fish, so i'm very serious about this. do not bury me at sea. third, as executor to this, my last will and testament, i name my dear friends at the pakistani intelligence services. they are solid, reliable people and, may i add, among the few individuals a person can still trust in this corrupt, cynical world we live in. fourth, as a special bequest to my devoted human shield, fatima, i leave an autographed picture

the focus is looking of the political spectrum from left to right. what it means for the 2012 race. louise story to talk about why no high profile participants have faced prosecution. over-the-top fixed for tomorrow morning on "washington journal" at 7:00 a.m. no one happy mother's day to all the mothers out there and grandmothers. have a great weekend ahead. [captioning performed by national captioning institute]

[captions copyright national cable satellite corp. 2011] >> in a minute, president and ceo of the american petroleum institute jack girard on a first on offshore drilling and gas prices. attorney general eric holder on the mission it is osama bin laden during a house judiciary committee hearing. >> this weekend, former utah governor and former ambassador to china jon huntsman delivers the commencement address at the university of south carolina. it is the first southern state to hold a presidential primary. that is tonight on c-span is road to the white house. >> this week, our guest, the president and ceo of the petroleum institute frank gerard.

>> the nation seen a slight uptick. you should it, prices fell. how did you explain-prices and when will the country get some relief? >> the price of gasoline in the united states is driven by a number of variables and factors. it is primarily the function of the price of crude oil. factors like the increasing of demand to places like china and emerging markets around the world and the value of the dollar and some of the investments going on currently in the middle east and north africa. other components that we should focus on is the supply side of the equation. obviously, at the end of the day, it is about economics, supply and demand. that is one area where we have not done as well as we could as a nation. the president has been down in brazil. he has encouraged the brazilians

to develop their offshore. he has called the saudis indicating that we would like you to produce more. we need to focus on american producing more oil and natural gas. the more we work on that component, the better off we will be paired >> given the declining oil prices, do you expect gas prices to fall? >> if you look at the price of gas and crude oil, they follow very closely. if the price of crude comes down, you'll see the price of gas comedown. >> how much to expect it to fall? it is difficult to predict. >> is an average of $4 -- you think it will go down much below that, near to $3? >> others say and suggest that

we have probably seen the high point now. the factors to watch closely in the price -- is the price of crude oil because that is the vast majority of the costs associated with gasoline. the price of crude is impacted by the global demand we have talked about. the other unfortunate factor is our unemployment rate has jumped up again. that suggests our economy may be slowing down. an economic recovery puts demand on crude-oil and decreases the cost. if we take another turn and slow down the economy, the pressure will diminish as well. that is something nineveh's want to see. we want to get the american people back to work. -- that is something none of us want to see. we want to get the american people back to work. >> d net, go ahead with your question.

>> the supply side has been a big issue on the hill. on thursday, the house passed a bill to jump-start some leases, both in the gulf and off the coast of virginia. i guess the question on a lot of people's minds is how fast to do we see the impact of that? how fast will we see an increase in supply when we is so much oil in this country and have it have an effect on the price of the pump? >> we need to stay focused on, one, the reality. these are long lead times. by the time the government offers a lease, we purchase a right to go look. the government does not know if there is oil or gas out there. we pay to find out if there is. once we potentially discover something, if we do, we pay for the right to hold that least then we also pay a portion of the revenue that comes from the production of that energy. those lead times are between

three years and seven years from the point of issuing the least to actual production. it does take a while. the other dimension we should focus on is how it is perceived in the marketplace. the mansion -- the message to the congress needs to send to the market is that help is on the way. these decisions should have been made two years ago. the administration has done almost everything to delay, to defer, and to discourage the development of american oil and natural gas. those signals are taken into account in the marketplace. those were looking at the long- term costs of energy said, well, it is that the policy of the united states is to not reduce their energy sources. that is set into the price. the thing that we can do right now in the component of supplies to send a signal to the marketplace that we're serious about producing american energy, by americans for americans. that should go along with to

send a signal that we will bring additional supply to the market place so we do not rely on other sources. >> so you think it will lower gas prices initially. >> it will have an impact on the price of crude oil, which is the key factor to setting the price of gasoline. >> the obama administration is critical of the republican proposal, saying that they enter cut the reforms put in place at the bp oil spill last year. >> first of all, it is unfortunate that they would say that. that contributes to a lot of the polarization around this issue. if you look at the bill that the house passed, it deals with issues of safety. regulators are changing the safety requirements. it has done nothing to change that. the enhanced elevated safety requirements of the industry, the industry itself is moving to increase air safety standards, which is our number one priority.

there is a lot of rhetoric out there. there is a lot finger-pointing. >> but the auto industry is placing profits above safety. -- but the oil industry is pushing profits of the safety. it addresses the problems that were raised in the gulf spill. there were problems aggressiveness -- systemic in the industry. >> we disagree with this argument that there systemic issues in the industry. idea to do is look at the facts and you will find the best demand is unfounded -- all you have to do is look at the facts and you will find that that statement is unfounded. we have drilled over 42,000 wells in the gulf. this is the first time anything of this magnitude has ever occurred. we have had a lung problems.

clearly, a tragic incident, a tragic accident. the industry will move very quickly to look closer at the personnel and equipment and a variety of other things to make sure that safety is number one. because it is our top priority. but that should not detract from the fundamental energy reality of the united states. the energy reality is that we produce about one-third of oil and natural gas that we consume. of that one-third, the majority of it comes out of the gulf of mexico. the gulf of mexico production today is down as a result of the moratorium imposed by the administration in the gulf of mexico. it is estimated by next year to be down as much as 25%. that does not help us in this energy reality and rising gas price scenario that we're struggling with. >> to get back to drilling after the deep water horizon incident

in april of last year, the very same republicans that are sponsoring these three bills to put to drilling back on the fast track, weather is leases or permitting decisions and areas based on the amount of oil they contain, they are the very same people who said, hey, we cannot put any bills out on reforms and oversight until we see the causes. the big major federal investigation that has subpoena power, which is the coastguard, we have yet to see that. should we not wait to see what that says about what happened out there before we go and pass bills that speed up drilling? >> first, we do need to hear from that investigative body. we need to do with their conclusions are. but we need to know -- but we

know what we need to do in this industry to produce the energy we demand. today, 69% of the american people support expanded development of the outer continental shelf to produce the oil and natural gas we need. the everyday struggle and the cost of energy, particularly gasoline, we can afford to wait for a year or two or three or four to get our energy house in order. today, we rely on oil and natural gas, more than 50 percent of it, from outside sources. many say we need to focus on domestic production. we can do the two items together. we can continue to focus on safety as a top priority and still produce the oil and natural gas the country needs. there's no reason why it has to be either or -- either/or. >> people on the hill have said we do not have the definitive conclusions from the major

investigation on the incident. >> as you know, there are a number of other investigations out there. the president has an oil spill commission. they have already reported on it. there are oil industry task forces with the best minds in the world looking to what we can improve. we're sharing best practices. the industry committed four of our largest members -- $1 a containmentild an system. we hope this never happens again in the gulf of mexico. >> gil long lead time that you were talking before, why not wait -- given the long lead time that you're talking about before, why not wait for the commission's report? >> it goes to the lead times of the oil and natural gas. do you want to tell the american

people we will lead to suffer under the gas prices because we do not have the political will to produce american oil and natural gas? we need to focus on whatever the report may conclude. but we must also look at the other changes. the department of interior has already had improvements to changes to safety practices. this is but one part of it. we do have to hold of it -- we do not have to hold everything else back waiting for the last thing. we can move on with these better things, which is strongly supported by a good bipartisan margin. >> you talk about supply and demand. that supply and demand equation is the demand.

the fact of the matter is, even if we drilled all that we can drill in this country, we are still huge consumers of oil. >> absolutely. we should be focused on every aspect of energy in our economy. number one, focus on how to use it more efficiently. how do we use less of what we have today than what we will produce in the future? this is a fact that many people do not know. the oil and natural gas industry are the largest investors in alternative forms of energy. 2000 to 2008, we contributed $58 billion in zero-committing technologies or low-carbon in leading technologies. emitting technologies

emittingarbon in meetin technologies. we have to find how to diversify that energy base. we are in the entire mix. a natural gas piece that is a game changer is the large vast resources of natural gas we have found. it has over tripled in the last few years. it is a great form of energy. it can produce energy. some are proposing it as an alternative in automobiles, trucks leads, etc. we're the major investors try to find the new frontiers, if you will, in energy development. that is a great point. we are all about oil and natural gas, which is 61% of the energy we consume. but we're also about all these other forms of energy. we will need a mix as we tried

to supply with the country demands. >> we started off talking about the high gas prices and the high oil prices. that is reflected in the corporate profits reported last week. chevron made $6 billion in the quarter. senate democrats would like to use some of that money, one in to repeal some tax breaks to the oil industry. do you not think it is appropriate? >> first, we need to dispel a member of the myths around these tax provisions. the first important myth to dispel is to owns orland gas. corporate management only owns 1.5% of the oil and gas industry. another 98.5% is owned by 130 million americans.

folks like you and i. where is the money? is in our pension plans. it is in the mutual-fund we all invest in for our future. that is who owns oil and natural gas. when we talk about earnings in oil and natural gas, their large, but that is because they are large companies. when we talk about taking away those earnings, in our view, it is a punitive measure. your punish it -- you are punishing the retirees, the teachers' union, the policeman, and others who invested in oil and natural gas. >> that is $4 billion a year that exxon gets. >> that is a myth that i would like to dispel. >> do you think that tax breaks would affect the industry? >> 's those are standard --

those are the standard industry- wide provisions. what the proposals are that are going on right now, which are punitive, they have identified five oil and gas companies and saying we will just take that tax provision away from you. we will leave it for the rest of the industry, for the rest of the companies, but we will punish you. we will punish you because you're successful. the oil and natural gas industry supports the employment of 9.2 million americans today. we believe that there are another 1 million jobs available. >> would the industry be affected by tax cuts compared to your project? >> absolutely. >> if you raise taxes, you're

raising cost. what you're saying is that we will discourage the very andanies who iwe rely on take away the earnings you have for reinvestment purposes, for purposes of giving to the shareholders, the pension plans and others. we'll take part of that away because you have been successful. why would we do that in this country? it doesn't make any bit of sense. it has nothing to do with the cost of gas. >> why should an oil company takes some of -- why should not an oil company to some of the burden? everybody is getting hurt. everybody's getting penalized. every federal agency, talk about medicare before they rolled back on that. why should not very profitable companies pay some of the burden, help the debt, help us

balance the budget? >> great question. let me dispel another myth. we currently pay even more than our fair share. today, the oil and natural gas industry contributes over $85 million a day to the federal government in the form of taxes, royalties, and the list goes on. the effective tax rate for the oil and gas industries 41% -- >> including royalties. >> the combination of all the costs to us -- 41% effective tax rate for the one and gas industry. effective tax rate for the other standard and poor's industrial companies, on average, 26%. we pay significantly more than other companies in this country. we're clearly not only paying our fair share, but more than our fair share. we're not begrudging that. what we begrudges people coming back and saying let's keep

penalizing a successful industry that makes such a significant economic contribution to our country. that is where we draw line and say, you know, some of these proposals are not fair. they are fundamentally designed to punish success. we do nothing that is good, found policy. >> when you put up that number, does that include the tax breaks? when to include that into the equation, where you live? >> the tax breaks the people like to talk about our standard business provisions that apply to everyone. so the 41% do not include those pared back to figure out what you actually own the federal government, the 41% effective tax rate applies to our industry. that is what we pay today. but democrats also say they do have leases that you are currently on and you are not pleasing them. using the.not >> that is another myth designed to figure point. but we give you one great example. shell oil co. has been operating and trying to permit

the operation of there. they're now in their fourth year. they spent close to $4 billion. they're waiting for a government permit to finish and have the opportunity to drill and see if they can find oil and natural gas on this particular lease. guess what. the government classifies that least as idle. why? because they are waiting on a government permit. the leases that we require from the federal government, we pay millions of dollars for them. we pay millions annually just to hold that leaves just for the right to look. it does not make any logical sense for companies to want to hold release to really pay the federal government. again, it is a red herring. it is designed to distract. it is designed to turn the attention away from failed, ineffective energy policies of this administration and some in congress whose real motivation is to say we do not want to produce oil and natural gas in this country.

we do not think that is good, sound public policy. it is not the way they propose it. we will push hard to educate the public to dispel some of these very myths. >> we have five minutes left. >> let's go back to money and penalties as you refer to them. as you know, some of the reforms that the bureau of ocean management will require more money. in this budget climate, they're not able to hire the top-notch petroleum engineering school inspectors. if they denied it the money they need, -- if they do not get the money they need, the oil and gas in this country should pay for its own oversight like other countries.

there would be an increase in inspection fees. will the industry support that? after this huge disaster last year, will the industry say we are willing to pay for our oversight if the budget-watchers on capitol hill does not give the money it needs to police the oil and gas industry? >> it would surprise you to know that we support the regulator having more money. we have sent a letter to congress to appropriate more money to our regulator to do just what you described, to have more inspectors, to hire more experts, to hire people with engineering skills so they can be an effective and robust regulator over the industry. the industry contributes $85 million a day to the federal government. if they need additional money, surely they could just take one day's earnings that the oil and gas industry gives them and add that to what they are already spending. that will give them ample what they need. that is along lines of what they

ask for. we support them having additional investigators, parameters. we believe that is in the best interest of the country. the more you bring a system that provides clarity and provides quick action or makes decisions, the better off we will all be. we support them having more oversight. >> -- glenn >> it goes back to the fundamental debate of fairness and how much we pay today. we pay the federal government millions of dollars a day. certainly, they can find the additional resources to regulate the industry. it comes into the question of how big the government should be. the billions of dollars regenerative every year and the billions more we could generate with additional opportunities to produce the nation's oil and natural gas are adequate resources.

it is not so much the question of how much they have, but how they use it. any to focus on the things they matt -- that matter most. you have to take that resource and make sure that they have a robust and adequate regulator. we support that in the industry. >> current federal law put a cap on liability for damages at 75 million love -- at $75 million. what does the industry think is an accurate number? >> the one that is not appropriate is the one with a limited liability approach. as you know, in the debate over the past year so, the insurers say that you will not be able to ensure any activities. unlimited liability results in no economic activity, no production of oil and gas in the gulf. >> should be $1 billion? >> we recommended to the hill that there's probably wait to do a mutual pulling of insurance

fund, if you will. at the end of the day, there would be adequate resources. we understand that it is our responsibility. when accidents occur like in the gulf of mexico, we take that seriously. we want to make sure there is adequate funding to do the cleanup and to protect the environment. we understand that is our role and we're working with the congress to figure out what that a proper level should be. >> let's go to one of the other changes post the deep water horizon. having companies prove they can contain an oil spill. there are two containment systems out there used by various companies as they get these new drilling permits and get bypasses on the moratorium. the question i have and i know that mary -- that many americans

have -- after what we saw transpire in the gulf last year, throwing everything we had to stop this long, how do we know it will work? it seems that we are depending a lot on those to work. and if they do not work, we're back to the same situation we were in the gulf, which was days, if not weeks, to drilling a relief well, to intersecting a very narrow drill pipe to stop that oil and gas from flowing. my and standing is the they have not been filled tested, except for the one used in the bp still. if they do not work, what is our best recourse if we have another, god forbid, major oil spill? >> that is a great question. it is a question of managing risk. how do you manage that risk to