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Record Gas Prices; Militant Group in Lebanon Says it's Observing Unilateral Cease-Fire; Britain Filing Murder Charges in Former Russian Spy's Death
Aired May 22, 2007 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: And good morning, everyone. You are in the CNN NEWSROOM.
I'm Tony Harris.
HEIDI COLLINS, CNN ANCHOR: Hi, everybody. I'm Heidi Collins.
Watch events come in to the NEWSROOM live on this Tuesday morning. It's May 22nd and here's what's on the rundown.
Smoke signals. A third day of fighting in a refugee camp in Lebanon. Now word of a truce and hope for the thousands trapped in the crossfire.
HARRIS: Murder they charge. Britain calling on Russia to hand over a one-time KGB agent. He is accused in the poisoning death of ex-spy Alexander Litvinenko.
COLLINS: Gas prices nudge up another notch. Yes, a new record high. Just what you wanted to hear, right? Well, we're going to ask our guest, is this highway robbery?
Coming up in the NEWSROOM.
(NEWSBREAK)
HARRIS: And forget coffee. Get your morning jolt at the pump.
While you were sleeping, gas prices climbed to a new record high. Just shy of $3.21 a gallon, according to AAA. That is almost two cents higher than the record set just yesterday. Gas prices averaged more than $2.85 last month and around $2.88 a year ago.
What's going on here?
Senior Correspondent Allan Chernoff takes a look for us.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN SR. CORRESPONDENT (voice over): When drivers fill their tank at Chris Cho's gas station, Chris tells them, "Don't blame me for high gas prices."
CHRIS CHO, GAS STATION OWNER: I would blame the oil companies. I mean, if you just look at their profit statements, they're making lots of money.
CHERNOFF: Record amounts of money. The country's big three oil companies: ExxonMobil, Chevron and ConocoPhillips, raked in $72 billion of profit last year. Some members of Congress charge price gouging is behind those profits.
SEN. BYRON DORGAN (D), NORTH DAKOTA: I find it kind of interesting that we keep talking about the marketplace as if it were a free market. Nothing could be further from a free market with respect to what's happening with oil.
CHERNOFF: A barrel of crude oil is actually a bit cheaper than it was this time last year. But oil companies say gas is more expensive because demand is high while supply isn't.
UNIDENTIFIED FEMALE: They should be blaming the marketplace. They should be blaming the supply and demand.
CHERNOFF: The nation's oil refineries are running well below capacity. Some critics charge that's intentional. But refiners say they are doing necessary maintenance that was delayed because of Hurricane Katrina. And in recent weeks, several refinery fires have caused output to be further reduced.
PAUL SANKEY, DEUTSCHE BANK: No company is stupid enough to try and make money by gouging the U.S. consumer. The simple fact is, they don't need to right now, frankly. They are making so much money just by the nature of the market.
CHERNOFF: There could be more supply if there were more refineries, but no new ones have been built in decades. Oil companies blame that on tough environmental policies and the high cost of upgrading older facilities.
(END VIDEOTAPE)
HARRIS: Allan Chernoff joins us live from Jersey City, New Jersey.
Allan, good morning to you.
Why don't the oil companies just simply build new refineries?
CHERNOFF: Good morning, Tony.
Absolutely. I mean, we mentioned in the package that there are tough environmental regulations. But the bottom line is they could do it.
It costs a lot of money to build a new refinery. And believe it or not, oil companies are actually somewhat reluctant to risk all that money because they fear that maybe refining won't be that profitable down the road.
Can you believe that?
HARRIS: Yes.
CHERNOFF: I mean, they're making bundles of money now, but they don't want to take the risk.
HARRIS: All right. So, you're at a gas station there in Jersey City, New Jersey. How do gas stations stay in business if they're suffering so much?
CHERNOFF: That's right. The gas owners here, they're complaining, along with our consumers. Have a look over here.
The price actually $2.89 here in New Jersey. This is the only state right now in the nation that still has the average price below $3 a gallon.
But nonetheless, even as prices go up, the gas station owners say it gets tougher for them because they have to pay credit card fees between 2 to 3 percent. And when gas costs so much, most people are paying with a credit card, not with cash.
HARRIS: Yes.
CHERNOFF: So, what do they do? They depend on the convenience store. Right?
It's almost -- every single gas station has a convenience store now. So they're depending on selling coffee, muffin, whatever.
Some gas stations like this even have vending machines. Sell a few Pepsis, a few Cokes. They're trying to make money wherever they can.
They've even got the cigarettes right over here, Tony. Seven bucks a pack.
HARRIS: Oh.
CHERNOFF: That's where they make their money. They're not making that much money on gasoline.
HARRIS: Oh, man.
Allan Chernoff for us this morning.
Appreciate it, Allan. Thank you.
Gas prices on the rise. Ahead in the NEWSROOM, what the oil companies are or aren't doing. We will talk with an expert in the field in the NEWSROOM.
COLLINS: In northern Lebanon, a new move over the past hour to end three days of fierce fighting. As the day began, dark plumes of smoke filled the sky over a Palestinian refugee camp near Tripoli. Lebanese troops trying to flush out Islamist militants.
Now word of a unilateral cease-fire. Senior International Correspondent Nic Robertson is on the phone now with us from Tripoli.
And you know, Nic, as we brought this story to the viewers yesterday, there was talk of a cease-fire, but sort of just because of the emergency going on for medical supplies, for food, and so forth.
Is this actually a political type of cease-fire?
NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: Well, there seems to be an element of that in it, Heidi. The prime minister here, Fouad Siniora, met with Palestinian representatives earlier in the day. A few hours later, the first reports came -- came to light indicating that there might be a cease-fire. And now five U.N. trucks carrying medical aid, food supplies -- and doctors have been able to get inside one of the camps.
This is the latest development. It does appear to indicate that some sort of cease-fire may have been established.
Now, I'm in Tripoli, about 10 miles away from that camp, and we have just seen a very tense standoff between security forces and the militants come to an end. It came to an end after a long gun battle in an apartment building, in a densely-populated (INAUDIBLE) gunmen, according to security officers, blew himself up. (INAUDIBLE) coming out on the streets and cheering the Lebanese army there -- Heidi.
COLLINS: Yes. Well, that's what I was just going to ask you about, Nic. And it sounds like we're having a little bit of trouble with your audio. So if you can still hear me and can stick with us, are there a lot of police on the ground now at this point from what you can see? What do they seem to be doing?
ROBERTSON: There is very tight security. I'm actually at a Lebanese army checkpoint on the edge of Tripoli right now.
Around that apartment building where the standoff was going on inside Tripoli, there were lots, perhaps 100, Lebanese security forces. There was also an elite special force that seemed to be leading the effort to capture or kill these militants. And on the periphery, they were providing sort of outside security, if you will, a hundred or so Lebanese army and armored personnel carriers.
We saw sniper rifles, automatic rifles, as well as rocket- propelled grenades being carried by the army. The building itself after that very tense standoff on fire, black, scorched on the outside, pockmarked with bullet holes -- Heidi.
COLLINS: Nic, what about people? Do you see any people walking around the streets? Or has everybody pretty much been told stay inside and try to stay safe in all of this?
ROBERTSON: You know, the situation really turned around within about 10 minutes, 15 minutes of the news that the militant had blown himself up. It was incredibly tense until that time. We didn't see people inside the apartment buildings. Close by, local residents were around corners. A lot of young men trying to see what was going on. But they were a block or so back.
Quite literally within minutes of the militant being confirmed dead by the security forces, these local residents came out on to their balconies, literally in the apartment building right next door where the gun battle had been going on. And residents swarmed around the corner onto the street, exactly where the standoff was, cheering in support of the Lebanese army -- Heidi.
COLLINS: Wow. All right.
Nic Robertson is on the story for us, live from Tripoli.
Nic, please let us know if anything else develops here, and we will come straight back to you.
Thanks so much.
Nic Robertson.
HARRIS: Arming the Lebanese military. U.S. shipments already under way, now in acceleration of those shipments being urgently discussed.
CNN Pentagon Correspondent Barbara Starr joins us now.
Barbara, good morning to you.
What can you tell us?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, Tony, discussions are under way between the Lebanese government and the United States about accelerating some of the shipments that had been going on to Lebanon since the war last summer.
Why is this so important? Well, certainly the U.S. is well aware that Syria and Iran, as well as Hezbollah, are sitting on the sidelines, watching the performance of the Lebanese armed forces. The goal of the United States is to help those Lebanese armed forces defend their country, be able to move around, and deal with situations like this current emergency so other players in the region don't move in, including al Qaeda.
What has been going on since the war last summer, the U.S. has shipped the beginnings of about $30 million worth of military equipment to the Lebanese armed forces. Very basic stuff, Tony -- ammunition, spare parts, trucks, Humvees, the things that are helping the Lebanese military move around their country even in this current emergency.
But since this all developed over the last several days, we have confirmed from senior U.S. military officials, as well as Bush administration diplomatic officials, that the Lebanese government is talking to the U.S. now about trying to accelerate that, trying to get more of this material shipped to Lebanon as quickly as possible. The top priority, Tony, is, in fact, ammunition. That is something the Lebanese military has now told the Bush administration it urgently needs -- Tony.
HARRIS: Well, Barbara, last we're we saw U.S. ships actually maneuvering off the coast of Lebanon. Could we see that again?
STARR: Well, you know, that was pictures that we all remember well, when the U.S. Navy and the Marine Corps moved off the coast of Lebanon to evacuate thousands of American citizens that were trapped in Beirut during the war between Hezbollah and the Israelis. Our understanding at this point is that the ambassador in Lebanon has made no request for assistance.
The belief is this emergency will not rise to that level. But make no mistake, Tony, walking around the hallways of the Pentagon this morning, I've asked that question, and I can tell you it's something the military is thinking about, thinking about whether they need to be prepared if that request were to come -- Tony.
HARRIS: CNN Pentagon Correspondent Barbara Starr for us this morning.
Barbara, thank you.
COLLINS: New details this hour on a deadly row house fire in Baltimore. Officials say five people have been killed, five others injured.
The fire broke out around 7:00 this morning, trapping a number of people inside the home. Two of the injured suffered heart attacks. And a firefighter is among the injured.
We'll pass along more information just as soon as we get it.
HARRIS: Let's get a check of weather now.
(WEATHER REPORT)
COLLINS: Well, it looks like a setup. A bomb jolts police, they are lured to the scene with a burned body.
We'll tell you the full story coming up in the NEWSROOM.
HARRIS: The safety of American troops. A report critical of body armor. Now the U.S. military fighting back.
That story ahead in the NEWSROOM.
MATTHEW CHANCE, CNN SR. INTERNATIONAL CORRESPONDENT: And I'm Matthew Chance, live in Moscow.
Dramatic developments on the NEWSROOM later on the radioactive poisoning case that reads like the plot from a Cold War thriller.
We'll have the latest from the Russian capital. COLLINS: A mother and her two children both graduate on the same day at the same time.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I'm going to go to both of my kids' graduations. And I'm going to watch them both walk across the stage.
(END VIDEO CLIP)
COLLINS: Double grads and double duty for a determined mom.
Coming up in the NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: A major new development in the poisoning death of a former Russian spy, Alexander Litvinenko. Britain plans to charge a Russian businessman who is also a former KGB agent with murder. The case likely to put London and Moscow on a diplomatic collision course.
The latest from CNN's senior international correspondent, Matthew Chance, in the Russian capital.
Matthew, good morning.
CHANCE: Good morning to you, Tony.
And there has been so many twists and turns in this dramatic radioactive poisoning case that's been really gripping Britain over the past several months. The latest development no less dramatic, with the British authorities actually saying that they found enough evidence now to name the person they believe was the poisoner of Alexander Litvinenko, the former Russian KGB agent who defected to Britain in 2000. He died, of course, in London back in November.
They named their suspect as Andrei Lugovoi, himself a KGB agent. And the British authorities made the announcement despite the fact, as you mentioned, that it's likely to place additional strain on relations between Britain and Russia. Ken MacDonald is the head of Britain's prosecution service.
(BEGIN VIDEO CLIP)
KEN MACDONALD, DIRECTOR OF PUBLIC PROSECUTIONS: I've instructed CPS lawyers to take immediate steps to seek the early extradition of Andrei Lugovoi from Russia to the United Kingdom, so that he may be charged here with murder and brought swiftly before a court in London to be prosecuted for this extraordinarily grave crime.
(END VIDEO CLIP)
CHANCE: Well, that statement underlining just how crucial the British authorities believe bringing the person responsible for this to justice really is. The British Foreign Ministry has said that they were expecting to see full cooperation from the Russians. From their part, though, the Russians have already made it clear that they have got no intention whatsoever of extraditing Andrei Lugovoi, who is currently living in Moscow, to Britain to face these charges.
There's also been reaction from Alexander Litvinenko's widow, Marina, who expressed concern. She welcomed the statement, but she expressed concerns that more than one person may have been involved.
(BEGIN VIDEO CLIP)
MARINA LITVINENKO, WIDOW: No, we don't know why my husband was killed and who asked for this murder. And I believe it's not only one person. You've got strong evidence about him, and I think it will be very helpful to take his charge to know exactly why it's happened, who stayed behind him.
(END VIDEO CLIP)
CHANCE: Well, it was of course Alexander Litvinenko himself who pointed the finger of blame at Vladimir Putin, the Russian president, from his deathbed, saying that he had been silenced for being such a vocal critic of the Kremlin.
Back to you, Tony.
HARRIS: Matthew, tell us about this Andrei Lugovoi. Who is he? We know that now he is a businessman. What about his former life?
CHANCE: Well, back in the 1980s, along with Alexander Litvinenko, they were both in the Russian security services, the KGB. They came into contact with each other then.
Since then, Andrei Lugovoi has ran a very successful security business, and he says it's in that capacity that he kept in contact with Alexander Litvinenko. Indeed, that's why he says they had this meeting in London.
Certainly, what he says is that he has no knowledge of any poisoning. He said he was a witness in this case, he had no idea that he was a suspect. But, you know, that may well change now that we've had these official accusations leveled against him.
HARRIS: Yes.
CNN's Matthew Chance for us this morning.
Matthew, thank you.
COLLINS: Gas prices on the rise. Ahead in the NEWSROOM, what the oil companies are or aren't doing. We'll talk with an expert coming up in the NEWSROOM.
ALI VELSHI, CNN CORRESPONDENT: And is a widely used drug for Type II Diabetes something that could cause risk of a heart attack? I'll have more on that when we come back in the NEWSROOM.
(COMMERCIAL BREAK)
COLLINS: Avandia is a drug used to treat diabetes in more than a million Americans. A new study, though, attacks the pill, linking it to an increased risk of heart attacks and even death.
Ali Velshi is here "Minding Your Business" this morning.
Certainly not something you want to hear if you are taking this drug.
VELSHI: No, not at all. And you know how many take this drug? There are a million American patients on this drug.
COLLINS: Yes.
VELSHI: Type II Diabetes is really, really a big deal.
Now, Dr. Steve Nissen, who is the chairman of cardiovascular medicine at the Cleveland Clinic, which is on one of the best places in the country, led a team that conducted a report that looked at a study of studies, really, about 42 different studies, and they concluded that the risk that Avandia poses to takers, a 43 percent increased risk of heart attack, and a 64 percent increased risk of heart death.
Now, Avandia is a big selling drug. This is GlaxoSmithKline's second big-selling drug. Almost 20 million Americans, by the way, have Type II Diabetes. This drug sold $3 billion last year worldwide. There are seven million people on the drug around the world, and as I mentioned earlier, a million here in the United States -- Heidi.
COLLINS: You know what? I'm actually e-mailing my dad, because he's got Type II, and I'm trying to figure out if he's taking it. And I'm sure that's what a lot of people are doing this morning just to double-check...
VELSHI: Yes.
COLLINS: ... and to figure out what to do next.
Do you just switch medications, or what should people be doing?
VELSHI: Well, this is one of those things that causes a problem, because GlaxoSmithKline has responded by saying they don't think anything is wrong with the drug. They say -- in fact, their statement is that "GSK stands firmly behind the safety of Avandia when used appropriately. And we believe its significant benefits continue to outweigh any treatment risks."
Now, there is another drug that's made by Merck. It's not the same class of drug, but it's also a big treatment for Type II Diabetes. So, it doesn't seem to be having -- if this had this effect, it doesn't necessarily mean that the Merck drug would. But again, Heidi, the wise thing to do for anybody who is on the drug is speak to a doctor first...
COLLINS: Of course.
VELSHI: ... as opposed to making self-medicating decisions. But, this is -- you know, it's a big deal for Glaxo and for people with Type II Diabetes.
COLLINS: It is. And as we look -- you know, to be fair, and look at this statement that they have made, GlaxoSmithKline saying that they firmly, as you just said, stand behind the safety.
VELSHI: Yes.
COLLINS: But when used appropriately? What does that mean? Are people taking too much of it? Not following their prescriptions?
VELSHI: Well, for the right things -- again, it's one of those things that's so common that it's unclear what they mean by "used appropriately".
COLLINS: Yes.
VELSHI: The question here, when you hearken back, when you think about Merck, which is what people think about with Vioxx, the question here is, what does GlaxoSmithKline know about this drug?
COLLINS: Exactly.
VELSHI: What are they going to do? This is not the FDA pulling the drug off. This is not Glaxo pulling the drug off. This is a study that says so.
Now, that's how we sort of move forward. This study was published in the "New England Journal of Medicine," so it gets peer reviewed.
Hard to know what to do. What happens next is going to be key. What GlaxoSmithKline says about this, what evidence they can show that it's safe, because, again, there are a lot of people who take these treatments. And when you have different treatments for the same condition, Heidi, often what it means is that you're reacting better to one or the other. So, it's not a matter of everybody being able to get off of this one if they don't want it and switch to the other one.
COLLINS: Yes, exactly. And trying to figure out here how many people were involved in this study and stuff, too, because you always want to know.
VELSHI: Twenty-eight thousand, I think.
COLLINS: Twenty-eight thousand?
VELSHI: All together. It was not one study. It was about 40 different studies they looked at, and they sort of pieced bits of it together, which is why there are some critics of the study.
COLLINS: Sure.
VELSHI: But the most important thing here is getting to the bottom of whether this drug does cause increased heart attack.
COLLINS: OK. All right. Well, a lot of people going to be watching this one.
VELSHI: Yes.
COLLINS: Certainly.
Ali Velshi "Minding Your Business".
Ali, thank you.
Good morning once again, everybody, 9:30 on a Tuesday morning.
Thanks for being with us.
HARRIS: And I'm Tony Harris. Heidi Collins here with me, as always.
COLLINS: I knew I forgot to say that.
HARRIS: Well, that's OK. It's all good. That's why I'm here.
One of the stories we're following this morning, in Iraq, dozens kill and wounded in a series of grisly attacks. The deadliest of the day so far, a car bomber strikes a Baghdad marketplace. At least 25 dead, 60 wounded.
A short time later in the capital, three mortar rounds slam into a college. At least three students died in that attack.
And north of Baghdad, gunmen killed a family of six. Baquba police say the killers posed as police officers and set up a fake checkpoint.
COLLINS: Protecting American troops. Controversy now over the type of body armor used in Iraq.
CNN Senior Pentagon Correspondent Jamie McIntyre takes a look.
(BEGIN VIDEOTAPE)
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice over): Army officials are irate about an NBC News report claiming that in an independent side-by-side test, Dragon Skin brand body armor outperformed the Army's standard issue Interceptor vests.
UNIDENTIFIED MALE: And we have a specific firing pattern protocol that we go through.
MCINTYRE: The Army argues the vests are substandard and that an unusually extensive Pentagon briefing released a video showing a bullet...
UNIDENTIFIED MALE: There's the shot.
MCINTYRE: ... ripping through the Dragon Skin vest while the CEO of the maker, Pinnacle, looked on.
BROWN: Zero failures is the correct answer. One failure is sudden death and you lose the game.
MCINTYRE: The Army says it happened more than a dozen times.
BROWN: This is a 7.628 by 63APM2 (ph) round. At the end of the day, this one disc of a Pinnacle SOV3000 vest has to stop this round. It didn't -- 13 times.
MCINTYRE: Reached by CNN, Murray Neal, the owner of Pinnacle, had a simple response. The Army, he says, is lying.
The Dragon Skin vests feature small discs that overlap like fish scales. While providing flexibility, the Army says the design also leaves weak spots where there is no overlap and that in extreme temperatures, such as the intense heat of Baghdad's summers, the vests break down.
(on camera): This Dragon Skin vest was subjected to temperatures between 25 degrees below zero and 120 above, and, as a result, some of the armor plates came apart and sort of gathered in the bottom of the vest. As a result, when they fired bullets in the back two of them went right through.
(voice-over): One of the outside experts consulted by NBC, former Pentagon chief weapons tester Phil Coyle, also told CNN the Dragon Skin design did seem to perform better in the limited NBC tests.
A more resilient design seemed to protect better against multiple hits, reduced the trauma felt and was more effective against some newer, more powerful munitions. But the Army says its interceptor armor is lighter, more durable and 100 percent effective at stopping most bullets -- the best in the world bar none.
BROWN: If there's something better out there we're going to buy it -- after we've live fire tested it.
MCINTYRE: The Army says it only reluctantly blasted Pinnacle in a public way because it was worried that families would be misled by the claims.
BRIG. GEN. TONY CUCULO, U.S. ARMY SPOKESMAN: We considered and took to our senior leadership -- and, if I could use a term, a sort of let's take the gloves off on this.
MCINTYRE: The debate already has some members of Congress hinting an investigation may be needed to settle the question of whose armor is better.
Jamie McIntyre, CNN, the Pentagon.
(END VIDEO TAPE)
HARRIS: High flying Congress -- members taking cushy charter flights.
Are they also taking taxpayers for a ride?
That story coming up for you in the NEWSROOM.
COLLINS: Booby-trap bombs -- militants leave a calling card at the scene of a murder investigation. More in the NEWSROOM.
HARRIS: And extreme makeover for an American icon -- New York's yellow cabs. We will explain in the NEWSROOM.
(COMMERCIAL BREAK)
(STOCK MARKET REPORT)
Today things are looking up a little bit already. The Nasdaq up, I guess, just a stitch.
HARRIS: Yes.
COLLINS: But we know something else is up much more than a stitch and that's obviously gas prices, still in the news...
HARRIS: Yes.
COLLINS: People's reaction to that and what they might actually do, if anything, to change their driving habits. I don't know, I guess that's still a possibility...
HARRIS: Opt out of gas.
COLLINS: Yes. No more gas.
HARRIS: Opt out.
COLLINS: That would be interesting.
All right, we're going to bring you our business stories coming up a little bit later in the show.
HARRIS: You know, it seems every time you turn around, gas prices are a little higher. That's because it's true. They're now at a new record.
Let's get some perspective on why and whether we will get any relief.
"Businessweek's" Wall Street and markets editor, Roben Farzad, joins us from New York.
It's about a year since we've talked, Roben. Great to see you again.
Thanks for your time this morning.
ROBEN FARZAD, "BUSINESSWEEK": Hey, Tony.
How have you been?
HARRIS: Outstanding. Well, not really. I'm a little outraged. But I seem to be -- I guess I'm the only one. I can't seem to stir up enough outrage on this story.
Here's my question -- gas prices right now, artificially high?
FARZAD: No. They're not. And as...
HARRIS: No?
FARZAD: ... as much as we want, as I've said a thousand times, as much as we want to shake our fists at the Exxons and Chevrons and Texacos of the world, this is a situation that the country has collectively gotten itself into.
We don't have enough refineries. There's a not in my backyard perception when a refinery is about to be built. A new one hasn't been built in 30 years.
And when we run into the summer driving season, invariably by Memorial Day, when people want to drive and get about town -- we love our cars and we're not giving this up, and we have a really high pain threshold for gas prices.
HARRIS: So you're telling me at $3.22 a gallon, oil refineries or companies are saying, you know what -- we want to built new refineries, but there is not a neighborhood in the country that will allow us to build one?
FARZAD: Look, I mean there is a half-hearted element to it, right?
HARRIS: Thank you.
FARZAD: I'll throw you a bone there.
HARRIS: all right.
FARZAD: A handful of the oil companies and refineries have actually been scheduled -- have staged unscheduled shutdowns of the refineries for maintenance purposes. And, you know, for crying out loud, why do you want to do this ahead of the summer driving ramp up, where we have to shift production whole hog to unleaded gasoline?
Well, it turns out they're loving this. The crack margins are huge. A lot of these firms are buying back stock instead of plowing the money back into building refineries.
But in their defense, no one wants a refinery -- a sooty, you know, ugly, not in my back yard refinery -- in their front yard.
HARRIS: You know, there is no -- the truth of the matter here, Roben, is that there is no incentive for oil companies to build more refineries. If you can limit refinery capacity, control markets, restrict supply, guess what?
FARZAD: Well, Tony, look, there should be...
HARRIS: ... you get huge...
FARZAD: ... there should be the...
HARRIS: ... windfall profits.
FARZAD: Right. It's fun to say that, but the margins are so fat in the refinery business right now that the economic forces should be alleviating this. People should be rushing to build these things. There's no shortage of private equity money.
The industry has an embarrassing amount of cash. Every time Exxon announces a profit, it's, you know, the first headline on CNN and CNBC, record quarterly profit. Of course they would love to plow it back into something.
But, you know, are they half-hearted about it, are they enjoying the status quo?
No doubt about it.
HARRIS: Yes.
FARZAD: And let me tell you, this could course correct. We saw gas prices hit a last summer and then plummet into the winter. So they can come out and say listen, we are at ample capacity, the summer is the summer, the global economy right now is so that everybody has this voracious demand for unleaded gasoline, so, so be it.
HARRIS: OK.
Were there more oil refineries in this country in the 1990s than there are today, currently, presently, right now at this moment?
FARZAD: It's stagnated. I mean plus or minus...
HARRIS: Stagnated?
FARZAD: ... with things taken offline, with mergers and acquisitions, with upgrades. But let's get down to brass tacks here.
HARRIS: Beautiful.
FARZAD: With the refinery business, we are really at a fork in the road. You talk about an inconvenient truth. You talk about people saying we're in a carbon constrained world where we have to be mindful of these things. Do you want to go ahead and invest in refineries with a useful life of 50 years and go full speed ahead with a fossil fuel based economy?
This is why we're feeling the discomfort right now. Our pockets tell us yes, full speed ahead, build the refineries. But I think from a conscience point of view, you're like well, do I want my children, you know...
HARRIS: There you go, Roben.
FARZAD: ... having these things in their back yard?
So it's an irreconcilable truth, if nothing else.
HARRIS: So we need to opt out of gas. Not easy to do right now, but if we continue to push for biofuels, hybrids, we are on the right path?
FARZAD: But it's not going to help...
HARRIS: If we're going to get over the addiction...
FARZAD: It's not going to help your pocket over Memorial Day weekend, I'll tell you that much.
HARRIS: Roben, great to see you.
FARZAD: Sorry for the bad news.
HARRIS: That's all good. It's all good. It's basically...
COLLINS: You're...
HARRIS: Well, what?
COLLINS: You're yelling.
HARRIS: Yes. I'm outraged. I'm trying to find some -- Roben great to see you.
FARZAD: Likewise.
Thank you.
COLLINS: Roben, save me.
HARRIS: Let's see you again inside of a year's time.
That's insane.
Thanks.
COLLINS: Well, they honk and often make up their own traffic rules. You probably know this if you've been to New York. But now, New York's famous yellow taxicabs may become kinder to the environment, at least.
HARRIS: Oh, really?
COLLINS: Tony, you'll like this.
HARRIS: Oh, really?
COLLINS: Mayor Michael Bloomberg announced just a short time ago he's requiring all 13,000 taxis in the city to switch to hybrid gas/electric models.
HARRIS: No!
COLLINS: Hybrids emit less exhaust and have higher mileage. The cabs have five years to make the changeover.
Is that fast enough for you?
HARRIS: No, of course not. But it's a start.
It's a step in the right direction.
COLLINS: Are you driving one of those things yet?
HARRIS: Look. Look, look, I'm going today. I am going...
COLLINS: No.
HARRIS: Thank you, Heidi, for teeing it up for me.
COLLINS: You're yelling.
HARRIS: You've got to get excited about something in this life, Heidi.
COLLINS: Yes.
HARRIS: And, you know ...
COLLINS: Hey, Rob, are you with us?
ROB MARCIANO, CNN METEOROLOGIST: I'm -- I'm here.
COLLINS: Can you hear him?
HARRIS: How you doing?
MARCIANO: Yes.
That switchover is never fast enough.
COLLINS: Yes.
MARCIANO: But can they go from 40 second to 14th in .23 seconds?
COLLINS: That's -- yes. This is what I'm talking about. Would they lose any speed when they switch over?
MARCIANO: Those guys are going to be so frustrated.
HARRIS: All right, I'm -- I'm leaving. I've had it.
MARCIANO: Wait. Sit out, T.
All right, I've got something to tell you, all right?
This is best part of the show, so listen up.
COLLINS: Oh.
HARRIS: There you go.
(WEATHER REPORT)
COLLINS: A houseboat on the edge -- we'll tell you about a dramatic river rescue coming up right here in the NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: I'm telling you, this whole gas thing, Heidi, I'm onto something here.
COLLINS: You're hysterical.
HARRIS: I'm ginning up the outrage around the country, single- handedly.
COLLINS: You're -- no, they're -- I'm sure there are others just like you.
HARRIS: I am on a fixed income. This is -- this is cutting...
COLLINS: Seriously...
HARRIS: This is a pocketbook issue for me, Heidi.
COLLINS: You can't even say it with a straight face. Good lord.
HARRIS: Oh.
Oh, podcast.
Every day you know to catch us, OK, 9:00 a.m. until 12:00 right there in the NEWSROOM. But you can now take us with you anywhere on your iPod. We're talking about the CNN NEWSROOM pod cast, available to you 24-7.
Make us a part of your life every day ...
COLLINS: Yes, you can ...
HARRIS: Download us ... COLLINS: You can listen to us in your SUV that's sucking up all the gas ...
HARRIS: Under your (INAUDIBLE)...
COLLINS: ... or your Prius that's not.
HARRIS: Exactly.
Just -- just listen. Just download it.
COLLINS: I can't wait to go car shopping with you.
Moving right along, lawmakers traveling in high style on the taxpayers' dime.
So is it money well spent?
Well, CNN's Drew Griffin is keeping Congress honest.
(BEGIN VIDEO TAPE)
DREW GRIFFIN, CNN CORRESPONDENT (voice-over): In Washington it's a rite of spring, an enduring ritual Congress just can't seem to quit.
JOHN BERTHOUD, NATIONAL TAXPAYERS UNION: You have taxpayers being forced to pay tens of thousands of dollars for these overpriced junkets.
GRIFFIN: Ah, yes, the siren song of an expensive military jet to whisk Congressmen to far away and often exotic places. And, naturally, you, the taxpayer, pick up the tab.
COLONEL GARY AKINS, D.C. AIR NATIONAL GUARD: Yes. Go ahead. Go on up.
GRIFFIN: Welcome aboard an $85 million government owned Boeing executive jet. Colonel Gary Akins is the man in charge.
AKINS: It's a nice way to travel.
GRIFFIN: And it's just one of several military owned aircraft at Andrews Air Force Base just waiting for members of Congress, like Representative Bennie Thompson of Mississippi.
Where did he go on spring break?
REP. BENNIE THOMPSON (D), MISSISSIPPI:
GRIFFIN: The Virgin Islands was one of many stops.
GRIFFIN: He's the new chairman of the Homeland Security Committee. Thompson and eight colleagues made a whirlwind trip to Mexico City, Honduras, the Virgin Islands then Key West.
Why? To check out matters of homeland security.
One night they stayed here, at the Caneel Bay Resort.
Critics are pouncing on this and some of the 12 other Congressional trips taken over spring break -- the trips made easy because members of Congress don't fly like you and me.
On board the $10,000 an hour Air Force jets, it's all first class -- movie screens, a couch, a conference area.
Don Humphries leads the flight service on board, which usually includes snacks, appetizers and full meals.
(on camera): A lot of taxpayers are going to look at this and go what the heck...
MASTER SGT. DON HUMPHRIES, D.C. AIR NATIONAL GUARD: Right.
GRIFFIN: Why -- why are -- because we're paying for this, right, I mean...
HUMPHRIES: Exactly.
Yes. Taxpayer dollars.
GRIFFIN: Congress' long standing rules for using military jets used to be you had to have five members of Congress go along, including both Democrats and Republicans. Empty seats -- and there usually are some -- can be filled by spouses and/or staff. So keeping them honest, let's take a look at some of the high flying spring breakers.
(voice-over): When New York Congressman Eliot Engel chartered to the Caribbean, he took four other Democrats, but no Republicans. The itinerary included a tour of a home for the elderly, an historic fort, a nature center and meetings with local officials.
A spokesman for Congress Engle said the trip was need because the countries in the Caribbean have been complaining of being ignored by the U.S.
It was also a pricey trip to London and Brussels. Barney Frank the new chair of the House Financial Services Committee, took two other Democrats to meet financial regulators. Seven more passengers rode along, including the adult daughter of one Congresswoman.
The total cost to taxpayers for that flight? $160,000.
That's double what it would have cost to fly all 10 business class. Barney Frank's spokesman told us a military charter just made it a lot easier in terms of transportation.
As for Congressman Bennie Thompson and his Caribbean trip, at an estimated 13 hours flight time, the cost was $130,000 just to fly.
(on camera): This looks like a first class boondoggle with some information peppered in.
THOMPSON: Well, if you look at the time that we actually spent in each area, given the fact that we spent less than 24 hours in any community, it would have been utterly impossible to do that trip commercially and logistically.
GRIFFIN (voice-over): Also along for the ride, Thompson's wife, three other wives and eight staff.
And that beautiful resort?
(on camera): Was Caneel Bay -- was that stop a mistake?
THOMPSON: Well, if it were not the only place available to stay, you could have justification that it could have been. But if it's the only hotel on the island that had a vacancy, it could not be a mistake.
GRIFFIN: New House Speaker Nancy Pelosi promised no more business as usual in Congress. So we called the speaker's office and asked about all these trips. We were told in an e-mail the speaker was unaware there was no Republican on Barney Frank's trip to Brussels and London, the speaker does not approve most trips and as for who does approve Congressional trips, well, that is done as it was done in the past Congresses -- by committee chairs -- chairs like Barney Frank and Bennie Thompson.
In other words, says the Taxpayers Union's Berthoud, business as usual.
BERTHOUD: These members are just not -- not leveling with the American public that they are doing the people's business when they're -- when they're going on these trips.
GRIFFIN: Back at Andrews, Colonel Akins says flying members of Congress is serious business.
AKINS: It's important people doing important work. And our job is to facilitate that. And it's other people's job to determine whether it's, you know, proper use or not proper use.
GRIFFIN: As for what's proper and what's not, at the moment it seems the sky's the limit. Drew Griffin, CNN, Andrews Air Force Base Maryland.
(END VIDEO TAPE)
COLLINS: One Republican was scheduled to join New York Democratic Eliot Engle on his Caribbean trip, but the Republican canceled about two weeks before departure. Engle said he couldn't find a replacement and so the speaker granted a waiver.
COMMERCIAL
COLLINS: Swim stalls -- that pair of humpback whales near Sacramento comes to a halt. They were heading down the river toward the Pacific Ocean. But not anymore. The mother and calf now are just sort of swimming in circles. It's so frustrating to watch this.
They made it as far as Rio Vista, about 50 miles from the Golden Gate Bridge and the ocean. The whales have been swimming around the Sacramento River for more than a week.
HARRIS: Living on the edge -- a houseboat teetering from atop a Kentucky river dam -- a little wobble here, a little wobble there, and the four people aboard could have plunged some 20 feet onto rocks below. It didn't happen. Look at that.
COLLINS: That is unbelievable.
HARRIS: That is.
Fire officials say the driver put the boat in reverse at top speed to keep it from going over. Then the four jumped into a city rescue boat. No one was injured. Police say the diver -- well, I'm sorry -- the driver of the boat was charged with operating the boat under the influence of alcohol.
COLLINS: Oh.
HARRIS: Look at that.
COLLINS: Well, open your wallet a little wider. Gas prices climb again. We've got a new record high. We'll tell you about it in THE NEWSROOM.
(COMMERCIAL BREAK)
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