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The Situation Room

BP: No Oil Leaking from Gulf Well

Aired July 15, 2010 - 17:00   ET

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

WOLF BLITZER, CNN ANCHOR: This is the day, this is the moment people all along the Gulf Coast and across the nation, indeed, around the world, have been waiting and hoping for. We're following the breaking news. BP now says it has shut in its ruptured well, and no oil, let me repeat that, no oil is leaking into the Gulf of Mexico right now, the first time in some three months.

The critical integrity test of the new well cap has been under way for the last three hours. There's still lots of risks and uncertainty as this test moves forward. We're keeping a very close watch on the live cameras beneath the surface. Let's go to CNN's Ed Lavandera first. He's in New Orleans to tell our viewers what is happening right now -- Ed.

ED LAVANDERA, CNN CORRESPONDENT: Well, Wolf, I really think the news of this moment is just the visual aspect of this. For almost three months we have seen oil gushing into the Gulf of Mexico. And even though it's very likely a temporary moment here, to be able to see pictures coming from 5,000 feet below the surface of the Gulf of Mexico and no oil spewing out of that runaway well, it is quite a sight to see.

But a lot of cautionary tones being struck at this moment, not only from federal officials, but BP officials as well. They say right now we are in the first six-hour window of the integrity test that is being done. Experts, dozens of them, scientists monitoring the pressure readings coming to them from inside that containment cap and the blowout preventer, and these -- these are crucial tests that will help them understand exactly what they are dealing with.

And then in the coming days they will decide how to move forward and be able to decide whether or not this containment cap that they have worked over the last few days to put into place, whether or not that can work by itself or if they will need to reopen valves, let more oil out, and begin the process of collecting it.

Either way, they have been saying they feel confident that they have kind of turned a corner here because they feel that even if they have to reopen valves and start collecting oil, that they have the capacity in place to be able to collect all of it. So the significance of this moment, people starting to talk about this, is the beginning of the end of this terrible oil disaster in the Gulf of Mexico.

So you can imagine across this region, Wolf, people are watching this intently. BLITZER: Well, the story will definitely continue, even under the best of circumstances, no more oil spews out. It's not going to take months. It's not going to take years. It may take decades to clean up this disaster, to clean up the disaster in the Gulf of Mexico. So that part of the story will continue.

But as you point out, there's no guarantee that this test is going to lead to success. It's a very critical several hours now -- Ed.

LAVANDERA: Right now, so to kind of give you a little bit of a time frame here, we're right about halfway through this first six-hour window. The best way to kind of think about this, Wolf, is break up the next 48 hours into six-hour blocks, and after each of those blocks, all of the experts will huddle back together, compare notes, and kind of see where they stand.

So worst-case scenario, this could be shut down after the first six hours if the pressure readings come back and the pressure readings are too low, which would tell them that there's a leak somewhere, and they want that oil coming out top so they can better control it.

But the longer they can sustain this, and this is really a question about -- of how long this containment cap can sustain the current condition, which is essentially sealing off the well, the longer it goes, the better news this becomes, and as long as those pressure readings stay high, that will tell them that there are no other leaks elsewhere that are causing major problems.

BLITZER: Stand by, Ed, because I want to bring in the chief operating officer of BP right now, Doug Suttles. He is joining us live from Dauphin Island in Alabama.

Mr. Suttles, thanks very much for coming in. How optimistic are you right now that we're at the beginning of the end of this nightmare?

DOUG SUTTLES, COO, BP: Well, Wolf, you know, clearly it's encouraging for the first time in 86 days not to see oil gushing out of this well, but I think we all need to be very cautious until we've completed the tests and seen the right results. We don't know if this is going to allow us to keep the flow contained until we get the relief well in or whether we'll have to reopen it, but it's clearly encouraging. But I think it's way too early to celebrate.

BLITZER: And it's fair to say, as we've been reporting, everyone has been reporting, based on what BP has told us, no oil right now is spewing into the Gulf of Mexico, this, for the first time in three months, is that right?

SUTTLES: That's right, Wolf. that's -- that is correct.

BLITZER: Did you anticipate that it would be shut down as quickly as it has? Because I was under the assumption that you would start closing valves here and there and over a period of hours, assuming the pressure levels were good, they would shut down some more? But you basically closed all of those valves at the same time, is that right?

SUTTLES: No, we didn't. Actually we started by stopping production from the containment vessel, so the Q4000 and the Helix Producer. After we did that, we then successfully closed the rest of the valves. I think that process took over two hours to complete before we finally got the flow completely stopped.

BLITZER: So right now, as we speak, what are you waiting for? What are you hoping to see? What are the key indicators that you're looking for?

SUTTLES: Well, what we want to see right now is that the pressure rises and gets high and stays high because that's an indication -- and not the only indication that we need, but a good indication that we have integrity in this well and that the flow isn't escaping somewhere else.

We also will need to do other tests. We're doing a lot of measurements at the same time, and we'll re-run that seismic survey that we ran the other day to make sure that there's no flow escaping anyplace else.

BLITZER: And do you have any preliminary readings on the pressure levels in these first three hours or so of this closure?

SUTTLES: I haven't seen -- you know, being here on Dauphin Island just now, I haven't actually seen the pressure data. I know it's being closely monitored by both our team and the government's team, and they are watching it, you know, literally second by second. And then every six hours they will formally review that data and determine if we should continue on for the next six hours.

BLITZER: And as we speak, right now, based on what you know, there are no leaks, is it that right?

SUTTLES: That's my understanding right now. We don't have any leaks. We don't have any oil coming out that we know of. And it's the beginning, you know. we've got another -- hopefully we'll continue it for the next 48 hours, which puts us well into Saturday afternoon.

But, of course, it is good to see that there's not any new oil coming into the Gulf. But, you know, Wolf, I've got to stress, and, you know, being out here on the Gulf Coast today, we're far from the finish line here. We've got a lot of work left to do. And we're going to be here for a long time.

BLITZER: Walk us through the option. What happens, God forbid, if it doesn't work over the next 48 hours? What's plan B?

SUTTLES: Well, the next -- if we have to re-establish flow, what we'll do is start up the containment vessels we have. We have another one, the Enterprise, to bring back in. Between those three we should be able to capture about 50,000 barrels a day, if there's that much coming out.

We're also finishing building out the system, and by the end of the month or so we'll have the capability of somewhere between 60,000 to 80,000 barrels a day and we'll have a system which is more robust to the potential of a hurricane. And obviously standing behind all of that is the relief wells, which is the ultimate solution to prevent this well from ever flowing again.

BLITZER: When will those relief wells be completed?

SUTTLES: Well, the first relief well is doing very well. We're only about four feet away from the original well-bore. We have about another 30 feet to drill before we run our last string of casing, and then after that we have about another 100 feet to drill before we would actually do what we call the intercept or drill into the old well and start the kill.

If we had continued good weather and the operations go as planned, we could be starting that operation the last few days of this month.

BLITZER: So, and that would be -- assuming that worked, that would kill this well, and there would be no more problem, is that right?

SUTTLES: Well, that's right, Wolf. The relief well, the intent here is, is to actually stop the flow if we haven't already stopped it and then fill this well up with cement, seal it off permanently so it can never flow. Now I just want to stress that could happen late this month or it could take into mid-August, depending on how complex that operation is.

But that is what we -- even if this cap is successful, we still have to do that because until we do that, the well still would have the potential to flow.

BLITZER: And we're showing many of the live camera images, pictures of what's going on. And the most encouraging thing that's going on right now is what we don't see. We don't see any oil coming out of this relief well, which obviously is the first time in three months we haven't seen that, which is excellent news. We hope it goes on.

As far as the weather is concerned, it's calm, it's good right now. Have you -- do you have any long-range forecasts? Because if there is a tropical storm or a hurricane, that changes the equation pretty significantly.

SUTTLES: Well, Wolf, it does. And, of course, the farther we go into the summer, the greater the chance of a storm grows. If you look at history, it says that about right now, about middle of July is when the probabilities start to grow.

So we've done a tremendous amount of planning, both with the Coast Guard, with the states and the counties and the parishes, to prepare for that. That's why we're also building a containment system that actually allows us to stay on station longer and get back quicker than the current system so that we would have the minimum amount of time where flow could be going into the sea. So a lot of work has gone on there. And I have to say, even if we are -- this cap is successful, those -- that containment work will continue. That's important work to continue as a contingency just in case something were to require us to re-open the well to flow.

BLITZER: And BP is committed to staying to help clean up this mess as long as it takes, is that right?

SUTTLES: You know, Wolf, we've shown that since the beginning. I think as of today we've spent about $3.7 billion. We still have 45,000 people out there working. We're going to be here as long as it takes. We're going to be here for a very long time.

BLITZER: Well, let's hope and pray that this this works. Doug Suttles is the COO, the chief operating officer, of BP. Good luck.

SUTTLES: Thanks, Wolf.

BLITZER: All right. Let's get some reaction to what we just heard from Democratic Senator Bill Nelson of Florida. His state has been dramatically impacted by what's going on economically and environmentally.

What's your immediate reaction, Senator?

SEN. BILL NELSON (D), FLORIDA: Hallelujah. It's a step in the right direction. Let's hope this cap holds and the pressure doesn't drop and then they can go on and kill the well with the cement on into next month. Then we've got to scoop up as much of the oil off the surface as we can. And then we have to have those research projects finding out how much oil there is underneath the surface and how that's affecting the health of the Gulf of Mexico.

BLITZER: How badly hurt is your state?

NELSON: Well, the entire Gulf Coast has been impacted economically in a devastating way. Just look at all the tourists that didn't come to Florida and our beautiful beaches, even though there's no oil on them. When they saw that picture of all the oil on Pensacola Beach, that was quite an incentive for folks to get scared about going to the beach.

And, of course, all the ancillary businesses, the hotels, the restaurants, the diminished sales tax revenues for the local governments, all how it ripples through the economy. We've been hurt and we've been hurt badly. Thankfully the president set up that $20 billion trust fund with BP.

BLITZER: Has any of that money started arriving in Florida?

NELSON: It has, and you know, as we've talked several times, how slowly it started to come. Up until a week-and-a-half ago, a lot of our local governments had not been compensated for the monies that they had already expended. Those decisions are being made in a more timely fashion now, so I'm encouraged.

BLITZER: Do you have any criticism of BP right now based on what you know?

NELSON: Well, the blowout preventer didn't work, the safety checks weren't there.

BLITZER: No, no, no, I'm not talking about the history. I'm talk about what they are doing right now.

NELSON: Well, I think they are showing that they have the capability, if everything works together. But my goodness, this has taken us three months. It has taken them, thus far, he said, $3.7 billion they have expended. There's going to be a lot more to come.

BLITZER: We'll stay in close touch, Senator. Thanks very much.

NELSON: Thanks, Wolf.

BLITZER: Senator Bill Nelson of Florida.

We have a lot more on the breaking news, the dramatic developments that are unfolding in the Gulf of Mexico right now. We just heard from President Obama. He's now reacting to what's happening with the oil situation. Stick around. we're only just beginning.

(COMMERCIAL BREAK)

BLITZER: We're continuing the breaking news with Jack Cafferty, who is back with "The Cafferty File."

Jack, good to have you back. Big news day.

JACK CAFFERTY, CNN ANCHOR: Thanks. Yes, big news day. Good news, at least for now. Way too soon to celebrate, but it's hard not to, isn't it? After almost three months, the flow of oil into the Gulf of Mexico has finally been stopped, for now.

Even if it's stopped for good, though, the implications of what has happened here are huge, and probably won't be known for some time. The damage to the environment immeasurable. Some say it will wind up being a lot worse than the Exxon Valdez.

The government wants a moratorium on offshore drilling. One judge already said no. The Obama administration came back with a second request. The oil spill has come to symbolize everything his critics say is wrong with this president's leadership. As those horrible pictures of the ruptured well and the gushing oil filled our television screens day after agonizing day, President Obama increasingly was seen as indecisive and unwilling or incapable of taking charge and managing the crisis.

At the end of the day, it was simply another problem this president didn't need. He has got more than enough already. And now, as we collectively hold our breath and wait to see if the well will hold, one wonders how all of this might translate to the politics of the mid-term elections, which will be here in roughly the same amount of time that the oil has been flowing into the Gulf. Here's the question then: How much will the oil spill hurt the Democrats this November? Go to cnn.com/caffertyfile and post a comment on my blog -- Wolf.

BLITZER: All right, Jack. Thank you.

Let's go to Ed Henry, our senior White House correspondent, right now. He's over at the White House.

You're collecting some reaction to what is -- at least for now, and we want to be cautious, Ed, at least some good news as this test has started.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Wolf. I've got some reaction from the commander-in-chief himself. You saw the president just a few moments ago come back from Michigan. He got off Marine One. He wanted to make a statement about Wall Street reform passing now in the Senate, headed for his desk for signature. He did do that, but this shows you the contrast that has been going on.

Here's a president trying to tout the fact that his three major domestic achievements, the stimulus, health care reform, now Wall Street reform, he has gotten all of them done, has gotten very little credit so far in part because of this Gulf oil spill.

I asked him whether he was hopeful now that maybe this is over. Take a listen.

(BEGIN VIDEO CLIP)

HENRY: Are you encouraged now that the oil has stop flowing in the Gulf?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think it's a positive sign. We're still in the testing phase. I'll have more to say about it tomorrow.

(END VIDEO CLIP)

HENRY: They obviously want to be very cautious here at the White House. I've been getting the same line from some of his senior aides. They don't want to be celebrating, as you noted, Wolf, before they really know what's going on.

But let me quickly take you inside the West Wing about what has been going on behind the scenes. A couple of days ago the president had Senate Democrats, several of them here inside the White House, talking strategy about legislation and what not.

I'm told by people in the room that the president said that he felt like he had some momentum, things were going pretty well a few months ago before the "Gs" came up. They call it the "Gs" around here: Greece and the Gulf.

They say the Greece debt situation spilled over here in the United States, has really stunted somewhat the effort to get that recovery going on the economy. And then, of course, the Gulf oil spill, really slowed the administration's momentum.

They are hopeful, I stress hopeful, here at the White House, that maybe now they are starting to turn the corner, but they are not going to celebrate until these tests are done -- Wolf.

BLITZER: And they shouldn't celebrate until everything is done and complete. Stand by, Ed. David Mattingly is in the Gulf region for us, getting reaction to the dramatic news that for the first time in three months no oil, repeat, no oil, at least for now, spewing into the Gulf of Mexico.

What are you hearing, David?

DAVID MATTINGLY, CNN CORRESPONDENT: Wolf, I've been getting comments from my contacts all across the Gulf at this hour. I spoke to a person with the governor's office here. I just got sent this statement from Governor Bobby Jindal. And he said -- he said that he is "cautiously optimistic at today's developments," but said that they have been "fighting this battle against the oil for months now, and they know that those battles are not over, that millions of gallons of oil are still in the Gulf, and some estimates show that the oil will continue to hit the shores in Louisiana here for months to come."

He pointed out very clearly, "work to revitalize our coast won't be done until our water and our shores are completely clean, and our wildlife, our communities, and our coastal industries are 100 percent restored." Setting the bar very high for BP to make sure everyone knows this disaster is not over economically and environmentally.

Similar comments from the mayor of Bayou La Batre, Alabama. He is involved in the fishing industry there, that town, their fishing industry there just devastated very early on in this. I talked to a lot of fishermen there who lost their livelihoods at the very beginning, because they couldn't get into the fishing areas to go through the oil.

And the mayor there said that the issue there has been compensation. That "a lot of people," he says, "feels like that they are still getting the run-around by BP," that they have not been adequately compensated. So that part of this disaster is not over either.

In Houma, Louisiana, we got a comment from a seventh generation oyster fisherman, and he says that when he heard the news, he screamed "yahoo," and he said that "hopefully this will be an end to this." He considers this moment bittersweet, that this has been a big emotional roller coaster. Their business is down 50 percent, and they are waiting to see what is going to happen now.

Now, on the tourism side, I talked to the mayor of Destin, Florida, they have had very little of the oil actually hitting the shores there, but it has just wiped out this tourist season for them. They rely on 100 days of summer, and they have lost a lot of those days already to this oil spill. And the mayor there said this news is an "absolute godsend, it will save so many livelihoods if they are able to turn this summer around," what little bit they have left with it. So she was very happy about this.

And I talked to the public safety director of Okaloosa County, and they had been trying for quite a while to get money from BP. He tells me that just this week they got their first check from BP of half a million dollars to prepare their protection against this oil spill. He says they are still going to be pushing BP to get more money, to set up more booms and more protection for their coastline because they know there's still a lot of that oil out there.

But others I've talked to said they have been watching that oil slick. That right now the footprint of that oil is relatively small compared to what it has been in the past. So, again, this just more good news that they have been looking for.

And I called Grand Isle, Louisiana. I talked to the city clerk there. He tells me that a lot of their vacation homes have been taken up by workers who are there working for BP right now. So that -- their recovery has recovered a little bit in that regard. They just got the word that a lot of the areas of the water are going to be open to sport fishing again, which was great news for a lot of the fishermen there. They hope to get back working again.

So today, the fact that the well has been capped is doubly good for them. They hope that the image of the oil hitting the shores all across this Gulf will be erased soon once this cap is on and once those waves of oil quit coming ashore.

Though they -- others are saying they are not quite so hopeful. That they think they will be seeing oil for quite some time to come, Wolf. So, again, a very mixed bag. People happy to see what's going on. Very cautious about what the future means.

And, remember, this disaster was more than just oil hitting the beach. This was oil hitting livelihoods. This was oil hitting hotel rooms, restaurants, fishermen, all sorts of economies linked to the Gulf of Mexico feeling the pinch of this. And now everyone waiting to see how this now will trickle into them once the flow of oil has been stopped permanently.

BLITZER: We'll see how long it takes, that $20 billion BP escrow account to be used up. David, don't go too far away. We're getting more reaction.

Congressman Darrell Issa, Republican of California, is joining us on the phone.

Congressman, this is good news right now, this is good news right now. It certainly could still collapse. It's a very sensitive moment. For the first time in three months no oil is spewing into the Gulf. What's your reaction?

REP. DARRELL ISSA (R), CALIFORNIA (via telephone): Well, I'm incredibly pleased, Wolf. This is exactly what we've waited, you know, 87 days for. Obviously the cap that is -- that has been put on proves that that cap could have been designed in 2003 when they knew these pop-off, you know, blowout preventers were not fail-safe

But having said that, good news is good news and now we need to make sure that the focus returns to where it should have been -- should much more than it was, which is keeping the oil from coming ashore, protecting habitat, getting additional resources there.

The money is obviously there, the resources exist, but putting the two to work seems to be vexing for this administration and the bureaucrats that came down there to make long papers part of the process.

BLITZER: Well, do you want the federal government to get more involved in regulating this oil industry?

ISSA: No, no, Wolf, I want the bureaucrats to realize that when you have a disaster, you don't use the same paperworks and the same long environmental studies before you allow sand to be put up on beaches to prevent oil from coming into marshes and so on.

One of the things that we're going to really be focusing on the days to come is, can we stop the oil better than we have for, you know, almost 90 days? And the answer, of course, is, in a lot of cases you have parish leaders and owners and other people who have been just absolutely frustrated because of a lack of cooperation, not by the president, not by the Congress, but by the faceless bureaucrats who say, well, we have to study this, no, you can't do it yet.

Obviously Governor Jindal ran into that early on, but we've had people down in the Gulf, and this is one of the real problems is, it's not that there isn't money, it's that there is red tape before they can do things.

Granted, some of them, Wolf, have never been done, or at least not done on this scale, but this is a time in which quick decisions need to be made if you have habitat at risk. (INAUDIBLE) one habitat might to be damaged (INAUDIBLE) go after another. You have to make a real decision and not simply have a long study.

But I'm thrilled today, this is a day to celebrate that at least new problems will stop coming.

BLITZER: All right.

ISSA: The challenge for all of us is now to focus on what's coming ashore, to make sure it doesn't destroy further habitats.

BLITZER: An enormous challenge still ahead, even if this works. Darrell Issa is a Republican congressman from California. Thanks very much.

Now let's bring in our senior political analysts, Gloria Borger and David Gergen, they're watching what's going on. David, the White House right now, you served four presidents, has to be very careful and cautious. The president has been. Other White House officials behind the scenes, they can't start corking Champagne bottles yet.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Absolutely not, Wolf. And there is no sense over there -- I was there earlier today. There's a sense of relief that this was coming, but no one wants to send any bouquets to BP. You know, there's a pervasive sense in the country that had it not been for the recklessness of BP, this spill never would have happened. It would have been clean stopped a long time ago, and the people and the wildlife of the Gulf would not be suffering. And the president has paid a price in the process.

BLITZER: The president certainly has suffered a great deal politically as a result of these three months.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: You know, you remember during the crisis, which is now almost, you know, fully three months, that people started comparing Barack Obama to Jimmy Carter during the hostage crisis. And there was a question of how competent Barack Obama was or if he -- if he was competent, how compassionate Barack Obama is.

And now he has got a political fight on his hands about a moratorium on drilling deepwater wells. He wants to have a moratorium. There are lots of folks in the Gulf who don't want to. So this has created a whole new set of political issues for this president that didn't have to occur.

BLITZER: You know, there was an article that was just written on Politico, on the Web site, John Harris and Jim VandeHei. A very smart article. I don't know if you read it.

GERGEN: I did.

BLITZER: But let me read a couple of lines from there because I think it's incisive. "Rep. Ed Markey, D-Mass, beat his chest to force BP to make public the footage of gushing oil from an underwater camera. Democrats celebrated that as a victory for public accountability, but it was actually a painful defeat for Obama. The camera produced an indelible image played 24/7 on cable that highlighted how ineffectual Obama was for two months in stopping this catastrophe."

GERGEN: It was ironic. I don't think -- the White House wanted the camera there. It's not that -- they were all for transparency, but it was one of these unintended consequences of this...

(CROSSTALK)

BLITZER: Be careful what you wish for.

GERGEN: ... strung out here. And here on the very day, they have gotten a significant piece of legislation through, historic in many ways, in the financial regulation, biggest piece of financial regulation since the Great Depression, and it's completely eclipsed now by this other story. So they are having traction. I just disagree about one thing...

BORGER: And even a success. And this is a story of success that is...

GERGEN: I agree. But they're not going to get much credit for it.

(CROSSTALK)

GERGEN: (INAUDIBLE) they don't think that the end of the spill is going to turn things around for them. It's really going to be jobs.

BLITZER: Jobs, jobs, and jobs. We're going to be speaking, by the way, shortly, with Congressman Markey.

But the article, John Harris and Jim VandeHei, this is a fair point, that, you know, what -- the constant images -- and television is full of images, as we know, this sort of backfired on the Democrats.

BORGER: It totally backfired on the Democrats. And the problem that this White House is really trying to deal with right now is that the more that President Obama seems to get done, the less credit he gets because these are all financial issues.

The issue of our time right now is the economy and the deficit, for better or worse. He's perceived in a way that they did not envision for him to be perceived. They envisioned him as a centrist, and because of these economic issues now he's perceived as somebody on the left side of the spectrum.

BLITZER: And you make the point that he was -- that some were comparing him to Jimmy Carter during the hostage crisis. Others were comparing him, David, to George W. Bush during the Katrina crisis.

GERGEN: That's right, and he's taken a lot of hits, but I must say, Wolf, I have some sympathy for the White House. Political operation or communications operation is not working. I was there working --

BORGER: It's hard.

GERGEN: During the '81 and '82 when we went through recession, when you go through hard times, I don't care what message you send out of the White House, the president still gets the blame.

BLITZER: Hold on for a minute because Congressman Markey is joining us now. I want you to join in the questioning. Congressman Markey, are you there?

REP. ED MARKEY (D), MASSACHUSETTS: I'm right here, yes.

BLITZER: Help us -- give us your reaction to this positive news, at least of right now, that for the first time in three months no oil is spewing into the Gulf of Mexico.

MARKEY: Well, we're at a very sensitive point right now. This is like the very early stages of a bone marrow transplant. The pipe obviously is still in very sensitive conditions. There's still a very great concern that it will not be able to sustain the amount of pressure that is now being placed upon it now that the well has been fully capped, so we're going to have to wait and see. We're hopeful, but there is still a possibility that the well cannot in fact take this kind of pressure, but we all are praying and hoping that it will, so that we can move on to just the stage where we have to clean up this spill and not have to deal with the continuing to spill out into the Gulf.

BLITZER: What you're concerned about, and we've discussed this on several occasions, is the structural integrity of that entire well. That's why every six hours BP and federal authorities, they are checking the pressure to make sure that this so-called solution doesn't result in catastrophe, but you're worried about the structural integrity whether the pressure can be handled.

MARKEY: Again, this is like someone out in the backyard. They have a hose and now they have put their hand on top of the hose. That is going to put tremendous pressure on all other points in the hose going all the way back to the source of the water. Sometimes leaks then come right out of the hose at other points where it is weak. This particular hose, this particular pipe, this particular well is thousands of feet long. This is now having enormous pressure to be put upon every single point of that pipe. We have to determine whether or not the structure, the integrity of the stability, the fragility of this pipe is such that it cannot in fact hold on to the oil and that the cure becomes worse than the disease. That's going to take several more days to make that determination.

BLITZER: And that's why we're not celebrating it, at least not yet. Congressman, Gloria Borger and David Gergen are here and they have a question they would like to ask.

BORGER: Congressman, can I ask you going forward, what does the administration have to do and what do Democrats have to do in terms of regulating deepwater drilling?

MARKEY: We are going to pass very strong legislation that will ensure that there are protections that guarantee that we not -- we not again see blowout preventers that don't work, that we have oil companies that do not have spill response plans that are in place that can respond rapidly in the event that there is an accident, and that there will be liability for these companies if in fact something does occur, that whistleblower protection be built into the law to ensure that any one of these workers that knows that there will be a problem will not be punished by the companies that they work for. We know that they existed on this well but there was great fear, so all of this will have to be put in place. We will be giving every member of the House and Senate an opportunity to vote on that kind of safety legislation in the next several weeks.

GERGEN: As you know, Congressman, the president and the administration got some blame here for being too slow to react. Will Congress revisit the command and control structure not only for preparation for natural disasters but also for the execution and the management of these disasters?

MARKEY: Absolutely. The president has named Ray Mabus, the secretary of the navy and former governor of Mississippi, to be in charge of the reconstruction of the Gulf, but we are also going to have to ensure that we go back and revisit MMS, go back and revisit this agency that should have been a watchdog but instead was a lap dog. This was a ticking time bomb that was set several years ago, back during the Bush administration that continued forward, much like the derivatives and the financial instruments that were not properly regulated that then exploded over the last year. We have to make sure that there is a much better command and control system put in place to make sure we never see an occurrence like this again.

BLITZER: And Congressman, let me get your reaction to what Politico wrote about you today, John Harris and Jim Vanderhigh, writing. I'll re-read it in case you didn't hear what I read earlier. "Representative Edward Markey beat his chest to force BP to make public the footage of the gushing oil from an underwater camera. Democrats celebrate that had as a victory for public accountability, but it was actually a painful defeat for Obama. The camera produced an indelible image played 24/7 on cable that highlighted hue ineffectual Obama was for two months in stopping this catastrophe." Do you agree with that assessment?

MARKEY: I do not agree with that assessment. I forced BP to put up the spill cam so that BP could not continue to hide behind the low balling of this problem that they had been engaging in up to this point. In fact, the president detailed not just Admiral Allen but also the secretary of energy, Steven Chu, Marcia McNutt who runs the geological service, to make sure that BP did not have autonomy in making the decisions. It was their equipment that we need to solve the problem but the discretion could no longer be left with them. I think the president did act as the commander in chief here but under very difficult circumstances where like the financial crisis it was something that was created by an earlier administration that then exploded on his duty, on his watch, but I think ultimately when people look back on election day, if this well is finally capped, that they will see that he did the job, and we will in fact be rewarded rather than punished, especially after we have an energy bill on the House and Senate floor that will give Republicans an opportunity to vote on renewable energy, on plug-in hybrids and other energy technologies that will take us away from this energy agenda that we've been living with for the last generation.

BLITZER: Congressman, he did have more than a year to clean up MMS at the department of interior under his watch, and apparently nothing happened during that first year he was president to get the job done.

MARKEY: Again, there was a latent problem at this agency, but I do believe that the president did respond in a way that ultimately will be viewed by the public as one that took command of this problem and assured that BP, a private corporation that turned a blind eye to all of the safety warnings that were there, to ensure that this problem was solved and then put in place a recovery program for the people in the Gulf, and I think Ken Feinberg, Secretary Mabus and others all represent part of that solution that ultimately will be seen as a victory for President Obama.

BLITZER: All right. Ed Markey, Democratic Congressman from Massachusetts, thanks very much. We're going to go back to the Gulf region in just a moment. Ed Lavandera standing by, and also dramatic developments on BP stock. Stay with us.

(COMMERCIAL BREAK)

BLITZER: We're staying with the breaking news. Out of the Gulf for the first time in nearly three months, no oil is spewing into the Gulf of Mexico right now. It's been stopped at least temporarily. We hope permanently. Let's bring in Ed Lavandera. He's been covering the story for us. Let me show you some before and after pictures because pictures are worth a thousand words. You see in the before version the oil coming out on the left part of the screen, same images on the right, no oil coming out of this well. It's all very dramatic. You're getting a lot of reaction as well.

LAVANDERA: You know, when you're looking at right there, Wolf, is why this moment is such a huge moment in the course of what we've been covering over the last three months. I mean, I don't think there's any words that can add to this to explain why this is such a crucial moment in the hope that what we see on the right of your screen there is what we can hope -- would hope would continue from here on out so we know that we're in the middle or the beginning of this integrity test. It will last a couple of days, and why this is significant, because if one of the two options they hope will play out here, essentially what we could be seeing is even if it's not capped, even if it's just captured and all the oil is brought to the surface and brought into vessels, while that relief work is going, we're still looking at mid-August before that relief well is ready to kill off this runaway well for good, so if this process can work, we're essentially saving almost a month's worth of oil from continuing to spill into the Gulf of Mexico. After three months, I would imagine people around here would say anything that you can do to spare just a little bit of oil going into the Gulf of Mexico is welcome news, and when you're talking about a month's worth of oil, I think that's what gets people's hopes up here very, very high.

BLITZER: And if it's 60,000 barrels a day, you do the math, and you can figure out how many barrels, tens of thousands, hundreds of thousands of barrels would be spewing in if there weren't the containment ships at the top or if these valves don't prevent the oil from spewing out right now. I guess people are just sitting around where you are, Ed, crossing their fingers and saying a little prayer and hoping this thing works.

LAVANDERA: Oh, there's no question. You know, we're here just off where the French quarter in New Orleans. People coming by and asking, you know, what's going on and how is it looking? Everywhere you look in this city, tuned in, like watching CNN, keeping tabs, always constantly asking us what's the latest? What's the latest, and, you know, once you get further down to the coast, cities like Venice, cities like grand isle so deeply affected and the marshlands down there and you get into Mississippi and Alabama and the Florida coastline as well, the end of this can't come soon enough.

BLITZER: Yes. Well, we're hoping and praying, along with everyone else. Stand by, Ed. Lisa Sylvester taking a look at BP stock. What's going on on that front now that the markets have closed?

LISA SYLVESTER, CNN CORRESPONDENT: Well, you know, Wolf, investors have been looking at these pictures, the very dramatic pictures, and have been following the news as well. BP's stock, it had been hammered since the April 20th explosion. You know, at its low point this stock was trading at $26.75 a share. That was at the end of June, and to put that in perspective, we have a graphic up that you can see. At its high, it was trading at more than $62, and that, Wolf, translated into real money, a loss of about $90 billion in company value. There was a lot of speculation that this company might have to file for bankruptcy or that BP could be the target of a takeover, but things have been slowly turning around, you know. The company, they set up that liability fund of $20 billion, and -- and there was also news that they were considering selling some assets to cover all this, the costs that they were incurring, so it seemed like at the time BP was starting to have a plan in place, and they were making decent progress on the relief wells. Well, put that all together, and investors said, you know, maybe -- they started to get more hopeful, more optimistic, and that started to push the stock price up. We have another graphic that we can show you. The stock price has been steadily moving up in the last five days, and today a dramatic jump. BP's stock, it jumped 7 percent to $38.92, and as you can see, can you see it right there at the very end of the trading day, you can see that sharp spike up, and it closed just under $40. So investors are also pretty optimistic at this point. Again, we don't know what the final outcome is going to be, Wolf, but people are, as you said, keeping their fingers crossed and saying a prayer.

BLITZER: Yes. We certainly all are, and as much as the stock could go up with the good news, certainly could go down, if god forbid, there's bad news as well.

SYLVESTER: That's exactly right.

BLITZER: All right. Stand by, Lisa. David Mattingly is getting more reaction. He's down in New Orleans. What else is coming in, David?

MATTINGLY: Well, Wolf, everyone we're talking to in the Gulf region is watching this very cautiously. Everyone I've spoken to has had a direct personal economic impact from this disaster, and they are reminding me that even though this oil has been shut off, there's already thousands upon thousands upon thousands of barrels of oil that have leaked into the Gulf of Mexico and into some of the most valuable fisheries in this part of the world, and they are saying that this is not going to be cleaned up right away. We still have so many unanswered questions regarding what the large volume of dispersants might do to the environment. Experts have been watching the health of the Gulf of Mexico, looking at the waters and the fish. They have noticed anecdotally strangely that there are fish in shallower waters apparently trying to get away from the deeper waters where the oil was. They have also noticed that there are areas where the amount of oxygen in the water is strangely low and going into the summer months that could be bad. It could lead to massive fish kills, so they are watching that very closely. Again, that oxygen being depleted because of all the microbes that are exploding right now that feed on this oil, there's so much of it for them to eat. There's an abundance of those microbes right now, and they are consuming the oxygen, so this environmental disaster still very much in the works, still very many unanswered questions about how bad and how far-reaching this is going to be. Economically speaking, some are worried that this summer is a complete wash for the Florida beaches, that it may take some time to convince people to come back to them now that the oil has been shut off, especially as long as that threat exists, that there's still oil in the water and the potential for landfall still exists. Again, there have been some encouraging signs lately that sport fishing has been allowed to begin again in several areas of the Gulf. That's putting some guys back to work whose boats were sitting idle, and they weren't able to put food on the table. Now they are being able to go back to work. The real sign that they are turning the corner here in the Gulf, it's believed will be when the commercial fishermen can go back out there unimpeded and go after the catch that they have been going after for generations, the fish, the shrimp, the oysters. All of those areas go back after that, and there's also the stigma problem that everyone is concerned about. Even though the fish that have been coming out of the Gulf have been determined to be safe, a lot of seafood distributors are still saying there's a stigma of people leery about eating Gulf seafood. That will take some time to wipe out. So, even though there's no oil flowing into the Gulf, Wolf, this disaster still rolling up on the shores in more ways than one.

BLITZER: And the cleanup will take a long, long time, even if it works. David Mattingly, don't go too far away.

Let's bring in our "Strategy Session" right now. Joining us our CNN political contributor, the Democratic strategist, Paul Begala and the former Republican senator from Minnesota, Norm Coleman. Guys, thanks so much for coming in.

The political fallout, Senator, is going to be enormous for a long time, but February if it works, even if no more oil comes out, the cleanup, based on the Exxon "Valdez" cleanup in Alaska, that's still going on 20 years later.

SEN. NORM COLEMAN (R), MINNESOTA: First of all we're thrilled that the bleeding looks like it's stopped. This is a patient that's lost a lot of blood, the lifeblood of the Gulf coast economy and the environment surrounding it. We've got to clamp on the artery that we hope holds. We don't know but this body has lost a lot of blood. There's going to be impacts, economic impacts, job impacts. We still haven't talked about we've got a drilling moratorium that's still in place that's going to have continuing impacts. This is good news. Folks have to be smiling today, but that doesn't mean that the pressure is off.

BLITZER: Yes. Everybody is thrilled that at least right now no oil is spewing out.

PAUL BEGALA, DEMOCRATIC STRATEGIST: It is, but note the caution in the president's voice when Ed Henry asked him about it. He didn't say thumbs up, and I was e-mailing a White House aide after that asked him about it, he didn't say thumb's up. I was e-mailing a White House aide after the comment the president said to Ed and he said, we are not putting up a banner called mission accomplished off of the trimmed balcony. They are very cautious as they should be because we don't know if this is going to hold.

BLITZER: Well, you heard Congressman Markey say that the structural integrity, and we can only hope and pray it doesn't, but it could still collapse.

BEGALA: Yes, and Senator Coleman's point is right too that this has been a long term 60, 70-day problem now, over 70 days, and it will be months and decades to continue. The other thing to look for are the criminal investigations that are going on. The attorney general went down there in the beginning of this and announced that there's criminal investigations, and as a citizen who grew up in the Gulf coast, who fished there, who's brother used to work on one of those rigs, I hope the criminal sentences if there's criminality found, I hope those BP executives go to jail for as long as the Gulf coast still has oil and if that's 20 years that's fine with me.

BLITZER: There are more than just BP executives. There were other companies involved in this as well.

COLEMAN: There's going to be a lot of looking at what happened. There is a commission in place to figure out what happened here. You asked the congressman a question about the response, but he didn't answer the response. He talked about the mineral management bureau and some of the problems there. A lot of the citizens are saying, shouldn't we have done better? Shouldn't we have gotten other nation's assistance in earlier? We need to look at the response. If you look at some of the polls, Wolf, the federal response is being panned. 70 percent of the Gulf coast residents are upset for the federal response, but they like 6 of 10 like what was going on at the local level. Maybe we will learn some lessons that the response is not just the federal level particularly with the reaction that you got here.

BLITZER: Well, let's get some reaction right now on the phone, James Carville who lives down there in the Gulf of Mexico in Louisiana, right now. James, you have been critical of the White House for some of its actions, but give us your reaction to the dramatic breaking news of today.

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Well, hallelujah, and things have, you know, since I was critical to be fair, things have gotten considerably better, even BP made the very smart decision to get James Lee Witt down there who is working with the local people. Hopefully, this holds. I mean, we are so accustomed to getting bad news, this is good. And from the standpoint of Louisiana actually the good news is BP's stock went up 10 percent, because we don't want them bankrupt, and that is the last thing in the world we want down here, because this is going to be a very, very long, very, very expensive cleanup. And hopefully this is the end of this phase of it, but we are just starting into a very, very long cleanup that areas that have just been devastating, and I heard Paul talking about a brother who worked on the rigs and fished in the waters and these are the most productive seafood quality in the world, and we have lost the oysters down here, and there is a ton of work left to be done.

BLITZER: James, quickly, do you support the administration's moratorium of deepwater drilling in the Gulf?

CARVILLE: In a word, no.

BLITZER: Because?

CARVILLE: Because, first of all, it devastates the economy and secondly, just putting a blanket moratorium out, there and they could have issued any number of regulations and clearly they had to do something, but I think that the commission sent that Senator Graham and Mr. Riley will lift this thing, and take 1,000 more safety procedures, and we can certainly have a better MMS than we had before and a number of thing to do, but no, I don't support this moratorium at all.

BLITZER: Senator Coleman, do you support the moratorium?

COLEMAN: I don't support it and the people in the Gulf coast don't support it, it's 60/38. American Action Network did polling similarly nationwide, and 23,000 jobs in the region making their livelihood in the industry. And Paul indicated his family even.

BLITZER: Because the interior department for President Obama says let's be safe, and put a freeze on it for now and see what happens. We don't want more of the disasters.

BEGALA: Well, they are losing in the court, too. And looks like it may have been poorly calculated.

BLITZER: Do you --

BEGALA: Well, I'm not an expert. I don't know enough to know but this is what we really need is prevention. This was not an earthquake in Haiti. This was not a storm. This was manmade, and should have been prevented by the United States government, this material management system that Senator Coleman mentioned was a victim of what law professors call regulatory capture whereby an industry takes over the government industry that is supposed to regulate them and corrupts it internally, and that is what the Obama administration is focusing on, and that is where it should be focusing on.

COLEMAN: This is a pretty big moment, Wolf, when myself and Paul Begala and James Carville all agree, because you had industry capture here.

BLITZER: I love agreement between the conservatives and liberals. Don't go far away, because Jack Cafferty is also standing by with the e-mail and his question this hour, how much will the oil spill hurt the Democrats this November? Plus my exclusive interview with the BP's chief operating officer Doug Suttles and more of the breaking news right after this.

(COMMERCIAL BREAK)

BLITZER: Back to Jack with "The Cafferty File -- Jack?

CAFFERTY: Question this hour is how much will the oil spill hurt the Democrats in the midterm elections this November?

Anita writes: "I don't think it will hurt the Democrats as much as the Republicans hope it will. It is big oil's fault the spill, and big oil ties in with the Republicans."

Mark writes: "Jack, let's just say that some are really ticked off voters in the Gulf states won't be happy campers when they go to the polls in November and you can bet your shrimp cocktail that Obama will feel the wrath of fisherman, oil rig workers and travel industry workers and oil workers in the south two years from now and rightfully so."

Jamie in Washington writes: "If the voters are thinking, no effect. It was the Bush policies and Cheney collusion with the oil companies and corporate conniving that caused both the economic and environmental disaster. President Obama may be too timid in response to many issues, but it is still a Republican disaster."

Matt in Florida writes: "Probably not much, because remember, the voting public in the U.S. has the attention span and memory of a fruit fly. Some other crisis or problem will come along, and cause the spill to be knocked out of the nation's collective consciousness by the time the midterms get here."

Nancy says: "You have to be kidding. The oil companies are the Republican's baby and the question is how much will the oil spill help the Democrats?"

And John writes: "It is another nail in the Democrats' coffin and not enough by itself to cost the Democrats the election, but when added to the economy and employment and immigration and all of the things that President Obama and the Democrats have failed to change for the better, it's a problem they won't overcome. Obama has looked impotent when it comes to dealing with BP and the oil leak. Hillary in 2012."

If you want to read more on this go to my blog CNN.com/Caffertyfile -- Wolf?

BLITZER: All right. Thank you, Jack.

You're in THE SITUATION ROOM.

Happening now, breaking news, BP begins a critical test, and reaches a milestone in the oil disaster for the first time in 87 days, there is no oil, repeat, no oil flowing into the Gulf of Mexico. But the disaster isn't over. We are going the find out what is next from the BP chief operating officer Doug Suttles.

And President Obama's cautious reaction to the news from the Gulf, and the toll the disaster is taking on his presidency.