Gulf Oil CEO on Energy Crisis

This is a rush transcript from "Your World with Neil Cavuto," July 11, 2008. This copy may not be in its final form and may be updated.

DAVID ASMAN, GUEST HOST: Barack Obama today pushing an energy rebate check in place of more drilling. He says he won't see any benefits from drilling for years.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: If we started drilling today, the first drop of oil would not come for another seven years.


ASMAN: My next guest disagrees. He says oil prices would come down right now if Democrats and Republicans would just stop arguing and start acting, for goodness sakes.

Joseph Petrowski is the CEO Gulf oil.

And, Joseph, I saw this piece in "The Wall Street Journal," I said, we want this guy. He is making sense, because you give advice to both Democrats and Republicans.

But, first, your advice to Barack Obama. Why is wrong when he says that because it would take years for this oil to come online, it would not move the prices now?

JOSEPH PETROWSKI, CEO, GULF OIL: Let me give you two reasons.

Video: Watch David Asman's interview with the CEO of Gulf Oil

One is that, at the current rate of demand, we are growing world demand in oil about 3 percent. In seven years, we are going to need another 20 million barrels a day. Part of where we are today is because we did not drill years back, when President Clinton first vetoed the ANWR drilling.

At some point, the line about seven years is glib and really the politics of where we have been and not where we need to go.


ASMAN: So, it is just not right? It is wrong when you say that drilling now won't affect prices, or at least for another five years?

PETROSWKI: Well, it will get worse, but it will affect prices today, positively, if the markets perceive that we are serious about addressing the energy crisis.


ASMAN: Because oil, when people -- even the speculators, when they are buying these oil contracts, they are all about the future, correct?

PETROSWKI: Absolutely.

The year 2016, which is eight years hence, today traded over $140 in the financial markets. If it is hard for the politicians to understand forward markets, let me put it to you in an analogous way. If tomorrow, in the city of Chicago, which Senator Obama should know very well, we announced there were going to be new building, there would be no permitting, there would be no new construction, what do we think would happen to the value of apartments and houses today?

Contrarily, if we announced that we are now going to expand the supply of housing in the city of Chicago, landlords, read, speculators, would in fact leave the market.


ASMAN: Joseph, we get the speculation bit.

Let's talk about the use-it-or-lose-it provision. And a lot of Democrats are saying, they say, look, you have got all these contracts, you oil companies. You are not using them properly. If you do not start drilling soon on those tracts of land, you are going to lose those contracts.

What do you say about that?

PETROSWKI: Well, that, again, is ridiculous. Rigs are renting for $300,000 a day. The price of oil today approached $150.

David, they are drilling as fast as they can today. What we need to do is make sure that we are successful in drilling and make all options on the table...

ASMAN: All right.

PETROSWKI: ... outer Continental Shelf, Gulf, everywhere. And it's one side of the equation.

ASMAN: By the way, you do not let Republicans off the hook either. You say they have been slacking with regard to mileage standards, letting those slip over the years?

PETROSWKI: Oh, absolutely.

You have got to attack this problem. This is a very serious problem - - $147, $150 oil is impacting us extremely bad. I believe it is not inflationary. I am worried about it being deflationary, because we are taking a lot of money out of the pockets of average Americans.

But, attacking it from both sides, it's too late to say it is just a supply problem or it's just a demand problem.

ASMAN: Understood.

Joseph, we have got to leave it at that -- Joseph Petrowski from Gulf Oil. Now, this is not the bigger Gulf Oil. This is New England's largest independent petroleum company.

Good to see you, Joseph. Thanks very much.

PETROSWKI: Enjoyed it. Thank you very much.


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