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American Morning

Energy Crunch Being Felt Across America

Aired May 17, 2001 - 09:00   ET

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

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: We begin with the president's plan for addressing the nation's energy crunch. Details will officially be revealed later on this morning, but they are already fueling debate. We'll have in-depth coverage this morning.

CNN White House correspondent Kelly Wallace outlines the president's plan. And then, national correspondent Eileen O'Connor is in West Virginia. She's got a look at how coal plants there figure into the strategy. And CNN's Lisa Leiter has the latest on the soaring gas prices in the Midwest.

We begin right now with Kelly at the White House.

Good morning.

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Good morning, Leon.

Well, Leon, this is it. This 163-page report, the president's answer to what he says is the worst energy crisis facing the country since the oil embargo of the 1970s. But even before the president unveils the 105 recommendations in this report, it is already generating controversy with environmentalists calling this proposal dirty, dangerous and one that benefits the energy industry and not consumers.

Well, not surprisingly, the president disagrees with that assessment. He believes he has the right mix of conservation and production, and he is taking his message to St. Paul, Minnesota. Mr. Bush leaving the White House a little more than an hour ago, headed for an energy-efficient plant in St. Paul where he will formally unveil this energy plan.

And here are a few highlights of this plan:

Number one, it eases regulations and reviews from environmental rules. These are moves the energy industry will definitely applaud. It also encourages the development of more power plants. The White House saying at least 1,300 more power plants needed over the next 20 years. It encourages exploration -- opening a portion of the Arctic National Wildlife Refuge in Alaska for oil and gas exploration and also some conservation incentives.

The White House saying $10 billion in tax credits and incentives overall with $4 billion in tax credits for consumers who purchase more fuel-efficient cars. And in a somewhat surprising move, the administration signaling it just might support increasing fuel efficiency standards for cars and sport utility vehicles and light trucks. The president has directed his transportation secretary to develop some recommendations, although no decision is expected before a scientific study about this matter is due out in July.

The president all along has been saying that his plan would not offer any short-term relief for consumers at the pump or power shortages in California. But that seemed to change yesterday when the president and his aides said that this plan, with the prospect of an increase in supply, would have a psychological impact on the markets and eventually bring the price down. Analysts, a bit skeptical about that, although the president also signaled his concern about rising gas and electricity prices. He said that federal agencies would be vigilant to make sure no price gouging is going on.

But, Leon, he remains adamant that he is against price controls on energy prices out West and that is something that Democrats and some Republicans are pushing the president to support, although he thinks it would discourage supply at a time of increased demand -- Leon.

HARRIS: All right. Thank you, Kelly. We'll see you later on.

HARRIS: Now, President Bush kicks off the campaign to sell his energy plan in a speech in St. Paul, Minnesota, this morning. And we'll bring you live coverage of that speech scheduled for 11:45 a. m. Eastern, 8:45 Pacific.

DARYN KAGAN, CNN ANCHOR: Now, let's talk coal. The plan to encourage more output from coal-fired plants has some environmentalists worried. Others, though, argue the plants are essential in meeting the country's energy needs.

Our national correspondent Eileen O'Connor is at a coal-fired plant in St. Albans, West Virginia.

Eileen, good morning.

EILEEN O'CONNOR, CNN NATIONAL CORRESPONDENT: Good morning, Daryn.

The John E. Amos plant is one of the largest coal-burning plants in the country. One of largest producers of electricity as well. With the rising cost of natural gas, coal is making somewhat of a comeback as perhaps an alternative again. It had been delegated becoming -- there was less coal-fired plants because of the fact that coal actually emits more emissions -- gases like nitrous oxide -- that contribute to acid rain and to global warming.

Plants like this, though, are putting in new catalytic converter systems, much like you have on your car, that would reduce nitrous oxide emissions some 85 to 90 percent. And they say they're encouraged by the president's wish to spend $2 billion on research into clean coal technology. And they're hoping that by that, they can cut those emissions going into the atmosphere quite significantly, particularly carbon dioxide emissions, they say, because these plants will be more efficient at burning coal and thus, they'll need to use less coal, less emissions.

Now with me is Vivian Stockman of the Ohio Valley Environmental Coalition.

Vivian, what do you think about the promise of coal for use? Environmentalists do have a lot of concerns about coal. It is dirtier than natural gas, correct?

VIVIAN STOCKMAN, OHIO VALLEY ENVIRONMENTAL COALITION: Well, we don't believe that there's such a thing as clean coal because coal is not only just burned, it's also extracted. And for West Virginia, for parts of Kentucky, other states in Appalachia, that means mountaintop removal, which means destruction to hundreds of thousands of acres of forests, streams, mountain communities.

Besides extraction, there's also processing of coal which creates coal sludge impoundments and these things are up to two billion, even more, gallons -- huge lakes. And we recently had a major spill of one of those 250 million gallons that polluted the environment.

Besides extraction and processing of coal, there's many other ways that coal is polluting the environment.

O'CONNOR: But one of the things is that people are talking about here is that if there were more coal-burning plants there could be more jobs in West Virginia, more mining jobs brought to this area and that there's a balance between economics and the environment.

STOCKMAN: Well, we hear that a lot but without a clean environment, you're not going to have any good jobs. And actually, worldwide, the renewable market is exploding. Wind energy is now the second cheapest source of energy. If you factor in the true costs of coal, it's probably even cheaper, and there's millions of jobs to be had in that worldwide. So I think it's time that we move forward and look at the new kind of jobs we can get with the cleaner energy.

O'CONNOR: OK. Another thing that Vivian and some others here have been talking about is that their -- they wish that the Bush plan had a little more emphasis on conservation. They believe that they could cut the need for energy and the need for coal-burning energy basically by some 30 to 40 percent -- Daryn.

KAGAN: Eileen O'Connor in West Virginia. Eileen, thank you -- Leon.

HARRIS: The southeast has escaped the blackouts and the power shortages causing problems in California and other parts of the country. But there are some concerns about meeting future energy needs there and coping with the immediate problem of high gasoline prices.

CNN's Miami Bureau Chief John Zarrella has a look at that story.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN MIAMI BUREAU CHIEF (voice-over): The summer sizzle is nearly on the southeast, but energy companies say there should be plenty of power to keep the A.C. chilling. Florida Power & Light, Duke Power, and the southern companies say they have energy reserves up to 20 percent -- enough for the summer.

But what about the future? Enron Corporation wants to build power plants in south Florida to operate when demand peaks.

UNIDENTIFIED MALE: They need facilities like this to meet the needs of south Floridians.

ZARRELLA: At public hearings, residents are telling Enron, "not in my backyard."

Meanwhile, with the price of gasoline, some folks probably wish they had an oil well in their backyard.

UNIDENTIFIED FEMALE: It's getting way out of hand. People can't afford it.

ZARRELLA: AAA says, take heart, the worst is over. Gasoline prices in the southeast have leveled off and may start falling after Memorial Day.

John Zarrella, CNN, Miami.

(END VIDEOTAPE)

KAGAN: We're going to turn now from the southeast to the Midwest, where people are paying some of the highest prices in the nation for gas.

Our Lisa Leiter is live at a Chicago gas station with the latest on the soaring pump prices.

Lisa, just how high is high?

LISA LEITER, CNN CORRESPONDENT: Well, Daryn, this Shell station on the north side of Chicago, the price of a regular gallon of gasoline is $2.15 and that is above the average for the city of Chicago. The AAA, today, saying the average price in the city is about $2.07 a gallon, so we're even above that out here. The only place other than Chicago where prices are higher is in San Francisco where today the price there is averaging $2.10 a gallon. But right here at this Shell station, the price is even higher -- $2.15

Now, we talked with the owner this morning who said he had to raise the price a couple of weeks ago, and when he did that price increase, it was by 10 cents a gallon in one shot. So consumers here are really feeling the pain.

And I'm here with Garrick (ph) right now who just drove in. He's on his coffee run this morning.

Garrick, how are you feeling about the gas prices?

GARRICK: Well, it's a bit much. It's a little bit frustrating. They seem to be steadily going up, but I hear that at some point they will come down. I can't imagine it sustaining at these prices for a very long time, but it is frustrating, yes.

LEITER: How long -- how much did it cost you to fill up today?

GARRICK: Well, it cost me about 45 bucks to fill up my car. Fortunately that'll last me a few days, but I do a lot of driving and that's quite taxing on, you know, the pocket.

LEITER: Do you need your -- do you need your car for your job?

GARRICK: Well, I do a lot of deliveries. I'm in the art business and I see appointments outside of my studio and that's pretty much -- yes, I do need my car .

LEITER: Do you feel like politicians, local and national, are doing enough to keep gas prices at a reasonable price?

GARRICK: Well, I really don't know. But I know that this gentleman here that owns this station, he does other things as far as incentives to keep you coming. The service is really good and stuff like that. But as far as the local politicians, I don't know. I find it strange that Chicago is so high considering it is the Midwest and I don't understand what that's all about so (INAUDIBLE).

LEITER: OK. Garrick, thank you, very much. We appreciate you joining us today.

So, Daryn, as you could see, there's some frustration here on the part of consumers. Consumers we spoke to, especially SUV drivers, very frustrated. One person we talked to recently said it cost him $80 to fill up their tank -- Daryn.

KAGAN: Giving stomach aches to people across the country.

Lisa, you told us about the average $2.07, $2.15. What's the worst price you've heard in Chicago for a gallon of gas?

LEITER: Well, the gas station near my house, which is a little closer downtown, is approaching $2.20.

KAGAN: Wow.

LEITER: So that's the highest I've seen, at least on my drive up here today.

KAGAN: Sounds like a good reason to take the El.

(CROSSTALK)

LEITER: That's for sure.

KAGAN: Lisa Leiter in Chicago, thank you -- Leon. HARRIS: No doubt. See those coins being sold like crazy right now.

KAGAN: Oh, $2.20.

HARRIS: Boy, that's something else. But I tell you what, it's not just the folks in Chicago and San Francisco, it's people across this country expressing a growing concern about the nation's energy crunch.

Let's get some more on the public opinion. Let's turn now to Gallup Poll Editor-in-Chief Frank Newport who is live, as usual, in Princeton, New Jersey.

Good morning, Frank.

FRANK NEWPORT, EDITOR-IN-CHIEF, GALLUP POLL: Good morning, Leon.

Let's put the energy situation and Bush's speech today in some context for you with the poll we just finished. Boy, this is really startling for us.

This is a question we've been asking every month. It's open- ended: What is the most important problem facing the country today? We let the respondents give us whatever they want and we code them.

Look at the change right here. Last month only 3 percent mentioned energy -- either lack of energy or fuel prices. This month, it's jumped all the way up to 21 percent and essentially, become top problem Americans are identifying is energy in just the course of a month. Those mentioning unemployment and the economy are actually down some. Education and mortality stayed about the same. This is a big, big jump here. Obviously Americans concerned about energy.

Bush, himself, his approval rating. Our last rating was at 56 percent. We can show you that. That's -- he's been kind of up and down in some points in here. We just put in some high points but that's coming down but about what we would expect at this point, neither above or below expected values.

A satisfaction with the way things are going in the country, we think because of energy, has been going down. Look at this, tracking it every month, this green line is the percent of Americans satisfied. It's been as high as 70 percent. I'll show you in a moment. But in the last several years -- it's now down to 46 percent. The lines have crossed. As of this past weekend, less than half of Americans say they are satisfied. We think that's because of the energy situation.

Just to put it in context, however, in May of Bush the elder's term, way back in May of '89, 44 percent were satisfied. About the same for his son. When Clinton took over in May of 1993, it was way down at 24 percent so not as bad as it was. This was the high point in recent years, 71 percent satisfied back in '99. Right now less than half of Americans satisfied, worried about energy -- Leon, Daryn, back to you.

HARRIS: All right. Good deal. Thanks, Frank. We'll see you in a bit -- Daryn.

KAGAN: CNN is following the energy situation closely, both on the air and on the Web. Tonight, CNN takes a special look at the energy crunch. Join us at 10:00 p.m. Eastern, 7:00 p.m. Pacific for that in-depth coverage. You can also log on to our Web site at CNN.com. AOL keyword: CNN.

The site -- this is a neat feature, Leon -- they have an interactive gas budget calculator which can tell you how much you'll pay for gas this year.

HARRIS: I saw that.

KAGAN: I don't know if I want to know.

(LAUGHTER)

HARRIS: Yes, it might be the kind of thing that would hurt to find out, huh?

KAGAN: Kind of looks like, no.

HARRIS: No. Boy.

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