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Candidates Focus on Energy, Spar Over Oil Resources

Sen. Barack Obama delivered a major speech on energy Monday, which included a call to open the nation's strategic oil reserves, while his rival, GOP Sen. John McCain, urged Congress to call off its August recess and pass new energy legislation. Advisers to both campaigns discuss the two views.

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  • JUDY WOODRUFF:

    The presidential candidates clashed over energy policy today, and we get the views of both campaigns.

    First, former U.S. Energy Secretary Federico Pena, he serves as Barack Obama's national campaign co-chair, and he joins us now from Denver.

    Mr. Secretary, good to see you again.

  • FEDERICO PENA, Obama Campaign’s National Co-Chair:

    Thank you, Judy.

  • JUDY WOODRUFF:

    First of all, does Senator Obama believe that there is a short-term fix for high gasoline prices?

  • FEDERICO PENA:

    There are no short-term fixes. There are short-term efforts we can take to begin to reduce world crude oil prices. But the real solution is to understand we cannot drill our way out of this problem, but to begin to invest in alternative fuels and to gradually get us off the use of oil. That's the long-term strategy.

  • JUDY WOODRUFF:

    If he doesn't believe that the country can drill its way out of the problem, why did he change his position in the last few days and now say he is willing to go along with some off-shore drilling?

  • FEDERICO PENA:

    Well, Judy, he hasn't really changed his position. What he said some months ago was he was against off-shore drilling by itself. But recently, a group of senators, the Group of 10, five Democrats and five Republicans, came up with a very interesting strategy, which involved eliminating the tax reductions for the oil and gas companies, taking that money, investing it in clean energy, alternative fuels, and some other conservation efforts, which Senator Obama has been supporting — that's the main thrust of that bill — and limited off-shore drilling.

    So in the context of a comprehensive approach, Senator Obama said he would be open to limited off-shore drilling. But let's be very clear: We cannot drill our way out of this problem.

  • JUDY WOODRUFF:

    Now, he's also said, as you just referred to, that he wants to levy a windfall profits tax on the large oil companies. How would he calculate that?

  • FEDERICO PENA:

    Well, there's a formula that's used, and that is to recognize that oil and gas companies have made profits in excess of what they normally would have achieved because of technology, innovation or investment.

    So the idea here is to allow the oil and gas companies to keep a certain level of profits. Added to that would be profits to be used for further investment, because you don't want to discourage them from making further investment. And any excess profits above that would be rebated to the government and given to consumers.

    And what the senator is proposing is a $1,000 energy rebate to couples and $500 for individuals to help defray the increasing costs of gas, food, health care, education costs, all the kinds of pressures that everyday consumers are facing today. And that's the approach that he's taking.

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