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CNN Live At Daybreak

State of Emergency; Gas Crisis?

Aired September 02, 2005 - 05:00   ET

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

CAROL COSTELLO, CNN ANCHOR: It is Friday, September 2.
Overnight, evacuees from New Orleans are turned away from Houston's Astrodome. Where will they go now? Either way, it's now an even longer wait for some hot food.

(BEGIN VIDEO CLIP)

JOY ARMOND, BABY'S MOTHER: I feel dead inside, to be honest with you.

(END VIDEO CLIP)

COSTELLO: Waiting for a reunion. The search continues for loved ones, no matter how big or small.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's also going to require a lot of money. And the federal government will do its part. But the private sector needs to do its part as well.

(END VIDEO CLIP)

COSTELLO: Emergency aid approved. And now the president plans to deliver that message in person to areas laid waste by Hurricane Katrina.

From the Time Warner Center in New York, this is DAYBREAK. I'm Carol Costello. Thank you for joining us. We also want to welcome our viewers from CNN International.

We'll have more on the aftermath of Hurricane Katrina in just a few moments.

But first, "Now in the News."

Al-Jazeera Television broadcast what it says is a videotape from Mohammad Sadiq, one of the four suicide bombers who attacked London on July 7. On the tape, Sadiq claims responsibility for the attacks and defends his actions. Sadiq died, along with 52 victims and three other bombers.

In Iraq, a U.S. soldier is dead after being shot by small arms fire during combat operations. The soldier was assigned to the 155th Brigade Combat team. In Aruba, a judge has ordered the release of Joran Van Der Sloot. He's the judge's son arrested in connection with the disappearance of Alabama teenager Natalee Holloway. As part of the release, Van Der Sloot must stay in Aruba. Holloway has not been seen since May, when she disappeared during a class trip.

Jacqui Jeras in for Chad Myers this morning.

Good morning, Jacqui.

JACQUI JERAS, CNN METEOROLOGIST: Good morning Carol.

And good morning, everybody.

(WEATHER REPORT)

COSTELLO: All right. Thank you, Jacqui. We'll get back to you.

Now for what's going on in the aftermath of Katrina.

More than $10 billion in emergency aid was green-lighted by the Senate. Most of that money is earmarked for FEMA operations. The House takes up the bill today.

About 100 National Guard MPs arrived at the airport in New Orleans late last night. The combat-ready military police are the first wave in what Homeland Security chief Michael Chertoff says will be three days of deployments.

And Louisiana's governor issued a tough warning to the people causing trouble in New Orleans. She says incoming troops are locked and loaded and know how to shoot.

More than 300 miles west of New Orleans, another drama is playing out. The doors of the Houston Astrodome have been closed to more evacuees. Busloads of people from Louisiana are now being turned away and told to go elsewhere.

CNN's Sean Callebs is in Houston. He has that story.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT: For the past several days, emergency officials here in Houston have been saying they plan to bring as many as 24,000 evacuees from the Superdome in Louisiana to the Astrodome. Well, that changed dramatically.

Now the fire marshal here has said that the Astrodome is simply too full and they are not allowing any more evacuees to be brought to the Astrodome. So a very ugly situation here, where three buses pulled up, people had been on these buses for several hours, seven to 12 hours.

One bus, no air-conditioning, incredibly hot. A passed-out passenger had to be carried out of that bus. Once those people got off they were told, "You cannot stay at the Astrodome." So they are being rerouted. There are three other locations we know of that evacuees from the Superdome are being taken: Huntsville, Texas; San Antonio; as well as Dallas. And it's certainly not going to be welcomed news.

We know -- we saw a number of buses that were parked just outside the locked gates here outside the Astrodome. Those people were not allowed in. At one point, a number of evacuees just got off the buses and began to walk in. They have been confronted by officers. We are told they are not going to be allowed to stay.

UNIDENTIFIED MALE: At this point, all buses have been diverted to other cities and other shelters.

UNIDENTIFIED MALE: So you're not taking any more people?

UNIDENTIFIED MALE: No, sir, not at this time.

CALLEBS: Certainly a tremendous -- a tremendous change in the plan here.

Sean Callebs, CNN, outside the Astrodome in Houston.

(END VIDEOTAPE)

COSTELLO: Some of the people being turned away at the Astrodome don't have far to go at all. Many are being sent to the Reliant Center, which is next door to the dome. Others are being sent to San Antonio, Dallas and Huntsville. So another long bus trip for them.

The Texas governor, Rick Perry, says his state is prepared to accept as many as 75,000 evacuees.

Another unfolding tragedy, children separated from their parents. A New Orleans couple is desperately trying to find out what happened to their 3-week-old baby boy. They last saw the child Monday at University Hospital in New Orleans. The mom says she's called the hospital repeatedly but has not been able to get through.

(BEGIN VIDEO CLIP)

ARMOND: I feel dead inside, to be honest with you.

(END VIDEO CLIP)

COSTELLO: The baby's parents were evacuated yesterday from the waterlogged Superdome to the Astrodome in Houston.

To Mississippi now. Survivors in each community we visit has harrowing experiences to tell. CNN's Gary Baumgarten is in Biloxi, and he joins us live with what he's seeing this morning.

Hello, Gary.

GARY BAUMGARTEN, CNN RADIO: Good morning, Carol. COSTELLO: What are you seeing this morning?

BAUMGARTEN: Well, people are very frustrated. We're getting word here that the president may be flying over, might even stop somewhere along the coast here to visit with some of the victims.

If any of them here who I've talked to have an opportunity to chat with the president, they're going to give him an earful, because they feel they have been forgotten, almost. It is taking a long time, because if you look at -- it is perspective (ph) for such a wide area, and they have to triage the areas that they go into. With a lot of the attention into New Orleans as it is, quite necessarily, people are going to feel, like, where is the cavalry?

And they're running out of water. They have no ice. They have no food. They're cooking in makeshift barbecues what little food that they have. And tempers are starting to get a little frayed here as well.

Not quite the situation that is New Orleans, of course, but they're just kind of wondering, when are they going to get the kind of help that they need?

COSTELLO: Gary, why aren't they getting aid faster?

BAUMGARTEN: I think it's just, Carol, because it's just so widespread, taking the FEMA folks and the Red Cross folks, and the Salvation Army people, and all of the other volunteers time to get into all the effected areas. They have logistical issues as well.

There's no housing here for them, just as there's no housing for the people who lost their homes here. I mean, there's a lot of real devastation here. Houses are just piled as matchboxes.

And it's kind of grim, because you walk through the area of Biloxi that they call The Point, which seems to have been the hardest hit, and the firefighters are going through the remains of the homes. And they put an orange or red mark on the buildings that have been checked out and they haven't found any victims. And there's an ominous black mark where a body has been found inside. And now when you walk through the area, you -- apparent -- you get what appears to be the stench of bodies occasionally wafting across.

COSTELLO: You know, it's interesting what you said about the president. There is much discussion about that, about how, you know, he's going to fly in, and he's warm and he's dry, he's going to have Secret Servicemen surrounding him, which is, of course, necessary to protect the president. But to people who -- who are suffering here, who don't have adequate security, who don't have food or water, they may not be happy at this point to see him.

BAUMGARTEN: I think they will, in this area, Carol, be happy to see him, because they want to be able to tell him directly what they feel needs to be done to help get them back on their feet so that he has a better understanding of what the situation is. A lot of people here are very isolated. They are relying on reporters, frankly, to let them know what's going on in the outside world because they have no power. And even (INAUDIBLE) what the situation is in New Orleans, it's (INAUDIBLE) a real good perspective, and it's starting to spread by word of mouth.

COSTELLO: Gary Baumgarten, reporting live from Biloxi, Mississippi, this morning.

Desperation, that's almost too simple a word to describe what's going on in New Orleans. Some of the worst scenes are playing out at the downtown convention center.

CNN's Chris Lawrence takes a look.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN CORRESPONDENT (voice over): It's hard to believe something like this could be happening in a major American city. This older woman in a wheelchair died. But no one comes to get her. So she sits on the side of a street, covered in a blanket.

That's another body on the ground next to her, wrapped in a white sheet.

UNIDENTIFIED FEMALE: These people couldn't leave because they couldn't afford to leave. The Superdome people went in that shelter because they couldn't afford to leave. And now we're dying?

LAWRENCE: Virginia Keys (ph) is here with her daughter and grandchildren, living on the street with almost no food or water.

UNIDENTIFIED FEMALE: We're dirty. We waded in that water, dirty, filthy water, and we're water. This is not the way we leave.

LAWRENCE: Mothers and their babies stuck outside the New Orleans Convention Center, surrounded by filthy trash and raw sewage, forced to live like animals.

UNIDENTIFIED FEMALE: Two days with no food.

UNIDENTIFIED FEMALE: I can't see how...

UNIDENTIFIED FEMALE: We're hungry!

UNIDENTIFIED FEMALE: We don't have no running water. We can't...

UNIDENTIFIED MALE: Miss, we don't either.

UNIDENTIFIED MALE: Concentrate on breathing, brother.

LAWRENCE: We saw a man have a seizure right in front of us, but there's no doctor or ambulance to help him.

(on camera): Some of these people have been waiting outside now for more than three days. And we're not talking just a few families, or even a few hundred families. There are thousands and thousands of people waiting outside the New Orleans Convention Center, and they have no idea when help is coming.

SHAREEF HASSAN, SCHOOL TEACHER: And we're not angry so much as frustrated and hurt. And we feel deserted, because not one time did I see or did anybody see an official step out here and talk to these people.

LAWRENCE (voice over): My mid afternoon, National Guardsmen dropped MREs on the crowd, but it's not enough to feed all these people. And it won't protect them from the rioters.

UNIDENTIFIED FEMALE: They left us out here with no lights and no security. This is not fair.

LAWRENCE: Virginia Keys (ph) and thousands like her survived Hurricane Katrina, but really aren't sure they'll make it through the catastrophe left in its wake.

(END VIDEOTAPE)

COSTELLO: CNN's Chris Lawrence in New Orleans.

As for the scene at the convention center, FEMA says it's a surprise. The director, Michael Brown, tells CNN that he hadn't heard about the crowd of people until yesterday. As we heard, those people say they've been stranded there for three days now. Brown says he's directing resources to make sure the people get food and water, but security may be an issue.

We're going to have more on that actually right now, because our producer, Jim Spellman, is on top of a building with police sharp shooters this morning. And those sharp shooters are protecting their own police precinct.

Jim, can you hear me?

JIM SPELLMAN, CNN PRODUCER: Yes, I can.

COSTELLO: Tell me -- tell me the scene. Set the scene for us.

SPELLMAN: OK. We're on top of this building in the French Quarter with police who have barricaded themselves in the building. All of their -- all the police from this district, as well as many of their family members, and people just of the public have all barricaded into this building.

There's police snipers on the roof where I've been all night. We've -- people have been shooting at us several times, and police have shot back. No indication why anybody would shoot at us, really, but they have.

There's been fires breaking out on the horizon. Right now, there's thick smoke coming from -- and periodic explosions coming from sort of the southeast, which police officers told me are railroad cars exploding.

At the convention center, there's been many reports of violence overnight. And there's not really much the police can do about it.

There was apparently a woman being held at gunpoint. There was a report that there was a fire at the convention center, all coming in on police radios. Impossible to tell if -- how they're being dealt with, because the police just cannot respond.

COSTELLO: OK. So most Americans probably don't understand why the police can't go inside the convention center and help that woman.

SPELLMAN: Thousands and thousands and thousands of people, families stranded there, they've been waiting for any type of boat, bus, something to come and help them. And as far as we can tell, that help just simply hasn't come. And we don't think that there's any indication that it will come anytime soon.

Certainly, the mayor...

COSTELLO: Well, Jim -- Jim, I understand that aspect. But from the security angle, why can't police go in there and restore order?

SPELLMAN: Well, there's a lot of people here who have looted a lot of guns from hardware stores and from sporting good stores. And there's heavily-armed men roaming the streets. And they're not afraid -- they'll fire at police at will for no reason.

And there's no electricity. It's pitch black. And there's thousands and thousands of people inside this dense -- this dense crowd inside the convention center. It's just simply unsafe.

Part of the problem is a police officer here told us that in some districts up to 60 percent of police officers, New Orleans police, have just -- have just left. They've abandoned their jobs and left.

So forces are thin. It's very, very difficult for them to communicate. They have some walkie-talkie systems that are working, but only on a -- on a thin emergency band.

We heard a call go out from a police officer for EMS, for an ambulance to come help a woman who had been injured. And the response was, "No EMS are out on the street. They can't operate."

COSTELLO: Back to the number of police officers who aren't showing up, did you say 60 percent?

SPELLMAN: In some districts, 60 percent. Here at this one, maybe 20 percent.

COSTELLO: Why aren't they -- why aren't they showing up? Is it because they're giving up? Or do they just need to get out of there?

SPELLMAN: You know, I don't think we can really answer that. It's just -- I couldn't tell you. But they're very dismayed about it.

But I tell you, the ones that have stayed here are truly incredible. These are people who have lost, you know, their own homes. The captain here of this district, his home is gone. His mother's home is gone. His mother-in-law's home is gone. And, you know, they have -- they have nothing left, just like a lot of other people here.

They're definitely trying to do what they can. But as they've been telling me all night, they need National Guard. They need a heavy military presence.

There's no way that they're going to be able to do it. There's simply more of them than there are of the police. And they're more heavily armed.

COSTELLO: Well, I know that the -- that the start of the National Guard coming into New Orleans has begun. And it will -- but it will take place over a number of days as far as to build up a huge contingent of National Guardsmen.

As far as planning for this sort of scenario, was there any planning before this hurricane hit as far as what the police would need to do?

SPELLMAN: Carol, I must admit, I just -- I don't have any information about that. I can certainly try to find out for -- for -- maybe in the next hour.

COSTELLO: All right. Jim Spellman, you be careful out there.

SPELLMAN: Thank you.

COSTELLO: And thank you so much for joining us this morning. And hopefully we'll get Jim back at the -- well, hopefully in between 5:30 and 6:00 a.m. Eastern Time. And then, of course, throughout the rest of DAYBREAK as well.

So many people are in need of help. If you want to donate, contact any of these organizations: the American Red Cross, Operation Blessing, or America's Second Harvest. Their telephone numbers are on your screen. And you can always go to our Web site, CNN.com, for a complete list of aid organizations.

Coming up, the storm is over, but the potential for a crisis is still very real. We'll tell you what officials are doing to try to prevent a huge public health crisis across the Gulf.

But first, here's one man's story after evacuating from New Orleans to Houston's Astrodome.

(BEGIN VIDEO CLIP)

ROBERT LEWIS, SURVIVOR: The Sewage and Water Board was trying to evacuate people out, but it was too late for us. So as the water rose, there were like bodies floating pass my front door, you know? Bodies floating pass the front door. I've never seen anything like this.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

COSTELLO: Take a look at the international markets. They're looking brighter this morning.

Tokyo's Nikkei took a big jump, up 93 points. The London FTSE is higher by 4.5. The German DAX up nearly 10 points.

Let's take a look at oil prices, because I'm sure you'll be interested in this.

In futures trading on the NIMEX this morning, light, sweet crude oil is still above $69 a barrel. And you know what that means.

Take a look at the runway at the Newark Airport here in the New York City area. You can see a FedEx plane being loaded up with supplies. This plane is on its way to the Gulf of Mexico. We don't know exactly where, whether it will go to New Orleans, or parts of Mississippi or Alabama, but we do know that much-needed supplies are being loaded into that plane, and it will be taking off shortly.

When we get more information on this, of course we'll pass it along to you.

The Bush administration is lending millions of gallons of crude to Exxon and Valero to help replace supplies lost to Katrina. Gas prices shot up beyond $3 a gallon in many states this week. It comes on the heels of fuel pipeline shutdowns and delayed oil deliveries since Katrina devastated the Gulf Coast states.

(BEGIN VIDEO CLIP)

BUSH: Steps were taken that will help address the problem of availability, but it's not going to solve it. Americans should be prudent in their use of energy during the course of the next few weeks. Don't buy gas if you don't need it.

(END VIDEO CLIP)

COSTELLO: The Energy Department says there are more than 700 million barrels of oil in the Strategic Petroleum Reserve. The agency has approved a request to loan ExxonMobil six million barrels of crude. And Valero Energy will get 1.5 million barrels.

Oil has been released from the reserve seven times under exchange arrangements. The most recent release was Hurricane Ivan in September of last year. But there are fears of a gasoline shortage, and they triggered a run on gas stations. In some cases, that pushed prices up even higher, with a few Atlanta stations posting prices above the $5 mark.

Is this just a panic attack by drivers? Or is it a sign of the prices to come?

Joining us from London to talk about it is Axel Busch, chief market correspondent from Energy Intelligence.

Good morning, sir.

AXEL BUSCH, ENERGY INTELLIGENCE: Good morning to you.

COSTELLO: How afraid should we be? Should we panic? Should we be relaxed?

BUSCH: I think there's a tendency in crises like these always to over-dramatize the situation. The situation is serious, but it's already being alleviated.

I understand that 20 tankers are loading or will be loading with gasoline for the United States here in Europe, and no doubt that others that we don't even know about. That will alleviate the situation by 20 percent or so.

But at the moment, we operate in almost an information vacuum. Any estimate of damage control and damage assessment is far too early to come up with any reliable figures. One can guess, but that's about all.

The problem is not really crude oil at the moment. It's products. It's gasoline for the southern states.

And here we are seeing something like a million barrels a day of refining -- gasoline and refining capacity down. When (INAUDIBLE) is anybody's guess, but we're talking not only potential structural damage to the plant, we are talking outages of electricity, we are talking problems with pipelines, we are talking problems with power, and we are talking problems with people. Where are the people who are supposed to repair these things? We don't know.

COSTELLO: Well, maybe they can't get there to repair them because of all the damage down there because of the hurricane.

BUSCH: Precisely.

COSTELLO: But still, you still say this is a short-term problem. But if we have all those other problems, might it turn into something more?

BUSCH: Yes, it could. And this is where we come back to the problem of production capacity.

We are taking two million barrels a day out of U.S. production. That is almost exactly the supply surplus that it was, that it's been enjoying for the past several months. And it's eating into OPEC's spare production capacity.

So in reality, when we take into consideration the various types of crude oil that OPEC can give us, or the various products that we need, than the world is now up against it. We are actually going to consume almost exactly what we can produce in terms of crude oil. That is a dangerous situation.

COSTELLO: That does sound dire.

A lot of people think that the federal government should put a cap on gas prices throughout the United States. Would that be a good thing?

BUSCH: Interfering with the free market is always dangerous. One of the things I will say in the situation here is that a free market will guarantee some kind of supply flow from areas where there's surplus gasoline to areas where there isn't, i.e., the United States.

If you started fiddling around with caps and price mechanisms and so on, you disturb that balance. I would not recommend it.

COSTELLO: Well, you know, you talk about not putting a cap, and I understand your reasons for it. But then you read about the profits that the oil companies are making. I want to read you something from Bloomberg.

It says, "The profit margin for turning a barrel of crude oil into heating oil and gas is $28.76 based on the futures prices in New York. That has more than doubled from August 26 and is five times higher than a year ago."

The oil companies seem to be making enormous profits from this.

BUSCH: Yes. And I'm not excusing that. The idea is to make profit, of course. But that seems excessive.

However, if you go back 18 months, they were making a loss. It strings a roundabout in this business, as in any other. But you could also argue that prices around the world will be affected by this. Here in London, for instance, we could see up to 10 percent increasing in petrol prices or gasoline prices because of the demand from the U.S.

It's a global industry. It's not a local one.

If the U.S. government wants to do something about this, they can do it on a local basis. They can loan our companies crude oil from the Strategic Petroleum Reserve, as they are doing.

COSTELLO: Right.

BUSCH: They can ease environmental regulations. But if you start...

COSTELLO: And they've done that, too.

BUSCH: ... if you start messing around with the price structure...

COSTELLO: Yes, but let's go back...

BUSCH: They have done that, too. COSTELLO: ... let's go back to the oil companies making all of this profit. There's been a terrible hurricane. People are suffering in our southern states. Why can't they cut the consumer a break, at least in the short term, because of what happened down South?

BUSCH: That would be fine. I have no problems with that at all. I'm not an advocate for the oil companies. But it's their decision.

COSTELLO: I understand that. Axel Busch, chief market correspondent for Energy Intelligence. Thanks for joining us this morning.

BUSCH: My pleasure.

COSTELLO: Still to come this morning, much more on the damage left by Hurricane Katrina.

We'll be right back.

(COMMERCIAL BREAK)

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