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Security Measure Taken for the Beijing Olympics; Tropical Storm Edouard Hits the Texas Gulf Coast; Jet Blue Will Now Charge Passengers to Use Pillows and Blankets
Aired August 5, 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: Good morning, everybody. I'm Heidi Collins.
HARRIS: And I'm Tony Harris.
Stay informed all day in the CNN NEWSROOM. Here's what's on the rundown. Tropical storm Edouard slogging the shores in Texas. Just a couple of hours ago, heavy rain and wind, and maybe more bluster than bite.
COLLINS: China on guard. Three days before the Olympics, Beijing smothers the city with security. Are the games safe?
HARRIS: B.Y.O.B., bring your own blanket. One airline charging you for comfort today, Tuesday, August 5th, you're in the CNN NEWSROOM.
OK. Severe weather to tell you about this morning in Texas. Tropical storm Edouard crashed into the Gulf Coast just a little while ago. And while it never gained hurricane strength, the storm could cause a lot of damage. Emergency officials are bracing for flooding. Several inches of rain are expected today.
COLLINS: People along the Gulf Coast weren't caught flat footed. They got ready for the arrival of Edouard by boarding up storms and businesses. And of course, even when a big storm is coming, some people cannot resist heading to the beach. Look at that, that crowd playing on the sand well before the storm's arrival, thankfully.
HARRIS: And we are covering all of the angles on the Edouard. Our Jacqui Jeras is monitoring things from the CNN Severe Weather Center. And Reynolds Wolf is getting wet there in Galveston. Hey, Reynolds, it looks better know than it did what 20, 25 minutes ago.
REYNOLDS WOLF, CNN METEOROLOGIST: Yes, it is - it's feeling I guess a little better in some ways. Still feels awfully wet. You say we're covering this at an angle. Right now the angle of the rainfall. Earlier it was coming in kind of horizontally. Now, it's kind of - well, now it's horizontally again. The wind does tend to pick up. The storm, as you mentioned, has already made landfall. Conditions here, although rainy and although windy at times, could have been far worse.
I'm actually coming to you from Galveston on the sea wall. You see it right here below my feet. And we're along Sea Wall Boulevard. This was actually made back in 1902, kind of a preventive measure, way to battle off storm surge, which is one of the number one killers if you have these tropical systems.
Now, back in 1900, this sea wall obviously was not here and you had one of the biggest natural disasters in America's history with over 8,000 people that lost their lives. Now, in 1902 they built the wall, and that is really been a great thing for this island. It has taken several hits over the years, but because of the wall it certainly has made matters a little bit easier to say the least, to deal with. It's easier to deal with today again because the rain, the wind not quite as bad as it could have been. You'll notice these shops across the street they have been boarded up. The wind really never got that strong, to be a threat or anything although we have seen some places boarded up farther down.
But we're having a beeping good time here today. A lot of the residents still going around. You see them driving up and down parts of Sea Wall Boulevard. A few people have been down here too, braving the elements. Actually, in terms of life stopping from the storm, it just hasn't happened. All the power is still here. No evacuations. It's a wet time, but things could be worse. Let's send it back to you.
HARRIS: All right. Reynolds, appreciate it. Thank you.
COLLINS: Now let's take a moment to get more on the storm's strength and where it's dumping a lot of rain. We saw some of that that already with poor Reynolds standing out there. Jacqui Jeras is in the Severe Weather Center now with more. Hi, Jacqui.
JACQUI JERAS, CNN METEOROLOGIST: Hey, guys. Yes. We have some new breaking information that we want to bring along to you right now. And it has to do with incredible rainfall and some flooding now. We're going to take you in on google earth. We got word that i-10 is closed. This is east of the Houston area and it's between Mile Marker 812 and 813. This is near the town of Wallaceville and Hankamer. Doppler radar is estimating that four to six inches of rain has fallen here, causing flooding along i-10, and this is very near highway 61 if you're familiar with the area. So i-10, a small section of it, is closed due to some of that flooding.
We do think flooding is our greatest threat here at this time, but wind could also be an issue. We just got reports of wind gusts of 68 miles per hour right at Sabine Pass which is right about here. That was a gust. Now we're starting to get confirmation of 60-plus- mile-per-hour gusts on the shoreline. There you can see all the rainfall which continues to come down. The center of circulation here pushing near the i-10 corridor. You can see those stronger thunderstorms moving into the Houston and Galveston area. There you can see it right along the interstate here. So expect to see the downpours and the urban flooding in those cities. We think widespread rain amounts of one to three inches on the outer edges and then three to six possibly locally more within the path and just to the right of Edouard still packing winds around 65. We'll watch for the winds to start to pull off a little bit as we head into late morning and early afternoon. That breaking news again, I=10 closed between 812 and 813 mile markers near Highway 61. So watch out for that water. That's our biggest problem today.
COLLINS: Yes. And don't drive through it.
JERAS: Don't drive through it.
COLLINS: Can't say it enough. All right, Jacqui.
JERAS: turn around, don't drown.
COLLINS: thank you. We'll check back later on. Absolutely.
We do have to get ready for the storm. People in Texas stocked up on the staples, you know, bread, water, ice. That kind of thing. The storm could knock out power to thousands of homes.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I lived through Hurricane Alesha. I was 11 years old. We lost everything we owned there. We lived right on the sea wall. Actually, waves crashing into our yard. I think if I can survive that, we can survive this tropical storm, even if it turns into a category 1. We'll be good.
(END VIDEO CLIP)
COLLINS: The National Hurricane Center says southeastern Texas could get up to 10 inches of rain.
HARRIS: Call in the cleanup crew and how. A powerful storm ripped Chicago last night, causing all kinds of problems. More than 200,000 people without power this morning. Look at that light show. This was the scene at Wrigley Field. Fans were moved out of the stands as the storm rolled through and tornado warnings popped up. At O'Hare, more than 350 flights were canceled.
COLLINS: A new earthquake rattles China's Sichuan province, that's the same area devastated by a powerful quake in May that killed almost 70,000 people. Today's quake a magnitude 6.0. Officials say one person was killed, five others seriously injured. The quake happened just a few hours after the Olympic torch relay reached the province. This is the last leg of the relay before the flames officially opens the Beijing games on Friday.
HARRIS: Osama Bin Laden's driver today at Guantanamo Bay, the jury is deciding the fate of Salim Hamdan. It is the first U.S. war crimes trial since World War II, Hamdan is accused of helping Bin Laden carry out the 9/11 attacks. He is charged with conspiracy and supporting terrorism. If found guilty, Hamdan faces life in prison.
COLLINS: Tennessee church shooting. A court hearing today for the accused gunman. You may remember the attack just over a week ago in Knoxville. Jim Atkinson is accused of walking into a Unitarian Church and opening fire. Two people died, seven were wounded. According to police, Atkinson said he targeted the church because it had been active in liberal issues. He faces first-degree murder charges.
HARRIS: Your money, your concerns, "Issue number one" here at CNN, relief at the pump. Let's get started there. This morning we've seen gas prices drop a full penny. OK. Today's national average, $3.87 a gallon. That's about 24 cents less than a month ago. But energy prices are still near record highs and they're fueling a GOP protest on Capitol Hill. About two dozen republican members of the House are refusing to take their summer break. They're demanding a vote on an energy package, the new policies would include offshore oil drilling. Interest rates likely to hold steady today. The economies top policy makers, the Federal Reserve Board meeting today. They're expected to hold rates steady.
COLLINS: Gas, oil and more. The two presidential candidates talking possible solutions to the nation's energy woes. Barack Obama in (Lansing) today. you saw him just a few minutes ago. And now still talking. Live pictures there coming out of Ohio, he is putting forward an energy plan that is now open to offshore drilling. John McCain visits a nuclear power plan in Michigan today. He wants the U.S. to build more of them. McCain advocated more offshore drilling yesterday in Pennsylvania. He also stumped at a motorcycle rally in Sturgis, in South Dakota.
HARRIS: Ready for the games to begin. China tightening security all around Beijing to keep the Olympics safe.
COLLINS: I want to a moment to get out to CNN's Sean Callebs. He is standing in Vidor, Texas to talk a little bit more about this tropical storm we've been following, Edouard, of course.
So how do things look there?
SEAN CALLEBS, CNN CORRESPONDENT: Well, Edouard has caused problems a little bit of a problem here, just off interstate 10 here in Vidor. If you look behind me, you can see a number of police officers, tow trucks, a lot of flashing lights. In the distance there's a 18-wheeler that flipped.
What happened, Heidi, was actually coming down the interstate right up through here. There is a great deal of construction going on. He lost control in the wind which you can kind of hear is whipping around now. He hit this retaining wall, flipped over, ripped the oil pan off the bottom of his truck. And as he rolled through this way, he spilled oil and diesel fuel all over the road.
So not only are they trying to clear this truck out of the way and keep this interstate open, but they've also brought some machinery in, they are going to put stand down on the road to cover that oil. Just one kind of graphic reminder of what this wind can do because right now it's very calm and then it will just whip up, a gust will blow and it doesn't take much to get a big rig like that going in weather like this. Right now we're not experiencing any rain, Heidi, but I can tell you we started out today in Clear Lake, Galveston bay, we've been driving through some very, very heavy bands of rainfall.
I heard Jacqui talking about the interstate that's closed, I-10. That's about 45 miles down that way. We may be heading that way next so perhaps we'll bring you a report from there not terribly long from now. Just a lot of problems out on this road. Further inland, it didn't turn out to be the soaker or the concern with the wind down the coast, but boy it could really pour up in this area and cause a lot of problems throughout the day.
COLLINS: Yes. And I'm glad you said that, Sean. Because I was wondering about it, if it was the same stretch of road that Jacqui was mentioning in our last hit with her. So, I appreciate that. Let us know if you decide to travel and take a look at that. Sure do appreciate that. Sean Callebs, for us from Vidor, Texas this morning.
And of course, we are tracking Edouard today right here in the NEWSROOM. The tropical storm a big rainmaker for Texas and Louisiana. Keeping our eye on the flooding.
HARRIS: President Bush arrived in Seoul, South Carolina, this morning, the first stop of his week-long swing through Asia. He will meet with the country's conservative pro-American president. His trip will also include stops in south Thailand and China where he will be attending the Beijing Olympics.
Protecting the games. Just one Olympic hurdle for China's government. Our John Vase has a look from Beijing.
JOHN VAUSE, CNN CORRESPONDENT: Anti-aircraft missiles around the national stadium. Heavily armed police roaming the airport and with metal detectors and bag checks in the subway, it doesn't look like much of a party in Beijing. More like a police state with overdraft.
DR. DAVID FINKELSTEIN, DIRECTOR, CHINA STUDIES CENTER: The Chinese are clearly hyperfocused and hyperworried about security. And this is something they've been working for at least three or four years by now.
VAUSE: More than anything else, the Chinese say they are worried about terrorism. The state media reporting last month an anti- terrorism force almost 100,000 strong seen here during a recent exercise was placed on high alert.
VAUSE (on-camera): Police have now set up checkpoints on many roads into Beijing. Vehicles are being stopped and then searched. They're looking for any possible threat, both Interpol and the U.S. State Department say there is cause for concern, especially from Muslim separatists in the northwest of the country with possible links to Al Qaeda. VAUSE (voice-over): Earlier this year, Chinese officials say they stopped a plot to bomb Beijing and Shanghai and poison the water supply during the Olympics. In March, a flight crew allegedly prevented a hijacking. Muslim separatists from the rest of Xinjiang region were blamed both times.
STEVE VICKERS, CEO, INTERNATIONAL RISK, LTD.: I doubt that that group has the wherewithal to make it to central Beijing and to intervene in the Olympics, but it is a threat and there are many other threats.
VAUSE: Threats like a biological attack. Beijing will make all preparations for a biological attack like anthrax. They even made antibiotics and vaccine, says this government official.
At the same time, thousands of foreigners like Sabrina who works for a private charity and asked not to reveal her full name have been kicked out of the country in a pre-Olympic visa crackdown.
UNIDENTIFIED FEMALE: I think a lot of people never looked at the rules before because they were never really enforced heavily. The authorities wanted to ensure protesters from groups like Save Darfur, Free Tibet, don't make it into China in the first place. And if they do, they'll be closely watched. Security analysts say china has spent hundreds of millions of dollars on video surveillance and facial recognition technology. Beijing is wired and will stay that way after the games.
RICHARD CHACE, SECURITY INDUSTRY ASSOCIATION: There's been a lot of issues about this raised, about how the technology will be used after the games or even during the games. That is a real concern. The legacy issue here is yet to be written.
VAUSE: Beijing always wanted these Olympics to be a kind of coming of age celebration. Three decades since this country opened up to the rest of the world and began a breakneck economic transformation. But the leader at the time warped Dao Xiaoping, when you open the window, the flies can come in. It seems for the next few weeks Chinese officials will be desperate to keep the flies out. John Vause, CNN, Beijing.
HARRIS: And you know, you can also follow all of the Olympic action at CNN.com in a special section I think we've mentioned the fan zone this morning. This unique site brings CNN's global resources right to your computer. Try this out. Just go to CNN.com/fanzone.
COLLINS: As part of CNN's ongoing effort to help you make an informed choice on the election, we're getting more time to hear what the candidates are saying in their own words on the campaign trail. Here is John McCain now talking energy in Lafayette Hill, Pennsylvania.
(BEGIN VIDEO CLIP) SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: We need an all of the above approach. We need to aggressively develop alternative energies like wind, solar, tide, biofuels and geothermal. But we also need to expand our use of existing energy resources here at home. That means we need more nuclear power. It means we need clean coal technology. And that means we need to offshore drill for oil and natural gas. We need to drill here, and we need to drill now.
And anybody who says that we can achieve energy independence without using and increasing these energy resources either doesn't have the experience to understand the challenge we face or isn't giving the American people some straight talk. Unfortunately, Senator Obama continues to oppose offshore drilling. He continues to oppose the use of nuclear power. These misguided policies would result in higher energy costs to American families and businesses and increased dependence on foreign oil.
We're not going to achieve energy independence by inflating our tires. I'm going to lead our nation to energy independence and I'm going to do it with a realistic and comprehensive all of the above approach that uses every resource available to finally solve this crisis. As a lot of Americans know, the Congress, doing nothing, decided to go on a five-week recess without addressing the energy challenge that's affecting Americans every single day in their ability to go to work and their ability to do their jobs and their ability to keep inflation down as they're trying to do here at the National Label Company. And they need a Congress that will act.
Congress should come back into session. Congress should come back into session, and I'm willing to come off the campaign trail. I call on Senator Obama to call on congress to come back into town and come back to work. Come off their recess. Come off their vacation. And address this energy challenge to America and don't leave until we do. Republican and democrat joining together and a very vital part of that is nuclear power and another vital part of that is offshore drilling. We have to drill here and drill now.
COLLINS: John McCain in his own words.
Talking energy, Barack Obama offers up his comprehensive plan. There he is, live pictures coming in of him, town hall meeting in Youngstown, Ohio.
HARRIS: Well, a legendary name in organized crime now on a criminal docket in Tampa, Florida. Police there have arrested John Junior Gotti, son of the late boss of the Gambino family. Two sources with knowledge of the investigation tell CNN that the 44-year-old Gotti faces murder conspiracy charges. More details are expected next hour in an FBI news conference. The older Gotti was nicknamed, you may recall, the "Teflon Don" for his history of avoiding conviction. He died in prison six years ago.
COLLINS: Crisis management. Barack Obama offers a position change on energy, plus some tough words for John McCain. CNN's Jessica Yellin has the story.
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Thank you, Lansing!
JESSICA YELLIN, CNN CORRESPONDENT: From Barack Obama, a change of heart. Just a few weeks ago he was against swapping oil out of the nation's emergency oil reserve but told a crowd in Michigan -
OBAMA: We should sell 70 million barrels of oil from our strategic petroleum reserve for less expensive crude which in the past has lowered gas prices within two weeks.
YELLIN: The campaign explains the switch saying that current high gas prices constitute a crisis for many Americans. And that it's just one piece of what they call a comprehensive long-term plan to reduce America's use of foreign oil. The reversal comes just as Obama is launching a stepped-up attack on McCain, accused him of having a do-nothing track record on energy.
OBAMA: I could not agree more with the explanation that Senator McCain offered a few weeks ago. He said, and I quote, "our dangerous dependence on foreign oil has been 30 years in the making and was caused by the failure of politicians in Washington to think long-term about the future of the country. What Senator McCain neglected to mention is during those 30 years he was in Washington for 26 of them.
And in all that time, he did little to reduce our dependence on foreign oil.
YELLIN: He charges McCain supports more offshore drilling because he's putting Big Oil ahead of American consumers. It's a line of attack Obama highlights in a new ad out today.
UNIDENTIFIED MALE: Now Big Oil is filling John McCain's campaign with $2 million in contributions.
YELLIN: But the McCain campaign points out Obama also received money from oil and gas money employees, more than $300,000 this year alone. Obama outlined his energy proposal, including giving consumers an energy rebate up to $1,000 per family paid for with oil company profits, and to put one million plug-in hybrids on the road within six years, in part by giving American automakers $4 billion to develop the cars and giving consumers $7,000 tax credits to buy them. His ten- year goal?
OBAMA: In ten years, we will eliminate the need for oil from the entire Middle East and Venezuela.
YELLIN: That's a message well suited to Obama's audience. He gave the speech in Lansing, Michigan, where voters are all too happy to hear about any plans to re-invest in the hard-hit American auto industry. Jessica Yellin, Washington.
HARRIS: OK. Watching Edouard, a live shot off the coast of Galveston, Texas, the tropical storm comes ashore bringing rain and wind. Pretty nasty day there in Galveston, but it could have been much worse.
HARRIS: Welcome back, everyone, to the CNN NEWSROOM. I'm Tony Harris.
COLLINS: Hi there everybody. I'm Heidi Collins.
Dodging a bullet along the Texas Gulf coast this morning. Tropical Storm Edouard made landfall a little over two hours ago. But, it's not packing as much of a punch as many forecasters feared.
Our Reynolds Wolf is live now in Galveston, this morning.
Hey there, Reynolds.
REYNOLDS WOLF, CNN METEOROLOGIST: Hey, Heidi.
Things are getting a little better here. The rain is beginning to let up, but we're still getting some winds in here. I'd say some of these right around 30 miles an hour or so, an occasional one over tropical storm force, just around 40. Really not that bad at this point.
To give you an idea of what's happening around me, you see plenty of traffic moving around parts of the Seawall Boulevard. In terms of the city itself, here in Galveston, there are no evacuations. Power is still on for the time being. People have been out and about, walking around. Many of the surfers, which you don't see now, were out enjoying some of the swells.
At this point though, the story is going from being a big rain- maker and -- rather a big wave maker and a big wind maker to a big rain-maker. Once the storm comes on shore the big threat is going to be types of some flooding for parts of Texas. That's kind of the good and bad thing, Heidi. Because remember Texas, they're absolutely desperate, desperate for some rainfall. So that is certainly a good thing.
Rainfall really good for Texas, the flooding is something they could do without and that is the concern. Speaking of rain, I'm going to take our Joel de la Rosa (ph), he's our photographer, take his little -- there you go -- little cloth and clean off the lens so folks at home can get a better idea of what's happening.
COLLINS: It didn't work, Reynolds.
WOLF: It didn't what? It didn't work too well?
COLLINS: Not so great. But we can see it. Sorry, go head, sorry. WOLF: Good to know. Well, I'll tell you one thing though.
Remember, we're very fortunate the storm didn't get stronger. A lot of times right before these systems -- right before they get onshore, they run into a batch of really warm water, which is like jet fuel to these storms.
And it really didn't intensify. So, it stayed right as tropical storm when it came onshore. Had it dropped a little bit farther to the south, it may have come ashore right here to Galveston. And you'll notice if you look across the street you'll see the Gulf of Mexico and there's a little bit of a dropoff. That drop-off is part of that seawall that was built back in 1902, as kind of a protective measure to keep this area safe.
Now, you'll remember a few weeks ago, we were way to the south in South Padre Island, another barrier island that's really, really low, only about 10 feet of elevation at its highest point. So, the Barrier Islands seem to be really susceptible to these storms. Thankfully because of the seawall, Galveston, much safer than it was, back in 1900, when over 8,000 people were killed in America's most deadly natural disaster.
That's the story from here. Again, it looks like we dodged a bullet. Certainly thankful. Let's send it back to you in studio.
COLLINS: Yes. No question about that.
All right, Reynolds. Appreciate it. Thank you.
HARRIS: Let's get another perspective on the storm's strength and where it is heading. You know what that means.
Jacqui Jeras in the severe weather center.
And Jacqui, give us a sense of where this storm is headed and what it's doing as it moves further inland.
JERAS: Right. Well, it's weakening a little bit. So, that's some good news. It's moving fast enough that flooding won't be a huge issue. But as you know, we've been getting reports of some flash flooding going on along I-10, a small section of that closed down now, east of the Houston area, kind of in between there and Port Arthur.
You can see the real heavy rain bands coming in along I-45 right now as well. This is pushing into the Houston area. Airport delays there are about two and a half hours, that's down from give or so. Here's Beaumont, here's Port Arthur. And you can see you're kind of in between bands, so you're getting a little bit of break. But, our producer Aaron Cooper, arrived there a while ago and he's telling us that there are many downed power lines and also lots of tree branches down. So, you still want to stay inside even though we're getting this little bit of break.
And you're going to see those wind gusts come in again with this next little feeder (ph) band that's going to be pushing through that area. So the threat still is high out there. You don't want to go outdoors.
There you can see I-45 and those strong thunderstorms east side of Houston, over towards Bay Town, could see gusts well beyond 50, maybe 60 miles per hour in some of those thunderstorms.
Rainfall estimated already near Port Arthur, between four and six inches. We think three to six widespread within that path. But even locally, heavier amounts are going to be possible here, one to three on the outer areas of Edouard.
There you can see some of the wind speeds, these are sustained winds, Beaumont at 29 miles per hour. And there you can see the track. It's going to still stay at tropical storm status, we think, by later on tonight. So, still packing a punch.
Now, let's talk of more specifically about some of these airport delays. There you can see two a half hours up out of Intercontinental. 45 minutes at Newark. We also had some problems last night and earlier today in Chicagoland area. Thunderstorms passing south of you, but tornado warning with lots of damage across parts of Chicagoland area. They had to roll up the tarps at the Cubs game last night and cancel that one early, unfortunately, due to those storms. And they're going to continue to push on off to the east. Go Cubbies.
COLLINS: Yes, go Cubbies. And go guys with the tarp. Boy, it's always amazing how they do that.
JERAS: I know! They really protect the field. It's amazing what they do.
COLLINS: Yes. All right, Jacqui. Thank you.
HARRIS: And happening today, a Pakistani scientist due to be arraigned in New York. Aafia Siddiqui is accused of shooting at FBI and U.S. Military officers who were questioning her. That happened last month in Afghanistan. The FBI had been looking for her for years as an al-Qaeda suspect.
(BEGIN VIDEO CLIP)
And here is a chaotic scene in Seoul, South Korea today, as President Bush showed up for his visit. Thousands of protesters hit the streets demonstrating against his trip. But it wasn't all anti- U.S. There were also welcome rallies for the president.
(END VIDEO CLIP) ` COLLINS: Extended duty ordered for about 1,200 U.S. Marines in Afghanistan. They were supposed to come home at the beginning of November. Now they will stay until the end of November. The Marines, mostly from air ground combat center at 29 Palms, are serving as trainers for the Afghan army. HARRIS: And bad weather delaying the evacuation of the last avalanche survivor on K2, that's the second highest mountain in the world. Right now the climber is at base camp and we're told he has severe frostbite and needs to be hospitalized. But with the bad weather right now, choppers can't get in to airlift him out. Now, yesterday, two other survivors were plucked from the mountaintop. They're also being treated for frostbite. 11 other climbers on this expedition were killed in the ice avalanche.
COLLINS: One airline gives passengers the cold shoulder. Want a blanket? Well, it's going to cost you. Issue number one, with our expert up next.
HARRIS: So, no Poppy Harlow today. You're stuck with me. Can't let the day go by without your Energy Fix. Oil prices below $120 a barrel this morning. The fist time we've been able to say that in what, three months. The reasons run the gamut.
First you can thank Edouard, the tropical storm that landed on the Texas coast, this morning. It did not disrupt oil production in the Gulf of Mexico. That has helped the price of oil drop $5 over the last two days. Another
reason oil prices are sliding, the weak U.S. economy. A Commerce Department report shows strapped consumers cutting back in June, as gas prices surged above $4 a gallon. Now, as consumers cut back, listen to this, demand suffers and that means lower prices. Continue to cut back. Continue to cut back.
Gas prices have now recorded their 19th straight drop. And now set at $3.87 a gallon, the AAA nationwide average is down about 24 cents, or 6 percent from the record high of $4.11 reported just last month. Still last year at this time, we were paying more than a dollar less, just $2.84 a gallon. Experts expect the gas prices to fall further if oil prices can hold at these levels.
Look, we want to hear what you're doing to save on your own energy. What kind of energy fixes are you incorporating into your own lives? Send your videos, your pictures, your stories to ireport.com/energyfix. And what knows? Your story might end up being a part of our Energy Fix segment.
COLLINS: Airline passengers, here's something else you're going to be paying extra for -- pillows and blankets. And they're so nice and comfy too, aren't they? Jet Blue charging seven bucks. The reason? Once again, the airline's desperate need to offset higher fuel costs.
So, Ben Mutzabaugh, is a travel reporter for USAToday. He often helps us sort these things out.
I don't know if it's possible this time around, Ben. We keep seeing these fees, these add-ones, when really, aren't we talking about fuel costs? BEN MUTZABAUGH, USATODAY: Yes. These are all about fuel costs.
And you know, and you're right, we've been seeing these. And Jet Blue is not even the first one to charge for a pillow or a blanket. Air Canada, Alaska Airlines, some other airlines have beat Jet Blue to the punch. Although this one is a little unique. $7 is by far the steepest fee we've seen for a blanket and a pillow, granted it's a combination.
COLLINS: Yes. But the pillows are so puny. I can't believe anybody would even come close to that. I guess they don't have a choice.
MUTZABAUGH: Well, we'll find out. You know, we'll see if people are willing to embrace this or not. But, as you said, this is really all about fuel costs.
You know, just like we're paying in the gas pumps, the price airlines are paying for fuel has gone up so much. And why they're adding on these fees instead of say, just raising the fares by $15, or $20, even $30, airline CEOs say they're afraid that they can't raise fares as quickly as oil prices went up.
I talked to Jet Blue's CEO, not about this, but about 2 months ago. And he said the problem is not only how much it's gone up, the price of fuel, but how fast. He said, if you start charging someone double for a product that they're used to paying half as much for a year ago, they're just not even going to buy. Here, if fares only go up say, 10 percent or 20 percent, you might still buy. And then of course, you get the bag fee, you get the pillow fee, whatever else you want to do. So, you're still keeping some of your customers and hitting them later down the road, for a little extra cash.
COLLINS: Yes. And people may not understand.
You know, the last thing that they want to do is raise the ticket prices. Because when we talk about profitability, especially for the airline business right now, it's kind of -- and I don't want to overstate the issue -- but kind of nonexistent.
I mean, when you raise the fare price, the base price of an airline ticket and your airline doesn't show up first you know, when you go online to try to make a reservation, the airline loses.
So it's really the last thing they want to do, to raise the ticket prices, right?
MUTZABAUGH: Absolutely. It's a cutthroat business. And just like you said, even a difference of $5 or $10 can drive some customers to another airline or competitor.
Now, keep this in mind. A lot of airlines like U.S. Airways, had a $300 million or so profit about this time a year ago. Lots of airlines were in the black last year at this time. But the cost of oil has gone up so much, that airlines are saying even today, that a fuel even at $90 or so, which seemed cheap -- I mean, expensive, not that long ago, they would be making profits. Not only profits, but in the hundreds of millions of dollars this quarter.
I think that really drives home the impact of how high these fuel costs have had. And you know, and about these fees, we hear a lot of complaints where flyers say, oh the airlines are nickel and diming me. There are some flyers, especially business travelers who say, you know what, I'd rather have the base fares stay low. And if I want a $7 pillow, if I want a $6 meal, if I want a spend $5 on in-flight entertainment then I'll pay it. But at least it's not in fare for something I'm never going to use.
COLLINS: Yes. And your frequent fliers I think, have been saying that for years, quite frankly.
I guess the last question I want to ask you about is, when will we see this change, if ever? I mean, what does the future look like? Give us a year ahead. Because if I were to show you some of the prices from just one year ago, for ticket prices, we're talking about increases of 276 percent for one airline, 227 -- there you have it, for another.
And you know, you've got to wonder how high it's going to go here.
MUTZABAUGH: You know, and I think that's the question that not only we as consumers are asking, but I think it's also the question a lot the airlines are asking.
I think they're waiting to see where oil sets in. The fact it's gone down here this week, certainly is an encouraging sign for everyone, including the airlines. I think right now the airline CEOs are really waiting -- the companies are waiting to see where the new equilibrium sets in.
Once they have a good sense of what it's going to cost going forward, they'll have a better idea. You know, for the past year, we've seen it go up you know, sometimes 5, 10 percent in a week, when you think it's already hit a high. And it seemed like there was no end in sight.
Maybe now oil will settle in at a consistent price. I think once that does, the airlines can adjust to a new reality. As for these fees, as long as fuel stays high and especially if it keeps going up, I think we'll continue to see airlines try to find even more ways to get revenues.
And the downside is, once the fees are in place and consumers are used to them, I don't see them coming away, even when fuel comes down, unless an airline like Southwest, with such a competitive advantage that they can force others to do it. But I think these fees are here for a good while.
COLLINS: Yes. Yes. We'll talk about Southwest another time. It's such a completely different model.
Anyway, Ben Mutzabaugh, we certainly appreciate it as always, you breaking things down for us.
USAToday's Ben Mutzabaugh. Thank you.
COLLINS: Oh, do I have a good one for you. Stick around for this because remember this video we showed you just a little while ago?
HARRIS: Yes. Yes.
COLLINS: This is the wedding taking place in the U.K. in the sky, wing walkers. They're not doing a lot of walking. But, they are getting married. There's the vicor (ph). Guess who we're going to talk to? We have the groom on the phone. He's going to be telling us what in the world was going on and why he chose to take his bride this way.
HARRIS: I'm bringing you more now of what the candidates are saying in their own words, part of our commitment to help you make a more informed choice on Election Day. Here's Barack Obama talking to supporters in Youngstown, Ohio, this morning about his new energy plan.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: So if I'm president, I'm immediately going to direct the full resources of the federal government and the full energy of the private sector to a single overarching goal: in 10 years time, we are going to eliminate the need for oil from the entire Middle East and Venezuela. We're just going to eliminate it in 10 years time.
And to do this, we'll invest $150 billion over the next decade, leverage billions more in private capital, to harness American energy and create 5 million new American jobs, jobs that pay well and won't be outsourced, good union jobs that lift families out of want and out of need and revitalize our economy.
Three major steps that we need to take to achieve this goal -- first, we're going to commit ourselves to 1 million 150-miles-per- gallon plug-in hybrids on the road within six years, 1 million new energy-efficient cars. And they're not going to be made in Japan, they're not going to be made in China. They're going to be made right here in Ohio, right here in the United States of America.
(APPLAUSE) We've got the technology. We've got the technology. The problem is, the car companies need to retool and they need a partner in the federal government. George Bush -- took him six years before he would meet with the big three automakers. We can't have that. The minute I take office, we're going to sit down with those car companies and we are going to say to them, what do you need to retool to meet our energy-efficient future? And we will give them the help that they need as long as they are making the changes that are going to make a difference in terms of bringing jobs back to Ohio and Michigan.
We'll do it by investing in research and development, providing $4 billion in loans and tax credits to auto companies so they can retool, and by giving consumers a $7,000 tax credit to buy these new fuel-efficient cars. That's how we're going to make sure that American workers and American companies thrive in the 21st century economy.
Second, we're going to double the amount of energy that comes from renewable sources by the end of my fist term. That means investing in clean technology research and development that's occurring in facilities all across the country, it means investing in tax incentives to encourage the production of renewables like wind and solar, power -- and developing the next generation of biofuels, it means finding safer ways to use nuclear power and store nuclear waste and to use more coal, one of America's most abundant resources, it means working to modernize our National Utility Grid so it can accommodate these new power sources without being overrun by blackouts.
(END VIDEO CLIP)
HARRIS: Illinois senator, Barack Obama. Check out our Political Ticker for all of the latest campaign news. Just log on to CNNPolitics.com, your source for all things political.
COLLINS: A walk down the aisle? No. That's too easy. How about a wedding ceremony walking on the wings of a speeding biplane? The groom is back on the ground and on the phone with us. Stick around.
COLLINS: On a wing and a prayer. Oh, and a preacher, too. Yes, love was in the air, along with the bride and the groom. It's a wedding ceremony that you're looking at held this morning over central England. You saw them share their vows live last hour right here in the NEWSROOM.
And people, believe it or not, we've got the groom on the phone. Barren McWaters is with us now.
Barren, can you hear me?
VOICE OF BARREN MCWATERS, GROOM: Hi there. COLLINS: It's Heidi Collins here at CNN in Atlanta.
I don't know if you knew this or not, but while you were getting married, we had you routed up live here on CNN. What do you think of that?
MCWATERS: Really? Amazing. I have not seen the pictures yet, but I'm looking forward to seeing that footage.
COLLINS: Well I guess first of all it's probably appropriate to say congratulations to you. Tell us what we're seeing here. I'm not sure you can see the pictures right now, but we're looking at three different planes. These are biplanes. And I understand -- I've done a little research, not sure that I've got it right -- but Team Guinot, these guys are a formation wing-walking team that travel the world and compete.
Are you guys part of that team? How did you come up with this idea?
MCWATERS: (AUDIO GAP) ... up with the idea for doing the wedding this way. It was actually Katie (ph) who had seen (ph) an ad for Team Guinot and then dared me to (AUDIO GAP) ... and it all went from there. It just got bigger and bigger and better. And it was all magical really, just amazing.
COLLINS: Now, I have to tell you, you're talking very matter of factually like this, like this was just a little decision you guys made -- and, oh I think we'll kind of do it in the air.
You said -- you were breaking up a little bit -- but you said your now-wife came up with the idea?
MCWATERS: Yes. She had seen an ad for the wing-walking team in Vienna. And then dared me to get in touch. And then I got in touch and sent them our story, how we met, how I proposed, and that we'd love to get married this crazy way.
COLLINS: Yes. I understand Team Guinot also offers the opportunity to go up on these planes and do some of this -- quote -- "wing-walking." So people can pay to do that, and clearly that's what you guys did.
OK, so now that it's all done, what do you think as you look back? You're a brand new groom.
MCWATERS: Yes, it has been an amazing experience, the whole day. And it's not over yet, we're just going to carry on partying and celebrating our love for each other.
COLLINS: Well we also understand there was quite a crowd gathered down below and they were able to hear the actual ceremony through a PA system.
What was the guest reaction?
MCWATERS: I think they were all shocked and amazed, truly in awe really -- just (INAUDIBLE). It was something special to see.
COLLINS: Oh, yes. It's special all right. And we're going to have you back on your first anniversary and find out what you guys are going to do to celebrate that because this was pretty remarkable.
Barren McWaters, we appreciate you so much, your story.
MCWATERS: Thank you.
COLLINS: Wish you the best of the luck with your new marriage, and congratulations.
You're informed with CNN.
Good morning everyone, I'm Tony Harris.
COLLINS: Hi there, everybody. I'm Heidi Collins. Developments keeping coming into the CNN NEWSROOM on Tuesday, August ah.