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BP Caps Ruptured Wellhead; Pinning Hopes on Relief Wells; Hurricane Concerns; Tar Balls Hit Florida; Scientists Back Use of Dispersants

Aired June 04, 2010 - 17:00   ET

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

HOLMES: The president on his way to Grand Isle.

Our coverage here on CNN certainly will continue on this, day 46 of the Gulf oil disaster. Now time for me to hand it over to Wolf Blitzer in THE SIT ROOM.

WOLF BLITZER, HOST: Thanks, T.J.

Happening now, it could mean some relief in the wake of the worst environmental disaster the country has ever seen. After successfully cap -- capping that ruptured wellhead in the Gulf, is BP now one step closer to stopping the gushing leak?

Plus, President Obama now surveying the growing devastation on what is his second trip to the Gulf in a span of a week.

But how is the visit playing with those hardest hit by the crisis?

And they're being called the lesser of the evils -- controversial dispersants being used to break up that oil in the Gulf. A new government report has just been released with brand new information.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

You're looking at video feeds of that gushing oil. They're coming in from robots working on the leak. Oil is now being sucked from the ruptured well to a drill ship on the water's surface. BP is hoping to seal four vents on a containment cap that was placed on the well last night. If successful, the move could drastically reduce the amount of oil escaping.

Meanwhile, new signs that the spill is spreading. Tar balls are now washing up on beaches in Pensacola, Florida.

CNN's Rob Marciano got a firsthand look at the gooey substance from a resident who lives there.

(BEGIN VIDEOTAPE)

ROB MARCIANO, CNN CORRESPONDENT: That is absolutely disgusting. If there's any doubt that this is from the oil spill out there, you shouldn't have any doubt anymore. This is definitely from there.

Have you ever seen anything like this across these beaches?

ASHLEIGH PITTMAN, FLORIDA RESIDENT: Never, ever. The small balls started washing up and my uncle stepped on one and it got all over his foot. And we knew immediately what it was.

(END VIDEO TAPE)

BLITZER: And a new forecast has hit -- has oil hitting as far east as Destin, Florida by tomorrow. We're watching this very closely.

President Obama is now in the midst of his second trip to the Gulf Coast within a week's time.

Our senior White House correspondent, Ed Henry, is on Grand Isle, Louisiana, covering the president's visit. Walk us through so far what the president has done -- Ed.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Wolf, as soon as he landed in New Orleans, about two and a half hours from me here, he basically went behind closed doors with some of the governors, some of the local officials, as well as federal officials, who are working to not only get this leak capped, but also trying desperately to make sure that these thousands of barrels of oil, that it's limited in term of -- in terms of how much of it washes on these shores.

The president, also, very interesting, in his brief comments -- you know, he's been under great pressure to show more outrage. He did just that in lashing out at BP.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My understanding is, is that BP has contracted for $50 million worth of TV advertising to manage their image during the course of this disaster.

In addition, there were reports that BP will be paying $10.5 billion -- that's billion with a B -- in dividend payments this quarter.

Now, I don't have a problem with BP fulfilling its legal obligations. But I want BP to be very clear they've got moral and legal obligations here in the Gulf for the damage that has been done. And what I don't want to hear is when they're spending that kind of money on their shareholders and spending that kind of money on TV advertising, that they're nickel and diming fishermen or small businesses here in the Gulf who are having a hard time.

(END VIDEO CLIP)

HENRY: There's certainly frustration with BP among people here on the ground that I've spoken to, but also frustration with the federal government because of the response to this tragedy. But, also, I spoke to a local man here who was telling me, look, he's upset that the president has this six month moratorium on more offshore drilling. The man said, look, this is the economic lifeline here. He said if a plane crashes, you don't basically shut down the entire aviation industry in America. Likewise, he doesn't believe they should shut down the oil industry in this region -- Wolf.

BLITZER: You were with him a week ago when he was there in Louisiana you're there today.

What's the basic difference between these two trips?

HENRY: Unbelievable, night and day, because seven days ago, I was on the beach right near where I'm standing now. And those tar balls Rob Marciano was just talking about were washing up on these shores -- very small, sand and oil mixed together. We saw that then.

Now, we're seeing actual oil just coming up, spilling up on the beaches around here. It's got people here deathly frightened, because they think that it's going to wipe out the entire fishing industry here.

The president under pressure to not just do these briefings, but meet with real people like fishermen. We saw a lot of Secret Service activity at a bait and tackle shop near here. I talked to the owner. He told me he's basically out of business right now. He's trying to stay afloat. He had to shut his doors, at least temporarily, because there's no fishermen. Many of the beaches are closed.

There are signs on the road here basically saying, end this nightmare. There's one sign directed at BP, not the government, that I saw on the side of the road that basically said, you know, no fishing, no swimming, how the heck are we going to feed our kids now?

People here are desperate. They feel like they're right at the edge of, frankly, going bankrupt -- Wolf.

BLITZER: Ed Henry is on the scene for us.

Thanks.

I know the president is heading toward your way.

We're going to check back with you.

He's driving to Grand Isle right -- right now.

We want to show you some pictures of BP successfully lowering that containment cap over the ruptured wellhead last night.

CNN's Tom Foreman is joining us now with more on the operation, what has happened over these past several hours and what is about to happen -- Tom?

TOM FOREMAN, CNN CORRESPONDENT:

And, Wolf, this is technologically a huge challenge. And these robots under the water a mile deep are helping us cover it around the clock, keeping an eye on what's happening.

And if you've been watching these all day, what you've been paying attention to is this -- that oil still boiling out there. The Coast Guard commandant, Thad Allen, says they may be containing about a thousand barrels a day. Well, that's a problem because we've got 12,000 to 19,000 barrels gushing into the Gulf at the latest prediction.

So the question is, why are we only containing 1,000 and what can we do about it?

This is the composite picture from all those robots. Let's bring up one tight shot and look at some of the details of what we're talking about here.

Why is all that coming out?

Well, because this cap has been put into place to hold the oil, but the cap has not been completely sealed yet. That makes a big, big difference. It's got vents in the top of it which are allowing this to come up this way. And those vents allow this to come out from the sides of the cap so that it can keep flowing.

Why would they want to do that?

There's a couple of technical reasons they want to. One, because the more water you get into this, the more water that you allow to come in here, into this cap, the more chance you have of having those crystals form called hydrates. So they don't want a lot of oil sealed in tight yet.

Eventually, they will. Eventually, they'll try to apply about 20,000 pounds of pressure here to get a tight seal. But right now, they don't want that.

Right now, they want to let this happen -- a little oil coming out here and here and here because that keeps the water from rushing in and freezing this thing up and making a mess. So they have a series of little slots along in here. And those slots are being closed one at a time. And as each one is closed, they're going to force more of the oil to not come out, but to go directly up that pipe.

But here's the thing. They've had some success. That's the whole point here. They've had some success with this operation. They don't want to blow it now by overtaxing this unit and making those hydrates form and possibly another leak form and then going right back to where they were.

One more thing, Wolf, worth meaning. This is the blowout preventer we've talked about all along. When they tried the "top kill," they pumped fluid in from the side through pipes to help fight the flow. Now, as they're siphoning off the top, they're going to try to reverse those hoses, eventually, and suck it out from the side and take oil away. The end result of all this, they hope, will be more like 80 percent containment and the ship above can take about 15,000 barrels a day. That's not too bad if you're talking about 12,000 to 19,000 in the leak. It's a big improvement over where we are now -- Wolf.

BLITZER: And right now, what, Thad Allen says about 1,000 barrels a day are already going to that ship, is that right?

FOREMAN: That's what he's been saying. BP will not give an estimate right now.

BLITZER: We'll watch it. These are critical hours. And we can't -- we can't emphasize over enough how sensitive and dangerous and difficult this operation is.

Much more coming up.

Also, a tumultuous day on Wall Street today. The Dow suffering its second worst slide of the year, tanking about 324 points. And the index closed below the 10000 mark for the second time in two weeks. Stocks were dragged down by weaker than expected job numbers and after Hungary became the latest country in Europe to announce its economy is in crisis.

Our Dr. Sanjay Gupta is standing by live in New Orleans. He'll explain why people are telling him this oil disaster is so much worse than Hurricane Katrina.

Plus, those controversial dispersants being used to break up the leaking crude oil. Now scientists are weighing in with a new report.

Are they making the situation better or worse?

We'll have the details.

And what's in store for Florida's tourist industry now that tar balls are washing up on its beaches?

I'll ask the U.S. senator from Florida, Bill Nelson.

He's standing by live.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Jack Cafferty for The Cafferty File -- Jack.

CAFFERTY: Wolf, for a man who was invincible on the campaign trail, Barack Obama seems to have lost some of his magic since he got to the White House.

Politico reports how a series of recent missteps has the president's team struggling to regain its touch. One top Democrats is quoted as saying: "It's baffling how one group of people can be so good at campaigning and so bad at politics."

First, the White House has come under fire for trying and failing to coax two Democratic Senate candidates out of office by offering them administration jobs. It's not a big deal. A lot of presidents do these things.

The problem here is, they got caught. And it runs counter to Mr. Obama's big themes of transparency and grassroots empowerment.

No more politics as usual, remember?

Then there's the crisis in the Gulf -- a catastrophic environmental disaster the likes of which we have never seen before. The president spends three hours on the beach in Louisiana and then goes to Chicago on vacation. And this happens weeks after the oil began gushing from the busted well on the ocean floor. Like it or not, there are times when a president is called upon to be a father figure to the nation, to sympathize, comfort and reassure us when things are bad. It's what made Reagan and Clinton so very popular.

Whatever happened to that firebrand charismatic speaker who made a thrill go up Chris Matthew's leg?

The president is in trouble. As Barack Obama marks 500 days in office, a new average of poll shows only 48 percent of the public approves of the job he's doing. And those numbers aren't good enough is he plans to spend more than four years running this country.

Here's the question, why does President Obama seem to have lost his touch?

Go to CNN.com/caffertyfile and post a comment on my blog -- Wolf.

BLITZER: All right, Jack.

Thanks very much.

Let's talk about this and more with David Gergen, our senior political analyst.

The impact of this oil spill on the president and the impression of the president, has it changed -- David?

What do you think?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: I think it has, Wolf. I think as you travel around the country -- I was just in Chicago, his hometown. And I must say, I was surprised how the cool the reaction was to the president. Many who had supported him in the past now are expressing some disappointment.

I -- I'm not sure he's lost his touch so much as he's been hit by a series of unexpected difficulties, which he's having -- he's struggling to deal with. It's the Gulf and then -- you know, which has knocked him off his game with regard to getting a climate bill.

And then along comes the flotilla incident in the Mediterranean. And that's knocked his whole effort to get sanctions against Iran -- it knocked that off of the tracks for a while and really complicated the situation.

And, of course, then the White House expected, Wolf, today that they would be bolstered -- they'd really get some good news out of the jobs report. And they got just the opposite.

BLITZER: Yes. The numbers were seemingly, on the surface, good -- with about 44,000 new jobs, the unemployment number going from 9.9 to 9.7 percent. But when you look closer, about 410,000 of those new jobs were temporary jobs for the U.S. Census.

GERGEN: That's right, Wolf. And only -- only 41,000 of the new jobs, a very small percentage, were actually in the private sector. Economists had been expecting about 150,000 to 200,000 new jobs in the private sector.

So this was a -- a severe disappointment. And -- and, Wolf, remember, going back to where we've been each month that it takes about 150,000 new jobs each month just to meet the growing size of the labor force and keep things even. So when you get 41,000, you're really going backwards again. And a lot of people are dropping out of the labor force this time.

And that, on top of the euro crisis, that seems to be spreading and you -- as you say, hit Hungary, is face the problem -- the president, he just can't catch a break.

Now, maybe this containment procedure will really catch up -- pick up a lot of that spill. That would be very good news for the president and maybe things would turn for him. But right now, he can't catch a break and he is in trouble.

BLITZER: Yes. Well, let's hope -- it would be good news for the people along the Gulf Coast...

GERGEN: It sure would be.

BLITZER: They need to a catch a break right now...

GERGEN: It sure would be.

BLITZER: And we're praying that this containment cap works. It's not going to completely resolve the matter, at least in August, when those relief wells go into effect. But let's hope it can contain the oil spillage, at least somewhat.

David, thanks very much.

GERGEN: Thank you.

BLITZER: While President Obama is certainly busy in the Gulf region, new information is coming out about his Supreme Court nominee, as well. Tens of thousands of pages of documents about Elena Kagan released today.

Our staff is poring over them right now.

And Florida senator, Bill Nelson, gets a firsthand look at how close the major slick is to coming into the Florida shore. He'll join us live. That's coming up.

(COMMERCIAL BREAK)

BLITZER: Those are live pictures. You can see the oil still spewing out from that well 5,000 feet below the water's surface in the Gulf of Mexico. They're hoping to start shutting down some of those vents over the next few hours to reduce that flow. It's a very, very delicate situation. We're going to watch it very closely. But the oil is still coming out.

Earlier in the day, Admiral Thad Allen thought about 1,000 barrels a day were being sent up to shore, to a tanker that's up there. But it's the earlier estimates of 12,000 to 18,000 or 19,000 barrels a day were coming out. That's still plenty of oil spewing forward.

Let's keep an eye on this for you.

In the meantime, Lisa Sylvester is monitoring some of the other top stories in THE SITUATION ROOM right now.

What do you have -- Lisa?

SYLVESTER: Hi there, Wolf.

Well, Israel is vowing to keep an Irish ship from reaching Gaza, setting the stage for another showdown. This 1,200 ton cargo ship is less than 150 miles from shore and is expected to reach the coast Saturday morning. Activists on the vessel say they will not resist if Israeli forces come aboard. Israel is facing international outrage after Monday's raid on a ship that killed nine activists.

And we are poring over more than 46,000 pages released today that documents Supreme Court nominee Elena Kagan's role as an adviser to President Clinton. In those pages, she helped defend his veto of a bill that would have banned late-term abortions. She wrote that President Clinton would sign a bill banning late-term abortions only if there were exceptions for the mother's health. Kagan's confirmation hearings are scheduled for June 28th.

McDonald's is recalling 12 million drinking glasses because they contain cadmium, a metal that can be dangerous after long-term exposure. The new Jersey company that makes the recalled glasses says it first heard there was a problem when it received a recall notice late last night, but said it's investigating the problem. The glasses feature characters from "Shrek" and started selling in May.

Be sure to watch CNN's special investigation, "TOXIC AMERICA," with Dr. Sanjay Gupta. It airs this Saturday and Sunday at 8:00 p.m. Eastern. Another recall for a potential problem with sticky gas pedals, this time by Chrysler. The company is recalling nearly 35,000 Dodge Calibers from the 2007 model year and a limited number of 2007 Jeep Compass SUVs. Chrysler says the pedals were made by the same Indiana company that made the ones involved Toyota's recall earlier this year -- Wolf.

BLITZER: All right. Thanks very much, Lisa.

We'll get back with you.

We're learning more about how the spill is affecting the health of people in the region.

Dr. Sanjay Gupta has been at the forefront of this reporting. He's standing by to join us live from New Orleans.

And how would a hurricane impact efforts to stop the gusher?

I'll ask a leading researcher.

And a critical day for a rocket that NASA hopes could one day transport astronauts to the International Space Station. We'll explain, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: You're in THE SITUATION ROOM.

Happening now, oil still spreading. The first waves of the slick have started washing up on beaches along Florida's Panhandle. We're going to have a live report from Pensacola. Stand by.

We'll also be joined by the president of a hard-hit Louisiana parish. She met today with President Obama. I'll ask her what he said and what she heard.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Let's get some more now on the massive oil spill in the Gulf of Mexico.

Our chief medical correspondent, Dr. Sanjay Gupta, is joining us from New Orleans -- Sanjay, you've had a lot of opportunity to speak to people in the community right now.

What are their biggest concerns?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, you know, it really breaks down into three things, primarily. Obviously, a huge financial concern. You know, you have generations of shrimper -- of fishermen. A lot of people think that chain of continuing to pass on this tradition, this sort of work, may be stopped by what's happened here. And that's really weighing on the minds of a lot of people here.

Physically, you know, people who have the most exposure to the images that you've been showing, Wolf, for some time now, that oil, that oil dispersant mixture, there are concerns about health effects. There's been precedents for this, for example, in Valdez in Alaska. And again, the people who have the most exposure, cleanup workers, they're concerned about that.

And finally, I think just of the mental impact. It's no secret, obviously, what happened here five years ago almost, that a natural disaster at that point now compounded by this manmade disaster. There's not enough mental health resources here. But this is something that a lot of people are thinking about, as well -- Wolf.

BLITZER: As the oil gets closer and closer to the beaches, to the shore, not only in Louisiana, but now in Alabama and Mississippi, even in Florida, the Panhandle, how safe is it to go into that water and swim?

GUPTA: Well, you know, it -- it's interesting. I think it becomes all those things at gradations of -- of safe. So, you know, you have these oil slicks out there. And certainly touching that -- just, you know, the physical contact, obviously not a good idea.

But -- but what happens is oil starts to weather as it comes further inland, is that these things called volatile organic compounds, VOCs, you know, they do start to weather and they start to come off of that. So by the time it gets further and further away from the source, it becomes less -- less problematic. Again, we're not saying that it's safe, but it's just -- it's gradations of safe.

This dispersant oil mixture obviously is of concern for a lot of people. This one particular dispersant that people have been talking about quite a bit, you know, it's something that's banned in Europe. It's not used over there. It is something that, if you look at the labeling on it, specifically, it says that it should be used with a respirator mask, for example.

Wolf, you've seen some of the same images that I've seen -- cleanup workers out there cleaning this up, literally on their stomachs, two feet above the water, their face almost in that stuff, without any sort of mask on.

So it -- it's concerning at that level. But by the time it gets to the beach, I think a lot of that -- those potential toxic components have started to weather off.

BLITZER: Sanjay, we're approaching the five anniversary of Hurricane Katrina. You were there. You were covering that disaster for all of us. Talk a little bit about the difference between Katrina and this oil spill, the impact it's having on the folks there.

GUPTA: You know, Wolf, that's a really interesting question. And I think the answer may be a little non-intuitive.

I spent a lot of time talking to people here. In fact, I visited a free mental health center yesterday in St. Bernard's Project, it's called. It was actually set up right after Katrina.

At that time, Wolf, a lot of people know that what happened was two things. The resources for mental health support went down.

Doctors left. Clinics shut down. And at the same time, demand for those types of resources went up because of what had just happened with Katrina.

But what was interesting, again -- and maybe not intuitive -- is that Katrina was, by all accounts, a natural disaster whereas this is a manmade disaster. And if you look at the psychology of that, people who suffer through a manmade disaster often have a lot -- a much more difficult time getting over that from a mental health standpoint. It seems to have a more profound impact, whereas with a natural disaster, people almost tend to rally together to try and support one another.

With this manmade disaster, you have people -- there's been a lot of infighting, squabbles among communities and a real sort -- sort of loss of hope, again, in terms of what the future holds. In terms of mental health, this may be worse than Katrina was even five years ago.

BLITZER: Hard to believe. All right. Sanjay, thanks very much. An important programming note for our viewers, don't miss Sanjay tomorrow morning live from New Orleans with his show "SANJAY GUPTA M.D.," 7:30 a.m. eastern, "SANJAY GUPTA M.D."

BP says so-called cut and cap operation to capture at least some of the oil gushing into the Gulf of Mexico began to bear some fruit today. Officials say oil is now being pumped from the leaking rise to a tanker ship above, but how much is still an open question? Joining us now is Tulane University researcher Eric Smith. Professor Smith, what's your best estimate based on the pictures you're seeing and what you're hearing from other experts and BP officials, government officials? How is this operation working, at least right now?

ERIC SMITH, TULANE ENERGY INSTITUTE: Well I think it's on schedule basically. I think people as always are going to be frustrated about the time it takes to achieve a stable situation. But what they did was put the cap in place, get it stabilized and then with all of these valves that were discussed earlier, open a lot of the oil is still venting out into the ocean. As they gradually enclose in the oil and allow the oil to travel up to the drill ship up at the surface, you should see a marked diminishing size of that plume that we're looking at right now.

BLITZER: Let's talk about how much of a diminishing size. Originally, over the last few days, they've been saying it was about 12 to 19,000 barrels a day that were spewing out. This morning, Admiral Thad Allen said maybe 1,000 barrels right now were being sent up to this tanker on the surface of the water. 1,000 out of 12 to 19,000 a day, that doesn't sound very hopeful. How much realistically, do you think they can cut that number down from 12 to 19,000?

SMITH: I think their goal they've mentioned already is to get about 90 percent of it captured. BLITZER: Wow. That would be amazing if they could do that.

SMITH: Well, I think it would be a big improvement over where they are right now.

BLITZER: It would be a huge improvement. And then the rest would supposedly stop in August when these two relief wells are drilled. Is that right?

SMITH: That's exactly right, Wolf. What BP has said all along and what the industry analysts have said all along is that until you get the relief wells drilled, you don't have a permanent solution. This is a band-aid.

BLITZER: I've heard some scientists and engineers say you know what, those relief wells, that's not necessarily a guaranteed success. It's not as easy as some might think it is. How difficult are those two relief wells that are being dug right now?

SMITH: Well, you know, the people always go back and talk about Istook which is the Mexican blow out in 1979. It took them three tries to get a relief well that worked. In the last 30 years, the technology has improved quite a bit. With the drilling motors and things, we can get the intersection within inches, not hundreds of feet as was the earlier case. So I have a very strong belief that one of these two relief wells will actually do the job. The only reason we have two ...

BLITZER: Go ahead.

SMITH: I'm sorry. The only reason we have two is the government strongly suggested to BP that if anything went wrong with one of the relief wells, they wanted to have the insurance of a second relief well underway.

BLITZER: Here's what concerns me. If there's a hurricane or tropical storm, you're going to have to stop that drilling for those relief wells, at least temporarily, isn't that right?

SMITH: Not necessarily. When we plot hurricanes coming into the gulf, the MMS normally will say that all drilling within 50 miles either side of the track has to cease and everybody needs to come to shore. You could have a hurricane in the gulf that misses us by 200 miles and nothing would happen to the drilling. The second point is that these are very robust drilling rigs and are designed to take a good deal of heavy weather so that they can continue drilling fairly late and can get back on location fairly soon after the storm.

BLITZER: Professor Smith, thanks very much for coming in.

SMITH: Happy to do it.

BLITZER: New concerns that hundreds of foreign fighters with ties to al-Qaeda could be hiding in Somalia. We have some details of this story coming up also.

Rockets like this one could soon become the next space shuttles. We're going to tell you why.

And survivors of the massive oil rig explosion. They are now sharing their personal accounts of the blast with CNN's Anderson Cooper. He's standing by to join us live.

(COMMERCIAL BREAK)

BLITZER: We're getting an update from the gulf from Anderson Cooper, that's coming up, but let's check in with Lisa Sylvester once again right now. She's monitoring some other top stories in THE SITUATION ROOM. What else is going on Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there Wolf. Well, British Prime Minister David Cameron is calling Wednesday's shooting spree that killed 12 people and wounded 11 others an appalling tragedies. We met today with survivors as well as first responders and officers investigating the mass shooting. Police believe a 52-year-old taxi driver used his knowledge of local roads to evade police while firing on random victims before killing himself.

As many as 200 foreign fighters working with al-Qaeda may be hiding in Somalia. According to U.S. officials, the fighters are believed to be from several nations including Afghanistan, Iraq and Pakistan. A senior U.S. official also confirms American forces are updating plans to conduct operations against al Qaeda personnel east African nation. One U.S. official calls it quote, the ultimate safe haven.

And after its first attempt was aborted, this rocket launched into space just hours ago carrying a capsule that could one day take astronauts to space. NASA hopes rockets like this will take over transportation to the International Space Station when the shuttle fleet retires. The rocket will orbit for about a year, and eventually burn up in the atmosphere.

And an Elvis impersonator has his eyes on a new role, Minnesota's next lieutenant governor. Todd Elvis Anderson has filed to be on the ballot for the August primary. The state requires a candidate's name to be the one by which they're commonly and generally known. The secretary of state's office says it doesn't think the nickname will give Anderson an unfair advantage. And there you see him in his trademark red suit.

BLITZER: Elvis lives, obviously, in Minnesota, who knew? All right. Thanks very much Lisa for that.

With the oil now washing up on beaches in Florida, what does it mean for the tourism trade in that state? I'll speak live with Senator Bill Nelson of Florida. He's standing by to join us.

And a government sponsored panel says dispersants being dumped on the crude oil slick right now are toxic, but they're the lesser of two evils. Details on that report. That's coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: Get to more now on the tar balls that are washing up on some Florida beaches. Joining us now on the phone, Democratic Senator Bill Nelson of Florida. Senator Nelson, thanks very much. I know you're in Panama City right now. You took a boat tour out there. Tell our viewers what you saw.

SEN. BILL NELSON (D), FLORIDA: Off Pensacola Beach, there had be a whole swath of oil that had been already sighted and when I went out with the coast guard out the path of Pensacola Bay, we could not find it, so that's naturally what's happening in choppy water. It's breaking it up and it's ending up as smaller tar balls on Pensacola Beach.

BLITZER: A week ago, I remember we were beginning to see those little tar balls on some of the coast of Louisiana and now, we know how much more serious it's become. How fearful are you that a week from now, it could really be bad in those beautiful, white beaches of Pensacola and elsewhere in Florida?

NELSON: There's good news and bad news. The bad news is that the wind is pushing it toward Florida. The worst news is going to be that if they don't get the well cap capped and it gushes all summer, it's going to fill up the gulf and there's not going to be anybody's beach that's going to be spared including the east coast of the United States when it gets in the loop current and goes around the keys and up the east coast. The good news is that the flotilla of ships, now several coast guard cutters and others, are out about 25 to 50 miles, scooping up the big swaths of oil before it ever gets to the beach and that's the goal, to try to keep it away from the bays and beach.

BLITZER: You have enough personnel and equipment to get that done?

NELSON: I think the coast guard and through the BP contract process with what they call vessels of opportunities, which are private boat owners, ship captains et cetera, I think they do now. But that's if they get the oil capped. If it keeps gushing, it's going to be all hands on deck that's going to have to be required to meet this potential disaster.

BLITZER: This is tourist season as we know, a lot of folks want to go to those beaches. What does this mean potentially for Florida's tourism industry?

NELSON: A huge economic hit. There're already cancellations. The restaurants are down a little bit. I just met with a fisherman here in Panama City. Their livelihoods are basically being taken away because a good part of the gulf is off limits to fishing and that which they're catching, people are afraid it's tainted and don't want to buy it. We've got a major economic impact.

BLITZER: Is it your expectation that BP will reimburse all these folks who are losing money?

NELSON: Yes, and ultimately, we will require it. That's why we're going to lift that artificially low cap of $75 million. BLITZER: You expect them to shell out billions of dollars. Is that what I'm hearing?

NELSON: If this -- it's already billions and if it goes all summer and you put that much oil in the gulf, it's going to be multiples of billions of dollars of economic loss and damage. Just think, you know, even the local governments, their revenues are down because people aren't in the stores, the restaurants, the hotels, paying the sales tax.

BLITZER: Good luck, Senator Nelson. We'll stay in close touch with you.

NELSON: Okay, thanks, Wolf.

BLITZER: Jack is standing by with your e-mail. That's coming up.

Also, those controversial dispersants being used to try to break up the leaking crude oil. Now scientists are weighing in with a new report. Are they making the situation better or worse? We have details.

And tomorrow a special edition of our SITUATION ROOM, a full hour devoted to the oil disaster and its impact, Saturday, 6:00 p.m. eastern, only here on CNN.

(COMMERCIAL BREAK)

BLITZER: Jack's back with "the Cafferty file." Jack?

JACK CAFFERTY, CNN CORRESPONDENT: The question this hour is -- why does President Obama seem to have lost his touch?

Kay in California, "Jack, I didn't vote for the president, and I'm not going to vote for him in 2012, but I am going to support him just a little for your question. Let's remember that President Obama came into office at the time of a recession, two wars, deficits, et cetera. His popularity was so high January 20th, 2009, that his numbers had nowhere to go but down. Here we are in June of 2010 with a natural disaster, hurricane season warming up, two wars, North Korea, Iran, and Israel all showing their teeth. A president can only do so much."

John in San Antonio, "Now that he's been elected, it's evident that he will continue the same policies that this country's been on for 30 years. Increase the size of government and spending, while destroying the economy and the middle-class. We've heard rhetoric of huge differences between Republicans and Democrats, but never anything that would change the direction of the country. Only what would keep our focus from the reality that we really have only one political party. We're under corporate control and being guided toward a one- world government, and there won't be enough people awake in time to prevent it."

Ron writes, "The basic fundamental skill of any junior executive is to be a student of to prioritize properly. Obama prioritized health care over jobs. A real dumb move. And it's been downhill ever since. Now, as unexpected emergencies arise, he's spewing words rather than action. He appears to be a nice guy, truly bright, with a lot of energy. However, his presidency is in a very deep funk, and he's quickly sinking to a point of no return."

Melissa writes, "He hasn't, but you Republicans want us to think he has. Especially since you're a reporter who loves to scare people in order to sell your articles."

Dan in Indiana writes, "He's a 1970s academic, who views the world through those lenses for good or bad. When the real world of war, oil spills, job losses comes, he and his fellow academics can't find the right book for the answer. Didn't we already do the idealistic 1970s once?"

If you want to read more on the subject, you'll find on it my blog at CNN.com/Caffertyfile. Wolf?

BLITZER: You can only hope, Jack, this cap and containment works right hours.

CAFFERTY: It's the first piece of a little bit positive news on this thing in, what, six weeks?

BLITZER: Yeah, I'm afraid to get my hopes up, because it's not the solution by any means, but if they could contain at least 90 percent of the oil spewing out, that would be good.

CAFFERTY: Well, contain any part of it gushing out of there.

BLITZER: Right.

CAFFERTY: If they can get a little bit. I never get my hopes up, ever.

BLITZER: I'm not getting my hopes up. Let's see. These are critical hours, Jack, thank you.

CAFFERTY: All right.

BLITZER: You've heard about the dispersants being used to try to break up some of that crude oil on the water surface. Now, the results of a major study are coming into THE SITUATION ROOM. Should they be used, the dispersants, or are they making matters worse? We'll have the answer next.

And at the top of the hour, only a few minutes from now, you're going to find out exactly what's happening at the bottom of the gulf in the desperate attempt to stem the flow of oil and ease this growing crisis.

(COMMERCIAL BREAK)

BLITZER: And this just coming in to THE SITUATION ROOM, a panel of scientists convened by the federal government is now recommending continuing the use of those dispersants on the gulf oil spill. Mary Snow's been looking into this story for us. She's joining us. I guess they've concluded the alternative would even make matters worse, is that right, Mary?

MARY SNOW, CNN CORRESPONDENT: Yeah, pretty much. This is a group of about 50 scientists. They're calling it a trade-off. Despite concerns about using dispersants, this panel said using them has been less environmentally dangerous than allowing oil to go into sensitive coastal habitats. We spoke with one of the decision makers.

(BEGIN VIDEOTAPE)

SNOW: With oil-drenched birds being found in Louisiana and blobs of oil washing up on some Florida beaches, members of a panel of scientists brought together by federal agencies say the damage could be worse without chemical dispersants used to break up the oil. And they're recommending that dispersant use continue, but they're not enthusiastic about it.

NANCY KINNER, UNIVERSITY OF NEW HAMPSHIRE: It's the lesser of the evils right now. Again, you have to understand that there is going to be damage. We're looking at what is the lesser of the evils.

SNOW: Nancy Kinner studies oil spill responses at the University of New Hampshire's coastal response research center, where she is co- director. The center is a partner with NOAA.

KINNER: See how it pumps in and then it comes up the water surface and forms --

SNOW: Kinner said most research has been done on oil spills on the surface, not in deep water like this one. She says because of a lack of funding for oil spill research, there are many things scientists don't know, including the long-term effects of the million gallons of dispersant already used which is an unprecedented amount in the U.S.

KINNER: They have a device down there which basically looks like a long -- a long rod that has nozzles coming out of it looking like nozzles from a garden hose, and the dispersant sprays out as the oil comes out of the wellhead and it gets mixed in by the turbulence of the oil coming out, and then that's where you get that breaking up of the plume and it dissolving, the droplets started to move into the water column.

SNOW: And the dispersants, Kinner said, are making more of the plumes stay under water. Critics charge it's just a way for BP to hide the damage, but Kinner says oil is mores toxic than dispersants, and the deciding factor was coastal marshes.

KINNER: You can see here --

SNOW: She showed us a marsh near her New Hampshire research center, saying because wetlands take so long to come back when damaged, scientists decided on a trade-off. The trade-off is to use the dispersants to protect the wetlands, right? KINNER: That's correct. And the near-shore shallow waters that have, again, very, very critical populations of small fish, crabs, oyster, shrimp, that kind of thing, so that's the whole trade-off is that you -- you are damaging organisms in the offshore, we're dealing with a very, very major oil spill every single day. And something's going to -- with that kind of oil, get down. There's nothing we can do about that. Until the well gets capped.

(END VIDEOTAPE)

SNOW: Wolf, this report comes with a big if. The scientists behind today's report said the use of dispersants must be continually re-evaluated with a constant look at climatic change and the species that are at risk. -Wolf