For the Capital Region, the Deepwater Horizon oil spill has unfolded on national television, newspapers and websites, but not in our backyards. If you live here, chances are your life hasn’t been dramatically altered in the past three months.
But Rob Walker, who runs wholesaler Louisiana Seafood Exchange on Lakeland Park Boulevard, already has seen the mere idea of oily seafood affect his bottom line.
“I used to think I was the Teflon seafood guy, and I could hold out longer than anybody and say my glass was half full,” he says. “I’m coming to terms with it. We are definitely feeling the lack of demand for this seafood right now.”
Walker’s voice rises in frustration as he explains that 70% of the Gulf of Mexico is unaffected by the oil spill, and the state has been diligent in keeping seafood that is potentially tainted from reaching the market. But consumers inundated by bad news are starting to assume all gulf seafood can’t be trusted, and retailers are responding by cutting their orders. Walker’s sales in early July were down at least 15% compared to last year.
He points to a July 1 report that said researchers might have found oil in crab larvae. The scientists were unsure if the orange globs actually were oil, or if the spill had anything to do with their findings. But a Google search several days later revealed 10 pages of alarming headlines like “Gulf oil enters food chain” that made no mention of the uncertainty. Walker suggests his own headline: “Media hasten gulf seafood industry’s demise.”
“It’s been awful for [outsiders’] perception of everywhere in Louisiana,” Baton Rouge Area Chamber President/CEO Adam Knapp says. “It’s like the Katrina effect all over again. Everybody thought we were underwater. Now everybody thinks everybody’s covered in oil.”
BRAC will be conducting some familiarization tours this fall for site-selection consultants, Knapp says, which will be a good opportunity to show them that Baton Rouge’s economy largely has been unaffected by the spill and the resulting offshore drilling moratorium.
From an economic perspective, however, state officials are far more concerned about the controversial moratorium, which applies to any deepwater floating facility with drilling activities, than they are with the spill itself. But the impact will be much greater on Houma and Lafayette, cities closely tied to offshore oil exploration, than on Baton Rouge.
“If you walk outside [in Baton Rouge], would you know there was a spill?” economist Jim Richardson says.
The concern for Baton Rouge is more long-term and indirect: If moratorium opponents lose their battle in the courts, and the ban on new drilling continues for six months or more as industry officials fear, the impact on the state’s fiscal picture could be dramatic. State government and two public universities are big employers, so cuts to the budget could lead to job losses.
“Everybody is so dependent on the energy industry in Louisiana,” Lt. Gov. Scott Angelle says. “Eighty percent of our general fund money goes to educate, medicate or incarcerate.”
If the oil industry takes a hit, he says, college professors, schoolteachers and bus drivers all could feel the impact.
“I really think it’s only going to deal us a glancing blow,” economist Loren Scott says, “and that is through the budget.”
But one person’s crisis is another person’s opportunity.
For example, some Baton Rouge travel agencies are picking up business by scheduling alternative plans to replace canceled trips to the Alabama and Florida gulf coasts. Some local attorneys will be involved in the inevitable litigation, although most of their clients will be from coastal parishes. One Baton Rouge attorney says he’d had discussions with locals who own property in Grand Isle and Venice.
LSU recently received a $5 million grant from BP, which operated the ill-fated Deepwater Horizon, for its $500 million Gulf of Mexico Research Initiative. Several LSU experts have received national media attention during the spill, and the university played host to a conference June 3 on the response and impact of the disaster.
“We ought to work toward becoming a 21st-century energy institution overall,” LSU Chancellor Michael Martin says. “There is an opportunity for us to build on the expertise we have to become an international center for addressing issues like this.”
Consumers have noticed higher prices for shrimp and oysters, and some restaurants are substituting crawfish in their shrimp dishes to save money. Louisiana Lagniappe owner Kevin Ortego says his price for a gallon of oysters has doubled, while peeled shrimp prices have increased 35% to 50%. Those costs are starting to be reflected on the menu; his price for an oyster platter has gone from $16 to $20.
“We’ve had more questions about where our seafood’s coming from and what we are serving than we’ve ever had,” he says. “But our June was the best June we’ve ever had, and we are predominantly seafood.”
But the prices Ortego reports paying might soon come down.
Walker, the seafood wholesaler, says the cost on some items spiked in mid-May; earlier this month, his shrimp supplier slashed prices in response to the weak demand. Walker usually buys at least half a truckload of shrimp per week, but he says he hadn’t placed an order in two weeks because he was sitting on product he couldn’t sell.
At some point, Walker might have to start selling more out-of-state and foreign seafood than he’s selling now. He wonders what will happen to Louisiana restaurants if they no longer serve fresh, indigenous soft-shell crabs or oysters. But while Walker might have to lay off some of his staff if demand doesn’t pick up, he’s not worried about his survival.
“I’m here,” he says, “for the long haul.”
