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Gulf Coast oil spill could wreck region's tourism and fishing industries

By Peter Whoriskey
Thursday, June 3, 2010; A05

The gargantuan blob of light Louisiana crude floating in the Gulf of Mexico has already closed oyster beds, shut down shrimpers, cancelled fishing tournaments and panicked beach hoteliers from New Orleans to Key West.

But the economic impact of the nation's worst ever oil spill may be just beginning.

With the vast majority of the oil floating offshore, where it will land and whom it will affect have become a guessing game fraught with worry. Wherever the oil goes, it threatens to obliterate billions of dollars for the region's tourism and fishing industries.

"It's like waiting for a hurricane to hit," said Mike Voisin, owner of Motivatit Seafood, which harvests oysters from the gulf. "We don't know where it will go. Every day we look at the forecasting maps."

"We're praying hard," said Ed Schroeder, director of the tourist bureau in Pensacola Bay, Fla., where people are wishing away an oily sheen about 10 miles off the coast.

A report of tarballs on the beach led the news in the local paper last week, though it is uncertain whether the tar came from the spill. "If we were picking a time for something like this to hit, it wouldn't be now," Schroeder said. "Our season just started."

At stake are industries that employ tens of thousands of people and generate billions of dollars in economic activity for coastal areas stretching hundreds of miles. Beyond fishing and tourism, the offshore oil business is likely to feel the effects soon, too, as some exploration halts under a federal moratorium, analysts said, and new safety measures are required.

"It's clearly going to make deep-water exploration more costly," said Edward Morse, a Credit Suisse oil analyst. "My rough estimate is that it will have at most a 10 to 15 percent increase in costs developing crude from deep water."

For gulf regions from Texas to Key West, commercial fishing contributes $1 billion to GDP, tourism and recreation contribute $13 billion, and oil and gas contribute $11 billion, according to figures from Charles Colgan of the National Ocean Economics Program.

Shrimp boats idle

As the slick slides toward Mississippi, Alabama and Florida, the damage could spread.

At the Mariah Jade Shrimp Company in Chauvin, La., Kim and David Chauvin have watched as the closing of about a quarter of the gulf to fishing has made the flow of shellfish to their dock just a trickle. The company has three of its own shrimping vessels, which have been enlisted to help contain the spill.

"Our dock is pretty much closed," said Kim Chauvin, 42. "At this point, we are going to be looking for other jobs. . . . What's really scary is wondering how much marine life will be left when this is all over."

The direct impact of the oil on Louisiana's oyster beds has been minimal, Voisin said, but the precautionary closures of the beds are taking a big toll on his business, which is down about 50 percent.

Moreover, he said, the news coverage has made diners wary of gulf shrimp and oysters, once prized by connoisseurs.

"We're beginning to have people ask, 'Where is that seafood from?' And if it's from the gulf, they ask for the buffalo wings and the steak."

Though the majority of seafood consumed in the United States is imported, the gulf region accounts for about a fifth of the nation's oyster production and more than 75 percent of the domestic shrimp output, according to Moody's.

The consequences for tourism could be even greater, analysts say, particularly if the oil begins washing up to the east, especially in Florida. The economies of coastal towns and cities from Bay St. Louis, Miss., to the Florida Panhandle depend on summer beach vacationers and could be devastated.

Rust-colored oil washed ashore on barrier islands off Alabama and Mississippi on Tuesday, and residents and business owners are bracing for more.

The tourism and recreation industries in the gulf could take substantial hits from the oil spill, said Colgan, a professor at the University of Southern Maine and the author of a study on the Gulf Coast economy.

"The headlines alone have scared people off," he said, warning that predicting the spill's impact remains difficult at best. "There's a drive to give this disaster dimensions. But this is uncharted territory. None of us who have studied these things over the years have any experience in deep-water events of this size."

'Can they cut it off?'

Reports of tarballs last week in Key West drew news crews, though the balls proved unrelated to the Deepwater Horizon gusher. But the attention highlighted the anxiety along the coast.

"My everyday worry is, when are they going to cut off the flow -- and can they cut it off?" said Jim Meadlock, owner of the Perdido Beach Resort, a 346-room hotel in Alabama.

For now, public perception of the risk poses as much of a problem as the actual impact.

In Panama City, Fla., the tourist development board is spending $800,000 on television and billboard advertising to assure the public that the beaches are clean. Each day, officials transmit a date-stamped picture of the beach to electronic billboards in the Southeastern cities from which their visitors tend to come. The county is getting $1 million in money from BP, and that will be used to pay for the ads, officials said.

"Today's forecast: Clear waters and clean beaches," the billboards say.

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