This is a rush transcript from "The O'Reilly Factor," September 10, 2008. This copy may not be in its final form and may be updated.
Watch "The O'Reilly Factor" weeknights at 8 p.m. and 11 p.m. ET and listen to the "Radio Factor!"
BILL O'REILLY, HOST: The top story tonight: OPEC has announced it will cut oil production. This is great, isn't it? OPEC, some of the greediest people on this earth, want to drive up oil prices so poor people can't heat their homes this winter. Let me be clear about this. Every American needs to punish OPEC, and that includes whoever the next president might be. And so we begin our final conversation with Barack Obama in that light.
Click here to watch the final part of O'Reilly's exclusive interview with Obama.
O'REILLY: $150 billion to alternative energy in the Obama administration.
BARACK OBAMA, DEMOCRATIC PRESIDENTIAL NOMINEE: Over 10 years.
O'REILLY: OK, over 10 years.
O'REILLY: To what? What's it going to be?
OBAMA: Let me give you some examples. We have to extend tax credits for solar, wind, hydro. We just visited a hydro plant…
O'REILLY: We just got our shot at it though. What if solar, wind and hydro don't work?
OBAMA: But that was true for the space program. Kennedy didn't know how we were going to go to the moon. The nature of discovery and research and innovation is you put money into a whole bunch of promising pots. It's like venture capital, and you figure out what works. And some things are going to work, and some things are not.
Look, I had a meeting with T. Boone Pickens.
O'REILLY: I'm with you. I'm with you.
OBAMA: Here's an example. He is absolutely right that we can't sustain importing 70 percent of our oil.
O'REILLY: Everybody knows that. But you've got to have a plan.
OBAMA: And I do have a plan.
O'REILLY: You should get nukes involved. Why are you against nuclear energy?
OBAMA: I am not.
O'REILLY: France and Sweden do it.
OBAMA: I am not against nuclear energy.
O'REILLY: Well, let's get the plants up.
OBAMA: Well, OK, why not?
O'REILLY: Let's start drilling in ANWR. What are you…
OBAMA: Who's arguing with you?
O'REILLY: Are you afraid it's…
OBAMA: ANWR, I think, is a problem.
O'REILLY: What, a caribou is going to be scared? Come on. You're with the folks that can't pay their heating bill and you're worried about a caribou going, what's that pipeline doing?
OBAMA: No, but I tell you — listen.
O'REILLY: What? What?
OBAMA: One of the great things about this country, we've got some beautiful real estate here.
O'REILLY: Oh, come on, nobody goes to ANWR. Nobody runs shuttles up there.
OBAMA: We are lucky to have some of the most beautiful real estate on earth. And we want to make sure that…
O'REILLY: You're making me cry here.
OBAMA: We want to make sure we're passing it on to the next generation. But this notion that I'm opposed to nuclear power, it's just not true.
O'REILLY: I don't want to hear pristine. I don't want to hear caribou.
OBAMA: It's not…
O'REILLY: I want to hear…
OBAMA: ...that hard to understand.
O'REILLY: …we're going to get this many new plants, we're going to put this much into solar. We're going to get this, this, this. And that would drive down the price of oil.
OBAMA: I'll help you.
O'REILLY: No, it's your deal. I'm not running for anything.
OBAMA: No, no, no. I'll make sure to send that plan so that you can start advertising it for us.
O'REILLY: Well, you can come back on and tell me.
OBAMA: I look forward to it.
O'REILLY: All right. Now, NATO doesn't fight in Afghanistan. I don't know whether you know that or not. The Germans won't fight. The French will, because they — Sarkozy.
OBAMA: They lost 10 of their troops.
O'REILLY: Right. But the Germans won't. A lot of the others won't.
O'REILLY: So it's all on us again. Why won't the Germans fight against the Taliban?
OBAMA: You know part of the reason?
OBAMA: Part of the reason is, is that we soured our relationship with the Europeans after Iraq. And, you know, when I went over to Europe, and if you listened to that speech in Berlin, which you know, a lot of your buddies had a good time making fun of.
O'REILLY: I don't have any buddies.
OBAMA: But if you listened to what I said, one of the things I said in that speech is you cannot think that the Americans are going to just carry all the freight on this thing. You guys have to step up to the plate.
O'REILLY: So when you're president…
OBAMA: But Bob Gates, the Secretary of Defense – who, by the way, I think is a serious guy in this administration and has helped…
O'REILLY: Good guy.
OBAMA: …helped straighten out some of the foreign policy problems — he himself has acknowledged that part of the problem is, politically, there is enough anti-Iraq sentiment in there, in Europe…
O'REILLY: To poison the well for Afghanistan.
OBAMA: To poison the well for Afghanistan.
O'REILLY: So you're going to change all that with a magic wand?
OBAMA: I'm not going to — no, I'm not going to change all that with a magic wand. I'm not going to change anything with a magic wand. What I'm going to do is I'm going to engage in the kind of deliberate diplomacy and change our policy in Iraq to send a signal to the world, the central front on terror right now is in Afghanistan and the hills between Pakistan and Afghanistan.
O'REILLY: But you can't change things in Iraq if it's going to benefit Iran. And that's going to be…
OBAMA: Well, that I agree with.
O'REILLY: ...that's going to be your minefield that you're walking on.
OBAMA: But Bill, you and I probably agree on the fact that Iran's one of the biggest beneficiaries of us going into Iraq in the first place.
O'REILLY: Has been, but not now. Now they're paying a big price for miscalculating the resolve of our country.
OBAMA: I will say the fact that the Shia militias have folded up right now is a good thing. Now you've got these special groups in the south…
O'REILLY: And it hurt Iran.
OBAMA: …which is still a problem. And we've got to deal with this.
O'REILLY: OK. The United States and Poland putting a missile shield in Poland, all right? Putin doesn't like it.
O'REILLY: Are you going to keep that missile shield in there?
OBAMA: I think that we have to make sure that — I've said this before. The Russians are playing a game when they pretend that this missile shield is directed against all their ICBMs.
O'REILLY: Yes, it's ridiculous. It's a defensive thing.
OBAMA: It's a defensive thing. And we…
O'REILLY: So you're going to keep it there, then?
OBAMA: And given what has happened in Georgia, I think that we have to send a clear signal that Poland and other countries in that region are not going to be subject to intimidation and aggression.
O'REILLY: OK, now I just want to get this on the record. You're elected president, you're keeping the missile shield in Poland.
OBAMA: I believe that the missile shield is appropriate. I want to make sure it works though. I want to make sure it works.
O'REILLY: We'll test it. All right.
OBAMA: Which is one of the problems that we've got.
O'REILLY: So Putin comes out last week and he says hey, look, we're going to reimpose our dominance on all of the countries that surround us. We don't care whether you like it or not because you're tied down in Iraq and Afghanistan. We're going to do what we want to do.
O'REILLY: Putin, nasty little guy, No. 1. Would you agree with that assessment?
OBAMA: Well, I'll agree with the assessment that I wouldn't look into his soul and…
OBAMA: ...think I know him.
O'REILLY: I'll put a cowboy hat on the guy.
O'REILLY: This is going to be a problem, all right?
OBAMA: It's a huge problem.
O'REILLY: OK. And…
OBAMA: It's one of our biggest problems.
O'REILLY: So you're going to have to confront Putin.
OBAMA: That's exactly right.
O'REILLY: Maybe not militarily. Maybe you can do it other ways. But Europe is weak, and Europe is cowardly.
O'REILLY: You know, what are they going to have, another meeting? Yes, Putin's quaking, aren't they? Isn't Putin quaking about…
OBAMA: Well, you know, here's the one thing I've said.
O'REILLY: I know you're going to rally them all. They're going to be terror warriors, right…
OBAMA: No, no, no, no.
O'REILLY: …right after you get elected. I know, I know.
OBAMA: Look, I mean, there are two things where we can have some leverage over Russia. No. 1 is that commercially, they are tied up with Europe, and they're increasingly integrated. Their stock market has taken a beating since they went into Georgia.
O'REILLY: Yes, but Putin does not care.
OBAMA: Well, Putin may not care, but there are a whole bunch of folks that…
O'REILLY: That do?
OBAMA: ...a whole bunch of billionaires in Moscow who do care, right. So that's a leverage point. And the Europeans can be helpful in applying that leverage point. That's point No. 1.
The second thing that we have to do is actually defensive. We've got to get our energy policies straight.
O'REILLY: Now, final question for you. I think I can kick your butt in one-on-one basketball.
OBAMA: You've got height.
OBAMA: But I think I've got speed.
O'REILLY: But you've got youth. I'm an old guy. I'm 73 years old.
OBAMA: Are you 73?
O'REILLY: Yes, this is Botox.
OBAMA: Is that right? You look good, man.
O'REILLY: How many are you going spot me?
OBAMA: What are you eating, looking like that at 73?
O'REILLY: I don't eat anything special. How many are you going to spot me on a one-on-one game? Because I think…
OBAMA: Game to 11?
OBAMA: I'd spot you 10.
O'REILLY: All right, you'd spot me 10. That's pretty cocky. That's pretty cocky. So now, I win, all right, I want to be secretary of state.
OBAMA: Now I hear you're…
O'REILLY: No, no, if I win, I want to be secretary of state.
OBAMA: I hear you're a pretty good athlete, but your game was football and baseball, right?
O'REILLY: Right. Senator, a pleasure.
OBAMA: I enjoyed it.
O'REILLY: All right. I enjoyed it, too.
OBAMA: Thank you so much.
O'REILLY: I hope you come back.
OBAMA: We'll be back.
O'REILLY: And good luck in the campaign.
OBAMA: Thank you so much. Appreciate it.
O'REILLY: And we will televise that basketball game if it happens. If I win, I'm secretary of state.
Content and Programming Copyright 2008 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2008 ASC LLC (www.ascllc.net), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon FOX News Network, LLC'S and ASC LLC's copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.