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CNN Live Today

Defending Big Oil; Teen Hate Crime?

Aired April 27, 2006 - 11:00   ET

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

DARYN KAGAN, CNN ANCHOR: Welcome to the second hour of CNN LIVE TODAY. I'm Daryn Kagan.
We begin with a story out of Texas, a beating and a horrific sexual assault in Houston. A teenage boy is fighting for his life today. His alleged attackers will be in court this morning. Authorities say the two teenagers hauled a 16-year-old Hispanic boy out of a house party. Reportedly, the victim tried to kiss a 12-year- old white girl.

The suspects are accused of kicking and stomping the boy, stripping off his clothes, and sexually assaulting him. Police say they tried to cover up the crime by pouring bleach over the boy's body.

Seventeen-year-old Keith Robert Turner and 18-year-old David Henry Tuck are charged with aggravated sexual assault. The pair may now face hate crimes. They reportedly shouted racial slurs during the attack. The victim is listed in critical condition.

Our Ed Lavandera is in Houston covering the story, and we expect to hear from him in just a few minutes

Right now we're talking about gasoline prices and what you are paying for gas. Did you know big oil is actually making less money? ExxonMobil Corporation reports a first quarter profit of $8.4 billion profit. It sounds like a lot, but the oil company did not actually make as much as Wall Street was expecting.

Analysts had predicted profits of more than $9.25 billion, and profits were down from the previous quarter. Of course, those numbers don't include the April run-up in gas prices.

Our senior correspondent, Allan Chernoff, is at the New York Stock Exchange to put it all in perspective.

We hear that "B" word, billions, and we thing big, but clearly people on Wall Street thinking differently.

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Yes, sure. Well, on Wall Street, well, a disappointment. But let's talk about the gasoline pump.

You k now, when we hear about ExxonMobil earning billions and billions, we kind of feel it comes right out of our wallet. Well, some of it does, but a lot of it does not. Let's put this in perspective here. ExxonMobil is a global company. And we've basically taken the analogy of black gold. I've filled a few containers with cola this morning. Let's assume that this is black gold, OK? This is the $8.4 billion that ExxonMobil earned during the first quarter.

Now, of that amount, actually only about two billion was earned in the United States. So, that would pretty much be this amount of cola. So, as you can see, it's less than one-quarter of all earnings coming from the United States.

And of that amount at the gasoline pump, well, Exxon does divide up its earnings, and it would actually amount, believe it or not, to just three of these one-ounce containers. If we put it all in perspective, this is proportional. So, three of these little one- ounce containers would be what Exxon is actually earning from the gas pump, and that's actually from all refining and marketing. So, it includes selling gasoline, also selling jet fuel, diesel, and lubricants as well.

So, the U.S. consumer certainly is getting hit, Daryn, but it's just a small portion, believe it or not, of this huge corporation's total earnings.

KAGAN: And so you're thinking -- I think we actually pay more per gallon of that soda than we did do for the gasoline.

How is Wall Street reporting -- reacting to these numbers?

CHERNOFF: Well, on Wall Street, you know, high expectations, without a doubt. As you mentioned, the anticipation was that Exxon would earn more than $9 billion, but the stock getting hit today, down about 2 percent, because Exxon came in with lower profits than anticipated.

And you know what happens on Wall Street. When a big company misses earnings and misses them by a significant amount, they take it out and they shoot it. And that's what's happening over here on Wall Street, because today it's down not only 2 percent, this comes on top of losses every single day this week.

So, Exxon has been declining, and it's also been declining right along with crude oil. The price of crude oil was at 75 bucks on Friday. Now it's down to the $71 range. ExxonMobil has been declining, along with crude oil. That certainly does impact the company's profitability.

KAGAN: Allan, thank you.

Allan Chernoff and a lot of soda there on Wall Street.

Thank you.

Well, sure, some are calling it gas pump robbery. And sure, you want to blame someone. But is it fair to target the oil companies?

Joining us now from Washington is Rayola Dougher. She is head of energy markets at the American Petroleum Institute.

Thanks for being with us.

RAYOLA DOUGHER, AMERICAN PETROLEUM INSTITUTE: Oh, thanks for inviting me.

KAGAN: OK. So, folks, you know, are going to the pumps, are paying close to $3 a gallon. Put a positive spin on this. Why should we not be ticked at the oil companies?

DOUGHER: Well, I think there is a lot of frustration because there is a lot of misunderstanding, too, about how these prices are determined. And we've seen crude oil prices move sharply upward, but those prices are set out in the international marketplace by all the forces of supply and demand out there, all the buyers and sellers each and every day.

And we have a really thin line right now between supply and demand, and that's pushing that commodity price upward. And when we pull up at the pump, about 60 percent of what we're paying for is the price of the crude alone, another 20 percent or so for taxes. And maybe 20 percent goes to the refiners, the marketers, the distributors. So...

KAGAN: Yes, we have -- we actually put together this graphic.

DOUGHER: Oh, great.

KAGAN: I don't know, can you see?

DOUGHER: Yes, I can.

KAGAN: OK. So, let's say it's $2.92.

DOUGHER: Right.

KAGAN: So -- and I guess it would vary state to state.

DOUGHER: Sure.

KAGAN: But basically, 58 cents for taxes...

DOUGHER: Right.

KAGAN: ... 32 cents for distribution and marketing, 29 percent for refining, and $1.73 for crude oil.

Do those numbers sound right to you?

DOUGHER: They sound in a good ballpark. And another thing to do looking at that chart is just think, OK, where are the profits?

KAGAN: Right.

DOUGHER: Now, the profits are distributed among the crude oil producers, the refiners, the distributors, the marketers. All together last year, the oil industry earned 8.5 cents on every dollar of sales. The rest of U.S. industry earned about 7.7.

So, when we hear all these billions of dollars, it's really good to put them in a perspective. Well, how much are they spending, what are their sales, how do they compare to other industries? And there are many industries that have been earning a better rate of return, typically like software companies or pharmaceuticals.

So, yes, they're big, and, yes, they're profits are growing, but so are their investments, so are their operating costs. And they're plowing this back in to try and get more product on the market.

KAGAN: Yes. Let me put up that graphic one more time and talk about another sector that gets some criticism, and that's the refineries.

DOUGHER: Sure.

KAGAN: So, refining, 29 cents. Some critics saying one of the reasons the refining situation and why this is so expensive is because there are not enough refineries, and they're blaming that on the industry, saying the industry doesn't want there to be a lot of refineries, so that forces the cost of gas to go up.

DOUGHER: Again, I think there's a lot of misunderstanding about the refineries and the refinery margins. That's the difference between the crude price and the wholesale price of gasoline.

Refinery capacity has been expanding, and we still produce about 90 percent of the gasoline we use in the United States. But our competition, the imports, are 10 percent, primarily in the Northeast. So, it has been a difficult end to the industry. Its rate of return on investment has been much lower than the rest of the U.S. industry, and it has struggled with permits and trying to get streamlining permitting processes to build on existing capacity and to build even new refineries, too.

It is -- we're in a global sort of refining industry as well. And what's happened in that market is that the kinds of crude available don't really match some of the refinery configurations. So...

KAGAN: Rayola, let me ask you this...

DOUGHER: Sure.

KAGAN: ... you know, there's a lot of -- I mean, clearly, it's not even up for debate. There is a lot of frustration out there.

DOUGHER: Sure.

KAGAN: And some of that frustration, you see e-mail going around, boycott this, boycott that, don't frequent these gas stations. What kind of effect would that have on the industry if people picked one particular brand or one particular company, not to buy their gasoline? DOUGHER: I really don't think it would have much of an effect other than it surely would have an effect on the businessman or woman running that service station, because 90 percent of them or 95 percent are owned and operated by small businessmen and women around America.

So, if you boycott their station, that's really who you're going to hurt first. And we're in a global market, and the price is set out in a global marketplace. So, boycotting one station wouldn't work.

A better way to go would be to use less fuel, conserve more, and that will save you money. And there are a lot of Americans trying to do that right now, just with little things like making sure the car is tuned and driving the speed limit and keeping their tires inflated. And that can all add up to maybe 15 percent or more savings.

So, a lot of people are already doing this. And that would be a much better strategy than going after your neighborhood service station dealer.

KAGAN: Rayola Dougher, with the energy markets -- heads the energy markets at the American Petroleum Institute.

Rayola, thank you for your time today.

DOUGHER: Thank you very much.

KAGAN: Have a developing story out of Houston. We want to go back to this story, this alleged attack, a heinous attack just outside of Houston. And our -- our Ed Lavandera is covering that story. There just was a court hearing involving two suspects.

Ed's on the phone -- Ed.

ED LAVANDERA, CNN CORRESPONDENT: Hi, Daryn.

Well, one of the suspects in this case, 18-year-old David Henry Tuck, just finished a brief court appearance here in downtown Houston. He had originally been -- was being held on $20,000 bond, but based on the evidence that the prosecutor started presenting to the judge in this case, essentially bond have been revoked. And so, David Henry Tuck is now being held without bond.

He's one of two people charged with the aggravated sexual assault of a 16-year-old minor at a party over the weekend. Prosecutors say that David Henry Tuck and Keith Robert Turner, a 17-year-old, were at this party, and the way the story essentially breaks down at this point, from the details we've been able to gather so far, is that these two men dragged their 16-year-old victim out of the house. And prosecutors say Tuck, wearing steel-toed boots, proceeded to kick the victim in the head repeatedly and then used a PVC pipe to sodomize him.

Prosecutors say that the victim has -- the pipe went so deep into the victim that the victim has suffered internal organs and that there is a very good chance that he could die from these -- from this attack. So, right now, these suspects are being held with a very strong possibility that if this victim does die, they will be charged with capital murder in this case, stemming from a party over the weekend. Prosecutors and authorities have said -- sent over a disagreement that they say the victim was trying to kiss another girl at the party, and that because of that, that's what's led the fight.

So, the other suspect in this case, Keith Robert Turner, has not made a court appearance yet. It was very brief and the suspects didn't say anything.

KAGAN: Ed Lavandera reporting on the phone from Houston, Texas. A very disturbing story there.

Ed, thank you.

More on that as those details become available.

Now this just in to CNN, a shooting at the airport in Cleveland, apparently involving a police officer. Jeff Maynor is with our affiliate WEWS and has the latest. He filed this report just a few minutes ago.

(BEGIN VIDEOTAPE)

JEF MAYNOR, REPORTER, WKYC: Barbara, the call came into Channel 3 News within the hour. The first call was that someone had been shot here at Hopkins. The second call, it was a police officer shot.

We're on the upper ramp here where people drop people off. And as you can see, traffic is moving. It has just begun to move.

The shooting was at the United ticket counter at this level. And inside there, the United ticket counter is yellow-taped off. People who have tickets can board planes. As a matter of fact, airport operations are running as normal, including United flights right now.

Now, what we learned when we arrived here was that a Cleveland police officer got into an altercation at the counter with, apparently, a homeless man, according to airport officials. Shots were fired. The officer was wounded, as was a civilian.

We don't know if that civilian was a traveler or an airport employee, but two people wounded. They were transported to Metro Hospital. In fact, we passed the Hopkins ambulance as we were coming out here on its way to Metro with the wounded here from Hopkins.

We have no word on the condition of the two people wounded here. Again, one, a Cleveland police officer. The other, a civilian, transported to Metro Hospital.

Airport operations were not affected, except for the momentary shutout around the United counter. There's a United flight that was scheduled to go about now, and Fred Zabow (ph) of the airport commission told me that it was going on schedule. Some people who were witnesses were being delayed, but the flight was going to move out on schedule. So, no disruption of airport operations here. But a terrible shooting, with a Cleveland police officer wounded, as well as a civilian -- Barbara.

(END VIDEOTAPE)

KAGAN: All right. Making best use of our affiliate there in Cleveland, these live pictures from WJW. That report was from WKYC. Jeff Maynor reported there that we enlisted from their local coverage.

Once again, a police officer shot at the airport in Cleveland, Ohio. For now, though, it does not appear that air traffic has been affected by that incident.

We move on to medical news. It is an all-out assault on the mumps. Dr. Sanjay Gupta tells us what you can do to stop the outbreak.

LIVE TODAY continues in a moment.

(COMMERCIAL BREAK)

KAGAN: Deliberations were called off this morning in the Zacarias Moussaoui trial. The judge announced a juror called in sick and was headed to the doctor's office. The rest of the jury was sent home.

Marshals will check with the sick juror a bit later to see if deliberations can resume tomorrow or if they're going to have to wait until next week. Jurors began the penalty phase of deliberations on Monday. They're deciding between life in prison or death for Moussaoui.

Boot camps get the boot. Florida lawmakers scrap the state's military-style juvenile detention camps. The move comes after the death of a 14-year-old boy at one of the camps. Lawmakers are putting a new juvenile justice program in place. House and Senate negotiators are spending $33 million to fund the new program.

The nation's heartland is the heart of a mumps outbreak. In Iowa, there's a massive immunization program to protect those most at risk.

Our senior medical correspondent, Dr. Sanjay Gupta, has more.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN SR. MEDICAL CORRESPONDENT (voice over): The CDC has rushed 25,000 doses of the mumps vaccine into the Midwest to try to control the largest mumps outbreak in the U.S. in more than 20 years.

DR. JULIE GERBERDING, CDC DIRECTOR: We have more than a thousand cases reported from eight states, and we also have additional cases undergoing investigation in seven more states. GUPTA: Mumps used to be as common in kids as chicken pox is today, but thanks to a vaccine developed in the '60s, the disease really has gone the way of black and white TV. Now there are only a few hundred cases in the U.S. each year, and the last major outbreak in the U.S. was in the late 1950s.

But a recent outbreak in Great Britain just last year left about 60,000 people infected. That same strain of the disease has been found in mumps patients in Iowa.

The vaccine is about 80 percent effective with just one dose. The recommended second dose increases a person's immunity to 90 percent. But many college students never got that second dose, and officials say they believe that's exactly where the outbreak began, in a college dorm.

DR. PATRICIA QUINLISK, IOWA STATE EPIDEMIOLOGIST: We certain know college campuses, because of the close living quarters, the fact that they spend a lot of hours a day in the cafeteria or in classes together, and also their social behavior -- obviously there can be sharing of saliva with beer glasses and things like that -- they have a high risk of transmitting a disease like mumps.

GUPTA: The symptoms of mumps are usually flu-like. And because most doctors haven't seen a case of the disease in many years, it can be easy to misdiagnose at first.

QUINLISK: Initially, you might just have fever, headache, not feel very well, but most people will go on to developing the parotid gland swelling or the swelling of the salivary glands under the jaw. And they sort of get that classic chipmunk look.

GUPTA: The disease is also spread much like the flu.

QUINLISK: By somebody coughing and sneezing on another person. So you have to be relatively close for that. Or through saliva, kissing, sharing a glass, something of that sort.

GUPTA: And although mumps is really fatal, it can cause miscarriages in early pregnancy and other lasting effects such as deafness or sterility. So experts recommend taking precautions like you would with the flu.

Don't share food or drinks, and wash your hands regularly. Also, make sure you've had both doses of the vaccine. If you've already had the mumps, experts say it's unlikely you'll get it again.

Dr. Sanjay Gupta, CNN reporting.

(END VIDEOTAPE)

KAGAN: It is called starter heroin. A new addictive drug could be coming to a school near you. Find out what it is and what to look for on CNN LIVE TODAY.

(COMMERCIAL BREAK) KAGAN: Texas teens are getting an early introduction to heroin addiction. Authorities say the new drug is called Cheese. "USA Today" reports it's popping up in middle and high schools in Dallas. And federal drug officials are alerting agents to watch for it nationwide.

Kids are snorting the drug. It's ground-up Tylenol P.M. with a little heroin mixed in. The drugs are crushed together and folded into notebook paper. It's sold for $5 for a quarter gram and two bucks for a single hit.

Authorities say the concoction is addictive. Users report feeling euphoric and then sleepy and hungry.

"Broken beyond repair," that's what a new Senate report says about FEMA. It recommends abolishing the disaster agency. The report calls for replacing FEMA with a new emergency management agency. That agency would remain within the Department of Homeland Security, but the head of the agency would have a direct line of communication with the president during disasters.

Senator Susan Collins summed up the criticism of FEMA last hour. You saw it live here on CNN.

(BEGIN VIDEO CLIP)

SEN. SUSAN COLLINS (R), MAINE: FEMA is discredited, demoralized and dysfunctional. It is beyond repair. Just tweaking the organizational chart will not solve the problem. FEMA has become a symbol of a bumbling bureaucracy in which the American people have completely lost faith.

(END VIDEO CLIP)

KAGAN: The bipartisan report was issued by Collins and the committee's ranking Democrat, Senator Joe Lieberman.

Uprooted by FEMA, actually by Katrina, chased away by Rita, and now booted by FEMA? There is word that thousands of hurricane evacuees who counted on year-long housing vouchers may not get them much longer.

"The New York Times" says almost a third of the 55,000 families who got the voucher are affected. FEMA says it only promised housing assistance for up to a year. But evacuees and local officials tell "The Times" that FEMA agreed to pay for an entire year.

The trauma of a hurricane and being forced from their homes, it adds up to math problems for students displaced by Katrina and Rita. Math scores for fifth-graders now living in Texas are lagging behind.

Just 45 percent passed the math portion of the state's standardized test. Officials blame the trauma from the storms and the poor quality of schools in New Orleans. They also say some students were placed in the wrong grades. They had no school records when they arrived in Texas. President Bush heads back to the Gulf Coast region today. The White House says the president will highlight the role of volunteers in a Hurricane Katrina rebuilding effort. His latest visit comes a little more than a month before the start of a new hurricane season.

The high price of gas may be driving some people to a life of crime. Residents of a Fresno apartment complex say someone stole gas right out of their tanks. About a dozen people found their tanks open and empty. They think it may be an inside job. They live in a gated apartment complex.

Well, how about this idea, running out of gas on purpose? Towing companies say some drivers are doing just that. Only in California. When the tank runs dry, they sit and wait for taxpayer-funded rescue trucks with a free gallon of gas.

California has some of the highest gas prices in the nation, more than three bucks a gallon, and it's going up.

The big kids picking on the teacher's pet, it's not the playground, it's the highway. And it's car class warfare.

CNN's Peter Viles has a story that he did for CNN's "ANDERSON COOPER 360."

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice over): Drive a Toyota Prius in California, and you're considered special, so special you can drive in the carpool lane all by yourself.

UNIDENTIFIED FEMALE: I think we should have special status. Anything to encourage people to buy hybrid/electric vehicles and get out of those massive monstrosities they're driving around.

VILES: Trouble is, hybrid drivers have a reputation for poking along to maximize gas mileage.

UNIDENTIFIED MALE: But I think people get in that lane and drive slower also which should not be tolerated. But they're not ticketed or penalized for that.

VILES: Check out this post on a car talk forum. "Hey, all you hyper milers, if you want to go slow and save gas, get a bicycle."

(On camera): Prius Driver Jane Valez-Mitchell, you may recognize her as a TV legal analyst, sometimes on "HEADLINE NEWS," says she's been honked at, tailgated, cut off and yelled at.

JANE VALEZ-MITCHELL, PRIUS OWNER: If your little Prius is standing in the way of their big Escalade, they get angry. Well, that's not how it works. Just because you drive an Escalade, doesn't mean you're more powerful or more important or should be able to get in front of me. Sorry.

VILES: It so happens this guy does drive an Escalade. UNIDENTIFIED MALE: Oh, I'd pay $60,000 for one of these or $100,000 for one of those. And, you know, here they go with these little hybrids and they getting on the diamond lane. I'm by myself, I can't even get in the diamond lane, you know?

VILES: Truth is Prius backlash is a two-way street.

CHRIS CUTRIGHT, TOYOTA DEALER OF HOLLYWOOD: I don't think the Hummer people are upset at the Prius people, I think it's the other way around. The Prius people are definitely upset at the Hummer people, no question about it.

VILES: And you can't beat this story of Hummer backlash.

UNIDENTIFIED FEMALE: It's big. I can't get anywhere, and it get gets egged constantly. I don't know if it's just teenagers, or I think it's like environmentalists egg my car. I've been egged four times.

VILES: Still, you'll never see this woman driving a Prius.

UNIDENTIFIED FEMALE: I'd rather ride a bicycle than to drive a Prius, I think.

VILES: Ride a bicycle?

UNIDENTIFIED FEMALE: I think so, yes. For sure.

VALEZ-MITCHELL: I mean, this is beautiful. It's luxury.

VILES: Peter Viles, for CNN, Los Angeles.

(END VIDEOTAPE)

KAGAN: And you can get a fresh perspective on the day's top stories from "ANDERSON COOPER 360." Tune into "AC 360" weeknights at 10:00 p.m. Eastern.

We like to take you behind the scenes every once in a while. I want to show you some of the help I have here today. It's bring your kid to work today. And these are some of my honorary daughters.

Are you girls having a good time?

UNIDENTIFIED GROUP: Yes.

KAGAN: Hey, how many of you kids watch "American Idol"? Who watches -- Oh! Who do you think is going to win?

UNIDENTIFIED FEMALE: Chris.

KAGAN: Chris?

UNIDENTIFIED FEMALE: Chris.

KAGAN: Chris. UNIDENTIFIED FEMALE: Chris.

KAGAN: Oh, we've got a lot of Chris fans. We're talking "American Idol" just ahead. The girls are following me, and we'll talk "AI" just ahead.

Wave as we go to break, you guys.

(COMMERCIAL BREAK)

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