This is a rush transcript from "On the Record ," November 3, 2008. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: First: Will Senator Obama deliberately bankrupt the coal industry if he becomes president, or was this a gaffe?? On January 17, Senator Obama gave an interview to the editorial board of The San Francisco Chronicle. Senator Obama spoke about his energy plan, including his "cap and trade" policy to lessen pollution.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: What I said is that we would put a cap and trade system in place that is more -- that is as aggressive, if not more aggressive, than anybody else's out there. I was the first to call for 100 percent auction on the cap and trade system, which means that every unit of carbon or greenhouse gas was emitted would be charged to the polluter. That will create a market in which whatever technologies are out there to be presented, whatever power plants that are being built, that they would have to meat the rigors of that market and the ratcheted-down caps that are placed -- imposed every year.

So if somebody wants to build a coal-powered plant, they can. It's just that it will bankrupt them because they're going to be charged a huge sum for all that greenhouse gas that's being emitted.


VAN SUSTEREN: Will these comments hurt Senator Obama in coal- producing states, most notably the battleground states of Ohio and Pennsylvania, because those states really matter and it really matters there what happens to the coal industry?

Joining us live is Mike Carey, the president of the Ohio Coal Association. Mike, when you heard those words, at least you've been quoted as saying that Senator Obama had been pandering. Do you want to expand on that?

MIKE CAREY, OHIO COAL ASSOCIATION: You know, I think the big issue here is that both candidates, both McCain and Obama, have been talking about clean coal technologies and support of clean coal technologies. And I don't think there's any doubt about that. But in the same breath, when you talk about making the carbon credits cost so much that you would bankrupt the coal industry, it really caused us to have pause.

Watch Greta's interview

Now, I got to tell you, you know, the coal industry is located in some of the hardest hit areas economically both in southeastern and eastern Ohio, western Pennsylvania, West Virginia, western part of Virginia. So you know, these comments at a time when the economy's just (INAUDIBLE) through hard times, you know, we shouldn't be talking about bankrupting any industry.

VAN SUSTEREN: The sort of the coal aspect of politics -- do you have any sense of whether those statements are sort of racing through the coal state, the coal state areas, and whether they've having any impact on people likely to go to the polls tomorrow?

CAREY: You know, look, Greta, I don't know. I would say that, Yes, I'd say you're hearing a lot of talk in the coal fields. These comments went through the wire on Sunday. Today, it really was resonating. I think a lot of people have picked it up.

But you know, the bottom line in this election, it's not just going to be the coal jobs, but when you talk -- and later on in that interview, he talks about having the skyrocketing of electricity cost. And that's just not going to affect the coal fields, that's going to affect every single working American in this country.

VAN SUSTEREN: Are you hearing anyone is changing a vote, a vote that would have been an Obama vote that's now a McCain vote as a result of the comments?

CAREY: Well, to be honest with you, Greta, I've been in the studios most of the day today. But I can assure you, I think the comments that were made make a lot of people stop and think. I was on the radio in Pittsburgh tonight and had a caller call in who was just talking about, You shouldn't mess with coal. You know, the bottom line is people are scared. They want to work. They want a paycheck. They want to be able to provide for their families. And dialing out any one particular industry is not the way to promote economic recovery.

VAN SUSTEREN: Mike, thank you. We'll be watching the coal states in the next 24 hours very closely. Thank you, Mike.

CAREY: Thank you, Greta.

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