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American Morning

Israel Not Ready to Stop Offensive in Lebanon; Lebanese Government Says it's Willing to Send 15,000 Soldiers Into Southern Lebanon; Oil Problems Spilling Over

Aired August 08, 2006 - 06:30   ET

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

TONY HARRIS, CNN ANCHOR: Happening this morning, the country's biggest oilfield could be shut down for months while BP replaces a damaged pipeline. That could drive gas prices even higher, with California hardest hit.
In Utah, doctors are doing reconstructive surgery this morning on two formerly conjoined twins. The 4-year-old girls were successfully separated last night.

And in Baghdad, at least 19 people are dead following a series of roadside bombings. More than 75 others are wounded. Officials say at least two of the bombs targeted police.

SOLEDAD O'BRIEN, CNN ANCHOR: Good morning. Welcome, everybody. I'm Soledad O'Brien.

HARRIS: And good morning. I'm Tony Harris, in for Miles O'Brien all week.

O'BRIEN: It's nice to have you.

HARRIS: Good to see you, lady.

O'BRIEN: Thank you for helping us out.

HARRIS: Oh, please.

O'BRIEN: Well, let's get back to the Middle East now.

Israel not ready to stop its offensive in Lebanon. In fact, the Israeli cabinet could decide tomorrow to approve attacks deeper into Lebanese territory.

CNN's Matthew Chance joins us live from northern Israel with more on what's happening.

Good morning to you, Matthew.

MATTHEW CHANCE, CNN SR. INTERNATIONAL CORRESPONDENT: Good morning to you, Soledad.

Israel is making it quite clear that, even though it's looking very closely at the diplomatic process that is under way at the United Nations Security Council, if that fails over the next few days, there is a military option, from Israel's point of view. Over the past few days, they have been really gathering forces along the Israeli- Lebanese border, ready to go in, if necessary, in support of the 10,000 to 12,000 Israeli soldiers that are already on the ground in southern Lebanon, battling at close quarters with Hezbollah fighters.

There has been another Israeli soldier killed today and more casualties being reported, as well, particularly around the town of Bint Jbeil, which, as you may remember, was a stronghold, or described as a stronghold by the Israeli military, of Hezbollah fighters some weeks ago. Last week, it was said to be captured by the Israel military, but the fact that there is still guerrilla fighting going on there with Hezbollah, fighters attacking Israeli soldiers and killing them, demonstrates, I think, just how difficult it is securing these areas across southern Lebanon.

Over the past six years, Hezbollah has been training hard, it's been digging in, it's been rearming itself, preparing for this possible conflict with -- with Israel. And it seems to be a very stubborn enemy to dislodge at the moment. So, if Israel expanded military operation, we expect that Israel's army will face more obstacles like this -- Soledad.

O'BRIEN: Matthew Chance for us this morning.

Matthew, thanks.

Other side of the border now. The Lebanese government says it's willing to send 15,000 soldiers into southern Lebanon.

Let's get more on that offer with Anthony Mills. He's in Beirut.

Hey, Anthony. Good morning.

ANTHONY MILLS, CNN CORRESPONDENT: Good morning, Soledad.

That announcement by the Lebanese government that it will be sending 15,000 Lebanese army troops to the south with certain conditions does go some way to satisfying a central demand by Israel, and the United States, for that matter, which is that the Lebanese army has to get down there to the south and really wrest control away from Hezbollah and secure that whole area, a vacuum that was created when Israeli forces withdrew in May 2000, and bring it under their control. However, there is one key issue here, and that is that the plan to send those troops down south is actually conditional, the Lebanese government has made it very clear, on the withdrawal of Israeli forces from south Lebanon.

So, on the one hand, it satisfies a central demand, but it also draws attention to the fact that Lebanon is saying those troops have to withdraw -- Soledad.

O'BRIEN: There were overnight strikes in Beirut, Anthony. We know that. Tell us a little bit about the neighborhood that's been hit.

MILLS: Well, Soledad, it's a neighborhood that nominally falls within the boundaries of the southern suburbs, the Hezbollah part of Beirut. But it is closer to the central part of Beirut than any previous strikes on the southern suburbs. And indeed, in a neighborhood in which residents had felt still fairly safe.

So, the residents were around, they were in the neighborhood, they were in the building that was hit, and that explains the casualty figure as well that we have from internal security forces here. Fifteen people killed at least, and 65 injured. And a sense of relative security in that neighborhood shattered, and a sense of foreboding, if you will, settling in -- Soledad.

O'BRIEN: Anthony Mills for us in Beirut this morning.

Thanks, Anthony -- Tony.

HARRIS: Happening "In America," tens of thousands of veterans could be at risk of identity theft. Last week, a V.A. subcontractor reported a desktop computer missing from his Virginia office. The computer contained personal information on about 38,000 hospital patients. It is not yet clear what happened, but the case is under investigation.

One of two men jailed in the serial shooter case in Phoenix says he didn't do it. Thirty-three-year-old Dale Hausner told reporters in a jailhouse interview yesterday that he is an upstanding member of society. But he said his roommate, Samuel Dieteman, may be involved. Hausner and Dieteman are accused of killing seven people since May of 2005.

Voters turning out in Georgia. Six-term congresswoman Cynthia McKinney is facing former commissioner Hank Johnson in the statewide runoff. You may remember McKinney from the infamous run-in with a Capitol Hill police officer. She later said it was much ado about a hairdo.

And fears of blackouts. The Energy Department says southern California and the area from North Virginia to New York are the most energy congested in the United States. Officials are calling for new power lines.

That will do it.

Time now for a check on the forecast. Chad Myers once again at the CNN weather center.

Hi, Chad.

CHAD MYERS, CNN METEOROLOGIST: I'm calling for new cars, too...

HARRIS: Yes.

MYERS: But I'm not going to get one.

Good morning.

(WEATHER REPORT) O'BRIEN: Still to come this morning, gas price worries. BP shutting down that major oil pipeline. It's going to have a big impact on fuel prices. We'll tell you how and where.

HARRIS: And another glitch at L.A. International Airport. Find out why thousands of people were delayed.

O'BRIEN: And nearly a year after Katrina hit, thousands of people in Louisiana are saying, "Help, FEMA." We're talking about trailers.

HARRIS: Oh, boy.

O'BRIEN: We'll tell you why they're still so hard to find.

(COMMERCIAL BREAK)

O'BRIEN: The price tag for that oil pipeline shutdown could be costing Alaska more than $6 million a day. And the bad news doesn't end there. Oil company BP is now saying it could be months before the pipeline is back in business.

Nearly all of the 22 miles of the Prudhoe Bay pipeline is dangerously corroded. And that means trouble for more than just BP. They operate the oilfield for other companies, like ExxonMobil and Chevron.

So, at a time when we're all hoping those gas prices are going to drop, well, the news out of Alaska sure doesn't sound like that's going to happen.

Let's get right to AMERICAN MORNING'S Alina Cho.

ALINA CHO, CNN CORRESPONDENT: Oh boy, Soledad.

O'BRIEN: I'm right, right?

CHO: You are absolutely right.

You know, that bad news you're talking about continues at the gas pump. By some estimates, prices at the pump have started to go up five cents a gallon in some cities, and they could go up another five cents in the coming days.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: I put $75 in this car just this week -- $75.

CHO (voice over): And don't expect relief from those gas pains any time soon. BP is shutting down its Prudhoe Bay oilfield in Alaska. It found corrosion so severe, it's replacing 16 miles of pipeline. That means 400,000 fewer barrels of oil being pumped each day, an 8 percent drop in U.S. oil production, some 2.5 percent of the total U.S. oil supply. BOB MALONE, CHAIRMAN, PRESIDENT, BP AMERICA: On behalf of the BP group, I apologize for the impact this has had on our nation and to the great state of Alaska. BP will commit the necessary human and financial resources to complete this job safely and as quickly as possible.

CHO: The West Coast will take the biggest hit. Some 25 percent of its oil comes from Alaska.

UNIDENTIFIED FEMALE: It's important that all these companies at all the different levels need to be as accountable as possible. Ultimately, it's affecting all of us.

UNIDENTIFIED MALE: I don't know how long it will take of increasing the prices.

CHO: Just how long will it take to bring the nation's biggest oilfield back on line? Weeks? Months?

MALONE: We will not commit to a date. This is going to be based upon when we can safely restart some of these lines.

CHO: BP is under investigation for a massive oil spill at Prudhoe Bay back in March, and for an explosion and fire at a Texas refinery last year which killed 15 people. As for the 16 miles of corroded pipeline discovered at Prudhoe Bay, federal regulators say it hadn't been cleaned and tested properly since 1992.

UNIDENTIFIED MALE: It is damaging not just because it's part of a series of incidents, it's not a standalone. A standalone accident, accidents will happen. When you have a number of them, people start asking questions.

(END VIDEOTAPE)

CHO: Government regulators are said to be overseeing the shutdown of the Prudhoe Bay oilfield, which could take anywhere from three to five days.

Now, as for how much of an impact that shutdown will have on gas prices, the next Lundberg Survey, which is the most reliable gauge, will be out on Sunday, Soledad. But safe to say we are inching close to that nearly $3.06 record set just after Hurricane Katrina. We're right at about $3.03 right now, but remember, that's the average in some cities.

O'BRIEN: Yes, we're paying much higher.

CHO: Like, New York, as you know, much higher, right.

O'BRIEN: Much more money than that.

What happens to the investigation now? You said that they hadn't -- or the government investigators said that they hadn't checked the pipeline accurately since 1992?

CHO: Since 1992. Of course, there are a lot of questions about, is there -- is this a wider problem?

According to one published report, the EPA has begun a criminal investigation into this matter. So, it's going to be a while, I think, before we really know what happened and we really know what's going on. But certainly, government regulators are watching, overseeing the shutdown and looking into this matter.

O'BRIEN: All right. What a big mess. All right, Alina. Thanks.

HARRIS: And still to come on AMERICAN MORNING, it's almost a year, believe it or not, since Hurricane Katrina devastated New Orleans. Find out why some people are outraged about plans to mark the anniversary.

And, are you looking for cheaper airfares? You could soon pay less. Get me out of the middle seat, too, while you're at it.

Stay with us here on AMERICAN MORNING.

We'll be right back.

(COMMERCIAL BREAK)

O'BRIEN: Happening this morning, air traffic back to norm at LAX. Thousands of people faced delays yesterdays when a computer system failed.

According to this morning's "USA Today," several airlines are planning to add more domestic flights, and that could mean cheaper fares. Yahoo. Finally.

And in nearly a year after Hurricane Katrina, more than a thousand St. Bernard Parish families are still waiting to get into FEMA trailers. In most cases, there are trailers available, but they need utilities or other services. FEMA says it's filling requests as fast as it can.

HARRIS: Well, there are some positive signs of rebuilding after Hurricane Katrina. Eight public schools in New Orleans opened Monday with 4,000 students, giving them an early start to the school years. More than 40 other public schools are scheduled to open by the middle of next month. An estimated 30,000 students are expected to attend those schools.

Later this month marks the anniversary of Katrina. Just how would you remember this disaster? New Orleans Mayor Ray Nagin thinks his city should mark it with a celebration.

O'BRIEN: Huh. I've got to imagine there are people who are saying, well, now, why would you want to do that?

HARRIS: Why would you want to -- not everyone, as you can imagine, is excited about the idea.

CNN's Susan Roesgen has more. (BEGIN VIDEOTAPE)

SUSAN ROESGEN, CNN GULF COAST CORRESPONDENT (voice over): You expect fireworks on the Fourth of July, but on the anniversary of Hurricane Katrina? That's what city leaders were planning. And that's not all.

(on camera): How about a talent show, an auction of Hollywood celebrity jewelry? Even a comedy night. When the mayor's office released those plans recently, some people were shocked.

UNIDENTIFIED MALE: I just can't imagine it. You know, it's too solemn an occasion.

UNIDENTIFIED FEMALE: There are some who have lost everything, and I don't think it's quite that type of thing to celebrate. You know?

UNIDENTIFIED MALE: Most of us just don't have the spirit for it, anyway.

MALCOLM SUBER, COMMUNITY ACTIVIST: Not only was it wrong, but he's not man enough to even admit today that it was a wrong conception.

ROESGEN (voice over): Community activist Malcolm Suber says the mayor shouldn't be planning a party, he should be planning a memorial to pay respect to the more than 1,300 people who were killed in New Orleans. And he should be helping those who have come back rebuild their lives.

But when we asked the mayor whether the anniversary would be a memorial or a celebration, he seemed to say it would be a little of both.

MAYOR RAY NAGIN (D), NEW ORLEANS: It's a memorial event celebrating that we survived one year after Katrina.

ROESGEN: Nagin says a city committee is planning the anniversary events with financial support from Harrah's Casino. Now, Harrah's says the festivities have been scaled back for logistical reasons. The fireworks idea has also fizzled.

Other communities are marking the anniversary in other ways. Welder Vincent LaBruzzo (ph) is making a stainless steel cross. This is what officials in St. Bernard Parish have asked for. No talent show, no fireworks, just a cross capable of withstanding 170-mile-an- hour winds, a permanent and solemn reminder of Katrina's wrath.

Susan Roesgen, CNN, New Orleans.

(END VIDEOTAPE)

HARRIS: You don't celebrate it. You...

O'BRIEN: Why would you want a permanent and solemn respectful reminder of all the people who were killed and lost everything when you could have a fireworks celebration?

HARRIS: Yes, exactly.

O'BRIEN: All right.

Moving on, because we just should, business news. Andy's got that as he minds your business.

Good morning.

ANDY SERWER, EDITOR-AT-LARGE, "FORTUNE": Good morning, you guys.

A couple high-profile businesswomen in the news. First off, Martha Stewart finally settles with the Feds, and Arianna Huffington gets a bundle of cash.

O'BRIEN: Ka-ching.

SERWER: We'll tell you about that.

HARRIS: Wow. Can't wait.

O'BRIEN: All right, Andy. Thanks.

Also ahead this morning, Senator Joe Lieberman, I'm telling you, he's in a fight for his life, politically speaking. Well, Connecticut voters now head to the poll to decide if they're going to support him, a man who supported President Bush, or not.

That's ahead on AMERICAN MORNING.

We're back in a moment.

(COMMERCIAL BREAK)

HARRIS: Well, we are going to talk about successful women.

O'BRIEN: All right.

HARRIS: And getting even more successful by the day.

Andy is here "Minding Your Business."

Welcome, Andy.

SERWER: Good morning, Tony.

We want to talk about Martha Stewart, first of all. She has finally settled with the Securities and Exchange Commission. As she puts it, her "personal nightmare is over."

A couple of details here.

She has to pay the SEC $195,000. That would include $45,000 that she made by avoiding a loss by selling her ImClone stock. In other words, she avoided a $45,000 loss by being tipped off, allegedly, in December of 2001. Bad news was coming about that drug.

She was also barred from being a director of a public company for five years, and she's also -- there's other certain responsibilities she cannot fill for a while. But she is at her company. This lifts a big cloud from her and her business. There is still a securities class action suit outstanding, however.

Also in the news is Arianna Huffington and "The Huffington Post." You know this Web site, you guys.

HARRIS: Yes. Yes.

SERWER: It's sort of a block clearinghouse that she set up. A lot of people doubted her, thought this wasn't going to work. But it works, and one of the reasons why it works is because none of the bloggers get paid a dime.

HARRIS: There you go.

SERWER: I kind of like that business model.

HARRIS: Yes.

SERWER: So, in other words, your content is free and then she has advertising. But now she wants to expand this business she's gotten an infusion of $5 million from venture capital firm SoftBank.

O'BRIEN: What is she going to do with -- I mean, what does the $5 million going to do?

SERWER: Well, what she's going to do is take it to the next level, which is video. The service is not 24 hours. She's going to hire more people, make it bigger, make it better. And then, ultimately, who knows, take it public, or sell it out to a big media company.

HARRIS: There you go. There you go.

SERWER: And then the real ka-ching begins, perhaps. But she is definitely -- you know, is a very venture-minded person. So interesting to see how that's working out for her.

HARRIS: So, when we talk to you in just a couple of minutes, next hour, oil, oil prices, the price of crude.

SERWER: Right. Yes, more fallout from the BP situation.

And we're also going to be talking about the Federal Reserve. It's Federal Reserve Day. And so that is some drama there.

HARRIS: Yes. Andy, thanks.

O'BRIEN: Thank you, Andy.

SERWER: OK.

O'BRIEN: A look at some of the stories we're working on for you this morning.

Lebanon coming up with its plan for peace in the Middle East as the violence rages on between Israel and Hezbollah. Live reports from both sides of the border.

Then, why some Arab states aren't happy with that U.N. resolution that calls for an end to the violence.

Plus, it's D-Day for Connecticut Senator Joe Lieberman. Is he going to survive his toughest challenge yet? We'll have a live report

And more testimony today in the brutal rape and murder of an Iraqi girl. A group of U.S. soldiers could face the death penalty if they're found guilty.

Plus, soldier stress. Just how prevalent is it? What's the Army doing about it?

We'll take a closer look at all those stories on AMERICAN MORNING just ahead.

First, though, a check of the forecast with Chad at the CNN Center.

Good morning again, Chad.

MYERS: Good morning, Soledad.

(WEATHER REPORT)

MYERS: The second hour of AMERICAN MORNING starts right now.

O'BRIEN: Thank you, Chad.

In search of a cease-fire in the Middle East. Both sides now weighing in on just who should control the border between Israel and Lebanon.

HARRIS: Voters heading to the polls right now in several states. Will Senator Joe Lieberman become a political casualty of the Iraq war?

O'BRIEN: Drivers, beware. That Alaska pipeline problem is sending gas prices up. We'll take a closer look at the fallout this morning.

HARRIS: And just how hot was it in July? How about record- breaking hot?

Those stories and much more ahead on this AMERICAN MORNING.

O'BRIEN: Welcome back, everybody. I'm Soledad O'Brien.

HARRIS: And good morning. I'm Tony Harris, in for Miles O'Brien this week.

O'BRIEN: Let's get right to the latest developments out of the Middle East.

Israel's cabinet preparing to discuss expanding the military offensive in Lebanon. Lebanon says it's now willing to send 15,000 soldiers into the south to replace Hezbollah.

Reports from both sides of the border. Anthony Mills in Beirut, Matthew Chance in northern Israel.

Let's get right to Anthony first.

Good morning, Anthony.

MILLS: Good morning, Soledad.

The announcement by the Lebanese government that it is going to send 15,000 troops to the south under certain conditions does go a certain step along the way to satisfying a key demand by both Israel and the United States throughout this conflict, which has been that the Lebanese army needs to exert control over the south of the country and wrest control away from Hezbollah.

However, there is a key condition for the deployment southward of these 15,000 troops. And that is the withdrawal of the Israeli forces currently in south Lebanon and the handing over, if you will, of authority to a mix of Lebanese army troops and United Nations peacekeepers. So it has also, this announcement, drawn the spotlight to a key demand by the Lebanese government, which is that Israeli forces must withdraw from south Lebanon if there is to be anything resembling peace again.

Soledad.

O'BRIEN: Anthony Mills for us in Beirut. Thanks, Anthony.

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