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Military Prepares for Rita; Key West Spared Brunt of Damage; Storm Could Cause Spike in Oil Prices

Aired September 21, 2005 - 14:30   ET

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

KYRA PHILLIPS, CNN ANCHOR: Now, after learning some valuable lessons from Katrina, the U.S. military is mobilizing troops by air, sea and land for the approach of Rita.
CNN Pentagon correspondent Barbara Starr has been gathering details all morning. Hi, Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Hello to you, Kyra. Well, getting ready indeed. Because, in fact, the U.S. military says it will be able to move in within 12 hours of Hurricane Rita making landfall. They are simply just now waiting to see where that landfall does happen.

Now, from New Orleans to Louisiana, they are, indeed, getting ready. In New Orleans, those two large amphibious warships, the Iwo Jima and the Shreveport, they are making tracks, headed out to the Gulf of Mexico, getting out of the way of Hurricane Rita. They will go out to the Gulf of Mexico, ride out the storm, and then come back in when the storm has passed.

Now, the top commander in Louisiana and Mississippi for the military, who was put in place for Hurricane Katrina, of course -- Lieutenant General Russel Honore -- says he, indeed now, making preparations for Rita. He spoke earlier this morning and he was very circumspect about the capabilities of Mother Nature.

(BEGIN VIDEO CLIP)

LT. GEN. RUSSEL HONORE, CMDR., JOINT TASK FORCE KATRINA: We just got to come to grip with it. There's some things we can do nothing about. I know everybody want to control everything. And it's the people who analyze everything from the fact that you can control it -- you cannot control this. You can learn to deal with it, accept it, keep your people informed and try to keep them safe. But, you know, we are beyond controlling hurricanes and storms.

(END VIDEO CLIP)

STARR: But what the military is, again, continuing to do is getting ready. Over in Texas, there are about 500 military personnel that have been preliminarily identified for the possibility of working with FEMA and working with civilian authorities in the aftermath of Hurricane Katrina. The state of Texas has now talked to the military. Texas, requesting five communications teams, about 20 military helicopters, all on standby, ready to move in. Kyra, it is those communications teams, again, that may prove to be all-important. One of the major lessons learn from Katrina is when communications go down, nothing else much works. And, in fact, already, back in Louisiana today, they are installing emergency military communications team equipment, just to be ready, just to be in place, even as Rita approaches -- Kyra.

PHILLIPS: We all learned the difference between cell phones and satellite phones, didn't we, Barbara?

STARR: Indeed.

PHILLIPS: All right. Barbara Starr, live from the Pentagon, thanks so much.

Well, the approaching storm has NASA preparing to evacuate the Johnson Space Center in Houston. Control of the International Space Station will be taken over by Russia's Mission Control Complex, just outside Moscow. Workers in Houston are covering computers and other electronic devices. And NASA facilities near New Orleans and Mississippi already are shut down after being damaged during Hurricane Katrina.

And the Florida Keys were spared the brunt of Hurricane Rita's wrath. But Rita sideswiped the delicate island chain yesterday, bringing with it heavy wind and rain.

CNN's John Zarrella surveys the damage.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN MIAMI BUREAU CHIEF (voice-over): All day, the Atlantic churned and the tide surged under the narrow strip of land that separates the ocean from the Gulf of Mexico.

In Marathon, several boats were submerged. Further up the coast, at Islamorada, floodwaters snaked among buildings and lapped over lawns. About half the population of the Keys had already boarded up and gone north along US-1 to avoid the wrath of Rita. Governor Jeb Bush told the rest to stay put.

GOV. JEB BUSH (R), FLORIDA: What we say around here is, turn around; don't drown. A lot of accidents take place as people at the last minute decide that they should leave. And it's too late to leave the Keys right now, given the wind conditions that exist.

ZARRELLA: Most heeded the warning and hunkered down, but not all. The intrepid, or foolhardy, couldn't resist the temptation of experiencing a Category 2 firsthand by road or even on a surfboard. In Key West, the streets were deserted for much of the day. Parts of US-1 were impassable, covered in seaweed and other debris.

But locals had experienced a lot worse.

UNIDENTIFIED MALE: We had a lot more flooding during Katrina and Hurricane Dennis this year than we have had so far with this -- with this storm here. So, there are areas of the city that are flooded, but nothing to the amount that we thought we were going to have.

ZARRELLA: Even so, the hurricane season of 2005 has taken its toll on the Keys.

UNIDENTIFIED MALE: We have had two hurricanes come very, very close to Key West. We have not had the eye hit the city. But the strain that has been put on the infrastructure, trees, the power lines, the -- the various -- the traffic lights, all that, it starts to play on itself.

ZARRELLA: But now Rita is gone from here, sweeping into the warm waters of the Gulf of Mexico and gathering in fury over the next three or four days, before the next landfall.

John Zarrella, CNN, Key West, Florida.

(END VIDEOTAPE)

PHILLIPS: Straight ahead, Ali Velshi talking about refineries at risk. Rita seems to be aiming for what Katrina missed. How this hurricane will impact prices at the pump. It's something you all want to see.

And refusing to pay. One major insurance company says it won't cover flood claims from Katrina. The state of Mississippi fights back.

(COMMERCIAL BREAK)

PHILLIPS: Now, to a New Orleans resident who could even give General Honore, that John Wayne dude, a run for his money when it come to take charge attitude.

CNN's David Mattingly catches up with Mama D (ph), a woman you definitely have to catch up with in order to talk to.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Deliver this message to Mr. Bush, Ms. Blanco and Mr. Nagin. I'm at home. I will get home.

DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): With the possibility of another disaster looming, Dyan French Cole is doing more than just staying put. She is readying her own relief efforts.

(on camera): What sort of plans do you have in place now? Do you have boats? Got gasoline?

DYAN FRENCH COLE, "MAMA D": Uh-huh.

MATTINGLY: What are you ready for?

COLE: Whatever we need to do.

MATTINGLY (voice over): After Katrina the long-time community activist better known as Mama D, rallied her neighbors in New Orleans 7th Ward. They formed their own search and rescue teams with almost a dozen boats. They carried the sick and elderly to higher ground. Turned the local school into a shelter, and turned her own flooded house into a relief center.

(on camera): Any idea how many people you ended up feeding?

COLE: Hundreds. Hundreds.

MATTINGLY: Right out of your own kitchen.

COLE: Out our kitchens. Out of everybody's freezer. Somebody's house -- my house is under water. If you're freezer is under water, go get the food. We cooked that freezer-full that day. You might have a chicken over here, and you might have seafood over there, and whatever, red beans over here. We were feeding, baby. We didn't have no choice. The dogs like the cat food and the cats like the dog food. I don't know.

MATTINGLY (voice-over): Going several days with her streets flooded and no outside help, it was Mama D who even protected the abandoned neighborhood pets. Today there are still feeding stations on the corners. Some of the louder dogs have become her neighborhood alarm system.

COLE: There he is. Hi. Say hi to the camera. Yes. Let them know you're there.

MATTINGLY: And as the floodwaters retreated, Cole (ph) and others watched empty houses to discourage looters. They worked to clean yards and porches, going so far as to post welcome home signs in anticipation of returning friends. Even though there is still no electricity or phone service, the turn around is remarkable.

(on camera): When you look at the clear and passable streets of the neighborhood today, it's hard to imagine how bad it really was here. But residents say when the levee broke, the waves coming through here were so high they were lapping up at the edges of their roofs. At one point, many people were dying. It was so bad that residents took down tree limbs like these, and formed barricades at either end of the street. The idea was to set up the barricades to prevent the bodies from floating up to their homes.

(voice-over): The magnitude of the suffering she witnessed for a moment was too much even for this pillar of strength. Her lowest moment proved to be a turning point.

COLE: I guess I was crying out loud. They came in the back of the room where I was to console me, to see us looking like we in the most remote third world country in one of the most popular cities in the world in a 2005. This is time for somebody to regroup. They got to go...

MATTINGLY: So instead of packing her bags, Mama D is organizing her own volunteers, collecting supplies and making plans to bring her neighborhood back from the brink again, in spite of the inescapable warning. UNIDENTIFIED MALE: National Guard. There's another storm coming. You need to evacuate.

MATTINGLY: National Guardsmen patrol, shouting alerts to anyone who will listen, and offer a bus ride out to anyone who will take it.

COLE: Come give me a hug.

MATTINGLY: Mama D simply responds with a kind word and a hug. An offer to leave is one she will not accept. She can't. Not when she believes the future of her nearly abandoned neighborhood depends on her.

MATTINGLY (on camera): No matter where any of your neighbors might be right now.

COLE: They are coming home.

MATTINGLY: You believe they are coming home.

COLE: I know they're coming home. I tell you what. You come have some gumbo with me in about six months. I'll introduce you to my neighbors. I promise I you will.

MATTINGLY (voice-over): That is an invitation that would be hard to turn down. A New Orleans neighborhood reunited, celebrating its survival and the safety of the neighbors who chose not to leave.

David Mattingly, CNN, New Orleans.

(END VIDEOTAPE)

(END VIDEOTAPE)

PHILLIPS: Hunkering down for Rita. The Category 4 hurricane seems to be headed directly for Texas refinery row. How this storm will impact your gas prices.

Plus, traumatized by Katrina, young kids speaking about the storm that swept their world away. Art therapy, straight ahead.

(COMMERCIAL BREAK)

PHILLIPS: Hurricane Rita poses a threat not only to Texas and its residents, but also to key oil refineries. The Texas coast is home to about a quarter of the U.S. refining capacity. That could mean even higher gas prices. That's something we definitely don't want to hear.

CNN's Ali Velshi here to talk about Rita's possible impact.

ALI VELSHI, CNN CORRESPONDENT: You know, this is -- people thought they at least dodged that refinery bullet and the oil production bullet after Katrina. And even then, there was a lot of damage from Katrina to pipelines and to refineries and to rigs and platforms in the Gulf of Mexico. But at least there was the other side of the Gulf where all the rest of it was going on.

Now this is the refinery, Kyra. You'll remember we were on this refinery as it was being evacuated, on this -- it's not a refinery, it's a rig in the Gulf of Mexico as it was being evacuated. Well that's happening all over again now, because no matter what Rita does, at a Category 4 through the Gulf of Mexico there are rigs and oil platforms all throughout that Gulf and they are vulnerable.

You can have up to 100 people on a rig, so they've got to evacuate that rig, even if that thing is coming that way. That means they have got to shut it down. The Department of Interior says you have got to hut the rig down and then evacuate up too 100 people 10 or 15 at a time on a helicopter. And that's what's happening now. So oil production and natural gas production is being shut down in the Gulf

PHILLIPS: OK, I understand that, and that it's being shut down. But then my question is, let's say Exxon, right, one of the richest companies in the world ...

VELSHI: Yes, yes.

PHILLIPS: And we're going to end up possibly paying five bucks a gallon? It doesn't make sense, Ali.

VELSHI: It's hard for it to make sense because as you said, ExxonMobil today is the most valuable company on the planet. Some estimates of this quarter, they will come in with a $10 billion profit. A quarter, three months, $10 billion. Why am I paying for this, as this happens?

It's purely supply and demand thing. Oil is a rare commodity now. And, you know, two things are happening. One is British Petroleum's big refinery -- almost a half a billion barrels a day, half a million barrels a day and in Texas City -- has just been shut down. We're expecting more of those by the end of the day.

And what these oil companies is do is they pass that cost and that increase cost of not producing and the tie-ups at the refineries and the shutdowns of the refineries, all the way through. We spoke to Peter Butel (ph), one analyst, this morning who says, look, if this affects a lot of production -- that's the Baytown refinery that we flew over. That's ExxonMobil's. That's the biggest one in the country. That's still open.

But if these refineries have to shut down, you will see that passed through. You will see more expensive gas because people will rush to the gas stations, and as you in the Atlanta area saw after Katrina, there were line-ups, there were some shortages. It shouldn't be widespread, but yes, you can expect to pay for this one, again.

PHILLIPS: So you've got this direct relationship among the shutdowns of the oil refineries like you said, the evacuations. That of course affects the price of oil, gas. So you think there could be a cutoff? I mean, we're thinking possibly five bucks a gallon, possibly these line-ups again. Could it get worst than $5?

VELSHI: I think so. Well, you know, at some point, people make decision, right? I've heard that at $3.50 a gallon, people start to think about those hybrid electric cars not as environmental advantage but economic advantage. I suspect, you know, when people drive SUVs at five bucks a gallon, you start making some choices about whether you need to live closer to work or take transit or get some kind of different vehicle. That's how you'll control the price of gas. Gas caps don't work, the idea of capping the price of gas.

If gas gets too expensive, people will pay -- won't want as much of it. And that's why OPEC started releasing oil earlier in the week, because they really don't want Americans, who consume, just to drive, 11 percent of all world oil production -- they don't want Americans getting off the oil habit. And so they're trying to keep it as cheap as possible. But if you can't refine it into gas, it doesn't matter how much crude oil is, the gasoline is going to be expensive.

PHILLIPS: Do we say oil habit or oil addiction, Ali?

VELSHI: Yes, oil addiction, absolutely.

PHILLIPS: What would be -- yes, would what be a better word?

VELSHI: It is absolutely an addiction. And again, Kyra, this is the thing that you see on every street corner. What you're not seeing just yet, and you're going to start to see it soon, home-heating oil prices, natural gas prices -- natural gas prices are at an all-time high, as well. You could be seeing more than a 70 percent increase in your winter heating bill over last year if you use natural gas.

PHILLIPS: Are you going to be heading back to any of these refineries, by chance?

VELSHI: Yes. I mean, we're keeping a very close eye to see how they're readying for this and how they're functioning. But sure, if there's a lot damage, we're going to have to get a close eye on what that is and how long it's going to take to get full oil up to production and gas up to production.

You know, the Katrina shutdowns are still not back in production and may not be for a few months. So we're going to be paying for this for a while. It's nothing like getting hit by a hurricane if you live there, absolutely not. But we'll feel this across the country.

PHILLIPS: Ali Velshi. I don't know if I should thank you, but, you know what I'm saying.

VELSHI: Yes, bearer of bad news.

PHILLIPS: Yes, right. Thanks, Ali.

All right. Well, Hurricane Katrina may wind up being the most expensive catastrophe in U.S. history.

(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

PHILLIPS: Surviving a hurricane can be traumatic experience for adults. Just imagine what it must be like for children. CNN medical correspondent Elizabeth Cohen reports on an effort to help kids deal with Katrina's aftermath.

(BEGIN VIDEOTAPE)

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT (voice-over): What Caroline Green has a hard time saying, parrot says easily.

ERIC GREEN (ph), COUNSELOR: Did the Parrot lose his house, too?

CAROLINE GREEN, NEW ORLEANS EVACUEE: Yes.

E. GREEN: What happened to parrot's house?

C. GREEN: He had a hurricane.

E. GREEN: He had a hurricane.

C. GREEN: The hurricane came and blowed down his house.

E. GREEN: Oh.

C. GREEN: And parrot was lonely, didn't have any friends.

COHEN: Caroline tells her story through her puppet. Her New Orleans home is gone. She's in a school where she doesn't know anyone. And when she sleeps, the monsters come.

C. GREEN: The monster got the big teeth. He has the big eyes.

COHEN: It all comes out in the play and art therapy these evacuee kids do with counselor Eric Green. Playing with the puppets brings out just how much 9-year-old Caroline misses her home, which she now says is under water.

C. GREEN: When I first moved to my new house, I was scared, because I thought I wouldn't make no friends.

COHEN: Her family now lives in a church shelter more than 100 miles away from New Orleans in rural St. Landry Parish. Counselors came from Johns Hopkins University in Baltimore to volunteer in the local school system, now home to about 1,000 evacuee children.

Dr. Green asked Caroline to make a scene in the sand, any scene she wants, and she does this.

C. GREEN: Katrina just washed away my whole house. My house just fell down like that. Everything just started falling like this.

COHEN: The plastic toys turned upside down, reflecting her real life, a devastated home, cousins missing, friends missing. C. GREEN: I think that they got flooded and either that or they must have swim somewhere, but I don't know, because I really do miss them.

COHEN: In another part of the room, 13-year-old Tommy Cumbaa shows a collage of what he misses most, like his cat.

(on camera): Do you think he's alive?

TOMMY CUMBAA, EVACUEE: I think he is. I have my hopes.

COHEN: You loved your cat?

CUMBAA: So much.

COHEN (voice-over): Tommy and his family survived a week in their attic before being rescued.

(on camera): You've been through a lot in the past couple weeks. How do you feel?

CUMBAA: I feel that I'm very grateful. It could have been worse.

COHEN (voice-over): Dr. Green says he worries that these children will have post traumatic stress disorder, but that, in general, these kids are resilient. He watches them work out solutions to their problems on their own.

C. GREEN: You don't have to be scared. You're my best friend.

COHEN: Frog and parrot, in the end, homeless, but not friendless, help deal with the trauma of a life turned upside down.

Elizabeth Cohen, CNN, Opelousas, Louisiana.

(END VIDEOTAPE)

PHILLIPS: That wraps up this Wednesday edition of LIVE FROM. I'm Kyra Phillips at the CNN Center Atlanta. Now, Wolf Blitzer, live in "THE SITUATION ROOM."

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