Transcripts

Hurricane Gustav Is Threatening More Than Just The Gulf Coast

PAUL KANGAS: President Bush declared a state of emergency in Louisiana today, ahead of hurricane Gustav's likely arrival on the Gulf coast early Tuesday. Many oil companies are evacuating employees off rigs and platforms and cities along the Gulf are ready to evacuate residents. As Jeff Yastine reports, Gustav is also causing jitters hundreds of miles from the coastline.

JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: The storm is what Gulf coast residents are most worried about, the driving winds and rain that pounded Jamaica as Gustav passed over the island. The storm is expected to enter the Gulf of Mexico this weekend and the projected path would take it right through the heart of the Gulf's offshore oil production area. That led to a volatile day in the New York oil pits with prices rising more than $3 a barrel in early trading. They finished the session down $0.13 at $115.46 a barrel. Nymex trader Ray Carbone says oil traders are now weighing Gustav's potential impact against the bigger picture for oil.

RAYMOND CARBONE, OIL & GAS TRADER, PARAMOUNT OPTIONS: Demand was in its ascendancy in 2005. Right now it's been slackening and I think people are putting some faith in that slackening demand to moderate the price rise if something happens. I think it's a mistake but I think that's the mentality going into this.

YASTINE: In Louisiana, residents watched Gustav with caution as they marked today's third anniversary of hurricane Katrina. New Orleans Mayor Ray Nagin said evacuations would begin when the storm is within 60 hours of the city. In Mississippi, FEMA Administrator David Paulison tried to reassure residents his agency won't make the mistakes it made in 2005.

DAVID PAULISON, FEMA ADMINISTRATOR: What we're seeing is a totally different type of response than what we had in Katrina. We have shifted the culture, if you will, of the emergency management system, from a reactive to a proactive system.

YASTINE: Mississippi's booming casino business is also poised to take a hit from Gustav. Most casinos now operate onshore gaming rooms after Katrina's storm surge sank or beached the original floating casino barges. But high gas prices, a weak U.S. economy and competition from other gaming venues are already hurting Mississippi's casino business. Now economists say Gustav, expected to be a category three storm by the time it makes landfall next week, could dim the big picture for the region's economy, after three years of post-Katrina rebuilding. Jeff Yastine, NIGHTLY BUSINESS REPORT, Miami.