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THE SITUATION ROOM

Gulf Oil Platform Catches Fire; President Obama Pushes For Mideast Peace; Hillary Clinton Takes Center Stage

Aired September 2, 2010 - 17:00   ET

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


WOLF BLITZER, HOST: Thanks very much, Rick.

Happening now, an oil and gas platform catches fire and burns off the Louisiana coast, forcing workers overboard and raising new pollution fears in the Gulf of Mexico.

Also, warnings stretching from North Carolina to New England to Canada, as a massive storm bears down on the East Coast.

We'll get the latest from the director of the National Hurricane Center.

He's standing by live.

And Russia's military is blowing up tanks and missile launchers with a lot of air. We're going to show you what's behind this secret inflatable arsenal.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: We begin with the breaking news. An oil and gas production platform caught fire in the Gulf of Mexico today, about 100 miles off the coast of Louisiana. Mariner Energy, the company that owns the platform, says the fire began at one of seven active wells connected to the rig. Thirteen workers were forced overboard, but the Coast Guard says no one was hurt. The Coast Guard reports an oil sheen, although the company says there was no hydrocarbon spill. Production from the platform recently averaged about nine million cubic feet of natural gas and 1,400 barrels of oil each day.

Let's get some more from CNN's Tom Foreman.

He's working this story for us.

What do we know -- Tom?

TOM FOREMAN, CNN CORRESPONDENT: Hi, Wolf.

Well, it's mainly what we don't know at this point. We don't really know what caused this fire. We don't know the extent of whether or not there is a spill. Conflicting reports on that.

Let's talk about what we do know. About 102 miles off the coast here, this is what it looked like when this explosion happened out there on this. This is a production rig, not an exploratory well like we were talking -- a drilling rig like we talked about with BP. That's important and I'll explain why in just a minute, because this involved producing oil from a series of wells beneath the surface.

That's a much more closed environment. That's an environment that is much more controlled than you have in a drilling process, where they're still exploring things. This was all sealed in. That's why the company is saying it's still all shut in and saying there is no spill, except maybe something that came off the deck here from a storage tank. But, again, that has been ascertained yet.

Here's what we know about the folks who went into the water and were rescued there. We know a photograph of it. We know that they're all apparently safe at this point.

But the big question, of course, Wolf, is how much danger is there now as this burns?

We know there are two lines that run from here -- pipes that run to shore from the well out here. We also know, as I said before, the different nature of the well. But let's compare it, if we can, to the BP rig, which is right over here.

If I were to fly into this rig today, I want you to look at where it is situated here, also.

You see this pale blue here and then the darker blue down here?

If you look at a bigger picture of the Gulf and the way it lays out down here, this shows more of the separation. This is the shelf that's just under the water off the coast here. This is much shallower water than out here, of course. This rig is situated on this part of it.

But if you go over here to the Deepwater Horizon, well, now -- or to the BP rig over here, you can see that that's in a situation where it's in the deeper water and the difference is profound. The distance between the two -- if I can get it to turn on here, it's having a little bit of difficulty -- is about 200 miles. But the difference between the two rigs is enormous. This one was in about a mile of water; the other one just over 300 feet.

The difference in pressure at depth, if you're dealing with a leak on the bottom, which we're not talking about over here yet -- we were talking about over here -- but the distance is profound.

Over here, it's about 150 pounds per square inch. Over here, it's well over a ton per square inch -- a totally different working environment if you're trying to deal with a leak at that level.

Also, you mentioned the amount of oil coming out -- about 1,400 barrels per day. The estimates were never really settled, I don't think, over at BP. We went through a lot of things, but somewhere in the nature of 25 times as much -- maybe a lot more than that -- from the BP rig, at the height of the leak over there.

So really, very different environments, Wolf, between what happened today and this, the BP disaster, which involved the full-on explosion and the loss of 11 lives. Nonetheless, the comparisons are -- are being looked at closely right now.

And this situation is being taken very seriously, with responses from Mobile and Houston and New Orleans -- all going out there immediately. Wildlife and fish people being sent out there immediately, specifically because they saw what could happen in the much more serious case of the Deepwater Horizon. They wanted to make sure that's not what's happening right now with Vermillion Bay -- Wolf, I'm sure all of those crews will get us a lot more answers in the next 24 hours.

BLITZER: And I just want to stress, Tom, as I'm sure you do, as well, all of this information very preliminary. Very often, the initial reports turn out not necessarily to be all that accurate.

Do we have any reason -- do we know what caused this fire?

FOREMAN: We do not at this point. There -- there seemed to be some tentative reports that it was connected to one of the wells, that there was some kind of explosion -- fire at the top of that or with a storage facility connected to that -- some of the areas where they separate the oil from the natural gas. But that, again, as you said, Wolf, is all very tentative.

The truth is, there will be a full-on investigation before we have even preliminary answers that we can rely on. And then, of course, the full investigation until we know for sure what happened. Obviously, they will be talking to all of those fellows we were looking at a moment ago in the water to hear what they saw, what they heard in the moments leading up to this fire -- Wolf.

BLITZER: Tom, thanks very much.

We're standing by.

The Coast Guard is getting ready to have a news conference on what they know. We'll check in with them shortly.

More than six weeks after BP's ruptured well was capped, crews today began removing the blowout preventer. Replacing it is a major step toward a final fix. But rough seas have stalled the effort to permanently seal the well. Officials say removal of the device must be done carefully because it may hold valuable evidence as to why it failed back on April 20th. That triggered the explosion that killed 11 rig workers and caused the massive oil disaster.

Let's get the latest now on Earl's whereabouts, this hurricane -- the storm, where it may be heading.

Joining us now from Miami is the director of the National Hurricane Center, Bill Read.

How much damage can Hurricane Earl do to the East Coast, Bill?

BILL READ, DIRECTOR, NATIONAL HURRICANE CENTER: Well, that -- that has yet to be determined. But, obviously, with a large wind field, fully foliaged trees and the close proximity to the land of a major populated center all the way up the East Coast, there's bound to be a -- a considerable amount of damage from that.

Our biggest concern right now, though, is the close approach to the Outer Banks and Cape Hatteras that will occur in the next six to 12 hours.

BLITZER: What do we expect to happen in North Carolina?

READ: Well, the -- there's very high seas and an elevation of the tide with those high seas; over washes of the barrier island with the big waves on top of it. There will be some property damage, a lot of road washout.

I understand, from talking to local emergency managers, they had a good response, though, to the evacuation, which is very good.

BLITZER: And then what happens as this hurricane moves north toward Virginia and Maryland and New Jersey, New York, the -- the New England area?

READ: Well, one of the things -- good things that's happening is we're fairly confident in the forecast of the curvature back to the northeast and the way the coastline ducks in for the major metropolitan areas of New York down to Philadelphia and DC, just fringe impacts from the storm. The main impact is in Jersey and East -- and Western Long Island. It will be the high surf and unfavorable conditions for beachgoers this end of the summer.

A bigger threat remains as it comes out toward Southern New England, because now we're out far enough in the forecast that I can't be overly sure that they're going to escape the direct impacts of the center of the hurricane.

BLITZER: So what I hear you saying is that sometime tomorrow, Friday, Philadelphia, Washington, DC, New York City, they may just -- just get a lot of rain, is that what you're saying?

READ: Well, maybe not even a whole lot of rain in there, just the breezy conditions from the -- the wind field out of northwest. It will be more close to the coastline, where the winds will be in the tropical storm force area for those regions.

BLITZER: So you're -- from what I hear you saying is North Carolina right now, the folks have got to get ready because they have only a few hours left before this Hurricane Earl makes direct impact?

READ: That's correct. Daylight is ending. The tides are coming up. Winds and rain are coming up. This is the time to -- to be in place and -- and stay safe. BLITZER: We're going to stay in close touch with you, Bill Read of the National Hurricane Center.

Thanks very much.

I want to go to the Coast Guard right now.

They're updating us on this latest explosion of this oil platform in the Gulf of Mexico.

(JOINED IN PROGRESS)

UNIDENTIFIED MALE: -- I'll give you Captain Troedsson.

And please remember, I will give -- I will call on you, all right?

Captain?

CAPT. PETER TROEDSSON, U.S. COAST GUARD: Good afternoon.

First, I'm pleased to announce that all 13 members aboard the oil platform have survived with no serious injuries. The fire is out and Coast Guard helicopters on scene and vessels on scene have no reports of a visible sheen in the water. There's no report of an evidence of leaks, but we continue to investigate and to monitor that situation, to make sure that that doesn't change.

At 0919 Central time, the Coast Guard received a phone call from a platform in Vermillion Block 371 that Platform 380 was on fire and engulfed in flames.

Platform 371's helicopter, owned by Bristow, flew to the scene and confirmed the fire and 13 people in the water. This was 80 nautical miles south of Vermillion Bay.

The Coast Guard then launched five helicopters from Air Station New Orleans, two helicopters from Air Station Houston, one fixed wing C-144 from our air station in Mobile, four patrol boats, one 175-foot cutter and one 210 foot cutter.

The Bristow-owned helicopter reported 13 people in the water closely grouped together, wearing survival suits. The owner of Platform 380, Mariner Energy, confirmed that only 13 people were on the platform today. The offshore supply vessel, Crystal Clear, recovered all 13 survivors from the water and transported them to the closest platform in Vermillion Block 371.

A civilian air ambulance helicopter and three Coast Guard helicopters transported survivors to Terrebonne General Hospital for attention. All survivors arrived between 2:30 and 3:30 this afternoon.

Mariner Energy, the owner of the platform, has followed their fire response plan and the fire is now extinguished. The Coast Guard cutter Skipjack, an 87-foot patrol boat, is on scene and has assumed on scene commander duties and continues to monitor the situation.

That's all I have prepared at this point and I'm ready to answer any questions you might have.

QUESTION: There were reports -- there were reports of -- of oil in the water. But now you're saying no sheen whatsoever.

I guess why were there conflicting reports earlier to now?

TROEDSSON: Yes, sir. The -- the initial report came from Mariner Energy themselves and their responding boat gave that report. And what I can tell you now is that the boats and the aircraft on scene cannot see a sheen. So we remain, obviously, ready to respond if one sheen or any sheen becomes visible.

(CROSSTALK)

QUESTION: Are you actually looking below the surface to check (INAUDIBLE)?

TROEDSSON: Yes, sir, we're actively looking. The boats on scene are looking. We'll have aerial patrols that will be looking, as well.

QUESTION: Tell us a little bit about what the status was of (INAUDIBLE) the operation (INAUDIBLE).

TROEDSSON: Well, unfortunately, I -- I can't comment on that. That will be the subject of an investigation. And I can't go into that anything that -- any -- anything that...

QUESTION: Was it in production?

TROEDSSON: Was it in production?

I believe it was in production at the time.

UNIDENTIFIED MALE: White shirt in the front.

QUESTION: How long before (INAUDIBLE)?

TROEDSSON: The company now reports that it has been shut down. And, of course, we continue to monitor that just to make double sure and quadruple sure that that's the case.

QUESTION: (INAUDIBLE)?

TROEDSSON: Well, we -- like I say, we'll continue to monitor it. They tell us right now that it has been shut down.

QUESTION: This platform is connected to separate wells?

Are you checking the connections to those wells underwater?

TROEDSSON: The -- the cut -- that's -- again, that's something that I would rather not speculate on at this point. The company monitors each of those wells. And so their data show that there's -- there's no flow through them.

QUESTION: What were they doing on the well?

What kind of work were they doing on the well (INAUDIBLE)?

TROEDSSON: I'm sorry, say that again.

QUESTION: What kind of work were they doing on the well?

TROEDSSON: That -- that, again, that's something that will be part of the investigation. But I don't know what kind of work they were doing that -- that was -- today that might have caused anything.

BLITZER: All right. So there's the latest information from Captain Peter Troedsson of the U.S. Coast Guard, basically saying that 13 folks who were working on this platform are OK. The fire is out. He insists there are no reports of a visible sheen, meaning oil on the surface of the Gulf of Mexico, but they're monitoring it. They're taking a closer look. They're investigating, certainly, the cause of this explosion that caused the fire and this incident -- this second incident of this oil platform exploding in the Gulf of Mexico.

We'll stay on top of this story for you and update you when we get more information. Certainly, a lot of folks in the Gulf of Mexico, Louisiana and elsewhere, they're deeply concerned about this second incident.

As Middle East leaders talk, Hillary Clinton has been very visible.

But just what role is the secretary of State playing in these Israeli-Palestinian negotiations?

And is controversial Arizona sheriff, Joe Arpaio, now in legal trouble himself?

Why he's being sued by the U.S. Justice Department.

Plus, the United States confronts Iran -- on the basketball court.

Did the players leave world politics behind?

Stick around.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here, he has "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: Wolf, when it comes to these midterm elections, the question now seems to be just how bloody will things get for the democrats. Every day brings more bad news, here's the latest batch. A new "USA Today"/Gallup poll shows Americans think Republicans in Congress will do a better job than Democrats in handling seven out of nine key issues. These include terrorism, immigration, federal spending, the economy, Afghanistan, jobs and corruption in government.

The two parties are essentially tied when it comes to health care. The only issue where the Democrats score higher is the environment, which is not exactly the one that's going to bring people race together polls come November.

Republicans have to win 39 seats to gain control of the House of Representatives. Some experts are predicting they could win 51, even 60. Some even think that democratic control of the Senate is a possibility, but that's much more of a long shot.

And it's not just about Congress either. Democrats are at risk of losing the governorships of some states that almost always lean left. Places like Michigan, Pennsylvania, maybe even President Obama's home state of Illinois.

So, with the Democrats poised to get a beating in 60 days and with everybody saying, it's the economy, stupid, the president has chosen this time to take another shot at peace in the Middle East. A noble cause for sure, but for decades American presidents have tried and failed.

A column in "The Daily Beast" this morning called the peace talks "charade," suggests the situation is exactly the same as it was three years ago under President Bush, and neither the Israelis nor the Palestinians have confidence in Mr. Obama's ability to broker a deal.

So here's the question this hour -- "Why have voters fallen out of love with the Democrats?" Go to CNN.com/CaffertyFile, post a comment on my blog -- Wolf.

BLITZER: We'll find out pretty soon. November 2nd, it's not that long away, Jack.

CAFFERTY: Your heartbeat is going up a little, isn't it?

BLITZER: Yes. Well, I love politics.

CAFFERTY: I know.

BLITZER: Did I ever mention that?

CAFFERTY: Start hyperventilating months ahead of time.

BLITZER: I know, it's always good. Stand by, Jack. Stand by, I want to continue this conversation with our senior political analyst David Gergen who is joining us now.

David, you saw the cover in today's "New York Post" -- "Now EARN that Nobel Peace Prize, Mr. President."

Let's put it up on the screen, there it is. Is there any way you think in the next year the Obama administration, led by the president, the secretary of state, are going to achieve an Israeli/Palestinian peace agreement?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, Wolf, there are encouraging signs here early on, at least about process. The fact that both sides agreed today to meet every two weeks, that was a breakthrough and shows a seriousness of purpose. But the compromises so far are on process and not on substance, and so far there's been no indication of that.

And as to the president, King Abdullah of Jordan last night directly called for the president to play a very active role, and we know from sources that President Mubarak of Egypt very much wants the president to be right in the middle of this, and it looks like to me the president wants to be in the middle of it.

But one has to wonder, given the amount of time we've seen, say President Clinton or President Carter, devote to this, whether that's what the American people want. You know, they want the president, as he said a couple of nights ago, to be focused on jobs and focused on economic recovery here at home and just as a year ago people were concerned when he spent so much time on health care and not on the economy, if he now begins to invest a lot of time on the Middle East, you know, which has been a graveyard for a lot of efforts in the past, as Jack Cafferty just said, I think Americans are going to have some doubts about the wisdom of that.

BLITZER: Cause those of us who have covered these peace kind of negotiations for many years know it's going to be almost impossible for the Israelis and the Palestinians to make the very difficult concessions they need to make if they are just talking, for example, to Senator Mitchell or even to the secretary of state, Hillary Clinton. It's going to take the president of the United States to get them both together, as Jimmy Carter did back in 1978, '79 in achieving the Israeli/Egyptian Peace Treaty.

GERGEN: Well, I do think, Wolf, that -- and the fact that Hillary Clinton is the secretary of state and given her international star power, that that actually is an asset for the president than she could play -- I don't know whether she would be a Henry Kissinger, you know, shuttling back and forth -- but she could be the strong secretary of state that's needed in this situation.

And working with George Mitchell, who is a very effective negotiator as we know from the Northern Ireland situation, she could, in effect, I think the president could let her take the lead for now and then come in later if in fact the talks are going well.

But, you know, we've got a big, big deadline coming up here just a little while from now later in September when the first big major substantive issue comes to the floor about these settlements. Mr. Netanyahu is under enormous pressure within his own party to, you know, end the moratorium on settlements, to begin construction and doing so aggressively, and it's conceivable he could even lose power if he doesn't do something on settlements. On the other hand, the Palestinians are saying if you go forward with settlements and forget the talks.

BLITZER: It's going to be huge --

GERGEN: It's crunch point.

BLITZER: And it's only a couple or three weeks away before we figure out, see what's going to happen on that front.

All right. Thanks very much, David, for that.

GERGEN: Thank you.

BLITZER: We'll stay on top of these negotiations over the next year, if they last that long.

It's only a matter of hours before Hurricane Earl slams parts of the eastern seaboard. We're tracking this massive Category 3 storm from our hurricane headquarters and on the ground. We'll have a live report.

Plus, it's a whopper of a deal. We're going to tell you why the popular fast food joint Burger King is about to get a brand new owner.

(COMMERCIAL BREAK)

BLITZER: Fredricka Whitfield is monitoring some of the other top stories in THE SITUATION ROOM right now.

Fred, what's going on?

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello to you, Wolf. Hello, everyone.

Well, the federal government is suing controversial Arizona Sheriff Joe Arpaio saying that he isn't cooperating with a Justice Department investigation. The government is looking into claims that some of the sheriff's department practices discriminate against Latinos. In a news conference just hours ago, the sheriff was defiant and denied any allegations of discrimination.

And Burger King has a new king. The company has agreed to be acquired by investment firm 3G Capital in a deal valued at $4 billion. The fast food chain operates more than 12,000 restaurants in all 50 states and in 76 countries. It has struggled more than rival McDonald's in the midst of high U.S. unemployment, and Burger King stock closed up 25 percent today.

The United States versus Iran is working out in Team USA's favor, that is in the sports arena. The American basketball team beat Iran 88-51 in world championship play in Turkey. The contentious relationship between the countries stayed of the court. The U.S. player Kevin Love said, quote, "At the end of the day, it was just basketball. I'll let CNN talk about all that stuff," end quote.

Wolf, pretty good play on the court action.

BLITZER: No doubt we will. Good for the Team USA.

Thanks very much, Fred, for that.

Another oil platform goes up in flames in the Gulf of Mexico. Workers are rescued, but is there a big pollution risk? I'll ask an expert on the oil industry.

And Defense Secretary Robert Gates visits Afghanistan and talks about corruption involving the president of Afghanistan, Hamid Karzai.

(COMMERCIAL BREAK)

BLITZER: Some diplomatic hand-holding from the secretary of state Hillary Clinton, the Israelis and Palestinians sat down face to face today over at the state department and agreed to step up work for a framework for a peace treaty. They set a one-year deadline for a blueprint deal. Our senior white house correspondent Ed Henry is following this story for us. All right. How did it go today, Ed?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Wolf, when you talk to senior U.S. officials they say behind closed doors they are seeing pretty good chemistry between the Israeli and Palestinian officials, and one senior official I spoke to at the beginning of this process told me that there would be two barometers when all of this was ending, these direct talks today. He said this a few days ago. Number one, would senator George Mitchell, the former senator and president's special envoy, come out and give a specific date for round two of these talks or a vague promise of meetings down the road? He did come out and say September 11th and 15th. Very specifically will be round two of these talks. Secondly, the senior official told me would the talks happen in the U.S.? The second round, or would it be in the Middle East? Senator Mitchell didn't get too specific about where the talks will be, but I'm told by senior officials they are going to be in Egypt, and that's a sign that the Israelis and Palestinians want to show that they can stand on their own two feet and they don't need the U.S. dragging this along, propping it up, if you will. Now, secretary of state Clinton will still be on the sidelines certainly for the second round of talks but the fact that they will do it in the region is seen here at the white house as a positive sign.

BLITZER: Did your sources say whether the talks would be in Cairo or Sharm el-Sheikh, the southern peninsula?

HENRY: Nobody is willing to go on the record with that yet but based on past experience and you know better than anyone, there's been a whole series of peace negotiations in Sharm el-Sheikh. That seems like the most likely location, Wolf.

BLITZER: Thanks for reporting from the white house.

As the Obama administration shifts its focus from Iraq to Afghanistan, defense secretary Robert Gates arrived saying no matter how difficult the struggle gets, the United States will not be fighting there 15 years from now. Let's bring in our pentagon correspondent, Barbara Starr. What did the secretary say about his meeting with the Afghan president, Hamid Karzai, because a lot of U.S. officials are quickly losing confidence in Karzai.

BARBARA STARR, CNN PENTAGON, CORRESPONDENT: Well, you know, Wolf, one of the main issues that continues to be a source of contention between both sides are the allegations of corruption in the government of Afghan president, Hamid Karzai. U.S. troops are fighting there, but is the government they are trying to support really an honest and forthright broker for the people of Afghanistan? It was a major issue when defense secretary gates sat down with Karzai today and then when they both faced reporters, have a listen to what both men had to say.

ROBERT GATES, DEFENSE SECRETARY: I think that the key here is that the fight against corruption needs to be Afghan-led. This is a sovereign country. Its government elected by its people, and -- and we think that organizations such as the major crimes task force and the special investigations unit are important, but they need to be run under Afghan auspices.

PRES. HAMID KARZAI, AFGHANISTAN: And I hope you would do the job of conveying the concerns of Afghan people and me as the president of this country to work towards building an Afghanistan with the help of the United States and our other allies that is based on proper laws and regulations that is a lawful state, not an abusive police state. We should fight corruption, but corruption has to be fought legally and correctly, not in a manner of banditry or violation of the rights of the people.

STARR: So, Wolf, what's really going on here? Well, a top Karzai aide had been arrested on allegations of corruption. Karzai said that the man was arrested inappropriately. He had him released from custody. This really set the U.S. teeth on edge. General David Petraeus acknowledging that there was friction about all of this but saying that he had heard Karzai personally assure President Obama that he will fight corruption. That is going to be a major issue for the next several months. Wolf?

BLITZER: Because a lot of U.S. officials are deeply worried about Karzai right now. All right. Barbara, thanks very much. Let's get some background on Hamid Karzai. Educated in part in India, fluent in several languages. From 1992 to 1993 Karzai served as the deputy foreign minister in the Afghan government after the fall of the Soviet Union. Later he briefly aligned himself with the Taliban briefly, but he declined to become Taliban's ambassador to the United Nations. In 1993 his father was murdered in Pakistan, allegedly by the Taliban. Two years later Mr. Karzai worked with the U.S. government to overthrow the Taliban from power in Afghanistan. Shortly after he was chosen as the interim leader of Afghanistan, and in December 2004 Karzai was elected president of Afghanistan. So how stable is the Karzai government? I'll speak with the former U.N. special representative to Afghanistan, Peter Galbraith. That will be coming up in the next hour.

Stunning new images of charred Ferraris now prompting a major recall of the supercar. We'll tell you what's believed to be sparking these sudden fires.

Plus, a popular physicist weighs in on the age-old debate over whether god created the universe.

(COMMERCIAL BREAK)

BLITZER: Powerful category 3 storm moving towards Cape Hatteras, North Carolina. Within the next few hours we'll have a full report. Chad Myers with the latest forecast. Rob Marciano right in the middle of it all. Stand by. We're going to North Carolina. Meantime, let's check in with Fred. She's monitoring some of the other stories in THE SITUATION ROOM right now. Fred, what else is going on?

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello, again, Wolf and everyone. Mexico's president is touting success against drug cartels. In his fourth annual state of the nation speech, President Felipe Calderon notes that law enforcement killed or captured three drug kingpins in the past year since he took office in 2006. Officials have arrested more than 10 cartel leaders and more than 5,000 hitmen. But in that time more than 28,000 people died in drug-related violence.

And Ferrari is recalling its new luxury supercar because of incidents just like that. The company is reporting five instances of the 458 Italia models catching fire. The car's heat shield can come too close to the exhaust system and ignite. Ferrari North America will start notifying affected customers within two weeks. The supercar has a base price around $230,000.

And physicist Steve Hawking says god did not create the universe arguing that it was an inevitable consequence of the law of physics. "The Times of London" published an excerpt from Hawking's new book "The Grand Design." In it he says because of gravity, the universe can and will create itself from nothing, end quote. The book hits stores next week. Wolf?

BLITZER: Going to cause another huge debate on this very subject. Fred, thanks.

WHITFIELD: Oh, just the beginning.

BLITZER: New predictions that the Democrats could lose the House of Representatives this fall. Is it a realistic possibility? We'll talk about that and more in our strategy session.

Plus, Hurricane Earl set to hit the east coast of the United States only a few hours from now. We'll have the latest update on this category 3 storm.

(COMMERCIAL BREAK)

BLITZER: The white house has just announced that the president will hold a full-scale news conference next Friday, a week from tomorrow, in the east room over at the white house. Of course, CNN will have coverage. This, by the way, is his first formal Q&A with white house reporters in some four months. This kind of full-scale white house news conference, next Friday over at the white house.

Let's talk about that and more in our strategy session. Joining us now, two CNN political contributors, the Democratic strategist Paul Begala and the Republican strategist Ed Rollins. This is a big deal or a little deal, finally going to start taking questions from that white house press corps, Paul?

PAUL BEGALA, DEMOCRATIC STRATEGIST: I think it's always good. I like when presidents do this. It focuses the mind. It focuses the staff and it focuses the president. It will require him actually to figure out where he stands on a few things that are kind of percolating through the system, so I love when they do this. I used to love the dry runs to try to predict what evil nasty questions you'd be asking President Clinton back in my day. Didn't succeed very much on that, but I think it's great. Good for the president and good for the country is?

BLITZER: What do you think?

ED ROLLINS, REPUBLICAN STRATEGIST: I think it's always good for the president to go before the public. Gibbs obviously has the daily duty and is not being as effective. President has not had great press conferences and needs one if he's going to set a tone here for this fall.

BLITZER: When you say Gibbs isn't as effective as he can be, elaborate a little bit, Ed. What do you mean by that?

ROLLINS: He hasn't gotten out of the campaign mode. He needs to communicate to the American public what the story is and he's too combative and gotten more and more combative as time has gone on.

BLITZER: Let's talk about Larry Sabato, a guy you both know, analyst over the University of Virginia, Center for Politics and has his new crystal ball looking out to November 2nd and says, "Given what we can see at this moment the Republicans have a good chance to win the house by picking up as many as 47 seats net. Remember, you need 39 in order to have John Boehner become the speaker of the house. In the Senate the Republicans have an outside shot of winning full control, that would be plus ten, but are more likely to end up with plus eight or maybe plus nine." Is he on target, Paul?

BEGALA: You know, first off, he's a highly respected guy, Larry Sabato, UVA, not the University of Texas but not a bad school, UVA. I can't say he's got an ax to grind. I've been saying all year on your program, telling Democrats my strategy is three words, build an arc. This could be category 4 or 5. We should have Chad Myers tracking this storm that's coming to hit the Democrats, but here's what they need to do, not just sit there passively and wait for the storm to hit. They need to build an ark and get out in front of this and put the Republicans on trial. Embrace the fact that the Congress may well switch and say what will the Republicans do, privatize social security, cut taxes for the rich and ship jobs overseas. That's the economic Republican plan in the eyes of Democrats. They need to start making like this press conference next Friday. Let's see how fast before President Obama starts talking about shipping jobs overseas and social security being privatized. If he's on those kinds of messages, it will tell us that the Democrats are getting on the offense here. BLITZER: Reality, Ed, you know and so does Paul that the Republicans can talk about al those things if they want to, but getting that done with the president of the United States and the white house and the veto pen, it's a lot more difficult, even if you have the majority in the house and even in the Senate. The president can veto that kind of legislation.

ROLLINS: Yeah. I don't think anything is going to happen in the -- I think everyone is now worried about getting re-elected. When you look at whether it's Larry Sabato who I have great respect for or Charlie Cook, one of the great analysts, everybody has 70, 80 members, Democrat members, who are basically in vulnerable seats. Rahm Emanuel did a very effective job with Paul's help in 2006 and 2008 recruiting candidates that won 50-plus seats, and they were Republican seats. Most of these seats are now in jeopardy, particularly if Republicans turn out. A lot of animosity towards Obama. Our side has intensified. Still got to win them. I never take them until we win them.

BLITZER: Ed, we heard what Paul says the president and the Democrats need to do now between now and November. Second, what advice do you have for them?

ROLLINS: Well, I'm not going to giver them any advice. I think Paul gives them great advice what. I'm going to say to my side is basically you've got to articulate what it is that you're about, that you're going to go there and make sure that more of this big spending and this deficit spending and more of these programs like the health care are not going to be implemented and that the bottom line sheer that you're going to go fight for ordinary people out there, the middle class that is obviously suffering and really go out and aggressively draw the line in the sand and say electing us creates a block on what the Obama and Pelosi and them want to do.

BLITZER: Where did the Democrats go wrong in the last year and a half, Paul? Why has it come down to a popular president, the Democrats with decisive majorities, lopsided majorities in the house and the Senate, and now they are facing a bloodbath? Where did the Democrats go wrong?

BEGALA: Well, you know what our buddy James Carville would say. It's still the economy, stupid, you know. When you've got 9.5 percent official unemployment, and it's really 15 percent, 16 percent, if you count people who have given up or have taken jobs below their skill levels or part-time, you have 15 percent, 16 percent unemployment, they are going to want to run you out of power, and so it's -- I think the Democrats have first and foremost a reality problem. They have a terrible economy, and that's the most important thing. They also have a political problem, but that's secondary, and I think the way to address that though is as I said before put the Republicans on trial. Don't try to tell the country you've done such a great job on everything when things are so bad, but instead said, you know, those guys are worse, and -- and that's probably -- that's a little negative message, but I like negative politics. Rollins is a very gentle soul.

BLITZER: He loves negative politics. In his day he was pretty good at that kind of stuff, as were you.

BEGALA: He's a boxer. He could kick my butt still.

ROLLINS: I doubt that. I do love this environment for us. I suffered -- I'm a little older than Paul and I've been through a lot of these and I've watched -- they are cycles. This is a good cycle for us, and if we do get the majority back, we do get close in the Senate, we've got to make things happen, and the one good thing about this is that it will force the white house and come and deal with Republicans in a real way. They didn't have to deal with Republicans because they had majorities in the house and Senate. They will have to deal with us, either way, we have the majority or we're close.

BLITZER: Did you notice, guys, the white house announced today the president is going to go back to Ohio next week, yet again, that key battleground state. I think he and his people are looking ahead to 2012 a little bit, but we'll discuss that on another occasion. Paul Begala and Ed Rollins, guys, thanks very much.

ROLLINS: Thank you.

BLITZER: Another oil platform fire. Is there a risk of more pollution in the Gulf of Mexico? We'll get the latest.

And Hurricane Earl, bearing down on the east coast right now. We'll have the latest forecast, and we'll take you to a place likely to feel the impact within the next few hours.

(COMMERCIAL BREAK)

BLITZER: Jack with the Cafferty file.

JACK CAFFERTY, CNN CORRESPONDENT: Why have the voters fallen out of love with the Democrats?

Rick says, "The number one reason is that the Democrats pass legislation against the wishes of the majority of Americans. I will not vote for any Democrat under those circumstances for any office whatsoever."

Jan from North Carolina, "Four words, Nancy Pelosi, Harry Reid."

Larry in Providence, "Americans don't have long memories and also want immediate gratification. They don't take time to think that eight years of a disastrous administration cannot be fixed overnight. Let them vote the Republicans in, and it won't be long before the questions why have the voters fallen out of love with the Republicans?"

Phil in Florida writes, "When you have control of both houses, and you can't get anything accomplished for fee of losing your job, what reason would anyone want to keep you around? Term limit is the only way that this country will ever grow."

Jerry in Georgia writes, "The answer lies in leadership, and Pelosi, and Reid, and Obama, not a leader in the bunch. Once the Democrats can pix a trustworthy and responsible and experienced leader, they will be back."

Joan in Minnesota, "That is an easy one, they are liars and we come from a generation of Democrats all 325 of us in our family have been Democrats for generations. And we have had it with the Democrats."

Ralph writes, "What is the average IQ of the American voter? H.L. Mencken said it best, democracy is a form of religion. It is the worship of jackals by jackasses."

If you want to read more go to my blog at CNN.com/Caffertyfile.

BLITZER: Smart people, thank you very much.

CAFFERTY: You're welcome.

BLITZER: An oil platform breaks out into fire. We will look into what happened today.

And Russia's military now literally blowing up the artillery in a move that could change the face of war.

(COMMERCIAL BREAK)

BLITZER: Potentially, we could have a change in war as we know it. Our CNN international correspondent Matthew Chance shows us why Russia's military is literally inflating its own artillery.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN INTERNATIONAL CORRESPONDENT: The pride of Russia's military on parade at the capital. This former superpower has a bizarre military secret. Outside of Moscow, it is blown up, literally. In the event of war, inflatable hardware like this fake missile launcher could be deployed on the frontlines and tanks, too, were available in blow-up form designed to confuse and mislead Russia's enemies, and the trick say the manufacturers is in the detail.

VIKTOR TALANOV, MARKETING DIRECTOR, RUSBAL FACTORY: This is an additional fuel tank.

CHANCE: Whoa. On this -- why would you need an additional fuel tank for an inflatable?

TALANOV: Because we have several tanks, and the real thing, something snap this one --

CHANCE: And it is to make it look more realistic?

TALANOV: Yes, yes.

CHANCE: The company's design team draw up the complex patterns needed to create convincing fakes. The arsenal is being stitched together from blow-up fighter jets to artillery guns to radars. Well, the interesting thing is that the Russian military has now ordered large numbers of these inflatables, specifically replicas of the latest battle tank and sophisticated missile systems. For Russia, it seems that fooling the enemy may be an important part of the future war strategy. Critics say that the money could be better spent on improving Russia's real decrepit hardware. But now the cheap fakes are filling in as a stand-in.

Matthew Chance, CNN, Moscow.

(END VIDEOTAPE)

BLITZER: You are in THE SITUATION ROOM. Breaking news, a hurricane closing in on the east coast. Mandatory evacuations are now under way. We are tracking Hurricane Earl. We will get you the latest coming up. And also, breaking news off of the Gulf of Mexico. A fire on an oil and gas platform. Workers are forced to leap for their lives into the water. We have new details this hour.