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CNN Larry King Live

The Energy Crisis

Aired August 04, 2008 - 21:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

LARRY KING, HOST: Tonight, the country's energy crisis -- bad and getting worse.
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SEN. BARACK OBAMA (D), PRESUMPTIVE NOMINEE: Without a doubt, this is one of the most dangerous and urgent threats this nation has ever faced.

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SEN. JOHN MCCAIN (R), PRESUMPTIVE NOMINEE: We need to offshore drill for oil and natural gas. We need to drill here and we need to drill now.

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KING: But Texas tycoon T. Boone Pickens has another plan.

(BEGIN VIDEO CLIP, COURTESY TBOONEPICKENS.COM)

T. BOONE PICKENS, FOUNDER, CHAIRMAN, B.P. CAPITAL MANAGEMENT: This plan will work.

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KING: Can an oil man end America's dependence on foreign crude?

If we don't do something soon, is our entire planet at risk?

T. Boone Pickens, Sir Richard Branson, Bob Woodruff and other power players are here.

They'll take your calls, too, right now on LARRY KING LIVE.

Energy topping number one tonight.

We have an outstanding to kick it off.

In Santa Fe, New Mexico Governor Bill Richardson, the Democrat who served as secretary of energy.

In Jackson, Mississippi, Governor Haley Barbour, former chairman of the Republican National Committee. In Berkeley, California, Robert Reich, economic adviser to Barack Obama and professor of public policy at the University of California at Berkeley.

And in Minneapolis, Representative Michele Bachmann, Republican of Minnesota, just back from a Congressional energy tour of Alaska and Colorado. She's a supporter of John McCain.

The issue was on both candidates' minds today.

Let's give a shout at this and then we'll get comments.

Watch.

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MCCAIN: Unfortunately, Senator Obama continues to oppose offshore drilling. He continues to oppose the use of nuclear power. These misguided policies would result in higher energy costs to American families and businesses and increased dependence on foreign oil.

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OBAMA: He said, and I quote: "Our dangerous dependence on foreign oil has been 30 years in the making and was caused by the failure of politicians in Washington to think long-term about the future of the country." Now, what Senator McCain neglected to mention was during those 30 years, he was in Washington for 26 of them.

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KING: All right, Governor Richardson, who has the edge in this question?

GOV. BILL RICHARDSON (D), NEW MEXICO, SECRETARY OF ENERGY, CLINTON ADMINISTRATION, SUPPORTS OBAMA: Well, Senator Obama, because he has an overall energy comprehensive plan -- plug in hybrids, fuel- efficient vehicles; by the year 2025, renewable energy for our electricity. He has drilling in a sensible way. He today announced that he's ready, as we did in 2000 under President Clinton, use the Strategic Petroleum Reserve.

I think what we need, Larry, is a comprehensive plan, not gimmicks. You know, Senator McCain -- a quick gas tax holiday. That's not going to make a difference. Offshore oil drilling -- it's going to take at least seven years to deal with lowering prices. It's going to damage our ecosystem.

KING: But...

RICHARDSON: What we need is to talk straight to the American people, that we have to be more conservation conscious as a country and as a people. KING: All right. Now, Governor Barbour, in that regard, though, Obama seems to have shifted. He now backs the idea of tapping into Strategic Petroleum Reserves and says he could support limited offshore drilling.

What do you make of that?

GOV. HALEY BARBOUR (R), MISSISSIPPI, FORMER CHAIRMAN, RNC, SUPPORTS MCCAIN: Well, Senator Obama can read a poll. Four dollar gasoline is the biggest issue in the United States today. It's killing people in my state, Larry. And I bet it's not much different out in New Mexico or anywhere else in the country.

And Americans are very reasonable people. They know if you want the price of something to come down, make the supply go up. Yet for 30 years, as John McCain said, Democrats in Washington have been fighting against production of more domestic oil and gas, against drilling offshore, against ANWAR, against more nuclear power, against more production of oil and gas from shale out in the federal lands and the West.

We've got to produce more domestic energy, including oil and gas, nuclear, clean coal. And we do have to conserve. There's no question about that. That's one of the things that will work quickly.

But we've got to get the supply up of domestic energy if we're going to wean ourselves off too much foreign oil.

KING: Professor Reich, doesn't that seem logical?

ROBERT REICH, PROF. PUBLIC POLICY, U.C. BERKELEY, SECRETARY OF LABOR, CLINTON ADMINISTRATION, ECONOMIC ADVISER, BARACK OBAMA: Well, it's not logical, Larry. I mean what we know, from the Energy Department and many other sources, is that if we drill for more oil right now, we're not going to see the results for seven or eight or 10 years. And the results, say the Energy Information Administration, are going to be negligible in terms of prices.

I mean the only way of weaning ourself off the addiction of oil is to invest, as Senator Obama wants to, in alternatives -- non-fossil based fuels, wind, biomass, water, other fuels that will allow us, over the long-term, to create five million new jobs, to be the center of alternative use for the country.

Still, there is a short-term issue. And what Senator Obama said, in the short-term, have a rebate back to American consumers, a thousand dollars per family. And that rebate comes from the extraordinary outrageous profits that oil companies are now making.

KING: All right...

REICH: That's the short-term solution.

KING: Congresswoman Bachmann, McCain and Republicans -- I guess you're among them -- are demanding that the House speaker and the Senate Majority Leader call Congress back into session just to deal with energy. And the president has the power to do that.

Should he?

REP. MICHELE BACHMANN (R), MINNESOTA, SUPPORTS MCCAIN: I believe that he should, Larry. And I believe that the Speaker should do exactly that -- call Congress back into session. House Republicans wanted to stay last Friday. We didn't want to go on vacation because the American people can hardly afford to go on vacation. It's unconscionable that the United States Congress actually had the guts to adjourn rather than stay and address the most pressing issue of our time, which is $4 a gallon gasoline, which is killing our economy, freezing wages and causing employees to really be suffering all across America.

KING: If it's an emergency, Governor Richardson, why go on vacation?

RICHARDSON: Well, look, I think the Congress should stay and do its job. But, you know, George Bush has been president the last eight years he's had a policy of drill, drill, drill. And, you know, he won't even look at the Strategic Petroleum Reserve, which I believe should be used very sparingly.

Senator Obama has a short-term and a long-term plan. The rebate of a thousand dollars to help consumers, ways that we can conserve energy, the Strategic Petroleum Reserve to deal with prices. And what he's done with the Strategic Petroleum Reserve makes a lot of sense. He's not draining the oil. It's a swap -- light oil for heavy oil, so you can recuperate it later. This will lower the price and do something about our reserves of home heating oil.

KING: We'll pick up...

RICHARDSON: So I think he's taking short-term and long-term steps that make a lot of sense.

KING: We'll pick up with Governor Barbour in a moment.

By the way, T. Boone Pickens is still ahead.

And you're watching LARRY KING LIVE.

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OBAMA: I will immediately direct the full resources of the federal government and the full energy of the private sector, working with state and local government, to achieve a single overarching goal -- within 10 years, we will eliminate the need for oil from the entire Middle East and Venezuela.

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(BEGIN VIDEO CLIP) MCCAIN: I'm going to lead our nation to energy independence and I'm going to do it with a realistic and comprehensive all of the above approach that uses every resource available to finally solve this crisis.

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KING: Governor Barbour, aren't alternatives a pretty good idea?

BARBOUR: Alternatives are a good idea. But, today, after 30 years of working on solar and wind, solar and wind produce less than 1/2 percent of the electricity produced in the United States. Conservation is a very good idea. And we are conserving as a nation.

But the fact of the matter is we're going to be a nation that uses a tremendous amount of oil and gas, of coal, and particularly we need to increase the amount of nuclear power.

You quoted John McCain earlier, Larry -- or somebody did -- as saying for 30 years, the government's policy has been against domestic production. And somebody tried to make a joke out of that. But that is the truth.

When George Bush, in 2001, said we need to produce more domestic oil and gas, we need to drill offshore, we need to produce ANWAR, the Democrats in Congress stopped it. He tried again in 2005 and he was stopped again.

And this idea these oil and gas supplies are a long way off, I remember when President Clinton vetoed the bill in 1995 that would have allowed drilling in ANWAR. And I remember what he said. He said oh, we wouldn't have any of the oil for 10 years anyway.

But wouldn't we have loved to have had two million barrels of oil from ANWAR starting in 2005?

KING: Now, OK...

BARBOUR: Wouldn't we like to be producing more in the Gulf of Mexico in a couple of years?

KING: Robert Reich, didn't, therefore, we make a mistake years ago, because you're talking seven or eight years. If we'd have done this seven eight years ago, we'd have had the oil.

REICH: Larry, our big mistake seven or eight or 10 or 15 years ago was not investing in alternative energies -- wind and solar and all sorts of energies that don't pollute the atmosphere, that provide good jobs to Americans. You know, Obama's plan would -- and it is already detailed. It would create five million American jobs. We got to the moon. I mean this country has the ingenuity and the capacity to get rid of our dependence on oil.

I have great respect for Senator McCain, but Senator McCain has not ever voted in favor of any of these bills, for wind or solar alternatives. He has voted against increasing mileage standards for cars and other conservation measures.

I mean we can't simply go on as we have before. Anybody and everybody knows that.

KING: Congresswoman Bachmann, isn't that a good point?

BACHMANN: I think the main point to know is that John McCain is for the all of the above approach. He's not saying let's just go with oil and not wind. He's saying let's do wind, let's do solar, let's do alternatives, let's do conservation, but let's also look at Outer Continental Shelf drilling, where there's 88 billion barrels of oil.

And also build nuclear, which is zero emissions. You know, Larry, we're the only country in the world that's made it illegal to access our own energy. That's why today, we're 70 percent dependent on foreign oil. We don't need to be there. The Democrat-controlled Congress has purposed that we are not going to add any new nuclear, no new oil, no new natural gas, no new coal. They won't even allow us to vote on alternative energy tax credits.

KING: I can't -- all right...

BACHMANN: They're the no energy Congress.

KING: I can't let you folks go without a political question.

Governor Richardson, a Republican official is telling CNN tonight that there's now a mutual understanding between the White House and the McCain camp that Vice President Cheney is unlikely to attend the Republican convention because McCain wants a fresh start.

What's your comment?

RICHARDSON: Well, you know, this is a decision that Senator McCain and Senator Obama want to make, obviously, to stimulate the convention, to make it interesting. You know, there are a lot of these conventions that get very dull unless you contain some drama. So, obviously, probably right before the convention, Senator McCain, and possibly Senator Obama, will announce their picks.

So this is -- this is logical and I think what you want is a...

KING: Yes, but is it logical that Cheney not attend?

The question is Cheney not attending.

Isn't that surprising -- or not surprising?

RICHARDSON: Well, it would be a little bit surprising because he is the vice president of the United States.

KING: Yes.

RICHARDSON: It could be that they don't want him out there. I don't have a -- I don't have a -- you know, I don't know what their thinking may be. KING: OK...

RICHARDSON: But it could be that they want a little presence of the president and the vice president.

KING: Governor Barbour, what do you make of it?

BARBOUR: Oh, I doubt that it's true, though I will have to admit, if somebody wants the convention to be entertaining and funny, that Cheney wouldn't be in the first 400 names that you would come up to for entertaining and funny.

But, you know, I do think these conventions really matter. And they matter because the American people, to the degree that CNN and the other networks are willing to show as much of the convention as possible, will get a sense about these two party and they will see that these two parties are very, very different.

KING: In another area, Robert Reich, Bill Clinton spoke with ABC earlier today, the first interview since his wife ended her campaign. And he had something to say about regrets.

Watch.

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UNIDENTIFIED FEMALE: Do you personally have any regrets about what you did campaigning for you wife?

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Yes, but not the ones you're saying. And it would be counterproductive for me to talk about them. There are things that I wish I had urged her to do, things I wish I had said and things I wish I hadn't said.

But I am not a racist. I never made a racist comment. And I didn't attack him personally.

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KING: Robert, why do you think he went to that?

She didn't ask him about racism.

REICH: Well, I think he was hurt by the contention that he had injected race into the race. Bill Clinton is a wonderful politician. He is a gifted politician. It's very easy to Monday morning quarterback, Larry, about what happened in a primary race.

But I think the Democrats really are intent on coming together now, looking to go forward and winning back the White House.

KING: All right...

REICH: Incidentally, if I may just very, very quickly answer that question that you posed to Governors Richardson and Barbour. I think that the reason that Cheney is not going to the Republican convention is very clear -- John McCain wants to distance himself as much as he possibly can from the Bush administration, even though his tax policies, his economic policies and his energy policies are exactly the same as the Bush administration.

KING: All right, Congresswoman Bachmann, do you think Dick Cheney should come or not come?

BACHMANN: I think everybody should come to Minneapolis. It's the most beautiful city in the United States. And everybody is going to want to come here. I think it will be tough to keep away from this city, it's going to be so great.

KING: Well said.

Governors Richardson...

UNIDENTIFIED MALE: (INAUDIBLE).

KING: Governors Richardson, Barbour and Professor Reich and Representative Bachmann, we thank you all. We'll have you back often.

UNIDENTIFIED MALE: Thank you.

KING: The Pickens plan -- the man behind it. T. Boone is next.

Don't go away.

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KING: Great to see him again and have him back on this program. He's T. Boone Pickens, the founder and chairman of BP Capital Management, the legendary Texas oilman, now investing in wind power and natural gas, advocating The Pickens Plan for reducing U.S. dependence on foreign oil. And his upcoming book, "The First Billion is the Hardest," will be published next month.

T. Boone, you've been an oilman all your life.

What changed?

PICKENS: I still am an oilman. You don't ever have an ex- oilman. It's like an ex-Marine, you know?

KING: All right. Why has your emphasis changed?

PICKENS: Well, that -- the business changed in the United States. I don't operate internationally at one time. I'm not interested in drilling wells out of the country. I don't drill many wells in the country.

But, that, you know, I think oil has peaked globally at 85 million barrels a day. And, so consequently, it's -- the oil is getting old and I am, too.

KING: You're putting your money where your mouth is, right?

PICKENS: Exactly.

KING: You're investing?

PICKENS: I did $10 billion on this wind farm.

KING: Your plan got a shout-out today from Barack Obama.

Let's take a look.

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OBAMA: T. Boone Pickens is right. We need a much bolder and much bigger set of solutions. We have to make a serious nationwide commitment to developing new sources of energy and we have to do it right away.

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KING: You're a life-long Republican.

How does that make you feel?

Have you spoken to Senator Obama?

PICKENS: Never have met him.

KING: You never met him?

PICKENS: No.

KING: How did you feel when he said that?

PICKENS: Well, that's good. But, you know, my plan, The Pickens Plan, is a -- it's non-nonpartisan. And I said that at the first. I'm not -- I usually am, you know, helping Republicans.

I'm not in this case. I'm not helping John McCain. I wanted it nonpartisan. I think it's so important to this country. And this is American. It's not political. And I do have a plan and the plan will work.

KING: All right, give me the essence of it.

PICKENS: OK. It's pretty simple, that we only have one natural resource in America that will replace foreign oil, and that's natural gas. We have an abundance of natural gas. It's cleaner, it's cheaper and it's domestic. And it will replace foreign oil.

I'm trying to get to $700,000 -- $700 billion a year down from where it is and I can...

KING: What do you mean down?

PICKENS: We can't have that kind of outflow of capital out of America and survive. We can't do it. I mean you extend that out 10 years and I promise you it will be closer to $10 trillion. KING: Is it a problem to get the gas?

PICKENS: We've got it.

KING: All right, so then what -- what -- why aren't they using it?

PICKENS: You know, I don't understand. I know what the fuel will do and it's available to us. We're now importing almost 70 percent of the oil we use in this country. And we have only one fuel that will replace it. Now, you've got Senator Obama wants to do the battery and the electric car -- the electric hybrid. I don't have a thing wrong. I'm not against any fuel if it's American. And the electric hybrid is -- it's a few years out. And you can't get in big numbers.

We can get in big numbers quickly with natural gas. And that's what we should do. I mean it's that -- it truly is that simple.

Now, I have also said go ahead and do the wind, which we've got one of the most beautiful resources in the world. There's a wind corridor from Sweetwater, Texas to the Canadian border and it could be -- it could developed. It could be developed quickly.

But Congress is going to have to give you access out of the wind corridor to transport the power to the East and West Coast.

KING: What's the difficulty in getting the natural gas and using it?

What's -- what's the hang-up?

PICKENS: You know, you ask me that and it's a logical, intelligent question, which...

KING: That's why I asked it.

PICKENS: I don't understand why, Larry. I do not understand why. I have wanted to get natural gas into transportation fuel for 20 years. I started selling this idea in 1988, 20 years ago. And I thought it would take me three years to get something done. It's taken me 20. It's taken me 20 years to get it done. It will work.

Let me give you the count to verify what I'm saying. There are eight million vehicles in the world that are on natural gas and only 142,000 in the United States.

KING: T. Boone has launched a $58 million P.R. campaign to push his energy plan.

Let's take a look at one of his -- part of one of his TV spots.

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PICKENS: America is blessed with one of the best wind corridors in this world. Using private investment and technology that already exists, we can supply 20 percent of our electricity needs, freeing us to build a bridge to domestic alternative fuels for transportation.

(END VIDEO CLIP)

KING: So the idea is to use wind power, to free up natural gas for use in power generation and then ship the natural gas into transportation?

PICKENS: Yes. Now, we have plenty of natural gas to do both. We can do both. We can actually -- power generation and also transportation fuel. But over time, five years, for instance, you will see the natural gas move out of power generation and go into transportation fuel.

KING: What does Exxon and Mobil think of this?

PICKENS: You know, I don't know. I don't know. They...

KING: Would you gather they would be opposed?

PICKENS: I haven't had either one of -- well, of course, Exxon Mobil is one company. But I haven't had Exxon Mobil or ConocoPhillips or my old company, Phillips, that -- they haven't called me and said bully, go forward with the idea, we think it's...

KING: A great idea to put us out of business.

PICKENS: But, no. They own over 50 percent of the natural gas. They're not going to go out of business.

KING: So why aren't they for it?

PICKENS: Pardon me?

KING: Well, they should be for it.

PICKENS: You'd think so. You would think so.

KING: It's a puzzlement.

We'll be back with more of T. Boone Pickens in a moment.

And then a great panel joining us, too.

If you've got a question, we'll take some calls.

Don't go away.

(COMMERCIAL BREAK)

KING: We're back with T. Boone. He's had a moment to think about my question of why nothing has happened and he now has an answer. Why has nothing happened?

PICKENS: We didn't have the leadership; 40 years, we went without leadership on this question in Washington. Democrats, Republicans, nobody came up with a solution. If you go back to Nixon, Richard Nixon in 1970, he made a statement that we import 24 percent of our oil. By the end of the decade, 1980, we will not import any oil. Not so.

By the time we got to 1991, we were importing 42 percent. I started making speeches in early 1990s. I said, we got to do something. We can't continue to import oil at this level. We'll be 60 percent by 2000. There were a couple of guys wrote articles in this oil business, said Pickens has lost his mind. We won't be importing 60 percent. Now, we're very close to 70 percent.

KING: We have an e-mail question for T. Boone from Scott in Legrange, Illinois; "you say we should switch to natural gas and wind power. Why not skip natural gas all together and use wind, solar and other sources that won't add to global warming?"

PICKENS: That's fine with me. You can't solve -- you have got to bridge -- you've got to bridge to -- let's say the battery or hydrogen, we're not ready for that. We don't have the technology. We do have a fuel that will replace foreign oil. You've got to use that fuel for 20 or 30 years, or until you're ready to bridge. But you have to reduce the 700 billion a year outflow.

KING: Another one from Kevin in Green Valley, Arizona; "wind power is great and we have a lot of wind in Arizona. But we have more solar potential. What is the solar component of the Pickens plan?"

PICKENS: Solar, no question, we've got to use it. Solar works extremely well with wind, because solar is in the day time, and your best wind is at night. Those work very well together.

KING: E-mail from Erlin (ph) in Washington D.C., "how do you respond to those who say your energy plan is all about profit? That the green you care about most is money?"

PICKENS: Well, I'm -- Larry, I'm worth enough money, you know that.

KING: I've heard.

PICKENS: I'm 80 years old. This isn't about Boone Pickens and money. I like to see myself here as a pioneer on the wind, because I have committed to a 10 billion dollar project. So I feel like I'm going out front and leading on how this can be accomplished, because there's plenty of wind in the wind corridor for everybody that wants to play in that game.

KING: Do you use wind turbines on your ranch?

PICKENS: No, I do not.

KING: Why not?

PICKENS: I am in Rolling Hills. It's not good to locate the turbines there. The south, 10,000 acres of my ranch, I could put turbines on it. I said I wasn't going to, but -- they're starting to look better to me all the time. KING: Over this whole general area, are you optimistic or pessimistic?

PICKENS: I'm optimistic, because when I see a solution to a problem, and I've got one, I'm optimistic that this could be accomplished. We have to go back to the missing link from the past. We have to have leadership in Washington to make it happen fast.

KING: Why do you think they haven't led?

PICKENS: I've got that question quick. Why haven't they? Cheap oil. That was it, cheap oil. You know --

KING: We had a good ride for a while.

PICKENS: We watched the French go to 80 percent nuclear. We were at 20. We saw the natural gas vehicle, eight million of them, which I mentioned, only 142,000 in the United States. We saw the Germans on wind. We saw the Spanish on wind, the Danes on wind, now the UK on wind. We've been slow, slow, slow. Why? Cheap oil, that's it, cheap oil. We were fools the way we got trapped on cheap oil.

KING: Have you dealt with the Saudis?

PICKENS: No, I never have.

KING: Do they have us, not a pun, over a barrel?

PICKENS: No question. Here we are using -- there's 85 million barrels a day in the world. That's it. I don't think you can get any higher than that. I think we've peeked. Of the 85 million, we use 21 million barrels and we produce almost seven million here. We're using 25 percent of all the oil in the world and we have three percent of the production, three percent of the reserves. We have four percent of the population. I mean, we're totally out of step with the world.

KING: We're like carnivorous.

PICKENS: We sure are. But we're getting ready -- it will cost us. We can already see that. As long as the oil was cheap, we took it to them. We almost said, send it to us, never mind the price. Then one day the price went vertical.

KING: With Barack Obama supporting it today, and John McCain will be asked about that, if he supports it, wouldn't that cause you a great deal of optimism?

PICKENS: It would. I would like to sit down with both candidates. I first thought it was best that the three of us sit down. I think now the best format would be to sit down, hopefully in the same day, several hours with each one of them, separate and with their staffs, and tell both of them exactly -- I think it would be better, for instance, if I sit down with Senator Obama, that he would be there with his staff, but McCain would send a representative to hear what was said. And then -- and say I met in the afternoon with McCain and an Obama person would be there. KING: Do you favor off shore drilling?

PICKENS: Oh, yes. I think you have to do everything. Everything goes now.

KING: One quick question from Rogers, Arkansas. Hello.

CALLER: Yes, Democrats say it would take ten years for drilling today to have an impact at the pump. Wouldn't we see an immediate affect if markets priced in the future supply growth.

KING: If markets what, sir?

CALLER: Markets priced in the future supply growth?

KING: Markets priced in the future supply growth.

PICKENS: I don't think markets will price it in. I think it's a supply-demand situation. You won't get any credit for the future.

One thing about it, I started talking about this three weeks ago, and we've had a pretty good drop in the price of oil, which is good.

KING: We thank you for that, T. Boone. America thanks you.

PICKENS: I'm not taking full credit.

KING: We'll be back, some panel members will be joining T. Boone.

(COMMERCIAL BREAK)

KING: We're back. T. Boone Pickens remains with us. We're joined now from Necker Island with sir Richard Branson, founder and chairman of the Virgin Group, in New York, Bob Woodruff, the ABC News anchor, anchor of "Focus Earth with Bob Woodruff," a weekly eco- newscast on Discovery's Planet Green. His documentary report, "china inside-out," airs Wednesday on ABC. And here in Los Angeles, Ed Begley Jr., the actor and environmental activist, star of the HDTV reality show "Living with Ed," and author of "Living with Ed, A Guide to an Eco-Friendly Life."

Sir Branson, what do you make of the idea of T. Boone Pickens?

SIR. RICHARD BRANSON, FOUNDER, CHAIRMAN, VIRGIN GROUP: I think it's an excellent idea. One thing that hasn't really been mentioned tonight is global warming. I'm a believer that the amount of carbon that's going up there is putting the Earth in peril, and therefore actually these high oil prices, you know, whether you believe in global warming or not, are driving people to come up with ideas to replace the dirty oil, the dirty coal. I think what T. Boone has said tonight makes 100 percent sense.

KING: How much has oil gone up for your airlines?

BRANSON: It's been horrendous. We've got five airlines around the world. We're paying over two billion dollars more than we were 18 months ago, and it's painful. But as a result of that, and as a result of a worry about global warming, we're investing a lot in trying to develop clean fuel for planes.

One of the fuels we think might be the answer is algae, the algae that grows in the sea. We tested one of our planes with a biofuel. It flew fine at 35,000 feet. We now need to develop a fuel that will not eat into the food supply, that will be able to fly jet engines for the future.

KING: Bob Woodruff, what do you make of the T. Boone Pickens idea?

BOB WOODRUFF, ABC NEWS: It's certainly an idea that has been accepted by so many people, and people are paying attention to this because Americans are waking up to this, largely because of the price of oil, also, other reasons. If you look around the world and the growth of so many of these countries that were not really creating much fossil fuel in the past, but now they are -- you look at India, you look at China, you see a huge growth in people not only demanding more food and more oil and more needs, but you also see that's affecting the sky over the Earth, which is now flowing to our country.

People are now waking up. Certainly with something like Mr. Pickens working on trying to find a new way to fuel their vehicles, getting energy at their house, people are really accepting that. If somebody can make a profit developing these kinds of changes in how we're getting energy in our country, they will see this as more possibility that it will actually happen in the United States.

KING: What's your thoughts or guess, Bob, why we haven't used natural gas more?

WOODRUFF: That's another one. If you're looking, certainly the fear of power overseas as one of the threats of the United States, of oil coming from countries that could some day be our enemy, that's one reason to try to get rid of oil. There's also another reason to get rid of that kind of fossil fuel, which natural gas is as well, the possibility of the rise in emissions. You look at China and India, since 1970, you saw a 70 percent increase in emissions until 2007, I believe, 70 percent increase. People are seeing that.

I think there's also been a resistance to natural gas because of that reason as well. We've gotten very cheap oil all those years, but now we're not and people are looking for something a lot cheaper, but also coming from the United States.

KING: Ed, what do you think of the Pickens idea?

ED BEGLEY JR., ENVIRONMENTAL ACTIVIST: It's a good idea. I'm very much in support of it. I know that wind power works. I've been creating many homes worth of clean power since 1985 with my wind turbine in the California desert. It's part of a wind farm. I know that solar works. It's been powering my individual house since 1990. I know that natural gas works. Before there were hybrids, I drove a natural gas car across country, the Ford Contour, for many years. This is a clean fuel.

Part of the reason the air is cleaner in LA from the 1970s is because of natural gas technology. I'm for, as he is, fuel cells and hydrogen vehicles, all that, keep working on that. But in the meantime, what do you have off the shelf technology that will clean up the air in Houston and LA, put money in our pocket and lessen our dependence on Mideast oil?

KING: If everybody's for it, why isn't it happening?

BEGLEY: He said it, because oil was so cheap. It was so cheap for a while. It's a different game now. It's not cheap now. We better get going. As a oil man and geologist said to my right, we can't drill our way out of this problem. There's plenty of natural gas rigs out there. Pure CH4, Methane, and it's a good power vehicles and power plants.

KING: T. Boone, the whole panel agrees with you.

PICKENS: Let's go.

KING: Start moving.

PICKENS: I have an airplane. Let's all go to Washington tonight. But they're not there. They're on vacation.

KING: Branson can fly anywhere he wants.

PICKENS: That's right.

KING: If going green is good business, why isn't the corporate world jumping on the bandwagon? Some answers coming up.

(COMMERCIAL BREAK)

KING: Sir Branson, a question I asked T. Boone, are you optimistic or pessimistic, Richard?

BRANSON: I'm optimistic. I think enormous amounts of money are being invested in clean energy. As a company, Virgin, we're putting all the profits from our dirty airline business into developing clean energy. We've had some major breakthroughs, particularly in really trying to improve solar. And there are a lot of other companies now coming into this sector. So I do think every month there will be bigger and bigger breakthroughs. I think man can find technological answers to these problems.

KING: Bob, couldn't I make a good case for pessimism?

WOODRUFF: I think it will tell you generation by generation. The ones that are young feel there's a great future for them. They're looking at this, hoping that the United States takes the leadership in this. Very much like the United States in the late 1990s with the Internet boom, became the leaders in this world. Not only do they show people a different way to communicate, but it also was a huge profit and created jobs for Americans, because we took the lead as a country.

I think that generation wants this to happen also with trying to fix the emissions problem. I think that certainly is optimism. There is pessimism with some younger, middle generation, where they don't think this can change that quickly, not fast enough, because they look at the numbers that -- in 2050 there may be a huge problem unless we act right now. No question about it.

KING: Ed, optimistic or pessimistic?

BEGLEY: Optimistic. We have four times the cars in LA that we had in 1970, yet we have half the smog. That's a big deal. That's running half way up the mountain. Natural gas technology has a lot to do with that. Other clear fuel things. The most important thing to note about the way we cleaned up the air in LA, they said we would go broke doing it. But then people finally figured out there was jobs making catalytic converters that combine cycle gas air, turbines and all this stuff that cleaned up the air in LA.

The Hudson River is cleaner. The Cuyahoga River doesn't catch fire anymore, because we had good legislation that worked, and nobody went broke doing it.

KING: T. Boone, you're 80 years old, right?

PICKENS: Right.

KING: Do you think you're going to see any of this happen soon?

PICKENS: I do. I'm optimistic because I know we have the fuel to fix it. Like Ed says, we did it in Los Angeles. And we can do it in this country. We're talking about cleaning it up. Bob's very interested in that and so is Richard. They want it cleaned up. But natural gas is two thirds cleaner than gasoline or diesel and it's ours. It's our fuel. And we can do that, turn the 700 billion around, and save 300 billion of it in five to ten years.

KING: Do you need government to do that? Or can private industry --

PICKENS: It can happen. You know, somebody said the other day that this wind idea of my would cost a trillion dollars. That can all be done privately. We don't have to stick that on the federal government. So all of this can happen, but it needs to happen quickly.

KING: What can you do to improve the energy situation? That's coming up.

(COMMERCIAL BREAK)

KING: By the way, in addition to giving you T. Boone's -- where you can reach him by the Internet, it's PickensPlan.com. And we're happy to learn that Ed Begley Jr. will be featured in a new show called "Gary Unmarried" on CBS on Wednesday. Let's take a call, to Ensenadas (ph), California. Hello. CALLER: Hi, Larry, great show. Two-part question, why don't we expand the solar text credits immediately? I think they're due to expire end of 2008. And why doesn't Mr. Pickens buy tune up masters and start giving free tune ups and air inflations to every American car. We could save immediately.

KING: Mr. Pickens?

PICKENS: I like both ideas. I don't have enough money. Wait a minute, I'm putting 58 million dollars in this campaign and it has -- it really -- well, it's 100 percent America is what I'm selling. Absolutely. But I don't want to tune up cars.

KING: That doesn't interest you?

PICKENS: No.

BEGLEY: It was a good amendment, the Bing and Baucus Amendment to the energy bill. It would have renewed those tax credits for solar, for wind, for renewables, and sadly that was taken out of the energy bill because of the lack of leadership, as everybody here suggests.

PICKENS: If they're going to pass the PTC, the Production Tax Credit has to be done or they --

KING: Sir Richard, what's your guess as to why there's been a lack of leadership?

BRANSON: It's a good question. I think there's been a lack of leadership in a whole lot of areas, I'm afraid, in America. And this is one, you know, glaring example. And we need a new election soon, so that there are leaders in the White House who will grasp this and make sure that, you know, not only America is not dependent on oil hopefully within ten years, but the rest of the globe can benefit from America's new awakening, and hopefully America can set an example to the rest of the world.

KING: Bob, you've been covering this scene for a long time, assuming you agree with T. Boone, why a lack of leadership? Why has no one come forward?

WOODRUFF: For one thing, what we've all woken up to is exactly what's happening around the planet. People have now looked at this and they agree that there are issues with emissions. I think that's true. But the big question now and, certainly, the political battles now is over how to fix it. Who's going to get tax money back? Who's going to be backed up by the government to try to rebuild various things, wind mills or nuclear bombs -- I mean nuclear weapons. That would be a completely different question.

That's what the fight is going on right now. There's still a lot of confusion and that is what people are arguing about, whether it's drilling off the shore or drilling on the shore. Those are questions that the politics are not really talking about and that's why there hasn't been an agreement, and there still hasn't been a lot of leadership. It's still very confusing. We need to have more reporting on this around the world and here in the country, about what works and what doesn't.

KING: You agree, T. Boone, that maybe we haven't reported it enough?

PICKENS: Maybe so. I don't think the subject is fully understood in the country. I think it's starting to be analyzed. We found from our polling and our focus group work that the American people do not believe they're being told the truth about energy. I'm not so sure anybody has lied to them. I'm not so sure that those were telling about it knew anything about it in the first place.

So I don't know. The American people --

KING: Do you think they suspect the oil companies?

PICKENS: You know, it's not the oil companies.

KING: Do you think they suspect the oil companies?

PICKENS: I do, yes. I think they do because I think the media has -- and Congress have been unfair to the oil companies, because when you look at Exxon-Mobil, for instance, the largest oil company in the United States, they still say they should be taxed, you know, windfall profits tax. Well, at the 85 million barrels that's produced in the world every day, Exxon-Mobil produced less than three percent of that. You can't tell me that somebody that has less than three percent of the oil is controlling the price of the oil. And that is not the case. And so --

KING: We're out of time. We have just skimmed the surface tonight. We thank you, T. Boone. Thanks to our old friend, Sir Richard Branson, and Bob Woodruff, who is doing so well. We're happy to see you well. And Ed Begley Jr.

Before we go, we want to send good thoughts and positive energy to columnist and commentator Bob Novak, a former member of the CNN team. Bob announced his immediate retirement today following the diagnosis of a malignant brain tumor. He tells the "Chicago Sun- Times" his prognosis is dire. I have known Bob for over 30 years. We wish him the best.

Go to CNN.com/LarryKing to download our ring tones and podcast and check out our photo galleries and more. And while you're there, why don't you send tomorrow's guest an e-mail. They are Katie Couric, Charlie Gibson and Brian Williams. They'll be here together to talk about their upcoming project. They're putting competition aside to join forces against cancer. That's LARRY KING LIVE Tuesday night. Right now time for Anderson Cooper and "AC 360." Anderson?