CNBC " Inteview With Senator Maria Cantwell And Senator John Barrasso" - Transcript

Interview

Copyright ©2009 by Federal News Service, Inc., Ste. 500, 1000 Vermont Ave, Washington, DC 20005 USA. Federal News Service is a private firm not affiliated with the federal government. No portion of this transcript may be copied, sold or retransmitted without the written authority of Federal News Service, Inc. Copyright is not claimed as to any part of the original work prepared by a United States government officer or employee as a part of that person's official duties. For information on subscribing to the FNS Internet Service at www.fednews.com, please email Carina Nyberg at cnyberg@fednews.com or call 1-202-216-2706.

MS. FRANCIS: Should Congress encourage offshore drilling in addition to everything green? Or should a crackdown on speculators?

We have two Senators from the Senate Energy Committee on hand to discuss with us. Joining us from Capitol Hill, Democratic Senator Maria Cantwell from Washington. We also have Republican Senator John Barrasso from Wyoming.

Senators, thank you to both of you for joining us. Here we go again, I mean, the crude oil bubble is inflating. What do you think is the solution before it goes back to 150 bucks a barrel and we see consumers crushed again? What would you want to do today?

SEN. CANTWELL: I personally would want to see transparency. For all the discussions we've had about credit default swaps and the lack of transparency that caused the housing crisis, we still have dark markets where oil is traded on ice, where consumers don't know what the real price of oil is being driven by, and today, you had a report from the pit that basically -- you had somebody there saying, wait a minute, this isn't about demand. That's not what's driving this price.

So consumers deserve an answer and we need to make sure that we don't have dark markets operating in the United States.

MR. KUDLOW: You know, Senator Barrasso, I appreciate what Ms. Cantwell is saying, but there have been so many studies about these oil markets. No one has ever come up with anything phony whatsoever and I want to ask you, Mr. Barrasso, because this is so important. There's legislation coming out of the Senate Energy Committee. Senator Dorgan wants to expand outer continental shelf offshore in the Gulf of Mexico, I mean, don't we have to produce more oil and natural gas and shale in order to get these prices at reasonable levels for consumers and for economic recovery? Don't we have to produce?

SEN. BARRASSO: We need to find more and we need to use less, and I voted with Senator Dorgan on that amendment yesterday in the Energy Committee.

We need to make and I understand the president wanting green energy. Well, we need those green jobs, but we need the red, white and blue jobs. We need all the American sources of energy. We need to make our energy as clean as we can, as fast as we can, Larry, but we need to do it without raising the prices on American families, and when the president says he wants green energy to be the cheapest form of energy, it's not because he wants to make that form of energy cheaper, it's because he wants to make all of the others more expensive with this expensive cap and tax program.

So I have grave concerns. I think we have to find more and use less.

MS. FRANCIS: I don't know, but Senators, which one of you wants to disagree with Larry back there about that point on speculators? I mean we saw an explosion in the price of oil and a collapse that dwarfed what actually happened to demand.

SEN. CANTWELL: Exactly.

MS. FRANCIS: I mean there's got to be something else in there.

SEN. CANTWELL: There is something else to be seen, and that is to make sure that you have a federal agency like the Commodities Future Trading Commission doing its job and overseeing. You can't have a trading like Nynex and have all the regulations on Nynex and then allow for something like ice to be a dark market and not have the CFTC look at oil futures.

So just like last summer when we had a price run up to over $140 a barrel and no one could explain it, we seem to be well on our way now where, today, you even have people as I said earlier saying that it doesn't have to do with demand.

So what we need to do --

MR. KUDLOW: But your initial agencies, Senator, the international agencies, both the U.S. and in Paris are saying, demand is picking up. Now, I will agree with you on one point. Some of this has to do with investment speculation on a cheaper dollar, so maybe we ought to fix our currency problem and stop spending and printing so much money in the United States. But whatever, bellyaching about the oil markets, Mr. Barrasso, doesn't produce a drop more energy and I don't see why we want to tax oil, tax gas, restrict the offshore. We can't do shale. What can we do? We're not going to have little green go carts tomorrow --

SEN. CANTWELL: Well, listen --

MR. KUDLOW: We've got to have to have some energy production in the next 25 years if you want to grow the economy.

SEN. BARRASSO: You need to find more and you need to use less and gold is up at $950 an ounce, oil is up, a lot of this has to do with the fact that China doesn't want to lend us any money. We've had reckless spending, reckless borrowing. We're wrecking the economy this way.

So if you're trying to say where do we want to hold my value and you have to hold it someplace, people are moving to gold, moving to oil and it's because of the way that this country has worked in such an irresponsible way with our own debt.

SEN. CANTWELL: Well, we don't want to be back to where we were with the credit default swaps and saying, why didn't we catch this? But to your point on yesterday's proposal, we now have before the Senate moving in this energy bill, a proposal to open up drilling just ten miles off the coast of Florida in what is a major tourist area for the state of Florida and really the southern United States.

MR. KUDLOW: I thought it was 45, Senator Cantwell.

SEN. CANTWELL: No. No. That's just where the details in the bill are so important. Destin, Florida, just ten miles off of that coast and they get hundreds of millions of dollars to the Florida economy in tourism and just ten miles off that will be drilling and that proposal has never had a hearing in the United States.

MR. KUDLOW: So you're going to vote against it, I take it.

SEN. CANTWELL: I already did yesterday.

MR. KUDLOW: Yeah.

SEN. CANTWELL: And I think the important thing is, you can have new resources, but they have to be done in a responsible way, and you have to realize that the United States has very little ability to impact the price of oil. We only have two percent of the world's oil reserves.

So getting to as Senator Barrasso said, the efficiency to getting to things like smart grid technology, other things that will help us on efficiency will help the United States.

MS. FRANCIS: Okay. We've got to go.

MR. KUDLOW: I've got to get out. I must respectfully and politely disagree. I think drill, drill, drill would make an enormous difference. We have a couple of trillion dollars worth of energy reserves out there.

Source