This is a partial transcript from "The O'Reilly Factor," November 1, 2005, that has been edited for clarity.

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BILL O'REILLY, HOST: "The Factor follow-up" segment tonight. The top five major U.S. oil companies have now reported third quarter results. Three at record profits. The rest were through the roof as well.

Joining us now from Santa Fe, New Mexico, the governor of that state Bill Richardson, who's a former energy secretary. Governor Richardson also recently returned from North Korea (search).

All right, you wrote a letter along with seven other governors asking President Bush and Congress to investigate price gouging. Do you think that major oil companies price gouged the American public?

BILL RICHARDSON, NEW MEXICO GOVERNOR: I do believe so, Bill. There's no correlation right now between $3 at the gasoline pump and the price per barrel in the international market. If it were $3, which it is now or close to it, it should be $90 per barrel on the international market and it's $65. So the economics don't work.

I do believe that there's price gouging. I believe the Congress and the administration need to investigate. And you heard whatExxon (search) said. They certified their profits at $9 billion in the first quarter. And then they said concurrently we're not going to invest in renewable energy and new refining capacity. We're an oil and gas business. And we're going to put that money in foreign exploration.

In other words, more foreign exploration, more dependence in Saudi Arabia (search) in other countries. But I do think there's definitely price gouging.

O'REILLY: OK, now.

RICHARDSON: I was always a believer in the...

O'REILLY: Go ahead. You were a believer in?

RICHARDSON: Well, in market forces. And I used to say it isn't happening. But the correlation, when you go to the pump and two hours later it's 10 cents more, the replacement costs involved do not justify the increase.

O'REILLY: OK. Now, Cavuto and a lot of the other analysts who stick up for the oil companies say look, it's free market. It's supply and demand.

And I reply it's not a free market. The mergers and the cabal that you have to deal with in OPEC (search) and in the American oil companies mean it isn't free competition. Who's right as a former energy secretary? Am I right or is Cavuto right?

RICHARDSON: Well, you're right. You're totally right because what happens is the Exxons of the worlds work very closely with Saudi Arabia, with OPEC. They talk about increasing production, decreasing production.

They're all tied in together. And I'm not saying necessarily the market isn't affecting prices, but the degree of increases is economically not justifying what is happening at the pump and what is happening in the international market. So there is price gouging.

O'REILLY: OK, now.

RICHARDSON: And what is worse is.

O'REILLY: Governor, you were Energy Secretary (search) under Bill Clinton (search) and Al Gore (search). Why in eight years did not Clinton and Gore start a more aggressive alternative energy policy?

RICHARDSON: Bill, we did push it, but not as much as we should have. We did push it. The Congress was not receptive. We had a big plan for more fuel efficiency in vehicles, more investments in renewable technology, distribute a generation, fuel cells.

There was a lot of resistance. The oil companies basically don't want any competition. They don't want solar wind and biomass and even cleaner coal. They like things the way they are. And they're very powerful in the Congress.

And so they caused the Republican-controlled Congress — and I'm not saying because it was Republican. It's the big oil companies not wanting any competition.


RICHARDSON: We did get some things through.

O'REILLY: But not.

RICHARDSON: But it wasn't enough. It wasn't strong enough.

O'REILLY: No, all presidents from Carter onward should have been looking into this, because now it's a disaster.

All right, I want to ask you about North Korea.

RICHARDSON: That's right.

O'REILLY: I want to ask you about North Korea. I mean, are they a threat to us over there? You were there. You were one of the few Americans they let in there. Are they a threat to the United States?

RICHARDSON: Well, they're a threat to Asia. They are a threat to the United States. They probably have two or three nuclear weapons.

Our objective should be very clear, to have them eliminate all of their nuclear weapons. They're very difficult, they're isolated. And I think we did some good.

My trip produced some talks that are happening in early November. They did agree to come. They showed me one of their nuclear reactors. There is reprocessing going on.

The trouble is I believe that the country needs some desperately to come out of their isolation. I do believe the Bush administration is going in the right direction, pursuing bilateral negotiations within the six-party talks, talking to them directly, making them a deal that basically says in exchange for you dropping your nuclear weapons, you're going to get some type of assistance. No attacks from the five countries in Asia. So I think it's moving in the right direction.

O'REILLY: Yes, but they are liars. Secretary, that just worries me. They're liars.

RICHARDSON: Yes, they are.

O'REILLY: You know?

RICHARDSON: Well, but it's better that you try to...

O'REILLY: Yes, I know.

RICHARDSON: ...trim their sails. And I give credit to Secretary Rice for moving us in the right direction.

O'REILLY: OK. Governor, always a pleasure. You're an honest guy. We appreciate your coming into the no-spin zone.

RICHARDSON: Thank you.

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