EDITOR’S NOTE: Contributing Columnist, Steve Nicklas, expresses his views and insights on various topics in Steve’s Marketplace column.
Oil doesn’t ripple — but its repercussions do. The British Petroleum oil spill is fraught with as much uncertainty and conjecture as hurricane forecasts. One thing is certain, however. The spill presents nothing that is good — in any economic, ecological, or ethical sense.
Though the spill is centered in the Gulf of Mexico, its grimy reach could extend far from there. Some experts predict the oil could enter the Gulf Stream, and possibly spread to South Florida and onto the Atlantic Coast.
Even so, the immediate or far-reaching effects from oil on our beaches here on Amelia Island, Florida is minimal by most accounts. However, there are other outlying impacts, and many of them.
— Shrimp boats based on the Gulf Coast may reposition themselves along the Atlantic Coast. About 30 percent of the Gulf is closed to shrimping, as well as fishing. This would create more competition for local shrimpers, according to industry experts. And Gulf Coast shrimpers know our waters already.
— A scarcity of fresh seafood would lead to higher prices for consumers and restaurants. Even if restaurants can offer certain types of seafood, such as oysters, the prices may be unrealistic in today’s fragile economy.
— A tainted perception of “Florida seafood” could hinder sales. Even though health officials have been exceedingly mindful of closing off polluted sections of the Gulf for fishing and shrimping, any sensational media-induced scare could further injure the seafood industry.
— Amelia Island tourism could experience an increase in activity. Many vacationers to the popular Florida Gulf Coast, as well as to the shores of Alabama and Louisiana, have cancelled their plans. They could relocate their vacations to alternative places like Amelia Island.
— In a purely financial sense, a significant number of municipal bonds are tied to tourism-based towns and cities in Florida. If revenues from tourism are impacted in any way, this could trickle through to the issuers of such bonds, causing financial downgrades and possible risks of default.
— In addition, the real estate markets in the coastal areas of Florida are being relied upon to propel the state back to financial health. An oil spill of this magnitude could impair that progress. However, potential buyers in harder-hit areas of Louisiana and Alabama may instead opt for the Florida coastal areas untouched by the oil spill.
Many of these implications are still far from reality. If recent attempts by British Petroleum are successful, further devastation will be minimized. Even if the oil spreads to the Atlantic Coast, the Gulf Stream is 60 miles from our shoreline; therefore, impact to Amelia Island beaches would be negligible, even in the worst-case scenario.
Also, while oil does not ripple, it becomes diluted in larger bodies of water such as the Atlantic Ocean. This also bodes well for our area.
And while British Petroleum is a foreign company (as the name implies), it has a vested interest in the U.S. through its extensive operations — particularly in the Gulf. Company officials have been standing behind claims and a commitment to clean up their accidental mess.
This is admirable. However, U.S. officials must ensure that British Petroleum (and others involved including Transocean and Halliburton) is sincere and committed — even after the public attention subsides. Hopefully, a fund in the billions of dollars will be established for clean-up purposes, and to repair those industries and towns and populations impacted by the ripple effects of the spill. And will be for years to come.
(Steve Nicklas is a financial advisor who lives on Amelia Island. He can be reached at 904-753-0236 or send eMail to [email protected])