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Brothers in Arms?; The Homeless Front; America Votes 2008; The Trouble with Oil
Aired November 11, 2007 - ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS: We hope you'll be with us. For all of us, thanks for watching, have a great week. Good night from New York.
TONY HARRIS, ANCHOR: One killed eight people at a school in Finland. The other allegedly wanted his own massacre in Pennsylvania. Now, investigators are looking into a possible connection between them.
A painful statistic as the United States celebrates Veterans' Day for every four homeless people you see, one is a veteran. Why and what can we do?
Your pockets are about to get a lot lighter and you can thank high oil prices for that. It's "The Trouble with Oil," a CNN special report coming up at 7:30 eastern.
But we begin this evening with an international crime investigation that might have links to a case in the United States. Police are trying to determine if there's a connection between a Finnish killer and an alleged plotter in Pennsylvania.
Two troubled teens on two different continents; Finnish investigators are looking into whether they could have been united by their admiration for the Columbine gunmen, their outcast status and the Internet.
Pekka Erik Auvinen is the 18-year-old Finnish student who shot and killed six classmates, his principal, and a school nurse last Wednesday before killing himself.
And this is 14-year-old Pennsylvania teen Dillon Cose (PH). He was arrested last month accused of planning a school massacre of his own near Philadelphia.
Finland's national police confirmed they are looking into whether there could have been, could have been a connection between the two adding, they are collecting all the evidence, and won't comment until they are sure of their findings.
The "Times" of London reports the common link could be two different mind space groups, both dedicated to glorifying the Columbine gunmen.
The Finnish investigators are already looking into the postings in chat rooms and other writings. His postings on YouTube included rants about revolution and this video of him taking target practice. Finnish police have also detained another teen, a 16-year-old who posted a video on YouTube. Police say the video threatened a massacre similar to the one carried out last week.
A nation at war pays tribute today to the men and women who have fought America's wars. President Bush observed Veterans' Day with a speech in Waco, Texas. In his role as commander-in-chief, Mr. Bush delivered a heartfelt thanks to those who have served in uniform.
GEORGE W. BUSH, PRESIDENT, UNITED STATES OF AMERICA: I thank our nation's veterans for the fine example that you have set for our country. I thank you for your courage and your patriot -- patriotism and your devotion to duty. I thank you for standing up for the men and women of our armed forces.
And I thank you for all you do to support the families they leave behind during this time of war.
HARRIS: Because the president was in Texas, vice president Cheney stood in at the Veterans' Day tribute at Arlington National Cemetery. He spoke at the tomb of the unknowns, and singled out the Americans now fighting in Iraq.
The vice president said he holds out hope they will return home victorious.
Also today a solemn commemoration at the veterans Vietnam Veterans Memorial. It took 65 hours, starting the middle of last week to read the names of the war dead inscribed on the granite wall, once divisive now revered. The memorial was formally dedicated 25 years ago Tuesday.
While many vets marched today, others are searching for a place to sleep. A new study finds a quarter of homeless people in the United States are veterans. And their faces are changing. Younger vets from the wars in Iraq and Afghanistan are showing up at shelters and soup kitchens.
Vince Gonzales has the story.
RYAN SUSSMAN, HOMELESS VETERAN: This is pretty much where we stay at rooms like these.
VINCE GONZALES, CNN CORRESPONDENT: Former navy airman Ryan Sussman is part of a new troop surge at home that has government officials worried.
SUSSMAN: Better than a cold sidewalk, yes, definitely. GONZALES: Sussman, who served aboard the "USS Carl Vincent" quickly found himself homeless after his recent discharge.
The same thing happened to veteran Jason Kelly.
JASON KELLY, HOMELESS VETERAN: I got stuck in a situation where I couldn't get a job, because I didn't have an apartment. And I couldn't get an apartment because I didn't have a job.
GONZALES: Kelly's job in Iraq was to patrol convoy routes for ambushes and roadside bombs.
KELLY: Basically, kind of attract fire, if there is any so it doesn't hit the convoy.
GONZALES: Both men found it hard to readjust to civilian life. Sussman still can't fathom how he ended up in a homeless shelter.
SUSSMAN: There are alcoholics, hard-core drug users that you're staying with in this small area and I'm like, "What am I here for? I don't belong here."
GONZALES: But he's not alone. A report released last week by the National Alliance to End Homelessness found nearly a quarter of the nation's homeless are veterans. On any given night, that means nearly 200,000 without a home.
Vietnam vets took years to slide into homelessness. But veterans from Iraq and Afghanistan, who have higher rates of post traumatic stress, are hitting the streets much more quickly.
Sussman and Kelly eventually found a place at a government housing program run by the U.S. Veterans Initiative, which has seen the problem grow.
DWIGHT RADCLIFF, LU.S. VETERANS INITIATIVE: The lack of the ability to go and get employment without having an address. We have hundreds of thousands of veterans at risk of being homeless.
GONZALES: in his weekly radio address, President Bush reaffirmed his commitment to veterans.
BUSH: Under my administration, federal spending for our veterans has increased by more than two-thirds. We've extended medical treatment to a million additional veterans, including hundreds of thousands returning from Afghanistan and Iraq.
GONZALES: But these veterans are bewildered by how quickly they fell through the cracks, and worry they've been abandoned.
KELLY: To a degree, yes. It's not really abandoned, but just currently ignored.
SUSSMAN: It just makes you want to curl up into a ball and go in the corner and just say, you know, "Forget it. It's not worth it."
GONZALES: Vince Gonzales for CNN in Los Angeles.
HARRIS: Let's turn to weather now. It is going to be, Jacqui Jeras tells us, a wild weather week out west. Jacqui good to see you.
JACQUI JERAS, CNN METEOROLOGIST: Good to see you, too, Tony. And welcome everybody. It is going to be very busy across the western part of the country.
We've got storms lined up out in the Pacific just waiting in the wings to come on in and slam into the West Coast and bring some real nasty weather.
Our first storm already arrived yesterday; right now it's making its way across the Great Basin and heading towards the Rocky Mountains. It's bringing in some light rainshowers into the valley areas and some pretty hefty snow fall totals in the higher elevations.
In the (inaudible), we're looking at three to nine inches by tonight above 7,000 feet. And over here into Wyoming we're looking at 6 to 10 in the mountains, 3 to 5 inches in the valley. And that includes you in Casper, yes, picking up a couple of inches down there.
On the south end of this front, where the tail is, it's bringing in some much-need rain across southern California, albeit very light. But at this point we'll take anything we can get. It came real close for you in San Diego, but most of the showers moved up to your north and down to the south into Baja parts of California.
Now we still have some time for this rain yet throughout the evening and overnight. But that front will be traveling eastward through the day tomorrow, and high pressure will build back in.
Strong offshore flow again for tomorrow means, yeah, critical fire danger expected in the same burn areas that have been hit so hard in the last month. And this will probably last not just into Monday but probably into Tuesday, as well.
All right. Here's our next storm waiting in the wings. And wow, look at this thing just wrapped up really tightly. This is a very potent storm system and it's going to be bringing in some very strong winds, especially along the coast of Washington and Oregon. Gusts up to 60 miles per hour; we could see 30-mile-per-hour gusts in Seattle and Portland.
HARRIS: Whoa, whoa, whoa. All right, thanks for the update, Jacqui, appreciate it.
An unexpected loss for hip-hop star Kanye West; CNN has confirmed the sudden death of his mother, Dr. Donda West. The artist's label Island Deb (PH) Jam says no more information is being released right now and that the family is asking for privacy. Dr. West was the former chair of the English Department of Chicago State University. She also was her son's manager and a respected figure in the hip-hop community.
Today, America honors its veterans, but how well is the nation caring for them the rest of the year?
And you probably heard, oil prices are nearing $100 a barrel. What that really means for you and your wallet, and what some people just like you are doing to find a detour around the high prices.
HARRIS: So a few minutes ago we told you about the many veterans facing homelessness. Another problem vets deal with, access to adequate health care.
CNN's Josh Levs is here now to tell us what, if anything, is being done to improve options for our veterans.
JOSH LEVS: A year for veterans. We're finding out these numbers about homelessness and after everything the nation has been through this year, it's the health care for veterans.
What we want to do today, since it is Veterans' Day, is take a look at these major issues facing America's veteran population and show you how this year Veterans' Day is different.
LEVS: Veterans' Day; each year, it's about gratitude and patriotism. But this year, it's also about overcoming a national shame.
ANNETTE MCLEOD, WIFE OF CPL. WENDELL MCLEOD: This is how we treat our soldiers. We give them nothing.
LEVS: The congressional hearings and scandal over deplorable conditions at Walter Reed Army Medical Center put into new light what President Bush had often said in the past.
BUSH: I can say to the loved ones in the military that their sons and daughters and husbands and wives get the very best medical care there is.
LEVS: The administration says it understands the problems and is fixing them.
BUSH: We have an outdated system that can bog down with some of those recovering in a maze of bureaucracy.
LEVS: Speaking last week at a new medical facility in Texas the president called for legislation needed to enact some changes and for a Veterans Affairs Spending Bill.
BUSH: Congress needs to take prompt action. LEVS: The Associated Press notes that veterans groups have been thankful to this congress for large budget increases engineered by Democrats.
Still, the National Veterans Foundation points to a series of problems that need attention. Like a backlog of claims for veterans' benefits, struggles with post traumatic stress disorder, and substance abuse rates. There are also concerns over homelessness.
NAN ROMAN, NATIONAL ALLIANCE TO END HOMELESSNESS: While veterans make up 11 percent of the civilian population, 26 percent of homeless people are veterans.
LEVS: the U.S. veteran population includes nearly 24 million people. About 250,000 are 100% disabled. And the U.S. military says more than 28,000 troops have been wounded in action in Iraq.
LEVS: We hope that's some helpful information for you. Keep in mind about that population this Veterans Day.
And Tony so you know, health care is obviously among the major concerns along with homelessness, PTSD, major concerns for these groups.
HARRIS: You know it would be nice if we had a secretary of a Department of Veterans Affairs. We don't have that person in place right now.
LEVS: At all.
HARRIS: But, there was a nomination I understand last week.
LEVS: Recently, yeah, President Bush just talked about this, Lieutenant General James Peake. And this would be a big deal. He was chosen in the wake of what happened there. He was a former army surgeon general and he is a physician and the president says he would actually be the first physician to take that post.
Obviously in the wake of what happened you can see why that person might be chosen. On the flip side you can see why that person might not be chosen, because they're saying, well, if he was army surgeon general, why didn't he do anything about how atrocious that care was?
And so you know, you're going to hear both sides. You're going to keep hearing it. Also keep in mind, President Bush only has a year left. Whoever he chooses as attorney general might be able to do some stuff. But early 2009 you're talking about a whole new team.
HARRIS: It is a huge department, the Department of Veterans Affairs. You need somebody in that place and maybe we can get a confirmation process. Who knows what those hearings will be like? But I suppose they'll be starting soon.
Josh, thank you. Appreciate it. Still to come, presidential candidate Barack Obama facing criticism from some quarters, not for something he did, but for something he didn't do.
Hear what our political bloggers are saying. That's next.
First, though, another look at how Americans paid tribute to our nation's veterans today.
There was magic in that wall. How could two pieces of granite engraved with names and placed in a depression in the earth come to be the most famous memorial in the city endowed with so many monumental tributes to men of honor?
I thank our nation's veterans for the fine example that you have set for our country.
HARRIS: Well, we want to catch up now with CNN's top political guru. You know who he is. He is Bill Schneider, our senior political analyst, and he is on his way to Vegas for a democratic debate.
Here he is with the election express in Utah.
BILL SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Like America's pioneers were crossing the west in a covered wagon, our own election express bus. Pretty nifty covered wagon, huh?
We're in Utah, which is the most republican state in the union. We're headed for Las Vegas, Nevada which has a different distinction. It's the Bellwether state. It's voted for the winner in every presidential election since 1912 with one exception, 1976.
Nevada is a fast-growing state with a growing population of retirees, a lot of new union members and Latinos who have come to the state to work in the construction industry.
That's why the democrats are allowing Nevada to hold an early caucus and that's why the Nevada Democratic Party and CNN are co-sponsoring a debate in Las Vegas this Thursday evening.
Now I'm betting in that debate, the economy is going to come up as a major topic. And I'm also betting that Senator Hillary Clinton, the front-runner, is going to find some way of getting in to that debate that the economy was pretty good when another Clinton was in the white house.
You know, they say what happens in Vegas stays in Vegas. But in this case, that's not true. What's going to happen in Las Vegas is going to have national and world significance.
Bill Schneider, CNN, with the Election Express in Utah.
HARRIS: And coming up Thursday night, the democratic candidates hit the Vegas strip. All bets are off as they clash again with CNN's Wolf Blitzer and the best political team on television.
Watch this Thursday night, 8:00 eastern, only on CNN.
You know, speaking of debates, there is a lot of on-line chatter about Rudy Giuliani's latest endorsement, Senator Obama's patriotism, or lack thereof, depends on whom you ask.
Let's bring in our bloggers, on the right Mary Katherine Hamm from townhall.com, good to see you, lady as always.
MARY KATHERINE HAM, TOWNHALL.COM: Yes, good to be here.
HARRIS: And on the left, Faiz Shakir from thinkprogress.org. All right, Mary Katherine let me start with you. Pat Robertson and Rudy Giuliani side by side last week; the man whose life has been about preserving the sanctity of life endorsing Mr. Giuliani.
What is Rudy Giuliani these days? Come on, Mary Katherine, what was that scene about?
HAMM: That's an odd couple, isn't it? You know, Pat Robertson has been increasingly unpredictable over the past couple of years. And he and Giuliani have been -- have had a relationship for a long time; a political relationship of sorts.
I'm not sure how much good it does Robertson personally. But the statement he made, which is that the war on terror trumps all, is actually something that echoes what I hear a lot from even very strongly believing evangelical conservatives.
So, his point that he makes is valid; whether the endorsement actually does any good remains to be seen. I think evangelical conservatives have become so much stronger in the past six years, and been leading politics in many ways that maybe they don't need these shepherds anymore.
HARRIS: Hey, Faiz, what did you think when you saw those two side by side?
FAIZ SHAKIR, THINKPROGRESS.ORT: It's not hard to understand. Pat Robertson is putting ideology and partisanship before his principles. And so I think if you look at --
HARRIS: Really now?
SHAKIR: I mean it's not hard to understand, is it? But I think there are deep fissures on the right here. And I think we shouldn't overlook that. The fact that Pat Robertson is with Giuliani is only one aspect of it. You have Tony Perkins, James Dobson. Key figures on the right who are threatening to support a third party if Giuliani gets the nomination.
That's not going away. That's a real issue they're going to have to confront. You've got Romney with some backing, you have Huckabee with some backing. Sam Brownback endorsed McCain this week.
So there are deep fissures there and it's undermining, in general, the entire social conservative cause.
HAM: There is definitely a split of the social conservatives and some confusion as to where they want to throw their power. I think there actually has been a bit of a backlash against Dobson and those guys for getting a little mouthy about that third candidate stuff.
A lot of social conservatives, frankly they see Hillary Clinton coming at them, and they are not necessarily abandoning their ideals but if they get promises on judges from Giuliani and they feel like that's a better option than Hillary, they may end up going that way.
SHAKIR: When Giuliani sacrifices his positions on abortion and gay issues we'll know why that is. It's because he sacrifices principles for partisanship.
HARRIS: Well, let's leave that there. Let's move on to this scene. You've seen the pictures, I'm sure, the photographs, they've been e- mailed all over the world it seems. Senator Barack Obama.
We'll see it here in a second; never placed his hand over his heart during the national anthem. This was at Senator Tom Harkin's steak fry event.
When did this happen? Oh, in September. Is this, Mary Katherine, is this photo evidence that Barack Obama is unpatriotic? And therefore, is unfit to be president of the United States?
HAM: I do not by any means think that Obama is unpatriotic because of this picture. I do think that it may -- Hillary thinks he's naive when it comes to foreign diplomacy. I think it may prove that he's naive when it comes to domestic politics.
You know, it's okay not to take your hat off or put your hand on your heart when you're a 16-year-old who wants to make some statement or is just generally uninformed about our traditions. But if you're running for president, you need to be a big boy, and put your hand over your heart, especially on Veterans' Day.
You know, Obama dropped the ball on that one. So he'll take a little flak for it.
HARRIS: Faiz, what do you -- come on now.
SHAKIR: This is the kind of post-9/11 politics from the right that we've been hearing. I'm glad Mary Katherine is not a part of that. But a lot of people want to impugn patriotism. We saw it with John Kerry, we saw it with Matt Cleland, we saw it with the Dixie Chicks. Everyone wants to impugn people's patriotism on the left.
We should look at actions rather than symbols. If you go to any baseball game, football game, half the people aren't putting their hands over their hearts. Actions, look at actions.
Ask not what your country can do for you but what you can do for your country. People who put public service, those are the people who we should respect and they're acting patriotic.
HARRIS: That's going to give Mary Katherine the last word here.
HAM: It's a fairly simple action you can take and it goes just like this. And it would have been easy for Obama to do it. And so he'll take a little flak for it.
SHAKIR: but he's not unpatriotic.
HAM: No, no, no, he's not.
HARRIS: Thank you both, it's great to see you. Good Sunday and thank you for your time this evening. We appreciate it.
SHAKIR: Thanks, Tony.
HARRIS: And still to come the price of oil is within striking distance of $100 a barrel. That is a big number but what does it mean for you and me?
Higher gas prices, larger heating bills. even a more expensive gallon of milk? And guess what, there is no help from Washington in sight.
They are not going to affect the price at your pump. Not going to happen. And it may be a good thing.
HARRIS: It's "The Trouble with Oil," a special report coming up next.
HARRIS: Parents, you will love it. Kids, well, you're going to have to get over it. Last week, Microsoft announced the family timer feature for its popular Xbox 360 video game system.
It lets parents limit the amount of time the system stays on. It is available for download in early December, just in time for holiday vacations.
Now for more financial news, here's Ali Velshi with "Getting Down to Business."
ALI VELSHI, "GETTING DOWN TO BUSINESS": Last week saw crude oil prices surge to record highs. This week look out for another possible jump in gas prices, and for google going mobile. Keep an eye out for the petroleum status report released on Wednesday. If crude oil inventories remain low, we could see a further increase in gas prices down the road. According to the most recent AAA survey, the average price for a gallon of self-serve regular is more than $3.08. That's up over 30 cents from a month ago.
To see if higher prices at the pump and the mortgage meltdown are beginning to affect consumer spending, look out for the retail sales report which is also due out on Wednesday. Well, one company that doesn't seem to have any financial concerns is google. Its stock recently topped $700 a share. The internet search giant just announced an alliance with dozens of major cell phone makers and service providers that will bring google stock to a phone near you by late next year. Well if you want more of this sort of thing watch me on "Minding your Business" each weekday morning on "American Morning." That's it from New York, I'm Ali Velshi.
HARRIS: You heard all week how the price of oil is pushing $100 a barrel. Maybe that doesn't mean anything to you, but for the next half hour, we are going to show you how it will impact almost every facet of your life. And how we're all going to end up paying a price. How much? Here, take a look at this.
HARRIS (voice-over): At the pump, in the air, throughout your home, to almost everything you buy. America is dependent on oil. Tuesday, prices hit a record high, $97 a barrel. And reluctantly backed off. Then, an international agency that's usually pretty conservative changed its tone, saying the demand will get worse, especially in the years ahead.
WILLIAM C. RAMSAY, INTERNATIONAL ENERGY AGENCY: Well, our estimate is that energy demand worldwide would increase by some 50%, 55% by 2030.
HARRIS: According to AAA, the average price for a gallon of gas is now over $3. However, in some areas of California, drivers are paying more than $4. Last week, American Airlines, the nation's biggest passenger carrier, raised the price of domestic round trip fares by $20. Other major airlines followed suit. But worst of all, higher prices are going to hit home, especially for those in the northeast. The energy information administration predicts home heating bills in that region will increase at least 22% over last year. And that is assuming that oil prices stay where they are. Which is anything but guaranteed.
HARRIS (on-screen): Yes, it's more expensive, but more expensive for a reason that doesn't have anything to do with the actual price of oil. What? How can that be? I had a conversation this week with CNN's Ali Velshi, and I started it by asking that very question.
(BEGIN VIDEO CLIP)
HARRIS: Cut through it all for us at home, and for me who're trying to figure it out. Why is the price for a barrel of oil so high right now?
VELSHI: Well, you know, and this is very tough for folks to understand, because it doesn't make sense. It's a supply and demand thing. You think that the more people who want it, and the less there is of it, that's where the price goes up. But that's sort of stopped at about 60 bucks a barrel. This has become much more about trading and speculation.
HARRIS: Ali, that is crazy. So you're telling me that somewhere around $60 is the true price for a barrel of this light sweet crude that we're talking about?
VELSHI: In so much as there's a true price, right, because you want to buy one, you're going to have to pay what those traders want you to pay. But the bottom line is from the point of view of what it should be based on economics and supply and demand it should not be anywhere near these levels and most economists and experts say for the long- term, we should see oil prices coming down. But the short-term is where we live.
HARRIS: What does all this mean for consumers now?
VELSHI: Well, you've seen the price come up. For a little while, it was a very surprising delay in how this oil price made its way up.
HARRIS: Absolutely. Couldn't understand that.
VELSHI: You know what, forget it, the delay's over, it's moving up. You're going to see gas prices now they're above $3 a gallon.
HARRIS: Just in time for the holiday driving season.
VELSHI: Exactly. That's taking money out that you otherwise might have been spending. Your higher interest payments are taking money out. Your lower dollar means that pick up anything that you work with and turn it around, it's going to say made in China. We import everything. Our dollar going down makes that more expensive. You put all that together, you know, that is going to take money out of your pocket. Now, not just gasoline, heating oil, if you live in the northeast. Anything you buy from a store that's got plastic on it. Anything that's delivered by a truck. Anything that's made in a factory that needs oil. There's no way you could avoid the increase in the price of oil. This affects everybody.
HARRIS: But, didn't we talk a couple of days ago about the supplies not being drawn down as far as some had predicted? And that was good news?
VELSHI: Right, but only, only $60 of this price is really about supply and demand. The rest of it is all speculative anyway. So let's say we found out we had a million extra barrels of oil in the United States. Guess what? Price will go down a couple bucks.
(END VIDEO CLIP)
HARRIS: Guess what? Energy traders are literally gambling with your gas money.
(BEGIN VIDEO CLIP)
ALLAN CHERNOFF, CNN, SENIOR CORRESPONDENT: Andrew Lebow has been an energy trader for nearly three decades. Never, he says, have there been so many investors bidding up oil.
(END VIDEO CLIP)
HARRIS: How's that possible? Our senior correspondent Allen Chernoff's report coming up in 60 seconds. It's the trouble with oil. You're in the NEWSROOM.
HARRIS: You know, the cost of filling up your car has been rising steadily for the past few weeks. The average national price for a gallon of gas is now hovering near $3.10 a gallon. That is the highest point since the summer driving season, which is usually the peak for gas prices. CNN's Allan Chernoff investigates.
CHERNOFF (voice-over): Prices at the pump are soaring yet again.
UNIDENTIFIED MALE: It's getting outrageous.
CHERNOFF: Is there a shortage of gas? Not at all. It's crude oil rapid climb to nearly $100 a barrel, says energy experts that's driving the price of gasoline, as well as home heating oil. Yet there's no shortage of crude oil, either, say fuel distributors like David Shouldwachter.
DAVID SHOULWACHTER, FUEL DISTRIBUTIOR: We have more than enough oil.
CHERNOFF: In fact the Department of Energy reports oil supplies are above average for this time of year. And demand, it actually declined in the past couple of weeks. Energy analysts say crude is rising because of fear there might be a disruption in the flow of imported oil. The last time there was a significant cut in foreign supply was when the U.S. invaded Iraq. Back then, the price of oil hit $35 a barrel. A fraction of today's price.
Andrew Lebow has been an energy trader for nearly three decades. Never, he says, have there been so many investors bidding up oil.
Is there any way that the supply and demand situation justifies oil at this level?
ANDREW LEBOW, SR. VICE PRES., MF GLOBAL: No, I don't think so. And I think we've seen a tremendous inflow of speculative money coming in to, not only the oil markets, but commodities in general.
CHERNOFF: Investors are putting hundreds of millions of dollars into the energy markets. SAM GREER, EXEC. VICE PRES., MERCANTILE EXCHANGE: Well now, it's as acceptable to invest in let's say crude oil or gasoline as it is to invest in IBM?
CHERNOFF: And many traders are embracing the old Wall Street rule that trend is your friend. The trend for oil has been up and it's been paying handsome dividends.
FADEL GHEIT, ENERGY ANALYST: The largest financial institution controlled oil price will dictate the direction of oil price much more than any oil country.
CHERNOFF: Of course, the trend could quickly change, leading traders to bail out of oil. But for now, a major reason we're paying more at the pump is that big investors have been striking black gold in the oil trade. Allan Chernoff, CNN, New York.
HARRIS: And the price of oil is within striking distance of $100 a barrel. And guess what? There's no help from Washington in sight.
(BEGIN VIDEO CLIP)
FRANK SESNO, CNN, SPECIAL CONTRIBUTOR: hey are not going to affect the price at your pump. Not going to happen. And it may be a good thing.
(END VIDEO CLIP)
HARRIS: A good thing? I'll let him tell it.
HARRIS: Three, four, five dollars a gallon for gas? Is that where we're headed? I spoke with CNN's special contributor Frank Sesno about what, if anything, Washington can do to help make sure this doesn't happen. In Washington, we count on Washington, D.C. to be our eyes and ears in matters like this. We don't want to spend $4, $5, $6 for a gallon of gasoline. But it looks like we're headed that way. What role can Washington play in helping us getting the oil companies, getting the oil suppliers off our backs right now?
SESNO: They're not going to do that.
HARRIS: What do you mean?
SESNO: Because the price of gasoline and the price of oil is not set in Washington. They may set the taxes. They may say well, let it go higher. They may tax the oil companies, which is what the democrats want to do. They are not going to affect the price at your pump. Not going to happen. And it may be a good thing. I think it is a good thing that they don't do that. Because at some level, let the prices go up.
HARRIS: Oh, no, no, no, no, no, what let the prices go up?
SESNO: Do you want to conserve? You want to use (inaudible)? You want buy your third Hummer, Tony?
HARRIS: No, no, no. Absolutely not. But you're saying that one way to discourage that kind of consumption is to apply a tax to make gas more expensive?
SESNO: No, I'm not calling for a tax. Don't get me there. Not at all. I want to keep the prices low, too. But the marketplace does work. One reason we drive the way we do is because we have been raised on cheap gas. Here's the bottom line. The era of cheap gas is over. Full stop. There's too much competition in the world, there's not enough supply in the world. We're importing 60% of what we use now. We used to take care of ourselves. Not anymore.
HARRIS: We don't want expensive gas. We like cheap gas. Why not the oil companies? Why can't they help us? Look, we see these quarterly profit reports. They're making unbelievable profits at this points when the price of a barrel of oil spikes. So why can't they give us something back over than higher pump prices?
SESNO: You asked me a moment about what can Washington do.
HARRIS: What can Washington do?
SESNO: The divide falls right between the parties, OK. Because there are two real different takes on this. The democrats say because of what you just said, these high prices, the oil companies are making gazillions of dollars. Let's tax them, tax them heavily, put the money into alternatives and renewables.
SESNO: The republicans say wait a minute, guys, and I'm oversimplifying here, but basically they say you're focusing on the wrong thing. We got more oil and gas. It's in Alaska. It's in the deep waters of the Gulf of Mexico. We need to be more aggressive in getting our own production going and better. That's the debate right now. You know what I think? It should be both.
HARRIS: Well, we've got to do something here. Because this idea of being dependent on these other sources, these overseas sources for oil, I can't tell you how vulnerable that makes me feel.
SESNO: And it makes everybody feel vulnerable. And that's, I think, one of the bottom lines of what we're seeing happen now. What we're seeing happen is that people are waking up, they're reading about the price of oil that goes up and up and up. They're reading about the people who are pumping it, Venezuela, Saudi Arabia, Russia. These are not always, you know, enlightened (inaudible) and people feel that they're being held hostage to the marketplace, and to producers who do not have the world, certainly America's best interests in mind.
HARRIS: Short-term, long-term, we see what's happening right now, short-term. But I have to read this to you. You know about this agency, the International Energy Agency. The head of that agency said this week, we're headed toward really bad days and that the global economy faces a serious energy shortage in the near future. Frank, what's going on here?
SESNO: China's using more. India's using more. Their economies are exploding and they're exploding on an oil economy. The ability of the international producers to pump more, both to feed that and to feed rising demand in this country, Europe and everywhere there's a growing economy, not there. And in poor countries, poor countries that are not producing their oil, they still have to pay for this. They can barely pay for their civilizations, for their societies, for their people as it is. And now they've got to pay for $100 a barrel oil. What that warning is is real. This could be a very, very difficult time unless these prices come down.
HARRIS: Frank, always, great to see you.
SESNO: Good to see you, too.
HARRIS: Thanks for your time.
So we've heard what Washington can or can't do. But what can you do?
(BEGIN VIDEO CLIP)
JONATHAN PRATT, NEW YORK RESTAURANT OWNER: I was driving a lot and I was driving a big, comfy, very expensive pickup truck that got about eight to nine miles per gallon.
(END VIDEO CLIP)
HARRIS: Next, meet everyday Americans who made a change, and inspire us all.
HARRIS: We know it's frustrating to hear gas prices are only going to get higher. We know it's frustrating to hear we consume too much energy. But right now, people are making changes to help their own budget, and change the energy picture at the same time. Maybe we can all get inspired by them. Take a look.
HARRIS (voice-over): You don't have to be a tie-dye wearing hippie to help fight the energy shortage. From L.A. to Atlanta to New York City, folks are finding ways to save money and save energy. Jonathan Pratt is one of thousands of Americans running their cars on biofuel.
PRATT: I was driving a lot and I was driving a big, comfy, very expensive pickup truck that got about eight to nine miles per gallon. My wife noticed that I was spending about $800 a month on fuel.
HARRIS: Pratt owns three restaurants in upstate New York. So he decided to take the excess grease from his kitchens, and fuel his truck. He got his mechanic to install a conversion kit for about $1800, it's big money. But he says he is saving much more.
PRATT: The first year we saved about close to $6,000. And it's been that way since about two years now.
HARRIS: The National Biodiesel Board says sales of fuel from vegetable and other natural oils went from 2 million gallons in 2000 to 250 million gallons last year. Then there's solar power. Domenic Bucci, a retired engineer living in Rhode Island, can't get enough of it.
DOMENIC BUCCI, R.I., SOLAR ENERGY ASSOCIATION: People aren't realizing that they've got to do something about energy, price of gas. They have to think about these things.
HARRIS: Listen to this. He's got a solar water heater.
BUCCI: That is steamy.
HARRIS: A solar cooker.
BUCCI: This is my pride and joy.
HARRIS: Plus he's even attached a solar panel to his roof to harness even more energy. While solar and wind power provide less than 1% of the electricity in the United States now, in a recent poll, solar power won out as the energy source Americans believe will be used most in 15 years. But the energy saving trend that is really catching on in America? Building green homes. You see them going up every day. The National Association of Homebuilders found 90% of home builders are interested in a voluntary program that would certify green buildings. Homes with better insulation, well-sealed windows and doors that don't leak precious AC or heat. And people with existing homes are also getting green upgrades.
BRENDA GALLAGHER, ATLANTA HOMEOWNER: This room was freezing cold and once the insulation went up it was amazing how the air balanced out in the house.
HARRIS: A part of creating green homes? Devices that control the flow of water. And more energy efficient boilers. All helping conserve energy so we buy less heating oil, burn less coal, while lowering our annual utility bills by thousands of dollars a year.
DAVID ELLIS, GREATER ATLANTA HOMEBUILDERS ASSN.: I believe in the next five to ten years, it's just going to be how we do it. Because people are going to want that. They're going to need that to make their homes energy efficient and also very special place to live.
HARRIS: And there you go. Jason Pelletier founded the group lowimpactliving.com with his wife last year. His website helps people figure out how to make their homes more environmentally friendly. Jason, good to see you. Thanks for your time.
JASON PELLETIER, FOUNDER LOWIMPACTLIVING.COM: Tony, it's great to be on your program.
HARRIS: Well, I have to ask you, there you have a piece all about the things that people can do to make their homes and lives more environmentally conscious. So why aren't more of us doing more of those things? Have you figured it out, Jason?
PELLETIER: Well, I haven't figured it out completely. But there are a couple reasons. I mean, one thing is that the things we're struggling against like global warming are such huge issues that people naturally ask what can I do as an individual about these things? The second is that there's so much technology, so many new products coming into the market right now, that there's definitely a bit of confusion on the part of consumers about where to start and what to do.
HARRIS: Jason, weren't you having some problems in your own life, in your own home trying to make your home more environmentally friendly? Is that, isn't that the reason that you started the company in the first place?
PELLETIER: Yes, that's a big part of it. I've been working in the environmental industry for about 15 years, and a few years ago bought a house in Los Angeles, and started to try to make it green. And after a couple projects, that took me 20 to 30 hours a piece, I was literally ready to give up. And I said if this is difficult for me, it must be so much more difficult for others out there and that's the start of low-impact living.
HARRIS: Beautiful. So, Jason, what are some tips? Help us out here, break the inertia for us. What are some practical things we can do now to make some real impact, a real difference in our life?
PELLETIER: Sure, well the first place I'd start is to say that this really isn't just about protecting the environment or reducing global warming. Most of these tips will not only save you money, but they'll also make your home a more comfortable and healthier place to live.
HARRIS: OK. OK.
PELLETIER: So where we start, we spend a lot of time helping people in their homes make these changes. And what we find is that in any home, the first 20% or so savings come out of what I would call behavioral things. And you know, a couple examples of that are setting your thermostat a bit lower when you leave the house, when you go to sleep at night. You turn off your lights, so why not do the same with your thermostat? And the other one would be your hot water heater. There are ways to make that more efficient. But the easiest way is to reduce the temperature from 160 or 140 degrees down to 120. Plenty hot enough to give you a hot shower, but very energy efficient.
HARRIS: Ultimately, what does the price for a barrel of oil have to get to? What does the price for a gallon of gas have to get to, before we all start to get serious about biofuels, and maybe some of the hybrid alternatives, before we get serious about real change in our automotive practices?
PELLETIER: Well, I think we're already starting to see that. I mean, if you look at $3 a gallon for gasoline, and higher, and nearing $100 a barrel for oil, people really are starting to buy hybrids at higher rates, ethanol powered cars, biodiesel powered cars. All of that. But the other part of this is that, you know, we're seeing similar rises in price in natural gas, in electricity, and other things, and I think we're still not quite to the point where that's really going to hit people hard enough in the pocket but where they'll start to make changes in their homes. But we're getting pretty close.
HARRIS: Are you optimistic about the future and folks making these changes?
PELLETIER: I really am. Because the changes that we're seeing. The new products that are coming out, the new services from the largest companies in the world, to some of the very smallest, it's just an explosion of innovation right now. And there seems to be a lot of everywhere we go, we talk to people that are excited to do these things, just looking for a way how. So I am optimistic.
HARRIS: Jason Pelletier, thanks for your time. Appreciate it.
PELLETIER: Thank you very much. It's great to talk to you.
HARRIS: Alternative energy is the future but oil is the present. The price is sitting over $96 a barrel and gas costing you more than $3 a gallon. You will have a lot to think about in your morning commute come Monday. I'm Tony Harris from CNN World Headquarters in Atlanta. Stay with CNN.
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