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CNN Live At Daybreak

Oregon National Guard on Lake Charles Rescue Missions; Gas, Oil Impact

Aired September 26, 2005 - 06:29   ET

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

ANNOUNCER: From the Time Warner center in New York, this is DAYBREAK with Carol Costello and Chad Myers.
CAROL COSTELLO, CNN ANCHOR: And good morning to you. Thank you for waking up with us. Chad will have your forecast in just a minute.

Also coming up this half-hour, stranded by floods. We'll talk to one of the men leading search and rescue missions through the hurricane disaster zone.

And the oil impact. Refineries are mostly spared. But will that have a positive impact on consumers? We'll find out.

But first, "Now in the News."

Another deadly day in Iraq. Seven people were killed in a suicide car bomb attack at a Baghdad checkpoint near government buildings. Police say 27 people are wounded. The dead and injured include Iraqi police recruits and oil ministry employees.

A prominent Lebanese journalist has been critically wounded in what appears to be a targeted bombing. The bomb was planted in the woman's car. Hours before the blast on Sunday, the journalist hosted a program about possible Syrian involvement in the assassination of Lebanon's former prime minister.

International weapons inspectors plan to announce today that the Irish Republican Army is fully disarmed. Disarming the outlawed IRA has been a longtime goal of Northern Ireland's peace process.

To the forecast center.

(COMMERCIAL BREAK)

COSTELLO: Now for a look at the Hurricane Rita disaster zone. Here's a damage assessment for you.

One of the areas hardest hit by Hurricane Rita was Cameron Parish in Louisiana. Parts of that parish are under up to 15 feet of water. The head of the area's emergency office says 90 percent of the homes in Cameron were destroyed.

Some of the floodwaters in Lake Charles, Louisiana, have started to recede, though, but that's revealing more damage to the city. The Lake Charles police chief says there has been sporadic looting. Fifteen arrests made so far. Evacuees have begun returning to Houston. Now much of the traffic we saw last week is heading in the opposite direction. The city has asked residents to stagger their return depending on where they live. But some people say, I'm going to ignore that order.

Nearly a million people are without power across the Gulf Coast. Most of those are as a result of Rita. But more than 150,000 people in Louisiana are still without power from Katrina.

The Texas governor, Rick Perry, says oil refineries in his state suffered just a glancing blow. The Valero refinery in Port Arthur, Texas, appears to be the only one that suffered any serious damage. There are four Louisiana refineries still closed down after Katrina. President Bush gets a briefing this morning at the Energy Department on the impact to the oil industry.

Residents who cleared out of Lake Charles, Louisiana, before Hurricane Rita hit are not being allowed back in yet. But rescue operations are under way to find those who stayed behind and now may need some help.

Members of the Oregon National Guard are going on those missions. So, let's check in now with Major Arnold Strong.

Good morning, Major Strong.

MAJOR ARNOLD STRONG, ARMY NATIONAL GUARD: Good morning, Carol. How are you?

COSTELLO: I'm fine. Nice to hear from you again. The last time I heard from you we were in New Orleans. Now you're in Lake Charles. Tell me the situation there right now.

STRONG: Well, right now, we have the largest brigade task force pretty much in the history of the Oregon Guard since World War II assembled here, headquartered out of Lafayette. We've got infantry battalions, artillery battalions, we've got engineer battalions, all focused on the clearance of Lake Charles.

We've got a large contingency that's working there with the aviation community doing over-flights. But surprisingly, no matter how hard-hit the area was, you know, the first day here we had about 50 evacuees. Yesterday, according to General Pritt (ph), whom you met last week, there was a single evacuee.

So, the area has been hard-hit, but residents are showing a lot of resilience and really kind of putting up their upper chin and getting to work.

COSTELLO: Of those who were rescued, what were their reasons for staying behind? And can you tell me about one rescue that was particularly moving or dramatic?

STRONG: Well, you know, there was a lot of -- it's very strange, because a lot of the people that actually came to us, the Cameron Parish, the southernmost -- the state of Louisiana is an "L." Right there at the apex is the Cameron Parish. The Cameron Parish was the most hard-hit.

One officer described it as if the hand of God had just laid it flat. Entire houses were just completely removed from their foundations and no evidence of the houses. So, it was a very challenging situation.

What we're doing is we're working on search and rescue operations, which were a lot more intense the day before. We're continuing to do that. We're doing security missions. We've got an infantry company that's attached with securing one of the oil refineries. We have transition of civil authority missions going on with a lot of the police and working hand in hand.

It's a very challenging mission. But, again, we've got a lot of practice at this over the last three weeks. So...

COSTELLO: Oh, yes. Yes, from doing rescue missions in New Orleans.

I wanted to ask you about looters, because the sheriff there said about 15 looters have been arrested. And they're searching for more. And if he finds any one, if there's no place to put them, he'll chain them up in his bathroom. I mean, he wants this stopped. Have you seen that?

STRONG: You know, I spoke with General Pritt (ph) and several of the battalion commanders last night. And really, the challenge on looting has been -- you know, you've got a presence of 4,000 National Guardsmen, which is one of the real deterring effects. And we ran into two incidents of looting on the first day we came down here, and have not had a real confrontation with looting since establishing that presence. So that's actually a good sign.

COSTELLO: It is a good sign. Major Arnold Strong joining us live this morning. Thanks.

And, of course, the members of the Oregon National Guard will head back to New Orleans after they're finished in Lake Charles.

The New Orleans mayor says he hopes, despite the fresh flooding, residents will be able to return home today.

Soledad O'Brien joins us now from New Orleans for a look at what's coming up on "AMERICAN MORNING."

Good morning -- Soledad.

SOLEDAD O'BRIEN, CNN ANCHOR: Hey, Carol, good morning to you.

Yes, that's a proposal that actually has a lot of people here somewhat perplexed. The mayor has said he's going to repopulate the city.

And if we can show you a shot, you can see, if you look at New Orleans, the city, which is kind of over my shoulder here, the lights are on. Entergy has been working very hard to bring the city back online. That's the major energy company here.

But then, across the canal here -- we're on the corner of Industrial Canal -- actually it's pitch black, and that's because they have no lights. They have no power. They have no sewer. They have no running water. They have a lot of damage.

And, in fact, when the mayor says people should come back, one has to imagine that lots of people will come back and to see how much of the damage has been done to their homes.

It's a real concern for the paramedics as well. There is an Army field hospital that's been set up now right along the back of the Convention Center. And they're worried that people will come back, be injured by either debris or, frankly, even have heart attacks from the stress they've been under and seeing that nothing is left of their homes.

They're set up to handle trauma, Carol. But they could have a big influx, depending on the number of people who come in.

So lots to talk about this morning on "AMERICAN MORNING" at the start of the hour. We'll tell you what's being done to repair the canal. The water is back in the Ninth Ward. They have a plan to pump it out. We'll talk about this repopulation plan and what people think of the mayor's idea.

And we'll also show you this Army field hospital that's been set up. They could do surgery. They're basically a trauma center. Well, hopefully they won't get too many patients today.

That's all ahead this morning at the start of the hour. Carol, we'll see you then.

COSTELLO: All right. Thank you, Soledad.

Here's a look at what else is making news this week.

Look for stronger signals for global positioning system units. A Boeing Delta 2 rocket is carrying the first in a series of eight new GPS satellites into space.

Tomorrow, look for the release of "An Unlikely Angel," a new book by Ashley Smith. She's the woman who talked accused Atlanta courthouse shooter Bryan Nichols into surrendering.

On Wednesday, a Senate subcommittee hearing on legislation dealing with steroid use in sports. Pro sports commissioners are expected to testify.

And the full Senate is to vote on John Roberts' nomination by Thursday. Roberts is virtually assured of confirmation as chief justice.

On Friday, the owners of a Rhode Island nightclub go on trial. A fire two years ago killed 100 people. The trial is to determine if owners must pay workers' comp benefits to dead employees' families. Still to come on DAYBREAK, Porsche -- Porsche is looking to expand its influence on another German automaker. We'll explain.

Plus, after two major hurricanes in oil-producing regions, we'll look at what the supply strain could do to your pocketbook long-term.

But first, here's a look at what else is making news this Monday.

(COMMERCIAL BREAK)

COSTELLO: It's time now for a little "Business Buzz."

Even though Rita didn't do as much damage as expected, Carrie Lee tells us there may still be a big economic hit because of the storms.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: That's right, Carol. We talked a lot about oil and prices and demand and all of that. But there are other industries as well that have been affected by Hurricane Rita.

The Port of Houston, for example, is one of the world's largest, and it was shut down over the weekend; 160,000 ships and barges use this port every year, moving everything from grain to electronics.

Also, 75 shrimp boats were docked at the port this weekend, waiting out the storm.

And experts are also worried the storm could send up prices for beef, as about 10 percent of the nation's beef production comes from East Texas.

Now, as we head into the third quarter profit reporting season, some are expecting several companies are going to report weak earnings due to the storms. In fact, late last week, Dow component Alcoa said it would be hurt by higher raw material and energy costs. That stock took a big hit on Friday.

And then, of course, there's the insurance industry. Losses from Rita are expected to be between $2.5 and $6 billion. And this comes on top of the damage from Katrina, which is estimated between $14 and $60 billion.

You know, Carol, the third quarter ends this week. It's going to be very interesting to see which companies weigh in and talk about these storms and their effect on business.

COSTELLO: Oh, you know, you talk about the insurance industry. Insurance adjustors haven't even begun going into the neighborhoods of New Orleans.

LEE: No.

COSTELLO: Because they can't.

LEE: They're still trying to get their hands around it and quantify the situation. Yes. COSTELLO: Carrie Lee, thank you.

LEE: OK.

COSTELLO: Your news, money, weather and sports. It's 6:44 Eastern. Here's what's all new this morning.

Southwest Louisiana's Cameron Parish has been virtually wiped off the map by Hurricane Rita. The storm surge pushed 15-foot-deep floodwaters into the parish, destroying or damaging 90 percent of homes and other buildings.

In money news, the carmaker Porsche says it plans to purchase a 20-percent stake in Volkswagen. The move is an effort to prevent a hostile takeover of Volkswagen that would disrupt business ties between Porsche and Volkswagen.

In pop culture, the Dave Matthews Band is going back on tour. It's set to begin two days after Thanksgiving. After a three-week run, the band will head back to the studio.

In sports, the New England Patriots beat the Pittsburgh Steelers in a rematch of last year's AFC championship game. The Pats used a last-second field goal to beat the Steelers 23-20. So, Ben should have been celebrating at that particular moment. In fact, he wasn't a short time after that -- Chad.

CHAD MYERS, CNN METEOROLOGIST: Yes, he did get a little injured yesterday, but got back on the field and played a really good game. That was his first regular season loss in 16 regular season starts.

COSTELLO: Isn't that something?

MYERS: That is unbelievable for a -- well, a second year rookie basically, because he didn't even start the first couple of games last year.

(WEATHER REPORT)

COSTELLO: Still to come on DAYBREAK, Hurricanes Katrina and Rita did a number on the nation's energy supplies. Some more insight on the oil situation when DAYBREAK continues.

(COMMERCIAL BREAK)

COSTELLO: And welcome back. It's 6:48 Eastern. Here is what will be making news today.

A verdict is expected in the next hour in the trial of 24 al Qaeda suspects in Madrid, Spain. Among them are three charged with helping to plan the 9/11 attacks.

Karen Hughes, the undersecretary of state for public diplomacy, is in Egypt. She's involved in talks in Cairo with Egypt's prime minister. And Katrina reconstruction efforts are the focus of a summit in Washington today. Business leaders, government officials and relief experts will get down to the details on the $62 billion Katrina relief bill.

"The Washington Post" offers this list of who gets the most out of a gallon of gas. When the average price of a gallon of regular gas peaked at $3.07 recently, crude oil producer profits jumped 46 cents a gallon over last year. Refiners' profits jumped 71 cents a gallon, or three times over last year. And distributors and gas stations not so much, just a penny a gallon. But when prices dropped, gas stations aren't so quick to follow along.

Rita beat a path to the heart of the nation's oil refineries. But initial assessments indicate relatively little damage to the Gulf Coast refineries.

So is that good news for gas and oil prices and for everybody surrounding the oil industry? Let's talk about it with Robert Slaughter. He's the president of the National Petrochemical and Refiners Association.

Good morning.

ROBERT SLAUGHTER, PETROCHEMICAL AND REFINERS ASSOCIATION: Good morning.

COSTELLO: President Bush will be briefed on the energy situation in this country. What will he likely hear?

SLAUGHTER: Well, I believe that he'll hear that the energy infrastructure did miss a potential catastrophic situation with Hurricane Rita over the weekend. However, some damage was done.

And I do believe that he will be told that the fact that a third of our refineries were offline for several days, we basically lost at least an entire day's demand of gasoline production in that time. We still have 5 percent of the capacity out as a result of Hurricane Katrina. The results from Hurricane Rita, there is at least one refinery significantly impacted by it.

A tenth of the refining capacity is in Port Arthur, Beaumont and Lake Charles, which was heavily impacted by this storm.

And I don't think we want to be lulled into complacency by early estimates of what's going on. People need to get into the factories, and we need to be aware of the fact that America's energy production and distribution system is compromised and will be for some time.

COSTELLO: You know, crude oil prices fell this morning. And, you know, most people would take that as a good sign. But is that premature for us?

SLAUGHTER: It may well be. I mean, there is no exact correlation, of course, between people's perception, which is reflected in the futures market, and what is really the case. We're all relieved that the damage from Hurricane Rita was evidently much less than was expected. But there was some. And we can't lose sight of the fact that from the production of crude oil to the production of natural gas to the production of gasoline and diesel, some serious events have occurred that will affect the system probably throughout the rest of this year.

COSTELLO: Well, let's -- I'm going to list some of the damage suffered by these oil refiners.

Valero Energy Corporation says its Port Arthur facility suffered significant damage. You mentioned that. They say it will take two to four weeks to return to full capacity.

Motiva Enterprises refinery in Port Arthur, also damaged by wind, and they didn't say when they would resume operations there.

Marathon says its Texas City refinery had minimal damage, had electrical power available, and was asking the plant's employees to return to work today.

Exxon said that it was beginning to deliver gasoline from its Baytown refinery, and that sounds like good news.

But still, don't you think that gas supplies will be tight? You mentioned that a little. How tight will they be? And where?

SLAUGHTER: Well, I believe, you know, because we have basically a national system of gasoline distribution, this tightness, which will indeed persist for a while, will be reflected throughout most if not all of the country, because, you know, we move gasoline supplies around to allocate into the affected areas. So, it may very well affect everyone for some time.

And, you know, it's just important to say that although we have apparently dodged a bullet, there is damage to some refineries in this area, which is a significant refining area. And, again, you know, most of our crude oil production in the Gulf has been shut in now for a while. Natural gas production.

And so, there are going to be some lingering effects here, and I don't think consumers can expect this to go away today or tomorrow. This is going to take a while. A lot of heroic efforts by the industry and also some patience from consumers will be needed.

COSTELLO: So, can you tell me, like, gas prices seem to be falling. They're at, like, $2.80 per gallon. Should we expect higher gas prices? And as far as our heating bills with natural gas, how much higher will they be over last year?

SLAUGHTER: Well, you know, people don't like to make predictions about energy prices, because so many have been wrong in the past. But, you know, barring another emergency of this kind, I mean, we would expect, you know, gasoline prices to, you know, basically not to see spikes. But, again, we have to find out exactly what damage has been done over the weekend. When it comes to natural gas, we have some real severe problems, I'm afraid, coming in natural gas. And we're hoping that Congress and the administration will take a good look at increasing domestic production, because we just have too much of this country shut off from producing additional reserves of natural gas that we actually have in this country. And we're going to need that supply.

COSTELLO: Well, we'll be eagerly awaiting the president's remarks at about 10:55 Eastern today. Robert Slaughter, thank you for joining DAYBREAK this morning.

SLAUGHTER: Thanks for having me.

COSTELLO: As I said, President Bush this morning will take a look at the effect Hurricane Rita has had on the nation's energy supplies. He'll be briefed at the Energy Department, and then, as I said, he'll make a statement. And you can watch it live right here at 10:55 Eastern.

Oh, we haven't done the mug thing in so long I kind of forget how to do it.

MYERS: Carol, when you were gone, we actually had Kelly Wallace in here, and she read the questions and all. So, we have to give away a mug.

COSTELLO: Great!

MYERS: It's about time. The winner is from Friday, how many years has Bill Gates topped the "Forbes" richest Americans list? And other than being just the number way too long, the number is actually 11. And when will the LSU football team have their first home game? Tonight.

And the winner is, the winner is from Merritt Island, Florida, Doug Norkus. Congratulations. The DAYBREAK coffee mug is in the mail.

I believe we have a question for today, and you can answer that, and we'll give away that mug tomorrow.

How many gallons of diesel fuel does Georgia's governor hope to save by keeping the schools closed today and tomorrow? And Porsche says it plans to buy 20 to 25 percent of voting stake in what other car company?

Submit your answers to CNN.com/daybreak -- Carol.

COSTELLO: All right. Thank you, Chad. That was a bit of fun we needed this morning.

MYERS: Yes, finally.

COSTELLO: When we come back, more headlines and a look at your travel forecast. You're watching DAYBREAK for a Monday.

(COMMERCIAL BREAK)

COSTELLO: Before we go, I'd like to share some thoughts about my week in New Orleans. There are so many positives in that ruined city, so many heroes and so much kindness.

From the one man working at the rental car place at the Louis Armstrong Airport, he was sleeping there. He had lost his home. He refused to take a tip because he just couldn't.

To the utility crew members who lived in a tent, worked 15 hours a day, and said they loved their jobs.

And to the National Guardsmen who swept debris off the streets, helped unload food at distribution points.

To the woman, who lost nearly everything, concerned about them, because they were from Pennsylvania and they weren't used to the Louisiana heat.

To the many people I interviewed, they said good-bye by saying, "Be careful, and have a blessed day."

There is hope in New Orleans. I didn't want to leave, because I wanted to watch the city come back. Not to say right now that seems impossible, but don't think that city won't come back. I am sure it will.

From the Time Warner center in New York, I'm Carol Costello along with Chad Myers. "AMERICAN MORNING" starts right now.

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