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Interview

MR. VARNEY: First to Washington. Is a deal to drive down gas prices finally near? A new GOP bill pushing more drilling off shore, but it also drops a key demand to drill in Alaska's wildlife reserve. Is the start of a compromise?

Welcome, everyone. I'm Stuart Varney in for Neil Cavuto. This is "Your World." To the guy who is sponsoring that legislation now, Senator Minority Leader Mitch McConnell.

Senator, as I understand it, you're going to encourage the exploitation of shale, oil and tar sands, drill on the Outer Continental Shelf, restrain speculators but drop drilling in ANWR. Is that basically the compromise bill you're suggesting?

SEN. MCCONNELL: Well, there are 44 Republicans who are saying this is a good place to start. Last time I was on this program, Neil said, what are you going to do about gas prices? Well, the gas price- reduction act that we introduced today is a good start. We're only a few senators away from having a majority in favor of doing four things essentially. Opening up the Outer Continental Shelf where states want to have it open, like Virginia, for example, which has been denied the opportunity. Getting rid of the oil shale moratorium put in by this new majority. A lot of Americans don't know this, but we have enough oil shale in this country that basically if you add it all up it's three times the oil reserves in Saudi Arabia right here on our own land.

And also we want to do things on the conservation side, like encouraging plug-in-battery cars and more transparency in the futures markets. We don't want to do anything that will send our futures markets, however, to London.

MR. VARNEY: Now, this is the beginning then. You've made this approach to the Democrats. We don't know what their formal response is at this point. But you're saying you'll go in half way to meet them to get something done.

SEN. MCCONNELL: Yeah, I mean, as you indicated, Stuart, in the introduction, we've actually put aside some of the things that we also think are really important, like opening up a small portion of the Alaskan wilderness. That's so controversial, we decided we'd put that aside and see if we could narrow this bill in a way that might produce a bipartisan majority.

The problem with the other side is they don't seem to want to do anything to increase our own production here at home. Most Americans don't realize we're the number-three oil producer in the world. A lot of this could be solved ourselves by increasing our own production.

MR. VARNEY: Sir, that's what I don't understand. This seems to be a very timid approach to a very clear-cut crisis. It's not what I expected in America. America is a very can-do country, but this is a timid response. Can you explain why it's like that?

SEN. MCCONNELL: Well, our good friends on the other side of the aisle don't want to do anything, no Outer Continental Shelf, no oil shale, no Alaska, no nuclear, no nothing. What we're trying to say here is look, we'll join you on the conservation side and doing some important things. Everybody I know is in favor of conservation. But we can't conserve our way out of this.

MR. VARNEY: Wouldn't it be a political winner to get out there in front of this thing, bang the drum for more supplies of energy in all its forms? Let's go do it!

SEN. MCCONNELL: Yeah, well, it would be a huge step forward to open up the Outer Continental Shelf. Right now, 85 percent of the Outer Continental Shelf has an off-limits sign on it, 100 percent of the oil shale has an off-limits sign on it. Stuart, it would be a big step in the right direction to take the off-limits signs down and to let us get at these enormous supplies that we have.

MR. VARNEY: Is it possible that Congress will adjourn, go on summer vacation without doing anything?

SEN. MCCONNELL: Yeah, I think so, regretfully. But as soon as we get back for a week, we'll be gone a week, as soon as we get back, we're going to be pressing forward on this gas price-reduction act. I do think it would make a dramatic step in the right direction.

MR. VARNEY: Senator Mitch McConnell, thanks for joining us, sir. Appreciate it.

SEN. MCCONNELL: Thank you, Stuart.

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