Gulf oil spill hurt SC businesses


When BP’s disastrous oil spill closed fisheries in the Gulf of Mexico last summer, it drove up the price of oysters and cost S.C. restaurants thousands of extra dollars.

But winning compensation for their losses is proving difficult for some Palmetto State businesses that rely heavily on the sale of Gulf seafood.

The Gulf Coast Claims Facility, charged with paying people who suffered financially from the spill, has recently denied requests from Palmetto State seafood businesses as it seeks to clear hundreds of thousands of claims across the country by mid-December.

All told, about 170 claims have been filed in South Carolina for compensation through the $20 billion fund BP established. It wasn’t known Friday how many of those are restaurant and seafood dealer claims, but recent correspondence shows the claims facility is taking a dim view of several payment requests.

Claims facility adjustors say some restaurants and seafood dealers in South Carolina aren’t dependent enough on Gulf seafood to warrant payments.

Columbia-area seafood dealer A.J. Rowe says that’s wrong.

Virtually every oyster he sells to restaurants in South Carolina comes from the Gulf of Mexico. Since the April 20 spill, he’s lost $5,000 a month and has had to close a seafood warehouse because of soaring oyster prices, he said.

“We are not even being heard,’’ Rowe said. “If you don’t live within 25 miles of the Gulf, you can’t get anything from the fund. But we are hurting just as much as they are on the Gulf.’’

Rowe, who runs Cajun Papa Seafood in Edmund, learned two weeks ago that his claim for compensation was being denied. He needs the money because he couldn’t raise prices enough to offset the high Gulf costs, Rowe said.

It’s a similar story at the Noisy Oyster in Charleston. The small restaurant chain has lost more than $42,000 because oyster prices rose after the spill, said owner Brett Yearout and his lawyer, Kevin Dean.

About 90 percent of the oysters sold at the three Noisy Oyster restaurants come from the Gulf of Mexico, Yearout said. At one point, Yearout said he was paying $78 per container for shucked Gulf oysters — more than twice the amount he paid before the spill.

Yearout said he didn’t raise oyster prices on the menu because people would not have paid double the normal $15.99 price for a fried oyster platter.

“That would not have sold,’’ Yearout said.

He and Dean learned Friday that the Noisy Oyster’s claim for emergency compensation had been denied.

“How would this be any different from a seafood restaurant or oyster bar in Panama City Beach (Fla.) that has been paid?’’ Dean asked. “They serve the same kind of stuff. Why should that make the Noisy Oyster any different when they are both ordering oysters from the same location?’’

Claims facility officials were not available Friday, but a form letter to Yearout said his claim didn’t make the cut. The Gulf Coast Claims Facility looks at the extent to which a job or business depends upon the Gulf and its natural resources, the letter said.

“The GCCF has determined that you did not demonstrate that you lost profits or income as a direct result of the spill,’’ according to the letter, which was addressed to “claimant’’ and was unsigned by claims facility administrator Kenneth Feinberg.

Claims from South Carolina are minuscule when compared to those in other states. Most of the more than 500,000 claims are from the Gulf Coast. Most of the approximately 170 S.C. claims are from Charleston, Horry and Greenville counties. About sixteen are from Richland and Lexington counties combined.

Many of the South Carolinians who have filed claims likely own property or have business interests on the Gulf of Mexico, although it’s clear not all of them fall into that category, attorneys and accountants familiar with the process say.

Why does South Carolina even need Gulf Coast oysters? Like other South Atlantic states, South Carolina produces seafood. But some types are more abundant in the vast Gulf of Mexico fishery.

The Gulf, for instance, led the nation in the production of oysters in 2008, providing about 59 percent of the nation’s total, according to the U.S. Environmental Protection Agency.

Unlike in South Carolina, oysters also typically can be bought year-round from the Gulf. S.C. oysters are only in season in the fall, winter and early spring. Because the S.C. coastline is smaller than the Gulf, the Palmetto State must close oyster beds for part of the year to give shellfish time to spawn and replenish themselves. Also, South Carolina does not produce the consistently large oysters found in the Gulf fishery, some Palmetto State restaurant owners say.

The BP oil spill occurred in April and was not capped for months. All told, it gushed 206 million gallons of oil into the Gulf of Mexico to become the worst spill in U.S. history, according to federal estimates. By mid-June, about one-third of the Gulf’s federally controlled fishing grounds had been closed. Oyster beds in the Gulf region also were damaged as freshwater was released from rivers to try and keep oil from floating into shore. Most fishing grounds have reopened and oyster prices have moderated recently, but they still remain higher than before the spill, S.C. seafood industry officials said.

Yearout’s request for reimbursement is considered an emergency claim, or one to pay the immediate damage suffered from the spill. The deadline to file emergency claims was Nov. 23, but those who believe damages will affect them for years to come can file claims for long-term losses.

Dean, Yearout’s attorney, said the Noisy Oyster case will guide the restaurant on whether to file an interim or final claim, which could cover long-term damages — or sue BP for reimbursement. People who file and accept final claims agree not to sue BP at a later date.

The Noisy Oyster’s case also can provide insight to others who may want to seek reimbursement for long-term damages or file separate lawsuits if they do not believe the claims process will provide enough money to offset losses, he said.

Not everyone expects to file a claim. Pearlz oyster bar, which has restaurants in Charleston and Columbia, suffered from the higher prices, but absorbed the cost.

“A lot of that money should go to fishermen down there in the Gulf,’’ said Nate Alton, an oyster buyer for Pearlz.

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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