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Gas Prices Spike as Refineries Shut Down; Cohn Breaks Silence on Charlottesville; Harvey Takes Aim at Texas; Kasich and Hickenlooper Unity Ticket; Corker's Competence Comments; Trump's War with GOP Lawmakers; Texas Braces for Flooding; Harvey Expected to be Category Three. Aired 9:30-10:00a ET

Aired August 25, 2017 - 09:30   ET

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

[09:30:00] JOHN BERMAN, CNN ANCHOR: All right, this morning, Texas bracing for impact as Hurricane Harvey roars toward the coast and heads straight for the heart of America's oil refiners, which could mean higher prices at the pump. Nearly half of the U.S. petroleum refiners are on the Gulf Coast and one third directly in the storm's path. And platforms and rigs already shutting down in anticipation.

I want to get what this means from you, CNN's chief business correspondent Christine Romans here with that.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Hi. It means higher gas prices. And we already saw it overnight. Another penny overnight. Maybe five to 15 cents higher gas prices you'll see over the next few days.

Now, the good news is, that will be maybe a week of higher gas prices probably in the south, the southeast, the mid Atlantic. And here's why. About 17 percent of U.S. oil refining capacity is right there along the Gulf Coast. So production is more like 17 percent of crude oil production.

So if you look at those yellow spots on the coast, those are oil refineries. Look at all of those offshore oil rigs and platforms. And I mean this -- this beast is coming right through this really important part of our energy infrastructure.

Now these big companies, I mean Anadarko and Shell and Conoco, they have already evacuated their manned rigs. They are literally tying stuff down and getting guys off those rigs so that people will be safe. And they know how to do this. There's a lot of infrastructure there.

But you will see gas prices rise a little bit because of the disruption in that refining capacity.

One of the things -- when you refine crude oil, you know, you get all these byproducts, chemicals. Those chemicals are all stored in big vats, in warehouses all along this region. So it's really important to watch how long there's a lot of water on the ground, roads inaccessible and electricity out. That could be disruptive to the chemical industry.

BERMAN: A risk to watch to be sure.

One non-hurricane bit of financial news we want to ask about. Gary Cohn, of course, the president's chief financial economic adviser in the White House saying he was reluctant to quit after Charlottesville but saying he's very disappointed with the administration's response. The market is very attached to Gary Cohn.

ROMANS: The market does not want him to quit. They market wants him to be a grown up in that White House talking to Congress, figuring out with Steven Mnuchin, the Treasury secretary, how to get tax cuts. If not tax reform, then tax cuts for business. A lower corporate tax rate.

And there were a couple of times in the last week when there were some rumors in the market that maybe he was under a lot of pressure to resign post Charlottesville and the market didn't like that. So Gary Cohn is a grownup in the White House that Wall Street -- top Wall Street folks would like to see remain.

BERMAN: All right, Christine Romans, thank you very, very much.

ROMANS: You're welcome.

BERMAN: All right, as we've been saying, Hurricane Harvey on track to become a category three storm by the time it makes landfall and it could be a category three by the time we get our next update at 11:00 a.m. And it could bring up to three feet of rain. Also, tornados throughout the day.

I want to bring in former director of the National Hurricane Center, Bill Read, is on the phone with me this morning.

Bill, just give us a sense of your area of biggest concern with this storm.

BILL READ, FORMER DIRECTOR, NATIONAL HURRICANE CENTER (via telephone): Well, I have two of them actually. The immediate landfall, which is a traditional major hurricane hitting a very storm surged prone section of the Texas coast late tonight and early tomorrow from Corpus Christi to just southwest of the Houston/Galveston area. That's the traditional hurricane.

Then the other concern -- and this is a bizarre one -- is something I haven't seen in a long, long time is a forecast for this to stall and almost completely stop moving just after coming inland and the incredible amount of rain that we should get out of that is going to lead to probably record flooding on a lot of the streams and rivers through much of the coastal area of Texas.

BERMAN: Yes, we could -- we could see this storm park for almost five days in some places. And we hear three feet of rain. I've seen a 40- inch estimate in some localities. What does that mean? You know, Houston get, I think, 50 inches of rain a year. So when you're talking two feet or more, that's just got to be a huge problem for these areas. READ: Right. And it's not that unusual to get more than 20 inches of

rain. I've counted about ten of those kind of weather events that I worked in my 40 years in Texas. And mostly due to tropical storms that have come inland and died out. But they're usually isolated over a pocket.

The difference here is we're forecasting this over a wide swath. And that's what really concerns me is, think about this. It comes inland. It stops right where it went inland just as the folks are trying to recover and the first responders are trying to help people out from the landfall, all this heavy rain is falling and that will really retard their efforts to do the same down there and get things back to normal.

And then, of course, you have what goes on over the next week effecting major metropolitan areas, anywhere from San Antonio to Houston.

BERMAN: Is there a "why" to this? Why there is so much water associated with this storm? One of the things we've heard from scientists over the last 10 years is that climate change does impact the intensity of many of the storm the that we see.

READ: I'm not -- I probably wouldn't attribute what we're looking at here. This is not an uncommon occurrence to see storms grow and intensify rapidly in the western Gulf of Mexico. That is as long as we've been tracking them, that has occurred. The why for the big rain is the stationarity. The fact that the storm is going to come inland and not move. That's, while it has happened in some cases, had a really big storm come and stall like this is really rare.

[09:35:27]BERMAN: And then it could bend back out over the Gulf as well, which is something people have to watch very closely over the next few days.

Bill Read, thank you so much for your expertise on this.

READ: My pleasure.

BERMAN: All right, we have news this morning about some people eyeing 2020. We're talking about a possible unity ticket. A nationally known Republican in talks with a nationally known Democrat about a joint operation here. We've got new reporting coming up next.

(COMMERCIAL BREAK)

[09:40:13] BERMAN: All right, just in to CNN, intrigue surrounding the 2020 election. Sources tell CNN that Republican Ohio Governor John Kasich and the Democratic governor of Colorado, John Hickenlooper, are considering a unity ticket to run in 2020.

CNN's political analyst Mark Preston all over this story.

First reported in Axios (ph), we should say, this morning.

Preston joins us on the telephone. All right, what's going on here, Mark.

PRESTON: Look, a couple things. What we've learned, just in the past couple hours, John, and as you said Axios (ph) reported this morning, is that John Kasich and John Hickenlooper, two governors, Kasich, the Republican from Ohio, Hickenlooper, the Democrat from Colorado, have had some very, very early conversations about possibly coming together, discarding their political affiliations and running as a unity ticket.

Now, I think this says more about the state of politics right now in America, John. You have the Democratic Party that is still very much in disarray, although we haven't really focused on that because all the oxygen in the room is taken up by Donald Trump.

Which leads us to Donald Trump, where, you know, you have many, many Republicans, including John Kasich, very upset with how he is leading the country right now.

I want to caution that this is very, very, very early on. But we do know that these two governors work very well together. They've already worked on bipartisan efforts to try to fix the health care system. They're going to work on immigration. And really, John, when you look at governors as opposed to senators, and congressman, governors tent to get along a little bit better. They're not nearly as partisan.

BERMAN: All right, interesting development. Mark Preston on the phone.

Let's dig deeper on this.

Joining me now, "New York Times" political correspondent Jonathan Martin.

Jon, two questions here. What does this tell us about the now? And what would it mean?

JONATHAN MARTIN, POLITICAL CORRESPONDENT, "THE NEW YORK TIMES": The now means that President Trump is probably at the (INAUDIBLE) of his presidency right now. His numbers are in the basement. He faced widespread condemnation from his own party for his comments about Charlottesville. And politicians see weakness and they -- then they jump. And John Kasich is no fan of Donald Trump. Has never supported him. They didn't sport him last year and isn't supporting him now.

And so I think that they want to get this out there to suggest that, hey, if the country doesn't like where President Trump is taking us, there is going to be a third party ticket potentially available in 2020.

Now, it's more complicated than that, of course. The fact is, is that it's very hard for a third party to find viability in this country. And so I think, not only as Mark pointed out, this is a ways away, but the practical challenges are immense. Also, one is a Democrat and one's a Republican. They --

BERMAN: And Hickenlooper is the issue here. MARTIN: Yes.

BERMAN: Really, Hickenlooper is the issue because you can make a reasonable case that this would hurt the Democrats more than it would hurt President Trump.

MARTIN: And Democrats would say this to Governor Hickenlooper, two term governor of Colorado, very much in the mainstream of the party would say, John, this is too serious of a time to risk losing the White House for four more years. You can't do this because you might drain votes that could help defeat Donald Trump.

BERMAN: All right, something else is going on this morning. This continuing back and forth between President Trump and the Republican leadership in Congress.

MARTIN: Right.

BERMAN: Obviously you were the first to report this rift, this shouting match, really, between Senator Mitch McConnell, the majority leader, and the president. Just this morning, the president going after Bob Corker, the chairman of the Senate Foreign Relations --

MARTIN: Right.

BERMAN: Who has questioned whether or not the president is stable.

MARTIN: Right.

BERMAN: This is what President Trump said this morning. Strange statement by Bob Corker considering that he is constantly asking me whether or not he should run again in '18. Tennessee, not happy.

MARTIN: It's extraordinary (ph). If you ever say anything nice to President Trump, especially in writing, you're a politician, be careful, because he's going to bring it back up and throw it in your face if and when you criticize him. This is a Trump signature, John. He loves dredging up some previous conversation you had in private to embarrass you when you do deem to criticize him.

What's striking about this is that of the senators, Corker has one of the better relationships with Trump. They talk in private, on the phone. They talk in the White House. The get along pretty well because John Corker was a businessman before he was in politics, made money in, guess what, real estate. So they actually have something in common. And I think Trump likes Corker.

But Corker's comments, by the way, which you've played here many times, were very much, I'm told, premeditated. He knew what he was doing when he criticized Trump last week as sharply as he did. And Trump has not only absorbed a week of coverage about this and is now lashing back, it says that he's got no loyalty, President Trump, John, to the institutional party. He's a lone operator. And when you criticize him, it doesn't matter if you're an "r," a "d" or an "I," he hits back.

BERMAN: He also has no respect for the notion of a private conversation, apparently.

MARTIN: Well, there's that too. There's that too.

[09:45:05] BERMAN: All right, Jon, as I said, you, along with Alex Burns, you know, the first to report this rift with Senator Mitch McConnell.

MARTIN: Yes.

BERMAN: You know, McConnell's staff, the White House, have been doing these back flips to tell us how it's not the case. How they're really getting along quite well. And then the president just keeps on digging. Keeps on poking the majority leader.

MARTIN: Yes. It's in the interest of Senator McConnell and his staff to present more of a public, positive, upbeat image, because they're fate is shared. The McConnell folks want to get bills passed. They want to -- you know, this fall, try to move towards tax reform or at least tax cuts so that next year they have something to go to the voters with.

But, privately, it is safe to say that pretty much every GOP senator, and certainly strategist, is up in arms about this president. They are bewildered why he keeps attacking them day in and day out when, again, they have a shared fate together. It's deeply frustrating to them and I'm not sure how it gets any better because he's not going to change.

BERMAN: I will give you, you know, two words. It could be the safe words for Republicans and the president in this sort of complicated, contentious relationship. The safe word here is tax cuts.

MARTIN: Yes, but that's not how this president -- he doesn't think in the medium term or the long run. He just acts impulsively about who criticized me last. I'm going to hit back. And that clashes significantly with McConnell, who's memoir, John, is called "The Long Game." Three words that this president's now very familiar with.

BERMAN: And, of course, there's one word the president is very familiar with, and that's Russia. And there are these investigations going on right now and this could impact that across the board.

Jonathan Martin, great to have you here with us this morning in New York. Appreciate it.

MARTIN: Thanks, John.

BERMAN: All right, bracing for disaster. We're talking about weather this time. And a direct hit. Hurricane Harvey only getting stronger has it churns ominously off the Texas coast. Professorial storm chaser Reed Timmer right now along the coast. We will go there, next.

(COMMERCIAL BREAK)

[09:51:22] BERMAN: All right, Hurricane Harvey now hovering off the coast of Texas. We want to give you the latest sense of where it's going. Meteorologist Allison Chinchar here with that. Allison.

ALLISON CHINCHAR, AMS METEOROLOGIST: Thank you, John.

Yes, we take a look at the current statistics. Right now still about 110 miles per hour. That is only one-mile-per-hour off from a category three storm. Now, we do expect it to get to category three strength. The question is, when? It could be five minutes from now it gets that upgrade or five hours from now. We know it will happen. The National Hurricane Center says they are expecting it to happen. We just don't know how close it's going to be before landfall when it finally does increase that much.

I will say, in the last hour or two, we've started to see signs of an eyeball replacement cycle. This means as a whole that the storm is trying to intensify and strengthen. Not good news because it's doing it right before landfall. But, again, we'll continue to keep a very close eye on this as it edges less than 24 hours from landfall.

BERMAN: All right, Allison Chinchar, thank you so much. We are watching it very closely.

And joining me now is a man who has make a career of chasing storms like this one, AccuWeather storm chaser Reed Timmer on the phone.

Reed, you're in Port Lavaca, Texas. Why?

REED TIMMER, ACCUWEATHER STORM CHASER (via telephone): Yes, right now this is where we're setting up for the storm. We do have a (INAUDIBLE) here right next to the (INAUDIBLE). We'll be on the north side of the hurricane. And also we're keeping an eye on the tornado (INAUDIBLE) that could emerge as this next band comes ashore. I'm looking out off of to the east. I can see that very dark sky and we do have a band of (INAUDIBLE) approaching.

This next band of (INAUDIBLE) is going to have the highest tornado threat with Hurricane Harvey. And then once that passes, then (INAUDIBLE) going to get inside the eye of the storm. We'll want to be on the north high wall here at Port Lavaca, so we're watching it very closely. If it wobbles back to the left and back to the right.

There's time to decide right now whether we should stay here or if we should head down to Corpus Christi or kind of find an elevated structure in between because when you're chasing a storm like this, you definitely want to be above ground and we're always looking for those elevated, concrete structures to cover the storm, to stay above the storm surge and that (INAUDIBLE) feet of rain that we're going to get from this storm as well and it just hovers over this area.

So this storm is about as life-threatening as it can get down here in (INAUDIBLE).

BERMAN: About as life-threatening as it can get. And it's so interesting that there's danger before the bulk of the storm makes landfall in the form of tornados right now than, of course, after, which is the real risk here, after the storm makes landfall with the rain. It's just going to park over Texas for up to five days dumping up to three feet of rain. What does that mean?

TIMMER: Well, I mean that's really what makes this storm unique as well. And it's been a long time since this region has had a hurricane. I think the last one in 2008 was Hurricane Ivan (ph) and that was a category two. That was a big storm that had major storm surge impacts from Galveston Island and to the east. This storm is coming in further south, but it's also going to impact the (INAUDIBLE), specially with that rainfall.

But this is also going to be a stronger storm than Ivan (ph). It's going to be -- well, actually, a category three when it comes to shore. And what makes it unique is it's stalling out. It's going to dump those (INAUDIBLE) rainfall (INAUDIBLE) what's called warm (ph) rain processes (ph) where you just get prolific rainfall rates (INAUDIBLE) systems. And with this system just meandering over the same area, it's going to dump 40 to 50 inches of rain, possibly even more, through early next week. So that's why we have enough supplies to survive for a week if we have to out here. We'll likely be here for several days. But this whole area is going to be inundated with flash flooding for a long time.

BERMAN: All right, Reed Timer, five days of possible flooding with that storm just parked over Texas before potentially it bends back over the Gulf. This could hit twice.

Reed Timmer, thank you so much for being with us. Please stay safe.

[09:55:01] As we said, Hurricane Harvey is heading toward the Gulf of Texas right now -- actually the coast of Texas. As we speak, we are getting new information, new developments on the strength of this storm. We'll bring you the very latest, next.

(COMMERCIAL BREAK)

BERMAN: All right, good morning, everyone. John Berman here.

At this moment, Hurricane Harvey on the verge of reaching category three strength. The first major hurricane to hit the U.S. in more than a decade. And that is not even the worst part.

Days of torrential rain are ahead. Forecasters say this storm will basically stall over the mid-Texas coast. That means some places could see 30 plus inches of rain. That's in addition to the storm surge, far higher than that. FEMA says this will all add up to a very significant disaster.

Now, we're going to get a new update from the National Hurricane Center this hour. While we wait for that, let's go first to CNN's Nick Valencia, standing pretty much in Harvey's crosshairs in Corpus Christi.

Nick.

[10:00:11] NICK VALENCIA, CNN CORRESPONDENT: Hey, John, good morning.