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Fracking for Natural Gas; Congress Debates the Future of Tax Cuts; Could Natural Gas Fire Have Been Avoided?; Bankers Plan to Avoid Future Crisis

Aired September 13, 2010 - 13:00   ET

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

TONY HARRIS, CNN ANCHOR: Quickly now, CNN NEWSROOM continues with Ali Velshi in New York City -- Ali.

ALI VELSHI, CNN ANCHOR: Tony, good to see you. You have a great afternoon.

I'm Ali Velshi. As Tony says, here's what I have on the rundown. Imagine looking out of your window and seeing this. I'm going to show it to you. It's what people in San Bruno, California, saw last week. I'm going to show you more of this horrifying home video.

Plus, it's a source of energy that could supply the northeast for decades. Residents say the process of getting to it is tainting their water and ruining their lives. It all comes down to one word: fracking. I'll explain.

Also, the technology of touch, it could change the way we interact with our mobile devices and with one another. I'll show you some mind-blowing concepts.

First, summer vacation is over for members of Congress. Midterm elections just around the corner. So as lawmakers flock back to Washington for a few short weeks of the people's business, one issue dominates. Tax cuts. Specifically whether to let the Bush tax cuts of 2001 and 2003 expire, and for whom? And for how long?

As you may know, President Obama wants to keep the lower tax rates permanently for individuals earning less than $200,000 a year, and for households earning less than $250,000. That's more than 97 percent of all taxpayers he wants to continue tax breaks for.

For everybody else, let those top rates revert from the current 33 and 35 percent to the pre-2001 rates of 36 and 39.6 percent. Now, if you're a high earner, that 39 percent will pack a punch. Don't ask your parents or your grandparents for sympathy.

Take a look at this chart of top rates over the past 100 years. In the mid-1970s, top earners -- remember this; this is important to remember -- sent as much as 70 percent of their incomes to the U.S. Treasury. In the mid-50s, the top rate was 91 percent. And a decade earlier just after World War II -- check that out; this is not a mistake -- the nation's top income tax rate was a staggering 94 percent. Now, right now, 2010, the goal is to juice the economy without ballooning the deficit any more than necessary. Supporters of tax relief for the middle class say extra income translates directly into extra spending. The lower you -- the less you earn the more likely you are to save, to use the money that you not pay in taxes for daily expenses.

Tax relief for the wealthy has a more round-about effect. Might be some extra spending, but there's also the possibility of more saving and investing. The investing part could lead to more hiring, especially if you invest in a start-up business, hired more people. Those people spend, and a virtuous cycle begins. But it is not a sure thing.

Republicans and some Democrats want to keep the Bush tax rates for everybody. President Obama says keeping the richest 2 or 3 percent at current rates would add $700 billion to the deficit.

We expect to hear live from the president in just about an hour from a backyard in Fairfax, Virginia -- somebody's backyard -- on the topic of help for small business. Small business is the growth engine of jobs in this country. Do they get relief?

In the meantime, our senior White House correspondent, Ed Henry, joins me to talk about taxes, and about politics, and about a stubbornly weak economy and about an election -- Ed.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Ali, right. I mean, I think as you lay that out, the new development here this morning, this afternoon is that this White House feels that over the weekend it sort of was a Boehner blink, if you will. John Boehner, the House Republican leader, sort of shifted his position.

He was on CBS yesterday and was basically saying that he could support just moving forward on extending the Bush tax cuts for the middle class as you just defined: individuals making $200,000 or less per year. Families makes $250,000 or less per year.

That is the Obama position. Remember, the president on Friday gave Republicans a push at that news conference here at the White House and basically said don't hold the middle class hostage. Go forward with extending the middle-class tax cuts and forget about the tax cuts for the rich.

The Republicans, like John Boehner, had been saying for weeks and for months, "Look, you've got to extend all of the tax cuts, for the rich, the middle class, everyone, for at least a couple more years."

Bottom line is that yesterday John Boehner signaled for the first time that he might be able to swallow just moving forward on the middle-class tax cuts, essentially, which is essentially the White House position and letting the rich -- tax cuts for the rich set aside for now. That's a big development and that's what --

VELSHI: Let me ask you this. That's how I would have interpreted it. And I know a lot about the business side of this. But I want to know how a guy like you, who knows a lot about the politics of this, interprets it. Let's just play that John Boehner clip for a second, because I don't know whether he was saying support it or if he were given no other choice, he would support it. Listen to what he said.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), MINORITY LEADER: If the only option I have is to vote for some of those tax reductions, I'm vote for them. But I've been making the point now for months that we need to extend all the current rates for all Americans if we want to get our economy going again, and if we want jobs in America.

(END VIDEO CLIP)

VELSHI: The implication there, Ed, is that, if he didn't have to vote for just extending them for the middle class, he would want to do something else. Or, for instance, if he were the speaker of the House after an election.

Let's just take a look at a recent poll that CNN/Opinion Research poll -- Corporation did. And the question is, should tax cuts continue for all Americans? Only 13 percent of Democrats think so. Thirty-four percent of independents think so -- it's a different poll. But I'll look at this one anyway. Thirty-one percent think that they should continue for all Americans, like John Boehner says.

Fifty-one percent thinks that they should continue for those households earning less than $250,000. That's what Obama is looking for. And no one thinks -- 18 percent think that these tax cuts shouldn't be continued for anyone.

The 18 percent is interesting, Ed, because if you extend the tax cuts even for the middle class, going to cost, it's still going to cost, by most estimates, $300 billion -- or $300 trillion -- sorry. It's going to add $3 trillion to the deficit.

HENRY: Right, long term. It's interesting, because, you know, this White House will say, look, we can't afford tax cuts for the rich. This is going to balloon the deficit. Right. They are in favor of tax cuts for the middle class extended without paying for them. That will balloon the deficit, as well. Not as much as extending tax cuts for the rich. But it still will balloon the deficit.

I think the bottom line is when you listen to what John Boehner was saying, sure, he preferred not to just move forward on the middle- class tax cuts. He clearly still wants to also pass the tax cuts for the rich, but for the first time we're hearing him say, "Look, if this is a stand-alone bill, I'll vote for just moving forward and extending the middle-class tax cut."

A big development for this White House. The challenge now for Democrats on the Hill is they're just coming back to work, as you noted at the top. They've got a narrow window here of a few weeks before they go back to the campaign trail full time. Do they now bring up the middle-class tax cuts, extending those Bush tax cuts as a stand-alone bill and try to call John Boehner out and give the voters a choice --

VELSHI: Right.

HENRY: -- heading into November?

But on the other hand, you already have the small-business tax cut bill the president has had on the Senate floor for a while. That's pending. He has this new proposal from last week, $200 billion for small businesses writing off 100 percent of their equipment in new plants. And finally this $100 billion tax cut on research and development.

VELSHI: Yes.

HENRY: So bottom line, all of these things are piling up in just a couple weeks' time. But I think the bottom line is this White House feels maybe for the first time in a long time they've got the Republicans on the defensive ever so slightly --

VELSHI: Yes.

HENRY: -- on this middle-class tax cut issue. Instead, it's been the White House for weeks now that's been on the defensive. They've finally seized upon something here that they can run with.

VELSHI: And in a nutshell, why has that happened? What made this shift happen? Did the White House -- you just laid out those things that the president outlined last week for $350 billion. The fact is none of that -- they've been throwing spaghetti against the wall, and it has not been sticking. Why all of a sudden this shift from Boehner? Why -- why are they got -- how they got the Republicans on the defensive?

HENRY: Yes. Well, when you talk to top Democrats in private, some within the administration, others on Capitol Hill and elsewhere, they sort of think that the president was not taking the fight directly to Republicans for some time.

Last week what did he do? He went out there and really beat up on John Boehner, pushed this idea of a choice between Republicans and Democrats. He talked about it before. But you saw a fired-up president last Wednesday in Cleveland. Then Friday, some of the pundits were saying, "Well, you didn't say anything new at that news conference. I don't know."

But he did succeed, at least, in framing this as don't hold the middle class hostage. That you need to at least move forward on those tax cuts.

Then 48 hours later, John Boehner is on CBS's "Face the Nation," it seems to be, shifting his position. I think it's pretty clear that they feel good inside this White House, that they're not there yet in terms of holding control of Congress, but for the first time, they found something by seizing on that middle-class aspect of this. They've finally put the Republicans on their heels. Maybe it's temporary. But finally, they found something that made John Boehner shift ever so slightly.

VELSHI: Very interesting. Ed, we'll talk to you a few times over the course of this show. Thanks so much. Our senior White House correspondent Ed Henry from the White House.

Straight ahead, we've got some unbelievable home video to show you of last week's gas explosion in San Bruno, California. It shows a massive fireball melting everything in sight. You're about to see it. Stay with us.

(COMMERCIAL BREAK)

VELSHI: People living in San Bruno just outside of San Francisco are returning home to ruin. A natural gas explosion on Thursday sparked a huge fire that killed at least four people, flattening more than three dozen homes. And if you haven't seen the pictures, it's really remarkable.

First of all, check out this unbelievable home video.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Is that a plane crash?

UNIDENTIFIED MALE: The flames are too high. Oh, my God.

(END VIDEO CLIP)

VELSHI: Could this have been avoided? Turns out here were some pretty serious safety concerns reported long before the explosion. CNN's Ted Rowlands has been following this closely from right when it happened. He joins us now from San Bruno with more.

Hi, Ted.

TED ROWLANDS, CNN CORRESPONDENT: Hey, Ali.

The safety concerns really did stem back a few years. And the concern was that this pipe was old, that it needed to be replaced. And the concern came from PG&E, and basically the cost estimate, they characterized this pipe as being a concern because it could fail.

Now, when they say "fail" or "concern," they're not talking about an explosion. Nobody thought that this would happen. They were talking about either a gas leak, maybe loss of service. This really was something that nobody had on their radar. It wasn't a situation where PG&E didn't fix something and now there was an explosion.

The investigation continues into what exactly did happen, and a lot of the investigation is on that pipe. If you look in the distance here, you can see that they are concentrating on that area inside the perimeter of that fence that's been built up. That is where the pipe blew, and that is where the crater now is. Earlier this morning, they took out a fairly large section of that pipe and put it into crates and have shipped it off to Washington, D.C. The NTSB is the lead organization in this investigation. They're going to analyze that piece of pipe, and they have a couple more pieces that they're going to be dissecting off today and shipping out to Washington.

They're also looking at home video. They're looking at surveillance video. That home video that we showed you earlier, they're looking at that and other pieces of video, because every piece of information is going to be analyzed in this, because, quite frankly, right now, Ali, it is a mystery as to why this failed and then why it exploded and caused so much devastation.

We did talk to a homeowner that came in with us yesterday. He is the gentleman that shot the home video. Here's what he said after surveying what is left of his neighborhood.

(BEGIN VIDEO CLIP)

WALTER MCCAFFREY, SAN BRUNO RESIDENT: Just looking at all this. I mean, I -- I saw all this from the news, but being here, and the first time coming up here and looking at all this, it was just -- there's no words. I can't really explain.

(END VIDEO CLIP)

ROWLANDS: To give you some perspective, that video was shot from this house up here. That's the balcony up there. We're a pretty good distance away. But when you looked at the video, the flame was right off the balcony, and that just gives you a sense of how intense that fireball was. And obviously, you could hear the emotion in his voice when he was shooting the video. That's how far he was away.

VELSHI: Wow. Tell, what happened to the guy has reported he been smelling gas for some time. Has anything come of that?

ROWLANDS: PG&E says that at this point they haven't been able to establish a record of their crews coming out and analyzing this exact pipe, but that is one of the major things that the NTSB is doing.

In fact, they're publicly asking people that smelled gas to talk to them. And they're analyzing what clues may have been there in the days and hours before this blast, and that will be something that's scrutinized very, very heavily, because, of course, the reason they smelled it is a warning system. You can't smell natural gas.

VELSHI: Right.

ROWLANDS: The only reason you can smell it is because the power company puts it in there as a warning. And if those warnings weren't heeded, that will be -- that will be, you know, one of the things that they'll really look at.

VELSHI: Yes. Well, this one of those things that everybody is interested in finding a solution for, because so much of the country uses natural gas, and they just want to make sure that's not going to happen in their neighborhood.

Ted, good to see you. Thanks very much for keeping us up to speed on this. Ted Rowlands in San Bruno, California, just outside of San Francisco.

Some of the brightest minds in the world have gotten together to try to prevent another global meltdown. We're going to tell you what they are doing to protect you, next.

(COMMERCIAL BREAK)

VELSHI: The collapse of Lehman Brothers in 2008 almost exactly two years ago set off a world banking crisis that battered the world's economy. Two years later, people are looking at how to stop that from happening again.

Banking regulators from 27 different countries met in Switzerland yesterday to hash out safeguards to hopefully keep our money safer. They agreed on a bigger cushion for how much cash banks have to hold onto in a rainy-day fund if the economy tanks.

Seems like a great idea. Bigger buffer to keep money safer. But forcing banks to stash cash could impact their ability to lend.

Colin Barr is a senior writer at "Fortune" magazine. (INAUDIBLE) is very close to (INAUDIBLE).

Good to see you. Thank you for being with us.

COLIN BARR, SENIOR WRITER, "FORTUNE": Thank you.

VELSHI: Is there anything that these -- these world financial regulators can do or have done that could actually prevent what happened two years ago from happening again?

BARR: I think they're on the right track. They're saying you have to hold more money. We're not going to have another situation where everyone levers up to the sky.

VELSHI: Right.

BARR: So that's important.

The other thing is that the experience in 2008 was bad for everyone, even for the bankers who kept their bonuses.

VELSHI: Sure.

BARR: People -- people didn't like having their --

VELSHI: Nobody wants this happening again.

BARR: Right. So I think --

VELSHI: Just tell me what you mean when you say -- because I know we talk about this very generally, but we -- we talk about not being so levered up or not having so much leverage. What does that mean? To my viewers what does -- what does that all mean?

BARR: All these banks borrowed so much money. It was easy to borrow money in the market. It was very cheap. Everyone assumed that there would never be another banking crisis; there would never be another recession, some people thought. Some thought we were just -- everything was going to grow to the sky. And so all kinds of banks did what lots of homeowners did and just borrowed and borrowed and borrowed, and they didn't have the ability to repay. These rules will keep that from happening again. That will -- that will certainly not be the case.

VELSHI: And in fact, banks borrowed much more than the average person, leveraging the ability to translate one dollar into many more dollars is not only common in the banking industry; it's kind of what, in recent decades, it's been built on.

BARR: It's what makes it work. I mean, the banks get your $10, and they can do $100 in lending.

VELSHI: Right.

BARR: So that's OK. The problem is that they were doing more than $100 in lending, and they were using that money to buy things that were not actually --

VELSHI: Right. The house of cards that we were talking about.

BARR: There was. A big house of cards.

VELSHI: OK. What were the -- what would you say in lay terms was the big accomplishment out of this meeting that took place in Switzerland?

BARR: Well, everybody's on the same page. Everybody knows that we have to have more capital. Europe didn't really want to have levels this high. The United States was one of the groups that -- one of the countries that was pushing for stronger regulation. So bank stocks are up today. A part of that is because the regulations aren't quite as stringent as people thought they would be.

But it's definitely a step in the right direction. Before banks were able to go 50-1. They were equal to about 50-1 on every dollar they had.

VELSHI: Right.

BARR: Now, this will keep that to 12-1 or something like that.

VELSHI: And some companies operate quite successfully with less leverage for banks. The bottom line is you can still have a prosperous economy with everybody taking a certain amount of risk.

BARR: Right. And we just have to be more patient. Part of the problem with the last crisis was everyone wanted to have everything right now. And that's -- this is the end of that mind-set, we hope. VELSHI: What about this fear that less lending will take place? We're in an environment where a lot of people say, if banks were lending more, particularly to small businesses, this economy could get going a little faster than it is. Does this crimp that?

BARR: Unfortunately, it probably does, but only a little bit. I think the bankers say this is going to be a huge problem for the economy. I think we all know actually that what's happening is a lot of people just said to themselves, "I can't afford to do that again. I can't afford to have that much debt."

And so the banks maybe they are being a little -- a little too stingy, but at the same time a lot of borrowers are not -- are not looking for money the way they were before. A lot of people are just saying, "I'm not going to go there again."

VELSHI: Stingy and safe are two sides of the same coin sometimes.

BARR: That's unfortunately -- that's the truth.

VELSHI: All right, Colin. Thanks very much.

And you can read Colin's stuff at Money.com column. He's a senior writer with "Fortune" -- "Fortune" magazine. Thank you, sir.

And by the way, we discussed this at length on my show on the weekend on CNN. "YOUR $$$$$" is Saturdays at 1 p.m. Eastern Time and Sundays at 3 p.m. Eastern.

All right. Vast amounts of natural gas are trapped in the ground below us. But the costs of getting through to some of it using a method called fracking are pretty high. Is this a bonanza or is this a bust? We're going to have a look at fracking when I come back.

(COMMERCIAL BREAK)

VELSHI: OK. As we've seen down in the Gulf of Mexico, oil and gas reserves can be a blessing and a curse. They bring jobs. They bring money. They give us the energy we need, but they are also environmental risks.

Well, from southern New York all the way down to West Virginia, folks are dealing with that very same dichotomy. Protesters are coming out today in Binghamton, New York, north of here, where the Environmental Protection Agency is holding a hearing on drilling for natural gas, specifically using a method called fracking, a way to free up huge gas reserves that are trapped in rock or shale deep underground.

That would be a big boon to the goal of energy independence, because there is a lot of natural gas stuck in the rock, and it's all here in the United States, domestic. So why all this opposition to it? Well, to frack, you've got to shoot millions of gallons of water and some chemicals at high pressure down into the ground, and that's got some folks worried about the water table and for potential for contamination. One area resident in New York -- in Pennsylvania, actually -- says his well water is practically flammable. I'm going to talk to you about that in a little while.

The site of today's EPA hearing is smack in the middle of the controversy, by the way. Binghamton is part of what is called the Marcellus shale. It's one of the largest natural gas deposits in the country.

Josh Levs joins me now to give us an idea of the area and the assets we're talking about.

You know, Josh, we started talking about this, I though we need you to just sort of -- just introduce this to us. I think most people have not heard of Marcellus shale unless you're in the affected area. Tell us about this.

JOSH LEVS, CNN CORRESPONDENT: It's huge. This is something that is underneath the country right now that is what "Fortune" magazine rightfully calls a gold mine. The amount of natural gas we're talking here is insane. Numbers in a second.

Big picture, this is -- we're talking about an ancient rock formation. Ancient sedimentary rock formation that goes back 350 million years, actually the remnants of that that created the Catskills. I have a picture up here from the National Geological Survey that shows some of the operation that is takes to extract some natural gas. It's just a good shot.

I want to get you to now this map over here. Take a look at how huge this is.

VELSHI: Wow.

LEVS: Everything that's yellow on this map is part of the Marcellus shell formation. So I want to take a look at how huge this is. You're talking about West Virginia, parts of Tennessee. All over Pennsylvania, parts of Ohio, way into the north and spread out throughout this area. There's a Penn State study that says 489 trillion cubic feet of natural gas --

VELSHI: Wow.

LEVS: -- could be inside this. And that's more than 20 times what we in the U.S. use just in one year. That's how big it is. I mean, massive in and of itself right there.

VELSHI: So the idea here is that they could have decades of natural gas out there, which is, by the way, what a lot of Americans use to power their homes. It's a clean burning gas but it is not easy -- I mean, think about this. You don't have to be a geologist or scientist to think about getting, extracting a gas from a rock. LEVS: No. It's really hard. This is part of the concern that people have. In fact, since we're talking about it, let's go to this video we have from the Marcellus Shale Corporation -- or Coalition, which says it works with responsible partners to try to bring about responsible drilling and ways to bring up this natural gas.

What they talk about here is the ways to go about doing it in their view. And I'll tell you, some more figures, we're seeing this. This gas deposit, Ali, these are the stakes here -- could be worth $2 trillion. And that's why there's so many companies that are already going for this. You've got shale gas production already accounting for 1/5 of the country's gas consumption according to a study at MIT. And the current rate is expected to provide more than half of our nation's natural gas by 2030.

Now Ali, imagine that they take this increase and start getting it out even faster and the time that some people are looking for natural gas. A lot less in the summer. But the fact is, you've got these high demand markets in that region. You've got New York and New England, all of those people there. If they can get it out, the stakes are incredibly huge, which also helps explain why CNNmoney points to this as an investment bubble right now.

All that said, we're also talking about environmental concerns. I do want to jump to this last video. This is the story that we got out of Pennsylvania in June of this year, and Ali, you know about this. There was a leak for a little while in Clearfield County there. It left natural gas polluted drilling water pouring out for 16 hours. So there are serious concerns about this.

But the economic stakes couldn't be huger, Ali. Trillions of dollars here.

VELSHI: Yes. And like we said, like we saw in the Gulf of Mexico, the bottom line is we consume more energy than anyone in the world. Disproportionately here in the United States. Much of it is imported when it comes to oil. So there a lot of people who say the more natural gas we can produce the better it is for our economy, the better it is for not depending on other countries, but there are costs to all this.

Josh, you've done a nice job of pointing that out. Thanks so much.

We're going to tell you more about this. We've seen the numbers and heard some of these arguments. When we come back, we're going to meet some folks who say they have been fracked over their well water going from fresh water to flammable water, because of fracking. I'll tell you about that.

(COMMERCIAL BREAK)

VELSHI: They call themselves suckers. Pennsylvanians who were paid to lease their land rights to a natural gas driller. Now they say the controversial method of extracting that natural gas - called fracking - has extracted way too high a price. More now from Drew Griffin of CNN's special investigations unit.

(BEGIN VIDEOTAPE)

GRIFFIN (voice-over): Bill Ely's pure artisan well water that he and his family have been drinking for nearly 50 years is now full of methane gas. He's sick of telling people about it, so now he just shows them.

BILL ELY, LIVE NEAR NATURAL GAS DRILLINGRIFFIN: I have it (ph) like this because (INAUDIBLE). It's going to blow it right out, but I'm going to try it.

GRIFFIN (on camera): Whoa. It looks like you scared me.

UNIDENTIFIED FEMALE: You know what? You're - you're really lucky you didn't -

GRIFFIN: What just happened? I mean -

ELY: That's just the gas went down. And that's why I said, it comes back and blow it out these holes. But if I turn it up a little bit and the water flak (ph) that, and then it'll just burn a flame right off the top.

GRIFFIN (voice-over): The gas bubbles through his well.

ELY: As you can see right now, you can't see it in the hose into the bottom of that because that's all gas.

GRIFFIN (on camera): And it was at one time clear?

ELY: Clear. Crystal clear.

GRIFFIN (voice-over): It steams off like Alka-Seltzer. In his chicken COOPER: , where it's dark, he can show you the flame.

What's causing this? He says like a lot of people in rural Eastern Pennsylvania, he has been fracked. This area is seeing a boom in the natural gas business because of a geological formation known as the Marcellus Shale and a drilling process called hydraulic fracturing.

Fracking, as it's known, drills down and then sideways into the massive shale rock that lies thousands of feet below, injecting mostly water and some chemicals, which cause many earthquakes. That fractures the rock, releasing clear, odorless, floating gold - natural gas trapped inside the Marcellus Shale, hundreds of trillions of cubic feet worth, enough to supply the northeast for decades to come.

Craig and Julie Sautner say they too are being fracked.

GRIFFIN (on camera): I'm going to play a little devil's advocate with you. That's a little bit why they say they're doing this, because this is clean fuel.

CRAIG SAUTNER, LIVE NEAR NATURAL GAS DRILLINGRIFFIN: Clean fuel.

JULIE SAUNTER, LIVE NEAR NATURAL GAS DRILLINGRIFFIN: It's - it's not clean to get. It's a fossil fuel. Any fossil fuel - coal, oil, gas, is - they don't see the dirty side. This is the dirty side of natural gas. It's clean to burn, but it's not clean to get.

GRIFFIN: Like Bill Ely, the Sautner's well is poisoned. Pennsylvania's Department of Environmental Protection confirmed it, and it's now forcing the gas exploration company, Cabot Oil & Gas, to truck in clean drinking water, though Cabot denies its process of fracturing has contaminated anything.

In fact, the company's spokesman cites a 2004 EPA study which found only a minimal threat to underground drinking water, and told CNN, "We don't believe the process is contaminating the ground water. As a technology, it's proven and safe."

C. SAUTNER: We don't know -

GRIFFIN: The Sautners and other homeowners just don't buy that. They are suing. Craig wants a clean water pipeline to his home, and he wants to be paid for a house that now has a methane release stack in his front yard.

C. SAUTNER: To keep it - to keep it from blowing up, yes.

GRIFFIN: And a neighborhood, he says, that is sometimes fogged in with methane mist.

C. SAUTNER: Will this become a ghost town some day? Maybe, right?

I - I sure don't want to live here anymore.

Drew Griffin, CNN, Dimock, Pennsylvania.

(END VIDEOTAPE)

VELSHI: Over the next hour and a half or so we'll be talking a lot more about fracking, bring you up to speed with what this debate is about.

Listen, an American woman caught in the middle of political turf battles in Iran. The newest twist, Iran says Sarah Shourd will be freed once she pays half a million bail. Details when we go Globe Trekking right after this.

(COMMERCIAL BREAK)

VELSHI: Time for Globe Trekking. First to Iran. American Sarah Shourd remains caught in the tangled and confusing web of Iranian politics. President Mahmoud Ahamadinejad personally got involved in the case saying, Shourd would be freed last Saturday, after more than a year in captivity with two other Americans. You'll recall, they were detained and accused of spying after allegedly straying into Iran, while hiking in Iraq. The U.S. government has rejected the charges as groundless and demanded that the Americans be released. However the day after, Ahmadinejad's announcement, Iran's judiciary, run by one of the president's rivals, cancelled the release, saying the move was illegal.

Iran now says Shourd will be freed once she pays a $500,000 bail. Shourd's mother says she has not received treatment for medical problems including a breast lump and pre-cancerous cervical cells. Shourd's Iranian lawyer says she's happy about her possible release but wishes her two friends could be freed with her.

All right. Now to Iraq. Amnesty International's out way new report saying up to 30,000 people held without charge. The human rights group says that some of the prisoners have been beaten and possibly tortured. In fact, Amnesty says the use of torture to extract confessions in Iraq is routine. Both the Iraqi government and U.S. Military deny those allegations. A spokesman for Iraq's prime minister says the figure of up to 30,000 detained is extremely exaggerated. The Amnesty report follows the transfer of up to 10,000 detainees from U.S. custody to Iraqi control following the recent end of American combat operations.

What does Jerry Brown's 20-year-old tip with Bill Clinton have to do with this year's California governor's race? Wolf Blitzer has the latest headlines from the CNN.com political ticker coming up next.

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VELSHI: Checking some top stories. House Minority Leader John Boehner says he will back President Obama's tax cut plan if there is no other option. The president's pushing to extend Bush-era tax cuts for the middle class, but not for people making over $200,000 and for couples earning more than $250,000. You can expect this issue to dominate Congress in the final weeks before the midterm elections.

Hurricane Igor has intensified to a category 4 storm with maximum sustained winds of nearly 150 miles an hour. Take a look at this view of the massive storm from space. The National Hurricane Center says Igor could reach category five. That's the most powerful level on the scale used to measure hurricane strength. Right now, Igor is still pretty far out in the Atlantic Ocean.

In Venezuela, officials say at least 23 people survived a plane crash today in the southeastern part of the country. A plane from a government-owned airline crashed shortly after taking off with at least 47 people onboard. No word yet on casualties. A witness says he saw the plane hit power lines before crashing and exploding.

Time for a CNN Equals Politics update. Right now, Wolf Blitzer in Washington with the hour's political headlines.

Wolf, good to see you. What's crossing the political ticker right now?

WOLF BLITZER, CNN HOST: Ali, always a lot of politics, especially now. We're only a few weeks away, as you know, from the midterm elections.

A fascinating story, we moved it on CNN Politics on our political ticker about this feud. It was a feud, I remember covering it back in '92 between Jerry Brown and Bill Clinton at the time. They both wanted to be President of the United States. Bill Clinton wound up getting the Democratic presidential nomination. But there were some angry words exchanged.

Now, Jerry Brown wants to be the next governor once again of California. He's going to fight with Meg Whitman for that. Meg Whitman has this very effective, very powerful ad that she's running that cites Bill Clinton, that quotes Bill Clinton. He's on tape, blasting Jerry Brown for supposedly raising taxes in California. This fight between Jerry brown and Bill Clinton now coming back. Meg Whitman being the recipient, being the beneficiary of this bruising battle right now.

A lot more on the political ticker. Another story we're watching is Charlie Crist in Florida. He's the independent candidate for the U.S. Senate. He's got some new ads, TV ads out there right now. What he's trying to do is show that he's in the middle. He wants to work with Democrats, with Republicans. He's trying to beat Marco Rubio, the Republican candidate; Kendrick Meek, the Democratic candidate. He's casting himself as someone who can work with both sides.

And finally, this is a surprise. In Texas, the race for governor there, incumbent Rick Perry. He's in a fight right now with the former Houston mayor Bill White. This new poll in Texas shows only a six-point lead for Rick Perry. It's a lot closer than a lot of people may have thought.

We'll be covering that, all of the politics, as you know, Ali, in "THE SITUATION ROOM" later today as we always do here on CNN.

VELSHI: Wolf, it is always a pleasure to see you, and a particular pleasure to have you here on our show. We'll check in with you later. Wolf Blitzer in the CNN Political Center.

And your next "CNN Equals Politics" update is just an hour away.

Listen, from iPhones to iPads to tablet computers. Clearly, touch screen technology is here. Where, however, is it going? If you've thought you've seen it all when it comes to mobile devices, brace yourself for our "Big I."

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VELSHI: Today's "Big I" segment. The future of touch screen technology, with iPads, iPhones, other hands-on technology. We're all pretty curious as to what the future holds with respect to touch screens.

One innovative design firm in Sweden called Tach put together a contest to get ideas about the future of screen technology. Then they put together this video. It shows what a normal day may look like in 2014. You see this guy? He's waking up, stretching his phone out to allow for a larger viewing area. The dual screen is actually malleable. That's kind of a neat thing that people are working on.

Next, you see a woman in her bathroom interacting with her mobile device through the mirror as she brushes her teeth. Able to read news, share stories, check her calendar, the time, all that through the mirror.

Now, what happens when you go to work? Two guys using a transparent touch screen monitor. This is like that movie with Tom Cruise in it. They're able to flip the screen through touch, share images across the desk, get approval for projects simply by touching them. The desk even acts as a calendar and a news feed.

Finally, you see two guys sitting on a park bench sharing an image. All they do - check this out -- is drag it from one phone to the other, literally. Watch this.

All right. They're about to -- there you go. There you go.

Now, current TACH technology can be found in 450 million devices worldwide. It's just a snapshot what you can find in mobile devices of the future. Very interesting. A lot of people banking on the fact that touch and visual are the technologies that will dominate our future.

Our other "Big I" today. The race back to the moon just got a new contestant. The Rocket City Space Pioneers have joined the Google Lunar X-Prize. The competition offers $20 million to the first group that can build and launch a privately funded spacecraft that can explore and transmit images from the moon.

Rocket City Space Pioneers are head quartering in Huntsville, Alabama. They're among 23 teams from a dozen countries registered in the competition. To win the grand prize, the team must successfully land on the moon, move around on the surface for a minimum of 1,500 feet, and transmit a specific set of video images and data back to earth.

The X-Prize Foundation is an educational nonprofit institute whose mission is to foster radical breakthroughts.

Complete touch screen technology video from TACH and to read up on the Google Lunar X-Prize, head to my blog, CNN.com/ali. We have links up to both of those things.

All right. Happy birthday to Super Mario. Get this: after 25 years he's still in the game, and not a touch of gray hair in that mustache. Stay with me for some "Odds and Ends.

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VELSHI: All right. "Odds and Ends" now. You put out the candelabra, the show is over. The Liberace Museum in Las Vegas will close next month after three decades of providing sensory overload. For those of you too young to remember, Liberace played the piano, but the rest - well, that was really the least of it. The word flamboyant seemed to have been made for him. He performed in case and sequins and sometimes pink turkey feathers on pianos covered in rhinestones or -- mirrored tiles on them. They were topped by Liberace's signature candelabra. His museum used to draw 450,000 people a year, but 23 years after his death, the number of people who remember him is shrinking. Throw in the recession, only about 35,000 have been to the museum so far this year. Costumes and props will go into storage.

All right. Let's go to Fairfax, Virginia now. The president is there. He is meeting with a local family. And -- that's not the president. That's the president. And he's meeting with a local family in their backyard. He's then going to be hosting an economic discussion with some neighbors and some local small business owners.

Can't see yet who he's talking to. Maybe he has a bunch of those people there already. Somebody's about to give him a mike. He's about to talk. Let's listen to him.