A Study of the Economic Impact of the Deepwater Horizon Oil Spill

A Study of the
Economic Impact of
the Deepwater Horizon
Oil Spill
Prepared for
By
OCTOBER 15, 2010
• Part One – Fisheries
• Part Two – Moratoria
• Part Three – Brand Damage

Contents
Acknowledgements........................................................................................................................... 4
Executive Summary........................................................................................................................... 5
Chapter 1: Oil Location and Composition ........................................................................................... 8
A. Dispersion of Oil Following the Deepwater Horizon Rig Explosion ......................................................8
B. Impact of the Loop Current ................................................................................................................10
C. Oil Composition—What Happens Over Time .....................................................................................11
Unique Dispersion Characteristics of Deepwater Spills.................................................................12
Surface vs. Deepwater Spill: A Comparison of Oil Fate/Composition ...........................................13
D. Critical Factors ....................................................................................................................................14
E. Modeling Oil Dispersion and Movement............................................................................................15
Modeling Oil (Hydrocarbon) Concentration ..................................................................................15
Comparison to Other Sources and Previous Spills.........................................................................16
Chapter 1 Takeaways..............................................................................................................................17
Chapter 2: Impact of Oil on the Commercial Fisheries’ Revenues.......................................................19
A. Overview of Commercial Fisheries in Louisiana .................................................................................19
B. Scientific Effects of Oil on Common Louisiana Seafood Species ........................................................21
Oysters ...........................................................................................................................................21
Shrimp............................................................................................................................................22
Blue Crabs ......................................................................................................................................23
Finfish.............................................................................................................................................23
Yellowfin Tuna................................................................................................................................24
Black Drum.....................................................................................................................................25
Menhaden and Striped Mullet.......................................................................................................25
C. Potential Effects on Louisiana Seafood Species from “High Concentrations” of Oil..........................25
D. Projection of Effects from “High Concentrations” of Oil on Louisiana’s Seafood Landings...............27
Annual Adult Loss Ratios................................................................................................................27
Percentage of Expected Landings Losses.......................................................................................28
Total Projected Volume and Revenue Losses................................................................................30
Chapter 2 Takeaways..............................................................................................................................31
Chapter 3: Economic Impact of Fisheries Revenue Losses and BP Claims............................................33
A. RIMS II Analysis of Economic Losses Due to Impacts on the Fisheries, 2011 – 2013.........................33
B. Impact of BP Claims and Vessel of Opportunity Funds on the 2010 Economy and Beyond ..............35
Chapter 3 Takeaways..............................................................................................................................39
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
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Chapter 4: Focus Group Study on Future Opportunities for LA Fishermen..........................................40
A. Profile of the Typical Fisherman’s Financial Situation........................................................................40
B. Focus Group Study Overview..............................................................................................................41
C. Methodology ......................................................................................................................................42
D. Findings...............................................................................................................................................42
General Perception and Understanding of the Disaster................................................................43
Work and Skills...............................................................................................................................44
Current employment with BP or elsewhere............................................................................44
Current skill sets ......................................................................................................................44
Repurposing boats...................................................................................................................45
Retraining and pursuing new opportunities ...........................................................................46
Age of fishermen and its impact on perceived opportunities.................................................47
Limited-English proficiency and citizenship issues..................................................................48
Relocation to pursue different opportunities .........................................................................49
Oil Spill Response...........................................................................................................................49
Possible claims packages.........................................................................................................49
Debt forgiveness......................................................................................................................50
Boat buy-back programs .........................................................................................................50
Fisheries subsidy programs and aquaculture..........................................................................51
Focusing on clean-up and coastal restoration ........................................................................51
E. Summary Analysis and Recommendations.........................................................................................52
Appendix A: Focus Group Questionnaire...........................................................................................54
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Acknowledgements
Greater New Orleans, Inc. is grateful to all who participated in this project. Most importantly, Innovative
Emergency Management, Inc., Headwater Capital Consulting and Jeremy Stone were instrumental in all
aspects of data collection and analysis. We appreciate the assistance of the Environmental Defense
Fund, specifically Oluseyi Fayanju for his critical economic impact analysis, as well as Timothy Fitzgerald
and Paul Harrison. Ewell Smith with the Seafood Marketing and Promotion Board; Albert “Rusty” Gaude
with the Louisiana State University Agricultural Center; Joshua Abbott with the School of Sustainability
at Arizona State University; and David Lavergne, Randy Pausina, and Joey Shepard at Louisiana
Department of Wildlife and Fisheries all contributed to the success of this project. We are grateful for
Seedco Financial’s assistance with the fishermen’s profile, and the critical work of Sandy Nguyen with
Coastal Communities Consulting and Tuan Nguyen with Mary Queen of Vietnam CDC. We are grateful
for numerous Southeast Louisiana fishing associations, including Lake Ponchartrain Fishermen's
Association, Louisiana Oystermen Association, South Plaquemines United Fisheries Cooperative, United
Commercial Fishermen's Association, Shrimp Task Force, Louisiana Shrimp Association, and Commercial
Fishermen of America. We acknowledge the valuable contributions of over seventy individual fishermen
who gave of their time, energy and stories to this undertaking. This project was funded by the Economic
Development Administration, U.S. Department of Commerce, with additional support from Chevron
through the Greater New Orleans, Inc./Chevron Coastal Vitality Project.
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EXECUTIVE SUMMARY
Greater New Orleans, Inc. is pleased to present this Economic Impact Analysis assessing the
economic effects of the recent Deepwater Horizon Oil Spill Disaster in the Gulf of Mexico on fisheries.
Greater New Orleans, Inc., a regional economic development organization, embarked on the process of
estimating the impact of the Deepwater Horizon Oil Spill just weeks after the initial, tragic rig explosion
triggered the largest oil spill in U.S. history. One of the major lessons of Hurricane Katrina is the
importance of early and accurate economic analysis. Such documentation strengthens the ability of
decision makers to ensure appropriate and timely recovery. This study is the first part in a three-part
series, intended to provide base-line information, coupled with advanced methodology about the
economic impacts of the Deepwater Horizon Oil Spill.
We recognize that the economic impacts of this oil spill are shaped by diverse and unprecedented
market changes. This project represents the first part of Greater New Orleans, Inc.’s three-part
economic impact analysis of the Deepwater Horizon Oil Spill Disaster, with studies on the Federal
Deepwater Drilling Moratoria and damage to the Louisiana Brand to follow.
While comprehensive data is still widely unavailable, this study presents a timely overview of the oil
spill’s composition and location at the time of publication; approximate financial impact of the spill on
commercial fishing revenues; an economic analysis that takes into account these losses as well as claims
payments and employment offerings from BP; and finally quantitative data from a recent fisheries focus
group study. Economic impact in this study is based on assumptions about the direct ecological impacts
of the oil spill as known to us nearly six months after the Deepwater Horizon oil rig explosion and does
not take into account the widespread changes in seafood consumption habits.
Moreover, this report offers a methodology by which to assess the economic impacts of the oil spill as
new information becomes available. Our combination of qualitative and quantative data emphasizes the
importance of involving lived experiences of workers and communities in affected areas of the Gulf
Coast. As more data becomes available we expect our final results to be challenged; however, we intend
the study to be a useful starting point for future analysis of this unprecedented disaster.
The Context
Originating with the Deepwater Horizon oil rig explosion, the Deepwater Horizon Oil Spill Disaster began
April 20, 2010 and released approximately 4.9
million barrels as it ran until June 13, 2010. The
effects of these events will be felt for years to
come.
The spill caused excessive damage to surrounding
ecosystems and fisheries with ecological impacts
still unfolding. Louisiana has always been a state
that relies on the ocean’s bounty for sustenance
and income; prior to the spill it provided the U.S.
with 30% of its domestic seafood. Our examination
of the economic impact takes into account the size
and location of the spill, the projected ecological
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
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harm to the fisheries, the payments by BP, and the day-to-day realities of local fishermen, to provide the
reader with comprehensive, up-to-date analysis.
Principal Findings
1) Diverse clean-up
methods are used
Various ecological and
anthropogenic clean-up
methods worked to
decrease oil concentrations
during and after the spill.
Combined with natural
processes, we estimate that
clean-up efforts limited the
oil concentration in
Louisiana’s estuaries to be
between 10 and 50 parts
per billion (ppb), while
concentrations at the well
head were measured to be
The various possible outcomes
or “fate” of the oil particles
following release from a
deepwater well. This figure
does not take into account
anthropogenic activities.
1 to 2 parts per million (ppm). Though the Deepwater Horizon oil well has been capped, currents and
storms may still change the oil concentrations on Louisiana’s shores. The long-term effects of these
concentrations are still unknown but have the potential to be ecologically devastating.
2) Possibly significant effects on early life stages of studies species; Revenue effects seen next two
years
Based on published research, we predict these oil concentrations will mostly affect early lifecycles of
commercial fish species and, possibly, the reproductive success of adults. The most affected species
include shrimp, crab, oysters, and menhaden. The primary effects, in terms of fishery revenues, will be
felt in the first two full years after the oil spill (three years, in the case of oysters, due to freshwater
diversion effects). Future studies regarding the causes of wide-spread fish kills in areas affected by the
oil spill will complement these predictions. Losses will be concentrated in communities with critical
masses of fisheries, resulting in disproportionate impacts in the coastal areas of the Greater New
Orleans region. In the past decade, communities in these areas have faced numerous hardships
including Hurricanes Katrina, Rita, Gustav, and Ike; decreasing seafood prices; land loss; and deforestation.
The impact of the Deepwater Horizon Oil Spill would be challenging in and of itself;
however, it builds on historical adversities.
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Projected Impact Scenarios for Revenue Losses in Louisiana Commercial
Fisheries
$180,000,000
$160,000,000
$140,000,000
Total includes three years shown. Estimates are
based on predictions of ecological impacts of
the Deepwater Horizon Oil Spill and do not take
into account changes in seafood demand.
$120,000,000
$100,000,000
$80,000,000
$60,000,000
$40,000,000
$20,000,000
$0
$88,835,512
$74,029,593
$59,223,674
$56,459,735
$47,049,779
$37,639,823
$27,349,741
$22,791,451
$18,233,161
$172,644,988
$143,870,823
2011 2012 2013 Total
Year
$115,096,658
High
Medium
Low
3) Some fishermen may benefit from BP claims and employment; related industries may suffer
The BP claims process and the Vessel of Opportunity program are providing some boat captains and
deckhands with temporary income. Due to changes in activities, from fishing to oil clean-up, this income
may not “trickle down” to distribute throughout all components of the affected industries, such as
docks, seafood processors, distributors, and equipment suppliers. These payments and incomes may
help to mitigate the overall negative economic effects of the spill in some areas.
4) Lifelong fishermen face few employment options following Vessel of Opportunity program
According to data from focus groups with 75 Louisiana
fishermen, BP employment has been lucrative and compelling,
provided one was able to obtain a contract. Once these
contracts are completed, few fishermen plan to leave the
industry. Should job transfer become necessary, few
commercial fishermen believe they hold many transferable
skills. Successful job training programs should focus on technical
skills linked closely with job placement and incorporate ESL
classes when applicable.
5) Further research is necessary to examine long-term ecological effects and market demand
This document is based on predicting the economic impact of short-term ecological damage. While our
study shows that these effects may not be catastrophic, or even as harmful as we expected, it must be
understood that there are many factors contributing to this unprecedented event. This study examines
the economic repercussions of short-term ecological changes and short-term BP claims payouts and
clean-up contracts. It does not take into account long-term ecological effects, which are still unknown;
nor does it take into account the impact on the Louisiana Seafood “brand.” Further research is needed
to examine the long-term ecological impacts of exposure to oil concentrations and dispersant chemicals,
as well as the impact on the fishery industry of decreased consumer demand for seafood.
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Chapter 1: Oil Location and Composition
In evaluating the impacts the oil will have on the Louisiana and the Greater New Orleans region’s
economies and fisheries, it is important to understand what areas have been and could be contaminated
by oil. Oil contamination in waters, in marshes, and on shorelines is a key factor driving the severity of
the effects.
This chapter focuses on the composition and dispersion of oil along the Louisiana Gulf Coast. In
compiling this information, we used data and modeling results from the National Oceanic and
Atmospheric Administration (NOAA), the Naval Research Laboratory, the National Center for
Atmospheric Research (NCAR), the University Corporation for Atmospheric Research (UCAR), and the
University of South Florida. We also gathered data from the HYCOM Consortium, a group of 23
government labs, university research groups, and private companies working together to develop and
evaluate an ocean model called the Hybrid Coordinate Ocean Model, or HYCOM. Their work is
sponsored by the National Ocean Partnership Program.
A. Dispersion of Oil Following the Deepwater Horizon Rig Explosion
Numerous government and university scientists have made estimates of the oil slick location during the
time the oil was flowing. The National Oceanic and Atmospheric Administration (NOAA) produced
surface oil trajectory maps from April 22, 2010 to August 23, 2010. Figure 1 shows the trajectory
prediction for July 1, 2010, a day with some of the greatest amounts of visible surface oil. Figure 2 shows
the surface oil trajectory the day the final cap was placed on the well, successfully stopping the flow of
oil.
Figure 1: NOAA trajectory map for surface oil resulting from the Deepwater Horizon Oil Spill.
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Figure 2: NOAA trajectory map for surface oil resulting from the Deepwater Horizon Oil Spill. The reduction in the amount of visible surface oil
can be attributed to natural and anthropogenic clean-up efforts as well as increasing amounts of oil settling below the surface.
Currents and water temperature are important for determining where the oil is expected to go at any
given point in time. NOAA and the HYCOM Consortium agreed that the loop current (which typically
flows from the Gulf around the tip of Florida and up the East Coast) played a significant role in directing
the flow of surface oil. As of mid-July 2010 it had pinched off to form several large eddies that were
carrying the water—and the oil in it—around in circles within the Gulf rather than carrying it to the East
Coast. This led to an expectation that little or no oil would reach the East Coast based on the direction
and speed of surface currents.
Despite the capped well, oil has continued to move—a recent wave came ashore in Louisiana on the
West Bank of the Mississippi River. Approximately three miles of shoreline were affected on the eastern
side of Barataria Bay in the Bay Jimmie, Bay Wilkerson, and Bay Baptiste areas 1 . This may have been an
isolated incident as EPA's surface water samples collected September 16 and 17, 2010 along the Gulf
Coast did not reveal elevated levels of chemicals usually found in oil. Additional analysis of water
samples collected along the Gulf Coast on September 16 and 17, 2010 did not detect levels of dispersant
chemicals above the reporting limit 2 . The Lake Pontchartrain Basin Foundation’s weekly oil spill report
for September 27, 2010 reads: “Approximately 104 miles of Gulf Coast shoreline is currently
experiencing moderate to heavy oil impacts- approximately 94 miles in Louisiana, 9 miles in Mississippi
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and one mile in Florida. Approximately 483 miles of shoreline are experiencing light to trace oil
impacts.” The most recent NOAA maps through the end of August 2010 show no visible surface oil.
B. Impact of the Loop Current
The loop current flows northward between Cuba and the Yucatan Peninsula, loops northward into the
Gulf of Mexico, then east and southward through the Florida Straits. The loop current slowly changes
shape and strength over several months. At times the current flows nearly directly from Yucatan around
Cuba. Over time, it grows northward and may approach Louisiana in the vicinity of the Deepwater
Horizon wellhead. Eventually the loop pinches off to form a circular eddy and a new shortened current.
Sometimes, an eddy may rejoin with the loop current rather than dissipating. During its typical lifecycle,
the loop current grows northward into the Gulf and sheds an eddy which dissipates as the current grows
northward again.
NOAA has been studying water currents in the Gulf and tracking the location of the loop current since
shortly after the start of the spill. On April 22, when the spill began, the loop extended far northward
into the Gulf, coming within about 60 miles of the spill site. About a month after the start of the
accident, a counter clockwise eddy formed near the northeastern part of the current and caused the oil
slick to tend to move in circles rather than being carried toward the Florida Straits. Around May 24, a
large eddy, called Eddy Franklin, started to “pinch off” from the loop current. As of July 26, 2010, Eddy
Franklin is more than 100 miles from the nearest oil associated with the spill. 3
NOAA analysis indicates that there is no clear way for the oil to be transported to Southern Florida, the
Florida Keys, or along the East Coast of the United States, unless the loop current fully reforms with
Eddy Franklin or moves northward, neither of which is likely to happen within the next few months. 4
Beyond the current NOAA analysis, predicting the long-term path of the oil with any accuracy is
problematic, due to limited data and limitations of current state-of-the-art models for ocean
circulations. The task shares some of the familiar uncertainty associated with predicting the track of a
hurricane in the Gulf. Winds, which are also a major factor in determining where the oil will go, cannot
be predicted accurately beyond several days in advance.
While several modeling analyses and studies 5 over the past few months have attempted to provide
some indication of the long-term trajectory of the spill, the results currently are subject to many
variables, assumptions, and uncertainties. Based on historical data, some of these predict that a certain
percentage of the oil could get caught up in the Gulf Stream and carried into the Atlantic. 6 However,
given the closed loop currents now in the Gulf, we expect the amount of oil carried into the Atlantic to
be minimal.
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Figure 3. The loop current and current eddies in the Gulf of Mexico as of July 26, 2010 (Source: NOAA)
C. Oil Composition—What Happens Over Time
In most major oil spills, oil has been leaked onto the surface of water or land, rather than deep
underwater. For example, in 1989 the Exxon Valdez oil tanker ran aground on the Bligh reef in Prince
William Sound, Alaska. The damaged tanker leaked more than 10 million gallons of crude oil onto the
surface of the water in Prince William Sound. 7 Most oil spills are very similar to this, with tankers
running aground in 35–65 feet of water approximately 2–3 miles offshore. When the tanker spills its oil
onto the surface of the water, the thick oil slicks are typically washed ashore.
In contrast, the Deepwater Horizon Oil Spill Disaster had oil gushing into the Gulf of Mexico from
damaged well casings approximately one mile beneath the surface of the water and about 48 miles from
the nearest shore. Oil behaves very differently so far under the water, where it is subjected to colder
temperatures and higher pressures than on top of the water.
This section explains what happens to the composition of the oil as it is released in deep water. It
discusses how long the different types of oil (top-water slicks, tar balls, underwater plumes, etc.) will be
present in the water and on the areas of land they reach, which were identified in the previous section.
How long the oil is present will influence the timeframe that the GNO region and Louisiana are impacted
by the contamination.
In analyzing what happens to the oil over time, we used only those models that were designed for
deepwater oil spills. There are very few models of this kind, as most are designed for the more common
spills on the water’s surface. We also drew information from academic journal articles. We gained
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valuable information from actual experiments conducted by SINTEF off the coast of Norway. SINTEF is
the largest independent research organization in Scandinavia. They focus on research in technology,
natural sciences, medicine, and social sciences that contributes to sustainable environments. In SINTEF’s
experiments, oil was released over 800 meters below the water’s surface and the outcomes were
observed and measured, significantly improving our understanding of deepwater oil spills.
Publicly available literature on modeling of deepwater oil spills is very limited, and journal articles that
were available were not detailed enough for us to incorporate into our model. However, we were able
to capture the main premises of the studies and apply them to our models.
Unique Dispersion Characteristics of Deepwater Spills
In the Deepwater Horizon Oil Spill Disaster, the extreme pressure and temperatures at 5,000 feet
underwater immediately act on the oil and begin breaking it up into tiny oil particles that can range from
the width of a human hair to the length of an average red ant. Most of these oil droplets will remain
suspended in the water while a small percentage float to the top and form thin oil slicks.
In turn, the oil particles or droplets can undergo a number of different outcomes:
Biodegradation—The oil droplets can be biodegraded or devoured by bacteria that reside in the
Gulf of Mexico.
Mixing/Sedimentation—After some time, the oil droplets can also mix with organic material in the
ocean and fall to the ocean floor through sedimentation.
Oil Slicks—A small percentage of the oil droplets float to the top of the water and form thin oil
slicks.
Evaporation/Photolysis—From the oil slicks, parts of the oil will evaporate or be broken down by
the sun in a process called photolysis.
Emulsification—Mixture of water with the oil slick can produce emulsions of water-in-oil called
“mousse” because of its consistency.
Landfall/Beaching—Oil slicks and mousse can drift toward the shore and become beached. Oil
stranded on the beach can be physically removed or recovered by clean-up crews.
Shore Sedimentation—After some time, oil that remains on the shore will sink under the shore’s
surface and become sedimentation.
These processes are illustrated in Figure 4.
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Figure 4. This figure depicts the various possible outcomes or “fate” of the oil particles/droplets over time
following release from a deepwater well.
Surface vs. Deepwater Spill: A Comparison of Oil Fate/Composition
When an oil spill occurs from a wrecked tanker, all of the oil is typically released and floating on the
water’s surface within hours. Evaporation and photolysis break down the oil components, but act only
on a small portion of the floating oil. Natural dispersion of the oil slick is a slow process which eventually
leads to biodegradation by marine bacteria and sedimentation. As the floating oil slick becomes beached
on the shore, the oil can be manually recovered and disposed, or it can filter into the sediment. Within
months, there is no more floating oil, and the breakdown process of the oil takes years.
In contrast, when oil is released deep under water, as with the Deepwater Horizon Oil Spill Disaster, it is
immediately dispersed due to extreme pressure and temperature at the release depth. It takes
approximately one hour before some oil droplets float to the water’s surface and form an oil slick. At
any given time, the percentage of oil that is floating on the surface is very small, probably less than 20%
of all the oil that has been spilled. In the Ixtoc I spill off the coast of Mexico (a sub-surface spill at
approximately 130 feet), some scientists estimated that less than 5% of the oil was within the top 60
feet of the water column. Evaporation and photolysis act on the floating oil in the same manner as a
surface spill. Biodegradation of the dispersed oil by marine bacteria begins much earlier in a deepwater
spill and is expected to destroy more oil than in a surface spill. Once the oil slick becomes beached on
shores, recovery and disposal of the oil as well as sedimentation can occur in the same manner as in a
surface spill.
Given what we know about what happens to the composition of oil over time for a surface spill, we can
estimate what will happen to the composition of oil from a deepwater spill. Figure 5 shows the
percentages of the different oil compositions we would expect to see at Day 100 of the oil spill and again
at Day 1,000.
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Figure 5. This figure depicts the expected distribution of fate oil over time from a deepwater spill. Because so
much of the oil is dispersed early in the process, biodegradation is facilitated. This figure does not take into
account the use of dispersant chemicals.
A recent federal report 8 indicates that about 75% of the oil spilled from the Deepwater Horizon has
evaporated, biodegraded, or been skimmed or burned. However, many members of the scientific
community have criticized these numbers as overly optimistic.
D. Critical Factors
The ultimate fate or composition of the spilled oil and its impact on the GNO region will be influenced by
several factors, some of which are either currently unknown or cannot be controlled by humans. These
factors include duration of the oil spill, human responses, and natural processes.
Duration of the oil spill clean-up efforts is difficult to determine as the volume of oil released is
unprecedented, considering most spills release a finite amount of oil in a short period of time (as in the
case of a tank rupture). The oil well began erupting oil on April 20 th and continued until June 15 th , a
period of 86 days, releasing 4.9 million barrels of oil into the ocean. The Deepwater Horizon well wasn’t
declared “effectively dead” by the federal government until September 19, 2010.
Human responses can help to speed up the recovery process from the oil spill. Recovery and disposal of
oil that becomes stranded on the shoreline can help the physical removal of oil. Dozens of private boats
were deployed to locate and report oil, and other boats were skimming oil. Chemical dispersants, the
subject of some controversy during clean-up efforts, have been used to break oil into small droplets,
which are more easily consumed by bacteria.
Ironically, nature—one of the principal victims of the oil spill—may play the largest role in the recovery
process. For instance, biodegradation of the spilled oil by marine bacteria may be responsible for the
largest proportion of the recovery process. Experiments have shown that marine bacteria can eliminate
30%–50% of oil within weeks.
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In addition, storms and hurricanes in the area of the oil spill would help to disperse the oil on the
water’s surface, and we saw evidence of this after Tropical Storm Bonnie moved through the Gulf of
Mexico on July 25, 2010. However, this dispersal mechanism includes an additional threat: hurricane
storm surge would be capable of carrying oil inland as far as the surge reaches, and debris washed up by
the surge could be contaminated with oil.
Analysis of currents and model results predict the ocean currents will eventually flush much of the oil
away from the waters off Louisiana rather than allowing it to remain in the release area indefinitely.
How quickly the oil will be flushed depends on the current and weather patterns that occur over the
next several months.
E. Modeling Oil Dispersion and Movement
To understand how the oil may impact marine life, we first had to determine how the oil was dispersing
and moving through Gulf waters over time. To accomplish this, we developed an oil dispersion model
that was patterned after one developed in 2003 by Dr. Pavel Tkalich, Principal Research Fellow at the
National University of Singapore’s Physical Oceanography Research Laboratory. 9 Tkalich’s model
simulates emulsified oil, particulate oil, and dissolved oil and their interaction between the oil slick on
the water’s surface and the deposition of oil particles onto the ocean floor. Our implementation of
Tkalich’s model included modifications to accommodate for a deepwater spill.
Movement of the oil is influenced by complex ocean currents, which our model did not include. We
were, however, able to leverage modeling results produced by the University Corporation for
Atmospheric Research (UCAR), which predict the movement of oil from the Deepwater Horizon Oil Spill
over the course of 132 days. 10 The UCAR model results were beneficial because they model the ocean
currents and show different possibilities for the oil transport by ocean currents and the dilution of the
oil concentration over time. We overlaid the results of our dispersion modeling and the UCAR model to
identify the movement and dilution of the oil concentration.
Modeling Oil (Hydrocarbon) Concentration
To understand how the oil will impact marine life, we also had to identify where the highest
concentrations of oil (or hydrocarbons) were expected to be, as higher concentrations of hydrocarbons
are more toxic. Because the oil is being spilled into Gulf waters about 5,000 feet below the surface,
higher concentrations of hydrocarbons, and therefore higher toxicity, are found near the bottom of the
ocean. Near the water’s surface, the levels of hydrocarbons and toxicity are much lower. 11
Figure 6. The highest concentrations of oil are 3,000 to 5,000 feet under the surface of the water (represented by
darker color), creating the highest levels of toxicity in this area.
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In our model, we assumed that 60,000 barrels of oil were released each day from April 20 to July 16
from the wellhead of the Deepwater Horizon. The model shows that the oil quickly becomes dispersed
in the water column and is carried by ocean currents, creating underwater plumes of oil that have been
detected by researchers.
Integrating results from our oil dispersion model and the UCAR model suggests that the maximum
concentration of oil (total hydrocarbons) that would have entered Louisiana’s estuaries after 100 days of
continuous spillage is likely to be in the range of 10-50 parts per billion (ppb). This is a conservative
estimate, since, like similar models, our model does not account for evaporation, biodegradation, or
physical removal of oil. However, according to EPA guidelines for risk to aquatic and human health,
these levels are not likely to impact human or marine life.
This concentration includes an adjustment factor for oil reaching the top 20 meters of the water column
from the wellhead. Biodegradation by microbes and evaporation of the oil that reaches the water’s
surface were not included in the concentration estimates but would reduce the estimates further. While
our concentration estimates are conservative, these concentrations are still not likely to impact human
or marine life.
Comparison to Other Sources and Previous Spills
Our current estimates for total hydrocarbon concentration from the Deepwater Horizon Oil Spill Disaster
match what is being reported by federal agencies, and fall into the range that has been observed in
other documented oil spills.
There have only been a few reports documenting the concentration of oil in the water column from the
Deepwater Horizon Oil Spill Disaster. On July 2, there were reports of underwater plumes of oil. The
highest concentration was detected at depths near the wellhead and reported as approximately 0.5
parts per million (ppm). Oil concentrations were undetectable beyond six miles from the wellhead and
near the water’s surface. 12 An interagency Joint Analysis Group (JAG) comprised of scientists from the
National Oceanic and Atmospheric Administration (NOAA), the Environmental Protection Agency (EPA),
and the White House Office of Science and Technology Policy issued a report 13 on June 23 that identified
concentrations of only 1-2 parts per million (ppm) at depths of 3,300-4,600 feet near the wellhead and
confirmed that oil concentrations were below detection limits in other locations and near the surface.
Surface water collected by the EPA to date along the Gulf Coast has not been found to have compounds
exceeding EPA guidelines for risk to aquatic life or human health. 14 Generally, this means that the water
samples tested contained less than 1 part per billion (ppb) for each individual substance of interest.
Surface water levels, however, may not indicate concentration on the sea floor.
These findings mirror those of other oil spills. For example, oil concentration was reported for the oil
spilled from the tanker Amoco Cadiz off the coast of France on March 16, 1978. The Amoco Cadiz ran
aground approximately 1.5 nautical miles from shore and spilled its entire contents of approximately 1.6
million barrels over a period of 14 days. This rate of oil spill corresponds to roughly 117,000 barrels per
day or approximately twice the rate of oil escaping the BP wellhead. Tests of the contaminated waters
during the first three weeks immediately after the spill revealed total hydrocarbon concentrations of 20-
150 ppb. By the end of July, 1978—four and half months after the spill occurred—the pollution level had
dropped to 1-3 ppb, which has no significance in terms of pollution. 15 One month after the Prestige oil
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
16

tanker sank off the Galician coast in 2002 and spilled its oil, the total hydrocarbon concentrations were
1-30 ppb. Other oil tanker spills, including the Baltic Carrier, Exxon Valdez, and North Cape, have
resulted in similar patterns of hydrocarbon concentrations ranging from 50 ppb to less than 1 ppb. 16
Chapter 1 Takeaways
Although the amount of oil leaked from the Deepwater Horizon well may be in the hundreds of
millions of gallons, due to natural dispersion patterns during and after the spill, the maximum
concentration of oil in Louisiana’s estuaries is likely to be between 10 and 50 parts per billion (ppb).
According to EPA guidelines for risk to aquatic and human health, these levels are not likely to
impact human or marine life. However, with concentrations at the well-head measuring between
1.0 and 2.0 ppm, there may be a continuum of polluted water between the well-head and
Louisiana’s shores which could affect the lifecycles of commercial fish species. For the sake of this
analysis, we will consider “high concentrations” of oil in coastal waters as a range of 0.05 to 2.0
ppm.
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
17

1 The Times- Picayune. September 11, 2010 “New Wave of Oil Comes Onshore West of the Mississippi River.”
http://www.nola.com/outdoors/index.ssf/2010/09/new_wave_of_oil_comes_ashore_w.html
2 Environmental Protection Agency. “EPA Response to BP Spill in the Gulf of Mexico: Coastal Water Sampling.”
http://www.epa.gov/bpspill/water.html
3 NOAA, Shoreline Threat Update, Southern Florida, Florida Keys and East Coast Deepwater Horizon/BP Oil Spill,
July 30, 2010 (Downloaded from
http://response.restoration.noaa.gov/topic_subtopic_entry.php?RECORD_KEY%28entry_subtopic_topic%29=entry
_id,subtopic_id,topic_id&entry_id%28entry_subtopic_topic%29=815&subtopic_id%28entry_subtopic_topic%29=2
&topic_id%28entry_subtopic_topic%29=1)
4 Id.
5 Mathew Maltrud, Synte Peacock, and Martin Visbeck. 2010. On the possible long-term fate of oil released in the
Deepwater Horizon incident estimated by ensembles of dye release simulations. Environmental Research Letters.
Expected 2010 publication; NOAA, Shoreline Threat Update, accessed Jul. 16, 2010 (available at
http://response.restoration.noaa.gov/dwh.php?entry_id=815); University Corporation for Atmospheric Research
(available at http://www2.ucar.edu/sites/default/files/news/images/features/2010/oilspill2nolanl.jpg); University of
Hawaii at Manoa, School of Earth Science and Technology, The long-term fate of the oil spill in the Atlantic,
accessed Jul. 16, 2010 (available at http://www.soest.hawaii.edu/soest_web/soest.gulf2010_longterm.htm);
6
University Corporation for Atmospheric Research (available at
http://www2.ucar.edu/sites/default/files/news/images/features/2010/oilspill2nolanl.jpg) See also University
Corporation for Atmospheric Research, Oil Spill Animations (available at http://www2.ucar.edu/news/oil-spillanimations-multimedia-gallery).
See also University of Hawaii at Manoa, School of Earth Science and Technology,
The long-term fate of the oil spill in the Atlantic, accessed Jul. 16, 2010 (available at
http://www.soest.hawaii.edu/soest_web/soest.gulf2010_longterm.htm)
7 Exxon Valdez oil spill, Wikipedia (available at http://en.wikipedia.org/wiki/Exxon_Valdez_oil_spill)
8 National Oceanic and Atmospheric Administration, Federal Science Report Details Fate of Oil from BP Spill, Aug.
4, 2010 (available at http://www.noaanews.noaa.gov/stories2010/20100804_oil.html)
9 Tkalich P, Huda K, and KYH Gin, 2003.A multiphase oil spill model.Journal of Hydraulic Research. 41(2):115-
125.
10
University Corporation for Atmospheric Research: Oil Spill Animations (available at
http://www2.ucar.edu/news/oil-spill-animations-multimedia-gallery)
11 Reed, Mark, Øistein Johansen, Henrik Rye, NarveEkrol, IvarSingsaas, Per Daling, and Per Johan Brandvik,
Deepwater Blowouts: Modeling for Oil Spill Contingency Planning, Monitoring, and Response, Proceedings of the
1999 International Oil Spill Conference, Seattle, WA. API Publication No. 4686.
12 National Oceanic and Atmospheric Administration, Administration’s Joint Analysis Group Releases First
Scientific Report on Subsea Monitoring data from Gulf Spill, Jun. 23, 2010 (available at
http://www.noaanews.noaa.gov/stories2010/20100623_brooks.html)
13 National Oceanic and Atmospheric Administration, Joint Analysis Group: Review of R/V Brooks McCall Data to
Examine Subsurface Oil, June 2010 (available at
http://www.noaa.gov/sciencemissions/PDFs/JAG_Report_1_BrooksMcCall_Final_June20.pdf
14
U.S. Environmental Protection Agency, Coastal Water Sampling (available at
http://www.epa.gov/bpspill/water.html; data and data table available at
http://www.epa.gov/bpspill/data/water_update_part2.pdf)
15 L Laubier. 1980. The Amoco Cadiz oil spill: an ecological impact study. Ambio 9(6):268-76.
16 Gonzalez et al. 2006. Spatial and temporal distribution of dissolved/dispersed aromatic hydrocarbons in seawater
in the area affected by the Prestige oil spill.Marine Pollution Bulletin. 53:250-59.
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
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Chapter 2: Impact of Oil on the Commercial Fisheries’ Revenues
In this chapter, we identify the effects that oil may have on seven economically significant marine
species—shrimp, oysters, blue crab, yellowfin tuna, black drum, striped mullet, and menhaden. We
include projections of how long it may take for each species to return to their pre-spill levels to support
Louisiana’s commercial fishing industry as they have in the past.
To predict recovery time for marine life in the Gulf, we used published models and the best available
data, including rates of marine life recovery observed in previous oil spills, such as the 1989 Exxon
Valdez spill in Prince William Sound, Alaska. Our initial estimates should be viewed as approximations
based on available data. A full assessment of the impacts on fisheries will not be possible for several
years because many of the effects may not be apparent in the short term. However, these initial
estimates are valuable in helping policy makers evaluate potential courses of action.
A. Overview of Commercial Fisheries in Louisiana
Together, shrimp, oysters, blue crab, yellowfin tuna, and menhaden represent the top five species in
terms of Louisiana landings revenue. Black drum and striped mullet were included in this analysis at the
request of fishermen’s associations and other organizations that could benefit from this information.
Together, these seven species contributed approximately 93% of 2008 Louisiana seafood revenue, as
shown in the Figure 7. 17 The oil spill’s impact on these species is a significant driver of economic losses
for the GNO region and Louisiana.
Figure 7. The seven marine species that are the focus of this analysis
made up about 93% of 2008 Louisiana seafood revenue.
These species are economically important to all five Gulf states, but Louisiana typically leads all Gulf
states in landings for each species, except striped mullet, as shown in Figure8.
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
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Figure 8. These images compare the total size of 2008 landings (in millions of pounds) for each of seven key
fishery species across the five Gulf states. Louisiana, represented by the leftmost section of each image, led the
Gulf states in every category except striped mullet.
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
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B. Scientific Effects of Oil on Common Louisiana Seafood Species
In order to make reasonable predictions of future landings, population dynamics models are necessary.
These population models estimate the impact that contaminants like oil may have on eggs and larvae
and the subsequent population sizes in the years that follow. These models typically include
assumptions on growth rates, natural movement patterns, natural mortality rates, loss due to fishing,
and assumptions about reproduction rates. Future analysis of these issues should include the kind of
detailed population models that were beyond the scope and timeframe of the current analysis.
To understand the potential effects on larvae and eggs, data on water quality samples need to be
obtained through a long-term, frequent water quality monitoring effort. The EPA’s water quality and
sediment sampling programs will be useful in this regard. If feasible, consideration should be given to
initiating studies of growth and development of key species’ larvae and sexually immature individuals in
current and future seasons. These studies would inform population dynamic models to help policy
makers best manage long-term recovery of Louisiana fisheries.
In the short term, however, we will look at how oil impacts different seafood species and the effect of
possible oil concentrations on species lifecycles.
Oysters
Anchored to their reefs, oysters cannot move to escape oil-contaminated waters. They filter, or
“breathe,” 50-100 gallons of water per day 18 and, as a result, they can bioaccumulate toxins present in
the water. The concentration of oil expected to kill 50% of animals exposed for a 96-hour exposure is
referred to as the “LC50” for that specie. The LC50 for mature oysters is approximately 300 ppm over 96
hours, making them one of the more resistant adult marine species. 19 Oyster eggs and larvae, however,
can be killed with much lower concentrations of oil (approximately 0.1-1 ppm).
In 2010, the first of two annual spawning seasons for Louisiana oysters occurred around late May. With
oil hitting some estuaries in late May, oyster eggs that were released during spawning and floating on
the water’s surface were in potential danger. Even a light layer of sheen could coat the eggs and cause
them to sink to the soft bottom, where they would die. Furthermore, toxins from the oil and the
dispersants could kill the larvae. 20
While mature oysters are highly resistant to the lethal effects of oil, they can accumulate toxic
compounds from the oil and become “tainted” and dangerous for humans to consume. An example of
oyster tainting occurred in 1978 when the Amoco Cadiz ran aground off the coast of France. Spilled oil
contaminated the shores and the oyster reefs. In this case, authorities considered oysters that had an
average value of 60+20 ppm (wet weight) to be tainted and could not be sold for human consumption.
As a result, approximately 6,000 tons of tainted oysters were destroyed. While some oyster reefs were
able to be used the following summer, other reefs could not be used until the second year after the oil
spill. 21
Additionally, oysters can only survive in waters within a narrow salinity range of 25-31 parts per
thousand (ppt). They cannot survive in open ocean water, which has a salinity of 35 ppt. 22 Since April 25,
2010, Louisiana state officials opened the flow of fresh water from the Mississippi River in an effort to
keep oil out of the estuaries. Reports in July, however, indicate that the influx of 30,000 cubic feet of
fresh water has decreased the salinity of the water and has caused widespread oyster deaths on
Louisiana reefs. According to Earl Melancon, an oyster expert at Nicholls State University, due to salinity
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
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changes, this year’s oyster production is considered a loss. Beyond the loss of this year’s oyster harvest,
the survival of the oyster reefs has been jeopardized by the effects of the fresh water and by potential
oil contamination. If an oyster reef is lost, Melancon stated that it will take a minimum of three years to
get it back into production, and it could take as long as five years. 23 Three years is a best-case scenario
that assumes the oyster reefs and surrounding area are not fouled by oil. If the oyster reefs are
contaminated by oil, their recovery cannot begin until the surrounding waters are suitable to sustain the
oysters and the other marine life that are important to the oyster ecosystem. 24
Shrimp
The major species of shrimp for the Louisiana shrimp
industry are brown shrimp and white shrimp. Similar
to oysters, adult shrimp are somewhat resistant to
the lethal effects of oil, with an LC50 of
approximately 30 ppm. However, shrimp eggs and
larvae are highly sensitive to oil.
The spawning season for white shrimp typically
occurs between April and June, 25 with shrimp eggs
being carried by the ocean currents offshore where
the larvae hatch and grow. Unfortunately, the
spawning season for white shrimp coincided with the
Deepwater Horizon Oil Spill Disaster, jeopardizing
next year’s shrimp class. The brown shrimp follows a
similar life cycle, but its spawning season occurs
primarily from January until March. 26 The amount of
oil present offshore will be affected by ocean
currents and weather conditions (storms and
hurricanes), and thus, it is currently unclear how
much oil from the Deepwater Horizon Oil Spill
Disaster may still be present offshore during the
brown shrimp spawning season.
We can draw some information on the potential
recovery of shrimp following an oil spill from the
2002 Prestige incident. The Prestige oil tanker broke
up and sank 250 miles off the shores of Northwestern
Spain on November 19, 2002. Approximately 380,000
Figure 9. White shrimp eggs and larvae were in the Gulf
of Mexico between April and June, potentially
jeopardizing this year’s shrimp class. (Graphic Source:
Louisiana’s Sea Grant College Program; Illustration by
Ken Varden)
barrels of oil were spilled from the tanker and affected more than 500 miles of the Northwestern
Spanish coast. 27 One year after the incident, the number of Pandalid shrimp caught was only a small
fraction of the catch prior to the oil spill. Two years after the incident, however, the shrimp landings
returned to pre-spill levels. 28 The magnitude and duration of the Deepwater Horizon Oil Spill Disaster
could, however, lead to a more prolonged recovery time for shrimp landings.
Management of the shrimp population is challenging because they are a short-lived species, with an
average life span of 1.5 years. If the larval class were severely impacted by the oil, more pressure is on
the remaining adult shrimp to help restock the population. Thus, the short lifespan of shrimp may
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
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equire more stringent controls on catch limits, a shorter shrimping season, or a ban on the entire
shrimping season to allow the shrimp to repopulate.
Blue Crabs
Adult blue crabs are more resistant to the effects of
oil than mature shrimp with an estimated LC50 of
approximately 70 ppm over a 96-hour exposure.
Blue crab larvae, like the larvae of other marine
animals, are highly sensitive to oil exposure. Blue
crab eggs are released near the shore, and after
hatching, larvae are carried out into open waters by
ocean currents. The larvae typically spend 40-70
days in open waters before moving back into the
estuaries. Blue crab larvae were in ocean waters
from March until past June and could have
encountered oil from the Deepwater Horizon Oil
Spill Disaster. In fact, scientists observed oil
droplets on blue crab larvae at the beginning of
July. This is not surprising given the fact that
approximately 40% of the area where crab larvae
were found has been affected by oil. 29
The exposure of blue crab larvae to oil puts this
year’s larvae in jeopardy. Blue crabs are a shortlived
species, with a typical life span of 1–2 years. In
order to rebuild a depleted blue crab population,
stringent catch limits, closed areas, or closed
seasons may need to be implemented.
Figure 10. Blue crab larvae were in ocean waters from
March through June and could have encountered oil
from the BP spill. Approximately 40% of the area where
crab larvae were found has been affected by oil.
Finfish
Unlike the oyster, shrimp, and blue crab populations, adult finfish are able to swim away from oilcontaminated
waters. In June, fish and rays were observed congregating in great numbers off an
Alabama pier, apparently trying to avoid the oil. 30 Fish larvae, however, cannot move away from the oil
and are highly susceptible to the toxic effects of oil-contaminated waters.
Data from other oil spills have demonstrated that fish landings experience a dramatic decline following
an oil spill, and we investigated the potential cause for the decrease. The published concentration of
hydrocarbons in the water following previous oil spills is much lower than the LC50 for fish, so it is
unlikely that decreased landings were due to adult fish having been directly killed by the oil.
Data from the 2002 Prestige oil spill in Spain suggests that fish actively moved away from oilcontaminated
water. The coastal region of Spain impacted by the oil experienced a decrease in hake (a
member of the cod family) landings to about 10% of normal, but hake landings dramatically increased
about 70 miles northeast of the oil-impacted region. 31 These findings suggest that the hake moved to
avoid the oil. The four-spot megrim (a deepwater flat fish similar to flounder) also demonstrated a
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
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similar pattern as the hake. Historically, bottom trawl surveys for megrim in the region show that fish
spawned in a given year represented the most abundant fish class the following year, with abundance
decreasing in the years that follow (see Figure 11, red line). Survey data following the Prestige oil spill
showed a different abundance pattern for the fish spawned the year prior to the oil spill (see Figure 11,
black line). 32 The year of the oil spill, abundance decreases, but the following year, abundance increases.
This increase in relative abundance in the year following the oil spill suggests that the megrim were not
directly killed by the oil spill, but moved away to avoid the oil and returned the following year.
Figure 11. Survey data following the 2002 Prestige oil spill in Spain showed a decrease in abundance the year of
the spill, but an increase in relative abundance the following year. This suggests that fish are not directly killed
by an oil spill, but move away to avoid the oil and return the following year.
The data from the Prestige oil spill suggest that decreases in fish landings following an oil spill are
primarily due to fish movement rather than direct lethal effects of oil. Experimental studies have also
demonstrated that minnows actively avoid aromatic
hydrocarbons in the water. 33 Another possible explanation is
avoidance of oxygen depletion in the seawater which can
happen when marine microbes consume and degrade oil
droplets in the water column. Laboratory experiments have
demonstrated that estuary fish such as spot and menhaden
actively avoid oxygen-depleted waters. 34
Yellowfin Tuna 35
The life cycle of the yellowfin tuna is quite different than that
of the other fish in this study. While the other fish generally
live in and near the estuaries and spawn offshore in open
waters, yellowfin tuna live and spawn in open waters, with
the larvae feeding closer to shore. The spawning season for
yellowfin tuna in the Gulf of Mexico typically occurs between
May and August in the open waters of the Gulf. 36 This
spawning season directly coincides with the Deepwater
Horizon Oil Spill Disaster, which could jeopardize the
spawning season, as well as the eggs and larvae of the
yellowfin tuna.
Figure 12. Yellowfin tuna’s spawning season
in the Gulf occurs between May and August in
the open waters of the Gulf. Because it
coincides directly with the BP oil spill, this
could jeopardize the yellowfin tuna spawning
season as well as their eggs and larvae.
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
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The exposure of yellowfin tuna larvae to oil puts this year’s larvae in jeopardy. The longer lifespan of
yellowfin tuna (an average of seven years) means that the population is not as sensitive as some of the
other species to negative impacts on a single larval year.
Black Drum 37
The life cycle of black drum fish is similar to that of blue crabs and shrimp. Black drum spawn from
January to April, 38 releasing their eggs to hatch and develop into larvae in the open waters of the ocean.
This timeline puts the black drum larvae at risk of exposure to oil from the Deepwater Horizon Oil Spill
Disaster. Black drum are a long-lived species where individual fish can live up to 40-58 years. It is unlikely
that aggressive fishery management would be necessary for black drum.
Menhaden and Striped Mullet
Though menhaden represents the second largest landings revenue for Louisiana, many people are not
familiar with the species because it is not a sport fish or typically consumed by people. Menhaden are
small fish that typically serve as a bait fish, fishmeal, fish oil, protein for animal feeds, and as fertilizer.
The spawning seasons for menhaden and striped mullet begin around October and end by March, 39 so
these spawning seasons have not yet been affected by the oil spill. It is unclear where the oil may still
persist and at what concentrations in the fall during the beginning of menhaden and striped mullet
spawning season.
The fishing season for menhaden in Louisiana typically runs from April until October and occurs primarily
in state fishing waters. With the fishing closures due to the oil spill, much of the menhaden fishing
season has already been lost and may be non-existent this year. The fishing season for striped mullet
runs from October to December, so there is still a chance that fishermen can land striped mullet this
year if all fishing closures are lifted by the fall.
Menhaden are a short-lived species, with a typical life span of 1–2 years. If the oil in the Gulf is
persistent and impacts the menhaden spawning season, which starts in the fall, a sizeable proportion of
the menhaden larval class could be lost. Due to its short lifespan, an appreciable loss in the larval class
could force federal and state authorities to consider management strategies to prevent overfishing of
menhaden in 2011.
C. Potential Effects on Louisiana Seafood Species from “High Concentrations” of Oil
The ultimate effects of oil exposure on marine life are dependent on the following variables:
• Species affected
• Stage of life of the species
• Oil concentration in the water
• Duration of exposure
To recap, oysters and crabs are more resistant than finfish and shrimp to the effects of water
contaminated with oil. The concentration of oil expected to kill 50% of animals exposed (LC50) for a 96-
hour exposure is approximately 70-300 ppm for crabs and oysters, approximately 40-70 ppm for
menhaden and drum, and approximately 30 ppm for shrimp. 40 The eggs and larvae of marine animals
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
25

are typically more sensitive to the toxic effects of oil-contaminated water, with LC50 estimates of 0.1-1
ppm for larval stages of both fish and crustaceans. 41
Understandably, higher concentrations of oil and longer durations of exposure create more serious
consequences to marine life. However, while high levels of exposure to oil in the water (due to
concentration or duration) can lead to lethal effects, lower exposure levels can have non-lethal effects
that reduce the rate of growth or reproductive rate. Physiological or behavioral changes may be induced
in adults exposed to 10-100 ppb, depending on the species tested, and as low as
1-10 ppb in larvae. 42
When comparing these levels with the possible “high-concentration” levels of oil as described in Chapter
1 (from 0.05 ppm to 2.0 ppm), we can project what effects oil from the Deepwater Horizon Oil Spill
Disaster may have on each specie. The following chart compares the figures from Chapter 1 with those
from this chapter:
Figure 12. Possible effects on marine species and larva from different concentrations of oil. These estimations do not take
into account the use of dispersant chemicals.
The “red zone” in the continuum above represents concentrations that are higher than any measured
from water contaminated by the Deepwater Horizon Oil Spill Disaster. Our estimates suggest that no
adult species are likely to be killed, even though the concentration of oil in the water may induce fish
and other marine life to flee. The “yellow zone” represents the range of levels found in high
concentration areas of oil, and suggests that larval death for all species may occur, as well as potential
non-lethal effects for adults. This does not mean that half of all larvae will die – if the specie’s larva is on
the strong end of the scale (i.e. only dying at 0.8 ppm) while the oil concentration in that area is lower
(i.e. 0.4) then it might survive. However, it would still experience non-lethal effects that would affect its
health and reproduction through adulthood. Thus, the “green zone” demonstrates that any adult or
larva passing through the high-concentration areas of oil described in Chapter 1 will at the very least
experience non-lethal effects.
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From this analysis, we can see that it is highly unlikely that adults of the Louisiana seafood species have
been dying from seawater with high oil concentration. On the other hand, these levels of concentration
have most likely had a severe impact on eggs and larvae, which could jeopardize this year’s larval class.
Also, while exposure may not kill some of the marine life, the sub-lethal effects could reduce both
reproduction and growth rates. Another secondary impact of oil is the potential reduction in the food
source used by different marine species.
Based on the available data, the timing of each marine species’ spawning season, and their average
lifespan, we identify oyster, shrimp, blue crab, and menhaden as the species that may be affected the
most by the oil spill. The death of oyster reefs caused by the influx of fresh water may require 3–5 years
to fully recover, but if the reefs become contaminated by oil, the recovery time could be much longer.
The eggs and larvae of white shrimp and blue crab were likely exposed to oil from the spill and could
suffer dire consequences. At this time, it is unclear how menhaden eggs and larvae may be affected by
the oil when they begin their spawning season in the fall. Shrimp, blue crab, and menhaden are shortlived
species, and any disruptions in even a single larval class may require strict fishery management
decisions to help these species repopulate. Thus, stringent catch limits, closed areas, or closed seasons
may need to be implemented.
D. Projection of Effects from “High Concentrations” of Oil on Louisiana’s Seafood Landings
If we compare the results of the previous analysis with historical landings data, we can begin to forecast
the length and depth of effects of the oil spill on Louisiana’s seafood industry. In order to do this, we
first need to develop loss ratios for the four most affected species which describe the projected number
of new adults lost each year due to experiencing “high concentrations” of oil. This loss ratio will be
composed of 1) projected larval losses and 2) projected reproductive losses in adults. Then, the ratio for
each specie and year will be applied to the projected volume of coastal areas that have experienced
“high concentrations” of oil. This will give us an approximate percentage of expected landings losses for
seafood species regionally and statewide each year. Finally, the landings loss percentages will be
compared to historical landings data to project volume and dollars losses for seafood landings in
Louisiana. Obviously this will only get us a “best guess” approximation of landings losses, but we will use
it as a baseline to create a few scenarios of loss for our broader economic analysis.
Annual Adult Loss Ratios
To calculate the loss ratios for each specie, we have to make a few assumptions. The first is that if the
species has been in any area of high oil concentration, its larvae will experience the full 50% loss within
the meaning of its LC50 number. Although it means we may have a higher estimate for loss than each
set of larvae will experience, we will attempt to capture that through our scenario development later in
this section. The second assumption is that any specie which does not spawn during the late spring and
early summer, will not experience larval losses, but will experience reproductive losses when mating
later in the year. To this extent, we will assume that brown shrimp and menhaden have not lost larvae,
but have experienced some lack of capacity in reproduction. However, since some current “young”
adults of the other species will participate in the the next reproductive cycle, they will too will
experience reproductive losses. We will therefore project their reproductive losses at half of the latecycle
species. The final assumption revolves around what percentage of the adults experiencing “high
concentrations” of oil will lose reproductive capacity. There is no data available to clarify this issue, but
assuming that that reproductive issues are only one of several variables that will affect adults exposed
to toxic levels of oil, we will use 20% reproductive loss for late-cycle species, and half of that, or 10%, for
early-cycle species. Based on these assumptions, we get projected loss rates for each specie as follows:
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
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White Shrimp Brown Shrimp Crabs Oyster Menhaden
Projected larval death (%) 50% 0% 50% 50% 0%
Projected reproductive loss from
previous years non-lethal effects 10% 20% 10% 10% 20%
Total Projected Impact on the Next
Year's Adults
We can then convert these rates to ratios, and then discount them across each year:
Loss Ratios for Each Specie, for Each Year
2011 2012 2013
White Shrimp 0.60 0.30 -
Brown Shrimp 0.20 0.10 -
Crabs 0.60 0.30 -
Oyster 0.60 0.30 0.15
Menhaden 0.20 0.10 -
In 2011, the first year of new adults following the oil spill, the ratios correlate directly to the larval and
reproductive losses we projected. For 2012 though, due to the fact that these adults are no longer apart
of the reproductive cycle to replace themselves, further losses need to be projected. However, we saw
in the data from other oil spills of this magnitude that good fisheries management and natural processes
were able to fill these gaps within a couple of years after the oil spill anyway. So since shrimp, crabs, and
menhaden only live up to two years, we have discounted the loss by 50% in 2012, and then assumed
that all levels would return to normal in 2013. Since oysters live up to three years, we discounted losses
by a further 50% in 2013 to cover any lingering reproductive effects in that specie.
Percentage of Expected Landings Losses
60% 20% 60% 60% 20%
In order to project landings losses due to the oil spill, we need to find some way to determine how much
area may have experienced “high concentrations” of oil during the past five months. According to
NOAA’s record of official oil sightings on land, we know that by August 23, 2010 the coastal portion of
the Greater New Orleans region had seen the greatest amount of oil and tar balls of anywhere within
the Gulf, with the areas of heaviest oiling ranging from Caillou Bay to the barrier islands on the east side
of Chandeleur Sound. In terms of amount of oil and fraction of the coastline covered, the greatest
impact has been near Grand Isle and the barrier islands in front of Barataria Bay. There has also been a
heavy impact along the northern edge of Barataria Bay in the vicinity of Wilkinson Bay, Bay Chene Fleur,
and Bay Batiste. Figure 13 from SkyTruth shows compiled oil sightings and NOAA projections for the
spread of the oil spill in the coastal areas right around the leaking well.
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
28

Figure 13. Cumulative oil slick resulting from NOAA analysis April 20 to July 15, 2010.
Although this is a compelling visual of the spread of oil, it does not give us a number that we can use to
calculate the percentage of areas where “high concentrations” of oil may have been. To approximate
this data, we will use the total miles of Louisiana shoreline, and take the percentage of that shoreline
that actually did experience oil.
Louisiana has 7721 miles of tidal shoreline. Even though most of the oil has been found in the southeast
region, there is no parish level data to differentiate between likely and unlikely oil areas. Also, since no
cumulative, multi-state totals of inundated shoreline have been published, we do not know exactly what
actual areas have seen oil. Therefore, to proxy the number for actual oil inundation, we will use Admiral
Thad Allen’s daily reports from the Unified Command Center. By taking a random sample of reports
from 10 dates between July and September, on any given day Louisiana’s shoreline has had an average
of 349 miles with oil (which was usually cleaned and removed from future tallies). If we multiply that by
a factor of 10 to account for all the areas that may have seen that level of oil over the past five months,
we arrive at a cumulative proxy number of 3490 miles of coastline, or 45.2%, that may have experienced
“high concentrations” of oil. (To be clear, this is not the same as “Heavy” or “High” amounts of oil as
referred to in various reports regarding oil sightings – it only refers to the possibility of having 0.05 to
2.0 ppm of oil concentration as discussed in Chapter 1).
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
29

With the proxy percentage of 45.2% of the Louisiana shoreline that may have experienced “high
concentration of oil, we can now calculate our total loss percentages per specie, per year. The “% Loss”
columns in the following chart represent this number.
Expected Landings Loss Percentage Calculation for Each Specie, for Each Year
2011 2012 2013
Ratio Volume % Loss Ratio Volume % Loss Ratio Volume % Loss
White Shrimp 0.60 45.2% 27.1% 0.30 45.2% 13.6% - 45.2% 0%
Brown Shrimp 0.20 45.2% 9.0% 0.10 45.2% 4.5% - 45.2% 0%
Crabs 0.60 45.2% 27.1% 0.30 45.2% 13.6% - 45.2% 0%
Oyster 0.60 45.2% 27.1% 0.30 45.2% 13.6% 0.15 45.2% 6.8%
Menhaden 0.20 45.2% 9.0% 0.10 45.2% 4.5% - 45.2% 0%
Total Projected Volume (lbs) and Revenue ($) Losses
The final step of this particular analysis is to use the loss percentages, historical landed weight, and
dockside prices to calculate projected volume and revenue losses for each specie over the next three
years. 2007 historical landing data was used as a comparative year for calculations 43 .
White Shrimp Brown Shrimp Crabs Oysters Menhaden
Historical Landed Weight (lbs)(2007) 64,476,408 45,127,747 44,976,150 12,857,602 789,620,750
Historical Dockside Price (2007) $ 1.48 $ 0.97 $ 0.78 $ 3.12 $ 0.05
2011 Expected Loss Percentages 27.1% 9.0% 27.1% 27.1% 9.0%
2011 Projected Loss in lbs 17,486,002 4,079,548 12,197,532 3,486,982 71,381,716
2011 Projected Loss in Dollars $ 25,908,713 $ 3,960,929 $ 9,464,374 $ 10,885,948 $ 3,739,665
2012 Expected Loss Percentages 13.6% 4.5% 13.6% 13.6% 4.5%
2012 Projected Loss in lbs 8,743,001 2,039,774 6,098,766 1,743,491 35,690,858
2012 Projected Loss in Dollars $ 12,954,356 $ 1,980,465 $ 4,732,187 $ 5,442,974 $ 1,869,833
2013 Expected Loss Percentages 0.0% 0.0% 0.0% 6.8% 0.0%
2013 Projected Loss in lbs - - - 871,745 -
2013 Projected Loss in Dollars $ - $ - $ - $ 2,721,487 $ -
However, these calculations are losses from oil only – they do not include projected losses from
freshwater diversions into the oyster leases. Losses due to changed salinity levels will almost certainly
result in a 50% loss each year for the next three years. Using 50% of the total revenue figure for oysters
in 2007 ($40,139,928), we need to add an additional $20,069,964 each year to the final numbers to
cover this additional impact. Therefore, the total projected loss to fisheries revenues between 2011 and
2013 is as follows:
Projected Loss of
Fisheries
Revenue
Oyster Correction
for Freshwater
Diversions
Total Projected
Loss to the
Fisheries
% of Annual
Fisheries
Revenue
2011 $ 53,959,629 $ 20,069,964 $ 74,029,593 27%
2012 $ 26,979,815 $ 20,069,964 $ 47,049,779 17%
2013 $ 2,721,487 $ 20,069,964 $ 22,791,451 8%
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
30

One final step is necessary to deal with the sheer number of variables and unknowns that we have
glossed over thus far. In some senses, these results could be understated. The effect of consumer fears
associated with the Louisiana seafood brand could limit demand for products. There may be a significant
amount of oil underwater that has yet to come ashore and increase or prolong oil concentrations. There
may be effects from the 1.9 million gallons of dispersants that this analysis does not capture. The
increased size of “dead zones” from tertiary oil effects could further drive up losses. The amount of
landings was projected to increase in the next few years due to recent corrections in the fisheries
industry (i.e. the end of the strike, etc.), which could increase the real volume and revenue losses. On
the other hand, the numbers could be overstated. The effect that the “high concentration” oil areas has
on larval mortality could be inflated (as discussed above). The proxy figures of oil inundation could
misrepresent the actual areas where marine species and oil could make contact. The timing of spawning
for each specie could be just early or late enough to bypass much of the sever oil concentrations in the
water.
In either direction, our analysis could be skewed due to a lack of data or imperfect assumptions.
Therefore, we feel that an honest analysis should provide High-, Middle-, and Low-impact scenarios to
represent the range of possible values. For this analysis, we will use a +/- 20% adjustment to the
baseline to express variance in either direction. With this adjustment, the final scenarios are as follows:
Projected Impact Scenarios for Revenue Losses in the
Louisiana Commercial Fisheries Due to the Deepwater
Horizon Oil Spill
High Mid Low
2011 $ 88,835,512 $ 74,029,593 $ 59,223,674
2012 $ 56,459,735 $ 47,049,779 $ 37,639,823
2013 $ 27,349,741 $ 22,791,451 $ 18,233,161
Total $ 172,644,988 $ 143,870,823 $ 115,096,658
It is important to remember that these loss projections take into account short-term ecological effects.
These results do not represent long-term ecological effects or the changes in market demand for Gulf
seafood.
Chapter 2 Takeaways
Of the seven primary species in the Louisiana commercial fisheries, shrimp, crab, oysters, and
menhaden are most likely to be affected by the oil spill. Adults of each specie are unlikely to die,
although they may suffer non-lethal effects to health and reproduction. Larvae and eggs of white
shrimp, crabs, and menhaden like received the worst effects of the oil. The primary revenue effects
for each will be felt in the first two full years after the oil spill (or in the case of oysters, three years or
more due to freshwater diversion effects). Without further complications, such as long term
ecological damage, the fisheries should normalize after two or three years. Projections of losses in
the interim are highly variable due to lack of concrete data and exclusion of market forces effects.
Likely projections of revenue losses in the fisheries range from $59 MM to $89 MM in 2011, $38 MM
to $56 MM in 2012, and $18 MM to $27 MM in 2013.
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
31

17 NOAA Fisheries, Office of Science & Technology, Fisheries Economics of the U.S.: 2008 Louisiana Tables
(available at http://www.st.nmfs.noaa.gov/st5/publication/econ/2008/gulf_LAtables_econ.pdf)
18 Bob Marshall, Oysters are uniquely sensitive to Gulf of Mexico oil spill, The Times-Picayune, May 25, 2010
(available at http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/05/oysters_are_uniquely_sensitive.html)
19 Daka ER and IKE Ekweozor. 2004. Effect of size on the acute toxicity of crude oil to the mangrove oyster,
Carasostreagasar. J. Appl. Sci. Environ. Mgt. 8(2):19-22.
20 Marshall, supra.
21 L Laubier. 1980. The Amoco Cadiz oil spill: an ecological impact study. Ambio 9(6):268-76.
22
Susan Tansey, Oyster Culture Cycle (available at
http://www.lamer.lsu.edu/classroom/edonahalfshell/pdf/oyster_cycle_all.pdf)
23 Widespread oyster deaths found on Louisiana reefs, Associated Press, July 17, 2010. (available at
http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/07/widespread_oyster_deaths_found.html)
24 Id.
25 NOAA National Marine Fisheries Service, Fish Watch – U.S. Seafood Facts, White Shrimp (available at
http://www.nmfs.noaa.gov/fishwatch/species/wild_white_shrimp.htm)
26 NOAA National Marine Fisheries Service, Fish Watch – U.S. Seafood Facts, Brown Shrimp (available at
http://www.nmfs.noaa.gov/fishwatch/species/brown_shrimp.htm)
27 Franco et al. 2006. Spatial distribution and ecotoxicity of petroleum hydrocarbons in sediments from the Galicia
continental shelf (NW Spain) after the Prestige oil spill. Marine Pollution Bulletin. 53:260-71.
28 Sanchez et al. 2006. Monitoring the Prestige oil spill impacts on some key species on the Northern Iberian shelf.
Marine Pollution Bulletin. 53:332-49.
29 John Flesher, Scientists find oil blotches on Gulf crab larvae, Associated Press, Jul. 2, 2010 (available at
http://www.wtopnews.com/?nid=220&sid=1994672)
30
‘Mass Die-Off’ Possible as Animals Flee Oil Spill, Associated Press, Jun. 17, 2010 (available at
http://www.foxnews.com/us/2010/06/16/fish-wildlife-flee-oil-congregate-near-shore-scientists-say-new-dangersawait/)
31 Sanchez et al. 2006. Monitoring the Prestige oil spill impacts on some key species on the Northern Iberian
shelf.Marine Pollution Bulletin. 53:332-49.
32 Id.
33 Farr et al. 1995.Behavioral avoidance of fluoranthene by fathead minnows (PimephalesPromelas).
Neurotoxicology and Teratology.17(3)265-71).
34 Shimps et al. 2005.Hypoxia tolerance in two juvenile estuary-dependent fishes. Journal of experimental marine
biology and ecology. 325:146-62.
35 Yellowfin tuna was chosen for this analysis instead of blackfin tuna because it typically represents over 95% of all
tuna landings in Louisiana.
36 NOAA National Marine Fisheries Service, Fish Watch – U.S. Seafood Facts, Atlantic Yellowfin Tuna (available
at http://www.nmfs.noaa.gov/fishwatch/species/atl_yellowfin.htm)
37 Black drum was chosen for this analysis over red drum or speckled trout (also a type of drum) because it typically
represents over 95% of all drum landings in Louisiana.
38
Sea Grant Louisiana, Louisiana Fisheries, Black Drum (available at
http://www.seagrantfish.lsu.edu/biological/drum/blackdrum.htm)
39
Sea Grant Louisiana, Louisiana Fisheries, Striped Mullet (available
athttp://www.seagrantfish.lsu.edu/biological/misc/stripedmullet.htm)
40 Daka ER and IKE Ekweozor. 2004. Effect of size on the acute toxicity of crude oil to the mangrove oyster,
Carasostreagasar. J. Appl. Sci. Environ. Mgt. 8(2):19-22.
Fucik, KW, Carr, KA, and Balcom, BJ. 1994. Dispersed Oil Toxicity Tests with Biological Species Indigenous to
the Gulf of Mexico. U.S. Dept. of the Interior, OCS Study MMS 94-0021
41 P Nounou. 1980. The oil spill age: fate and effects of oil in the marine environment. Ambio. 9(6):297-302.
42 Id.
43 This data was obtained from Annual Commercial Landing Statistics published by NOAA in 2007 (available at:
http://www.st.nmfs.noaa.gov/st1/commercial/landings/annual_landings.html).
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
32

Chapter 3: Economic Impact of Fisheries Revenue Losses and BP Claims
Following on the model developed above, we will now analyze the loss of these revenues on the
broader economy.
A. RIMS II Analysis of Economic Losses to Due Impacts on the Fisheries, 2011 – 2013
Our economic impact projections are made using the Bureau of Economic Analysis RIMS II model. The
RIMS model is frequently used to evaluate effects associated with positive or negative changes in
economic activity within a given region of the U.S. The model consists of multipliers that allow analysts
to estimate the effects of an event on regional output, employee earnings, or employment as a result of
changes in product demand.
For every job that is lost from commercial fishing, there is a ripple effect throughout the State in terms
of jobs, earnings, output and tax revenues. For example, the direct loss of a job in the commercial fishing
industry indirectly affects jobs that support the fishing industry, such as boat suppliers, net makers,
truckers, etc. These are called indirect effects.
The ripples do not stop there. Each affected employee may reduce his or her own expenditures because
of diminished employment horizons. This induces impacts on employment in other businesses in the
area, such as grocery stores, retailers, restaurants, and others. These impacts are referred to as induced
effects on the economy. As jobs are affected, so are employee earnings, output, and tax revenues.
Economic input-output models like the Bureau of Economic Analysis RIMS II model calculate the ripple
effects of direct job losses using multipliers specific to various industries. As inputs to the model, we first
estimated revenue losses in the fishing industry due to projected losses in landings. The following tables
use RIMS II multipliers for Louisiana (in 2006 dollars) to show how revenue losses impact employment
(i.e. jobs in all sectors of the economy, not just fisheries), earnings (i.e. the wages lost from those jobs
throughout the economy), and output over the three years of expected losses (i.e. the impact on GDP
due to those losses), for each of our projected scenarios.
While examining this table it is important to consider employment losses are not necessarily whole jobs,
but instead are Full Time Equivalents (FTEs). Commercial fishermen rarely fish one specie of seafood –
instead, they have a portfolio of products that they fish throughout the year. So while there may be
complete devastation in the oyster subsector, fishermen may still be able to pick up revenue in the
other subsectors. Therefore, the loss of 1,705 FTEs in 2011 may not result in the loss of 1,705 discrete
jobs, but rather underemployment for a larger group of affected persons.
2011 Economic Effects High Mid Low
Projected Lost Revenues in the Fisheries $ 88,835,512 $ 74,029,593 $ 59,223,674
Negatively Affected FTEs 2,046 1,705 1,364
Output Loss $ 220,134,398 $ 183,445,331 $ 146,756,265
Earnings Loss $ 52,857,129 $ 44,047,608 $ 35,238,086
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
33

2012 Economic Effects High Mid Low
Projected Lost Revenues in the Fisheries $ 56,459,735 $ 47,049,779 $ 37,639,823
Negatively Affected FTEs 1,300 1,083 867
Output Loss $ 139,907,223 $ 116,589,352 $ 93,271,482
Earnings Loss $ 33,593,542 $ 27,994,619 $ 22,395,695
2013 Economic Effects High Mid Low
Projected Lost Revenues in the Fisheries $ 27,349,741 $ 22,791,451 $ 18,233,161
Negatively Affected FTEs 630 525 420
Output Loss $ 67,772,659 $ 56,477,216 $ 45,181,772
Earnings Loss $ 16,273,096 $ 13,560,913 $ 10,848,731
Three Year Totals High Mid Low
Projected Lost Revenues in the Fisheries $ 172,644,988 $ 143,870,823 $ 115,096,658
Negatively Affected FTEs 3,975 3,313 2,650
Output Loss $ 427,814,279 $ 356,511,899 $ 285,209,520
Earnings Loss $ 102,723,768 $ 85,603,140 $ 68,482,512
Not adjusted for inflation.
From these tables, we can see that over the three years following the oil spill, gross losses to the
economy due to lost fishing revenues may be between $285MM to $428MM. This will result in the loss
of between 2,700 to 4,000 jobs, and lost employee earnings of between $68MM and $103MM. The
losses are not just in the fisheries industry, but include the industries that feed into the fisheries, as well
as the industries that fishermen spend their money in (such as retail, food, and other businesses).
While these numbers are not exceptionally large when spread across the state, they are potentially
devastating when considered from the point of view of rural communities. A hundred jobs and $10MM
of economic output can be devastating to small towns like Buras, Cocodrie, and Yscloskey. Similarly,
underemployment for some low-income workers can make the difference between making ends meet
and struggling to get by. Additionally, as with all events, the Deepwater Horizon Oil Spill Disaster did not
happen in a vacuum—many areas were already affected by the recent economic downturn which placed
residents in an increased place of vulnerability even before the oil spill.
Finally, although we did not have the capacity to forecast all economic effects in this analysis, it is
important for future studies to consider the effects on other related industries like seafood processing
and recreational fishing. Individual processors have reported losses of between 60% and 70% in
revenue, while others have reported layoffs of 50 or more persons. Similarly, fishing lodges and tours
are reporting up to 95% losses. 44 The revenue and employment effects of the oil spill on seafood
populations described in Chapter 2 will have similar economic effects across the state.
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
34

B. Impact of BP Claims and Vessel of Opportunity Funds on the 2010 Economy and Beyond
A proper discussion of losses in 2010 has been conspicuously missing thus far, primarily because there is
not definitive data regarding the losses to fisheries revenues since the oil spill began. Although there is
the general knowledge that fisheries closures have reduced opportunities to fish, there have still been
fishermen plying slivers of open water, or in regions west of the spill. Also, anecdotal evidence has
pointed toward the fact that for those who have fished in the few open areas, there has been a Katrinalike
effect where fewer boats are fishing, but each has greater hauls of product than normal. Since adult
populations are still fairly unaffected, there has not been a total loss for 2010 45 . When looking at
landings for shrimp and menhaden through August 2010, the following NOAA statistics show losses less
than half when compared to 2009: 46 Landings Jan-Aug 2010 (lbs) Percent Change
Shrimp 16,518,000 -44%
Menhaden 778,102,000 -32%
Numbers for oysters, crabs, and finfish were not readily available for this study, and without them, it is
not possible to speculate on the general economic decline in 2010. However, to setup a “straw case” for
loss, we could take an assumed 50% loss for the entire commercial fishing industry, and use a RIMS II
analysis to calculate the current year’s impact. Using the 50% of the $248,000,000 figure for 2008
revenues mentioned at the beginning of this study, we can assume the following losses for 2010:
Estimated 2010 Economic Loss (straw case)
50% Loss of 2010 Fisheries Revenues $ 124,000,000
Employment Lost
Output Loss
$
2,855
307,272,000
Earnings Loss
$ 73,780,000
Lost fishing revenues are not the only impact on the fisheries economy. British Petroleum’s claims
process and the Vessels of Opportunity Program (VOO) program invested money into the economy to
cover losses, and it is important to look at these payments during 2010. They may have a substantial
correcting impact on this year’s economic losses, and the potential future economic impacts we have
discussed above. In the months following the initial rig explosion, BP began paying lost income claims to
commercial fishermen and other effected parties. The majority of these were “small claims” of a few
thousand dollars per person or business, per month. Some businesses, like docks and processors with
considerable lost revenues, were able to file for “large claims” in the hundreds of thousands.
Additionally, commercial fishing boat owners were hired under the Vessels of Opportunity program to
take their vessels into the Gulf and skim oil, lay boom, perform controlled burns, and other activities.
Daily pay rates for the VOO are as follows:
Vessel Length
Vessel >65’
Vessel >46’-65’
Vessel >30’-45’
Vessel less than 30’
Pay Rate
$3000/24 hour day
$2000/24 hour day
$1500/24 hour day
$1200/24 hour day
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
35

Crewmembers were also compensated up to $300/day. 47 Obviously, for boats working several months,
this program was quite lucrative. Many fishermen were activated for weeks at a time, and were even
paid for time spent on shore.
Total claims and VOO payments to fishermen in Louisiana through September 23, 2010 is as follows: 48
Source
BP Claims
GCCF Claims
VOO
Total
$
$
$
$
Amounts
157,000,000
118,376,450
195,000,000
470,376,450
These totals exceed even the worst-case scenario of the forecasted losses to the industry. It is important
to keep in mind; however, that there are few, if any, people who are getting rich. For instance, the
$195MM in VOO funds were paid out to only 1,238 vessel owners and their crews. Although many
fishermen signed up for the program (approximately 15,700 in Louisiana alone), only a fraction were
finally employed through the program. 49 The individual effects of the programs are disparate and at
times uneven.
It would be tempting to say that such a huge influx of cash into fishermen’s hands would necessarily
reverse the economic losses to the fisheries industry described above. However, these payments are not
necessarily being made to the “fisheries industry” even though they’re being made to fishermen. In
economic terms, this means that although the induced effects of payments are likely (i.e. the
consumption effects of fishermen buying goods and services are expected), the direct and indirect
effects are not guaranteed (i.e. funds paid for fishing activities and fisheries support businesses may not
be expected results).
For example, as commercial fisheries reopened after the spill, not all fishermen returned to their
traditional work. Many continued to work for BP or the parishes because it was lucrative and steady; so
much so that some seafood processors were paying 30% premiums to lure fishermen back to work. 50
These fishermen were not engaged in commercial fishing – they were engaged in cleanup – so they were
not paying employees “fisheries” wages, or buying ice from ice-houses to keep their shrimp cold, etc.
Their impact as economic actors has been completely different, so investments into their “businesses”
do not necessarily change the direct and indirect economic effects of decreased seafood landings.
To better understand what effects these payments do have economically, it is important to understand
how the fishermen might be spending their dollars. Cumulative data is not known about spending
habits, but for the purposes of this study, GNO Inc. performed a small survey of commercial fishermen
to create some proxy numbers for estimating economic impact of claims and VOO contracts. The survey
was administered to 40 captains and deckhands who are clients of two technical assistance non-profits
in the Greater New Orleans region. 51 The results were as follows:
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
36

Captains Deckhands Wtd. Avg.*
Business Expenses (repairs, new gear, etc) 16% 0%
11%
Household Expenses 10% 18%
12%
Savings 36% 17%
30%
Debt Repayment (formal and informal) 19% 13%
17%
Other - taxes 5%
0
4%
Other - food, drink, entertainment 14%
100%
52%
100%
25%
100%
*Weighted Average is calculated with 70% captain, and 30% deckhand.
The information is interesting, especially because of the differences between deckhands and captains.
Deckhands, who typically reported between $8,000 and $30,000 in funds, spent more of their money on
short-term consumables or household expenses. However, captains, who reported between $50,000
and $400,000 in funds, spent more of their money on long-term investments into their businesses, or
put the money into debt repayment and savings. Some businesses owners have already begun to pay
quarterly estimated tax payments on their claims and VOO funds, while others not only repaid formal
debt, but also informal debt to friends and family members.
Since the volume of funds is so much greater for captains than deckhands, we used a weighted average
of 70% for captains and 30% for deckhands in order to create a proxy for spending. Using these
percentages, we were able to calculate a rough approximation for how claims and VOO monies may
have been used:
Business Expenses (repairs, new gear, etc)
Household Expenses
Savings
Debt Repayment (formal and informal)
Other - taxes
Other - food, drink, entertainment
Total
Wtd. Avg.*
11%
12%
30%
17%
4%
25%
100%
Funds (Claims/VOO)
$ 52,682,162
$ 58,326,680
$ 142,524,064
$ 80,904,749
$ 16,463,176
$ 119,475,618
$ 470,376,450
To be clear, this estimate will not reflect reality. Not only is it based on a fairly small sample of
fishermen, but it does not take into account the various claimants like docks, processors, restaurants,
and others that do not spend their claims in the same manner. However, it does give us an interesting
platform for thinking about how claims and contract payments may affect the economy.
Savings, taxes, and formal debt repayment may not necessarily have a near-term input-output economic
effect, but the other expenditures do, and we can use RIMS II multipliers for each relevant industry to
measure their impact in 2010.
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
37

Claims and VOO Economic Effects
Fisheries
Business
Expenses
Household
Expenses
Food/Drinking
Total Economic
Impact (2010)
Estimated Revenues Spent $ 52,682,162 $ 58,326,680 $ 119,475,618 $ 230,484,461
Employment Gain 1,213 735 3,516 5,464
Output Gain $ 130,546,398 $ 75,148,094 $ 234,578,429 $ 440,272,922
Earnings Gain $ 31,345,887 $ 21,102,593 $ 63,561,029 $ 116,009,508
Not adjusted for inflation.
From the total impact numbers, it seems that the induced effects in the economy from BP payments are
quite large. Household and Food/Drinking expenditures are creating hundreds of millions of dollars of
earning and output, and creating thousands of jobs. It is hard to know if they have fully “replaced” losses
since we have not done analyses on other economic effects like losses in the value-added industries (i.e.
food processing, etc.), tourism, etc.
The real story here is the reinvestment back into the fisheries economy. If we take the straw case above
for 2010 losses in the fisheries, and control for the reinvestment into fisheries businesses following the
claims and VOO program, we can create a “corrected” estimate of economic loss in 2010.
Estimated 2010
Revenues Loss
Estimated Claims/VOO
Reinvestment
Net 2010 Loss
Fisheries Revenues $124,000,000 $52,682,162 $71,317,838
Employment (FTEs) 2,855 1,213 1,642
Output $307,272,000 $130,546,398 $176,725,602
Earnings $73,780,000 $31,345,887 $42,434,113
Not adjusted for inflation.
Again, some of this may be speculative arithmetic. But it clearly shows that if the broader population is
indeed reinvesting into their businesses with claims and VOO funds, then the actual direct and indirect
effects on the fisheries will be less than expected. In other words, there may be less net-makers and hull
welders out of work in 2010 than we previously thought (although clearly jobs are being lost and the
commercial fisheries economy is still suffering).
There are some further points worth mentioning. Fishermen who are saving their claims and VOO funds
may eventually spend those funds on tax obligations for their claims payments, but they may also
reinvest those funds into their businesses in 2010 or 2011. That could have further positive effects on
the fisheries economy, and induced effects throughout other sectors of the economy. Similarly, those
who paid off informal debt obligations to friends or family have created a situation of further economic
benefit since those funds will most likely be spent back into the economy as well. We cannot presume
what those effects may be without surveying the informal lenders, but this is an added bonus.
Finally, it is important to avoid having these big picture scenarios cloud our understanding of how
people experience this disaster on the ground. As we mentioned above, not everyone has received
claims and VOO payment equally, nor have small businesses and individuals benefitted from the indirect
and induced effects of this cash infusion equally. There are many people who will continue to remain
Economic Impact of the Deepwater Horizon Oil Spill – Part One: Fisheries
38

out of work, and who may need further support. The final chapter of this analysis explores this issue and
provides recommendations on how to help those fishermen who are left behind.
Chapter 3 Takeaways
Between 2011 and 2013 gross losses to the economy from lost fishing revenues resulting from shortterm
ecological effects, may be between $285MM to $428MM and result in the loss of between
2,700 to 4,000 FTEs, and lost employee earnings of between $68MM and $103MM. However, due to
the fact that fishermen are reinvesting some of their BP claims and VOO contract funds back into
their businesses, the 2010 fisheries economy may not be as hard hit as expected. Similarly, spending
those funds in other industries will improve the whole economic outlook of the state, although it is
unknown if the total economic losses can be reversed simply through these programs. Most
importantly, since these programs are unevenly targeted to fishermen, the micro- and macroeconomic
benefits will not be realized by everyone, which will necessitate a policy response. These
estimates do not take into account the changes in seafood demand and long-term ecological
impacts.
44 Associated Press, Times-Picayune, September 19, 2010. “Final oil well sealing is small comfort to suffering,
anxious Gulf residents”
(http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/09/final_oil_well_sealing_is_smal.html)
Chris Kirkham and Brett Anderson, Times-Picayune,July 30, 2010 “Producers hope Louisiana commercial fishing
reopening calms seafood safety concerns.”
(http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/07/producers_hope_louisiana_comme.html)
Bob Marshall, The Times-Picayune, September 06, 2010, “Uncertain future after Gulf oil spill has Buras fishing
lodge owner on edge”
(http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/09/uncertain_future_after_gulf_oi.html)
45 We acknowledge that mass fish kills that coastal residents have witnessed in August and September of 2010;
however, we do not take these into account in our analysis as the causes of these events are still yet to be determined
and have not been officially linked to the Deepwater Horizon Oil Spill.
46 NOAA Fisheries, Office of Science & Technology, Fisheries Statistics Division: Shrimp Statistics, June 2010
(available at http://www.st.nmfs.noaa.gov/st1/market_news/)
47 BP Vessels of Opportunity Program Factsheet | http://oilspilloutfitters.com/bp-vessels-of-opportunity-programfactsheet.html
48 GCCF Program Statistics - Overall Summary, September 23, 2010, www.gulfcoastclaimsfacility.com;
British Petroleum, personal communication.
49 LA/TX Field Based Integrated Services Team, Daily information Summary, August 4, 2010
50 Kathrine Schmidt, Houma Today, “Unemployment among fishermen difficult to measure” July 4, 2010
51 Thanks to Coastal Communities Consulting and MQVN CDC for working with their clients to furnish this
generous data.
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Chapter 4: Focus Group Study on Future Opportunities for LA Fishermen
In this final chapter, we explore the qualitative effects of the oil spill, especially in terms of the
entrepreneurs and employees that it has affected. The macro-level effects of the oil spill on the
economy are important, but the only way that policy practitioners can alleviate the effects of the spill is
to understand how individuals may perceive and respond to this disaster. The following analysis
incorporates data from a recent focus group study that GNO Inc. commissioned with commercial
fishermen in Southeast Louisiana.
A. Profile of a Typical Fisherman’s Financial Situation
The most devastating aspect of the oil spill is on the purchasing power of individual families and their
ability to meet consumption needs. To better contextualize the situation of individual fishermen, we
include here the results of a series of interviews that Seedco Financial Services, Inc., a Community
Development Financial Institution (CDFI) conducted with a group of 69 fisheries borrowers during May
and June of 2010. 52 The interviews were meant to gauge the financial position of their borrowers, and
determine how devastating a significant loss of income would be on their businesses and personal lives.
The summary data presented here are averages of the responses given by commercial fishermen.
Income and Expenses for Fisheries Families
What is the annual income of
each household member?
Please indicate monthly expense
for the following:
Primary $ 67,346 Rent or mortgage $ 802
Secondary $ 32,692 Utilities $ 670
Other $ 13,750 Food $ 747
Total $ 113,788 Medical $ 260
Vehicle $ 1,011
Do you have another job?
Credit Cards $ 460
Yes 18% Child Education $ 443
No 82% Other $ 641
Total $ 5,035
Personal and Business Debt Held by Commercial Fishermen
Yes No Mean Median
Do you have any other business debt?* 63% 37% $41,020 $24,289
Do you have a mortgage? 63% 37% $121,520 $103,000
Monthly payments $1,126 $1,000
Do you have personal credit card balances? 61% 39% $19,950 $7,100
Monthly payments $629 $360
Do you have any other personal debt? 68% 32% $31,884 $20,000
Monthly payments $703 $571
Total Average Debt $214,374 $154,389
Total Average Payments $2,458 $1,931
*Does not include value of loans held by Seedco Financial
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The obvious observation from these data is how highly leveraged these fishermen are. Following Katrina
many of them had to take out quite a bit of debt in order to rebuild their homes, boats, and lives. Many
of them barely qualified for their loans in the first place, and need consistent returns from commercial
fishing in order to meet these obligations. The next issue is the difference between the primary
breadwinner’s income in the family and that of the spouse’s income. Generally, commercial fishermen
make the bulk of the income in the family. If that income disappears, the remaining family incomes may
not be enough to cover monthly expenses. In this particular study, losing the primary income leaves an
average of $47,000/year in income to cover an average of $60,000/year in household expenses. Finally,
when interviewed about other job opportunities, over 80% had not been able to find new work without
commercial fishing. Although this will most likely change as more fishermen try to compensate for lost
wages, it is unclear whether commercial fishermen can or will leave the industry, and what they will do
if they choose to do so. The following study attempts to answer this central problem.
B. Focus Group Study Overview
Between July 19 th and July 25 th GNO Inc. held 10 focus groups in four parishes of the Southeast region of
Louisiana (Plaquemines, St. Bernard, Jefferson, and Orleans). The focus group breakdown includes the
following :
Group # Date Location Meeting Place Ethnicity Participants
1 18-Jul NO East House Vietnamese 6
2 19-Jul Port Fourchon Boat Caucasian 3
3 19-Jul Port Fourchon Boat Vietnamese 4
4 19-Jul Pointe a la Hache Dock African-Am. 6
5 21-Jul Chalmette
Community
Center
Caucasian /
Croatian 8
6 22-Jul Lafitte Restaurant Caucasian 13
7 23-Jul Port Sulphur Trailer Park Latino 13
8 23-Jul Buras House Cambodian 13
9 23-Jul Buras House Vietnamese 3
10 24-Jul NO East Coffee Shop Vietnamese 6
Total 75
During the focus groups we interviewed 75 individuals, including captains, deckhands, dock owners,
dockhands, and seafood purveyors. There was a good cross-section of fishers who harvest oysters and
shrimp, but there were only a few crabbers, and no fin-fishers that we know of. Seafood purveyors were
either storefront seafood shops, or independent sellers (at farmers’ markets or by the roadside).
We met with fishers of most local ethnicities including Caucasians, African-Americans, Vietnamese-
Americans, Cambodian-Americans, Croatian-Americans, and Latin-Americans. Some of the sessions were
held in English, while others (in limited English-proficiency communities) were co-facilitated with Sandy
Nguyen of Coastal Communities Consulting (CCC), who translated or provided translation services from
local language speakers.
Participants were primarily male. Female participants included seafood purveyors, fishermen’s wives,
and one commercial fisherwoman.
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We had a range of boats from 17’ aluminum skiffs to +100’steel-hull freezer boats. There was a variety
of gear types including skimmers, trawlers, dredgers, and crab boats. A significant number of
participants had BP jobs, but a slight majority did not.
C. Methodology
Our methodology focused on ensuring a diversity of responses, getting an informative critique of our
ideas thus far, and providing direct support to commercial fishermen.
In order to cover the most sub-divisions of the commercial fishing community, we asked heads of
fisheries associations (including the Louisiana Shrimp Association, the United Commercial Fishermen’s
Association, and the Louisiana Oystermen Association) to invite members who could provide critical
feedback on our work. We also worked with community liaisons to invite participants from more
isolated communities like Cambodian captains and Latino dockhands.
We located all focus groups in the field, making sure to only visit locations that commercial fishermen
could conveniently and comfortably attend. Several contacts generously provided their homes for our
meetings, and other community members provided their facilities as well.
The discussions were group-oriented. The facilitators asked pre-written questions and the participants
were encouraged to respond in any formal or informal manner that they chose. All findings were
qualitative in nature; no quantitative data or statistical sampling was utilized.
The questions were divided into three sections: Perception of the Disaster, Work and Skills, and Oil Spill
Response. The interview sheet is appended to this report. Perception questions focused on how
catastrophic the participants think the oil spill is. An emphasis was put on how long they thought the
damage would last, and what the worst-case scenario might be.
Work and skills questions focused on what skills commercial fishermen have, what skills they would be
capable of or interested in learning, and what industries they might want to transition into if commercial
fishing ends. Response questions focused on what kind of benefits and services that fishermen might
expect (or respect), and what kind of programs that organizations like GNO Inc. could provide for them.
All the underlying components of possible claims scenarios and CVP concept were discussed, including
boat buy-back programs, amounts of disaster debt and debt forgiveness, cash payouts, business
technical assistance, advanced skills training, workforce training, job placement, ESL programs, green
business, and participants’ own entrepreneurial aspirations.
Following each focus group, participants were compensated for their time with donations of $100 per
participant from GNO Inc. Recipients were asked to provide identification like commercial fishing
licenses, social security numbers, and ITIN numbers (for non-citizens) that could be used to verify
participation in the commercial fishing industry.
D. Findings
Focus group participants were very receptive to the interviews, and provided detailed feedback on our
questions. However, there was a great deal of uncertainty. Since the ecological effects are still unknown,
many fishers had a difficult time accepting or thinking about worst case scenarios. Some participants
were hostile to the notion of a collapse of the fisheries and refused to speculate on the future.
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The findings covered many topics. The following are findings segmented by category and topic, and
recommendations for incorporating the findings into GNO, Inc’s overall approach.
I. General Perception and Understanding of the Disaster
Almost all of the fishermen interviewed thought the oil spill is “bad”, but the perceived consequences of
the disaster varied widely. Some fishermen thought they could be back in the water this year, while
others thought the impact could last for 20 years or more.
The amount of oil that fishermen have physically seen has made an impact on how bad they think the oil
spill is. At one of the Vietnamese-American sessions, it appeared that those with BP jobs skimming oil
thought of the disaster as much less catastrophic. Spending hours each day searching for oil in the Gulf
with only small sightings has given the impression that there’s not much oil out there. On the other
hand, fishermen from the same group who have worked on fire crews burning oil thought that the Gulf
is inundated with oil.
Many fishermen reported being more worried about the effect of dispersants than oil. One participant
in Lafitte said “We’ve had oil naturally seeping into the Gulf for centuries. There are natural organisms
that will deal with it. But these dispersants… that’s what could destroy the fisheries”. There was also
broad agreement that there is much more oil under the water that can’t be seen, and it’s unknown how
much of that will enter the estuaries. Oil under the water was also expected to heavily impact trawling
since dragging trawl door along the oil-soaked sea floor will destroy product and equipment.
Almost everyone agreed that the oysters would be hardest hit because they are stationary. The other
species might be able to go elsewhere and return when the worst is over. A number of fishermen
thought that the short reproductive cycle of shrimp would allow them to recover quickly.
Some fishermen thought that the ecological effect was less meaningful than the market perception of
Louisiana seafood products. Across racial and other demographic lines individuals thought that the
country’s perception of the oil spill would create much deeper and longer-term consequences than the
spill itself. They were also worried about catching any contaminated product since it would reinforce the
perception that Louisiana seafood is unsafe.
Few participants expected a worst case scenario of total loss. Most thought that some middle ground
was likely, though there was no agreement on what that may be. On average, most participants thought
that the disaster would affect the fisheries for at least 3 to 5 years, if not longer. But “affect” meant
something more ambiguous that total loss. Regardless of how long the fishermen thought the disaster
would last, they seemed to think that fishing would continue in some form. The oil might “kill a lot of
[seafood] babies” but there would still be product out there. In a show of possible fishing hubris, some
fishers felt that they would survive on the remaining product, even as early as this year’s August shrimp
season.
One impression taken from these meetings is that fishermen are disaster veterans. Having persevered
through so many disasters, it is difficult for many commercial fishermen to accept the gravity of this one.
That's not saying that they aren't acutely aware of the possibilities of total loss, but they are in no rush
to accept the worst-case scenario. Fishermen do not believe that commercial fishing could be over in
Louisiana.
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Summary Recommendations – Perception
• Since there is still so much uncertainty around the disaster, perceptions may change quite
radically by the time programs are designed, funded, and implemented. Further focus
groups or direct communication with fishermen should be maintained to make sure that
proposed activities and outcomes match fishermen’s perceived needs.
• At this point, programs cannot be predicated on the notion that the fisheries will be shut
down indefinitely. A more successful approach may be to frame programs (like skills training,
etc.) as a hedge against catastrophic loss, and an activity for fishers to participate in while
the ecosystem recovers.
II. Work and Skills
Current employment with BP or elsewhere
Less than half of the participants reported having BP jobs. Almost all of them were receiving claims
checks, but few felt that the claims amounts were sufficient to replace lost income. There was a wide
disparity in the effect that BP jobs were having economically. Some fishermen have received hundreds
of thousands of dollars from constant participation in the Vessels of Opportunity program, while others
are still waiting to be called up for work. Those with smaller boats and smaller incomes are faring the
worst since the sliding scale of payouts effectively penalizes smaller fisheries businesses.
Many thought that the Vessels of Opportunity program might end in one to three months, but there was
a common perception that BP would continue to employ fishermen for clean-up indefinitely. News of
the containment cap’s success in stopping the flow of oil did not seem to change fishermen’s perception
that BP would continue operating the Vessels program.
Almost no one has taken on other work, or has heard of anyone looking for new jobs. Fishermen who
don’t have BP jobs generally have contracts with BP that they are hoping will give them a job in the
future. The expectation of work derived from these contracts is preventing fishermen from looking for
new or interim opportunities.
Summary Recommendations – Current Employment
• Since the financial lure of BP jobs is so compelling, near-term programs should somehow
dovetail with the BP jobs process. Programs that are short in timeframe (i.e. one week
certification programs, etc.) or located in local communities could give fishermen the
flexibility to participate while waiting for BP work.
Current skill sets
Very few fishermen thought that they had any other skills than commercial fishing. Many fishermen said
that they have construction skills like carpentry, but few felt that they were of the level or quality to be
considered “skilled labor”. Fishermen in Pointe a la Hache felt that even if they have other skills, the lack
of paperwork or a work history to verify those skills will bar them from seeking alternate employment.
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Passing tests to prove these skills were also considered a barrier. A fisherman in Lafitte described it like
this:
“If you ain’t got a good education… you could be the best electrician they got, but if I can’t pass that test
that they give me, they won’t let me go do electrical work… and that’s what’s hard … It’s not that I don’t
know how to, it’s just that I’m not book smart. They use all these big words that I can’t figure out”
Current skills that were considered genuinely applicable to other industries included captaining boats,
mechanics, and welding. The only industry that participants felt they could realistically use these skills in
was the oil and gas industry. When asked, “What industries do you think you could realistically transition
into?” most people felt that they could operate crew or supply boats for oilrigs. There is a close
relationship between commercial fishermen and the oil industry with some fishermen reportedly
working for the oil industry in the past. One fisherman in Chalmette had laid seismic sensors for several
years while another had worked on the drilling rigs. However, between the already stiff competition for
jobs and the federal moratorium on offshore drilling, few thought there would be any opportunities for
fishermen in oil and gas.
Captaining was found to be only slightly transferrable to other sea-based jobs. Operating a fishing boat
is not necessarily the same as operating a tug boat, and fishermen would need to get trained and
licensed to do so. One barrier to operating other boats is the required number of operating hours
needed to get a new license (i.e. one license was reported to require 480 days of on-the-job operation).
Although there was some disagreement on the details, several fishermen stated that a change in laws
meant that hours spent captaining a fishing boat could no longer be applied toward licenses for other
types and classes of boats. If this is true, it means that captains would essentially be treated as novices
instead of seasoned veterans of the Gulf.
Summary Recommendations – Current skills
• A significant barrier to using current skill sets is the formalization of those skills. A technical
assistance emphasis on better packaging and communication of these skills could increase
the success of fishermen who transition out of the industry. Similarly, educating other
industries on how to understand and utilize the skills of fishermen could create a similar
effect.
• Stakeholders should consider influencing regulatory policy in this arena. Working to loosen
restrictions around licensing or permitting could increase the number of opportunities for
fishermen. Programs could be oriented around testing and proving those skills in nontraditional
ways to meet regulatory thresholds.
• As it stands though, commercial fishermen do not have a lot of transferrable skills, and will
likely need significant investments of training and resources in order to transition.
Repurposing boats
There was almost universal agreement that commercial fishing boats could not be repurposed for use in
other industries. The idea of converting boats for carrying oil and gas crews or supplies was not
considered viable. Licensing for other industries relies on specific boat types with different hulls than
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shrimp and oyster boats. Besides using the boats for charter fishing or pleasure cruises, there is not
much else that they can do with the boats. Moreover, they see no opportunities in charter fishing or
tourism anymore, so they would not invest into making those changes either.
Another issue to consider was boat size and build. Small fiberglass and aluminum boats cannot be used
too far offshore. A great deal of the fishing industry is composed of small-boat fishermen working the
“inside” areas of the bays and bayous. If the primary industries utilizing boats are operating offshore,
these smaller boats will have no use.
If commercial fishing is no longer viable, these boats may truly be stranded assets. However, it is very
important to point out that boats have a limited shelf-life. Unattended boats will die at the dock due to
weather, tides, vandalism, or other reasons. Something must be done with them if fishing cannot be
pursued.
Retraining and pursuing new opportunities
When asked about leaving the fisheries industry, one participant in New Orleans East said “That is the
worst case scenario – changing your career”. No one was interested in leaving the fisheries industry. This
was primarily due to the ambiguity of the scale of the oil spill, a personal reluctance toward leaving
commercial fishing, and the feeling that fishermen can’t do anything else. Even when the declining state
of the industry before the oil spill was discussed – including the rising cost of diesel and the reduced
purchase price of product at the dock – participants still did not have any interest in leaving commercial
fishing. Almost everyone felt that they were committed to fishing for life, and will only leave the
industry if they are forced to.
As such, it was difficult to effectively discuss transition opportunities or brainstorm around what type of
long-term employment would be interesting to them. Conceptually, there was broad agreement that
fishermen want to own their own businesses. No one was interested in having a boss. Also, most people
agreed that working outside or in mechanical trades is more likely and interesting than conventional
jobs in buildings. Many people want to remain on the water – it is what they are used to, and what they
like. Almost all fishermen agreed that they would need to pursue new opportunities that support a
middle-class lifestyle. Wages would generally need to be high to be compelling to them.
The notion of training itself was considered nearly impossible. Fishermen didn’t feel that they could
endure “going to school”, and many felt that the lack of formal education or literacy would prevent
them from learning anything new. Some also felt that they could not afford the time or money for such
education.
The one trade that continually received some interest was welding. Individuals either wanted to learn
how to weld, or wanted to use their own skills to start a welding business. Most people felt that there
were a lot of job possibilities for welding. Also, several fishermen expressed interest in supplementing
their skills with contractor training so they can pursue contracting opportunities.
There was slight interest in truck driving or similar trades. Some Vietnamese-American fishermen
expressed interest in driving big rig trucks, while some African-Americans thought driving dump-trucks
sounded interesting. However, many participants felt that there were barriers to getting a Commercial
Driver’s License (CDL) due to required physicals. Many fishermen felt that they had sufficient medical
problems barring them from getting licensed.
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To a certain degree, the responses broke along ethnic lines. Latin-American dockhands were interested
in any opportunities, including minimum wage jobs. African-American captains were interested in heavy
machinery opportunities (like operating cranes, etc) and assumed that they could work for the parish
until such opportunities arose. Cambodian-Americans had many ideas related to new businesses that
they would start, including grocery stores, restaurants, liquor stores, and a donut shop. Caucasian
fishers and seafood purveyors were generally resistant to pursuing new opportunities, but they
encouraged support organizations to come up with ideas and bring them back for discussion.
There were a few fishermen who had non-traditional skills they were interested in utilizing. One
fisherman does catering, while another fisherman wants to open a butcher shop. One fisherman wants
to cook Chinese food, while another one wants to care for porpoises and other sea life. A few people
expressed interest in working for Wildlife and Fisheries or the Coast Guard.
Fishermen in Pointe a la Hache discussed how they are all involved in some form of subsistence farming.
While they currently only raise food for each other, there could be interesting entrepreneurial
opportunities if they wanted to develop businesses from these skills.
One other aspect worth mentioning is that there was considerable trepidation about finding jobs. Even
with training, participants felt that companies are not hiring, or that fishermen would not know how to
enter other industries. They also thought that new opportunities would necessarily put them on the
“ground floor” and they would be unable to ever match their current income possibilities in commercial
fishing.
Summary Recommendations – Retraining
• Successful retraining programs should identify niche opportunities and provide deep support
to small clusters of like-minded fishermen. Since there is little agreement on trades that
fishermen could or would enter, it is not likely that broad programs focusing on only a few
trades would create the same impact as smaller, targeted programs.
• Exceptions include skill building in welding or general contracting. Trainings for these could
potentially be held with broad appeal, and sessions could be held around current BP work
schedules.
• Tapping into the passions and non-traditional skills of commercial fishermen, no matter how
fringe they may be, could encourage more people to participate.
• Any form of retraining or education should be subsidized. Tuition for classes and a daily
stipend for living expenses could draw more participants and reduce attrition.
• An emphasis should be put on ‘on-the-job’ training over school-based training.
• Linking “transformative” training directly to job placement programs will not only accomplish
more in terms of outcomes, but will also create further incentives for fishermen to
participate.
Age of fishermen and its impact on perceived opportunities
The age of fishermen was discussed frequently. Almost everyone felt that older fishermen were
particularly vulnerable, especially due to age discrimination. Most people felt that even if you retrained
a fisherman, no one would be willing to hire an “old man” for work.
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The most at-risk age bracket seemed to be late forties to early sixties. Respondents agreed that those
fishermen were too old to retrain, but too young to retire. Older fishermen were concerned that since
they were lifelong fishermen with no other marketable skills, they would be unable to retrain or find
new work.
Few older fishermen reported having significant retirement resources or savings. One participant in
Chalmette explained the situation very succinctly: “Fishermen die on their boats; that’s their
retirement.”
One younger fisherman from Lafitte provided another age-related dilemma. He is 30 years old, has a
family, and has invested a significant amount of capital and time into his fishing boat. He felt that fishers
in his situation were equally vulnerable because they have only begun to repay themselves for that
investment. They have essentially worked to maximize their potential, but have had no opportunity to
reap the benefits of working the industry.
Summary Recommendations – Age
• Any program should have significant resources provided for retirement planning. The
majority of fishermen interviewed need programs that take into account their age and the
limiting factors of that age.
Limited-English proficiency and citizenship issues
One Vietnamese fisherman described the language barrier this way:
“When we communicate out here on the water, we use signal horns to signal port or starboard. We
have ways of communicating without using language. But if you’re operating a crane or some heavy
machinery, you have to know English, or someone could easily be killed. I speak pretty good English, so
I’ll be ok. But for these guys who don’t speak any English, they’re going to have a hard time getting any
skilled jobs even if they know how to do them.”
There was agreement in most limited-English sessions that language-requirements will be fundamental
to successfully obtaining new skilled jobs. Some non-English speaking fishermen were interested in
pursuing ESL classes for this reason, but most felt that (especially due to their age) they would not be
able to learn any meaningful amount of English that could help their careers.
Latino fishermen were more concerned about citizenship than language. Many of these fishermen
described how as fishermen, their citizenship papers are not usually examined. Deckhands do not need
commercial licenses. They are provided with 1099s at the end of the year, and they pay taxes on these
wages using Individual Taxpayer Identification Numbers (ITIN). ITIN numbers are issued directly by the
IRS, and the applicant's immigration status is not verified nor is there an in-person meeting required.
Many of these fishermen are paying into the system until immigration laws change and they can apply
for formal legal status.
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Commercial fishing is one of the few opportunities where immigrants can work while learning the
language and establishing residency. If this is no longer available to them, they are unsure of what they
will be able to do.
Summary Recommendations – Language and Citizenship
• Besides providing ESL classes, some research should be put into what skilled labor exists
that does not require high-proficiency in English. Multilingual trade schools should also be
researched.
• Non-citizens were interested in pursuing formal legal status. Discussions with immigration
non-profits or other agencies could assist in providing these clients with the right services.
Relocation to pursue different opportunities
Few fishermen thought that they would leave Louisiana. Many did not think they would leave their
parish or local community, even if there were no jobs there. There is a deep feeling of rootedness and
home here.
One participant responded to the question saying “If I leave here, I not only have to adjust to a new
career, but also a new place”. In commercial fishing, knowing the local waters is more important than
anything else. Moving to a new location with seafood product does not guarantee any better chances
for fishing if the fisherman does not know the local area.
A few indicated that if the payout was large enough, and they could no longer fish, they might move
away from the coast and resettle elsewhere. But those who thought they might move tended to believe
that they would be poor when doing so. One Chalmette participant said that she would “buy a piece of
land and live like a hillbilly” if she couldn’t sell seafood anymore. A Vietnamese-American fisherman said
he would leave and find the poorest town to live in because the cost of living would be cheaper.
III. Oil Spill Response
Possible claims packages
“We don’t really care to rely on other people. We don’t want no handouts” - Lafitte Fisherman
When discussing the possibility of payouts from BP, the government, or other entities, commercial
fishermen did not seem to think that any sort of payout would be sufficient. From their experience with
other disasters, there has never been enough resources to adequately support them. More importantly,
there is not a price that they can put on their livelihood and lifestyle. The quality of their lives as
fishermen is far more important than the income they derive from it (as evidenced by their dedication to
the industry even in the face of a collapsing fisheries economy).
When discussing financial compensation, numerous commercial fishermen said that responding entities
should buy the businesses out, not just give grants. In terms of compensating lost income, participants
were adamant that gross income should be used in lieu of net income. Especially when food, shelter,
and wages are expensed through the business, there are many lost benefits that are not captured by a
net income calculation. This is not an under-reporting issue – it is just an issue of income being paid
before the bottom line is calculated for tax purposes.
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Fishermen were asked to think of a total claim amount that they would consider fair and beneficial.
Every group responded with $1,000,000 dollars. One Vietnamese fishermen justified this number by
saying that the top response on “Family Feud” for the question “How much money would allow
someone to live comfortably?” was one million dollars, which seemed reasonable to him if the rest of
America felt that way.
The primary concern by a few fishermen was that claims will be taxed. They felt that it was hard to think
of how much money could help them when half of that money could be taken by the government.
Debt forgiveness
Potential debt forgiveness programs were considered interesting, but did not get general acceptance.
The problem is that many fishermen don’t have debt. Even with flexible underwriting after Hurricane
Katrina, many fishermen couldn’t get approved for loans.
Of those that did have debt, the average amount seemed to be between $50,000 and $75,000.
Boat buy-back programs
Many fishermen suggested, of their own accord, that boat buy-backs should be a key component of a
financial response. That is not to say that they would actually sell their boats – but if they would have to
exit the industry, most thought that selling their assets would be an important component.
However, this did not work for a lot of fishermen. For those fishermen who have smaller skiffs or
skimmers, their boats could be worth $35,000 or less. A boat buy-back does not have the same appeal
to owners of smaller boats who would lose the same job or business as an owner of a larger boat, but
who would not receive the same compensation as that other boat owner.
There were also significant discussions around basing boat buy-back values on appraised value or
replacement value. The appraised value for a given boat on the market may be between 100 and 200
thousand dollars, but the replacement value of those boats (i.e. to build from scratch again) could easily
be in the half million-dollar range. Although leaving the industry permanently would undermine a
justification for replacement value, some fishermen thought that it reflected all of the investments they
have made into the boats that will not get realized through an appraisal value.
For example, one fisherman explained that he has had his boat for nine years, and it is currently
appraised at $120,000. But he has been investing $25,000 into the boat for each of those nine years.
Between the purchase price and the upgrades, the value of the boat to him is worth around $350,000
dollars or so. In order to reap the value of these investments, he needs to fish commercially for much
longer than the nine years he has had the boat. So a buy-out program would need to cover the
appraised value as well as some portion of the replacement value for him to consider a payout as “fair”.
Another issue raised was what if a person has more than one boat? Will they all get bought out?
One last bit of data regarding buy-backs was that following the closure of the gill net fishery, there was a
net buy-back program to get the nets off the market. Fishermen at the Chalmette focus group felt that
the program had been a failure because the buy-back price was $0.25 cents per foot of net. The
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fishermen said that many of them had thrown the nets away instead of getting such a small price for
assets that were worth much more.
Fisheries subsidy programs and aquaculture
As a part of the argument that the oil spill’s worst-case scenario may not happen, some fishermen were
interested in receiving some assistance for staying in the water until the “middle-case” scenarios played
out. If the ecology is only partially affected by the spill while the economy suffers more intensely, some
fishermen thought that subsidies could be used to preserve commercial fishing until the situation blew
over. These subsidies could include subsidizing the price of inputs by reducing the costs for diesel and
ice, and by boosting dockside prices through subsidizing the purchase of seafood. Some fishermen feel it
is unfair that some industries in America like corn producers get numerous subsidies, while commercial
fishermen are left to fend for themselves.
Another interesting point was that this could be a great time to invest into aquaculture. The Lafitte focus
group discussed the possibilities around land-based shrimp ponds or other facilities that could shift the
harvesting of local species off of the Gulf waters. Although aquaculture is not a skill-set derived from
marine fishing, it could be a middle ground where seafood continues to be harvested even if marine
fishing collapses.
Focusing on clean-up and coastal restoration
An interesting theme that arose was not to look to the past for fisheries, nor to the future for skills
transition, but to capture the present through clean-up and restoration. Some fishermen were worried
that as “clean-up contractors” are brought in, local fishermen will lose out on clean-up jobs to out-ofstate
“professionals”. It was insulting to them because they feel that after the past five years,
commercial fishermen are trained experts in a disaster recovery and clean-up jobs. Putting emphasis on
recognizing and utilizing those skills was important to them.
Similarly, there was an interest in utilizing captains and others in coastal restoration projects.
Commercial fishermen know the coast better than most people, and have boats or other equipment
that can be utilized in restoration projects. The pay for these activities could also be quite good, so some
fishermen feel that they should be at the front of the line for these projects.
Summary Recommendations – Oil Spill Response
• Programmatic responses will have to be sensitive to the content of financial claims. Certain
claims components will allow fishermen to think outside of commercial fishing, while
others will not. In any event, a comprehensive package may be necessary to move
fishermen forward.
• Clean-up and coastal restoration could be a key area to apply political and financial
investment. There may be a lot of room for innovation here and in the aquaculture
approach.
• Programs that support commercial fishing will be just as important as programs
transitioning from fishing – both on practical and psychological levels.
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E. Summary Analysis and Recommendations
After meeting with fishermen in different communities, from different backgrounds, and in different
economic situations, several common themes were evident.
• The oil spill has yet to precipitate an urgency regarding the future. Fishermen will wait out the
situation and try to find ways to return to their livelihoods when they can. Consequently,
besides direct cash payouts, there is not currently a demand for social sector programs like
workforce training or job placement services.
• Commercial fishermen have a range of informal skills, but the majority only have a background
in commercial fishing. Furthermore, most interviewees do not have interest in developing new,
formal skills sets outside of fishing or related activities.
• There is some flexibility with fishermen when it comes to other “coastal” careers. Oil and gas
jobs, long-term marine clean-up, and coastal restoration created the most conversation with
participants. The more aligned opportunities are with their boats or the coastline, the more
commercial fishermen seem interested.
• Although on the group-level there was little interest in leaving commercial fishing, on the
individual level there were fishermen who had passion or skills outside of the fisheries
(predominately in food service). Those with broader interests seemed interested in pursuing
new entrepreneurial opportunities, but only if the future of commercial fishing precluded other
income.
• Regardless of what happens with the oil spill, commercial fishermen face incredible barriers to
success outside of the fisheries industry. Age, education, language capacity, citizenship, physical
health, lack of formal employment histories, and lack of savings or saleable assets will make it
difficult to successfully find work or start new businesses outside of fishing.
• Claims will need to be nuanced and comprehensive for fishermen to find them fair, or to provide
them with the resources to adequately help them move on from commercial fishing if that
becomes a necessity. The smaller the fisheries business (in terms of income and assets), the
more likely they will need additional funds and services.
Following the interviews, our findings pointed toward a number of principles that should be applied to
post-disaster programming related to the oil spill. These principles are intended to improve the success
of programs, but are not necessarily “required” for program operations.
1) The first is that case management and personal/business formalization counseling should be at
the forefront of any initiative. What fishermen need more than anything is a way to see through
the morass of challenges they face, and find ways to deal with significant barriers to their
success. Effective technical assistance providing holistic services for fishermen will ensure that
program outcomes are sustained beyond the completion of training courses or entrepreneurial
trainings.
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2) The second principle is that near-term programming should not necessarily be designed with
broad, transformative goals in mind. Programming should instead be focused on incremental,
value-added opportunities that continue to support fishermen as fishermen, and make sense to
them under the current perception of the situation. Courses in welding or contracting could
improve skill sets for fishermen without pushing them towards exiting the industry.
3) The third is that programming for “transformative career transition” should be crafted for small
clusters of fishermen with a passionate interest in a topic. The majority will not participate in
programs aimed at exiting the fisheries, but some fishermen will if the programs are highly
targeted to their interests. Clusters can be an appropriate scale for investing heavily into small
groups who exhibit the most dedication to change.
4) The fourth principle is that the more a fisherman invests into new opportunities, the greater the
perceived benefit should be. This may seem obvious, but it is essential. Any program that is
“transformative” in nature will need a very clear outcome to be successful. If a fisherman is
going to turn his back on a lifestyle he has had for thirty years, he needs a guaranteed job at a
good pay scale to be interested in the opportunity. Simply providing comprehensive training
programs without jobs attached is not likely to incentivize participation.
In other words, finding interested employers or clients (for businesses) will be just as important
as coming up with incubator programs that reflect fishermen’s career desires. Also, subsidies for
participation will add to the perceived benefits that the program delivers.
5) The final take-away from the focus group data is that program design should look to the coast
for new opportunities as much as it looks away. Commercial fishing may continue, and coastal
clean-up and restoration will probably increase. Focusing on medium-term coastal job
opportunities could pave a path for fishermen to return to commercial fishing when those
projects are done, just as working in the oil and gas industry allowed fishermen to do the same
in the past. In the long term, coastal restoration and green industries could provide the most
high-paying jobs for fishermen who seek transition out of the fishing industry but wish to remain
on the water.
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Appendix A: Focus Group Questionnaire
GNO Inc. CVP Focus Groups
Location_________________
Date_____________________
# of Participants___________
Perception
How “bad” is the oil spill?
What do you think will happen to the commercial fishing industry because of the oil spill?
How long do you think the fishing areas will be affected by the oil?
When do you think LDWF will reopen the fisheries?
To you, what is the worst case scenario? How prepared are you to deal with this scenario?
If this gets worse, are you thinking of leaving Louisiana?
Work and Skills
How long do you think your BP job will last?
What other kinds of jobs are fishermen finding right now besides BP jobs?
If the fisheries don’t reopen after the BP jobs end, what will you do for work?
What kind of skills do you have right now?
What industries do you think you could realistically transition into?
What else could you use your boat for?
Are there marine or other certifications you would want to get to be able to do other work? What are
they?
Response
If you got a comprehensive package of money and services related to the spill, what would you think is
fair and beneficial?
How much of your debt is Katrina/Rita/Etc. disaster debt? ($ amount and %)
If there was a boat buy-back program, would you participate?
What do you think of an assistance package composed of cash, debt forgiveness, and a boat buy-back?
What else can be done to help commercial fishermen?
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52 Seedco Financial Services, Inc (Seedco Financial) has been working with the fishery industry in
Southeast Louisiana since 2006. Seedco Financial has provided financial and technical assistance to
nearly 700 commercial fisherman and other related fishery industry businesses in Southeast Louisiana.
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