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Chaos of War; President Biden Set to Announce Plan to Lower Gas Prices. Aired 1-1:30p ET

Aired March 31, 2022 - 13:00   ET

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

[13:00:01]

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Ana Cabrera, Don Lemon pick up our coverage right now.

ANNOUNCER: This is CNN breaking news.

ANA CABRERA, CNN HOST: Hello. And thanks for being with us. I'm Ana Cabrera in New York. Don Lemon is with us in Lviv, Ukraine.

And we begin with the chaos of war in Ukraine battering economies around the world. Just minutes from now, President Biden will lay out his plan to deliver some relief and reassurance to Americans. He is set to announce a record release of oil from the Strategic Petroleum Reserve to help bring down the skyrocketing gas prices.

He will also apply new pressure on oil companies to ramp up production. And we will carry the president's announcement live here on CNN. So, stay with us.

Meanwhile, in Ukraine, new video of a Russian tank ablaze there, as Ukrainian forces claim to have broken Russia's encirclement of Chernihiv. That's in Northeastern Ukraine. And it appears to be yet another setback for Russian forces.

And, last hour, we learned Russian troops have now withdrawn from Chernobyl, the site of the 1986 nuclear disaster. The agency overseeing it says some soldiers were suffering from radiation exposure and that a riot actually almost broke out among the Russian military. CNN has not yet been able to verify that claim.

DON LEMON, CNN HOST: According to British intelligence, Russian troop morale is so bad that some soldiers are refusing to carry out orders and some Russian forces are even sabotaging their own equipment.

And new today, Russian President Putin has authorized a military draft of more than 134,000 Russian citizens. It's worth noting that today's number is in line with the annual spring call-up from the previous two years.

These incredible images of burning buildings and a crater shooting flames are from Kharkiv. That's in Northeastern Ukraine. Officials there say that Russian forces have unfolded a relentless barrage of shelling on that region, at least 47 strikes in the past day.

CABRERA: Let's begin this hour at the White House and CNN's Kaitlan Collins.

Kaitlan, what more are you learning about the president's plan to help bring down gas prices?

KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, this is going to be the biggest release that you have ever seen from the Strategic Reserves. President Biden is going to announce this plan shortly. But we got some details earlier on what exactly this is going to look like from senior administration officials, who briefed reporters on this plan to release up to 180 million barrels of oil from the Strategic Reserves here in the United States. That's about a million barrels a day for the next six months.

It is the biggest that you have ever seen from the Strategic Reserves that's ever been released since it was established in the 1970s. But there are questions, of course, of how quickly it can affect prices and what that's going to look like and, of course, how to replenish those reserves as well.

And the reason President Biden is doing this, it's clear when you look at rocket fuel numbers are right now. Right now, the average is over $4 a gallon, compared to a year ago. You see it was about $2.39 when President Biden took office.

And ever since this invasion of Ukraine started and since this war has been going on, you have only seen those prices go up as this market has been incredibly unstable and the world has tried to deal with the sanctions on Russian oil and how to really combat that, and, of course, people who are hesitant of buying Russian oil.

And so this is an effort that President Biden is making to try to lower those prices. Of course, it remains to be seen how long it takes before consumers can actually feel the difference there. And one other thing you will see President Biden talk about today, Ana, is going after companies saying that they are not doing enough here at home to ramp up production.

And you're going to see the president asked Congress to impose fees on companies that they don't believe are doing enough to ramp up production. So that will all be part of this effort, though, of course, they realize this is a huge issue for them, of course, given how high the prices are, Ana.

CABRERA: OK, Kaitlan Collins, we appreciate that.

We again will be taking those remarks that announcement live here expected this hour on CNN. And we will also discuss the impact that we could see, all of us in America, at the gas pump shortly -- Don. LEMON: Now back to the situation here in Ukraine.

Poland's prime minister says Ukraine's allies need to keep imposing crushing sanctions on Russia and warned that Russian troops will try to capture one-third of Ukraine's land -- quote -- "quite soon."

Now, we know Russia wants to create a land bridge along the Black Sea. And that includes cities like Mykolaiv, where CNN's Ben Wedeman is now.

Ben, hello to you.

What's the situation the ground there now?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, right now, Don, the curfew is in effect and the mandatory blackout as well.

So, if you look behind me, you might see a few cars rushing to get home, but it is really -- we're in the center of the city and it is pretty dark here.

[13:05:01]

Now, the city is still reeling from that strike on Tuesday morning on the regional governor's office. The latest death toll is 20. But more than 48 hours after that attack took place, rescuers are still searching for more bodies.

And this is a city that very much has been on the front lines of this war, this Russian invasion. And many people saw it coming. The other day, we spoke with the mayor of this city, who said he saw this war coming.

(BEGIN VIDEO CLIP)

OLEKSANDR SYENKEVYCH, MAYOR OF MYKOLAIV, UKRAINE: I think -- from 2014, I thought that the war will be like this. So everything you see on me, this bulletproof vest, boots, anything, I bought it a couple years ago, so I started to learn how to shoot.

I was in special school for that.

(END VIDEO CLIP)

WEDEMAN: And even though Russian forces have been pushed back from the city, no one is under the impression that the threat is still not there. In fact, we were watching today as, on this, one of the main boulevards of the city, city workers were cutting down massive trees, cutting them up.

The big trunks will be used in trenches and in barricades around the city. The smaller branches will be sent to the front lines, where soldiers will use them to keep warm -- Don.

LEMON: All right, Ben Wedeman, thank you very much -- Ana, back to you in New York. CABRERA: Putin massively misjudged this war, those words directly

from a top British intelligence official moments before he said this:

(BEGIN VIDEO CLIP)

JEREMY FLEMING, DIRECTOR, GCHQ: We have seen Russian soldiers, short of weapons and morale, refusing to carry out orders, sabotaging their own equipment, and even accidentally shooting down their own aircraft.

(END VIDEO CLIP)

CABRERA: Joining us to discuss is CNN military analyst Major General James "Spider" Marks and CNN national security analyst Steve Hall. He's a former CIA chief of Russia operations.

General, your reaction to what we just heard, in addition to this new reporting about Russian troops pulling out of the Chernobyl area reportedly sickened and panicked, and that was described as a riot nearly breaking out among them.

BRIG. GEN. JAMES "SPIDER" MARKS (RET.), CNN MILITARY ANALYST: Yes, you see the collapse of the Russian military from top to bottom.

Frankly, I think our intelligence community, having been a part of it -- Steve's been a part of it -- are, frankly, I think quite surprised at the extent of that collapse.

Look, anything Putin tries to do now to fix this mess that he has created will be a day late, dollar short. I mean, it's going to be ineffective. Primarily among this, what you see is, there's no linkage between tactics on the ground and strategy. And that's absolutely essential.

The principles of war have been violated. And you have a military that is just crushing under the blow of absent and corrupt leadership. And you're -- and you're seeing the results of that morale and in the ranks. It's not surprising. Troops have an opportunity to have their voices heard. And they will do it with a number of different weapons in their hands.

You give them explosives, they will make a decision on what they think is right.

CABRERA: It's so interesting to hear they're sabotaging themselves.

MARKS: Sure.

CABRERA: Steve, when we listened to that clip moments ago, what also stood out to me is that, again, this is another example of intelligence intentionally being shared here by officials. This time, it was from the U.K., in this major speech in Australia. What's the strategy by putting this out here?

STEVE HALL, CNN NATIONAL SECURITY ANALYST: Well, I can tell you, Ana, it's going to make -- it makes intelligence professionals, even former ones like me, nervous, because, of course, it's so ingrained in us to protect sources and methods.

But the most recent intelligence is fascinating. It's out of GCHQ, which is sort of the British NSA equivalent, signals intelligence. And signals intelligence simply means listening to -- trying to listen to what enemy transmissions, in this case, Russian transmissions, are up to.

And, apparently, not only the Western intelligence services, but the Ukrainians are getting pretty good at it, aided by the fact that, as Spider was alluding to earlier, we have a morale problem in the Russian army, which means they're whipping out their cell phones and trying to communicate with each other, both tactically, where are you, where's your unit, and perhaps also back home in Moscow.

That makes it really easy to collect. And then it is an interesting political decision to say, look, it's worth perhaps showing the Russians how good we are at collecting this stuff, in order to get the word out to citizens of both countries, citizens of the world as to what's really going on in the Russian military right now.

So it's an interesting decision, but it's been very illuminating.

CABRERA: Yes, and it's fascinating to learn what is happening on the ground and behind the scenes.

General, I want to ask you about this news that Russia is drafting more than 134,000 people into the military. It's unclear if these draftees will participate in this war in Ukraine.

[13:10:02]

I wonder, how long would it take to train for battle?

MARKS: Well, the draft is not unusual. I mean, this is, I think, a biannual -- or, I'm sorry -- twice-a-year kind of a deal for the Russians at this volume and this scope in terms of conscription; 135,000 troops coming on, being brought forward and going through their training will make zero -- will have zero impact on the outcome of what's taking place right now.

Any outcome that would occur would come after their basic training, their specific training, and then the integration into units. And that literally is months down the road. So, look at this and think nothing of it in terms of how this would affect conditions on the ground right now. It's irrelevant.

CABRERA: I do wonder if it affects morale or if it affects the optics about Russian forces. Again, the Kremlin has said this draft isn't for the Ukraine mission, but we know they lie.

And it sure is notable that this is happening as Russian forces are struggling.

Steve, do you have a thought on the message Putin may be trying to send both inside and outside his country by announcing this draft at this time? HALL: You know, Ana, it's always interesting to try to read what's

signaling the Kremlin and specifically what Putin might be signaling.

I'm inclined to agree with Spider on this. I think it's probably -- I mean, there's no doubt that the Russian military is not doing well, and they can -- and they need all the people that they can get. And so that they're doing these constructions, sort of along the normal schedule, is not surprising.

For me, the most important signal that I'm trying to decrypt, if you will, from Moscow at this point is, are these military pushes and withdrawals that we're seeing on the Russian side, withdrawing from the west, maybe moving into the east more, a prelude to try to maximize the diplomatic options that the Russians have?

Can they say, we have taken over everything in the east, we're going to leave the west to you, in some sort of deal? Or are they, as the Pentagon thinks, regrouping for just broader operations later on down the road? It's hard to tell. It will be really interesting to see, Ana.

CABRERA: Yes, it is really hard to tell what their strategy is, especially because they announce one strategy, but then we have seen shelling increase in the outskirts of Kyiv and around Kharkiv.

The NATO secretary-general said just today we should expect more Russian offensive actions that will bring -- quote -- "even more suffering."

General, even more suffering, what would that look like?

MARKS: Well, it's simply more of the same.

I think the notion of a strategy is a fair one, in that they don't have a stretch. They have demonstrated they don't have a strategy. The strategy is now following the conditions on the ground. And the Ukrainians have been setting the tone of this engagement.

And as Steve just described, it's now potentially, legitimately, a strategy that looks like half-a-loaf. Everything east of the Dnieper River in the vicinity of Donbass now is what the Russians always wanted to try to achieve.

So, more of the same really is, they're not going to adjust the conditions on the ground, except through the tactics that they have used to date, which is long-range fires, dumb weapon systems that are going after a stationary civilian target.

That's what they have been able to do. And so now they're in a problem. They have an incredible problem with their logistics. They're moving units off the line to resupply, which is illogical. You don't do that. You push logistics forward. You don't move them away from a line.

So you see this violation of these different principles, not to try to achieve a strategy, but to change the narrative. CABRERA: Meantime, talks are set to resume between the two sides

tomorrow in an online fashion, but there's been an increased conversation around potential face-to-face meeting between Putin and Zelenskyy.

Steve, could that accomplish what lower-level talks haven't? And would you be concerned about Zelenskyy's safety if they were to meet?

HALL: Well, I'm daily concerned with Zelenskyy's safety. I mean, it's somewhat amazing to me that he's still alive, although it does speak to what we were discussing earlier about the Russians' ability to do special operations type of stuff to go after leaders and so forth.

But I am worried about his safety. I'd even more worried about his safety if he was anywhere near anybody Russian, because, simply, what we have seen the Russians do in the past, whether it's poisoning people, putting stuff in their tea, there's all sorts of things that the Russians are very good at.

But, frankly, I actually think that there's not much of a chance that Vladimir Putin would actually agree to a meeting with Zelenskyy. He doesn't sees Zelenskyy as his equal. He has said that Ukraine isn't really a country. And the Russians are nothing, if very consistent about sort of what they refer to as reciprocity.

So, a president meets a president. A prime minister meets a prime minister. And if you don't consider the guy sitting across from you as legitimate, then that would actually be sort of a -- something that Putin would want to avoid and what he thinks, I think, would make it look bad on him.

[13:15:00]

So, I would be surprised if he actually decided to go ahead with a meeting with Zelenskyy.

CABRERA: This has been such an insightful conversation.

Thank you both very much, Steve Hall and General Spider Marks. I appreciate your time.

A bill to punish Russia for its unprovoked war on Ukraine is still stalled in the U.S. Senate. Why? And will it be enough? We will ask Senator Bob Menendez next.

Plus, how Chris Rock addressed getting slapped by Will Smith in his first stand-up show since the Oscars.

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CABRERA: Any moment, President Biden is set to announce plans to counter rising energy prices, and that includes releasing a record one million barrels of oil per day from the strategic oil reserve.

[13:20:01] And here's why. Gas prices remain painfully high, almost $4.23 per gallon, on average. And a new Kaiser Family Foundation poll shows 71 percent of Americans worry about affording gas and other transportation costs. And keep in mind, in February of 2020 -- that was pre-pandemic -- just

40 percent worried about paying for gas.

Matt Egan is here with us, along with Daniel Raimi. He's an energy policy economist and a fellow at Resources for the Future.

Guys, thank you both for joining me for this discussion.

Matt, I want to talk about the impact of this move first, because we all recall President Biden made the announcement back in November that he was releasing all of this from the Strategic Reserve, the 50 million barrels. At that time, we did see gas prices come down about 12 cents over the course of several weeks, but then they just bounced right back up.

So would anything be different about this plan?

MATT EGAN, CNN REPORTER: Well, Ana, this plan, the size of it is staggering. I mean, this amounts to a shock and awe campaign from the White House, 180 million barrels over six months. That previous record release from November was just 50 million. So, this is triple the size of that.

This is really kind of a break-the-glass moment. And in the short term, it could help ease the shock caused by the war in Ukraine. But it's not going to make gas prices cheap again. Oil prices actually did go down sharply last night as word of this leaked out. But they bounced off their lows, as you can see, down about 4.5 percent, $103 a barrel. That is still high. They're not collapsing.

Veteran analyst Tom Kloza, he told me that he still expects the national average for gasoline to go up to as high as $4.50 a gallon this summer. That's about a quarter higher than today, although he had been worried that it would go to $4.75 a gallon.

CABRERA: That's crazy, and especially when you think about what Kaitlan reported earlier. When the Biden administration began in January of 2021, we were looking at gas prices almost $2 a gallon cheaper on average.

Daniel, there is some criticism from members of the opposite party blaming this president for the rising gas prices, falsely claiming that he is standing in the way of more oil production domestically. But a majority of oil executives polled actually admit that profits are the reason they're not producing more; 59 percent say investor pressure is the main driver. Just 6 percent blame government regulations.

So is there anything more the president can do to encourage these companies to give less money back to shareholders and invest more in production? Would charging fees for permits not being used change this? DANIEL RAIMI, RESOURCES FOR THE FUTURE: Well, in the short term,

there's really very little that the administration can do, other than leverage the Strategic Petroleum Reserves, as they are doing, to try and reduce prices.

In the longer term, the really smart strategy for the Biden administration or any future administration would be to attack this problem, not from the supply side, but rather from the demand side.

The United States imports a large amount of oil, even though we also produce and export a large amount of oil. And as large as we are using lots of oil, that means we are connected to global oil markets, which will be volatile for the foreseeable future.

And when those prices spike because of Russian invasion in Ukraine or an attack in Saudi Arabia or some other international event that the U.S. has no control over, U.S. consumers will pay those high gasoline prices, no matter how much is produced or consumed here at home.

And so the key to reducing our economic exposure to high gasoline and diesel prices is to simply use less gasoline and diesel. That's something that, of course, will take a long time to play out. But it's a more effective and efficient way to reduce our exposure to this volatility.

CABRERA: But, just to be clear, could the U.S. ramp up production to become independent, as some lawmakers have argued?

RAIMI: The idea of energy independence has been problematic since its inception, and it continues to be problematic today.

As long as we are connected to global oil markets, we cannot, we cannot be independent of international disruptions that happen with regard to Russia or Saudi Arabia or China or any other country. It simply does not matter how much we produce in the short term when it comes to those gasoline prices that consumers pay.

Now, in the long term, the U.S. being a large producer does provide economic benefits for the United States, especially in places like Texas and North Dakota and Alaska. But it does not insulate us from the market volatility and pain that consumers face when prices spike.

CABRERA: Matt, domestic oil production is right now down only 10 percent from where it was that in late 2019.

But prices are up more than 80 percent. Why the disparity?

EGAN: Yes, that is certainly a great frustration, I think, to a lot of people, including officials in the White House. And a lot of it does have to do with pressure from investors to return capital to them through share buybacks and dividends.

[13:25:10]

They want the companies to not spend on expensive drilling projects, because that's what they did in the past, and it didn't work. So that is a key role in here. The industry also points to concerns about regulation.

But going back to the Strategic Petroleum Reserve for just a second, that -- it makes a lot of sense that they're using this right now, because this is an emergency. It was designed for natural disasters like hurricanes or wars, like we're seeing right now.

But the problem here is that it is not a bottomless pit of oil. There's limits here. Even heading into this crisis, the SPR was at a 20-year low. And so I think that's why we have seen the market react the way it has. We know that the U.S. can't constantly release oil from the SPR.

CABRERA: OK, we will hear from the president more about this plan and what he sees as the impact going forward here in this hour.

Thank you both so much, Daniel Raimi and Matt Egan.

We have this just in, a breakthrough. Senator Mitt Romney says Republicans have struck an agreement in principle with Democrats on the $10 billion package to help the U.S. efforts to fight the COVID-19 pandemic. As we learn more, we will bring it to you.

Stay with us. You're live in the CNN NEWSROOM.

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