Senator Mitch McConnell, in another virtuoso performance, said in no uncertain terms in a CNBC interview last night that the GOP is committed to drill, drill, drill. Interestingly, he said he is willing to do business with the Democratic leadership, and despite news reports to the contrary talks between him and Harry Reid are in fact going on. But if the Dems stonewall, then McConnell will take it to the people in a concerted national effort to make the point on drill, drill, drill and position the GOP for a comeback in the congressional elections this fall. Once again, the distinguished Republican Senate leader showed an awesome command of an issue as well as a clear strategic view on how to proceed. I hate to say he is underrated, but he is truly one of the top Republicans in the country. What follows is a transcript of the interview:
Kudlow: Our lead story tonight is the hammer and tongs, drill, drill, drill battle in Congress that could decide the fate of the November election, the economy, and stocks. Here to tell us about this historic battle is Republican Senate Leader Mitch McConnell of Kentucky. Mr. Leader, welcome back. Thank you sir for your time.
McConnell: Glad to be with you Larry.
Kudlow: Senator McConnell, there’s a lot of talk about a drilling deal that could be out there – energy speculation, trading speculation may be part of it. There was a 94-0 vote on a procedure. Where is this debate? Because this could really be a huge issue for stocks and the economy, and I reckon for the November election as well.
McConnell: Well there’s good news and bad news. The good news is we’re turning to the subject. The bad news is our Democratic friends think this is only a speculation problem. You know, the most famous rich Democrat in America, Warren Buffett, says it’s not a speculation problem; it’s a supply and demand problem. Boone Pickens has been down here promoting his plan which involves doing everything. He thinks we ought to do all of these things.
What our goal is as Senate Republicans is to get the Democrats to open this thing up. Let’s have real amendments on real issues. And at the top of the list, obviously, would be following the desire of over 70 percent of the American people to get the option to go into the Outer Continental Shelf. Right now 85 percent of the Outer Continental Shelf is off limits. [Democrats] have shut down all of the oil shale. We have three times the reserves of Saudi Arabia in oil shale, right here in America. A moratorium has been imposed by this Congress last year on that. We need to have votes on those amendments and see if we can do a better job of opening up our own resources and become significantly less dependent on Middle East oil.
Kudlow: Senator McConnell, let me pick you up on the moratorium idea. First of all, what would be in this? Would it be a total reversal of the moratorium that expires September 30th? Are we talking offshore drilling? Are we talking Alaska, ANWR. Are we talking shale?
McConnell: Well I think we ought to do, at the very least on offshore, is give states an option. A state like Virginia for example, which wants to go into the Outer Continental Shelf, is currently not permitted to do that. At a very minimum, we ought to allow states an option. Many of our members obviously think 50 miles and out, and that’s what we’re talking about, nobody by the way would see any of these oil rigs, because they’d be further out away from the shore. Why not give states the option at the minimum to do that?
And why in the world would we want to shut down oil shale when we have three times the oil reserves of Saudi Arabia right here on shore, on land, in the western United States? There are other things we ought to do as well. I’d like to see a vote on opening up a small portion of the Alaskan wilderness. I’d like to see an amendment on coal to liquid. We’d all like to promote nuclear power, particularly those who are concerned about climate change. There are a lot of things we need to do. And we need to do them now. The American people are demanding that we do it now.
Kudlow: There are reports that you were having negotiations with Senator Reid and the Democratic leadership in recent days over amendments to what I guess is some kind of anti-speculators bill. I’m not sure if that’s even right. But the report said that these negotiations broke down sir. Can you shed any light on that?
McConnell: No they continue. The first thing we want to make clear to the Democrats is that we want to get on this subject, and stay on this subject. We think they want to just pass some kind of bill on speculation that almost no one thinks would make a difference, and then move on to something else. We want to stay on this issue. We want to offer amendments that will make a difference. We hope that will encourage the American people that we’re finally going to get a handle on our own energy production and try to make a difference in the future, rather than handing our future over to Middle Eastern governments, many of whom are not friendly with us.
Kudlow: Senator, there’s a gang of ten out there, I’m sure you know about it. We interviewed Senator Mary Landrieu of Louisiana who’s one of the ten. They’re looking for a compromise deal to open lots of drilling opportunities offshore and onshore. Not Alaska, but I think the shale was included with some conservation measures. Sir are you working with the gang of ten? Might that be some support for your position?
McConnell: Well I certainly hope so. I’ve certainly encouraged this group. I think any Democrats we can find who are willing to come on board for additional drilling both on and offshore, I think that’s a good thing. And by the way, I want to emphasize that every member of my conference also is in favor of most of the measures you can think of to use less. For example, we’re enthusiastically in favor of incentivizing battery-driven cars. Many of my members are interested in natural gas, natural gas automobiles, which are driven all around the world, except here. We have a few here, but not nearly enough. We’re for both finding more and using less. Our Democratic friends, most of them, and I think Senator Landrieu may be an exception to that, are only interested in using less. They’re not interested in finding more. And that’s not enough to help solve this problem.
Kudlow: As you can imagine, the whole world is watching this debate. Since President Bush removed the executive moratorium, we’ve seen a precipitous drop in energy. Oil prices are off, I don’t know, more than $20 dollars, about 15 percent, just on the hope of greater energy supplies. So the whole world is watching this debate in the Senate and the House. Do you have any sense of a timetable for votes that would give us guidelines?
McConnell: Well we’re on the subject now. And our view, Republicans in the Senate’s view, is that we ought to stay on this subject until we do something worth doing. Something important that will send a signal, not only to the rest of the world, but to the American consumer that we intend to get a handle on this problem and make progress.
Kudlow: You know Senator, you and I have talked about your need to create a firewall against, perhaps, contingencies in the election coming up. 60 votes is the magic number. In your judgment, is this drill, drill, drill argument a key political issue? Could this in fact boost GOP hopes for November?
McConnell: Well it could. My first choice frankly is to get something done that’s important for the country. But if our friends on the other side are unwilling to increase domestic production, then we’re happy to take that to the people as a political issue this fall. First choice is to have an accomplishment; second choice is we take it to the American people. We think they’re on our side. We think they want us to expand American production, and to begin to solve this problem now.
Kudlow: When might the first votes occur? Are we talking tomorrow? Are we talking Friday? Are we talking actually before you go out for Labor Day?
McConnell: Yeah. Friday and then you know, if we stay on the subject, which is my goal, we’ll be still dealing with this next week.
Kudlow: All right, Senator Mitch McConnell. Thank you very much for the update sir. We appreciate it.
McConnell: Thank you Larry.