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Hard Times Wash Up Before BP Oil in Gulf Coast Towns, Bayous

Beach goers in Biloxi
Tourists walk off the beach in Biloxi, Mississippi. Photographer: Joe Raedle/Getty Images

July 8 (Bloomberg Businessweek) -- It’s supposed to be high season in Biloxi, Mississippi, but George Griffith stands on a stretch of beach where seagulls, tacking into a bullying southeast wind, easily outnumber the dozen or so die-hard tourists testing the surf.

“Look, nobody’s here,” says Griffith, one eye on a bruise-blue rainstorm gathering offshore. Griffith knows the ebb and flow of this place well. In 1986, the 47-year-old Iowa native abandoned Midwestern winters for these warm and sugar-sanded shores. He spent the past 13 years working his way up to manager of R.A. Lesso Seafood, a longtime, family-owned Biloxi shrimp processor.

It was, he says, a great life, until BP plc’s Deepwater Horizon rig blew up on April 20. Now, the catastrophe that won’t end --BP’s gusher has spewed oil into the gulf for almost three months -- is playing out like a bad summer movie up and down the Gulf of Mexico’s 1,631 miles of U.S. coastline.

May and June mark the peak of shrimp season here, says Griffith, but Lesso’s business is off about 65 percent. Federal and state authorities have shut fishing grounds, and hundreds of boats that would normally be hauling in shrimp have been hired by BP for its cleanup efforts. Lesso’s 35 employees have taken pay cuts as processing plunged from 72,000 pounds a day to 25,000.

Spoiled Beaches

Numbers like this mount up along the northern Gulf Coast, from Texas to the Florida Panhandle, where oil has marred dozens of miles of shoreline. Fear of more -- federal maps show oil menacing the shore from Terrebonne Parish, Louisiana, to Fort Walton Beach, Florida -- is putting a dent in the Gulf’s $100 billion annual tourism industry. Anecdotally, business is off about 50 percent at Biloxi hotels even as most of the city’s beaches remain open. In Orange Beach, Alabama, condominium complexes that ought to be full are half-empty. An Alabama Gulf Coast visitor’s bureau survey on July 4 showed tourism had plunged 50 percent from the previous year.

In normal years, a substantial commercial fishery helps feed these tourists and the nation. Louisiana fishermen alone catch as much as 120 million pounds of shrimp in a good year; the wider Gulf produces about 69 percent of the nation’s shrimp and 70 percent of its oysters.

Dean Blanchard, a blunt-talking 51-year-old Cajun, figures the BP gusher has cost his Grand Isle, Louisiana, shrimp-processing plant about $30 million in sales to date. Grand Isle’s beaches were among the first to be hit by BP’s oil, and he was soon shut down. “I got a death sentence from Day One,” he says. From 90 employees, “I’m down to eight workers.”

Prosperity Flip-Flop

True, some ex-employees are skimming oil for BP, and it’s proving far more lucrative for them than shrimping ever was. Those lucky enough to sign on with BP are getting as much as $2,000 a day for their boats. Others are getting BP payouts, collecting $2,500 a month.

“But some of these are guys that were making $5,000 to $6,000 a month with me,” says Blanchard. “The idea that BP is making people whole is a lie.... They are making people that were poor, rich, and people that were rich, poor. They’ve turned everything upside down.”

For Pete Gerica, a 57-year-old New Orleans-area crab fisherman, the spill isn’t just a blow to the economy but to his autonomy. With about 35 percent of the Gulf’s federal waters and 57 percent of the state’s fishing grounds now closed, Gerica has found himself fenced out of his traditional waters and stuck, with plenty of company, in Lake Pontchartrain, just north of New Orleans. The 40- by 24-mile brackish lake may seem large, “but there are 40 to 50 of us in there now, with some guys fishing 300 to 500 crab traps,” says Gerica. “That’s thousands of traps -- an unreal number. The pie is getting cut thinner and thinner.”

Hanging On

Tinakon Dan Sananikone, 49, is feeling pressure too. A Laotian immigrant who came with his family to the U.S. in 1976, he founded a successful crab wholesaling operation. Before the spill, about 20 crabbers sold to him at his docks in Lockport, Louisiana, about 50 miles south of New Orleans. Since the spill, he’s lost about 70 percent of his sellers; their grounds have closed or they’ve gone to work for BP. “We’re just trying to hang on,” he says.

Griffith, staring out at a thunderstorm that is now clearly headed for the beach, says at least storms come and go. A Katrina survivor -- he was swept from a Biloxi building by a surge and nearly drowned -- he sees no end to the BP nightmare. In past years he easily made $10,000, including overtime, in the prime six weeks of the season; this year he will make about $3,000 to $4,000. Next to go, he fears, will be his job.

“But it’s not just our business,” says Griffith. “It’s hotels, the restaurants, the souvenir shops. It’s the lady we buy our plastic bags from. She’s got a warehouse full of bags. I feel bad for her, but we can’t buy the bags because we don’t have anything to put in them.”

To contact the reporters on this story: Ken Wells in New York at Kwells8@bloomberg.net; Katarzyna Klimasinska in Houston at kklimasinska@bloomberg.net

To contact the editor responsible for this story: Josh Tyrangiel in New York at jtyrangiel@bloomberg.net.

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