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CNN LIVE AT DAYBREAK

Road to Recovery; Oil Storm; Dolphin Rescue

Aired September 20, 2005 - 05:30   ET

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


KELLY WALLACE, CNN ANCHOR: From the Time Warner Center in New York, this is DAYBREAK. I'm Kelly Wallace in today for Carol Costello who's on assignment in New Orleans this morning. Thanks so much for waking up with us. We will hear from Carol in just a moment.
Also, we want you to take a look at the left side of your screen. CNN is working with the National Center for Missing and Exploited Children to get out information on Katrina's divided families. Calls to the center have quadrupled since Saturday morning. Twenty-one missing children cases have been resolved with CNN's help. And with your help, more cases can be resolved.

First though, a look at the stories "Now in the News."

Osama bin Laden's top lieutenant says the Taliban remains strong in Afghanistan. Ayman al-Zawahiri also is downplaying U.S. achievements in Afghanistan. He says -- quoting here -- "there is no reform except through jihad." The comments are on a videotape released by an Arab television network.

Some dramatic video out of Basra, Iraq, British troops clashing with members of Iraq's Mehdi Army militia. One personnel carrier and an armored vehicle were set afire. Two soldiers managed to escape the burning vehicles.

North Korea says it will not drop its nuclear arms ambitions until it is given a nuclear reactor for generating power. The demand comes a day after Pyongyang agreed to end its nuclear weapons ambitions at six-nation talks in Beijing.

To Chad Myers at the Forecast Center in Atlanta. Chad monitoring Rita.

Where is it now?

CHAD MYERS, CNN METEOROLOGIST: Still a tropical storm, 70 miles per hour. Did not gain hurricane strength overnight. The hurricane hunter aircraft had flown back and forth and back and forth trying to find hurricane force wind speeds. They never got above about 68 knots aloft. Now you have to think that the winds aloft are a little bit higher than the winds at the surface, so they subtract a little bit, and they never got winds higher than 70 miles per hour down here at the surface.

Now there is a large band in the eye here, another big part of the eyewall to the south. But we're watching these outer bands now come in to places like Tavernier and Key Largo and right on up even in to Ocean Reef. Boy, that was a big band that just rolled through. I suspect wind speeds in that storm at least 50 to 60 miles per hour. And now they're calming down.

Every time, though, one of the arms goes by, one of these feeder band arms, the winds are going to pick up. As the arm goes by, the winds slack off. You can even see it when you're standing out there looking at it. You can see this feeder band coming at you, and you go I better go inside.

Here it is, just the whole thing rotating around. Going to rotate so that you can see the eye itself. The eye right back here about 160 miles from Key West. That entire storm is going to continue to move toward Key West. But the forecast now is for it to slide slightly south of Key West.

One more thing you'll see on the very last couple of frames, that red box. That is a tornado watch. There could be some tornadoes, some waterspouts that come onshore and cause some damage as well. Hurricane warnings all the way through the Keys, almost past Miami to Golden Beach.

Back to you.

WALLACE: And, Chad, just quickly, how soon or what time today would we likely to see the eyewall passing close by Key West?

MYERS: Looks like the closest eyewall passage to Key West. There's Key West right there. Not that dot, that's the Dry Tortugas, nobody lives there here. Well, boats do. But anyway, back out here. This is Key West. The closest approach about 2:00 today. That's when the wind speeds should be at their worst. And then it gets better, goes better. The wind speeds go down after about 4:00 or 5:00. And here's the extended path all the way in to parts of Texas -- Kelly.

WALLACE: All right, Chad, thanks so much.

MYERS: You're welcome.

WALLACE: Talk to you in a few minutes.

MYERS: OK.

WALLACE: Turning now to New Orleans. The city's mayor, Ray Nagin, had pushed for hurricane evacuees to come back to parts of the city. Well, now he's telling them to leave again because of Rita. The mayor has ordered a mandatory evacuation for the east bank section of the city, and he's urging people in another neighborhood to get out.

(BEGIN VIDEO CLIP)

MAYOR RAY NAGIN, NEW ORLEANS: We are suspending all re-entry into the city of New Orleans as of this moment. I am also asking everyone in Algiers to prepare to evacuate as early as Wednesday.

(END VIDEO CLIP) WALLACE: Well our very own Carol Costello joining us now live on the phone from New Orleans with the latest.

Carol, it is certainly confusing there. Give us a sense of what the folks on the ground are saying. They're first told they can go to parts of the city and now they're told, nope, get out as quickly as you can.

CAROL COSTELLO, CNN CORRESPONDENT: Kelly, confusing, that's like an understatement. People are on a roller coaster ride of emotion.

I've got to tell you, we were going out of the city to do some stories yesterday. I-10 was packed. We jump out of the car. We say, my gosh, it's a traffic jam. What a beautiful sight to see. I mean there was truck after truck after truck of people coming in, bringing supplies into the city of New Orleans. Residents in the Algiers neighborhood were coming back. They were stuck in traffic for an hour and a half waiting to get back to their homes. And moving stuff back into their homes, Kelly. They're happy, hopeful.

And then this announcement comes from the mayor, and they just stop. And I can't tell you the letdown that showed on their faces, because what do you do? I mean you've just come from a hotel somewhere where it's been hard to keep the room. People have called back to the same hotel they were staying at in Baton Rouge, or wherever they were, and their reservation is gone. There are no rooms available.

Other people have simply run out of money. I mean you know it takes money to go back and live somewhere for a time, especially if you don't have family members living elsewhere. So they're sort of stuck. They don't know what to do. They're saying things like, well, we have no choice, we're going to stay. I don't know what to do. I just think there is a sense of bewilderment that is it over yet.

WALLACE: It is incredible, Carol, and impossible to comprehend, really, what they are going through. Give me a sense, though, as they are listening to forecasts coming from people like Chad Myers and others about this impending storm Rita, what are they saying about the possibility of another hurricane coming close by New Orleans?

COSTELLO: Well you know they're really worried because of the levees. Because the mayor says the levees are weakened and the repairs they made might not even survive like a Category 3 storm or less. That's what really has people worried. If it was just a hurricane and the levees were in good shape, they wouldn't really be worried. In fact, people in Algiers would probably stay because they're at a higher elevation and they didn't get flooded, even during a Category 5.

But now, even people on the west bank, you know west of the Mississippi River, you know they're fearing this storm. And there's just a sense of, god, not again. I've heard so many people say those exact words -- Kelly.

WALLACE: I bet they're saying it over and over again. Carol, you're doing such a great job on the ground there. And we look forward to talking to you at the top of the hour.

You can see Carol's reports here on DAYBREAK and also on "AMERICAN MORNING" this morning and throughout the week.

Turning now to President Bush, he has scheduled two more trips this week to the hurricane disaster zone. The president will be stopping in Gulfport, Mississippi and New Orleans today. This will be President Bush's fifth trip to the region since Katrina. A separate two-day trip to Alabama, Arkansas and Texas is scheduled to begin on Friday.

The weekend trip means the president will be away from Washington during a large anti-war rally. A new CNN-"USA Today"-Gallup Poll shows that only about a third of respondents think President Bush is doing a good job when it comes to the situation in Iraq. The poll, which was taken over the past few days, also shows that the president's overall job approval rating is at just 40 percent.

In this poll, we also asked how the government should pay for the president's plan to rebuild the Gulf Coast. Fifty-four percent of you want to cut spending when it comes to the war in Iraq, while 17 percent think that raising taxes is the way to go.

Well still ahead on this Tuesday edition of DAYBREAK, storming weather and edgy oil market. What will all this mean for oil and gasoline prices? We'll talk about it with an energy market expert. That's coming up.

Also ahead, an update on the search for some missing dolphins washed into the Gulf of Mexico from an aquarium during Katrina. You don't want to miss that.

But first, here's a look at what else is making news this Tuesday morning, September 20.

(COMMERCIAL BREAK)

WALLACE: Nice view here in New York City, the sun not up just yet.

Just as gas prices drop, crude oil prices shoot up more than $4 a barrel. Crude oil closed above $67 a barrel yesterday, but is down a bit this morning. Experts say this volatility shows that the oil industry is nervous about what Tropical Storm Rita might do to already crippled Gulf Coast refineries.

Joining us to talk about all of this is Mark Lewis of Energy Market Consultants.

Mark Lewis, thanks so much for being with us here. Question for you, how much is fear right now driving oil prices, fear of what could happen when it comes to Rita driving the price of oil around the world?

MARK LEWIS, MANAGING DIR., ENERGY MARKET CONSULTANTS: Well the oil price has been driven mainly by fear now for several months. The concern is not so much on the crude supply side, which is why OPEC has a problem, at the moment, in trying to dampen down the bullish markets.

The concern is much over the refining side, the availability of specific products, gasoline at the moment, heating oil in the winter, particularly in the U.S. Which means, of course, that any threat of disruption from a hurricane is going to add tension to the market, which is exactly why the price has moved up today.

WALLACE: Yes. So we saw the prices obviously going up. After Katrina, they went down a little bit. So obviously we should expect probably continued increase as there is more fear of more disruption when it comes to refineries, based on the storm Rita?

LEWIS: The -- yes, I mean the problem we fear is it's very difficult to placate any concern in the market until you know you get to the time that the problem is perceived to be. And really it's primarily the winter that is the key driver at the moment. Gasoline supplies are inching up. Gasoline demand looks as if it could be falling somewhat or weakening.

And you have a situation now where it's a possibility of shortages a few months ahead. And that sort of psychology in the market is very difficult to dampen. It's very difficult to offset by OPEC or anyone else doing anything at the moment. So we're going to live with this volatility for a while to come, until we get to the point when our winter supplies seem to be adequate.

WALLACE: Yes. Question for you about OPEC, which you talked about a little bit concerning the supply. We know OPEC meeting. What's the likelihood of any kind of immediate increase in oil production?

LEWIS: There's little point in OPEC increasing production, at the moment. There isn't a problem with world crude stocks. There isn't a problem with U.S. crude stocks. They're in plentiful supply. They're ahead of a year ago.

The problem is in the downstream sector that crude oil has to be converted into usable products, and that's where the bottlenecks are. The closure of four U.S. refineries after Katrina still with us, and that's tightened up the market even further. So it's adding to the pressure.

OPEC can -- all OPEC can really do is to make some statements about the availability of oil in the future, if and when the market needs it. I don't see a strong likelihood of them actually changing anything in terms of current production or the current quota at this meeting. They're much more likely to try and give a message which is you know OPEC is not trying to drive the price up at the moment.

I strongly feel that OPEC is concerned about the height that prices have reached. They're worried about the impact on demand and what may lie ahead next year, the year afterwards, when the market will turn around. WALLACE: You of course know, Mr. Lewis, Americans complaining for months and months now about the price they are paying at the pump. And you hear from people who say, you know what, we don't really understand.

Obviously you have supply and demand. So if you have a higher demand with a set supply, the price is going to go up. But some people feel that are some potential people taking advantage, in a way, of some perceived fear to increase prices to then pass that down to the consumer?

LEWIS: Well the problem with oil is you have a very imperfect market. It's a commodity market now. OPEC has lost control over prices. We've become used to, in the past, to OPEC turning the tap on and off at the crude oil site and regulating the market that way. Now you know they can't do that at the moment. They can't do it because they're not in control of the refining site.

You know OPEC production accounts for around 40 percent of the world total. But on the refining side, OPEC ownership of refineries is only about 10 percent. And they really haven't got the control that they've had when there was a surplus in the refining sector. And we've been used to that for many years now and it's changed.

The growth in demand, particularly last year, and particularly driven by the U.S. and China, has changed all of that. So we've run into capacity squeezes, which are now being made worse in the refining side by the loss of refineries in the U.S., and the threat of further losses from the current hurricane.

WALLACE: Well obviously an interesting topic...

LEWIS: So I don't think -- I think...

WALLACE: Go ahead, finish up.

LEWIS: Yes, sorry. It's not a case of -- I don't believe it's a case of anyone gouging prices. It's a function of the market and the fact that we live in now in a commodity-driven oil market and not a physically-driven oil market. So it's driven by fear, concern and so on. And they can move the price by several dollars a barrel on a daily basis, and that's a fact we all have to live with at the moment.

WALLACE: Well we'll be watching.

LEWIS: It's making it difficult for all of us, particularly if it's unplanned.

WALLACE: We'll be watching it and see how -- yes, fear and concern with Tropical Storm Rita now what impact that could have.

Mark Lewis, Managing Director, Energy Market Consultants, joining us from our London bureau, thanks so much for being here on DAYBREAK. We appreciate it.

Well this question for you, do you feel you're getting gouged at the gas pump? You can now blow off some steam about it, but that's about all you can do. The Energy Department has set up a toll free hotline you can call to report suspected price gougers. That number 1-800-244-3301.

But here's the problem, there is no federal law against charging higher prices at the pump, even during emergencies. The Energy Department's Web site says complaints will be forwarded to the Federal Trade Commission and the Justice Department, but it fails to mention that federal regulators have no real authority to take action.

Well still to come here on DAYBREAK, out in the wild. Gary Tuchman brings us up to date on the rush to save aquarium dolphins swept out to sea by Hurricane Katrina. An unbelievable story coming up on this Tuesday. We'll be right back.

(COMMERCIAL BREAK)

WALLACE: And now for a follow-up on a rescue story we were telling you about last week. It's about the Gulfport dolphins. Four have been saved, but the four others are missing.

CNN's Gary Tuchman went out yesterday with the dolphin trainers to try and track them down.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT (voice-over): Eight aquarium dolphins swept out to sea, four of them captured, with the hope the other four would be captured by today. But in the Gulf of Mexico, all is quiet, no sign of the other four. The man in charge of the destroyed aquarium is Moby Solangi.

DR. MOBY SOLANGI, DIRECTOR, OCEANARIUM OF GULFPORT: They've been here for a week. Something has happened that even the wild animals have gone. There is some sort of an environmental or some change that is happening, they're sensing that this is weird.

TUCHMAN: This was the scene when we were out last week with the government biologist from NOAA and the dolphin trainers, all eight of the dolphins frolicking in the Gulf. Four of the sea mammals were pulled up on a floating feeding station and hugged tightly and then wrapped up in a stretcher that wrapped up the rescue of these animals that cannot live indefinitely in the open waters because they have spent most of their lives in captivity.

Even though all eight were swimming around, the difficulty of getting the dolphins on the floating mat, along with increased afternoon winds, have limited the rescues to no more than two a day.

Jackie, Tony, Kelly and Noah, ranging from ages 5 to 30, are safe and being taken care of at a naval facility in Gulfport. But Shelly, Elijah, Tamara and Jill are missing.

(on camera): For days these people have gone out in the waters and seen the aquarium dolphins almost constantly, playfully swimming in the water. Now it's very quiet, and there's a profound sense of disappointment and much unease.

(voice-over): Then a brief glimmer of hope. Dolphins are sighted. But the excitement doesn't last long. They're swimming away from the people they know on this boat. These are wild dolphins.

Sheriff's department pilots fly the aquarium president in a chopper to see if they can see the missing dolphins by air. Just after we pass the devastated Mississippi coastline, we see dolphins.

UNIDENTIFIED MALE: Yes, yes, looks like it.

UNIDENTIFIED MALE: Yes, look at him. Yes, he's upside. He's playing around.

TUCHMAN: The boats are radioed to get closer to the dolphins. And, once again, disappointment, they, too, are not the aquarium dolphins.

SOLANGI: Next up is to constantly keep going back to the feeding station and wait for them to come. And we'll keep looking for them as well.

TUCHMAN (on camera): And just hoping for the best.

SOLANGI: We certainly are.

TUCHMAN (voice-over): Gary Tuchman, CNN, Gulfport, Mississippi.

(END VIDEOTAPE)

WALLACE: And coming up next on DAYBREAK, we'll hear from you, your e-mails. Don't go away, we'll be right back.

(COMMERCIAL BREAK)

WALLACE: And welcome back.

Time now to read some e-mail. We've been asking you, do you support a price cap? We're talking about a price cap on gasoline after a natural disaster. Well we've been getting lots of e-mails from both sides.

Lisa (ph) in Virginia says, yes, yes, yes, she does support a price cap. She says the president should put this into effect immediately. She says after the greediness shown by gas station owners and oil companies when Katrina hit, there should be a gas price cap and stiffer fines for price gouging.

David (ph), though, from Oakland, California, says, no, I do not support price caps for gasoline after natural disasters, because I think Americans have been too insulated from the true costs of their oilaholic addiction. However, he says he does support profit caps, which should be imposed on the oil companies themselves to prevent them gouging for no reason other than sheer greed.

Well keep those e-mails coming. And the next hour of DAYBREAK starts just one minute from now.

(COMMERCIAL BREAK)

WALLACE: It is Tuesday, September 20, and once again the Gulf Coast could be in harm's way. People in the Florida Keys and along the Gulf Coast watch with wary eyes as Rita threatens.

Also, a defiant mayor changes his tune, urging New Orleans residents to wait a little longer before returning home.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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