The Deepwater Horizon oil spill, now deemed the worst in American history, may inflict more damage to the future of New Orleans than Hurricane Katrina.
In a matter of days, Katrina and the levee failure wiped out the physical and social fabric of many communities. Across the Gulf Coast, more than 1 million people were displaced from their homes and another estimated 1,400 persons lost their lives to the disaster. In New Orleans, the severe flooding destroyed more than 134,000 homes, wreaked havoc to public and private infrastructure, disrupted businesses, and severed generations of family and community ties that held many neighborhoods together.
But this protracted oil spill disaster could undermine the basic economic purpose of the New Orleans metro area and threaten its very existence.
Cities exist because of their economic function. They bring similar firms and workers together to increase efficiencies and productivity, often borne out of the strategic value of their location. Chicago grew up around Lake Michigan and became a major trade and transportation hub and the gateway to the west. Boston maximized the assets of its location after the Revolutionary War to emerge as one of the wealthiest ports in the country. The founders of New Orleans chose its location (above sea level!) near the mouth of the Mississippi River and the Gulf of Mexico, making the city a commercial center and destination for immigrants.
Today, New Orleans’ livelihood and economic survival remain intricately tied to the health of the water and the coastal area. The New Orleans metro area’s three largest economic drivers are tourism, oil and gas, and port and transportation. The fishing industry matters, too, especially to the outlying parishes like Plaquemines Parish. We must invest in rebuilding New Orleans because these industries bring economic value to the nation and generate additional jobs and wealth to the metropolitan area.
These industries are dependent upon a healthy coastal ecosystem, open and navigable waters, and a strong system of wetlands and barrier islands to protect them. More than the levee system, the coastal wetlands provide one of the most natural and resilient ways to protect the region, including its key industries and infrastructure, from the ravages of a major hurricane. They are a breeding ground for hundreds of aquatic species that bring critical environmental and economic value to the region and the nation. The wetlands have been already eroding at an alarming rate over the decades. The spread of this oil spill and the unknown length of its impact may cause irreparable harm. These assets are disappearing before our eyes.
Fisheries. This now highly-visible industry in Louisiana produces 20-25 percent of all seafood for the lower 48. There are approximately 4,800 registered commercial licenses for small, independent, and self-employed businesses in the greater New Orleans metro area, who fish for crabs, oysters, shrimp, and flounder. The oil spill has resulted in an indefinite U.S. government ban in fishing for nearly 40 percent of federal Gulf waters, and researchers are still determining the biological impact of the oil-slicked wetlands.
This industry has lost jobs and income, both for fisheries and the seafood processing and manufacturers. The fear is that the perceived lack of health and safety of all the seafood from the region will result in a severe drop in demand for Louisiana seafood. Beyond that, the main concern is whether the seafood industry, already struggling with global competition, will bounce back, especially if it takes generations for the sea life to return to normal.
Tourism. New Orleans’ arts, culture, food, music, and festivals make the city unique and draw domestic and international visitors and cruise ships year-round. This is the metro area’s largest economic driver. While real-time data is hard to come by, stories are abounding from businesses about the costs of closed beaches and cancelled hotels and vacation packages, although there may be some offset due to people coming into the region to deal with the spill.
Oil and gas/shipping. These are the second and third largest export sectors of the New Orleans economy, generating some of the highest-wage jobs in the community. The region produces 30 percent of all crude oil and 12 percent of all natural gas for the nation. The port remains one of the busiest in the country. While the administration has been clear that drilling will be part of the U.S. energy portfolio, at least in the short-term, the future of offshore drilling remains in limbo as a moratorium on new leases and likely new regulations on the industry take root. While the Port of New Orleans remains open, it is unclear whether freight and cruise ships will stay on a business-as-usual schedule as the clean up and mitigation efforts intensify.
As the Obama administration takes control of this disaster, it must make one critical investment to help the businesses and citizens of this region bounce back: the restoration of the coastal wetlands. The wetlands are the protector and the provider of the New Orleans economy. Doing so also has the added benefit of preserving the billions of taxpayer investments already made to repair the homes, infrastructure and the levee system caused by the other named disaster.
The people of New Orleans have been working tirelessly to mend their beloved city. As the five-year anniversary of Katrina approaches, the city and all its partners can point to promising efforts to reform the public school system, improve the delivery of health care to the most needy, and make inroads to a highly dysfunctional criminal justice system. The Saints’ Super Bowl victory seemed a capstone to a lot of hard work.
But the oil spill may make those efforts futile and deliver another blow to the Big Easy, which is already struggling to reinvent itself in the face of enormous challenges.
Amy Liu is the Deputy Director of the Brookings Metropolitan Policy Program.
Allison Plyer is the Deputy Director of the Greater New Orleans Community Data Center.