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No Oil Flowing Into Gulf; Interview With Doug Suttles

Aired July 15, 2010 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You are in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

We are following all of the breaking news, a very, very dramatic development today. For the first time in nearly three months, no oil is spewing into the Gulf of Mexico.

David Mattingly is on the scene for us. He is getting more reaction to this dramatic development -- David.

DAVID MATTINGLY, CNN CORRESPONDENT: Wolf, Admiral Thad Allen releasing a statement to us just a short time ago.

She says, we are encouraged by this development, but he cautions this isn't over. He says they are going to have to continue to watch the data that is coming in, watch how this cap performs, but very interesting here, he talks about this cap as a temporary measure to be used for hurricanes.

He said the information they are gathering for this says will help them gain a better understanding of options for a temporary shut- in of the well during a hurricane. And he says very plainly here, it remains likely that we will return to the containment process using this new stacking cap connected to the risers to attempt to collect up to 80,000 barrels of oil per day until the relief well is completed.

So, it looks like the plan is to go back to releasing the oil, let it get pumped up to the surface, this new stack allowing them to be much more efficient than they were before capturing all possibly of that oil and taking it up to the surface, where they will be able to quantify once and for all exactly how much oil has been leaking out of there every day.

And Thad Allen again talking about using the cap only as a temporary measure in case of a hurricane, because although ships and containment vessels on the top would have to disconnect and move out of the area, leaving the oil to flow back into the Gulf. So with the cap, if it is successful, that's the time that they will be able to know that they can use this cap for -- to make it essentially hurricane-proof.

And something that I have noticed in talking to Admiral Allen and others involved with this, if you want to see the people closest to this operation, the ones behind it making the decisions, if you want to see them breathing a sigh of relief and maybe slapping each other some high-fives, that's going to come after the seismic tests that are done after these pressure tests are done with this cap.

One those seismic tests are done, that will tell them if there has been any leaking of oil out of the wellbore. If they don't see any oil leaking out under this tremendous pressure, that is when they know this has been a tremendous success, but that is still days away -- Wolf.

BLITZER: Yes, maybe as long as 48 hours, and that takes us into Saturday.

Stand by for a moment, David, because I want to bring in an expert. Don Van Nieuwenhuise is a petroleum expert from the University of Houston who is joining us right now.

I know everyone is excited that no oil is spewing into the Gulf right now, Professor, but how concerned should we be that this is sort of a false excitement?

DONALD VAN NIEUWENHUISE, GEOLOGIST, UNIVERSITY OF HOUSTON: Well, I would not call it a false excitement, but we do have to be cautious because there are a number of steps that still need to be taken obviously to completely kill this well, and bring everything under control.

But one of the issues that is very, very important here is that they do have a way of containing the flow when we actually have a hurricane, and also this cap is going to be instrumental in helping them to ensure that the kill process runs properly.

And the seismic test of course that is coming up is something that is very important, because that will tell them if any oil and gas is actually leaking into layers of the rock, and actually displacing saltwater that would normally be in those rocks with oil and gas and it will be a clear-cut indication that there is a leak, but if they see nothing it will be a very good sign that there is no significant leaking whatsoever in this well.

BLITZER: Because I want to put up on the screen the before and after because it speaks volumes about what is going on right now. On the left hand of the screen we're going to put up the before. On the right part of the screen, you will see what is going on right now, basically.

You don't see any oil. Before the test started, you saw a lot of oil spewing up. As you can see there, that was this morning. Late this afternoon, no oil coming out. But yet we just got this statement from Thad Allen and you heard David Mattingly report it.

He writes -- he says this at the end of the statement: "It remains likely that we will return to the containment process using this new stacking cap connected to the risers to attempt to collect up to 80,000 barrels of oil per day until the relief well is completed." Why would they do that? Why would they reopen the valves and start to contain it on these ships and tankers atop the Gulf of Mexico when it seems to be closed right now?

VAN NIEUWENHUISE: Well, when they actually start producing this oil, they don't actually have to open it up to the sea, because now -- if the test goes fairly well, they will have control of the well, and they can produce as much or as little of the oil as they want.

But one of my gut feelings is that they want to flow this oil well, and actually see what the actual flow rates really are, since we have had a lot of difficulty trying to come up with an accurate estimate. And I'm pretty sure that that would be one critical reason for trying to flow this well to find out exactly what the flow rates are. Now, they can do this without releasing any more oil to the surface if this test is successful.

BLITZER: Because the concern is if you have to still use those containment vessels and there is bad weather, a tropical storm or a hurricane, those ships have to leave, right?

VAN NIEUWENHUISE: The ships would have to leave, but they could shut in those valves again. They could shut in those flow lines and stop the oil flow when those ships are gone.

So, essentially they have control of this well at this point in time, and it is still yet to be seen whether or not they will continue to have control. We don't know if there are significant leaks deep in the well.

There's a couple of weak points at 9,000 feet and one at 17,000 feet that they might be particularly interested in looking at and watching in the seismic. But if this all holds up, and they are able to start producing it, they will have control of this well. They will be able to produce when they want and stop when they want, and we are not going to see much more oil in the Gulf of Mexico, if this test to be successful.

BLITZER: Because Congressman Ed Markey, the Democrat of Massachusetts, keeps raising his concerns about the structural integrity of this well. It could still basically blow up and make this horrible situation even worse. Are you worried about that?

VAN NIEUWENHUISE: I was always worried about this if they were to stop the flow of the oil quickly. In other words, a lot of the folks were thinking, well, you just need to shut it in. If they were to shut this well in quickly, and allow the pressure to spike from 11,000 to say 8,700, 9,000 up at the top, it would be like a train running into a brick wall, and it could have caused significant damage.

They clearly have not done that. They have clearly taken very careful steps in closing this well off. And it's -- I think every minute and every hour that passes without any significant noticeable damage to the bottom of the riser package in the blowout preventer and also the top of the well, as long as that looks good for the next 12 hours or so, there is a good chance that the integrity of the upper part of this well is in good shape, and there would be no reason for concern at that point in time.

BLITZER: Professor, David Mattingly, who has been covering this story from day one, has a question he wants to ask you as well.

Go ahead, David.

MATTINGLY: Yes. Professor, it has been difficult to get anyone to quantify exactly what the risk is deep underground with this well. We know that they have conducted seismic tests.

In fact, when I was out in the Gulf earlier this week, that is what they were doing and it prevented us from actually getting close to the well site. But as they were doing that, they say it gave them the confidence to go ahead, but I am curious, how deep in the ground could there be damage from this heavy pressure that is going on, and what kind of risk are they actually taking with this? Because that would have an effect on the relief well, wouldn't it, once that relief well is dug deeper down.

VAN NIEUWENHUISE: Well, not too much actually, because when you get deeper in the rocks, the confining pressure, the pressure in the rocks, themselves, is also high.

So, when you have the well blowing out from say 17,500 feet, and you have got over 11,000 pounds per square inch pushing on it, if you have a leak at 17,000 feet, which is where one of them could be, if you have a leak there, the pressure is not much less, so the pressure differential is not that great.

So, they are not really concerned about the pipes exploding at this point or blowing up or anything of that nature or even rupturing so much, is that some of the seals may be leaking, and if they are, oil and gas could be getting produced into some of the formations.

And in the short-term, that is definitely not a problem, but if it is allowed to flow for a long period of time, you could get large pockets of oil and gas that could travel miles for example through the formations and perhaps find a weak spot, what we call a fault, in a rock and it could find a pathway to the surface.

So, one of the reasons why you do a kill well is to seal all of these deep leaks that you have in a well so that you don't have to worry about that long-term nagging problem that could be a bad situation down the road.

BLITZER: Based on your expertise, Professor, everything you know as of right now, are we at the beginning of the end of this nightmare?

VAN NIEUWENHUISE: If this test continues positively like it seems to be, I would say, yes, we are getting near the end of the beginning.

And even if they have some difficulty, again, it is very important to realize that they actually have control of this well. And they have control of this well at this point in time, and that is a huge step. It may not be the final answer. There may be additional problems that they have to sort out, but they have now finally after 87 days shown us that they can actually control this beast that has been sending thousands and thousands of barrels of oil to the Gulf of Mexico every single day.

BLITZER: Don Van Nieuwenhuise is the petroleum expert from the University of Houston.

Professor, stand by. We're going to probably come back to you. I just want to make sure you can help us better appreciate what is going on.

Jack Cafferty is also standing by with "The Cafferty File" in just a moment.

And then later, my exclusive interview with BP's chief operating officer, Doug Suttles.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, not a comforting thought. There are thousands of oil wells under the ocean. And we have seen the effects of one going terribly wrong, the economy of the Gulf Coast decimated, fishing and tourism industries crushed.

If the administration's moratorium on offshore drilling is upheld by the courts this time around, thousands of additional people will lose their jobs in an economy already overrun with folks who can't find work.

Drilling for oil at these depths is risky at best and can be disastrous at worst, as we have seen.

But we need the oil, because, for almost 40 years, ever since the Arab oil embargo way back in 1973, this country has failed to develop a coherent energy policy.

We just keep whistling past the graveyard of dependence on the Middle East and on deepwater drilling, waiting for the next crisis, whether it's another blown well, a ruptured pipeline, or war in the Middle East that will interrupt the flow of oil and drive prices through the ceiling.

And it's not a question of whether there will be another crisis. It's a question of when the next one comes and how bad it will be.

But just like with so many of the other challenges that confront our country these days, the government and by extension we the people seem content to live in a world of denial, unwilling to make the tough decisions necessary to make our energy future safer and more secure.

Here's the question, then: How should this Gulf oil spill affect this country's energy policy going forward? Go to CNN.com/caffertyfile. Post a comment on my blog -- Wolf.

BLITZER: I have been hearing all the complaints about the energy independence, the need for energy independence, going -- and you and I are old enough to remember all the long gasoline lines after the '73 war, during the Arab oil embargo, when we started hearing the need for energy independence. We are still hearing it, Jack.

CAFFERTY: Yes. Here we are 40 years -- almost 40 years later talking about the same unsolved issues.

BLITZER: Yes. And I hope it is not going to take another 40 years to resolve this.

(LAUGHTER)

CAFFERTY: Let's hope.

BLITZER: Thank you, Jack. Stand by.

We are continuing to follow the breaking news right now. For the first time in months, there is no oil leaking into the Gulf of Mexico. That is because of a critical test BP is currently conducting on a new well cap.

So, what happens after this test is completed? It should be completed within 48 hours. The national incident commander, retired Coast Guard Admiral Thad Allen, explains the process.

(BEGIN VIDEO CLIP)

ADMIRAL THAD ALLEN (RET.), NATIONAL INCIDENT COMMANDER: ... at the end of 48 hours. We will terminate the test, go back to production with the Q4000 and the Helix Producer, and we'll then evaluate where we're at. That will include most likely another seismic run over the area, this will be -- this will allow us to take a look at the sea floor and actually do sensor testing into the formation to see if there are any areas where there -- pockets of oil may have formed as a result of being forced out of the wellbore.

Just to refresh, because I stated this yesterday, but it's really good for everybody to understand, we have a complete time lapse 4-D map of the area that was conducted before the well was commenced to be dug. There was another seismic run that was done on the 26th of April following the event itself. We did one in advance of this event.

The seismic run was not quite as clear as the original one, because there's a lot of other obstructions out there, all the vessels that are there, and all of the simultaneous operations that are going on. But still, it was good enough for us to understand that there weren't any developments on the sea floor in the formation that would be problematic proceeding with the well integrity tests.

So our goal would be after 48 hours to do another seismic test, and that involves some very sophisticated sensing with some vessels, and our scientific team is working on that right now, so we're going to want to know if we can detect any kind of oil that might be coming up from the sea floor, any methane gas that might be escaping in advance of oil moving forward.

(END VIDEO CLIP)

BLITZER: The man in charge of administering BP's $20 billion claims fund is hearing firsthand from people whose lives have been turned upside down by this oil disaster. Ken Feinberg is holding a series of town hall meetings in New Orleans in the area today.

CNN's Amber Lyon has been covering this story for us.

How is it going, Amber?

AMBER LYON, CNN CORRESPONDENT: Well, Wolf, out here right now, I get the feeling among local shrimpers, fishermen it is cautiously optimistic.

Now, right now, Feinberg is inside this town hall giving a speech to a standing-room-only group of people. And we were able to grab one of those shrimpers out here right now.

Glenn, how are you doing today and what did you think when you first heard that for the first time since the well blew that no oil is leaking out into the Gulf?

GLENN POCHE, FISHERMAN: Well, I feel like I can get back to a little bit of normal and I don't have to roll and no sleep at night. And it is a big relief off of a lot of people and shrimpers. It is a big relief off their chest.

LYON: I see you are wearing a Super Bowl champion shirt. You were telling me earlier it feels almost like the Saints won the Super Bowl again.

POCHE: Same night -- it feels to me like the Saints won the Super Bowl again. That is the feeling right now.

LYON: And what is next? Can you really breathe a complete sigh of relief?

POCHE: Yes. I think I really would feel a lot better when the oil is cleaned up, and the fishermen can go back to work and get back to normal, where we can supply the best seafood in the world. Louisiana products in seafood is the best. Our restaurants will be back in line and we can tell people that we have the best seafood in the world, you know?

LYON: All right, thanks, Glenn.

And as we said earlier, Mr. Feinberg is in there giving a speech right now. He's been touring Louisiana all day long, and he says in three weeks, he is going to take over the claims process. As of now, BP has been handling it, and that is why Feinberg has been nicknamed the $20 billion man. Now, he says when he takes over, the first thing he's going to prioritize is making life easier on these fishermen. As of now, BP has been paying them checks once a month. Feinberg says he wants to dole out six-month lump sum checks -- Wolf.

BLITZER: Wow. All right, good for him. All right, we will watch it together with you, Amber. Thanks very much.

We are going to stay on top of the breaking news.

(NEWS BREAK)

BLITZER: Coming up: a video timeline of how today's oil flow shutdown got under way. Plus, we will go back to New Orleans to get more reaction to the dramatic breaking news.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: For the first time in 87 days, no oil is flowing into the Gulf of Mexico right now. All the oil has stopped. You can see all the dramatic pictures showing no oil spewing out right now.

Just a short time after the oil stopped flowing, we got some important details from BP's chief operating officer, Doug Suttles.

(BEGIN VIDEOTAPE)

WOLF BLITZER, CNN ANCHOR: 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, GLOBAL EXPLORATION, 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 have 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...

SUTTLES: Yes.

BLITZER: ... 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. Do you have any long-range forecasts, because if there were a tropical storm or 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 the storm grows. If you look at history, it says about right now, about middle of July is when the probability starts 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 is why we are 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 that even if we are, or this cap is successful, that containment work will continue. That's important work to continue as a contingency just in case that something were to require to us reopen the well to flow.

BLITZER: BP is committed to staying to helping clean up this mess as long as it takes. Is that right?

SUTTLES: You know, Wolf, we have shown that since the beginning. As of today, we have spent about $3.7 billion, and we have 45,000 people out there working. We are going to be here as long as it takes. We are going to be here for a long time.

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

We taped that interview earlier with Mr. Suttles. All right. Let's dig deeper right now and further appreciate the time line of what has happened today. CNN's Jessica Yellin is standing by with more on this part of the story. Jessica?

JESSICA YELLIN, CNN CORRESPONDENT: Well, Wolf, the oil flow as you've been reporting and as Doug Suttles just explained was shut down in a number of steps, but we want to show you the pictures of the well at each of those stages. First of all as you know, they made sure that the oil flow to the containment ships that were floating on the surface of the ocean that that flow was cut off and then they began the process of shutting down the well. The first picture is at 11:30 a.m. eastern time. This is when they closed the kill line. But there was still more to go. The next picture you see is at 1:30 p.m. eastern time and that's when they closed the choke line, that last valve, and BP said in a tweet at this time, quote, we did it a half turn at a time so that we slowly, slowly closed the well. Once that was complete at 3:25 p.m. eastern, that is when we saw the amazing image, no oil coming out of the well, and that is when BP began what they have been calling the integrity test. As you know, they are measuring to make sure that the pressure stays high in the well, and if it drops, that basically means there is a leak someplace they need to find, and this test is expected to last at least a few more hours and it could go for as long as two days, Wolf.

BLITZER: We may not know until Saturday whether this is successful or not. Jessica, thank you very much. Ed Lavandera is standing by in New Orleans, and we will check in with him to see what is going on there, and what he is hearing from the sources. Also, what today's test does and doesn't do for the president of the United States. Lots happening this afternoon right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We are following the breaking news right now in THE SITUATION ROOM for the first time in some three months, oil from that blown out well is no longer flowing into the Gulf of Mexico. CNN's Ed Lavendara is joining us now from New Orleans with more. We are getting lots of reaction, but update our viewers on what you know, Ed.

ED LAVANDERA, CNN CORRESPONDENT: Well, right now, Wolf, we are in the middle of that first six-hour window of the integrity test, and they have basically told us to think of the next 48 hours and divide it up into six-hour blocks and after each of those six-hour intervals goes by, the scientists and everyone who is watching closely the pressure readings on the integrity test will compare notes and see how to proceed forward. The longer they can sustain the pressure and keep the pressure high and keep the pressure high and steady, the longer this will go on. So the longer this pressure test can keep going, the better off and the better sign that will be. Of course, if things are not going well, it is very possible they can shut it off after six hours. So, in the early primetime hours of tonight, we will get a sense of that first window closing down, and when we see what kind of update we with get from BP officials and from the federal government as well as to how to first block of testing went. That is going to be very interesting to see. We are still several days away and obviously, Wolf, we still are looking at those pictures to make sure that everything is still is sealed up. We will be monitoring closely here in the coming hours, just what kind of response, and it will be fascinating to see what kind of readings the experts and scientists huddled up in the rooms monitoring this constantly, and see what kind of action they take here in the hours ahead.

BLITZER: Are any formal briefings from the BP officials scheduled or are they going to continue to update us as they have over the past several days with these tweets on Twitter where they send out updates, and we are all watching and listening and waiting for them very closely?

LAVANDERA: Yeah, we are still trying to figure that out, Wolf. We have seen on their website that they have promised an update later this evening. This has come in various different forms over the course of the last three months, so it hasn't been consistently done one way, so, you know, we are monitoring all of it, as quickly and as fast as possible so that when the announcements are made, we can pass it along. But they are fully aware as you spoke with Mr. Suttles as well, fully aware of how much interest there is going to be after each of the six-hour windows goes by to see what information they are gleaming from the tests.

BLITZER: Ed, standby, because we will get back to you.

I want to bring in CNN's John King right now. He is the host of "JOHN KING USA" coming up at the top of the hour. Big news day today here in Washington. The Senate does what they have been trying to do for a long time, they pass financial reform, and the white house wanted it and the president made a statement, but it is being overshadowed, I guess as it should by the dramatic news coming out of the gulf.

JOHN KING, CNN ANCHOR: And Wolf it's been a frustrating time politically for the president in the sense that many at the white house feel he is not getting enough credit for things he is getting done and that he's having a hard time breaking through on the issues he wants to talk about, because of the oil spill. The president's approval rating is staying pretty flat for the last couple of months. It's hard to say it's gone up or down because of the oil spill, but the white house wants up to 50 percent or so by the election. That's tough when the country is dominated by a story that is frankly quite depressing. The president was in Michigan today trying to talk about the stimulus plan, trying to sell his economic message. The public is largely skeptical on that point. Again, overshadowed by what the white house hopes is a very positive development. But there's no question, you were talking about this earlier with Ed Markey, there's no question that having these images dominate our national conversation for the past almost three months, if nothing else, puts a break on the administration's efforts to try to change the debate. They are hoping this changes. Now that does not take away high unemployment. That doesn't take away skepticism about the health care plan or anything else, but they would like to have a clearer path to communicate between now and election day.

BLITZER: Well, it is interesting that he gets the economic stimulus package passed. He gets health care reform passed. Now he's gotten the financial reform that Wall Street reform passed, but it does not look like he is getting a lot of credit at least if you look at the poll numbers from the American public.

KING: The white house believes and believes, and we will see if it works that the financial reform is an easier sell, a more positive sell. There is a great deal of skepticism about the health care plan, the public roughly evenly split. The stimulus plan, what the administration believes it should get a lot more credit than it does. Most pollsters in both parties will tell you they're past the point where they can shape the debate. People have settled in whether they like it or not. Financial reform largely the public likes what is in it. Republicans say there's too much regulation, there's too much government. The public likes it overall. The question Wolf in a political environment is at what point do people make up their mind? We are a little over 100 days from the election. Have they already decided they like or don't like this president's agenda, they like or don't like big Democratic majorities, maybe they want to send some Republicans in as a check for the president, but look for the president to pivot to talk about the pieces of financial reform that he wants to tell consumers if you are getting a new mortgage loan, you are protected. If you think that the bank is doing risky investments, you are protected. They want a clearer path to make that case, and they believe that financial reform is cleaner sell, if you will, than stimulus or other pieces of the economic policy.

BLITZER: And how serious is the riff between house Democrats and the white house? Right now, as you know, the Republicans need 39 seats in the house to become the majority and there could be 60 or 70 or maybe 80 seats at play right now, and a lot of the house Democrats think that the white house has not been helpful to them, those in the swing districts.

KING: It is a very serious riff, and it is a very familiar riff. The house always feels it is a stepchild to the Senate. This house has long felt that this president has not paid enough attention to them, but Speaker Pelosi and the leadership team went into the white house last night essentially saying, let's turn the problem into an opportunity. They gave the president a list. They say we need you to do these things. It is in both the president's interest and the house interest to put this behind them. What they want from the president is more fund-raising, more appearances and targeted racing, and less criticism quietly or on the record from the white house on some of the house initiatives. Detente? Will it be peace? I don't know. They have detente today as opposed to this time yesterday.

BLITZER: You're going to have more on that coming up at the top of the hour with "JOHN KING USA." Thank you.

An amazing find very deep under lower Manhattan at the site of the new world trade center that is going up right now has archaeologists very excited.

(COMMERCIAL BREAK)

BLITZER: We are following the breaking news. BP says that there is no oil flowing into the Gulf of Mexico right now, and this is for the first time in 87 days. That is the result of that critical integrity test as it is called on the new cap on the leaky well. The BP chief operating officer Doug Suttles says it is too soon to draw any final conclusions, because the test still is under way, requires another 48 hours. President Obama also is being cautious. He is calling this though a positive sign, saying that he will have more to say tomorrow. BP's stock jumped on word that the oil flow had been cut off and closed at over $38 a share, and that is an increase of more than 7 percent.

No matter what happens next week or the coming days I should say with the leak, there is still a lot of work, enormous work to clean up the mess in the Gulf of Mexico, and a lot of questions about federal oversight. At a Senate hearing today here in Washington, the EPA administrator did not seem to know whether she had the authority to ban or limit the use of oil dispersants. Listen to the tense exchange.

(BEGIN VIDEO CLIP)

SEN. BARBARA MIKULSKI (D), MARYLAND: So, if you said, Admiral Allen, this we are now heading into a danger zone or a flashing yellow light so significant, better be safe than sorry --

LISA JACKSON, EPA ADMINISTRATOR: Yes.

MIKULSKI: -- I want to either ban or limit the use of dispersants, could you have the power to act unilaterally?

JACKSON: I believe so I do, chairman, but I do want my lawyers to get you a response.

MIKULSKI: I know, but that is a question that you needed to know from day one, Ms. Jackson.

(END VIDEO CLIP)

BLITZER: Tense meeting there, there in that hearing, and I am sure she will get the lawyers all over it, and get the answer to the senator very, very quickly.

Lisa Sylvester is monitoring some of the other top stories in THE SITUATION ROOM. What else is going on, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Well, a bizarre twist of fate for thousands of Russians who have drowned in the last week as they tried to escape the summer heat. The Russian emergency's ministry says that children are among the dead in the last two days, but the agency says that the blame lies with inattentive parents. They also say many of the adults who drowned were drunk. Russia's record-breaking heat wave has seen temperatures rise to 105 degrees.

And a New York lawmaker is putting Apple on notice writing a letter to CEO Steve Jobs what he calls insufficient iPhone remedies. Senator Chuck Schumer says that the reception problem should be fixed for free, and Apple should clearly explain the phone's issues. Apple will address the issue at a press conference set for tomorrow.

Intelligence officials say that seven suspected militants have been killed in a U.S. drone strike along the Afghanistan and Pakistan border in Thursday's attacks including three missiles believed to be the 41st U.S. drone attack in the Pakistan's tribal area this year. The military officials have not confirmed the strikes, but the U.S. is the only nation operating in the region known to be capable of firing such missiles.

And feeling a little bit hot under the collar these days? Well, you have a good reason to. Scientists say that the world was a little over a degree warmer in June than the 20th century average which was about 60 degrees. And where was it obviously hotter? Well, researchers say Peru, the Midwest and east coast of the United States along with eastern and western Asia. I know folks here on the east coast would certainly agree with that, because it has certainly been a hot June, Wolf.

BLITZER: It happens in the summer. It gets hot especially here in Washington, D.C. All right. Lisa, thank you very much.

By the way, there is another way to follow what is going on here in THE SITUATION ROOM. You can go to twitter and read my tweets, and go the CNN.com/WolfBlitzercnn, all one word.

Let's go to Jack right now. He's got the Cafferty file. Jack?

JACK CAFFERTY, CNN CORRESPONDENT: The question this hour is how should the gulf oil spill effect this country's energy policy going forward?

We got this is from Gary who retired from Texaco. "My opinion is it shouldn't effect it at all. The gulf is where the oil is. One mistake probably because of somebody's cost saving idea on the rig overrode safety which caused it to happen and can never be allowed again. This has been a wake-up call for everybody, the government and the oil companies alike. To abandon oil drilling in the gull is to defeat America's attempt at energy independence. Offshore drilling simply needs to be done with more attention to procedures by all parties involved, simple as that."

Sal writes, "We should consider the spill as divine intervention. We are oil addicts. We need to begin taking the methadone of green energy."

Richard in California writes, "Even without the oil disaster the country should be going full steam ahead to get ourselves off oil. Will we do any better now that we have had the disaster? Are the oil company stooges in Congress still there? There will be no change that the oil companies do not want."

Carl in San Francisco writes, "It ought to be the shot heard around the world. Historically, oil came from wells drilled in god forsaken places we never heard of or could pronounce the name of and their rulers all wore robes and turbans and had 100 Rolls Royces each. Gas was 25 cents a gallon. Now thanks to short-sighted thinking we're drilling in places that never ought to be considered safe to drill, obviously."

Andrew writes in Amherst, New York, "Two things ought to come out of this. One, we should be less dependent on oil as a nation and, two, this should prove the need to drastically increase our hydro and nuclear power supplies. I mean, even the French get something like 80 percent of their power from nuclear power plants. And they're the French."

You want to read more about this? Go to my blog, CNN.com/Caffertyfile.

BLITZER: If you want to read more about this go to lemon? I wasn't sure where you were going.

CAFFERTY: Don't get bi-lingual on me.

BLITZER: Thank you very much.

Work is now under way on a new world trade center to replace the one destroyed on 9/11 and crews excavating the site have made a surprise discovery, the remains of an 18th century ship buried deep under lower Manhattan. CNN's Mary Snow is working this amazing story for us. Explain what you've learned.

MARY SNOW, CNN CORRESPONDENT: This really is amazing, Wolf. This is a site where construction is under way for what will eventually be an underground security center for vehicles and workers unearthed the hull of a wooden ship.

(BEGIN VIDEOTAPE)

SNOW: At the construction site at ground zero a rare find, remnants of the ship dating back to the 18th century. We were allowed to climb down 25 feet to the site and see first hand what archeologists stumbled upon Tuesday.

MOLLY MCDONALD, ARCHAEOLOGIST, AKRF: Two timbers pulled up by a back hoe and immediately thought that looks like a ship timber so we stopped the back hoe and started excavating with shovels and uncovered a portion of this hull and since then have uncovered the rest that you see.

SNOW: What we can see is believed to be half of a ship. Marine historian Norman Brouwer was brought in to take a look.

NORMAN BROUWER, MARINE HISTORIAN: It appears to be an ocean going vessel and probably at some time in the 1700s. It's heavily built, very solid frames, close together.

SNOW: One mystery, the circular structure that Brouwer says may have been used as a fire place. An anchor was also recovered. How significant is this find?

MCDONALD: I mean, I think it remains to be seen, you know, what this ship really is, but it's pretty significant. I think it's pretty exciting. There haven't been that many ships found in Manhattan, you know, it was something that occasionally ships were used as part of land filling so it probably was part of filling in this land so it's not unheard of.

SNOW: Because of the history here archeologists have been monitoring the construction site. The Wildlife Conservation Society shows just how much of lower Manhattan was underwater hundreds of years ago in its project. Compare that to now.

ELIZABETH MEADE, ARCHAEOLOGIST, AKRF: Mostly it just tells us about the landfill structure of this particular area and how they were reusing things like old boats to build out the land because the shore line was originally at Greenwich street bat block that way.

UNIDENTIFIED FEMALE: Where we're standing now at one point was just the Hudson River.

MEADE: Hudson River, yeah.

SNOW: The site is just south of where the world trade center towers once stood. This rare relic, hidden for more than 200 years.

MEADE: This is the kind of thing that archeologists are always hoping to find and very rarely actually do.

(END VIDEOTAPE)

SNOW: As you might imagine, the remnants of this ship are very fragile. Workers are continuing to excavate it, collecting samples to study it. The hope is that parts of it will wind up in a museum. Wolf?

BLITZER: Mary Snow, thanks very much for that.

By the way, this isn't the first ship found under lower Manhattan. In 1982 another 18th century ship was unearthed a few blocks away along the eastern water front. Other finds include an African burial ground with hundreds of graves uncovered back in 1991. It's now the site of a national monument. In 2005 digging in the new subway tunnel under Battery Park revealed a large section of an impaired fortress protecting 17th century columns.

Now that he's engaged, Levi Johnston is leaving a lot of broken hearts behind. CNN's Jeanne Moos has a most unusual look when we come back.

(COMMERCIAL BREAK)

BLITZER: Here is a look at some Hot Shots coming into THE SITUATION ROOM. In Indonesia, an activist dressed as a protest or protests against deforestation. Take a look at that. In Pakistan, women walk past a wall decorated with graffiti. In China, paramilitary soldiers race to temporarily dam a flash flood. In France, onlookers dressed as cowboys wave at the American flag during the tenth stage of the tour de France. Hot shots, pictures worth a thousand words.

Not everyone is happy that the former bachelor Levi Johnston is now officially off the market. CNN's Jeanne Moos finds all of this most unusual.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT: She is hart broken over news of the engagement between Bristol and Levi. No, not Sarah Palin. We mean Kathy Griffin.

KATHY GRIFFIN: My lover, Levi. I woke up this morning in your arms spooning.

MOOS: So what if she made it all up? Her imaginary affair with Levi is part of her comedy stick with her playing off his Vanity Fair photo shoot on the ledge of a building.

LEVI JOHNSTON: I was all harnessed up. It was a little scary.

GRIFFIN: We're going to recreate that later tonight at my place.

MOOS: Or going ice fishing with Levi.

JOHNSTON: Right here.

GRIFFIN: Ah!

MOOS: As part of her life on the "d" list reality show.

GRIFFIN: Holding Levi close I realized this is where I'm meant to be for three days. And then get the [ bleep ] out of here.

MOOS: Now she is forced to hear Levi gushing about his fiancee Bristol and their baby.

JOHNSTON: I love them both very much.

MOOS: No wonder Kathy Griffin has posted her suffering on her website.

Poring over Levi's "Playgirl" spread while listening to a tear jerker by Celine Dion.

Ripping out Levi's pictures. But Kathy Griffin wasn't the only one thrown for a loop. This cover is how Levi's own sister and mother discovered that he's engaged to Bristol Palin. In a post entitled "who needs coffee when you wake up to news this shocking" Levi's sister blogs about how her crying mother woke her up with the cover of "US Weekly" on her laptop. Not exactly the image I wanted to come face to face with when I first opened my eyes. There seems to be bad blood between the Johnston's and the Palins. The Johnston's still want to be invited to the wedding. Levi's mom told "Inside Edition" don't leave us out of it. That would kill me. But it's not just women mourning the news that Levi is getting married.

UNIDENTIFIED MALE: I think Levi is really hot. I'm pretty jealous, major crush.

MOOS: Levi may be hot but Kathy Griffin is already moving on to another hottie, Taylor Lautner from the "Twilight" films. Levi, you dog, how could you just dump her?

GRIFFIN: I'm going to be looking in his beautiful chocolate eyes all night and waiting for magic to happen.

UNIDENTIFIED FEMALE: What about you?

JOHNSTON: The same thing.

MOOS: A man of few words but "I do" will apparently be among them.

Jeanne Moos, CNN. New York.

(END VIDEOTAPE)

BLITZER: Remember you can follow what's going on in THE SITUATION ROOM, among other ways, we're on Facebook. Go to facebook.com/CNNsituationroom to become a fan. I'm Wolf Blitzer in THE SITUATION ROOM and "JOHN KING USA" starts right now.

KING: Thanks, Wolf. Good evening everyone. Tonight breaking and hopeful news from the Gulf of Mexico.