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The Situation Room

Hurricane Rita Targets Texas; Gas Prices Headed For $5 a Gallon?; New Orleans Rushes to Shore Up Levees

Aired September 21, 2005 - 15:00   ET

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


WOLF BLITZER, CNN ANCHOR: I'm Wolf Blitzer. And you're in THE SITUATION ROOM, where news and information arrive at one place simultaneously. Standing by, CNN reporters across the U.S. and around the world to bring you the day's top stories.
Happening now, it's 2:00 p.m. Central in Texas, where communities all along the coast are evacuating, getting ready for the worst from a massive storm named Hurricane Rita. Could another entire city wind up under water?

In the Gulf of Mexico, offshore oil rigs have been abandoned. Onshore oil refineries are at risk and oil prices are soaring. Could the price at the pump reach $5 a gallon?

In New Orleans, residents once more are forced to leave, as engineers rush to shore up the battered levees. Can they withstand another deluge?

You're in THE SITUATION ROOM.

Hurricane Rita threw a scare into South Florida, but now the target is Texas, with landfall expected early Saturday. The entire coast could be at risk, especially a 250-mile stretch from Corpus Christi to Galveston and beyond. The governor says now is the time to leave. Evacuations are mandatory in Galveston, which is busing out people who can't leave on their own. The low-lying port was leveled by a hurricane a century ago.

Houston residents who may face a storm surge are being asked to move out, and much of the city will shut down over the next two days, as it prepares to ride out the storm.

As coastal residents seek safer ground inland, Texas officials say there are plans to shelter a quarter-million people and perhaps twice that many.

Rita is gaining strength as it crosses the warm waters of the Gulf of Mexico.

To find out where it's headed and how powerful it's likely to be when it gets there, let's turn to our meteorologist Jacqui Jeras. She's joining us from the CNN Hurricane Center -- Jacqui.

JACQUI JERAS, CNN METEOROLOGIST: Well, Wolf, we just got information the last half-an-hour the storm has grown stronger and is now packing winds of 150 miles per hour. That still keeps it in the Category 4 status. However, it's getting close to a 5 now. It's greater than 155 or -- yes, 156 or better would be a major hurricane, a Category 5.

You can see the imagery here in the eye, so clearly defined, a good sign of a very, very strong storm. It's moving off to the west right now at about 13 miles per hour. It's about 750 miles away from Corpus Christi, Texas. We do expect that there are going to be fluctuations in intensity over the next several days, as it makes its trek through the Gulf.

It very well could be a Category 5 for the 5:00 advisory tonight. We also anticipate hurricane watches will be posted, likely at 5:00 tonight. So, watch for those changes as they continue to develop. We will bring them to you. We are expecting it to be a major Category 3, 4 or 5 hurricane at landfall somewhere along the Texas coast. We still cannot rule out western Louisiana. We still cannot rule out extreme northern parts of Mexico.

But, more and more, it is looking likely that it's going to be somewhere between Galveston and Corpus Christi, kind of pushing towards the Port Lavaca area. We don't want to pinpoint just the center of the storm exactly, because this is a very large storm.

Wolf, the tropical-storm-force winds go out nearly 300 miles across side to side. I want to show you. This is the wind field forecast as the storm approaches the Texas coast. And look how it engulfs almost the entire thing and even clips parts of Louisiana. We will watch for this to push inland then. And even if it doesn't make a direct hit on Galveston, they'll at least get tropical-storm-force winds and very likely could get the hurricane-force winds, along with some strong waves and storm surge.

Also, keep in mind, because how -- the size of this storm, we're going to see some damage inland. You could even have power outages as far north as, say, Austin or San Antonio, extending up towards Waco, Texas.

A lot of people getting ready to evacuate, if they haven't already done so, and the heat today is also a problem. Check out the heat index. The temperature your body feels in Houston right now, 101 degrees. So, a lot of cars could stall out with that if you are sitting in traffic. So, make sure you have your emergency kit with you. Bring bottled water. And bring some food with you, because, if you are going inland, you still could have some problems with power outages -- Wolf.

BLITZER: This Rita, Jacqui, looks very much at least the way Katrina did as it was going through the Gulf of Mexico. It built up from a 2 to a 3 to a 4 to a 5. But then, when it made landfall, it was a 4. A similar situation seems to be unfolding right now.

JERAS: Yes, that certainly could happen, Wolf.

As I mentioned, we will see fluctuation in intensity. Also, another thing to keep in mind are the water temperatures. They are slightly cooler into the western Gulf, so that's favorable. What happens is that the eye wall kind of forms itself, breaks down a little bit and then strengthens once again. And that's what affects the wind speeds near the center of the storm.

So, it just depends on the timing of this thing. If it gets in one of those high cycles, we could see a 4 or 5 at landfall. If it weakens down and we get lucky, we'd be looking at maybe a 3, Wolf. Hate to say 3 lucky, but...

(CROSSTALK)

BLITZER: Yes, a 3 is still awful, as we all know.

There have only been three hurricanes that have hit the U.S. at a Category 5 level, 156 miles per hour or higher, in 1935, 1969 and 1992. So, these are not very normal, shall we say, in the scheme of hurricanes.

JERAS: No, they are not. And, remember, the Galveston hurricane of 1900, that was a Category 4, with winds of 150, exactly where it is now. And that was the deadliest storm on record.

BLITZER: What, if anything, could conceivably cause Rita to make a turn and move closer towards Louisiana and New Orleans?

JERAS: Well, there's an area of high pressure right now. And I actually have a great explainer for this. And if you can wait until the 3:00, I will bring that up for you and show it to you graphically.

But, basically, there's a big area of high pressure, which is kind of covering parts of the western Gulf and this part of the country right here into the lower Mississippi River Valley. And that high pressure system right now is driving the storm westward.

What's going to be happening over the next couple of days is that the high is going to be drifting off to the east. High pressure systems rotate clockwise. So, those winds on the back side of the high are going to be pulling the storm up to the north. So, if that high shifts east quicker and moves over towards Georgia, that will drive it northward earlier and bring it closer to Louisiana. But, right now, we don't expect that to happen.

BLITZER: All right, Jacqui, we are going to be checking back with you.

By the way, these live pictures that we have been showing our viewers, these are live pictures from Galveston. You see the surf coming in, not very significant right now. That will change dramatically over the next few days. You see that long pier going out there.

We're also standing by for a news conference. These are live pictures coming in from New Orleans as well from our -- courtesy of our affiliate WWL. We expect the mayor, Mayor Ray Nagin, to be speaking with reporters shortly. We will be bringing that to you as well, lots of news happening even as we speak right now.

Rita posing a major threat, as we all know, not only to the people who live out there, but to the oil industry as well.

Our Ali Velshi is joining us now with the bottom line. He's joining us from New York.

Galveston. You hear that Texas coast, you think oil rigs; you think refineries.

ALI VELSHI, CNN CORRESPONDENT: Yes.

BLITZER: You think the price of a gallon of gasoline.

VELSHI: Galveston has been pretty very busy in the last few days with helicopters taking off and landing, bringing workers back from those oil rigs and platforms in the Gulf. We now have closures of rigs and platforms from all the major oil companies. Valero, BP, Shell, Apache, Exxon, Conoco, Chevron, all of them have shut facilities in the Gulf.

British Petroleum just reporting now it has evacuated all facilities in the Gulf of Mexico. And you saw that -- that -- that hurricane coming in. Well, it's not the hurricane-force winds that the platforms and rig operators have to worry about. It's all of those winds can wreck the pipelines and the rigs. We now have also heard from British Petroleum that they've closed the Texas City refinery, which is just northwest of Galveston.

That is -- it may well be the second largest refinery in the country. Almost half-a-billion barrels oil -- I'm sorry, half-a- million barrels of oil a day, Wolf, are refined through that. You can surmise that, if that refinery is shut down, you may see others shut down.

We're seeing an increase in the price of oil again today. It has pulled back from its absolute highs. But we are watching this carefully. As we speak now, that hurricane is starting to affect rigs and platforms in the Gulf of Mexico. Before it makes landfall in Texas, the brunt of it will be felt by the oil-producing activities in the Gulf.

Remember, Wolf, that, while Katrina got one part of the Gulf, it missed the other productive part of the Gulf with refineries and rigs. Now it's getting to that side of the Gulf. This could be very damaging to our oil and gas supply.

BLITZER: And, as you know, Ali, the Saudis keep pointing it out, other oil-producing states point out, there's no shortage of crude. It's the shortage of refineries...

VELSHI: That's right.

BLITZER: ... to take that crude and refine it into gasoline, which is a problem. If these refineries are put out of business for a while, that poses a significant potential problem, the price at the pump.

VELSHI: That's right. It's not an on and off switch. To get both the supply out in the Gulf of Mexico and the refineries evacuated and shut down, they can't just leave them, because there are oil supplies. They can't have spills and things like that.

So, Department of Energy, Department of the Interior requires that they really batten down the hatches. That takes time. And when they bring them back up online after they check damage, that could be several days. We don't have several days of refined gas sitting around in this country. We use so much of it. And that's part of the problem here. You will see this reflected in the price of gas across the country if this storm stays where it is, in terms of its intensity, or gets worse, Wolf.

BLITZER: All right, Ali, we are going to get back to you shortly. Thank you very much.

Mindful of its tragic past and still very vulnerable, Galveston is taking Hurricane Rita, as it must, very, very seriously.

CNN's Deborah Feyerick is joining us now live. She's got more.

You are on the scene. What's it like there, Deb?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, it is extremely -- it is extremely quiet, as a matter of fact.

You can see, this is one of the main streets here in Galveston. And it is virtually empty. We saw a post office truck go by just a short while ago. They are going to be delivering mail and picking up mail until about 4:30. But you can see these stores here, they have boarded up. This has been happening across the city Galveston, obviously, people heeding the mayor's warning to get out and get out quickly.

You can see, as we sort of pan across the main street here, one, two, people. But, for the most part, folks are evacuating. And the mayor wanted that. She said, go now and you will be able to go wherever you want. Go later and you're going to go where we tell you. So, it seems like they are listening to that advice -- Wolf.

BLITZER: Showing our viewers, Deb, a live picture of the shoreline at Galveston. How far are you from there from the water?

FEYERICK: We're really just a couple of blocks. We're at City Hall right now.

We can tell you that the mayor -- we were talking to her earlier. We asked, what happens if the water reaches 30 feet high? She said it's really not a concern, because, unlike New Orleans, Galveston is an island. And so, that water will drain pretty quickly. So, she believes that, even if it does reach those levels, after about three days, the city will be dry, or at least dry enough that they can make their way throughout the city.

But she is staying with a core group of her people. They're going to be staying at a hotel, the San Luis, which is built on top of a World War II bunker. And that's about 37 feet above the tide. So, they feel that they are going to be safe and be able to ride out the hurricane -- Wolf.

BLITZER: Have most of the people already left Galveston? How are the evacuations moving along?

FEYERICK: Well, we have to tell you, what happened in Galveston this morning is probably an example of what should happen for every evacuation.

They called in 80 buses to bring people who had no transportation out of the city. And what they did is, last week, they actually sent out civilians, volunteers, to go house to house and talk to people who might possibly be stranded in the event of a hurricane. They came up with lists. They came up with possibilities, in terms of who would be able to go, who would be able to stay.

Then they sent city buses out to pick them up today, bring them to a community center, and then have them board those buses that were ready and standing by. People got there early. And within a two-hour stretch of time, everybody was on those buses and on their way to Huntsville, Texas, and a couple of those people even having arrived now.

So, really, it was a model of an evacuation, just the way they did it. They got about 1,500 people out. Everybody else apparently has their own car. And they're going to be heading out of town, either, if they haven't yet, at about 6:00, when that mandatory evacuation likely to kick into effect.

BLITZER: Well, they are clearly sensitive to what happened in New Orleans, especially the poor people, the disabled, the elderly, the sick, the special needs. They are working feverishly, I suspect, to help them leave.

FEYERICK: They really are. And that's one of the lessons that a number of people I spoke to said, the lessons that they learned from Katrina. And that is, don't leave your sick and your most vulnerable until the very end of an evacuation. Get them out first. There's a hospital here, the University of Texas Medical Branch.

They told us that, in fact, they were getting out their most critical care patients. They had some ambulances standing by, even helicopters for those who are very difficult to transport or in the most fragile care. They were getting those people out beginning yesterday. They got out a couple of infants in the neonatal care unit. So, they really took precaution to make sure that those folks were out.

And they said, everybody was thinking about that. They did not want to be in a situation where people started turning up dead in nursing homes and at hospitals. As a matter of fact, the nursing homes evacuated at 7:00 this morning, Eastern time -- Wolf.

BLITZER: One more quick question before I let you go, Deb. Given what happened to Galveston in 1900 -- the whole city was basically wiped out -- and Galveston is an island off the coast of Texas -- basically, that's what it is -- and given what happened to New Orleans just three-and-a-half weeks ago, are there individuals you are meeting there in Galveston who are saying to themselves, you know, we're just going to ride this out?

If they are, they are pretty nutty, but are you meeting those kinds of people?

FEYERICK: Believe it or not, Wolf, we stopped by to get coffee at a little convenience store owned by a guy named Bob. And his -- I think it was his daughter said that he was going to just stick it out. He was going to try to ride out the storm. I said, why? She said she had no idea why he was going to be staying behind but, but she said that she herself was most likely going to be leaving.

So, yes, there are some people who are going to try to stay. But people who have been in this city and have heard evacuation warnings and have never done a thing about it, they were on those buses this morning saying, uh-uh. After what happened in New Orleans, they are not taking any chances.

BLITZER: All right, Deb, Deborah Feyerick, thank you very much.

Deborah Feyerick is on the scene for us in Galveston right now.

Some people in the Texas target area are reliving a nightmare. Hundreds who fled Louisiana after Katrina have been moved from Houston's Astrodome complex to shelters in Arkansas.

Gwendolyn Garley and her family survived four days on a rooftop in New Orleans before they were airlifted to safety and then driven to the Astrodome. A family member took them to Galveston, where they were just beginning to settle in. Now they face another hurricane and another relocation.

(BEGIN VIDEO CLIP)

GWENDOLYN GARLEY, TWO-TIME EVACUEE: Galveston opened their arms. They opened their hearts to us. Ms. Kathy Brown (ph), she did all she could to help us. We got up every day. We helped ourselves. We got an apartment. We registered our kids in school. We were setting up roots. We was ready to move on with our lives. And this happened. We have to evacuate again.

(END VIDEO CLIP)

BLITZER: And we will have much more coming up on the evacuations. Those who left New Orleans, left Louisiana, for parts of Texas and now, once again, they are being uprooted.

In the meantime, let's go up to New York, Jack Cafferty standing by with his thoughts on what's going on -- Jack.

JACK CAFFERTY, CNN ANCHOR: Thank you, Wolf.

You remember this lady we're going to show you. Cindy Sheehan is the woman who lost her son in Iraq and camped outside the president's ranch in Crawford, Texas, this summer, demanding a meeting with him. There she is. Before August the 29th, couldn't get away from this lady. She was everywhere. But now it's, Cindy who? Because, for the last three weeks, the news media have been scrambling to report on Hurricane Katrina and now Rita. Network resources have been stretched. Even some foreign correspondents have been called home to cover these storms.

But what about Iraq? Nine Americans have been killed there since Monday of this week. This is Wednesday. The body count of U.S. troops that have died in that conflict, over 1,900 now. The United States is spending $6.5 billion a month to fight ongoing wars in Iraq and Afghanistan. And although Iraqi legislators have signed off on the final draft of the constitution, some U.S. officials are concerned about what's going to happen if the Iraqis reject the document in next month's referendum. And that is a distinct possibility.

So, here's the question. Has hurricane coverage taken too much media attention off the war in Iraq? You can e-mail us at CaffertyFile -- one word -- @CNN.com.

BLITZER: Good question, a fair question. Thanks, Jack. We will check back with you very, very soon.

Still to come, bracing for another big one. The death toll from Katrina tops 1,000. Will Hurricane Rita bring another deadly blow? We will take you live to New Orleans, where they are keeping a close eye on the levees.

And a little bit later, paying for Katrina. It's going to cost more than it did to rebuild Europe after World War I. So, where is the money coming from to foot the bill? We will take a closer look at how the storm may hit your pocketbook.

Stay with us here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're watching Hurricane Rita as it moves across the warm waters of the Gulf of Mexico. Right now, it's a high hurricane Category 4, winds of about 150 miles an hour. If it gets up to 156 miles an hour, then becomes a hurricane Category 5. We're watching this. We're waiting for the latest developments from the National Hurricane Center.

We're also standing by for a briefing here in Washington. The acting director of FEMA, the Federal Emergency Management Agency, David Paulison, expected to brief reporters on what FEMA is doing now to prepare Texas and Louisiana for Rita. We will go there live once it happens.

And we're also standing by, the mayor of New Orleans, Ray Nagin, about to speak to his city council in that city. We will bring that to you live as well, lots of news happening.

More than three weeks after Hurricane Katrina hit the Gulf Coast, the death toll is mounting; 799 bodies have now been recovered in Louisiana, bringing the overall death toll in the region to 1,033. In New Orleans, the U.S. Army Corps of Engineers is working around the clock to patch the battered levee system. Officials say six or more inches of rain and a storm surge of more than 10 or 12 feet would be enough to flood the city once again.

The former FEMA director, Michael Brown, will testify, by the way, next week, as a congressional committee looks into the government's response to Hurricane Katrina. Brown resigned last week amid widespread criticism of that response.

Most of New Orleans has been drained of Katrina's floodwaters, a giant step on the road to recovery. But the city now faces another evacuation, and, depending on the course of Hurricane Rita, another possible flood.

Let's go live to CNN's Mary Snow. She is joining us in New Orleans.

What's the latest there, Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, we are outside the Convention Center. And this is being used as a staging area for anyone in the city who needs transportation out of the city.

The mayor told them that they can come here and find buses. The mayor said that he has about 500 buses available, if need be. Today, though, we're only seeing really a handful of people showing up here, some who stayed here through Katrina and said, enough is enough. We don't want to take chances.

I just ran into a man who went to go on a, bus saying that he was stopped by the police. He was told there was a mandatory evacuation. When he said he had no way out of the city, he came here. Now, the city is saying that people will be taken to shelters if -- in the state. If they are filled, they're going to be taken outside the state. Some of these people have no idea where they are going. They say they just want to leave the city, even though, as you mentioned, federal officials do not believe that there will be much damage here.

But even the threat of rain could trigger flooding. And that is what people here are worried about. Now, as people leave, an Army hospital is moving in here to the Convention Center.

We have someone joining with us right now. This is Captain Rob Rigdon. He's the chief of operations of the 14th Combat Support Hospital.

And, Captain, you got the order yesterday to move in here and make a -- and set up a makeshift hospital, right?

COL. ROBERT RIGDON, CHIEF OF OPERATIONS, 14TH COMBAT SUPPORT HOSPITAL: That is absolutely correct. We were set up at the airport in support of the military and civilian populace there. And we got the order mid-morning yesterday and started movements yesterday afternoon to set up inside the Convention Center. That's correct.

SNOW: What are you expecting? You told me that this is going to be a hospital for civilians. What are you anticipating here?

RIGDON: Sure.

We have been told that our mission is to provide a stopgap measure for emergency services for the civilians for the next two to three weeks, in anticipation of worst-case scenario with Hurricane Rita, in addition, to provide emergency services while the city gets back on its feet.

SNOW: Any idea, though, of how many people you might expect in a worst-case scenario?

RIGDON: No. I wish we could predict that. That would allow me to tailor my services to be more efficient.

SNOW: All right.

Well, Captain Rigdon, thank you very much for joining us.

And, Wolf, you know, it's kind of hard to get a handle on just how many people are in this city, despite there -- well, we know that there are thousands of military personnel here. But I asked the city how many people are actually here. They don't really have a firm number -- Wolf.

BLITZER: Given what happened at the Convention Center, Mary, only three-and-a-half weeks or so ago, are there people a little reluctant to ask individuals once again to come back there?

SNOW: Absolutely.

And, you know, really there are about seven people I ran into today who came here. And it was really a measure of last resort. What the mayor stressed yesterday, that people aren't actually going inside the Convention Center, where people, after Katrina, were desperate for food and water for days. And he stressed that they are coming outside.

But this -- it really is a symbol of such desperation. And people were reluctant to come here. But, as I said, this was really a last resort. And these people who are boarding the buses say they don't really care where they go. They just want to leave the city. They do not want to take any chances here.

BLITZER: All right, Mary Snow, in New Orleans for us, we will get back to you. Thank you.

Still to come, facing down potential disaster, Galveston barely above sea level and right now in the path of a hurricane. Are residents ready for the big one? We will take you there live.

And a little bit later, giving back the pork, the pet projects that may take the axe to help hurricane recovery. Jeanne Moos has the scoop.

Stay with us. (COMMERCIAL BREAK)

BLITZER: We're watching a monster, a Category 4 hurricane, winds of about 150 miles an hour, Hurricane Rita moving across the warm waters of the Gulf of Mexico, almost reaching a hurricane Category 5 status. That would be winds of 156 miles per hour.

We're watching this hurricane very closely. We're standing by for a briefing here in Washington. The acting FEMA director, David Paulison, expected to brief reporters shortly. We will bring that to you live on what the federal government is doing to get ready for Rita.

We are also watching what's happening in New Orleans, the mayor, Ray Nagin, getting ready to speak to his city council. We will bring you that live as well.

We're watching other news beyond all of that.

And CNN's Zain Verjee is joining us from the CNN Center in Atlanta with a quick check of what's making news right now.

Hi, Zain.

ZAIN VERJEE, CNN CORRESPONDENT: Hi, Wolf.

In Washington, Supreme advice and partial consent. This morning, a bipartisan group of senators offered President Bush its list of names to fill the seat for retiring Justice Sandra Day O'Connor's seat. Senator Arlen Specter, the chairman of the Judiciary Committee says President Bush was noncommittal on any one choice.

Meanwhile, on John Roberts' nomination as chief justice, a Democrat offers his consent. Judiciary Committee member Senator Patrick Leahy, the ranking Democrat, says he'll vote yes for Roberts. Leahy says although he was bothered by Roberts' lack of candor at last week's hearing, he does believe that Roberts is a man of integrity.

In Iraq, new fallout from that British jail raid in Basra this week. Now today, 500 protesters took to the streets. They were upset over what Iraq's prime minister, Ibrahim al-Jaafari, calls a regrettable incident. What happened was this.

On Monday, British forces stormed a detention center in the city and later on they went into a house to rescue two undercover British troops that were apparently being held by Shia militia. Wolf, back to you in THE SITUATION ROOM.

BLITZER: All right, Zain. Thank you very much. We'll get back to you shortly as well.

We're all feeling the effect of this hurricane season over at the gas pump. Ali Velshi joining us with the bottom line on what we're about to feel. Ali, I suspect it ain't going to be good.

ALI VELSHI: No, in fact we're getting comments -- we're getting information from all over the place at the moment. The Energy Information Administration now saying that the Hurricane Rita could have a substantial impact on Gulf coast refineries. We already know some of them have shut down.

And what we are hearing now is from the Department of the Interior, which handles all the offshore drilling for oil and natural gas. Yesterday, 57 percent of Gulf of Mexico oil production was offline as a result of Hurricane Katrina. Right now their new report, 73 percent of Gulf coast oil production is now offline. We're going the wrong direction.

As you recall, with Hurricane Katrina, almost all of it was offline. So we are now getting to the point where less oil is coming into those refineries. Remember that no matter how few refineries we have and how tight our capacity is, if there's no oil going into them, there's no gas coming out of them anyway.

So we are now having a feedstock problem getting into the refineries. We know that one major refinery with -- responsible for half a million barrels of oil refining per day is shut down. Others are looking into it. So we are going to start to see the pressure on gas prices very quickly.

One thing to keep in mind, Wolf, we've had person, one analyst at least talk about the fact that gas prices could go up to $5 a gallon, if we start seeing panic buying and anxiety, which we saw after Hurricane Katrina. Remember that it feeds on itself. If people start rushing to the gas station thinking there are shortages, that what pushes the price up.

There's no reason to fear immediately a shortage of gasoline. We'll see what happens over the course of the next few days, but at the moment there isn't a fear of a shortage. It is the panic buying and the anxiety that will cause that, unless a pipeline is disrupted like it was after Katrina. So at the moment what we're going to see is pressure on the prices. We don't have a supply problem right now and that's important to keep in mind -- Wolf.

BLITZER: Ali, thank you very much.

Galveston, Texas, no stranger to hurricanes. We'll show you the devastation the city suffered 105 years ago in the deadliest disaster ever to hit the United States.

Also, it's the most dangerous part of a hurricane. We'll look at the threat of Rita's storm surge. All of that coming up. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: This is new video that we're getting in, people driving away from Galveston, Texas. You see traffic moving in one direction off that island, evacuation ordered. About a quarter of a million people live in Galveston County in Texas, and that is clearly in harm's way. Right now, people learning lessons from what happened in New Orleans. We're standing by -- I just want to remind our viewers -- for a briefing here in Washington from the FEMA acting director, David Paulison. He's the man who replaced Michael Brown who resigned last week. We'll go there live once that happens, and we're also standing by in Baton Rouge. The mayor of New Orleans, Ray Nagin, is about to speak to regional legislators and we'll bring you that live as well.

The drowning of New Orleans was a terribly tragedy which played out right before our eyes, but a century ago, another city was drowned when a hurricane struck the Texas port of Galveston. Thousands died. It remains this country's deadliest natural disaster. As Galveston today looks nervously ahead to the arrival of Hurricane Rita, we will have specific updates on what is going on there right.

But first, let's go to the mayor of New Orleans, Ray Nagin. He is speaking in Baton Rouge to legislators.

MAYOR RAY NAGIN, NEW ORLEANS: It's my honor to be here to day to give everyone another briefing on exactly what's going on in the city of New Orleans. I was last here about a week ago, and it seems like everything is working in dog years, seems like so long ago.

There are so many things that have happened, there are so many things that are happening on a day-to-day basis, an hour-to-hour basis, and we're trying to make the best decisions possible with the best information that we have at the time.

The information changes. We get updates on a regular basis. We have multiple federal, state and city agencies trying to coordinate information. So it's a very challenging process that we're into. But I think we're still moving in the right direction.

Let me just briefly give you an update, and then we can take questions.

After the major event happened, we set about a plan to focus on a couple of key areas. The first area is rescue, which we are still doing to this date. Yesterday we rescued a 70-year-old man from a home. He had been holed up there. He had water and food -- not a lot. And his wife had passed five days earlier. So we were able to rescue him yesterday.

So the rescue efforts are going on and we are continuing to recover bodies.

Evacuation is the second area that we decided to focus on right after the storm. I think we've done a pretty good job of evacuating once we got the delayed responses and all the kinks out. We are still evacuating people from the city of New Orleans.

We have a new evacuation station. It's at an old location, it's at the convention center. There are buses that are staged. They're picking up people as we speak. People are moving toward the convention center as we speak. We moved two bus loads of individuals out yesterday. We had individuals to show up today. Two young men showed up this morning with suitcases. They had been holding out, and they were doing OK, and they walked to the convention center. And we have buses staged and ready to take them out to different locations.

Where they go is dependent upon the state and the feds. The state is handling all in-state transport, and the feds are handling anybody who is going out of state.

The next area that we have been dealing with is dealing with trying to recover as many of our beloved deceased citizens as possible. That process is going through a couple of different phases.

The first phase was to get as many bodies out of the water as possible, which we pretty much have done that.

The second phase was what the federal government and the troops were calling a hasty search, where they would go throughout the communities basically trying to identify where any dead bodies were. The third phase was to go door to door and to do somewhat of a sniff- and-sight test to see if they could locate any of the bodies.

Those three distinct phases have been completed. The next phase of our search is to go in the homes to see if there are any bodies in homes and in attics.

All of this process was hampered by the high water that was still in the city.

We have a map that I got this morning, and the Army is basically moving out of...

BLITZER: We're going to break away briefly from Ray Nagin. David Paulison, the acting FEMA director, is speaking here in Washington about Hurricane Rita.

R. DAVID PAULISON, ACTING FEMA DIRECTOR: ... as we speak now. We have also requested the Department of Defense, for six heavy-lift helicopters, to make sure that we get the Urban Search and Rescue support on the ground and get those supplies that we've positioned where they need to go.

Disaster medical assistance teams: We have 400 medical personnel already pre-staging in Texas to prepare for this storm coming in.

For some of the commodities, just a small amount I'll mention here, we have 45 truckloads of water already in place. We have 45 truckloads of ice already in place and 25 truckloads of food and meals ready to eat already on the ground there.

And also, something we're doing, as I said yesterday, we're working with the Department of Defense to help with several things. We're putting five two-person communication teams on the ground to set up communications after the storm comes through. In case those a fire and police communications are not operating, we're going to help them very quickly get those back up in place so they can operate and do the job that they are trained to do.

We've also asked the Department of Defense to help us put up a 2,500-bed hospital system in case there are injuries. We want to make sure we have the capacity and the capability to deal with any injuries that we might have during this storm.

And we've also asked (inaudible) food kitchens to feed at least 500,000 meals a day in this disaster when this hurricane comes through.

We have helicopters in place to move teams and commodities for those isolated areas that may not be in the highly populated areas of Texas.

And also, we're requesting some temporary bridging in case we have any flooding that washes roads out as we've seen in the past in some of those areas.

We're working with, also, the Department of Defense -- the Department of Transportation, excuse me -- to mobilize buses right now to help evacuate people. And also, we're mobilizing large numbers of ambulances to preposition those and get those in place -- again, in case we have injuries there.

On preparedness side -- and, again, these are some of the things I'm asking you, the media, to help us get out -- I strongly, strongly urge the Gulf Coast residents to pay very close attention to this storm.

It's already a Category 4. It's a huge storm (inaudible).

They have to be prepared. You have to be prepared to take care of your families. Again, if you go to our ready.gov Web site or fema.gov Web site, there is a list of things in there that we will ask you to prepare yourself for.

Some of those are going to be food and water for three days -- medicines, diapers, flashlights, batteries, portable radios -- those types of things that you're going to need to take care of yourself and your families. And it's important that you do that.

We need you to make sure you have the communications plan for your family, know where your family is, know how you're going to contact each other and also know your evacuation routes when you are going to leave town when you are asked to evacuate -- and know where you are going to go.

If you don't have a place to go, the state of Texas has shelters in place and you just contact them and move to one of those shelters when you're asked to move.

Take care of your home. Put your shutters up. Move your patio furniture inside. Anything that's going to fly away and be a missile, make sure you get that inside your home.

And also have a plan for your pets. You don't want to leave them in your home with you. Personal perspective: I know what's going on at the local level. I've done this for a long time. Those local officials are doing their evacuations. They are doing the evacuation planning. They're getting their emergency preparedness plans out. They are getting ready for the storm. Texas has a great emergency management system. We are working with them very well. We are in communication with them not only daily but several times a day to make sure they have the tools and the necessary items to do their job.

We are comfortable that Texas is going to be ready for this storm. It's not going to be fun. It's a big storm. But we're comfortable that we're doing all that we can do to be prepared to take care of the residents of Texas as this storm moves into the Gulf area.

And with that, I'll ask any questions you might have.

QUESTION: Can you give me can example of how -- a specific example of how -- your communication coordination with the state and local officials for this hurricane is different than for Hurricane Rita?

PAULISON: Well one thing, we're on the phone with them, talking with them, asking them do they have the things they need. And also, every day, we have a video conference with all the states in that area so they can tell us what they're doing and what their shortfalls are.

And then we have a complete staff of people listening to this video conference to write notes and take notes down and make sure that, if we have those resources, we can get them to them.

It's almost an hourly conversation with the states in the area.

QUESTION: And that didn't take place for Hurricane Katrina?

PAULISON: No, it did. Yes, it did.

QUESTION: What's something that...

PAULISON: Well, I'm not going to get into what happened in Katrina. You know, I'm dealing with what we can do for Texas right now. Like I said yesterday, we're going to go back and look very carefully -- very carefully -- at what happened in Katrina and what worked and what didn't work and what we can do better.

But now is not the time to do that. We have other things in place for that.

QUESTION: The White House was just talking about coordination being a lot better, and I was looking for a specific example.

PAULISON: We are making an extraordinary effort to make sure that we have a coordination system in place where we are talking with those people, like I said, almost on an hourly basis, making sure they have the things to do the job.

We are not making any assumptions in this storm. We are asking questions. They are asking questions. That communications plan is so, so important, like the White House said. That's correct.

QUESTION: What (inaudible) pre-position supplies? What have you done in addition to what you did in Katrina? Like, you know, are there more meals ready to eat? Are there communications teams in place? Give us a sense of what's the fuss here, what's the...

PAULISON: I think in the most important thing that we're doing is work with the Department of Defense to use their assets up front before the storm instead of waiting until after the storm lands.

Again, we're not taking any assumptions for granted at all. We're going to make sure this time, to make sure we have all those resources available, that whatever the government has to offer is going to be on the ground, helping Texas.

QUESTION: (OFF-MIKE) yesterday to today. I'm wondering why you've done that and whether or not that was a request from the states and locals and whether or not that was the federal government thinking that these were the deployments and the assets that were needed down there.

PAULISON: The planning is ongoing. The Department of Defense use of their equipment and supplies has always been our plan for this next storm. And we're simply just putting that in place.

QUESTION: But you increased your levels, when you talked about...

PAULISON: The urban search and rescue teams, yes. It's a lot larger storm than it was yesterday. It's a Category 4. It's a huge storm. Look at the size of it. It covers most of the Gulf. We want to make sure we're ready.

I'd rather pre-deploy more assets than we need than not have enough.

QUESTION: So it was a federal decision to send more down...

PAULISON: That's correct. Yes.

QUESTION: (OFF-MIKE)

PAULISON: Right, the military has the facility to set up a 2,500-bed hospital. They're in mobile units. It may not be all in one place. But it's to handle 2,500 beds somewhere in that Gulf Coast region.

QUESTION: You had said that flood insurance was the best hope for homeowners. Can you explain why some of (inaudible) Maryland who had flood insurance are still (inaudible). What should be done for them?

PAULISON: I'm not sure about that particular case. I know that last year we closed over 98 percent of our flood cases. And there's a few hanging out there; that's true. And we're working with those. But we closed almost 98 percent of those flood insurance cases. And the particular Maryland issue that you asked about, I'm asking for a briefing on that to find out exactly what those...

QUESTION: (OFF-MIKE)

PAULISON: Again, I'm not familiar with the particular issues. I've asked for a briefing from my staff. I think you came up earlier. And I'm going to find out exactly what that issue is.

QUESTION: (OFF-MIKE)

PAULISON: About the federal disaster declaration?

Yes, they've submitted their declaration and we're working on it at this time.

QUESTION: Would that make your job easier in terms of response time before the storm hits?

PAULISON: The pre-landfall disaster declaration is just simply an opportunity for us to help them pay for some of those things they have to do up front. And we're working on that declaration right now.

QUESTION: (OFF-MIKE)

PAULISON: Well, it will be a combination of a lot of things, and we won't know that until we see what's there and what happens after the storm.

We're going to have communication experts on the ground to tell us how we can quickly get communications back up and operating.

Folks, thank you very much. I appreciate it.

BLITZER: David Paulison, the acting FEMA director. He's the man who replaced Michael Brown last week after Michael Brown resigned. Briefing everyone on what's going on, as far as FEMA's concerned, preparing for Hurricane Rita.

He's making an additional remark or two. We'll monitor that.

But let's go back to Baton Rouge, Louisiana. The mayor, Ray Nagin, is still speaking to regional legislators there on what's happening in New Orleans and Louisiana as it prepares for Hurricane Rita.

NAGIN: ... the port is open, the airport is open. The I-10, Interstate-10, underneath the Pontchartrain Expressway, is open. We have restaurants that are working and recertifying. We have 189 restaurants that have recertified to date. We have the major hotels that have been working and trying to get the hotel occupancy back up to where it was. Unfortunately -- or fortunately -- government officals are taking up most of the hotel rooms right now.

We have two cruise ships that are parked in the city of New Orleans. They're primarily being used for police, fire, EMS, as well as other critical support services.

And that pretty much concludes my report.

UNIDENTIFIED MALE: Mr. Mayor, real quick. You talk about the...

BLITZER: All right. We'll continue to monitor what's happening there, as well. Lots of news unfolding here in THE SITUATION ROOM. We'll take a quick break right now, digest what we've just heard and continue our special coverage as we brace for Hurricane Rita. It's moving across the Gulf of Mexico right now, a Category 4 storm with winds of approximately 150 miles an hour.

Tom Foreman's here. He's going to show us what potentially could happen along that Texas coast, right after this.

(COMMERCIAL BREAK)

BLITZER: We're watching Hurricane Rita move across the warm waters of the Gulf of Mexico, a Category 4 storm right now. What does this mean potentially for Galveston?

Tom Foreman is here and he's got closer look at the nervous jitters that must be there right now. Mandatory evacuation under way.

TOM FOREMAN, CNN CORRESPONDENT: Big, big thing going on. You know, David Paulison said something a short while ago that's very important. It's something that his predecessor Michael Brown couldn't say, something his boss, Secretary Michael Chertoff, still can't say. He's been working in this business for a long time. He knows what to expect.

Let's look at Galveston real quick, and we'll show you what to expect. If we fly into Galveston, you see that it really is a barrier island, in very close. But I'm going to move over here and show you what could happen with the storm surge here. If this is this inlet right here, if you had a four-foot storm surge that came in, this is what you'd start getting.

Look at the levels that are going to come up. That's what's happening to the island as a four-foot storm surge comes in. You an add in an eight-foot storm surge, Galveston's going to look like this. You go into a 12-foot storm surge, like this; you take it up to a 16- foot storm surge, like this.

And if you get a full impact from the biggest storm we can imagine, look what happens to Galveston. It will be completely underwater. The difference right now in the federal government preparations right now is David Paulison seems to understand that, and that could make all the difference.

BLITZER: All right. We're going to take a quick break. But I want you to stand by, because we have a lot more to talk about and show us these images.

We'll take a quick break. More of our special coverage, as we continue to watch Hurricane Rita.

(COMMERCIAL BREAK) BLITZER: It's almost time for the markets to close and the closing bell. Let's check in with Ali Velshi to see what's going on. Hi, Ali.

ALI VELSHI, CNN CORRESPONDENT: Hey, Wolf.

Busy market out there today, but it is still about Rita and what's happening and what impact it's going to have. Remember, these oil companies are the biggest companies in the world right now. There are a lot of investors watching it. And for those who aren't invested in it, you're paying for it somehow, every time you flip on a switch or turn your car engine on.

So right now, we're looking at oil, which has closed higher, $66.80 for a barrel of crude oil. That's not -- those aren't record numbers. But you know, that's a lot more than we used to pay for oil. That's going to affect gas -- the price of gas. We're already seeing refinery shutdowns. The number two refinery in the country has shut down. The number one refinery's evacuating non-essential personnel. And that is affecting the price of gas, some say as high as $5.00 a barrel. Wolf, follow that.

(STOCK MARKET REPORT)

BLITZER: It's been like that for a few days now. Thank you very much, Ali.

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