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Special Report

All-Star Panel on Massive Gulf Oil Spill

This is a rush transcript of "Special Report With Bret Baier" from April 29, 2010. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

JANET NAPOLITANO, HOMELAND SECURITY SECRETARY: Today, I will be designating that this is a spill of national significance.

READ ADMIRAL SALLY BRICE-O'HARA, U.S. COAST GUARD: At this point, the trajectory has the spill leading edge of oil reaching landfall in Mississippi Delta region sometime later tomorrow.

CAROL BROWNER, WHITE HOUSE ENVIRONMENTAL POLICY COORDINATOR: The announcement that was made of Secretary Salazar about a new five-year drilling plan is the beginning of a process. Obviously what is occurring now will also be taken into consideration as the administration looks to — how to advance that plan and what makes sense and what might need to be adjusted.

(END VIDEO CLIP)

BRET BAIER, "SPECIAL REPORT" HOST: So is the administration reconsidering its policy on offshore oil drilling as the recovery effort, really an effort to stop the oil slick, as you look at the video here, from reaching land? It's three miles in the Mississippi River Delta and spewing 5,000 barrels a day into the Gulf, five times more than originally thought.

What about this, the politics and clean-up. Let's bring in our panel, Bill Kristol, editor of The Weekly Standard, Nina Easton, Washington Bureau Chief of Fortune magazine, Mort Kondracke, Executive Editor of Roll Call. Mort?

MORT KONDRAKE, EXECUTIVE EDITOR, ROLL CALL: I think the president did right thing and demonstrated pragmatism and bucked the environmental movement by announcing at the end of March he would open certain areas in the southeastern United States and Alaska to offshore drilling as an act of expansion of production of gas and oil, not that he got any credit for it from Republicans who thought it was just half-hearted.

Now he is hugely embarrassed by this massive spill. And I'm sure Carol Browner, the leading environmentalists in the administration in the White House, was against it from the time. Now there is probably another fight whether the policy will be implemented or not.

But he's doing the right thing. He's sending hands down there, SWAT teams and all the rest, to make sure that other oil rigs are safe. And apparently this one did not have the kind of automatic shut-off system that other rigs have. So if that will help and other rigs are safer, I think he should go ahead with the policy.

BAIER: There are many questions how this all happened in this explosion as the investigation continues. Just to put it in perspective, if this well cannot be closed it will be about 100,000 barrels of oil, that's 4.2 million gallons.

By comparison, the Exxon Valdez was 11 million gallons in 1989 in Alaska. It's still a big deal for gulf coast residents.

NINA EASTON, WASHINGTON BUREAU CHIEF, FORTUNE MAGAZINE: It's a big deal and a big disaster. And I think you will see a reset button pushed on the oil drilling plan that the president announced last month, because what we will see is, as we know, these oil slicks play out over the weeks and possibly months before the clean-up is done.

And you're going to be seeing this on the nighttime news on a regular basis. The other thing, you are going to see a lot of comparisons to the Exxon Valdez and comparisons, environmental groups making comparisons to the Cleveland river — or the Ohio River that was burning in the 1970s, as they did today. You will see all these concerns.

At the same time in Congress you will be having hearings, and you will have members of Congress, Democrats, looking into the safety records of these oil rigs.

Now between 2001 and 2007 there were something like 1,400 accidents, 41 people died. Those are real numbers. Everybody, I think there is a public perception that the rigs are safer, and they are safer than they used to be. But I think there was a perception they were ultra safe. But I think the oil industry will be fighting an uphill battle to prove they are safe as they said it was just a couple months ago.

BAIER: Bill, here's another number, more than 3,500 oil rigs operating right now offshore around the U.S. This is one incident. But you cite a number of different incidents over the past five or six years. What about this and the political implications?

BILL KRISTOL, EDITOR, THE WEEKLY STANDARD: Look, the data is pretty clear in general the offshore drilling of oil has become incredibly, quite safe. Not perfectly safe, but compared to other ways of getting energy, quite safe, compared to mining of coal for example, and very environmentally clean, except when there is a disaster like the spill.

The Exxon Valdez was much bigger. If we cut down on the offshore drilling we will increase coal mining in the U.S. or tankers. Tankers are less safe and tend to have bigger spills like the Exxon Valdez did in 1989. That got cleaned up faster than people expected and left lasting damage.

Here, obviously the lives is what is tragic. The oil spill, itself, I don't think will be a huge disaster over the medium and long-term honestly.

The question is the public debate, is the public grown up enough — I think the public is — and are politicians grown up enough — I'm doubtful about that — not to let one incident drive public policy.

BAIER: Is this easy no for the Obama administration to say you know what? We tried to reach out, but this is it. We're going to shut off the —

KRISTOL: They can do that, and they will depend on Saudi oil and Venezuelan oil and we'll fund terrorists and Hugo Chavez instead of drilling our own offshore.

EASTON: To make another point. The politics are a little bit more complicated in that some politicians want offshore drilling like Senator Webb in Virginia because of the revenue, particularly with the oil prices climbing again. So Democrats aren't completely opposed to offshore oil drilling.

KONDRACKE: You are clearly going to have a fight and a fight within the administration all over again. Carroll Browner will probably lead the charge against it, maybe Lisa Jackson of the EPA will be against it, too.

And people in favor of it will be those, I would think, including foreign policy and national security people, who want to help us be energy independent, Jim Jones for example, of the National Security Council.

BAIER: Do you think it could factor into some political races, namely Florida where Charlie Crist says he is reconsidering? He says maybe we should look at not offshore drilling?

KONDRACKE: I have to say that Charlie Crist gives moderation a bad name. He also vetoed the teacher education quality standards down there. I don't know where that guy stands on anything anymore.

BAIER: All right, Mort, good to have you back.

(LAUGHTER)

You can find more about the oil spill and the statistics we talked about on offshore drilling on our homepage, Foxnews.com/specialreport.

Next up, will new sanctions against Iran really be worth the effort?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ILENA ROS-LEHTINEN, R-FL., HOUSE FOREIGN AFFAIRS COMMITTEE: So in exchange for their support for unanimous vote in the U.N. Security Council, we are willing to water down our bill that will have strong sanctions to carve out and say, oh, Russia, you can continue to do business with Iran. China, continue to provide that economic lifeline to Iran. It's incredible.

MICHAEL O'HANLON, BROOKINGS INSTITUTION: Obviously, we can't be granted exemptions in general, because the whole point of the sanctions is to clamp down on trade and investment.

(END VIDEO CLIP)

BAIER: As Congress is working on legislation to target Iran selling gasoline or refining equipment, the Obama administration is signaling they want exemption for firms based in "cooperating countries." Lawmakers are saying Russia and China are included there.

Here is what the White House is saying in response, quote, "We strongly reject the idea that it's somehow being weakens," sanctions, that, "Rather, we're working to make sure the president has maximum flexibility as we increase the pressure on Iran across many fronts." We're still talking about the United Nations sanctions effort.

We're back with the panel. Nina, what about this?

EASTON: The thing to understand is that there are two tracks of sanctions going. I don't think people understand that. One is legislation in Congress to limit gasoline imports. The second is the U.N., where you do need the Chinese and Russian support.

The effort on the Hill is a feel-good exercise for politicians, but it's a unilateral exercise, and it won't have a huge amount of impact. And in fact there's an argument can be made limiting the gasoline imports and you are enriching the Revolutionary Guard because they'll be smuggling gasoline in at premium prices. So there is a question about the road they're going down.

The Obama administration needs to get Russia and China on board. You need the world condemning Iran. You don't just need — as the Iranians would call it, the regime would call it the Zionists and the evil Americans. You need the world condemning these guys.

Sanctions, they're not going to cause a turn-around in this regime. They can potentially weaken it, especially if they're aimed at the sources of revenue to the Revolutionary Guard, which is the direction they're heading.

BAIER: This administration, Mort, had tough time with sanctions to begin with and if they are working on exemption before the U.N. Security Council —

KONDRACKE: I just totally disagree with what Nina said on this. Don't forget, Obama said that he was going to give Iran until the end of last year to knuckle under and quit its uranium enrichment program or there would be consequences. It is now five months later. They are still enriching uranium and there are no consequences.

They're trying to buy support of Chinese and Russians for what will be weak sanctions coming out of the United States which will have no impact on the Iranian nuclear capacity.

Meanwhile, Congress is saying cut off their gasoline on the theory that if gasoline prices go way up, and there has to be rationing, that the public in Iran will blame the regime, as indeed it should. Once there was rationing, even the suggestion of rationing caused riots and burning of gas stations and stuff like that in the past. So —

EASTON: How will unilateral sanctions —

KONDRACKE: This is not unilateral sanctions. This is, in fact, this is a threat. The threat of these sanctions has already caused suppliers and insurance companies in Switzerland and even Russia to cut off gasoline to Iran. The price is going up.

And companies like Total, the big French oil company, say they will not cut off gasoline to Iran unless they're compelled to do so by this law.

BAIER: It would have to be a coalition of the willing in addition to the U.S.

KRISTOL: What the U.S. is threatening, the only thing that could possibly work, none of these sanctions will probably work and military force would be the only option.

But the sanctions that could work is the U.S. denying access to U.S. markets to companies that deal with Iran such as the French company Total. If France is faced with a choice such as the U.S. or Iran they might cut off supplying oil to Iran. And a lot of businesses have begun pulling back from Iran under the threat of unilateral U.S. sanctions.

So the Obama administration wants to weaken congressional sanctions which could have an effect. They are really in the U.N. sanctions which are incredibly weak. They are really putting emphasis — they don't like Congress in the way. They want to work with the U.N.

This is the U.N. this week that added Iran to U.S. committee of status of women, Iran, a very fine country to lead the world for gender equality and honorable and respectful treatment of women. And this is the U.N. to which Ahmadinejad, the president of Iran, is coming next week to participate in conference on nuclear proliferation.

You can't make up what happens at the United Nations. And this is where the Obama administration is focusing the efforts.

KONDRACKE: Even worse than trying to exempt China and Russia is trying to delay the bill. The bill has done good already. Obama should sign it and try to enforce it.

BAIER: We will see. The House has just passed a bill directing the Puerto Rican legislature to ask residents if they wish to be considered for statehood, essentially, a referendum there. Earlier, the Democrats defeated a Republican effort to a requirement English be named the official language for Puerto Rico. We will have more on this effort for statehood for Puerto Rico, an amazing story, Friday.

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