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OUR VIEW: Jeopardizing a visitor industry for little in return

The Mississippi Business Journal over the years has chronicled the exodus of Mississippi corporations, trade associations and non-profit groups to Alabama’s Orange Beach and Gulf Shores and Florida’s Panhandle for their conventions and trade shows.

While we lamented the loss of hospitality dollars to our state, we conceded the lure of the sparkling sand beaches and seaside golf courses these destinations possessed. But our comparisons never included the freedom from visual blight visitors to these areas enjoyed. After all, visitors to Mississippi’s coast enjoyed the same visual freedom.

But perhaps not for much longer.

A bit of Mississippi’s past is about to catch up with it. In the middle of the last decade, legislators mandated that the Mississippi Development Authority sell oil-and-gas exploratory leases inside 150,000 acres of the Mississippi Sound, an area that takes in the famed wilderness islands just off the coast.

4.1.1Neither the tidal surge dangers exhibited by Hurricane Katrina nor the environmental catastrophe of the Deepwater Horizon oil platform explosion has dissuaded the state’s leaders from allowing the drilling rigs within easy sight of the coast. Not even the prospect of jeopardizing the $1.6-billion-a-year visitor industry along the state’s coast has caused any rethinking.

Meanwhile, the light is about to turn green on putting the state’s sea bottom up for sale, all with the full blessing of Gov. Phil Bryant.

For now, the light is set on caution, thanks to a lawsuit in Hinds County Chancery Court brought by preservation groups the Sierra club and Gulf Restoration Network. They argue the state has not carried out the drilling legislation’s requirement for a genuine analysis of how the Mississippi coast’s visitor industry would fare once drilling rigs are sitting within three miles of shore.

State officials have acknowledged a concern but say they can do the analysis after the leases are awarded. The rub there is that leases are contracts and you have to live with them.

Here is the risk to the hospitality sector the state has conceded to this point: “Exploring for and extracting gas and oil from the Mississippi Sound could have measurable impacts to the tourism industry, particularly if there was a significant spill.”

The cursory analysis performed by Bob Neal, senior state economist, qualifies the warning by noting a Florida study done for that state found that as long as the rigs have no discernible impact on beach quality, vistas and the overall visitor experience “the impact of oil and gas infrastructure would probably be negligible.”

Is “probably” the level of confidence Mississippians should accept in deciding the future of its visitor industry? Can we expect hundreds of millions in new hotel and casino resort investments in exchange for providing an assurance the near-shore rigs “probably” won’t diminish the visitor trade?

What’s more, the “probably” in relation to avoiding diminished visitor levels only applies if no accidents occur.

Jeffrey K. Bounds, Gulfport native and doctor of science, distills the numbers this way: The state can take in $8 million to $9 million a year over the 20-year life of drilling in a reserve s estimated to hold 350 billion cubic feet of natural gas. In return, it risks the 24,000 jobs the state attributes to the coast’s hospitality sector as well as the sector’s $500 million annual payroll and $125 million a year in state revenues.

The risk we address here is the best-case scenario of no rig explosions, massive leaks or other environmental catastrophes. Throw in any of those outcomes and the risk implications go off the charts.

While the state may be eager to get a deal done forthwith, thank Providence and the invisible hand of Adam Smith that the market may delay things – at least as long as natural gas stays plentiful and cheap.

In the meantime, perhaps the state can get serious about weighing the risks the drilling would pose to the coast’s key economic engine.


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