What follows below is an unofficial transcript of my interview with Sarah Palin on Kudlow & Company last night. Mrs. Palin is is the youngest governor in Alaskan history as well as the first woman to hold the office in the state. Her approval ratings remain in the stratosphere. Governor Palin believes more oil and gas production from ANWR and offshore is crucial to America’s future. She is also high up on McCain’s possible veep list.

Kudlow: All right, drill, drill, drill! Nobody does it better than Alaska, if only Congress would let it. So here to tell us all about it, Alaska Republican Governor Sarah Palin.

Governor Palin, thank you ever so much for coming on. We appreciate it. I want to start with this, it’s an oddball question. I mean, Senator McCain says it's too pristine to drill. Senator Obama says the drilling won't work. What is your response to this? How do you fight back?

Palin: Well it will work. And Senator McCain is wrong on that issue. He’s right on a whole lot of other issues, so thank goodness that he’s understanding and evolving with his position on OCS [Outer Continental Shelf]. So that’s encouraging. I think he’s going to evolve into, eventually, supporting ANWR opening also.

Obama is way off base on all that. I think those politicians who don’t understand that we need more domestic supply of energy flowing into our hungry markets, you know, they’re living in La-La Land. And we’re in a world of hurt if their agenda continues to be to lock up these safe, secure domestic supplies of energy.

Kudlow: Tell me about the “world of hurt” in your judgment. The criticism of ANWR is - this is what you hear from people in both political parties - there’s not enough to matter, it’ll take too long, and it won’t impact the price of oil internationally or gas at the pump. How do you respond to that?

Palin: Well it will impact, in a positive sense, the price of fuel eventually. We’ve got to start somewhere. Again, we’ve got domestic supplies sitting there underground. The reserves are ready to be tapped. And you know, nowhere more than Alaska – Alaskans - would be impacted by development in ANWR. And here in Alaska, our constituents, the people who live here, want it drilled. So that tells you that we have confidence in the safety and the responsibility that we’ll see there with the development of ANWR.

Remember too Larry, we’re talking about a sliver of the coastal plain of Alaska being explored and drilled for oil. It’s about a footprint of a 2000-acre plot of land. That’s smaller than the footprint of LAX, for instance. So it’s not so grandiose an acreage that it is out of the realm of possibility for others to start understanding why it is that we can do this safely. We can have a small footprint, and not adversely impact the land, the wildlife, that’s part of Alaska.

Kudlow: Well what do you have up there around ANWR? Is it a bunch of big fat blue flies? People say nobody goes up there. Humanoids don’t populate it. It’s just the blue flies. I mean, I want to keep blue flies healthy. Maybe you can tell us about that?

Palin: Well sure, we want to keep the blue flies healthy also. [Laughter]. But again, it’s a small portion of land up there. Alaskans understand that while we have these reserves underground, ready to be tapped, you know, we want to invite safe responsible development. We want those who can safely develop it. We want them to compete for the right to tap those resources and start feeding these hungry markets.

Kudlow: How long would it take? How long would it take? I hear so many, Senator Obama says this, and a lot of Democrats say this, some Republicans, how long will it take Governor? What’s your estimate on this? To start lifting out of ANWR?

Palin: It’s going to take at least five years. You know, and there are other areas in Alaska too, that have the reserves that need to be tapped, certainly offshore. There’s trillions of cubic feet of natural gas, and billions of barrels of oil there too that need to be tapped. We also have a natural gas pipeline that is underway now, a process to get that constructed, where we can build infrastructure and allow known reserves of natural gas up on our North Slope - it’s already there, it’s already proven – to be tapped and flow through a natural gas pipeline. Our legislature is dealing with that issue right now, getting ready to license a company to build that gas line. Again, to feed these hungry markets.

Kudlow: Alright, so now you’ve got another case where both candidates seem to be off course. Senator Obama wants a windfall profits tax on oil companies. And Senator McCain talks about obscene profits, which I regard as the near cousin to the windfall profits tax. What’s your response to these criticisms?

Palin: Well we just went through a process of making sure that the oil and gas resources that Alaskans own are properly taxed. And we just increased a tax on profits of oil companies up here, because an earlier version of Alaska’s tax formula had been corrupted by some politicians who are now in prison for the corruption. But we had to revisit the way that we were going to tax profits on oil companies. We just got through that, and it wasn’t an obscene amount of tax placed upon them. In fact, it’s driven more by a desire to explore and to develop with independent companies coming into Alaska. So you know, on a national level, they’re going to have to deal with that, but we just dealt with it on Alaska’s level. And we have a healthy valuation of our oil and gas reserves, and we’re deriving healthy revenue for our state off that.

Kudlow: Well are profits a dirty word? In energy, or other businesses?

Palin: Well no, of course not. And low taxes of course, we know spur the economy. I’m a Republican. I am for low taxes. We have to make sure though that an appropriate value is placed oil and gas resources. And that the people who own these resources are able to benefit from the development of them. But no, profit is not a dirty word.

Kudlow: Why don’t we just liberate, and decontrol, and deregulate the whole bloody energy business – whether it’s oil, gas, shale, nuclear, coal, natural gas, as well as wind and solar – why don’t we just decontrol, deregulate, go for an America first energy policy? Get independent of Saudi Arabia? America first. Create all of these millions of high paying jobs. Why isn’t anybody talking about that in this race? That’s the natural, Reaganesque thing to do. Isn’t it?

Palin: Yeah absolutely! You’re hitting the nail right on the head. That’s what so many of us normal Americans are asking. The same thing. Why aren’t the candidates talking like that? Where we can secure America and we can be more independent when we talk about energy sources if we could drill domestically.

Here we sent [Energy] Secretary Bodman overseas the other day, and our president had to visit the Saudis a few weeks ago, to ask them to ramp up development. That’s nonsense. Not when you know that we have the supplies here. You have the supplies in your sister state called Alaska, where we’re ready, willing and we’re able to pump these supplies of energy, flow them into hungry markets across the U.S. We want it to happen. It’s Congress holding us back.

Kudlow: Alright. I’ve got some sound from Senator John McCain. Please take a listen.

Audience member: Would you consider Alaska Governor Sarah Palin for a vice-presidential running mate?

McCain: Could I say that this meeting is adjourned? [Laughter]. We’re still going through the process, but the governor of Alaska is a wonderful person, and very popular in her state, and very honest and straightforward, and I think has a future in our party]

Kudlow: Alright Governor, you probably heard Senator McCain waltz his way through that one. Let me just ask you. If he asked you to be his vice-president, would you accept in light of your disagreement, apparently, over ANWR drilling?

Palin: Well I’d like the opportunity to get to change his mind about ANWR, I’ll tell you that. But Larry, I’m gonna give you the same answer that any other potential VP gives you and that is you know, I really enjoy my job here in Alaska as governor. I believe that there’s a lot that Alaska could be and should be doing to contribute to the rest of the U.S. And I think I can do that in my job here in Alaska. And I know that, again, the other potential VPs are saying the same thing that they like where they are today. So I also have to say though that it’s really probably out of the realm of possibility to be tapped for that position, so I don’t even have to worry about it.

Kudlow: Well okay. You’ve got a lot of work to do drilling up there to help the rest of America. But let me ask one final question. In your judgment, is it time for the Republican Party to put a woman on the ticket?

Palin: Oh, we’re overdue for that. Absolutely. I would love to see that happen.

Kudlow: Alright. Governor Sarah Palin, Alaska. Thank you very much Governor. Appreciate it.