Deep Water ≠ Light Reading: At 380 pages, the Oil Spill Commission report offers an in-depth discussion of the 2010 disaster in the Gulf. One of the challenges facing Congress and the White House in 2011 is how to implement the report's recommendations, including ones that are pertinent to the health and survival of Louisiana's wetlands (Source: Oil Spill Commission)
Shortly after the Oil Spill Commission published its latest report to the President on January 11, the Environmental Defense Fund and seven other non-profits released a statement encouraging Congress to act on one of the report’s key recommendations.
The groups urged the Republican-led House and the Democratic-led Senate to unite behind proposals to direct 80 percent of the Clean Water Act (CWA) penalties assessed on parties responsible for the spill towards Mississippi River Delta restoration. This theme was soon picked up on other blogs, and its message was echoed in timely editorials published later that week in The New Orleans Times-Picayune, The Economist, and The New York Times.
Given the broad base of local support for Gulf Coast restoration, and the shared opinion that oil spill penalties should support this initiative, it would make sense for a significant portion of the responsible corporations’ CWA fines to go towards rehabilitation of regions affected by the spill. However, as Louisiana and its neighbors continue along the uneven path towards recovery, the question on many minds is how soon this environmental restoration funding–via CWA fines from BP, Transocean, and/or Halliburton–will translate into economic benefits for the people of the Gulf Coast.
And of those benefits, one could not come soon enough: jobs.
The Best of Times, the Worst of Times
At first glance, the employment issues facing Louisiana might not seem severe. That's because by some metrics, the state is doing far better than its peers.
Louisiana netted 19,200 new non-farm jobs between October 2009 and October 2010, while the United States as a whole eeked out a gain of 35,000 over the same period, according to the Bureau of Labor Statistics. In the two years since the collapse of Lehman Brothers and the commodity and stock price slumps that followed, Louisiana’s unemployment rate has consistently remained below the national average. In addition, the announcement of new factory openings and impending trade deals last summer was seen as evidence of the Louisiana economy’s resilience to recessionary shocks.
However, when you delve deeper into the numbers, you find that things are far from perfect in the Pelican State. Especially worrisome are recent developments in Louisiana's employment indicators. Louisiana was one of only 16 states to report an increase in unemployment between October 2009 and October 2010, and while the national unemployment rate fell slightly from 10.0 percent in November 2009 to 9.8 percent in November 2010, the state's unemployment rate rose from 7.3 percent to 8.2 percent during the 12-month period. These numbers show that the gap between joblessness in Louisiana and unemployment in the rest of the United States is narrowing. In other words, they suggest that the job market in the Pelican State is worsening at the very moment when the job market of the nation-at-large is improving.
The wetland parishes have not escaped the economic pain. In the New Orleans-Metairie-Kenner metropolitan statistical area – home to most of the Mississippi River Delta’s residents – every one of the seven parishes reported an increase in unemployment between November 2009 and November 2010. The jobless rate in Orleans Parish surged from 8.1 percent to 9.8 percent, matching the national average.
One of the factors behind the recent uptick in unemployment was the BP oil disaster. The effects of the Gulf oil spill appear to have been concentrated in the coastal parishes that were impacted earliest (and longest) by subsequent fishery closures and deepwater drilling moratoriums. These events idled thousands of workers, putting a chill on the economy of southern Louisiana. While the disaster itself created unexpected windfalls for some residents, many workers, especially those in the fishing and fossil fuel sectors, wonder if a return to pre-spill normalcy is possible now or in the near future.
Problems in Plaquemines Parish
As an example, consider the experience of Plaquemines Parish. The finger-shaped parish, which includes the southernmost sections of Louisiana, extends into the Gulf of Mexico. Given its lengthy coastline, the thinly-settled peninsula is economically dependent upon the riches that lie within and beneath its surrounding waters.
In 2009, Plaquemines Parish ranked fourth (behind the more heavily populated Terrebonne, Lafourche, and Jefferson Parishes) in the percentage of state commercial fishing licenses held by its residents. That year, Plaquemines Parish issued 811 licenses to commercial oystermen and shrimpers, who in turn provided business for dozens of bait shops, restaurants, refueling depots, and repair stations dependent upon the fishing industry. The parish also was an important supply point for offshore oil platforms, providing hundreds of jobs in catering and transportation for residents of Venice, Pointe à la Hache, and other ports.
Plaquemines Parish was one of the first places where oil from the Deepwater Horizon hit land. Oil sheen was reported in East Bay and West Bay on May 7, and tar balls began washing ashore near South Pass on May 12, less than a month after the April 20 Macondo well explosion.
In the months that followed, temporary work from the Vessels of Opportunity Program and other cleanup projects helped to reduce the impact of the spill on employment in the parish, while the influx of journalists, spill voyeurs, and others provided steady business for companies situated near the spill zone. Anecdotal evidence of an unexpected boom in Plaquemines Parish was borne out by ballooning sales tax revenue, which increased 80 percent year-on-year between June 2009 and June 2010.
Leader of the pack: The chart above illustrates the important role that fishing played in the pre-spill economy of Plaquemines Parish (Sources: Louisiana Workforce Commission, Plaquemines Parish Government)
Now the cameras have departed, and with them thousands of media personnel. Since tourism has not yet rebounded to its pre-spill levels, the motels, hotels and restaurants in Plaquemines Parish are struggling to attract clients. Besides the service sector, other industries critical to the economy of southern Louisiana – including fishing and energy extraction – remain in tough shape. The sluggish recovery from the deepwater drilling moratorium has idled dozens of oil industry workers, while oystermen and shrimpers in coastal communities have faced shrinking demand for their catches amid a consumer backlash against Gulf Coast seafood.
Requiem for a bream: Several months after the Deepwater Horizon explosion, this dead fish was photographed in an oil-slicked stream near Pointe à la Hache, the seat of Plaquemines Parish (Source: Wikimedia Commons)
Unsurprisingly, the distribution of funds from the Gulf Coast Claims Facility (GCCF) has not been enough to prevent real hardship from stalking the villages and hamlets of Plaquemines Parish, creating a surge of anger and desperation among workers with few alternatives to their pre-spill careers.
What will happen to these people? What sort of training and development programs could be established to create opportunities for residents of Plaquemines Parish? And how could these short-term opportunities be structured to improve the long-term health of southeastern Louisiana’s economy?
The recovery of Plaquemines Parish could be helped along by post-spill legislation and its effect on long-delayed wetland protection projects. If billions in oil spill penalties are used to expedite environmental rehabilitation in southeastern Louisiana, the swamp could replace the sea as the engine of economic growth in Plaquemines Parish.
The Economic Potential of Environmental Protection
Many of the areas coping with an increase in unemployment are the very places that would benefit most from an expedited program of coastal rehabilitation in southern Louisiana. As a result of its location along the lowest reaches of the Mississippi River, Plaquemines Parish would be a major site for initiatives to rebuild and restore Louisiana’s deltaic wetlands.
Several of the Louisiana Coastal Area (LCA) projects authorized by Louisiana’s Office of Coastal Protection and Restoration (OCPR) are sited in Plaquemines Parish. They include the Medium Diversion at Myrtle Grove, the Medium Diversion at White Ditch, the Barataria Basin Barrier Shoreline Restoration, and the Modification to the Caernarvon Diversion. These public works projects will restore natural habitats critical to bird populations and aquatic life. In addition, the wetlands and barrier islands they will create shall serve as natural components of the region’s flood defense system.
The work will be expensive, but these investments will pay dividends by providing a new lease on life for southeastern Louisiana. The LCA initiatives, in concert with other plans for coastal restoration and flood protection in southern Louisiana, could create tens of thousands of jobs for people throughout the Pelican State.
Hands-on Work at Hopedale: A construction crew installs flapgated culverts at a hydrologic restoration project site in St. Bernard Parish (Source: Louisiana Office of Coastal Protection and Restoration)
If we reference the U.S. Army Corps Chief of Engineers’ project cost estimates for the White Ditch Diversion ($91.5 million) and the Barataria Basin Barrier Shoreline Restoration ($248.6 million), and use a jobs/spending ratio of 9.45 full-time equivalent (FTE) job-years per $1 million from our Central Wetlands Unit analysis, we can conservatively estimate that these two projects alone would create (91.5 + 248.6) * 9.45 ≈ 3,214 full-time jobs in Louisiana. If we instead use the respective spending caps (150 percent of projected cost) to estimate the price tag for these initiatives, and reference the Economic Policy Institute’s job/spending ratio of 20.3 FTE job-years per $1 million for environmental work, then we could say that, at the high end, the Barataria Basin Shoreline Restoration and the White Ditch Diversion would generate (1.5 * (91.5 + 248.6)) * 20.3 ≈ 10,356 full-time equivalent positions in Louisiana. Inevitably, many of these jobs in construction, landscaping, engineering, and project management would go to residents of Plaquemines Parish, creating new opportunities for its 20,000 residents.
Regional leaders recognize that these efforts are important for the future of Plaquemines Parish and its neighbors. Parish President Billy Nungesser, who was appointed to the Louisiana Coastal Protection and Restoration Authority (CPRA) in 2009, has stated: “Our coastal plan is our economic development plan. Failure is not an option.”
We agree. The comprehensive restoration of southern Louisiana’s wetlands will demand consistent input from visiting planners, engineers, and consultants, providing a new client base for the state’s service sector. Restored wetlands will provide resilient new habitat for aquatic life, improving the health of important fisheries in the Gulf and supporting the long-term recovery of Louisiana’s marine industries. The flood protection afforded by buffering swamps and marshes will keep communities and infrastructure sheltered from storm surges and floods, allowing southeastern Louisiana to remain an active hub of America’s offshore energy industry.
To us, the case is clear, but the important decisions now lie with Congress and the President. They have the power to make restoration funding a priority this calendar year. We hope that the House will act soon on recent legislation from Rep. Ed Markey (D-MA) and Rep. Steve Scalise (R-LA) to direct Clean Water Act funds towards marsh and swamp restoration on the Gulf Coast. Failure to move now on post-spill penalties for wetland rehabilitation would be a bad break for Louisiana, its beleaguered environment, and its battered economy.