TOPICS > Economy

Rising Fuel Costs Damage Viability of Fishing Industry

July 16, 2008 at 6:35 PM EDT
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Rising fuel costs are reaching far into the pockets of tuna fisherman, who are struggling to keep their businesses alive as the price of fuel skyrockets.

LEE HOCHBERG, NewsHour correspondent: There’s usually excitement along the Pacific coast at the start of the summer tuna fishing season, but this summer, Lewis Hill was openly troubled as he prepared to fuel up his boat at Westport in Washington state.

LEWIS HILL, commercial fisherman: In the next 90 days, I plan on probably burning $45,000 worth of fuel. And I don’t know what we’re going to catch.

MALE: You getting a thousand in each one, Lewis?

LEWIS HILL: Probably. You realize when the last time I got fuel, the price was $2.76?

LEE HOCHBERG: In one year, the price of diesel at these pumps has jumped 70 percent. It exceeds $5 a gallon at many West Coast ports. But the price of tuna has remained constant since the 1980s.

LEWIS HILL: Fuel has become such a major item. We might find fish 50 miles from here or we might have to go 500 miles from here or 1,000 miles from here. It’s just we’ve got to go where we’ve got to go. And it’s a gamble.

You spend more money here than you could on a crap table.

LEE HOCHBERG: Hill swallowed hard as he purchased 2,000 gallons of fuel. His boat burns a gallon per mile, even with a new, more efficient $50,000 engine.

Instead of striking out in search of migrating albacore, some fishers are scaling back on their season or simply tying their boats up and staying in port.

Richard Hagel has fished tuna from these Washington docks since 1975, and he says he’s not sure it’s worth it anymore.

RICHARD HAGEL, commercial fisherman: If the price of the fish do not come up to offset fuel, we won’t be fishing. You know, nobody wants to do this for nothing.

Coastal economy hit hard by oil

LEE HOCHBERG: It's not just the fishermen who are suffering. So, too, are businesses like Pacific Seafood in Warrenton, Oregon, which processes and ships a variety of fish and shellfish. Craig Urness says high fuel costs have hit every part of the company.

CRAIG URNESS, Pacific Seafood: So if it costs them more to catch it...

They're going to be squeezed. We're squeezed. Our transportation costs are up. You know, at every level, you get margin-squeezed out of the business. It's hurting at every level.

LEE HOCHBERG: In fact, the ripples have hit the whole coastal economy, people who do fiberglass repairs for the Westport fleet, like Bruce Hatton.

BRUCE HATTON, boat repair contractor: That oil affects everything. My supply for fiberglass materials has doubled for the material itself, and then it's gone up also for transportation costs for shipping it around. So some guys can't afford to fix their boats.

LEWIS HILL: Well, hopefully we'll get the fish in here.

LEE HOCHBERG: One solution the fleet is trying is to use a research vessel to scout out the migrating albacore so not all the boats waste fuel looking in empty waters.

LEWIS HILL: The concern is that the time I get from here clear to here, they might quit biting. And then I ran all that way for nothing.

Market fish prices hard on fishing

LEE HOCHBERG: The problems faced by Northwest tuna fishermen are not unique. In Alaska, fishermen are sitting idle. On the Atlantic coast, lobstermen are taking fewer trips to their traps. In the gulf, shrimpers are seeking out cheaper fuel in Mexico.

So why don't they all just raise the price of their fish? They can't because of competition from low-cost imports and farmed fish.

And tuna fishermen face an extra challenge. Tuna pricing is set by Asian and European tuna fishermen, who fish in their own local waters and can their fish locally and cheaply.

Bumblebee, StarKist and Chicken of the Sea, in fact, all do their canning in Asia. With no canneries left in this country, the American fleet has to freeze its catch and then pay extra to ship it whole to European or Japanese customers. That freight cost already makes U.S. tuna more expensive.

A group of 40 western fishermen has struck a deal with those European customers to boost prices for tuna filets. But Mike Shedore, who was involved in the negotiations, says, if fuel costs keep rising, the deal will fall apart.

MIKE SHEDORE, commercial fisherman: The fuel cost, the fuel volatility is a factor in anything that we do down the road. As long as we have this wild card of dysfunctional fuel prices, everything's up for grabs.

Subsidies may save American fishing

LEE HOCHBERG: In another approach, fishers Douglas Fricke and Barbara Morris are trying to revive the domestic market. They're selling their tuna to new micro-canneries, which produce a higher cost, but less processed tuna for American specialty stores. But Fricke knows that market is limited.

DOUGLAS FRICKE, commercial fisherman: I have a son that's involved in marketing. And he says, "Dad, you can have all the quality you want, but price sells. And people just aren't willing to pay three times as much for the quality."

LEE HOCHBERG: An organization of 400 West Coast tuna trawlers and supporting businesses says its members cannot be expected to compete with European and Asian fleets that are subsidized by their governments. The group is calling on Washington to help by giving subsidies and tax incentives to U.S. fishermen.

LEWIS HILL: Well, the government subsidized the farmers; they've been bailing the airlines out; they've been bailing the bankers out. We need help, too. You know, you watch the news. This government isn't doing squat.

LEE HOCHBERG: Last month, legislation was introduced to give those who fish a temporary income tax credit. But in the meantime, the fishermen are on their own.

Hill left Thursday, was burning 125 gallons of fuel each day, and at last check hadn't caught any fish yet.