they say. Pres. Gorbachev gave a very long speech at the U.N. in December of 1988 about his belief in international law and collective security. This is someone who really means it, and I think if those are principles that he's going to live by when it comes to a choice between perhaps the risks of jettisoning an ally like Iraq and joining in an international action that essentially seems to uphold those principles, I think what he does is the latter, I think it would have been very hard for him to believe what he says he believes and essentially turn against the American action in this crisis.

MR. LEHRER: As a practical matter, when they get into the room there in Helsinki, and Mr. Bush says to Mr. Gorbachev, or let's say Gorbachev says to Mr. Bush, okay, what do you want me to do, what in the world is there that Gorbachev could do to help Bush and the situation? Specifically what could he do?

MR. BESCHLOSS: Well, I think Pres. Bush would say, No. 1, I thank you very much for your help in this in terms of the economic and political actions and also as Dimitri says for not obstructing the military action. I think Pres. Bush would say that this is not an aggressive attempt by the United States to stay in the Middle East on your borders forever, but at the same time, it's very important, Mr. Gorbachev that you and I, meaning Pres. Bush, not show the nations of the world that there are perhaps differences between us that might cause this alliance in the Middle East to begin to splinter. This is a crisis that has to last a number of months. There has to be solidarity.

MR. LEHRER: Yeah, but that's not a solution to the crisis. In other words, there's no way these two men could come up with something, something for Gorbachev to do when he leaves and something for Bush to do when he leaves that would solve the thing?

MR. BESCHLOSS: It's very unlikely. You know, all during the cold war we always heard from largely in the third world that there was a great fear that one day there would be an American-Soviet condominium that would rule the world, clean up every problem in every region. On the Saturday of the Washington summit between the two leaders in June, there was a conversation that went from region to region around the world about what the two countries could do in concert to begin to solve some of these problems. That is not something that fills every third world country and non- allied country with a great deal of hope. So I think both leaders are walking a fine line between, on the one hand, allied action, and on the other hand, not seeming as if there is some kind of American-Soviet conspiracy to dictate terms to the rest of the world.

MR. LEHRER: Mark Katz, when Gorbachev was here for the Washington summit, he was asked at one of these public sessions, particularly the one with the members of Congress, about the Middle East, and he said, well, there's got to be an international conference, you've got to get everybody sitting down at the table that we can get this thing resolved and it's going to take the United States and the Soviet Union to get the thing done. Is that likely to come up again at Helsinki, do you think?

MR. KATZ: I think that Gorbachev is likely to repeat that sort of statement. Of course, this statement was made in terms of the Arab-Israeli conflict.

MR. LEHRER: Right.

MR. KATZ: And I think that he will probably make this type of statement again. I think, however, that while Soviet-American cooperation is perhaps a necessary condition for the resolution of many of these third world conflicts, it's not a sufficient condition by any means. If you go region by region and look at all of these, the causes of all these third world regional conflicts are not U.S. to U.S.S.R. Our conflict did not start these regional conflicts in the third world. They may have exacerbated them but the causes of these conflicts are local and those causes remain no matter what the state of Soviet-American relations.

MR. LEHRER: Yeah. Dimitri Simes, as you know, everybody, the whole world knows that the discussion within the United States at this point is whether to sit and wait with our 100,000 troops in Saudi Arabia until Saddam Hussein gets squeezed and says, okay, I give up guys, or popping militarily and get the thing resolved sooner. Assuming that kind of discussion takes place between Bush and Gorbachev in Helsinki, what would be your hunch as to which way Gorbachev would push Bush in terms of making the choice on that major policy?

MR. SIMES: Well, Jim, let me say first that there's one specific thing which Pres. Bush is bound to raise with Gorbachev, and I'm talking about 193 Soviet military devices in Iraq. They are not very important militarily, they're not with troops. They're not with Iraqi staff, but symbolically they're important. I'm sure that Pres. Bush would be asked after the summit what happened, what transpired. So this is one issue where Gorbachev can accommodate the American President. More specifically,I think that Pres. Gorbachev is really not preoccupied with the Persian Gulf conflict. You have to appreciate that foreign policy is one area where he still is relatively in charge. Everything else is disintegrating. It is Boris Yeltsin, it is Republican leaders. Gorbachev is somewhat isolated. He needs a successful summit. He needs to appear with George Bush. He needs, as Mr. Korotich said, to look as a man of principle. It gives him a new political momentum. I don't think that he is going to push Pres. Bush one way or the other. He would not say attack military action. To become a co-conspirator against Iraq, the Soviets would not do that. He would talk about diplomatic solution. I don't think he would propose anything specific. I would suspect that Pres. Bush would be talking. Pres. Gorbachev would be responding. That is going to be the dynamics in my view.

MR. LEHRER: Do you agree, Mr. Korotich, that Gorbachev is not going to come with an agenda for Mr. Bush as to how this issue should be resolved in the Middle East?

MR. KOROTICH: I think now it's question of isolation, who will be isolated. Now the Soviet Union is the big mass media and a lot of supporters in this corner of globe where America never had that. Now America can organize together with Soviet Union support to the actions, and I think it's principally important too. We must have those boys who are now in Saudi Arabia happy when they come back. We have terrible experiences with our boys in Afghanistan or yours in Vietnam. We must know that it's very risky to a nation to send their children in such operation without success, why I think Gorbachev and Bush will discuss the moral aspects of this case, because it's very important if super powers will be morally defeated in this, it will be defeat for Soviet Union and the United States and now our positions are not so -- I just was in Mexico City where I was attacked by leftists who shouted that you are fascist, you see now we're changing our position. It's really strong, it's really serious, and Bush and Gorbachev talk as new allies in changing world, changing situation.

MR. LEHRER: But wouldn't after they develop this relationship, Mr. Korotich, wouldn't Mr. Gorbachev, if Bush asked for some advice, wouldn't he give it? I mean, if Bush were to say, hey, how am I going to get out of this thing, Saddam Hussein says I'm not going to give up Kuwait, we've got a hundred thousand troops there, you got any ideas?

MR. KOROTICH: I think sometimes we simply find relations between leaders. They have a lot of lines on which they consulted and in which they solved their problems before the summit. I made interview with the Emir of Kuwait a few months ago, and he talk with me about the danger of aggression from Iraq, about the messages he sent about this danger to the leaders of super powers. I think that now Gorbachev and Bush will talk about the changes in their politics. It's really strong thing and it's impossible, as you know, to change geography, but possible to change geopolitics. Now we are in process of both changes and they'll change it together.

MR. LEHRER: Michael Beschloss, because this was a quickly called summit, it's only going to last for five hours or so, and nobody expects, I mean, it's not a summit with a lot of papers to be signed and all of that, is it almost a sure thing that it's going to be successful, because there are expectations like that?

MR. BESCHLOSS: Well, I think that's something the two leaders are trying to do and that's why the other day in the joint announcement you saw a little bit of hedging saying, well, we're not doing just the Middle East, we're talking about arms control on some of these other issues. That takes the edge off the conflict if one does arrive during this conversation. I think the best way, Jim, to give a lie to that entire approach is to say would this summit have been held if there was no Gulf crisis, I think it's hard to say that the answer is not no.

MR. LEHRER: So it's really being held for the picture at the end, is it not, for the two of them to stand and say we are together and there's no daylight between us?

MR. BESCHLOSS: That's right, and I think it's worth mentioning also that there is a very close relationship between the two foreign ministers, Baker and Shevardnadze. This crisis greeted them when they were on a boating trip in Siberia. That is very different, needless to say, from previous such crises.

MR. LEHRER: Well, gentlemen, thank you all four very much.

MR. MacNeil: Still ahead on the Newshour stepping up Saudi oil production, the view from the Texas oil patch, a conversation with Sen. Sam Nunn and a Roger Rosenblatt essay. FOCUS - FLOW CONTROL

MR. MacNeil: Next two reports on the Gulf crisis and the supply of oil, first the view from Saudi Arabia. The authoritative Middle East newsletter reported today that the Saudis will increase their September oil production to replace more than half the shortfall from the loss of Kuwaiti and Iraqi oil. At the same time, Saudi Arabia continues to exercise control over millions of barrels of Iraqi crude stockpiled at its Red Sea Port of Yanbu. Lindsay Taylor of Independent Television News has this report on the situation.

MR. TAYLOR: Emerging through the Red Sea heat haze, the Almageous Terminal, a ghostly reminder to Iraq of the price of invasion. The U.N. embargo has enclosed Iraq's only outlet through Saudi Arabia. Some 10 million barrels of Iraqi crude worth about $250 million remain trapped in these storage tanks. But the Saudi government's making it clear it would be happy to see that flow again as soon as Saddam Hussein withdraws from Kuwait.

ABDULAZIZ AL-ORAYER, Deputy Finance Minister: We hope it will open tomorrow if they comply with the demands of the Arab League resolutions and the United Nations. It's a world effort and we hope this will happen.

MR. TAYLOR: But would you be happy to do business with Saddam Hussein again after this?

ABDULAZIZ AL-ORAYER: Of course, why not? Saddam Hussein is an Arab leader and Iraq is a brother country and we were hoping to help as we helped in this war effort, we helped in the reconstruction and development of Iraq, and the Iraqi people are our brothers and we hope they will come to their senses.

MR. TAYLOR: Isn't that very forgiving though, given what he's done in Kuwait, that you fear he's going to invade your own country, that you're prepared to do business with him again?

ABDULAZIZ AL-ORAYER: Economics is different from political feelings. We are doing business with Russia now and we don't have as many problems with our borders in Iraq as you did with Russia's.

MR. TAYLOR: Although Iraq's terminal in Saudi Arabia is shot for now, huge tankers still ply the Red Sea. Having passed inspection by the Naval blockade, many come here just off the Coast from the Iraqi terminal to Saudi Arabia's own vast oil and petro chemical complex, a main outlet for Saudi crude. Strategically placed to avoid the more volatile areas of the Middle East, should a conflict erupt with Iraq, this outlet would provide a vital supply line to the West.

ABDULZARAG ALGAIN, Director General, Yanbu Project: If anything happens in the Gulf that we're going to have another alternative to have our oil from East to West and to have, we can export our oil as well as our petrochemical industries.

MR. TAYLOR: Is it, in effect, a life line to the West?

ABDULZARAG ALGAIN: Of course it is.

MR. TAYLOR: The Saudis are confident Yanbu is beyond Iraqi strike range. Nevertheless, security here has been intensified. The complex is constantly patrolled. The town of Yanbu, built from the desert in just 10 years to service the port is home to some 22,000 people whose lives are dependent on the industry. Already producing huge quantities of oil, Yanbu's production can be more than doubled should the need arise. In Yanbu Port, the Saudis are busy preparing themselves for any increased production originally planned years ago to meet future peace time demand. Now with Iraq's outlet shut off and the continuing threat of aggression, more and more tankers could find themselves using this Red Sea port as the world benefits from that fortuitous planning. FOCUS - ANOTHER BOOM?

MR. LEHRER: Now another prospective on the oil impact of the crisis in the Middle East. It comes from the part of the United States where oil is something you drill for and sell, as well as buy. Correspondent Betty Ann Bowser of public station KUHT reports from Houston.

MS. BOWSER: It was pay day in Pasadena, Texas, last Thursday. At the Zero Inn near the big refineries, oil workers cashed their checks and shared a few beers. They talked about the crude oil prices which haven't been above $20 a barrel since 1985 until now.

CONRAD SNYDER, Pipe Fitter: Things are going to pick up in Texas over this and you're not going to see nothing but good times in the future.

MS. BOWSER: Are you optimistic?

DAN ROGNER, Pipe Fitter: I'm real optimistic unless Hussein backs off and prices drop back down.

MS. BOWSER: In less than two weeks, the spike in crude prices has pumped big dollars into the Texas economy, which is making its way back from the oil bust of the 1980s. John Olson of First Boston Corporation has been tracking the ups and downs of the industry for 12 years.

JOHN OLSON, Oil Analyst: Houston and Texas are doing very well without this particular crisis. It can do much better with it. If you put an extra $5 a barrel on the price of crude oil, this economy reaps another $3 billion or so of additional revenues. The same thing can filter right through the refining and marketing and petrochemical sector as well.

MS. BOWSER: Another place Olson and other economists think there could be a ripple effect is in the real estate industry where thousands of foreclosed properties are on the market, heirs of the savings & loan crisis. George Mitchell is a real estate developer and oil man who thinks an upturn in the oil industry could help bail the government out of the S&L crisis.

GEORGE MITCHELL, Mitchell Energy Corp.: I think real estate will come back better because even though you will have higher interest rates, you're going to have a better economy here, in my opinion. But I have to remind everybody that the savings & loan and the bank problem was probably 70 percent triggered by a poor energy policy. That's a serious indictment of what an energy policy should have in this nation, that should never happen.

MS. BOWSER: For almost 10 years there has been a limited amount of drilling for new oil because crude prices have been too low to support the risks involved in exploration, but now activity is picking up.

JOHN SAUER: I think clearly we will drill.

MS. BOWSER: John Sauer is chief economist for the Conoco Oil Corporation.

JOHN SAUER, OIl Economist: I think that we will see an improvement in the Texas economy. I don't think anyone right now expects a frenzy that we had the last time when people thought that with the price of crude in the early 1980s, that $40 a barrel heading for 50 and then to $100 a barrel, I don't think that anyone would realistically expect that that's going to happen.

MS. BOWSER: What industry leaders want to happen is a stabilization of oil prices. Millionaire oil man Mitchell is one of them.

MR. MITCHELL: It has to get moving with incentives to get going. Conservation --

MS. BOWSER: What will it take for you to get going again?

MR. MITCHELL: It will take some assurance that we think this $25 oil is going to stay or some assurance that the government is going to give some tax benefits.

MS. BOWSER: Are people clapping their hands down here in Houston these days?

MR. MITCHELL: No, because they know it's a serious problem nationally. It may cause a recession. Houston on average will do better than the rest of the nation, but I think it's a serious problem that we'd rather not happen.

MS. BOWSER: Just like consumers elsewhere, Texans are paying more for gasoline which has increased an average of 11 cents a gallon since the invasion of Kuwait.

CONSUMER: It'll hurt some of us because some of us barely can make it now.

MS. BOWSER: A sector of the agricultural economy is also feeling the pinch. Texas produces more rice than any other state and independent oil man Rob Mosbacher says the situation in the Middle East is hurting farmers.

ROB MOSBACHER, Mosbacher Energy Company: What it does is increase the price of fuel to them and not only is Texas a major rice exporter, but as a matter of fact, Iraq had been one of the major consumers of Texas rice.

MS. BOWSER: Even the oil industry is not immune. A long-term hike in oil prices could also hurt the refining business in Texas, where 30 percent of the country's petroleum is processed. John Dosher is an oil analyst who last week appeared on Houston public television station KUHT.

JOHN DOSHER, Senior VP, The Pace Consultants, Inc.: Houston is more a petroleum processing center than it is a petroleum production center. We have refineries, we have chemical plants, and a very substantial part of our economy is derived from processing petroleum. High priced oil is going to depress these industries. One of the biggest job creating activities in Houston today is a very massive amount of construction going on in petrochemicals and refining and that is going to be depressed by high oil prices.

MS. BOWSER: High priced oil is not going to bring the exploration business back overnight either. Since 1982, more than 400,000 people have been laid off as depressed crude prices made exploration economically unfeasible. Oil wells have been cannibalized, parts sold off piece by piece. Others have been sealed with concrete never to produce again, and industry leaders say it will take time and money for drilling to resume. Russell Wright is editor of World Oil Magazine.

RUSSELL WRIGHT, World Oil Magazine: We don't want another boom like we had in the late '70s and early '80s.

MS. BOWSER: Why not?

MR. WRIGHT: Well, we don't have the equipment here to handle it right now. It would be inflationary both here and in the rest of the country, and after every boom there's a bust, so we don't want to see that. We'd rather have some stability.

SPOKESMAN: Anybody that thinks that 25 to 30 dollar oil will create this majorboom in the oil and gas business is not aware of what's happened in the last five to ten years in our industry. It's been decimated. At the high point of the economic boom in the oil business back seven or eight years ago, probably now nine, we had 4800 rotary rigs operating in the United States. Today we have 1,000 or less. And as a consequence of that, you don't have the potential to go back out there overnight and redeploy those rigs.

MS. BOWSER: What industry leaders say is needed is a national energy policy to stabilize prices, to stimulate exploration and get the domestic oil business going again. CONVERSATION

MR. LEHRER: Finally we have another in our series of special conversations about crisis in the Gulf. Tonight we are joined by Senator Sam Nunn the Georgia Democrat, Chairman of the Armed Services Committee. He was In Saudi Arabia and Egypt last week. Senator Nunn thank you for joining us.

SEN. NUNN: Thank you Robin.

MR. MacNeil: Just following up on our conversation about the Bush Gorbachev Summit. What do you see as its main importance and purpose?

SEN. NUNN: Well they have plenty to talk about in arms control. There is sort of a bog down in both the strategic arms control and the conventional arms talks now. It doesn't mean that we are not going to get an agreement. I think that an agreement in both areas is inevitable but a leadership kind of directive from the top I think would be very helpful to the arms control negotiators. The Middle East, of course, is going to be on the agenda and short term I think the Soviets are doing something. They have supported the United Nations sanction and their cooperation has made it possible for other nations that are usually skiddish about going along with the UN. So I think that deserve some thanks. In addition to that we are actually leasing one of their cargo ships to transport military equipment out of Texas. Now we have come a long way when we start leasing Soviet cargo ships for that purpose. So I think they deserve some thanks for that. I would also probe, I I were President Bush, to get their military advisors out of Iraq. I think that it is important symbolically and psychologically in sending a clear message to Saddam Hussein in that he is going to have an erosion of his military capability. Beyond that I would say in the longer term we need to discuss seriously with the Soviets how we begin to address the question of preventing other Saddam Hussein's in the world to gain weapons of mass destruction including nuclear, including missiles, including also chemical and biological. While we also discuss a way to cooperate with the Soviets and other nations in eroding his present capability. I would add one other item to the agenda. You had a very interesting segment oil situation in the World. I think that it is time for the United States to seriously consider, if the Soviets are amenable, helping the Soviets with technology to develop their own oil resources. They have started a declining period of production with their oil resources and I don't think that is in our interest. We would like to increase the total supply of oil in the World. Also the East European Countries are at risk here. The Poles, for example, have taken a strong step towards market economy but they are counting on Iraqi Oil. The same thing with Czechoslovakia. And the Soviets are beginning to cut their subsidies to these East European Countries which is understandable. So helping them increase their production may be the best way the United States can help the Soviets and it also can help the rest of the World and particularly the East Europeans. This would not require a budgetary approach. It would require giving our oil companies the go ahead and the technology companies to go into the Soviet Union and exchange their technology for the Soviets oil. I hope that the Soviets would be eager to receive that kind of help and I also think that it would be very helpful if they would give some assurances about contracts and that kind of thing. In other words they have to move more towards the free enterprise system to accommodate this kind of move.

MR. LEHRER: Senator let's talk about, you mentioned, international cooperation to stop aggression. Let's talk about that in the light of the Gulf crisis. For years you have been active in your role in the Senate in building up American forces and promoting allied cooperation in that endeavor. How do you feel about the U.S. sending an Army in Saudi Arabia and then having to go around the World cap in hand to some of the countries with an even bigger stake in MId East oil to pay for that operation?

SEN. NUNN: Well I am concerned about the principle of the thing in appearance but I am more concerned about the money because the Allies have got to their part. We have spend according to rough calculations about 4 trillion dollars over the last 40 years in defending Europe. Germany is very strong now economically. The Japanese have been rebuilt since World War II with a great deal of assistance from us. So I think that it is time for them to come up to the batters box and take their just role in the World. And we are really protecting their oil interest more than we are protecting our own. So I think the Japanese, the Germans, our friends in Asia, our Friends in Europe are going to have to contribute. We are spending approximately a billion to two billion dollars per month. We have an oil bill of more than that. And I think for the Japanese to put up only a billion dollars is absolutely ridiculous. They need to be coming up with at least 5 to 10 billion dollars and I think the Germans are going to have to come up with a substantial amount also.

MR. MacNeil: Does this mean that coming out of the cold war the UNited States is going to be effectively the World's policeman but when they dial 911 and the US arrives it is going to present a bill. IS that the way that it is going to work?

SEN. NUNN: Robin we have gotten ourselves in to a fiscal mess now. We have had no fiscal leadership from the White House and I must add also from the Congress for the last ten years. We are in a situation so if we don't go around the World and collect money we are going to have to go on the bond market and borrow it and most of that is going to have to come from the same sources. So I would rather get it from them with no interest rather than floating more bonds. Either way we are going to get the money from abroad. We don't have enough savings in our country to cover our own budget deficit and I think that is sad but it is true now. I think that the challenge is to turn that around and I hope that the budget summits and I hope leadership from the White House don't use this latest episode as an excuse to not address a long term budget plan and fiscal plan.

MR. MacNeil: Because of the fiscal problems is Mr. Bush in effect reversing the Nixon Doctrine. If the Nixon Doctrine said your boys will fight but we will pay. Are we now saying our boys will fight but you will pay?

SEN. NUNN: We are somewhere in between but it is a good question. I still believe in elements of the Nixon Doctrine that said front line countries have to put up the forces. We will help. We will put up some of our but they have to put up their forces. It is time. I think, Robin for us to slow down the number of American forces going in to Saudi Arabia and to speed up the Arab forces going in with particular emphasis on Egyptian forces and Syrian forces. This is very important militarily and perhaps it is even more important psychologically. When Saddam Hussein loses one way or the other I think and hope that is inevitable. I think, that it is important that this be seen as an Arab defeat but rather a Saddam Hussein defeat. That is very important that we not turn the masses of the Arab peoples against us over a period of time.

MR. MacNeil: Would that be what the Soviet Journalist Vitaly Korotich was calling a moral defeat for a super power. I don't know if you heard him. If a super power is morally defeated it would be very dangerous. Would that be a moral defeat if the U.S. did the right thing but ended up alienating a large part of the Arab world.

SEN. NUNN: It certainly would be detrimental over a long period of time. I am not sure what he meant by a moral defeat. I don't think that we can afford to lose in either way in the short term or the long term. I think that we have to be very careful about opinion in that part of the World and I think that it is time for the Saudi Arabians to make it abundantly clear to the Egyptians and the Syrians that they want some of their heavy forces in there. The United States has to consider how many forces we have in their now. We don't have enough heavy forces but it is very difficult to get our tanks in there. And the tanks of the Syrians and Egyptians can be brought in much closer to Saudi Arabia. It is also very important that we do not get so many ground forces in there that we don't have a rotational base. Those young men and women are not going to be able to stay out there in that desert for the next six to eight months without some rotation. We are going to have to have enough units here to be able to switch every three months and certainly every six months and we have got to have a policy that is sustainable. We've moved from phase one which is to deter and to defend and to rally international support for the embargo which has been done by President Bush very well. We are moving in to phase two now which I would call the phase and patience and determination and that means that we have to have a sustainable posture in the Middle East.

MR. MacNeil: Coming back to the point we were discussing a moment ago. What is the new emerging World order. I mean does the U.S. remain a super power if it can not pay the bills for its own military projection?

SEN. NUNN: I think the answer to that is yes. We can pay it Robin. If we go on the bond market our credit is still good fortunately and we can simply borrow more money, have a larger deficit, take the risk that at some point the financial situation is going to turn around and we are going to be very exposed to a financial debacle but we have been doing that for some time and we have gotten away with it. So it is not a matter of not being able to. We can still borrow the money but it is not prudent for us to continue to have this kind of fiscal policy. And I think that even if we were not in the very bad fiscal shape we are in with the Federal budget we still have every right to look to our allies around the world and say it is time for you to do your part.

MR. MacNeil: Before this crisis broke out the conventional wisdom was that after the cold war the real competition isnot going to be military in the World it is going to be largely economic. The two main competitors were Germany and Japan. How does it help the U.S. in that struggle to be their protectors in the Persian Gulf?

SEN. NUNN: That is a good question too but I don't think that it is in our interest for Germany and Japan to have a bad recession. I don't think that it is in our interest for inflation to break out in that part of the World. We are in a World wide economy right now. If we weren't we couldn't borrow the money to begin with that we have been borrowing to run our deficit. So we are in it together in terms of international economy. I think that one of the most serious risks out of this whole thing is economic. I hope that we can achieve our goals in the Middle East without a war. I think that is possible but it is going to take continued international cooperation but if we are going to maintain the embargo we are going to have to get out in front and mitigate the inevitable damage to key countries in the World that are not going to be able to stand this increase in the price of oil. I named two a while ago Poland and Czechoslovakia but you could also list Brazil, you could also list the Philippians. You can list other countries in Eastern Europe and those countries after finally removing the Soviet shackles that have been imposed on them for years and going out boldly to try to come around to a market economy. If they fall flat on their face then the implications there may be more severe than any other implications flowing out of this Middle East crisis.

MR. MacNeil: Have you added up in any rough figures what the total cost of this could be for a year if you take in the compensation to those countries that are in the U.S. interest?

SEN. NUNN: It is very loose and very ballpark and very much speculation Robin, but putting all this together you are talking about 50 billion dollars and you are talking about one year and you are assuming no war. If there is a war the price tag, of course, goes up.

MR. MacNeil: Fifty Billion dollars a year assuming no war?

SEN. NUNN: And I am talking about not only the cost militarily but also the cost economically to keep these countries afloat to maintain the embargo.

MR. MacNeil: Are you comfortable tonight. It is a month in to this. It is a month today since the Security Council first voted for Iraq to withdraw. Are you comfortable that the U.S. is going to come out of this in good order or do you have an uneasy felling about it?

SEN. NUNN: It has been handled well so far. I am uneasy about the number of forces we are putting in to Saudi Arabia. I believe we need to move to the subtle phase of getting more Arab forces in there. I certainly am concerned about the potential lose of life with those young men and women in the desert. They are fine outstanding solider and marines and I think that we all want to do everything we can with international cooperation, the embargo to stop short of war if that is achievable. I would like to see those young people come back alive and well.

MR. MacNeil: Senator Nunn thank you very much for joining us.

SEN. NUNN: Thank you. ESSAY - SHARING THE BURDEN

MR. LEHRER: Finally tonight some thoughts from Essayist Roger Rossenblatt of Life Magazine on the Build up of American troops in the Middle East.

MR. ROSENBLATT: Watching U.S. forces pour in to the Persian Gulf I wonder what it would be like for the America to be at war again. Specifically what feeling would exist between those who went to fight and those who stayed at home. My reference point is Vietnam, of course, and there are obvious differences between the two conflicts. The Super Powers instead of being the feuding Godparents of this war are united against Iraq. President Bush unlike President Johnson has been very careful garnering world opinion against Saddam Hussein and getting the UN Security Council to vote a economic and military embargo. International law, traditionally the law of convenience, for America's pursuit of foreign policy goals has been invoked from the moment Saddam invaded Kuwait. Americans aren't exactly wild about the idea of going to war but again unlike Vietnam there seems to be a general determination that the present course of action is right and necessary. The circumstances of service are different now as well. Today we have a voluntary Army. With Vietnam we had a draft and a lottery and a whole mess of condition under which one was called up or deferred. What would not be different between this time and Vietnam, however, is the painful and confusing division between those who go to war and those who do not. In certain ways that division dug deeper during Vietnam than the one between the pro and anti war camps. No matter how one felt about America trying to hold off communism there was something troubling about the idea of a fighting force made up largely of minorities and the poor while the priveldged and educated were allowed to keep safe. It was especially troubling the country was based on equality of opportunity which one would think ought to include the equal opportunity at danger. War may be savage and stupid but it is also honorable for those who have to stand by side as comrades in arms. Commentators usually stress only the savage stupid parts. The writers who emerged bitter from the first World War railed against the romanticizing against mass killings. The English Poet Wilfred Owen sneered down the ancient battle cry it is sweet and fitting to die for ones country. Calling it the old lie which it was and is. Yet there is an undeniable glory sort of a sad and twilight glory to the enterprise too. Derived not from grand national missions from the shared risks and sacrifices of the human being who fight. Oddly the futility of war gives it a purpose. People are thrown in to a incomprehensible horror in which the one thing they understand is their dependent connection to one another in a live or die place. I never experienced that connection and that has been a source of deep regret to me. Even though I disapproved of our being on Vietnam I had no special wish to see my head blown apart. Yet I didn't have to make a conscious choice about going to war. By the time that Vietnam was a roaring hell I had so many automatic deferments that it would never had occurred to me to enlist. I was married, I had a child, I was a college instructor. I was pursuing a degree. My station in life lively dictated that I would survive the war strolling a University campus while a black high school drop out my age would be sweating under a helmet. Looking back I wish that I would have stood at his side. I am not talking about mere guilt although there is plenty of that. I am not even talking about national duty. National duty is the most prevertable of emotions. I am talking about the moral logic that says, or in my opinion ought say, every bodies war every bodies risk. Not all my non combatant contemporaries feel this way and their consistency in opposing the war is as morally logical to them as my less consistent thoughts are to me. I certainly respect their feelings. Still I suspect there are more who share my sense of regret than have spoken of it. Much of the uproar during the 1988 GOP National Convention about Vice President Dan Quayle having joined the National Guard to stay out of Vietnam was made by people of my generation and Quayles who in their time also joined the national guard. got teaching jobs, fled to Canada or rigged disabilities that disqualified them from serving. Quayles detractors said the hypocrisy was his being a hawk who chickened out. But I think that something else was going on in their minds. Vietnam thanks to books and movies is being to be seen not as an abstract political decision but as a place where ones countrymen fought and bled. Willy nilly Quayle came to represent the decision to let others do ones bleeding. I visit the Vietnam Memorial in Washington and descend in to blackness. Walking down beside the Wall of names takes speech away. Every time I am there I watch the veterans my age who seem to return again and again to that Wall as those compelled to visit the scene of an accident they survived and I wonder if I belong there with them. I do not know if simply being a citizen gives me the right to mourn. I do not know if the vets in their hearts would cede me that right. The conflict with Iraq boils over and continues Americans will begin getting in the same division of ranks as before. I offer this with out meaning to suggest that I have a solution to the problem. I don't. I only know that the division will only hurt us again. It will leave us on opposite sides of an invisible fault line and fill both those who go and those who stay with a sorrowful discomfort. This time like the last time we would not know what to say. I am Roger Rosenblatt. NEWS SUMMARY

MR. LEHRER: In other news today, Boris Yeltsin said the Republic of Russia should enact economic reforms independent of the Soviet Union's central government. Yeltsin is President of the Republic. He said Soviet economic dictatorship had brought widespread poverty and misery. He urged the Russian parliament to approve a plan establishing a market economy within 18 months. In the Canadian province of Quebec, soldiers surrounded about 30 armed Mohawk Indians in a small, wooded area. The Mohawks are the final holdouts from a two month land dispute. They were fighting the expansion of a golf course on to what they considered ancestral land. Yesterday the last Mohawk barricades were dismantled by Canadian troops. RECAP

MR. MacNeil: Again, recapping today's developments in the Middle East, Iraq suspended the air lift of more Western hostages, Pres. Bush returned to the White House from his Kennebunkport vacation home. He'll prepare for next Sunday's Helsinki summit with Soviet Leader Gorbachev. U.S. aid workers in Jordan warned of food riots among tens of thousands of Asian refugees stranded by the conflict, and Iraqi officials said the United Nations embargo has led to food shortages which could hurt foreigners in Iraq. Good night, Jim.

MR. LEHRER: Good night, Robin. We'll see you tomorrow night with among other things a conversation with Former U.N. Amb. Jeane Kirkpatrick. I'm Jim Lehrer. Thank you and good night.