Friday, June 21, 2013

SURPRISE, SURPRISE, SURPRISE: How 'Gas & Oil' Industry Helps Create Coastal Dead Zones

Scientists are expecting a very large "dead zone" in the Gulf of Mexico and a smaller than average hypoxic level in the Chesapeake Bay this year.

Surprise, surprise, surprise,” is how Gomer Pyle would’ve put it.

The report from the National Oceanic and Atmospheric Administration (NOAA) forecasts the 2013 hypoxic "dead" zone in the Gulf of Mexico will be between 7,286 and 8,561 square miles, placing it among the 10 largest ever recorded (an area the size of the entire state of New Jersey). Hypoxic (very low oxygen) and anoxic (no oxygen) zones are caused by excessive nutrient pollution, often from human activities such as agriculture, which results in insufficient oxygen to support most marine life in near-bottom waters.

“…the growing dead zones in the Chesapeake Bay are the direct result of inadequate water filtration — a job that was once carried out by menhaden,” noted author Paul Greenberg, while Jim Uphoff at the Maryland Department of Natural Resources said of menhaden, “they are filter feeders that consume phytoplankton, thus controlling the growth of algae in coastal waters. As the population of menhaden declines, algal blooms have proliferated, transforming some inshore waters into dead zones.”

Imagine, a single adult bunker filtering as much as 2 million gallons of water a year, essentially inputting bad water and outputting clean water by ridding 4 to 6 gallons of algae from the water in a single minute.


It should be of no surprise to anyone that the biggest dead zones in coastal U.S. waters are at the mouth of the Mississippi and in a small region of the Chesapeake, right where factory menhaden reduction operations by the publicly-traded resource degradation outfit known as Omega Protein (stock symbol OME) are based. Omega’s manufacturing facilities, the ports where hundreds of millions of pounds of menhaden are offloaded for processing into livestock feed and fish meal, are located in the Gulf towns of Abbeville and Cameron in Louisiana and Moss Point in Mississippi, as well as at Reedsville, Virginia on the Chesapeake Bay.

Headquartered in Houston, Texas, Omega Protein traces its origins to Zapata Oil, founded in 1953 by future-U.S. President George H. W. Bush and business partners John Overbey, Hugh Liedtke, Bill Liedtke, and Thomas J. Devine. Overbey was a ‘landman’ skilled in scouting oil fields and obtaining drilling rights cheaply, while Bush and Devine were oil-wildcatting associates who performed oil exploration drillings. Their joint activities culminated in the establishment of Zapata Oil through an initial $1 million investment provided by the Liedtke brothers, Bush's father Prescott Bush and his maternal grandfather, along with an inner-circle of wealthy oil tycoons. Hugh Liedtke was named president, with Bush was vice president.

A 1975 internal CIA memo noted how Zapata was founded through Bush's joint efforts with Devine, a CIA staffer who had resigned his agency position that same year to go into private business, but who continued to work for the CIA under commercial cover. Devine would later accompany Bush to Vietnam in late 1967 as a "cleared and witting commercial asset" of the agency. (Read more about Zapata here at Wikipedia.)

In 1997, Zapata Protein would go public in seeking additional investors, changing its official name to Omega Protein in 2002.


During 2013 alone, the OME stock price has ranged from a low of $6.32 a share on January 7, to a recent high of $11.03 on May 21. One investor called the near-doubling of the OME stock as coming entirely as a result of fish meal supply reductions in Peru following extreme government restrictions there on the anchovy catch. After finding that "the Peruvian anchovy is in danger of extinction," Peru’s President Ollanta Humala cut anchovy production there by 68%, opening a new international market for Omega’s ground-up fish meal product.

Using spotter planes to find the menhaden, high-powered vacuums to suck out acres upon acres of fish from the water, and large factory ships to ‘reduce’ the oily baitfish to meal, Omega Protein essentially functions to take as much menhaden from areas of the Chesapeake and Gulf of Mexico as is technological possible, leaving these waters devoid of a natural “water filtration” while lining the pockets of their investors. What’s left behind are hungry striped bass, weakfish and crabs whose primary source of protein is ultimately turned to fish meal for Peruvian aquaculture facilities (and others around the world), and vast hypoxic "dead" zones where algae and phytoplankton chokes the oxygen from the water.

In addition to its wanton destruction of a vital ecosystem stock, Omega Protein Corporation has also come under fire for other environmental issues in recent years. On June 4th of this year, OME pleaded guilty to a pair of Clean Water Act violations stemming from bilge water discharge practices at its Reedville, VA facility, requiring the company to pay a $5.5 million fine, be placed on a three year term of probation, and implement an environmental compliance program.

In addition to the $5.5 million fine, the Chesapeake operation was required to make a $2 million payment to the National Fish and Wildlife Foundation to fund projects in Virginia related to the protection of the environmental health of the Chesapeake Bay.

OME has always claimed to be a champion of the environment, and when you search for Omega Protein at Google or Bing you’ll find the company boasting of its “sustainability,” claiming to be “committed to protecting the environment and menhaden fishery that provide us with our livelihood.” The livelihood of Omega’s workforce has always been used by their corporate leaders in defending the company’s ability to degrade our local waters of menhaden. In December for example, the Atlantic States Marine Fisheries Commission (ASMFC) opted to reduce the total allowable catch of menhaden by 20% beginning in 2013, a move that Omega’s Ben Landry called "big blow for the blue-collar workers in the Northern Neck of Virginia, as well as up and down the East Coast."

According to the Daily Press of Hampton Roads, VA, “Omega employs 300 workers in its reduction facility in Reedville, where menhaden are ground and boiled down into fertilizer, food for pets and livestock and dietary supplements. Thousands of other jobs depend on the industry, including fishermen in Omega's eight-vessel fleet.”

"Well have to run some numbers," Landry told the Daily Press last winter, adding "I can assure you it's probably going to cost the fleet at least one vessel, and that results in (lost) jobs directly there."

Well, surprise, surprise, on May 20th of this year, one day before OME’s stock surged to its highest point of 2013, the company announced the launch of new two state-of-the-art fishing vessels at the Reedville facility. At 196 feet and 184 feet long, these are the first new vessels christened by Omega in more than 20 years.


In terms of the Omega employees, while they claim to have a staff of 300 in Reedville alone, the company has historically be able to utilize foreign (largely Mexican) H2B Visa workers for temporary employment during the fishing season, although according to its 10-K the company's initial application for 2013 was denied by the U.S. Department of Labor. As of the filing of Omega's 10-Q on May 7 Omega's re-application had not yet been approved, and the company had already "embarked on a program to complement its workforce with non H2B Visa domestic workers."

While Omega hadn’t disclosed the dollar amount of its utilization of the program in 2012, according to a Freedom of Information Act request Omega Protein received 695 H2B visas for foreign workers in 2006 and 2007 at $12,000 per worker for the season. Landry said of the visa program, "the average laborer, a young man, blue collar worker, can make an extraordinary rate in the oil and gas industry [in the Gulf] and it was something we weren't able to keep up with."

Of course, it’s funny that Landry would differentiate himself and his corporation from the “oil and gas industry” in the Gulf of Mexico, given the fact the company’s history is built upon oil and gas revenues going back to Bush, Liedtke, and Devine. There is very little difference between the owner/investor of a Gulf oil rig and that of a 196-foot factory reduction ship, they both function the same.

The good news is that the large-scale commercial menhaden fishery - the ‘reduction’ industry - has been gradually phased out of all Atlantic States except Virginia. And while the overall 20% reduction in overall allowable harvest of menhaden voted by ASMFC sounds like a good deal for the fish and the ecosystem, it’s really a hollow victory for the resource given that Virginia has represented on average about 34% of Omega’s overall catch over the past five years. Coastwide, the total allowable catch now is 20% less than the average catch from 2009 to 2011, but the decision has also granted Omega 85% of the entire coastwide harvest.

Given that all state waters except Virginia are now closed down for the menhaden reduction industry, it’s expected that the Chesapeake will continue to be hit hard in the future by factory ships. In turn, the expected 8% loss in Omega Protein’s overall sales volume thanks to the Virginia restrictions will now have to offset somewhere if investors are going to continue to flock towards OME stock. That means an increase in overall harvest can be expected in the Gulf of Mexico, where there are no similar cap restrictions on the amount of menhaden which the reduction industry may harvest. Omega and its spinsters will say that increased harvest leads to increased employment.

However, where the Louisiana unemployment rate was 3.7% in 2006-2007, topping 6.5% in Mississippi during the same period, Omega’s manufacturing facilities in that region had utilized close to 600 of those low-paid foreign workers through the company’s H2B visa program.

While Jim Nabors’ boyhood home of Sylacauga, Alabama is a good 250 miles from the mouth of Mobile Bay on the Gulf of Mexico, I’m sure that his beloved Gomer Pyle could’ve surmised this hypocrisy quite well in just three, simple words:

“Shame, shame, shame…”

One final point which many find interesting - where groups like the Recreational Fishing Alliance (RFA) were pushing ASMFC and federal officials to go after Omega’s Chesapeake Bay operations, while calling for an outright ban on the reduction industry there, environmental activists working under the Pew Charitable Trusts umbrella pushed for the coastwide bunker cap which was approved back in December.

With Pew’s billion-dollar coffers, one might think that a crushing blow to Omega’s heart was within reach in 2012. However, with Pew’s activist support, Omega Protein’s 85% share of the Atlantic Coastal menhaden harvest was memorialized, with local bait harvesters taking the lion’s share of the overall harvest limit on a state-by-state basis.

Pew Charitable Trusts of course was founded by J. Howard Pew, Mary Ethel Pew, Joseph N. Pew, Jr., and Mabel Pew Myrin—the adult sons and daughters of Sun Oil Company (SUNOCO) founder Joseph N. Pew and his wife, Mary Anderson Pew. If you’d like to get in touch with SUNOCO INC, feel free to write them at 1308 N US Highway 83 in ZAPATA, TX 78076.

Tuesday, June 4, 2013

RED LOBSTER & OLIVE GARDEN GO ANTI-ANGLER – Corporate Owners Officially Ask Gulf Council To Take Red Snapper Away From Recreational Sector

While the Gulf of Mexico red snapper population is getting healthier, the owners of Red Lobster and Olive Garden don't believe anglers should be given the opportunity to fish for them - despite a recent decision by NOAA Fisheries.

A week before reopening the season, federal regulators announced that the recreational season in federal waters for red snapper will be 17 to 34 days instead of 9 to 28 based on updated recreational landings data and new information from Louisiana and Texas according to a release from NOAA Fisheries. The recreational season is set to open on June 1 in federal waters, which begin 9 nautical miles off Florida and Texas and 3 nautical miles from the Alabama, Mississippi, and Louisiana coasts.

NOAA Fisheries also raised the total allowed red snapper catch from 8 million to nearly 8.5 million pounds, with 51 percent allotted to the commercial sector and just 49 percent for recreational anglers. However, according to the Recreational Fishing Alliance (RFA), one national restaurant chain is not happy with that allocation between commercial and recreational red snapper fishermen, and has asked the Gulf of Mexico Fishery Management Council (Gulf Council) to consider giving anglers less fish.

Darden Restaurants, the corporate owners of Red Lobster, Olive Garden, LongHorn Steakhouse, Capital Grille, Bahama Breeze and Season 52 restaurant chains, has recommended "for consideration a review of the Gulf of Mexico recreational sector quota," which the corporation feels presently gives anglers too much of the overall red snapper quota at 49 percent. "This sector is allocated a very large portion of the red snapper quota, almost equal to that of the commercial sector; however, they do not have the same reporting requirements that the commercial sector."

In a recent Sun Sentinel article by Washington Bureau correspondent William Gibson, it was reported that Darden Restaurants supports stricter quotas on red snapper harvest in the Gulf of Mexico, evidenced by the 2012 letter to the Gulf Council in which Darden called for continuation of more restrictive red snapper quotas, while asking that "commercial fishers should be allotted more and recreational anglers less."

RFA was able to track down the official letter to the Gulf Council at a website run by the Gulf of Mexico Reef Shareholders Alliance, a group of individual fishing quota owners in the Gulf whose organization is heavily funded by Environmental Defense Fund (EDF) and other organizations who support programs giving full ownership of coastal fish stocks to select groups and individuals. In their official letter, Darden Restaurants claims personal support for helping establish 'catch share' programs in the Gulf of Mexico, explaining how rigid time limits in place by law to rebuild fish stocks should actually be shortened to force recreational anglers to have fewer days to fish for iconic species like red snapper.

"Some stocks in the Gulf of Mexico, including red snapper, are not on target to be rebuilt in 10 years, as is mandated in the Magnuson-Stevens Act," the letter from Darden Restaurants reads, while also "calling for improved data collection and monitoring from recreational fishers and shorter rebuilding plans within 10 years" which they claim could lead to clearer benefits to the Gulf resource.

RFA said that greenwashing efforts of organizations like EDF and Pew Environment Group has influenced several major corporations to turn their back on the angling public. In response, RFA is encouraging U.S. saltwater anglers to respond with a less than subtle message - take your business elsewhere!

"If Olive Garden, Red Lobster and Capital Grille would like to deny anglers the opportunity to fish, then it's time to deny those restaurants the opportunity at our business," said RFA executive director Jim Donofrio. "If Darden Restaurant chain thinks that if anglers are denied the right to fish, that we'll simply dine out more at Red Lobster or Olive Garden, then I hope anglers are willing to send the message that shows them just how wrong that is."

RFA recently called on a nationwide boycott of Wal-Mart because of similar corporate neglect for core customer values. "The Walton family uses their fortune to buy off friends who'll cover for their despicable business practices, whether it's corporate greenwashing with EDF, rebranding efforts through national trade association campaigns, or apparently by way of directed bribes to local officials in other countries," Donofrio said last August. "Don't just stop buying fishing tackle at Wal-Mart, stop supporting this company altogether and let's quit supporting complete buyouts and takeovers of local communities."

Through their contributions of over $36 million towards no-access marine reserves and catch share programs, RFA said the Walton family has turned their back on local fishing communities and even their own customers. "Shopping for fishing equipment at Wal-Mart is contributing directly to the demise of our sport, it's supporting lost fishing opportunities and decreased coastal access for all Americans," said Donofrio. In late May, Wal-Mart also pleaded guilty to violating the Clean Water Act to the tune of over $110 million in federal fines.

RFA said that environmental organizations today function more like corporate public relations firms for major retail business outlets like Wal-Mart, Olive Garden and Red Lobster who are often criticized at the local level. However, EDF recently has created turmoil inside even its own environmental ranks by providing support for oil giants Chevron and Shell who are pushing for hydraulic fracturing of shale rock to extract oil and natural gas.

"The recent national headlines showing how EDF has ruined the environmental movement by carrying the financial load for major corporations should be red flag in Congress where efforts to protect our small business owners have stalled in recent years by the so-called green movement," Donofrio said. "Darden Restaurants, like Wal-Mart, sees big green only for its shareholders, certainly not for the local constituents."

RFA noted how New York Times originally reported last year how EDF "does not accept contributions from Wal-Mart or other corporations it works for," though when confronted on the fact that the $1.3 billion Walton Family Foundation (started in 1987 by Wal-Mart founders' Sam and Helen Walton) has been underwriting EDF's effort to replace the nation's owner-operated fishing businesses with a catch shares model designed to cap the number of active fishermen by trading away ownership of the resource to those with the deepest pockets, the reporter responsible for the story conceded that in a rush to meet deadlines she never considered the relationship between the Walton family and Wal-Mart.

"I didn't think to check the EDF board for Walton family members, or Walton Family Foundation donations," said reporter Stephanie Clifford, adding "None of the third parties I'd spoken to had mentioned that connection, which isn't an excuse - I should have thought of it myself, but didn't."

RFA said groups like Pew and EDF have been given a free pass by the mainstream press in recent years, but Donofrio hopes that the current climate with journalists appearing to fall under intense, unethical and perhaps even illegal government scrutiny may be the tipping point that fishermen have longed hoped for in terms of open and responsible reporting.

"Pew recently sponsored their own fish summit in Washington DC designed to influence Congress towards adding more restrictive measures to our federal fisheries law, while EDF appears to be carrying the water for oil giants and Wall Street investors," Donofrio said. "This isn't conspiracy, it's a transparent culture of treachery and deceit within the environmental business community."

"Saltwater anglers need to send a unified message to businesses like Wal-Mart, Red Lobster and Olive Garden, and turn your back on those who turn their back on us," Donofrio said.