It’s been almost a decade since the U.S.S. Oriskany was sunk 20 miles off the coast of Northwest Florida. That event created the largest artificial reef in the world and set off a wave of commerce in Northwest Florida, as fishing boats and dive operators capitalized on the new resource.
Those businesses have been on the decline since the Deepwater Horizon oil spill, but, now, Escambia County officials think they might know how to right the ship again: by sinking another one.
On a recent Thursday morning,Capt. Doug Hammock dropped anchor at the Oriskany. Aboard his boat, the H2O Below, about a dozen divers, some from as far away as Fayetteville, Arkansas, clambered around the deck. They pulled on wetsuits and hoisted tanks of compressed air, eager to plunge into the Gulf’s crystal clear water.
Hammock is one of those who benefitted from the Oriskany’s sinking. A career mechanic, he began diving recreationally in the 1980s. Back then, the idea of making a career from his hobby wouldn’t have been possible. The Oriskany changed all that. Since 2006, he has made his living hauling divers to the wreck.
“When the Oriskany became a possibility that was an opportunity for me to retire from being a mechanic and do nothing but dive charters,” he said, “because it was going to generate that kind of economy.”
Business was good in the beginning.
“The first year the Oriskany went down, there must have been 25 boats running to the Oriskany,” he said. “At any given time, there would be 10 or 15 of us tied off to the top of it.”
The bonanza came to a halt in 2010, though..
“We were having a really good year” Hammock said. “We had had some great weather. We had a great spring and, then, the BP oil spill.”
Hammock doesn’t think BP should be blamed entirely for the industry’s demise. After all, there was also the Great Recession, skyrocketing fuel costs and other, more subtle factors to deal with. Still, it’s undeniable: Things just haven’t been the same since 2010.
“This year, there might be 25 or 30 times that there was one other boat on it with me,” Hamrick said. “There's been many days I was the only boat out there, and there's been many days I only had four or five people on the boat. My business is off at least, headcount wise, 60 percent from the first four years.”
But Hammock is optimistic that things will improve again. Escambia county officials are looking to spend $1-2 million to sink a second large vessel between Pensacola Pass and the Oriskany. The project is just one of dozens that could be funded through fines generated from the spill and funneled to Gulf Coast counties through the RESTORE Act.
Robert Turpin leads the county’s reef program and authored the proposal to sink another vessel. He says the initial investment would be worthwhile. As proof, he points to the work of Dr. William Huth.
Huth is a diver, like Hammock, but, more importantly, he is an economist at the University of West Florida. As such, he spends a lot of time thinking about the economics of reefs.
Earlier this year, he and his colleagues determined that, statewide, artificial reefs contribute roughly $3.8 billion to the economy each year and create nearly 40,000 jobs.
“That’s about what Disney employs,” he said.
In Northwest Florida alone, reefs contribute half a billion dollars to the economy and created more than 8,000 jobs, most of them related to recreational diving, the researchers found.
Huth thinks that impact could be even bigger if a second ship were sunk. He coauthored a paper in 2009 that sought to measure that additional impact, in terms of something called “consumer surplus.” Huth explained what that means.
“Whenever you're in a market context and you pay a price less than what you were willing to pay, you get a surplus,” he said. “So if you were willing to pay $10,000 for an automobile and you get it for seven, then you got a $3,000 surplus, because you were willing to spend 10 but you only had to spend seven.”
Measuring this surplus is especially important when trying to determine the value of what are called “public goods.”
“Normally, in economics, we have markets,” Huth said. “You can go down to Wal-Mart, and on the shelf there’s a price.”
In the case of public goods, though, there is no market to establish prices. Supply and demand don’t operate, and economists must find an alternative way to account for the consumer surplus, so that the true value of the good can be identified.
In the case of the Oriskany, Huth and his colleagues estimated a consumer surplus of between $1.2 million and $3.5 million. A second ship could add anywhere from $900,000 to $4.7 million to that total, they determined.
One thing such a sinking would almost certainly accomplish is raising the profile of the Pensacola region as a diving destination. Hammock said the publicity was needed. He doesn’t think the area has done enough to promote the Oriskany.
“Pensacola, Florida has the largest man-made artificial reef in the world,” he said, “and we're not promoting it, at all. That's a problem.”
Turpin said the added value of the publicity, alone, would likely exceed the costs of sinking a ship.
“We have to have more than just the Oriskany,” Turpin said. “We can't just be a one-trick pony in the market for attracting ecotourism such as diving and fishing to our area.”
Regardless of what the benefits of sinking another ship might be, getting the project funded almost certainly won’t be easy. That’s because there is only so much money to go around.
“There's going to be a lot more funding requests than available funding,” Turpin said, “so the competition is going to be very strong for all of the RESTORE dollars.”
Hammock is still hopeful that the project will go through, though. His livelihood depends on it.
“If we could pull a mothballed anything out of the fleet that used to surround the Oriskany and bring it here and sink it, it would start all over again. It’d be like the Oriskany was reborn.”
The deadline to submit projects for RESTORE funding is Sept. 30. Once that date is passed, all projects will be vetted by committee and then opened up for public review and comment. The ultimate decision over which projects get funded will rest with the Escambia County Commission.
This article is part of a collaboration between WUWF and the UWF Center for Research and Economic Opportunity.
