This is a rush transcript from "The O'Reilly Factor," July 16, 2008. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: Now for the top story tonight: another view of [America's oil crisis]. Joining us from Washington, FOX News analyst Karl Rove.

I remain, I remain disappointed by President Bush's lack of urgency on this issue. President Clinton and green guy Al Gore should have been pounding the drum for eight years, conserve, conserve, conserve. President Bush and Dick Cheney should be doing the same in their two terms, and they didn't do it.

KARL ROVE, FORMER BUSH ADVISER: Well, I disagree, respectfully. This president and this administration put more into alternative energy research than any administration in history by a significant factor. And as a result, things like the lithium ion batteries, which are needed for cars, plug-in cars, all kinds of cellulosic and other forms of ethanol, hydrogen, wind, solar, all of these with one exception saw a dramatic movement in terms of being able to come to market. That is to say we used to think these things were way out in the future. And now we're either bringing them to market or on the verge of bringing them to market because this administration from the very beginning...

O'REILLY: All right, maybe that's true...

ROVE: ...invested large sums of money.

O'REILLY: Maybe that's true, and maybe it isn't. But I'm an American citizen.

ROVE: It's true.

O'REILLY: And I don't know anything about it. It's an invisible...

(CROSSTALK)

O'REILLY: Wait, wait, wait, wait. It's invisible. It's invisible to me. I'm praying you're right.

ROVE: Bill...

O'REILLY: I mean, I don't question the money. But the progress, I don't know.

ROVE: Bill, I think you need to get a briefing on this because the people in the advanced energy projects at the Department of Energy have been doing incredible things.

O'REILLY: OK.

ROVE: And...

O'REILLY: Then they haven't made it public because I haven't gotten a briefing. And nobody watching me has gotten a briefing.

ROVE: Yes.

O'REILLY: So it's their fault.

ROVE: Well, two...

O'REILLY: Because I'm paying for it.

ROVE: Let me make two other points.

O'REILLY: Go ahead.

ROVE: Let me make two other points. This administration took the most dramatic improvements in over 30 years in fuel efficiency, fuel savings, using the authority that it has under law on light trucks. That is to say, for light trucks, your pickup truck, your SUV, and so forth. The government has the right under law to set standards for that. And they did an innovative, a novel approach that in essence requires to be improvements among fuel efficiency for every kind of light truck, big and small measured against people in their weight class. We tried to apply that same standard to cars, but were denied authority by the Congress, Democrat and Republican.

O'REILLY: They're all — but look, all I'm saying is the leader of the country is President Bush. And you just heard him say it's presumptuous of me to tell the consumer what to do.

See, I got that mentality. I understand that. But I also understand that the American consumer is the most powerful entity in this country. And if people would understand that their own conduct and behavior can put it to the oil companies, can put it to OPEC, can drive the price down of oil and gas...

ROVE: Yes.

O'REILLY: ...if we all mobilize. Come on, Mr. Rove. You know there hasn't been great leadership on this.

ROVE: Oh, I disagree. I disagree with you.

O'REILLY: Well...

ROVE: There are two — there are three issues here, three issues. One is technology. We have to have new technologies come online, and we've made the investments in that.

Second of all, we have to retool the auto industry in order to make the kind of cars that are more fuel efficient. And you'll notice the kind of car companies that are making hybrids and others are the kind of car companies...

O'REILLY: Absolutely.

ROVE: ...adding jobs and plants.

And third thing is — and this is the big problem, Bill, is ultimately, I mean, think how many years. I've had the same car for seven years. I'm going to have the same car for a couple more years. It takes nine years to turn over half the American automobile fleet. That is to say even once we get all of these very fuel efficient cars in the place, it's going to take a while before people take their old car...

O'REILLY: I got that, but it's...

ROVE: ...and buy the new one.

O'REILLY: It's the urgency of the problem that I think many Americans don't — still don't get. It's a national security issue.

ROVE: I've heard that.

O'REILLY: $330 billion abroad has just wiped out our dollar. And we have to stop it. We have to start to go inward. You're right, Congress has let us down. But I'll tell you, I am a fair man toward President Bush. I think you know that. I think you know for his entire term, I have been fair to the president. Would you cede that?

ROVE: I would. But look, I just...

O'REILLY: OK. He has not led...

ROVE: Oh, I disagree.

O'REILLY: ...emphatically enough on this issue.

ROVE: I disagree.

O'REILLY: All right.

ROVE: I disagree.

O'REILLY: Well, it's a gentlemen's disagreement.

ROVE: He stood up before the United States Congress and called for a dramatic expansion of alternative energy research, and it took two years for Congress to finally respond.

O'REILLY: All right. But he hasn't made it as urgent as it is, and now the economy is tottering. Now look, if you had to — say I...

ROVE: Bill...

O'REILLY: ...I want you to be candid here. Say I...

ROVE: Bill, let me say one more thing. Let me say one more thing. One percent increase in worldwide supply of oil has a 10 percent impact on price. And from day one, this president has been saying look, while we need to increase alternative energy sources and find new ways to power our automobiles....

O'REILLY: We have to drill. I got the drilling.

ROVE: ...we got to drill.

O'REILLY: And most Americans support the drilling now.

ROVE: Now, now...

O'REILLY: Because we're in this bad — yes. But it's all a combination. It's conservation. It's drilling. It's alternative. But — and up until two months ago, or maybe four months ago, Americans went blithely along getting — filling up the Explorers and the Expeditions and...

ROVE: I know. I disagree, Bill, because look, if you look at oil usage over the last six, seven, eight, nine years, in the United States essentially flat.

O'REILLY: Flat.

ROVE: And that's because people are changing their attitudes.

O'REILLY: If it had gone down three percent every year, we wouldn't be in this mess. That's all I'm saying.

ROVE: If pigs — and if pigs could fly, it'd be an interesting...

O'REILLY: Well, remember...

ROVE: ...we'd look out our windows, but…

O'REILLY: ...I love pigs and I love flying.

ROVE: The point is...

O'REILLY: But we're three percent of the population of the world. We use 25 percent of the energy. So...

ROVE: We're 5 percent...

O'REILLY: ...the pig...

ROVE: ...of the world.

O'REILLY: All right, five.

ROVE: Five percent of the world.

O'REILLY: Twenty-five. The pig...

ROVE: But what we use, we use efficiently, Bill. China has an economy one-fifth the size of the United States and their carbon emissions...

O'REILLY: All right.

ROVE: ...are larger than the United States.

O'REILLY: Well, very good discussion.

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