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New Oil Record; Economics of Flooding; Senators Supposedly Receive Sweetheart Deals

Aired June 16, 2008 - 10:00   ET

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

HEIDI COLLINS, CNN ANCHOR: It's Monday, June 16. You're in the CNN NEWSROOM.
TONY HARRIS, CNN ANCHOR: But first up this hour, Jacqui Jeras is in the Weather Center talking about today's severe weather threat.

Jacqui, good morning.

(WEATHER REPORT)

HARRIS: It is.

COLLINS: Yes, and they need it, don't they?

All right, Jacqui. Thank you.

We want to get back to the story, though, in the heartland where there is quite a bit of heartbreak.

In northern Iowa, floodwaters crest. The Iowa River hits the record high but falls short of the worst fear. That's small comfort, though, at the University of Iowa where the waters have swallowed more than a dozen buildings.

In Cedar Rapids, flood waters pulled back and worried homeowners wait to rush in. Today, though, unsafe conditions are keeping thousands of people from their flood-ravaged homes.

Some owners have returned only to have their hopes crushed. Their homes and their belongs awashed in mud.

CNN's Sean Callebs is on the University of Iowa campus and Jim Acosta is in Cedar Rapids where safety officials are blocking the return of evacuees.

Let's begin with Jim. Jim, it's got to be really tough to hear. I know you can't go back to your house. But they have to wait until it's safe.

JIM ACOSTA, CNN CORRESPONDENT: That's right, Heidi.

And we are standing underneath interstate I-380 here in downtown Cedar Rapids just to show you exactly why officials made the decision that they made late yesterday and heading into early this morning.

We're standing next to a fuel tanker that was actually lifted up by these rising floodwaters and then dumped underneath this interstate, I-380, through downtown Cedar Rapids during this huge flood that just washed away so many homes and businesses in this city.

And essentially what happened yesterday was -- and we have some video of this to show you -- some of the thousands of people, some 24,000 people were evacuated from their homes and some of those people were able to start going back to their homes and businesses yesterday to see what kind of damage was left.

They're also to gather some belongings and bring them out. Many of those residents doing so in plastic bags. And then during that process, what authorities realized was, as they were going back to some of these homes and going inside some of these properties, they were finding gas leaks. They were finding manhole covers that had come off.

And so they felt that because of these dangers that were essentially in almost every neighborhood in this community, they had to make a decision, a snap-second decision there to go ahead and call off these returns back to these neighborhoods to reel these folks back in and keep them outside of these checkpoints.

And this is just one dramatic example of why they had to do this. It is just too dangerous for many of these people to go back to their homes at this point.

Some of the good things that are starting to happen here -- we can mention that the drinking water supply -- that was a big concern here for a while. They were able to get that back up and running and little by little they are getting the power grid up for the community here.

But I can tell you we're in the second largest city of Iowa -- 120,000 people here. The downtown is still without power at this point, Heidi. They have got a long way to go here.

COLLINS: Absolutely. And just to see once again another sort of example of how strong this thing was is this huge fuel in the background.

What is that again?

ACOSTA: Yes.

COLLINS: It's a -- it's a tanker?

ACOSTA: Yes, it's a fuel tanker that is -- from down the street. We can't really tell at this point. And it was essentially lifted up by these floodwaters and put over here. You can see some of those floodwaters behind me. There's a fire department station off in the distance.

And this flood essentially showed no mercy to anything in its path. Fuel tankers, cars, washed away downstream from here. There's a kayak behind my photographer who's standing with me now. And so this is essentially what people are coming to grips with at this point and that is why officials made the decision that they did because, you know, they thought it was a good idea yesterday to let these folks go back to their homes. But what they went back to was simply too dangerous to continue this.

COLLINS: Yes.

ACOSTA: So throughout the day today, they'll be going back reassessing and hopefully getting those people back out there tomorrow.

COLLINS: Yes, the hardest thing to find right now, I'm sure, is some patience for those folks.

Jim Acosta, sure do appreciate it. Thanks.

HARRIS: And let's go to the University of Iowa right now where officials will assess their losses today.

CNN's Sean Callebs is on the Iowa City campus.

Sean, good morning to you. You know a lot of very valuable assets on that campus had to be rescued.

SEAN CALLEBS, CNN CORRESPONDENT: Yes, it really was. They did a great amount of work. One of the real irony, tragedy, however you want to look at it, they knew this water was coming. It was coming downstream. They were predicting how high the Iowa River would get at historic high level.

One of nine rivers in the state, I should point out, are at historic highs right now but it didn't get as high as they thought. As you guys said earlier, that is little consolation to folks here in Iowa City. Hundreds of homes had to be evacuated.

But let's talk about how this campus was affected. We'll begin over there. That is basically a brand-new building, the School of Art. It's a design -- the architecture actually inspired by a Picasso work, and significant damage there.

This is the Museum of Art here and the president of the college -- the president of the university told me that they are going to have to probably replace this tire building. Certainly disappointing news here.

Also, only 60,000 people live in this city, but you can be sure that people all over the state are watching what's going on at this campus. There's such a strong connection to people across Iowa.

If you think about the number of graduates, 30,000 students attend this campus, something like 50 percent of the state's doctors, 75 percent of the state's nurses, 80 percent of the public educators in the public school system all graduated from here.

And the president, Sally Mason, told me that she's getting a lot of calls and she really feels that Hawkeye spirit across the state, and she says, yes, it's going to be difficult but they will be able to rebuild.

(BEGIN VIDEO CLIP)

SALLY MASON, UNIVERSITY OF IOWA PRESIDENT: Let me reassure people out there that care deeply about this university, we will be fine. We'll get through this. We'll come back bigger, better, stronger than ever before. The spirits are high. We continue, despite the losses, to anticipate now cleaning up and getting on with the important work that goes on here.

(END VIDEO CLIP)

CALLEBS: And it's interesting, a lot of people are coming down to the campus as waterlines looking out across this lagoon where a courtyard used to be.

And it's really agonizing. I mean the water is so high. It's not going to come down for such a long time. The STOP sign there barely peaking out over the water.

But I want to show you some of the works of art that were in this museum of art here in this campus. People across the nation may not know about the historic collection that is here. Between $300 and $400 million worth of treasured pieces.

And they all had to be whisked away basically with some sort of secrecy. The president of the university was worried about security here moving that amount of financial value here and they actually took the artwork to Chicago.

It is being held, Tony, at an undisclosed location. And -- but who knows where it's going to end up because if the president's right they have to rebuild this building. Tough news.

HARRIS: Boy, you can rebuild the building but save the art.

Sean Callebs for us this morning. Sean, appreciate it. Thank you.

You have watched the pictures, heard the stories. And if want to help those impacted by the flooding go to CNN.com and "Impact Your World." That's at CNN.com/impact.

COLLINS: Britain ups its commitment to the war in Afghanistan and sounds a warning to Iran.

President Bush meeting with British Prime Minister Gordon Brown today. Our Elaine Quijano joining us now from London.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Hello to you, Heidi.

Well, in addition to those topics that you just mentioned, Iraq also an issue as well as President Bush sat down with talks earlier today with British Prime Minister Gordon Brown.

Now President Bush specifically tried to dispel any notion that there is daylight between the U.S. and the UK position when it come to how and when troops should be withdrawn from Iraq.

Here is President Bush from earlier today.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I just want to remind you that he's left more troops in Iraq than initially anticipated. And, like me, we'll be making decisions based upon the conditions on the ground, the recommendation of our commanders without an artificial timetable set by politics.

(END VIDEO CLIP)

QUIJANO: Now for his part, British Prime Minister Gordon Brown essentially echoed the president's sentiment, but he also gave president a gift of sorts, announcing that he plans to send more troops, more British troops to Afghanistan. Unclear just how many troops we are talking about.

But certainly it's coming at a time when the United States has been trying to drum up additional support for Afghanistan.

We should tell you President Bush is now in Northern Ireland. He is meeting with politicians in Belfast. Northern Ireland is his last stop, Heidi, in what's essentially been a week-long farewell tour of Europe -- Heidi.

COLLINS: All right. CNN's Elaine Quijano for us.

Thanks so much, Elaine.

HARRIS: In Pakistan today, warning Afghanistan not to send these troops across the border to chase down militants. Both nations Washington's allies in the fight against the Taliban and al Qaeda.

But comments by Afghan president, Hamid Karzai, are raising tensions between the two. He said Afghan troops have the right to cross the border in pursuit of militants. Pakistan launching a strong protest today and bowing to defend its territory.

COLLINS: You can't go home. Residents who evacuated one flooded Iowa city are now being kept from going back, in the newsroom.

(COMMERCIAL BREAK)

HARRIS: Welcome back, everyone, to the CNN NEWSROOM. I'm Tony Harris.

Here's another jolt to your weary wallet. Higher electric bills -- we will tell you when and why and offer some advice on how to deal with the latest case of sticker shock.

(COMMERCIAL BREAK)

HARRIS: A big step in the nationwide struggle. Today is wedding day for dozens of same sax couples as of 5:01 Pacific Time. This evening they can legally say "I do" in California.

A state's Supreme Court ruling last night legalized same-sex marriage. California is the second state to allow it. Massachusetts east the first of four other states allow civil union.

COLLINS: The Iowa floods, more than 36,000 people have been forced from their homes. Most are in Cedar Rapids and most are in limbo now. Officials are blocking their return because of safety concerns.

Joining us to talk about that a little bit, evacuee Veronica Johnson.

Veronica, tell us what happened to you. I know that you are, obviously, out of your home.

VERONICA JOHNSON, RESIDENT, CEDAR RAPIDS, IOWA: I have been out of my home for about four days now. I live by a gas station and the tankers from underground busted up through the ground. And so I have gas spilled all around my house and the whole neighborhood.

So that's why I'm understanding that we're not allowed back in my house.

COLLINS: Yes, we've talked quite a bit this morning about some of the safety concerns, which I imagine most people sort of forget about it. You're so worried about the water and all of your belongings.

JOHNSON: The water has actually went down but it's more because of the potholes and the ground sinking, basements collapsing.

COLLINS: Wow. Unbelievable. We're looking at -- just let you know our viewers are seeing, you know, some of this incredible damage there in Cedar Rapids.

Apparently, from what I understand, you pretty much got trapped. I think you went over to your mom's house first after the water came rushing in?

JOHNSON: Yes. First I evacuated from my house and I went to my mom's house after sandbagging and I was extremely tired, went over there to lay down. Fell asleep, woke up maybe an hour later, but it sounded like a water fall was in my ear.

I went to the top of the stairs, heard it coming in even more than when I was sleep. Went to the window, it was -- had already come up passed her porch. She stays on the second floor. I had a truck outside and my truck was halfway filled like halfway through the window.

COLLINS: Geez. JOHNSON: So my dad had to come and get me up out of there.

COLLINS: Yes. Well, thank goodness that he was around. I understand that you were able to walk out. Obviously, there's no driving anywhere from what we're looking at here.

Is everyone in your family OK?

JOHNSON: Yes, ma'am.

COLLINS: That's certainly some good news there. I'd love to know, too, what you think about the response from everyone, all of the authorities in the area. They've been a help to you?

JOHNSON: Yes, they have. Red Cross, police department, fire department and land services, the people who they brought in, the Marines and stuff, the guards, National Guards, they've been excellent.

They are keeping us out of our homes even though we're, like, getting upset with them. We have no right because they are trying to protect us. They've been doing an excellent job.

COLLINS: Right.

JOHNSON: I mean from the beginning to now, they are still doing an excellent job.

COLLINS: Well, that's great to hear. Absolutely great to hear. It's an interesting point you bring up, especially speaking to someone who's out of your house. I know your whole family is pretty much at the shelters. You've got a ton of allergies.

Mold and mildew being the allergen which is something, you know, we don't think about too often, but going back to a home that is destroyed by water is going to be really tough for you and we understand that. So we're glad that you're with us.

Veronica Johnson, thanks for telling us your story.

HARRIS: Israel's settlement expansion plans coming under U.S. criticism. We will speak to former assistant secretary of state James Rubin.

(COMMERCIAL BREAK)

HARRIS: Let's get you to the New York Stock Exchange now about -- coming up on an hour into the trading day. And as you can see, the Dow off of its session lows. Boy, we started off the day in rough territory, down 80 points or so. It rebounded just a bit.

The Dow down 42 points. The NASDAQ up slightly. Is that correct there? Up slightly. OK. And we are checking the markets throughout the morning right with Stephanie Elam right here in the CNN NEWSROOM.

Soaring prices from the pump to the grocery store. Get ready for another shock. Higher electric bills. No, not with summertime fast approaching.

Personal finance editor, Gerri Willis joins us now.

Gerri, how high are these prices going up here? What are you seeing?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, Tony, good morning. We're looking at 29 percent from for some folks. Electrical rates are set in individual communities regionally, locally. We're seeing some bumps up -- bump up in prices of 29 percent. That's a big deal.

And you know why this is happening, Tony. It takes energy to make energy.

HARRIS: That's right.

WILLIS: Those power plants consume coal. They consumed natural gas. Those prices have doubled in the last year. So they're just passing on some of those increased costs to you.

HARRIS: I'm curious, I mentioned summertime looming here.

WILLIS: Right.

HARRIS: What's the outlook for the summer?

WILLIS: Not -- well, from your -- from a perspective of somebody paying for AC, air conditioning...

HARRIS: Exactly.

WILLIS: ... it's not good. The Farmer's Almanac says that we could have one of the hottest summers on record so, look out, you're going to be using that air conditioning this summer.

HARRIS: That's right.

WILLIS: And you're going to be facing some increased costs.

I know a lot of people out there, Tony, were thinking hey, winter is over, things are going to get better in terms of my energy consumption. Not so.

HARRIS: Well, OK. Here comes the tips portion of our segment here. What can folks do -- what can we all do to sort of lower our energy bill particularly with the summer months approaching?

WILLIS: Well, you have to think about using that AC wisely. Now you know all of the obvious stuff about closing your curtains, making sure your house is closed down so that AC doesn't get used too much.

But think about this, if you have air conditioning units that are in windows, put them on the shady side of the house. That will make them 10 percent more efficient and if you have an AC unit that fills the whole house, you'll definitely want to think about getting a programmable thermostat because that will save about 10 percent on your energy bill.

Another thing, Tony, that people don't think about, landscaping by simply putting trees in front of windows that are exposed to the sun. You can actually cut your energy bill and those space at windows leaves fall when the season changes...

HARRIS: Sure.

WILLIS: ... guess what, you know, only the sun can get to your house and warm it up.

One thing that utilities out there are doing, Tony, that, you know, you really should ask about, if you're having a hard time paying these bills, is they allow you to do what the big companies do, and that's time shift your usage and peg the electrical rate that you pay to the time you use it.

So what you can do is not use it during peak times. You can pay lower rates.

HARRIS: I get it.

WILLIS: Not everybody is doing that.

HARRIS: Yes.

WILLIS: But if you're really having a hard time out there, it's definitely worth thinking about.

HARRIS: Yes, it's something to think about.

Gerri, give us a preview of what's coming up. I would suggest -- I'm thinking that a lot of these topics that we just talked about would be a part of "ISSUE #1" in noon Eastern Time.

WILLIS: Well, you bet you, you know. Today on "ISSUE #1" at noon on CNN we'll debunk one of the biggest gas myths of all time. And we'll tell you what it is at noon but not now. This is a tease after all.

Plus we'll tell you why high gas prices could be causing some trouble for your child's school district and what's being done about it.

All that, noon Eastern.

Don't forget send us your e-mails. We'd like to hear from you with your financial questions. We answer them live on the show. Got the...

HARRIS: Yes, it's great fun.

WILLIS: ... "Top Tips" promo right there.

HARRIS: Yes.

WILLIS: You send questions to "Top Tips," too. We love hearing from you. It's all interactive.

HARRIS: See you at noon, Gerri. Thank you.

WILLIS: My pleasure.

COLLINS: Sky high crude making big oil producers nervous.

Saudi Arabia now saying it will boost production but will it rein in high prices?

(COMMERCIAL BREAK)

HARRIS: And welcome back, everyone, to the CNN NEWSROOM. I'm Tony Harris.

COLLINS: Hi there, everybody. I'm Heidi Collins.

Misery in the Midwest. Three rivers pour out of their Iowa banks and swallow nearby towns, even a college campus isn't spared. Flood waters had swamped more than a dozen buildings of the University of Iowa but it could have been much worse. Students and faculty spend days building sandbags (INAUDIBLE).

Today in Cedar Rapids, safety officials have blocked the return of worried homeowners. They say it's just too dangerous for the thousand us of people to make their way back into the flood zone.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: They said it could be two weeks. They said it could be a week. They said it could be up to six weeks. So we're just kind of waiting and see.

UNIDENTIFIED FEMALE: That's really all we can do is just wait at this point, you know, and see. And pray that we haven't lost everything.

(END VIDEO CLIP)

COLLINS: In much of northern Iowa, floodwaters have crested and a sense of optimism slowly rises.

The Iowa River hit a record high but fell short of the most dire predictions.

Meanwhile, towns that are downstream are bracing now for their flood threat.

HARRIS: Let's get an update on all of this and the threat in the northeast.

Jacqui Jeras in the Severe Weather Center.

Jacqui, good morning.

(WEATHER REPORT) HARRIS: And remember to send us your I-Reports. Just go to CNN.com and click on I-Reports. Or you can type ireport@cnn.com into your cell phone. As always, be safe.

COLLINS: New stumbling blocks in the way of an Israel- Palestinian peace deal. Israel announcing plans to build another 1,300 homes in east Jerusalem. The Palestinian leader calls the settlement the greatest obstacle on the road to peace. And Secretary of State Condoleezza Rice says it's "not helpful." Joining me now from New York, James Rubin, a former assistant secretary of state.

Good morning to you. Thanks for being with us.

What do you make of the timing of this announcement?

JAMES RUBIN, FORMER ASSISTANT SECRETARY OF STATE: Well, I think it's a sign that the hopes for any sort of peace agreement between the Israelis and the Palestinians has gone to a very, very low probability.

COLLINS: Really?

RUBIN: The fact that the United States has criticized Israel right now. It's been a very, very long time since America has involved itself in the peace process. It's really just been the last few months. People were hoping this could get done in the next six months. And I think the odds of that are becoming increasingly long indeed.

COLLINS: Any chance, Jamie (ph), that Israelis could change their minds? I mean these are plans. They haven't been built yet.

RUBIN: Well, absolutely. And the settlements themselves are not, in my opinion, the real stumbling block. The real stumbling block is that neither the Palestinians, nor the Israelis involved, are getting the kind of support from the United States that would allow them to make these big, big compromises. The whole Middle East has been in a disastrous state for several years now. You have Hezbollah ascendant (ph) in Lebanon. You have Hamas ascendant (ph) in Gaza. You have Tehran ascendant (ph) in the region. This is really a bad time for our friends and a good time for our adversaries.

COLLINS: Yes, there are some people who would probably say though, why is the United States involved? Aren't these two countries in control of their own destinies to a certain degree.

RUBIN: Well, yes. And in the end, it is going to be up to the parties themselves to make these decisions. But President Bush is really the first president to leave Middle East peace aside for most of his two terms. It really isn't until this last year, the eighth year of his administration, that he and his secretary of state have spent any time and energy on it. That was an unprecedented decision. Every other president that I can think of in the last 30, 40 years has made Middle East peace a priority, has put the United States in the position as a peace maker in the region. And one of the reasons why America is so unpopular around the world, is that the many countries and many people think that, at a minimum, the United States has to try to make peace between the Israelis and the Palestinians. The fact that we've left it to the end has been troubling.

COLLINS: But what about the road map to peace in 2003? I mean did not Israel agree and sign that agreement and say that indeed they would not build on disputed land?

RUBIN: Well, yes. The roadmap involved commitments by the Israelis and commitments by the Palestinians. But remember, that road map was before Hamas was elected. This was a decision by Washington to push these elections forward. The Israelis didn't want the elections. The Palestinian leadership didn't want the elections. The fact that we pushed forward for an election, causing Hamas to be elected, and they don't recognize the state of Israel, they wont' renounce terrorism, they won't abide by past agreements, has been the wild card that has destroyed the possibility of progress.

COLLINS: Let's listen for just a moment so that people know exactly what was said in case they missed it by Condoleezza Rice regarding the building of these settlements.

Let's listen.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, SECRETARY OF STATE: I do believe, and the United States believes, that the actions and the announcements that are taking place are indeed having a negative effect on the atmosphere for negotiation. And that is not what we want. We should be in a position of encouraging confidence, not undermining it.

(END VIDEO CLIP)

COLLINS: Kind of interesting, wasn't it? I don't know if it was strong enough. You would obviously know that better. But isn't is usually that this type of pressure is put on Israel sort of behind closed doors?

RUBIN: You're absolutely right. This is unusual for a secretary of state to make these kind of strong comments in public, in Israel. And I think it's probably an expression of her frustration. Condoleezza Rice has taken several trips there and really has nothing to show for it. And all she seems to be doing is managing these increasing bad news developments and she's probably quite frustrated.

On the other hand, the Palestinians and the Israelis that I talk to have made very clear that the United States really hasn't done very much in these talks. They haven't come up with any concrete suggestions. That Condoleezza Rice, when she comes back from these trips, her reports are essentially about the atmosphere, whether it was warm, whether it was intensive. So the U.S. is in this funny position where we seem to want an agreement, but we're really not doing very much. COLLINS: All right. We will, of course, be watching this story as it unfolds here. Who knows what's going to happen in the end. We appreciate your time, as always, Jamie Rubin, former assistant secretary of state. Nice to see you.

RUBIN: Nice to see you.

HARRIS: Elian Gonzales, the Cuban boy once at the center of an international custody feud, has joined Cuba's Young Communism Union. The 14-year-old pledging his allegiance Saturday. Gonzales was six when he was found floating in an inter tube off the coast of Florida. His mom died on that trip and his relatives in the United States lost the fight to keep him.

COLLINS: They went from crazy to cool in the neighborhood.

(BEGIN VIDEO CLIP)

JORDANNA DERVAES, URBAN HOMESTEADER: Right when I began to accept being different and unusual, then it started becoming hip.

(END VIDEO CLIP)

COLLINS: The world catches up to the green family.

(COMMERCIAL BREAK)

HARRIS: Saudi Arabia says it will pump more oil. Now in theory, that should help reduce prices. But oil hit a fresh record high this morning. So what gives? CNNMoney.com's Poppy Harlow has our "Energy Fix" from New York.

Poppy, good morning.

POPPY HARLOW, CNNMONEY.COM: Good morning, Tony.

Well, they sure woke investors up this morning. Oil soaring to nearly $140 a barrel earlier today. We're right above $137 right now. Of course, this is despite news of that production increase.

Now over the weekend, Saudi Arabia reportedly said it plans to boost production by 200,000 barrels per day starting in July. That, of course, would raise the Saudi's production to 9.7 million barrels per day or about a 2 percent increase. But take a look at that graphic there on the screen. It's really just a drop in the bucket. Compare that to the 86 million barrels that the world consumes each and every day. That's just about a 0.02 percent. So it's really nominal. Now the Saudi's, they will boosted production by about 500,000 barrels per day since May when the kingdom announced the 300,000 barrel increase -- Tony.

HARRIS: So, Poppy, OK, it's not a huge increase, but you would think that this move would sort of calm oil prices. That certainly hasn't happened.

HARLOW: Yes, or at least not leave them to spike, of course. But that's not what happened. A lot of people feel that the Saudis could have done more. And that's what's key here.

There's a lot of debate about how much the kingdom can actually produce. Most analysts take that number just around 11 million barrels per day. So the current increase would bring Saudi Arabia pretty close to capacity, but not at capacity, at least not right now.

More in focus today, though, is the weak U.S. dollar, coupled with a fire at a very important oil field off the Norwegian coast. They're both contributing to the record spike that we're seeing in oil prices.

And by the way, Tony, the reason the Saudis are so interested in boosting production, they're concerned that if the price gets too high, consumers are going to figure out ways of living without using so much oil.

HARRIS: Yes. And we're already beginning to see some of that, aren't we, Poppy?

HARLOW: Of course we are. Take a look at the sale of hybrid vehicles here in the U.S.. They're soaring. In fact, Toyota's actually struggling to keep up with demand for its hybrids. The company says it can't produce enough batteries for those cars. It also says there is going to be a crunch in terms of how many hybrids roll off the production line until the end of this year.

Toyota hybrids still use some gas, but this is so cool. There's a new car out from Honda that uses none. The first hydrogen fuel cell cars are rolling off the production lines in Japan. I know, it's very, very cool. It vehicle emits only water. So that's a very low impact on the environment.

But, unfortunately, it's not an energy fit for everyone out there just yet. A three-year lease is going to be about $600 a month. So gas would have to really shoot up to make that a good deal financially. So we don't have hydrogen stations yet either on every corner, so fueling the cars, that could be pretty difficult as well.

But it is a start, Tony. It's a start.

HARRIS: Yes, it's mass production. Let's get mass production working on it and we can start to bring the prices down a little bit.

HARLOW: Exactly. We're following this here on the CNNMoney.com energy desk from every angle. Log on to our Web site for a lot more information on this. It could help you.

HARRIS: Way to go. All right, Poppy, thank you.

COLLINS: Last week's flooding in the Midwest is likely to have a ripple effect on consumers across the country. Stephanie Elam is on the floor of the New York Stock Exchange with details now on the economic impact of that incredibly bad weather.

Hi there, Stephanie.

STEPHANIE ELAM, CNN CORRESPONDENT: Hi, Heidi.

Yes, you know, for people who don't live anywhere near the Mississippi River, nowhere near the Midwest, you may not think that this has much of an impact on you, but shipping is really taking a hit because of these floods and that means higher prices are probably in the works perhaps for consumers as far as food goes, anything else that gets shipped.

So let's take a look at what we're talking about here. Starting off with River Freight. "The Wall Street Journal" is saying that hundreds of barges are getting stuck at various points along the Mississippi River. The Army Corp of Engineers lists at least 11 locks that are closed along the rivers. And on a typical day, over 20,000 tons of cargo pass through these locks. So that's obviously a big deal there.

Now think about the railroads as well. A lot of those railroads going under water there. Disruptions could be longer-lasting, in fact, and more widespread than the river because you've got to repair everything and get it back up and running. So that's also a problem.

Floods have actually washed out major rail lines in five states. That would be Iowa, Wisconsin, Minnesota, Missouri, and Illinois. Such a huge part of the country we're talking about. And so customers have been told to expect delays on their shipments. And maybe 24 hours, maybe 48 hours, it could be indefinite at this point. So that's obviously a problem that they're looking at.

"The Wall Street Journal" also saying that Union Pacific, that's the largest freight railroad, that they say six lines out of service at some point over the last several days. So they've been dealing with that as well. Canadian Pacific Railway closed its line between Chicago and Minneapolis but was able to reroute a lot of their lines. But still, obviously, widespread effect here, Heidi.

COLLINS: Yes, no question about it. The river lock, boy, that's pretty -- incredibly unusual, at least as far as I know. I've never really heard of them locking them down. But it's 11 now. It was nine to begin with, I guess.

But obviously for consumers, we're going to be spending more money.

ELAM: There's really no way to see it any other way at this point, Heidi. I mean higher prices are going to factor in because the shipping costs, think about those gas prices already being higher. So this is a bad time for this to happen. Not that there's ever a good time for this kind of thing. It also means delays in shipments for goods that are transported by train and barge. So all of this having a huge ripple effect.

And I know you just had Poppy Harlow on talking about oil. Well the oil prices, they're up sharply again and that's not helping things here on Wall Street. Oil climbing more than $3. So that's adding to the pinch here. Also the dollar weak and that's what everyone's focusing on here. So I you take a look at the numbers, we are down. The Dow off 45 points at 12,262. The NASDAQ barely in the green at this time. But obviously we'll have to keep our eyes on it.

Heidi.

COLLINS: Yes, definitely. Stephanie, we'll check back with you a little bit later on. Thanks.

ELAM: Sounds good. Thanks.

HARRIS: Powerful senators. They keep an eye on companies that are caught up in the mortgage mess, but did they get sweetheart deals from one of them?

CNN's Brian Todd has the story.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): As chairman of the Senate Banking Committee, Chris Dodd has tried to crack down on companies accused of predatory mortgage lending at the center of the home foreclosure crisis. He's pushed for more regulation and even criminal charges against some lenders.

SEN. CHRISTOPHER DODD, (D) BANKING CHAIRMAN: Obviously they've been engage in practices, in some instances, where they new the borrowers were incapable of making their financial obligations.

TODD: But one company being investigated for fraud in the mortgage crisis, Countrywide Financial Corporation, reportedly gave Senator Dodd cut-rate deals on two loans. Deals not available to the general public. According to a report in "Conde Nast Portfolio" magazine, Dodd's fellow Democrat Kent Conrad, chairman of the Senate Budget Committee, got similar deals. The magazine sites internal documents and e-mails saying Countrywide's CEO, Angelo Mozilo, directed staffers to give lower interest rates and points to influential people.

Countrywide did not return our calls and e-mail. Contacted by CNN, Dodd and Conrad reacted with outrage to the report. They acknowledged they got competitive rates, but both say they sought favorable treatment and were not aware that they were getting it. Records from Conrad's office show he got below market rates for one property on at least two occasions. But in a telephone interview, Conrad said this about Countrywide's loan for another property, an apartment building in Bismarck, North Dakota.

SEN. KENT CONRAD, (D) SOUTH DAKOTA: With respect to the Bismarck property, which was a loan of less than $100,000, that I actually paid above-market rates.

TODD: There's no evidence of anything illegal here. And one watch dog group says Dodd and Conrad may not have violated Senate ethics rules if they didn't know they were getting loans not available to the public. But -- MELANIE SLOAN, CMTE. FOR ETHICS & RESPONSIBILITY: Particularly I think for Senator Dodd, being on the Banking Committee and then getting a loan that is at such a better rate than what is generally available, I think that's going to be a tough sell politically. How did he really not know this loan was on such better terms.

TODD: Melanie Sloan says her group is calling for a Senate ethics investigation of these deals, but the two senators state clearly they believe they've done nothing wrong. Conrad says he's never met Angelo Mozilo in person. Says he's only talked to him once over the phone.

Brian Todd, CNN, Washington.

(END VIDEOTAPE)

COLLINS: Running 4,000 miles on faith and planting a flag every mile honoring those who gave their lives in Iraq.

(COMMERCIAL BREAK)

COLLINS: Think you're doing your part to save the planet. You'll be green with envy to watch how one California family does it.

Here's CNN's Thelma Gutierrez.

(BEGIN VIDEOTAPE)

THELMA GUTIERREZ, CNN CORRESPONDENT, (voice-over): This is quite possibly one of the few households in America where rising food prices are not an issue.

JULES DERVAES, URBAN HOMESTEADER: You just stay at home and you grow your own food in your backyard.

GUTIERREZ: Where high energy costs are not a concern.

ANAIS DERVAES, URBAN HOMESTEADER: We try to cook outdoors using the sun and free energy.

GUTIERREZ: Where sky-high gas prices haven't hurt one bit.

JUSTIN DERVAES, URBAN HOMESTEADER: It takes special oil heat and then some chemicals. It makes bio diesel.

GUTIERREZ: Meet the Dervaes. A family of four who live off their land. Every horizontal and vertical inch they can find. In their backyard, their front yard.

JULES DERVAES: In our driveway we've got strawberries.

GUTIERREZ: Even the driveway of their three-bedroom in Pasadena, California.

JULES DERVAES: One of our biggest crops is edible flowers.

GUTIERREZ: That's right. Even their landscaping is edible. The Dervaes' urban home is a working farm on a tenth of an acre.

JULES DERVAES: You get a little radish (ph) taste out of it.

GUTIERREZ: They sell to local chefs.

JULES DERVAES: They may call for three pounds of salad. We pick the three pounds of salad. No waste. No mess. That cuts down overhead.

GUTIERREZ: Anais Dervaes say her family has been living green way before green was in. Their home is paid for and they live on about $25,000 a year. What they don't sell, they eat.

So what can you actually cook in here?

A. DERVAES: Anything that can be cooked in a normal oven can be cooked in a solar oven. And here we have some home-grown potatoes that we harvested and that we're cooking up for dinner tonight.

GUTIERREZ: The sun also powers their home and heats their water.

A. DERVAES: You're looking at our homemade, outdoor solar shower.

GUTIERREZ: This is the shower you use in the summertime?

A. DERVAES: Yes. And it's heated with a simple black garden hose and then the water peculates down and waters our edible landscaping.

GUTIERREZ: The Dervaes pick pets, like chickens, ducks, and goats, that contribute.

JULES DERVAES: Right now they're just pets and they eat up our waste greens. So we call them composters.

GUTIERREZ: Even their toilets give back.

A. DERVAES: You'll wash your hands with the new water. That water will go in and fill your bowl.

GUTIERREZ: Just when you think you've seen it all . . .

A. DERVAES: This is our bicycle powered blender.

GUTIERREZ: Isn't there a side of you that ever just wants to get out of bed, go in, turn on the blender, make whatever you need to make.

A. DERVAES: We don't really know another way. In a sense I've grown up like this.

GUTIERREZ: Jordanna Dervaes says as a kid she was picked on for living green.

JORDANNA DERVAES, URBAN HOMESTEADER: Right when I began to accept being different and unusual, then it started becoming hip.

GUTIERREZ: In 10 years she says they went from the crazy family on the block, to the envy of their neighborhood.

Thelma Gutierrez, CNN, Pasadena, California.

(END VIDEOTAPE)

HARRIS: From partner, to spouse. Gay and lesbian couples get hitched in California legally.

(COMMERCIAL BREAK)

COLLINS: Quickly we want to get this information out to you that we have just received here in the CNN NEWSROOM coming out of California. Woodland, California, to be specific.

We have learned that there's a manhunt going on at apparently I- 5, which I'm sure many of you have heard of. Parts of it are closed down. Now they're looking for this suspect, 35-year-old Marco Topete. You see his picture there. He is accused of shooting and killing a sheriff's deputy. It happened on Sunday night. Unfortunately, we've learned that the deputy has since died.

Something about a baby being found. An abandoned baby in a car. The baby is fine. I believe that is what the officers were responding to and then shortly after there was this shooting that took place. Once again, a sheriff's deputy was shot and killed.

So now we've got live pictures coming in from our affiliate KCRA of the manhunt that is going on for 35-year-old Marco Topete. We'll keep our eye on that one for you.

Good morning once again, everybody. Welcome to the CNN NEWSROOM. I'm Heidi Collins.

HARRIS: And I'm Tony Harris.

Let's begin talking about the difficulties in the heartland right now. In northern Iowa, flood waters crest. The Iowa River hits a record high. But it falls short of the worst fears. That is really, when you get right down to it, a small comfort, particularly at the University of Iowa where swollen rivers have overflowed their banks and have swallowed at least a dozen buildings.

We are covering that story from a couple of angles this morning. With our Jim Acosta and our Sean Callebs. We will get to them in just moments.

Good morning, everyone. You are informed with CNN. I'm Tony Harris.

COLLINS: Very quickly off the top here, we want to get you back to the situation in California that we are following. Getting some live pictures in of a manhunt going on for this man right here, 35- year-old Marco Topete. He is a suspect in the killing of a sheriff's deputy. The deputy was shot on Sunday and apparently died overnight.