This is a rush transcript from "Your World with Neil Cavuto," June 24, 2008. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Well, is this fight over offshore drilling a winning issue for the GOP? Well, it's a question I posed with former presidential candidate Mitt Romney just moments ago.

(BEGIN VIDEOTAPE)

CAVUTO: Do you feel that the president, even though he has been pushing this issue of drilling more for oil here to help get us out of this energy fix, looks like he's sympathetic more to the oil companies than the American people, and the Democrats are going to present that, and, by extension, almost any Republican candidate, as being a candidate and a party of big oil?

MITT ROMNEY (R), FORMER MASSACHUSETTS GOVERNOR: You know, I know the Democrats are going push that. And I'm sure King Abdullah and others are going to push that kind of thinking as well. They're saying, oh, it's the speculators that are guessing on the price of gas that's causing gasoline to go up, and it's the big oil companies.

Watch Neil's interview with Mitt Romney: Part 1 | Part 2

But, you know, you can look at the simple numbers. And, hopefully, we Republicans are smart enough to educate the American people. We're sending over $1 billion a day out of our country, not to speculators, not to oil companies, but to countries like Venezuela and Iran and Saudi Arabia and Russia. We're sending money out there.

Those guys, they're getting so much money, they're building ski resorts in the desert. That's where the money's going. The American people are going to see through this populist message that the Democrats are selling and recognize that America has to become energy sufficient.

And that means nuclear power, clean-burning coal, oil of our own, or we're just going to keep on taken — being taken to the cleaners.

CAVUTO: John McCain has been a little inconsistent on this, Governor. He has talked about the need for drilling off the coast, even though for a while he was opposed to that. He supports nuclear subsidies and the like, even though he does not share the same for ethanol. In other words, he's flip-flopped on these issues a number of times and confused folks.

Is he going to regret that?

ROMNEY: You know, I know that, when circumstances change, you have to look at the numbers and see what they mean. When gasoline gets to $4 a gallon, that surely would hopefully mean that a thoughtful leader is going to understand what the implications are for our country.

John McCain, however, on the issues that you've described, I think, has been pretty darn consistent. He's said, for instance, that he did not support offshore drilling when states opposed it. And his plan today is to say, look, allow offshore drilling, but the states must also agree with it. And I think...

CAVUTO: But isn't that a lot like, Governor, saying, I was for it before I was against it, before I was for it?

ROMNEY: No, I don't think so. He's said, look, it's going to be up to the states. The federal government is not going to prohibit drilling, but the states have to go along with it.

And what's really changed over the last several months, for instance, is the people of Florida, for instance. I saw the poll saying that the overwhelming majority of Floridians want to drill offshore in Florida. Well, that's a big change than where they were.

And the reason for the change or the flip-flop on the part of the public is, we're paying $4 per gallon for gasoline and we recognize that we're enriching some very bad people, and it's time for us to take action to put ourselves on track to ultimately provide for our own needs.

CAVUTO: Do you think Governor Crist in Florida has flip-flopped on this because he wants to be John McCain's running mate?

ROMNEY: I don't think — you know, I don't know what Charlie Crist has said about this topic. But, again...

CAVUTO: He's for drilling. He's now for drilling off the coast.

ROMNEY: You know, if the people of the state are used to paying $2 a gallon for gasoline, and then it goes to $4, that changes people's perspectives.

That's — you know, this idea that if you change your mind when circumstances change, that, somehow, that's wrong, that strikes me as being intelligent. People who are unwilling to change their mind when circumstances change really shouldn't be in public office.

And this is a circumstance where our country is having its treasury drained by sending money outside of this country to some very bad people. And it's time for us to finally say, you know what? We can't keep on living like this. We're going to have to change our ways.

And drilling for additional oil is one way to do that. More nuclear power is a way to do that.

And I look at Barack Obama. He's said, look, let's not do additional drilling. Let's not have nuclear power. Let's not expand nuclear power. Let's tax coal and gas, he says, natural gas.

Those are the two domestic sources we've got right now that are meeting the bulk of our energy needs, electric needs. Barack Obama does not have any plan at all. And John McCain has laid out a pretty bold plan to get America energy independent.

CAVUTO: Let me ask you, Governor.

You're probably the most successful businessman to have ever run for president of the United States. So, when you hear, on both sides, actually, and among, as you said earlier, the Saudis themselves, that speculators are to blame for the big run-up we've seen in oil prices, what do you think of that?

ROMNEY: Well, you know, I think it's a natural human tendency to assume there's some bad guy out there that's making things bad for us and it has nothing to do with ourselves.

And the truth of the matter here is, we've been using a lot of energy, pretty inefficiently. Demand around the world is growing like crazy. China, India, developing countries are now buying cars. And the result of all of this is, we're using a lot more energy, and we're not finding a lot more.

CAVUTO: Yes, I understand that, Governor. But do you feel that speculators, as some fear, have gunned it — in other words, taken what would be higher oil prices anyway and put it on steroids?

ROMNEY: You know, it's very possible that people speculating on what the future price of oil will be have made it go up faster. You know, I know there's going to be evidence to try and take a look at that and understand whether that was the case or not.

But, you know, there are going to be speculators, whether they're here in this country or in Russia or around the world. It's not like America is the only place in the world where people can take a bet on whether oil's going to go up or down. It happens all over the world. That's not going to stop.

CAVUTO: So, in other words, they could take what — if the markets are shut down here, they could go across the globe?

ROMNEY: Well, yes.

CAVUTO: Right.

ROMNEY: People are able to buy and sell oil, and buy ships full of oil around the world. That's what happens. There are markets all over the world.

This is a world economy, and the United States Congress is not going to be able to regulate what people in Great Britain are doing and France and Africa and Russia and all over the world — China.

We're going to have to recognize that, if we want to see energy prices that are more stable, and most important, in my view, if we want to see that, instead of money flooding out of our country going to other places, but, instead, it stays here, then we're going to have to develop our own resources — nuclear, coal, gas, of course additional drilling, the renewable resources, better battery technology, John McCain's incentive to try and get people to really focus on battery technology. All these things mean money here.

CAVUTO: What do you think of that, by the way? To me, Governor — I got you. And I didn't mean to interrupt you, sir.

But this $300 million whoever comes up with the best battery idea, to me, it sounds goofy. Now, maybe there's some wisdom in it, and it does sort of incentivize some guy in a garage to come up with something neat. But is it really a constructive use of oil strategy to just offer up what amounts to a door prize for whoever comes up with the neatest thing?

ROMNEY: You know, we've done that before. We've had rewards and incentives for people developing new technologies. It's always stimulated a lot of activity and energy — for fuel economy in vehicles, for aircraft and their ability to go long distances. And these kinds of prizes have brought in all sorts of inventors.

And it's not huge money compared to the kind of money we send out of the country every day, over a billion dollars. So, it's a way for us to stimulate a little activity and show, if you will, the commitment of this country towards new technologies, because, long term, 10 and 20 years out, we're going to have to develop new ways of powering our vehicles, heating our homes, and providing for our energy needs.

(END VIDEOTAPE)

CAVUTO: All right, up next, the question everyone is asking: Is Mitt Romney going to be John McCain's number two? He might have just hinted, at least, at the qualities of that number two.

(COMMERCIAL BREAK)

CAVUTO: Well, will Hillary Clinton supporters decide who John McCain picks as his running mate? Former presidential candidate Mitt Romney weighing in on that.

(BEGIN VIDEOTAPE)

CAVUTO: Let me ask you, Governor. Sentiment seems to be building among a lot of bitter Hillary Clinton supporters that they're looking more fondly at John McCain, and that the pressure is building on John McCain then, ironically, not to choose a more conservative running mate, but one that would be palatable to these disenchanted Hillary Clinton voters.

Is that a wise strategy? In other words — I'm sure you're not here to offer recommendations on running mates — but that unlike this sentiment that he has to pick someone more conservative, that he ultimately could pick someone more liberal?

ROMNEY: You know, I really — I can't offer strategy for what kind of person he ought to pick, other than to say that I think, when people are looking at who they're going to vote for, for president, you know, 99 percent of the vote is who that president is, and maybe 1 percent is the number-two guy or gal. And I think, in that case, you're looking for somebody who could be president if that were necessary. That's — that's really the key consideration.

And there are some great people in our party who I think would be able to step in if that were necessary. And I think the senator has got an ample supply of folks to turn to.

CAVUTO: OK. And one of those folks is always rumored to be you. I know you're too classy to get into that debate, so I won't get into that debate. But I do know this, that, during the campaign, you guys had sort of this feisty relationship, and, in debates, it almost seemed downright agitating. But I have heard from almost everyone who I consider reliable that you've become quite close, and, in fact, you know, almost strange bedfellows.

(LAUGHTER)

CAVUTO: So, I don't know if that's true, but is it — is it true you're tighter now, you're more in simpatico now? What?

ROMNEY: Well, surely, when you're in a competitive battle with someone else, you know, you're going to be going back and forth pretty hard and pretty aggressively.

We had — I don't know — 13, 14, 15 debates. And, in a debate, you're trying to just distinguish yourself from the other candidate. And, you know, I always have respected John McCain and recognized him as an extraordinary leader and an American of extraordinary note.

And I showed him that respect throughout the campaign. He did me as well. We got along very well. We knew each other, of course, well before this campaign.

You know, I like John McCain. Hopefully, it's reciprocated. But I don't think that figures into the consideration of what happens down the line. I think that's really, you know, what's best for America.

CAVUTO: All right. Well, you can't hate each other, right? That would not be...

(LAUGHTER)

CAVUTO: Right?

ROMNEY: No, I wouldn't be working like I'm working to help John McCain get elected, other than for the reason that I like him as person, I respect him as a leader, and I believe, without qualification, that he is the person to lead this country over the next eight years, not Barack Obama.

He is right with regards to the tools to get our economy going again, to get health care on track, to get energy on track, and to make sure that we're safe.

CAVUTO: Governor Romney, always a pleasure. Thank you, sir.

ROMNEY: Thanks, Neil. Good to be with you.

CAVUTO: Same here.

(END VIDEOTAPE)

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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