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Another Green Scandal for the Obama Administration?

This is a RUSH transcript from "The O'Reilly Factor," December 16, 2011. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: Thanks for staying with us. I'm Bill O'Reilly.

In the "Lou's the Boss" segment tonight, the Defense Department has announced it will buy $450,000 gallons of biofuel for the U.S. Navy from a company called Solazyme. The problem is, the fuel is being purchased at $15 a gallon, four times… four times… the market price of conventional jet fuel. And there's a friend of the president's advising Solazyme.

So we asked Lou Dobbs to look into it, and here he is.

Is this another crony capitalism boondoggle?

LOU DOBBS, FOX NEWS BUSINESS ANCHOR: This is better that crony capitalism, Bill. This takes it up to something we have great affection in Washington. It's comprehensive crony capitalism.

O'REILLY: Comprehensive.

DOBBS: I mean, the government funded the creation of the refinery to produce the biofuel, over $20 million. Then they provide the customer, in this case the U.S. Navy.

O'REILLY: Did it start before the Obama administration when they did this?

DOBBS: No.

O'REILLY: No. So this is all green Obama stuff?

DOBBS: This is...

O'REILLY: Let's just walk through it.

DOBBS: Sure.

O'REILLY: OK, the guy who's advising Solazyme is T.J. Glauthier...

DOBBS: Right.

O'REILLY: ... former Clinton guy.

DOBBS: He joined the Clinton administration for a full two terms.

O'REILLY: And a friend of Barack.

DOBBS: Absolutely.

O'REILLY: OK, so he's advising the Solazyme. So they build the refinery to get this biofuel. The federal government builds it, not a private company.

DOBBS: Right.

O'REILLY: But...

DOBBS: Interject then their partner in this, another company, Dynamic Fuels, which already has a refinery so they didn't really need the other part of the refinery.

O'REILLY: Why did they build it if they didn't need it?

DOBBS: Well, it's green. You don't have to be reasonable; you don't have to be rational. This is about pursuing the Holy Grail for the environment.

O'REILLY: Yes, but if you're wasting… I like green energy. I think you probably do, too. If it could be reasonably priced they'd buy it. But why are we wasting money? If you already have a refinery to do the biofuel, why build another one?

DOBBS: The rationale is here that Solazyme can bring with it an algae process that will...

O'REILLY: An algae process? I can do that.

DOBBS: For probably less than $20 million.

O'REILLY: Right. So now they build their little refinery, and they have to sell the biofuel to somebody. So the Navy buys it...

DOBBS: Right.

O'REILLY: ... at four times the price that they could buy something else. But, but, is it worth it because it's cleaner burning, and Navy guys will be able to breathe easier? Is it worth it, Lou?

DOBBS: No. And the Navy guys are breathing easier because they've got 670 million gallons of fuel already at their disposal. It's fossil fuel.

O'REILLY: They don't need the extra $450,000?

DOBBS: They don't need that.

O'REILLY: So they're going to store the 450. And this is a different fuel than what they have now?

DOBBS: Right.

O'REILLY: It's cleaner burning?

DOBBS: It's cleaner burning, and it's, as you say, 15 bucks a gallon. But it's a demonstration project, and it's all government. It is all government.

O'REILLY: This is why we owe $15 trillion, because we're doing all of this environmental experimentation on the taxpayer dime.

DOBBS: It's certainly part of it, but the great thing is you start digging into this a little and then you find out Dynamic Fuels, which is the first part of the contract, they're part owned by Tyson Foods. And then you start adding up who's, you know, putting whose money where, and it's just one giant circle.

O'REILLY: Tyson Food, are they a contributor to Obama? Is there...

DOBBS: but in fairness to Tyson Foods, they contribute to everybody but they contribute which ever way the wind is blowing.

O'REILLY: All right. Now, you see the debate last night?

DOBBS: Absolutely. I thought it was terrific.

O'REILLY: Why did you think it was good?

DOBBS: Because I got to watch Newt Gingrich give one of the best expositions I've ever seen on the rescissions of 1802. I got to see...

O'REILLY: We roasted him in the top of the show for maybe overreaching here, being empiricist and frightening people that if he did obtain the presidency that he would be just taken by the power and run roughshod.

DOBBS: I think that that's his political liability. But for me watching, I love to see his demonstration of understanding of history.

O'REILLY: Absolutely.

DOBBS: You're a… you're a historian yourself. So it was impressive to me to watch Newt… Newt Gingrich in that moment, to watch Mitt Romney, who I thought had his best debate.

O'REILLY: Why? What did Romney do that was so good?

DOBBS: Romney got to say that our foreign policy when it comes to Iran was pretty pleased. That's as real as I've seen Mitt Romney get.

O'REILLY: Yes, he's talking about the drone.

DOBBS: Exactly.

O'REILLY: Now, I'm going to have Romney on "The Factor" on Monday. We've got lots of questions for him. But you thought this was the best job that he did?

DOBBS: I think it was the very best job that he has done.

O'REILLY: Did you think that Gingrich got hammered by Michele Bachmann and Ron Paul when they went after him on abortion? And Freddie Mac and all of that?

DOBBS: I think that they tried to hammer him. I think he came out of it standing tall. I really do. I think he stood up against the assailants.

O'REILLY: Why do you think Gingrich has slid in the polls the last couple of days?

DOBBS: Because the man hasn't got a humble bone in his body.

O'REILLY: He's got to be more humble?

DOBBS: I would… I would say...

O'REILLY: That means he has to watch me a little bit more.

DOBBS: He has to watch Bill O'Reilly...

O'REILLY: Yes.

DOBBS: ... and emulate that modesty.

O'REILLY: Yes.

DOBBS: Which I do you.

O'REILLY: Do you think it's about personality and not about policy?

DOBBS: I think it's about finding in his character some place for self-deprecation and some humility. I mean, even if he would feign humility, I would appreciate it.

O'REILLY: Feign humility?

DOBBS: Absolutely.

O'REILLY: I don't know how to do that. I'm humble by nature. All right. Lou Dobbs, everybody. Merry Christmas, Lou.

DOBBS: Merry Christmas.

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