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PAULA ZAHN NOW
Crude Awakening; President Bush's Iraq Plan Realistic?
Aired May 25, 2004 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR (voice-over): Five steps and 36 days to go. Is the president's plan to let Iraq run itself realistic?
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We'll be there to help and we'll help in a variety of ways.
ZAHN: And had your fill at the pump?
UNIDENTIFIED MALE: It's highway robbery.
ZAHN: Who's to blame for sky-high gas prices, the oil companies, the war or us?
UNIDENTIFIED MALE: I bought a gas guzzler, but I bought it four years ago.
ZAHN: Tonight, part one of our series, "Crude Awakening."
ZAHN: Good evening. Welcome. Glad to have you with us tonight.
At this time last night, we heard President Bush lay out the five steps he says are needed to achieve freedom and democracy in Iraq. Now comes the hard part, making it all happen. And all this week, we're going to take a look at what needs to be done.
The deadline for the first step, turning over authority to a sovereign Iraqi government, is just five weeks ago. Step two, establishing stability and security. Step three, rebuilding Iraq. Step four, gaining more international support. And step five, holding free elections.
Tonight, we zero in on step one.
BUSH: The June 30 transfer of sovereignty is an essential commitment of our strategy.
ZAHN (voice-over): Although the handover is just 36 days away, there is a lot to do. The structure for the interim government is set, a president, prime minister, two vice presidents and 26 government ministers. But no one has been named to any of these posts. This man, the U.N. special envoy to Iraq, is under a lot of pressure to fill in these blanks.
BUSH: Lakhdar Brahimi is now consulting with a broad spectrum of Iraqis to determine the composition of this interim government.
ZAHN: Three Iraqi groups are competing for power in the new government, Kurds, Sunnis and Shiites. And they often do not get along. The Shiites and Kurds each want at least one of the two highest positions, prime minister or president. The problem is that the U.S. wants one of those positions to go to a Sunni, two jobs, three groups. That means somebody gets left out.
Lakhdar Brahimi is having real difficulties getting the three groups to agree on who gets what. Yet President Bush is confident Brahimi will name officeholders soon.
BUSH: The special envoy intends to put forward the names of interim government officials this week.
ZAHN: That will be a crucial step in returning power to the Iraqis.
ZAHN: If it happens this week at all.
Joining us now to look at the challenges ahead in Iraq, both political and military, regular contributor Joe Klein of "TIME" magazine, Retired Army Colonel David Hackworth, and Kiron Skinner of the Hoover Institution at Stanford University.
Great to have all of you aboard tonight.
Joe, I want to start with you this evening.
ZAHN: So how do you get these three groups to agree on two positions, the top two positions in this new provisional government?
JOE KLEIN, CNN CONTRIBUTOR: Well, actually, the top two positions are easier than the big eight.
You have the president, the prime minister, two vice presidents and then four major ministries, foreign ministry, defense, oil and interior. It was assumed that the Sunnis would get the presidency and it would be this distinguished diplomat, Adnan Pachachi, and that the Shiites would actually run the government, have the prime minister.
Brahimi, I'm told, submitted a slate of candidates and they were rejected by all sides. A lot of the battling I think is going on for who is going to control the ministries and also for whom which Shiite may actually be fulfilling the top role of prime minister.
ZAHN: Kiron, you know insiders within the Bush administration. How troubled are they this close to the turnover that these things aren't completely settled? KIRON SKINNER, HOOVER INSTITUTION: Well, my sense of what's going on is that many in the administration and those who are looking closely at Iraq right now are pleased by some of the undercurrents that are taking place.
For example, in March, the transitional administrative law was approved by the entire Iraqi Governing Council. It ensures freedom of speech, religion, the press and so forth. And I think these are good signs. And what's happened in the past year, the ministries that are now being run by the Iraqis themselves, the upturn in the economy. So I think there's a sense that the groundwork is being set for more civil society and democracy.
ZAHN: And while you made that point, Kiron, I see Joe shaking his head no, particularly when you said some positive undercurrents going on.
You don't buy that at all, Joe?
KLEIN: Well, on the transitional, on the TAL, on the transitional constitution, yes, the Governing Council agreed to it. But two days later, Ayatollah Sistani said that he didn't agree to it. He's the most powerful force in Iraq.
And my understanding is from all sides and from people within the administration that that's pretty much a dead letter right now and they need to start over again constitutionally.
ZAHN: Just a quick rejoinder here, Kiron.
SKINNER: Yes, I would like to say, in response to that, the fact that we're even having this debate about democratic processes, we couldn't have imagined it a year ago, suggests something really is afoot in Iraq, that there is a debate back and forth about what type of structures and institutions and political culture will take place in a country that had never had these kinds of debates in recent years.
So I think that these things are a good sign, even when there's a step backward. And that's my core point.
ZAHN: Let's move on to the issue of security with Colonel Hackworth.
How soon will the Iraqi army be in a position to do what it needs to do?
RETIRED COL. DAVID HACKWORTH, U.S. ARMY: Well, the key to the whole thing is have a security shield, so behind that the politicians can do their thing. And it seems to me that, based on what the president said last night, that the Iraqi army right now has five battalions that are good to go and with eight more coming online in Iraq. It is wrong, totally wrong.
ZAHN: What is wrong with that?
HACKWORTH: Well, right now, according to my sources in Iraq today, I went to them, I said, is this true? Because I have been writing about this, have good sources that have been doing the training? They said, Hack, no, hell no. We have three battalions that are marginally ready. No way will we have eight more battalions ready by July.
So the president is getting bad information from somebody, the same kind of bad information that brought about the weapons of mass destruction, that brought about the tie-in with 9/11. Somebody is feeding him some bad stuff.
ZAHN: What are the repercussions of not having the army ready to be in place?
KLEIN: Well, it's very serious in terms of security.
Look, the president laid out five points last night. Ambassador Bremer laid out seven points last November. None of those seven points have come to fruition. We've succeeded in none of them. This is all about implementation and details. And so far, the administration hasn't been very successful in getting the details right on the ground, not only in terms of security, but also in this political process, which is going to be a very, very difficult one and it may go down to the June 30 deadline.
ZAHN: Kiron, you'd have to concede, when it comes to details, particularly of having security in places, this is a problem for the administration, isn't it?
SKINNER: Well, I think that there are several ways to think about the security issue. I think that we can run the numbers, but we can also look back at April in Fallujah. That was a difficult month, a difficult situation. But what emerged is an attempt to work jointly with Iraqis on security issues and policing forces.
So I think we want to come at all angles at these issues and see where in fact there's an evolution both politically and in terms of security. And I think we haven't spent much time talking about the way security is being shared. And I think that that is beginning to evolve. And it came out of a very difficult month.
SKINNER: We saw some attempt to share responsibility.
HACKWORTH: I'm feeling very much like Yogi Berra, that it's deja vu view all over again. During the Vietnam era, we had Richard Nixon coming up with the same kind of stuff. It was called Vietnamization. Vietnamization will save us. The Vietnamese army, which we poured billions and billions of dollars into for 20 years, when the game really came to finals, they flunked the course.
And right now, the Iraqi army, after one year of extensive training, the first battle, they ran; 40 percent of the army threw their weapons down and took off. And 10 percent of the army that we trained shot their weapons at us. So this is not a force that we can say with a magic wand we're going to Vietnamize.
ZAHN: Well, trio, we've got to leave it there this evening.
Joe, Kiron, and Colonel Hackworth, thank you for your time. We'll have to bring you back, because we have plenty more to discuss, particularly as the countdown continues to handover.
ZAHN: And now that the president has begun laying out his vision for Iraq, what is John Kerry's plan for Iraq's future? I'll be asking former Democratic presidential candidate, current Kerry campaign adviser, General Wesley Clark, for specifics.
And some people still have a sense of humor about high gas prices. Check out this sign. Part one of our special series "Crude Awakening" looks at what is causing the jump at the pump.
And we'll be talking about politics in a city that knows a thing or two about the subject. Carlos Watson goes to New Orleans to take "The American Pulse."
ZAHN: We have heard President Bush's five-step strategy for Iraq, but American voters are still waiting for a plan from democratic presidential candidate John Kerry.
Retired General Wesley Clark, a former NATO commander and a former Democratic candidate, is now advising the Kerry campaign. He joins us tonight.
Always good to see you.
WESLEY CLARK (D), FORMER PRESIDENTIAL CANDIDATE: Great to see you, Paula.
ZAHN: Particularly nice to see you in person for a change.
ZAHN: First off, what would John Kerry be doing any differently right now on the ground than the Bush administration is, given the set of circumstances that we see today?
CLARK: Paula, John Kerry has said consistently that we have got to invite our allies in, in a responsible fashion, let them share in the decision-making, and take some of the load off the American decision-making and the American reputation in Iraq.
ZAHN: Isn't that essentially what the president said last night, particularly through U.N. involvement?
CLARK: Here's what's happened is, bit by bit, the hard-line ideological position of the neocons is eroding under reality and the president's position is moving closer and closer to what John Kerry and most of us in the Democratic Party have been saying all along.
The president has turned over the decision-making of who's going to be the interim government at least nominally to Brahimi. But he'll still have a big say. The administration will still have a big say. And this is the real issue. Is the United States willing to let other people have a share of responsibility in moving the process forward in Iraq?
I can't tell. I'm waiting to hear the U.N. Security Council. I don't understand how you can say there's full sovereignty for Iraq if the American military reports through American military channels to the president of the United States. What is the mission of the American military? Is it to just guard the borders?
If there's a new Fallujah, do you go into Fallujah and take them on? And what if the Iraqi interim government says, please, don't destroy this city, and we say, no, no, we're going to get these guys, they hurt our people, we're going after them? Who resolves that issue? And if it's not resolved by the Iraqis, then how is it that they -- what is it that they -- sovereignty do they have?
ZAHN: On to the issue of General Sanchez. What do you read into that move, that he's been replaced?
CLARK: I think it's routine.
Rick Sanchez is an outstanding officer. He worked for me in two assignments. He was my man on the ground in Kosovo for a critical six-month period in the fall of 1999, the early spring of 2000. He's an outstanding officer. He has the highest standards of integrity. And I believe that this is a move that was planned for some time.
ZAHN: You don't think it has anything to do with what some people are alleging, that he is a scapegoat for this prison abuse scandal?
CLARK: Well, I think that there was a plan all along to bring in a four-star and put him on the ground. Whether Sanchez was going to be that four-star or not was up for discussion. But I think that we're not at the end of the investigation on this. As I've looked at where the investigation is, the American people should demand that we go a lot higher than a three-star general in Iraq for the source of the trouble at Abu Ghraib and the other prisons in the system. This goes right to the top of the United States government.
ZAHN: Can you name names tonight?
CLARK: Well, we know that Secretary Rumsfeld was apparently briefed and his lawyers were engaged in some of the roughing-up treatment for the people who allegedly didn't fall within the Geneva Convention in Afghanistan. And we know that there was leakage from the Afghanistan methods over into Iraq. I think that's been pretty clearly established.
We know that the White House counsel was writing memoranda explaining to people how to avoid being subject to the Geneva Convention. This is an astonishing thing, to have the White House council advising on how to avoid falling under the rules of law.
ZAHN: I know John Kerry has said long ago Don Rumsfeld should go. Is that what you're saying tonight?
CLARK: Well, I think that certainly Secretary Rumsfeld is in a position where he has compromised the reputation of the United States of America by the treatment. I'm not saying he can't command soldiers. I'm not saying people in Congress won't trust him. It's not, could he effectively present a budget?
It's a question of, can the United States effectively continue the mission if it doesn't hold accountable those who are held accountable? But, ultimately, this goes beyond Don Rumsfeld. In my view, I think this goes to the tone set at the top of the administration in its general attitude toward international law, international understandings, and in some of the writings of the White House counsel.
ZAHN: General Wesley Clark, thank you for your time tonight.
CLARK: Thank you, Paula.
ZAHN: Good to see you.
Of course, these are difficult and dangerous times for Iraqis. And many are still struggling with the horrors of Saddam Hussein. When we come back, you will see why these Iraqi man were given an incredibly cruel punishment by Saddam Hussein. We'll also show you why they now have reason for hope.
And Americans are paying more for mile. We're going to look at what factors are really behind the surge in cost of gasoline in our series "Crude Awakening."
(COMMERCIAL BREAK) ZAHN: At the White House today, a stark reminder of the horrors Iraqis suffered under Saddam Hussein. President Bush hosted some remarkable guests know as the merchants of Baghdad. Their story of atrocity and survival is the subject of a new documentary called "Remembering Saddam."
BUSH: I'm honored to shake the hand of a brave Iraqi citizen who had his hand cut off by Saddam Hussein.
ZAHN (voice-over): Nine years ago, these Iraqi businessmen were accused of trading U.S. dollars. Their punishment, jail for a year and Saddam Hussein ordered the amputation of their right hands. In the Muslim world, the right hand signifies virtue, the left, disgrace.
(BEGIN VIDEO CLIP, "REMEMBERING SADDAM")
UNIDENTIFIED MALE (through translator): They told us, prepare yourselves. Tomorrow's the surgery. We didn't eat because of the anesthesia. And we kept praying to God to let us survive after the surgery. We had no choice. We had to accept the fact. Thank God that he gave us the courage to deal with it.
(END VIDEO CLIP)
ZAHN: The surgeries were videotaped for Saddam to be used as a scare tactic. After the fall of Baghdad, that videotape found its way to documentary filmmaker Don North.
(BEGIN VIDEO CLIP, "REMEMBERING SADDAM")
UNIDENTIFIED MALE (through translator): I wish they had executed me instead of taking away my hand.
(END VIDEO CLIP)
ZAHN: Struck by the brutality, North found the merchants of Baghdad and set out to find their stories. The footage you're watching comes from North's "Remembering Saddam."
(BEGIN VIDEO CLIP, "REMEMBERING SADDAM")
UNIDENTIFIED MALE (through translator): I saw a video camera that filmed us. And I saw all the doctors, but I was not able to see their faces. After leaving the operating room, I didn't see my hand. And these pains, my hand has ached ever since then. As we speak, I still have these pains. These pains will remain with us until the last days of our lives.
(END VIDEO CLIP)
ZAHN: Despite that pain, the men chose to watch the tape of their amputations. As North's documentary developed, he sought medical help for the men. What happened next is extraordinary. The documentary, "Remembering Saddam," ends here, but the story continues far from Baghdad, in Houston, where a variety of benefactors donated transportation, medical care and $25,000 prosthetic arms to each man.
DAVID BATY, DYNAMIC ORTHOTICS & PROSTHETICS: When you first meet them, all their right hands are in their pockets, because that's the way they walked around for nine years, with the end of their limb stuffed in their pockets.
ZAHN: A team of surgeons prepared each of the men's remaining limbs to receive the prosthetic hands. But, perhaps most poignant, they received state-of-the-art hands.
TIM DIBELLO, DYNAMIC ORTHOTICS & PROSTHETICS: When they first got their new hands, they all cried.
ZAHN: These seven men, marked by brutality, have now found reason to hope.
ZAHN: Wow. Powerful.
Earlier today, I actually spoke with the producer of "Remembering Saddam," Don North, along with one of the merchants of Baghdad, Basim Al Fadhly.
ZAHN: Don and Basim, thank you so much for joining us tonight.
So, Don, let's go back and retrace a little bit of the story for our audience tonight. You were given a bootleg copy of the tape and you were outraged by these amputations that were actually filmed. What did you do next?
DON NORTH, DOCUMENTARY FILMMAKER: Well, the tape was shocking. The secret police of Saddam Hussein had documented the surgery on the perfectly healthy hands of these nine Iraqi men.
It reminded me of the Nazis and Dr. Mengele experimenting on patients. I was shocked and tracked them down in Baghdad. It wasn't hard to find them. Everyone knew the story. And they agreed to trust me with their story, make a documentary out of it.
ZAHN: And, Basim, this has been quite a journey for you. And we heard earlier on in the piece about the new hope you've been given through the use of this new right hand. You can feel free to show it to us tonight as we speak.
But you also met the president today, the president of the United States. What did the two of you talk about?
BASIM AL-FADHLY, FORMER IRAQI PRISONER: You know, Paula, when anyone look like me, a new hand moving, and meeting with Mr. President of the United States, when he talked with me, he talked frankly and (UNINTELLIGIBLE) I feel that Iraq and Iraq people go to freedom.
ZAHN: And, finally, Don, if there is one thought that you want to stay with the American public about Saddam and the methods of torture he used, what do you want them to know?
NORTH: I suppose that Saddam must take his place as one of the world's most cruel tyrants. He takes his place with Pol Pot, who murdered over a million Cambodians. Nobody's had to go and apologize to the Iraqi people for not understanding or not realizing what Saddam was doing.
AL-FADHLY: Please, I want to say one word to anyone who see me on television. I stayed nine years suffering from Saddam regime. I want to return to Iraq and walk together with Iraqi people to building a new Iraq with a new hand.
ZAHN: That is a great sight to see, that new hand. And I know how proud you are of all the people who have helped you along the way as you try to rebuild your lives.
Gentlemen, thank you both for joining us tonight. We appreciate it.
NORTH: Thank you, Paula.
AL-FADHLY: Thank you.
ZAHN: And when we come back, we will begin our special series on the skyrocketing cost of gasoline. And we're going to tell you what is behind the prices that have drivers over a barrel. And I'll ask a Saudi Arabian official whether his nation can do more to help.
Then we're going to head for a world-famous Louisiana cafe, as we take "The American Pulse." Carlos Watson samples a gumbo of political opinions in New Orleans.
We'll be right back.
ZAHN: The question tonight: How much did it cost you the last time you filled up your car, van or SUV? Well, more than the last time, no doubt.
Fifteen percent of those responding to a new CNN/"USA Today"/Gallup poll call rising gas prices a crisis; 49 percent say it is a major problem; 29 percent call it a minor problem; 56 percent say the price of gas will make them drive less this summer. It makes tonight a good time to begin a series we call "Crude Awakening."
(voice-over): It's a pain many of us feel. You fill up your tank, you empty your wallet.
UNIDENTIFIED MALE: Your whole paycheck is going towards gas now.
UNIDENTIFIED MALE: Unjustifiable and outrageous. ZAHN: The Lundberg Survey, an industry analysis that regularly tracks gasoline prices, says the average cost of a gallon of gasoline has risen by more than 14 cents in the past two weeks to $2.07. That's a lot. But when you factor in inflation, today's prices are not even close the average gas price in March of 1981. In today's dollars, gas then cost $2.99.
Will we reach that price this year? Well, there is no sign that gas prices are leveling off, so maybe. The question is, who's to blame? In 1973, OPEC cut off supplies to the U.S. and created an oil crisis, with long lines at the gas pumps and gas rationing. But is OPEC to blame today? And how about recent events in the Middle East? Is the Iraq war driving up oil prices? And what about us? Less than 5 percent of the world's population is American, yet American drivers use 13 percent of the world's oil supply, as we continue to drive SUVs and other gas-guzzlers.
UNIDENTIFIED MALE: We're just paying the price for our own neglect.
ZAHN: What needs to be done to bring gas prices down? And when can we drive again without having to give up an arm, a leg and more?
ZAHN: And for the Saudi perspective on all this, I spoke a little bit earlier today with Adel al Jubeir, foreign affairs adviser to Saudi's crown prince.
(BEGIN VIDEO CLIP)
What responsibility does Saudi Arabia bear for the record high gas prices that we see today in the United States?
ADEL AL JUBEIR, FOREIGN AFFAIRS ADVISER TO CROWN PRINCE ABDULLAH: I don't believe we bear much responsibility. We have been producing oil. We have been seeking to moderate the oil markets. We have been seeking to bring the price of oil down. We have increased our production. We monitor the markets very carefully.
We believe that the reason prices is so high is a function of several factors. The first is the massive speculation on the part of hedge funds that's driving the price up. A second factor is shortage in refining factory, which is driving the price of gasoline and other products up, which, in turn, are lifting the price of crude oil. A third factor is the geopolitical situation and concerns about instability in Iraq and other places of the world. And a fourth factor is a tremendous growth in demand in markets such as China and India.
ZAHN: But sir, according to the U.S. Department of Energy, the overwhelming factor here is crude oil prices. And while the OPEC target price range was $22 to $28 a barrel, prices haven't been anywhere near that in over a year.
AL JUBEIR: We are the largest -- we are the country that has the largest reserves in the world. Almost 30 percent of the world's oil reserves are in Saudi Arabia. We have no interest in seeing oil become a non-competitive source of energy.
ZAHN: Is there else anything Saudi Arabia can do, at this point, to help bring down the cost of crude oil?
AL JUBEIR: Yes. We have been -- we have informed our customers that we will make available over 9 million barrels of oil for them. We have also informed them that if they need additional quantities, they should just ask for them and we will make them available. We have a capacity of up to 10.5 million barrels, possibly even close to 11 million barrels. We will do whatever it takes to ensure that there are adequate supplies of crude oil.
ZAHN: How long could you sustain a demand of 10.5 million barrels a day to 11 million barrels a day?
AL JUBEIR: We can produce at that level for a fairly indefinite period. In fact, we are engaging in projects now to increase that capacity even more, so that we can take care of future demand growth. But the 10.5 million to 11 million level is sustainable almost indefinitely by Saudi Arabia. Indefinitely meaning for a number of years.
ZAHN: Sir, you no doubt know there was a controversy last month when author Bob Woodward suggested some kind of deal had been cut between the Bush administration and a member of the Saudi family to specifically help bring down the cost of oil before the election, the Saudi royal family denying that that ever was the case. But what do you see happening between now and election time here in the United States?
AL JUBEIR: We have a very strong relationship with the Bush administration, just like we had a strong relationship with the Clinton administration and every other administration going back to Franklin Roosevelt. We will do whatever it takes to maintain balance at moderate prices in the oil markets. Politics has nothing to do with it.
ZAHN: And for folks who are scratching their heads tonight, still trying to figure out the formula, even at a time when you're saying you're trying to moderate supplies, and we have seen record high crude levels over the last several weeks, you're saying Saudi Arabia could not do more than it's doing now?
AL JUBEIR: I believe what bothers consumers is the high price they pay for gasoline at the gas stations, and that, frankly, is a function, to a large extent, of the shortage in refining capacity in the U.S. You have not built a refinery in America for, I believe, 25 years. If it's a function of the various environmental regulations that make the gasoline market in the U.S. so fragmented as to make it difficult for people to sell gasoline in the U.S. from outside the U.S., our oil minister recently has indicated that Saudi Arabia would be willing to build one or two refineries in the U.S. to help alleviate shortages of gasoline in the American market.
ZAHN: Mr. al Jubeir, we got to leave it there this evening. Thank you very much for your time. We appreciate it.
ZAHN: Well, that's the outlook from the world's largest oil producer. When we come back, a journalist who's covered the oil industry for years responds to that view. I will ask him who he thinks is most responsible for soaring prices.
ZAHN: And we are back. We just heard what the Saudi government has to say about the record prices at the gas pump. Now let's turn to a journalist who's covered the industry for years. Paul Roberts is the author of "The End of Oil: On the Edge of a Perilous New World. He joins us tonight from Seattle.
Good to see you, sir. Welcome.
PAUL ROBERTS, AUTHOR, "THE END OF OIL": Good evening, Paula. Thanks.
ZAHN: Let's quickly reprise for our audience some of what the Saudi official just told us. He said Saudi Arabia doesn't bear much responsibility for the price hikes. He blamed it on a shortage of refining capacity. He said the U.S. has onerous environmental rules. And he said, basically, if we want more oil, all we need to ask is to ask for it, that Saudi Arabia can give us 11 million barrels a day. Is that the truth?
ROBERTS: It's pretty absurd. I mean, you know, we do have a small, constrained (UNINTELLIGIBLE) refinery capacity in this country, but the rest of the world doesn't. There are idle gasoline refineries all over the world. We can import as much gasoline as we need, and that's what we're doing. We get about 10 percent of our gasoline in this country from oversees. You know, the main thing driving gasoline prices is the price of crude oil, and the Saudis do bear some responsibility there. You know, they let the price run up too high after the Venezuelan crisis a year-and-a-half ago, and we've been playing catch-up ever since.
ZAHN: And they also -- the criticism is that they waited for an awfully long time to increase supply once Venezuela was on strike and the world was without that oil for some 45 days.
ROBERTS: That's exactly right, you know? And now -- now we're in a situation where prices are high, and the Saudis are making noise as if they're trying to moderate them, but they're essentially doing everything in the opposite direction. They're keeping prices high. And if, you know, the Saudis were so convinced that it was a refining issue, you know, that is that there's plenty of oil, but it's a refining issue, why would they be promising to raise their own production? Why would they be promising to invest heavily in new wells? I mean, you know, the Saudis know what's going on. They're keeping the price high because they want the revenues now.
ZAHN: Well, I -- that's striking, what you're saying because I want you to square it with this Gallup poll that examines what a lot of Americans think about the situation today. When asked, "Who do you blame for higher gas prices?" 22 percent blame oil companies, 19 percent blame war in Iraq, 9 percent blame OPEC. What about the oil companies here? What role do they play in all this?
ROBERTS: The oil companies are making a bundle of money right now, but they're in this same position, where, you know, they can't get into the Middle East to produce more oil. They can't get much more oil out of Russia than is already coming out. There's not a lot of options for Western oil companies to go find more oil. We're all relying, in some way or another, on OPEC. And you know, really, OPEC has already said -- I mean, we talk about a price band (ph). They want oil supposedly in around $25 a barrel. But the fact of the matter is, many Arab analysts believe that oil could rise up to $35 a barrel and it still wouldn't hurt the world economy. And that is, effectively, the new price level that OPEC is willing to live with, you know? And I think that's something that we're going to have to start living with.
So blame -- blame really does rest on the shoulders of OPEC. They know what they're doing. You know, this isn't -- this isn't something that's completely out of their control. And you know, maybe they will try to bring prices down before the election. I'm not sure that they're going to be able to do that. And you know -- and I think we also have to kind of take a step back and say, All right, well, suppose we do find a way to moderate oil prices? You know, it's going to happen again. Next year or the year after, we're going to be in the same place. We'll be asking the same questions.
ZAHN: So how do you break this cycle?
ROBERTS: Well, I think we need to -- we need to rethink our energy strategy. We need to have an energy strategy. You know, right now, we're still using kind of an antique, an American antique, which is that, you know, we just need to go find more oil. We need to have either more drilling at home or we need to establish better friendly relations with oil producers, like Russia or Saudi Arabia. Neither of these are working. You know, I think what we're seeing now is evidence that those older strategies aren't working.
ZAHN: All right, I'm going to give you 20 seconds for a closing thought, that if you were to apportion blame tonight, would -- the majority of the blame, then, would rest with OPEC. And then who's next on the list?
ROBERTS: OPEC gets the near term. The U.S., generally, and this administration particularly, really need to, you know, confront the fact that our energy strategy doesn't work. We need to start looking forward. What are we going to be burning here in five or ten years, you know? Where are we going to be getting the energy supplies that our economy's going to need? And how are we going to square that with our need to deal with things like climate? You know, we're doing nothing right now except wishing the old days would come back. And wishing's not going to be enough.
ZAHN: All right, we're going to have to leave it there this evening. Paul Roberts, thanks for educating us this evening. We appreciate it.
ROBERTS: Thanks, Paula.
ZAHN: And it would be much easier to find the villain in the rise of gas prices if all the money landed in one pocket, say the oil companies or Saudi sheikhs. But there is more to it than that, as our Bruce Burkhardt found out.
BRUCE BURKHARDT, CNN CORRESPONDENT: Supply and demand. It's that simple and it is that complicated. But let's take look at the demand side first. Where is it coming from, all this new demand that puts an upward pressure on prices? Well, the short answer is China and us.
(voice-over): China has been going through a huge growth spurt in their economy, and growth is fueled by petroleum. As for us, we're driving more, in cars that drink more gas, SUVs, light trucks. According to Department of Energy figures, we've used 300,000 barrels a day more during the first quarter of this year compared to last. That's a 3.5 percent increase. Now, combine that with what's going on on the supply side, and that's the recipe for high prices.
A couple of major causes for the supply problems -- and it's not all OPEC, but let's start with them. The cost of crude oil makes up by far the largest chunk of we pay for gas. Almost half of what we pay at the pump is the crude oil price. And OPEC, though they make up only about a third of the world oil supply, can control that third to have a dramatic impact on world-wide prices. Oil industry experts say the Saudis have much to do with that, with the world's largest supply of oil. By keeping their stocks low, they've kept the gas market tight, producing just enough to meet current demand. And OPEC has learned from Alan Greenspan. Just as anything he says can impact the financial markets, OPEC can whisper a rumor and send the oil markets skyrocketing.
(on camera): Now, that's the OPEC part of the problem, but here in the U.S., we've got issues, too, refining issues.
(voice-over): Our refining capacity hasn't kept pace with demand. Oil men say complex permitting procedures the myriad of environmental regulations have cut into profitability. Combine that with another challenge: Gas marketers must produce not just one or two types of gas but dozens of different kinds to meet local environmental regulations that can vary not just from state to state but sometimes from county to county. Producing so many different kinds with fewer refineries can create some bottlenecks in the flow -- i.e. shortages. And shortages equal higher prices.
In the end, gas prices aren't the result of economic or market processes alone. That would be complicated enough. But throw in international politics, and that is throwing gas on the fire.
(END VIDEOTAPE) ZAHN: That was our Bruce Burkhardt reporting. You can log onto cnn.com for tips to help you use less gas and get the most mileage your car can deliver.
Tomorrow, our series, "Crude Awakening," continues. We're going to look at whether the U.S. should tap into the strategic petroleum reserve to help keep gas prices down.
But coming up next: In a city that prides itself on hot jazz and spicy food, there's a healthy appetite for politics, too. Voters in Louisiana could play a crucial role in the upcoming presidential election, and Carlos Watson takes "The American Pulse" to New Orleans next.
ZAHN: In the last few weeks, CNN's Carlos Watson has been adding up the frequent flyer miles taking "The American Pulse." He's talked with a wide range of people about the issues that matter to them in this election. So far, he's sampled voter opinion in an NBA locker room -- everybody had their clothes on -- in Florida, a church in Minnesota, a gay bar in Pennsylvania and a ballpark in Arizona. His latest stop, a state steeped in politics and important enough for both candidates to have visited recently, Louisiana.
And Carlos Watson joins me now after letting the good times roll in New Orleans. Welcome. Good to see you.
CARLOS WATSON, CNN POLITICAL ANALYST: Fantastic food. I almost didn't leave!
ZAHN: I don't blame you! So let's talk a little bit about Louisiana, a reliably Republican state. The president enjoys, what, a 14-point lead there now...
WATSON: In the latest...
ZAHN: ... he won handily in 2000. But John Kerry's spending an awful lot of time there.
WATSON: John Kerry's spending time because, believe it or not, Bill Clinton won there twice in the '90s -- not once but twice. And Louisiana's got a good history. They've voted for the last seven presidential winners in a row. So John Kerry's hoping that this time around, they'll vote for him. And obviously, the president, who won by 8.5 points, is thinking, I need your nine electoral votes. Come my way.
ZAHN: So who did you talk to and when? And were they sober when you spoke to them?
ZAHN: I want to know if you talked to them at 2:00 in the morning or, you know, late in the afternoon? WATSON: Or 4:00 in the morning or -- we talked to five really interesting voters at one of the best little cafes in New Orleans, called Cafe du Monde. Lots of people who are watching have probably heard of it, if you like banniers (ph), if you like great coffee. Those are the folks we spoke to. Only two of the five voters had voted last time. That's going to be one of the stories we talk about, voter turn-out. Three kind of lean Republican, two kind of lean Democrat. Four women, one man. Very interesting group.
ZAHN: Let's meet them now.
SHARON WASHINGTON (D), DID NOT VOTE IN 2000: I thought it was deplorable. You know, it's just like back and forth, you know? You degrade our people, and we're going to cut your people head off and...
UNIDENTIFIED FEMALE: But he wasn't even a soldier.
WASHINGTON: He wasn't a soldier?
WATSON: What does that make you think, when you see something like that?
UNIDENTIFIED FEMALE: It's not an easy question.
WANDA COLEMAN (D), VOTED FOR GORE IN 2000: End the war, bring the boys home.
UNIDENTIFIED FEMALE: People have died already. It would be for nothing if we just ended it. No, we have to finish what we started, otherwise, everything will be for nothing.
BERT BENRUD (I), VOTED FOR BUSH IN 2000: I don't think we can back down. What you're looking at is a small number of individuals trying to influence what you're doing. You know, the bombing in Spain of the trains -- now, all of a sudden, the Spaniards come out en mass and vote for a different candidate, and they pull their troops out of Iraq. That is completely wrong.
WATSON: Sharon, what do you think when you hear that?
WASHINGTON: If we're not going to pull the troops out, then we need to find the source of the problem and solve it.
WATSON: Do you think we should send more troops over there?
WASHINGTON: I want the ones over there home.
WATSON: You want them to come over now.
WASHINGTON: Right now. Like, today. You know, this has gone on too long. I have a brother over there. I haven't heard from him in six months.
WATSON: Do you know whether or not he's still alive?
WASHINGTON: Well, we're all assuming that no news is good news, you know? So that's what we're praying and we're hoping on.
WATSON: The president will say the war is about creating democracy and helping in the war against terror.
COLEMAN: But it wasn't.
WATSON: What do you think it was about?
WATSON: Bert, what do you think?
BENRUD: I personally believe that it was something that needed to be done. I mean, here you have a bully in the playground.
UNIDENTIFIED FEMALE: True.
BENRUD: You know? And who's going to stand up to him? I mean, we can say, OK, let's forget about those people that he's gassing and killing in Iraq. Somebody has to stand up to him.
WATSON: But now, Bert, what do you say to people who say there are lots of bullies in lots of playgrounds all over the world?
BENRUD: Things don't happen overnight. Life is not a sitcom, where in half an hour or an hour, you know, you see the beginning and the end and a successful conclusion. It's a long battle.
WATSON: What's the most important issue for you in this election?
WASHINGTON: It would have to be education because I have school- age kids, and I see how they're struggling in math. You know, they used to offer programs for that kind of stuff, to help the children. But this year, nothing.
WATSON: Do you think one candidate will be better on this issue than another?
WASHINGTON: No. I think it's all a bunch of talk. It needs to be proven to me. I have to see a difference.
UNIDENTIFIED FEMALE: I'm pro-life.
WATSON: Is that very important to you?
UNIDENTIFIED FEMALE: It's a big issue for me. I mean, I don't think it's right, you know, to kill children (UNINTELLIGIBLE)
WATSON: Are there other issues that you think are important in this election? UNIDENTIFIED FEMALE: Economy.
WATSON: Are you happy with the economy right now?
UNIDENTIFIED FEMALE: I see a lot of people travel. I see a lot of people spending money. And if they let aliens come here and work and they find a job, everybody can find a job, right?
UNIDENTIFIED FEMALE: I'm worried about the economy. I think it's actually getting a little worse. You know, gas prices are going up. And I'm still making the same and still have to support myself off of the same pay that I've been getting.
WATSON: Bert, you, vice president, 18 years here. Economy can't be a big issue for you.
BENRUD: It is. It is. This business supports many families, and that's the most important goal for us, is to be able to sustain the families that depend on us. And you can't do that without a good economy.
WATSON: Do you feel like the economy's in a good place?
COLEMAN: I know if I come to work today, I can go home and buy me a loaf of bread and a pound of meat and go home and eat and be happy and sleep on a full stomach.
ZAHN: Especially if it's filled with banniers.
ZAHN: Let's talk a little bit about the cynicism we heard loud and clear.
ZAHN: If John Kerry has any shot at even trying to eke out a small victory in Louisiana, it all rests in voter turnout. What has he got to do?
WATSON: He's got to make sure that African-American voters, who represent some 35 percent of the voting age population, ultimately represent 35 percent of the vote. If that had happened for Al Gore in 2000, Al Gore actually would have won Louisiana. Instead, black voters only made up some 29 percent of the vote in Louisiana. So voter turnout among African-Americans in Louisiana's going to be a big story. And by extension, that's true in a couple other Southern states, where Democrats have a nominal shot, states like Arkansas and Georgia.
ZAHN: So how aggressive are John Kerry's efforts, at this point?
WATSON: Well, he's certainly stepped it up. In addition to the 17, quote, unquote, "battleground states," he now is spending advertising money and time in Colorado and Louisiana. Surprise, surprise, that hence we went there. And so it'll be interesting to see whether or not it resonates. But he's going to have to talk not only about the war but about the economy. And you heard here a very interesting topic, Paula, which people aren't talking about yet, education. For a lot of these mothers of children, in particular, that's a critical issue, and they don't hear anyone talking about it in a way they find compelling.
ZAHN: One-word answer. Next week, where in the world is Carlos Watson?
WATSON: I'll give you more than one word, Brad Pitt's home town, Springfield, Missouri.
ZAHN: Oh! Many clues there you gave us...
WATSON: Yes, yes, yes!
ZAHN: ... and the actual name of the town.
WATSON: Yes, yes.
ZAHN: Carlos Watson, thanks. We'll be right back.
WATSON: Good to see you.
ZAHN: And that wraps it up for all of us here tonight. Thanks so much for being with us. Tomorrow: Would tapping into the nation's emergency oil reserves ease gasoline prices? Part 2 in our series on the cost of oil, called "Crude Awakening." Again, thanks for joining us tonight. "LARRY KING LIVE" is next. Have a great night.
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