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Tuesday, November 1, 2011

High Fuel Costs Mount for Local Fishermen

Every time lobster fisherman Dan Riley pulls his boat onto the fuel dock before a trip, he knows it’s going to painful.

The 30-year-old entrepreneur owns and captains his own boat, the 40-foot Caitibeth, which is named for his two twin daughters. The diesel engine on the Caitibeth is fed from four tanks, each holding 80 gallons. With gas prices hovering around $4 a gallon, Riley’s stop at a fuel dock off Harbor Island in San Diego Bay runs him roughly $1,000.

Due in some part to the unrest in the Middle East and a poor economy, recent spikes in prices of fuel are always making headlines. Almost daily, you’ll hear about how gas prices are affecting prices of airline tickets, and about how people are feeling the pain at the pump; people cutting back on extras, making their coffee at home rather than stopping for that latte at the local coffee shop, people riding their bicycles to work. But how have those high prices affected the fishing industry, an industry that is heavily reliant upon fuel to bring seafood lovers their lobster and swordfish?

San Diego's G Street Pier

“That’s the hard thing,” Riley says of the high fuel costs. “Along with the restrictions from [the Department of] Fish and Game, it almost drives out the one-man fisherman. Of course, it’s easier on the big guys because they can absorb the cost, and they can also come up with tons of fish. There’s a lot of talk about sustainability and all that, but they’re driving out the people who make it sustainable.”

Riley, a San Diego native who looks more like a football player than a fisherman, is one of the few in the business who don’t have a family tradition in the fishery. Because the Department of Fish and Game only issues a certain number of licenses to prevent overfishing and promote sustainability, many licenses are passed on to relatives. In fisheries like Riley’s, a license can cost $75,000.

“I’m lucky to be where I am,” he says. “I knew the right people at the right time.”

Riley explains that other than repairing and replacing his gear, fuel is his biggest expense. Additionally, he needs to buy bait and pay any crewmen he hires to help him on the Caitibeth.

“To be honest, I’ve never heard of any alternative to using gas to power our boats,” Riley says. “No matter what, we need that petroleum. What are we supposed to do, put sails back up on our boats?”

San Diego has been home to a vibrant fishing industry for thousands of years. Even before Cabrillo sailed into its big bay in 1542, Kumeyaay Indians were there fishing from canoes. Later, scores of Italian and Portuguese immigrants formed the backbone of prosperous fishing communities such as Point Loma and Little Italy. Until heavy regulations forced them to relocate to other countries in the 1980’s, the embarcadero was home to numerous tuna canneries and purse seiners; of all the fisheries in the world, those in the United States, and more specifically in California, are the most regulated.

According to the Port of San Diego, there are more than 130 commercial fishermen in the area, and their catch includes rock crab, California halibut, shark, rockfish, albacore tuna, spot prawns, swordfish, red sea urchins and the California spiny lobster.

San Diego's Tuna Fleet

The Port has also stressed the importance of the fishery upon the overall financial health of San Diego’s economy. A 2007 survey by Responsive Management, a research firm focused on public opinion, showed that 70 percent of Californians either moderately or strongly agreed that they like visiting working waterfronts, and even visit places specifically for that reason.

But that’s not all. People love to eat seafood.

According to a study conducted by the Port of San Diego in which restauranteurs, retailers and processors were interviewed, there is a high demand and interest for locally-caught seafood.   The National Oceanic and Atmospheric Administration reported that on average, Americans eat nearly 17 pounds of seafood each year, which is up from 12.5 pounds in 1980.

While prices of fuel are high enough for those who drive automobiles, prices are that much higher for fishermen who fill up at fuel docks.

“Marina fuel distributors appear to have a monopoly with no incentive to be competitive,” Utilities Consumers’ Action Network Gas Project manager Charles Langley states in an email. “Marina prices tend to be excessively high, and are in my opinion, often guilty of price gouging.”

“We have people that come in, and because the red diesel we sell doesn’t have any excise tax, people are upset because we’re not cheaper than people on the street,” says Erik Poole, the owner of High Seas Fuel Dock, a family-run business that has been operating on Shelter Island since 1972.

According to Poole, the costs of operating a fuel dock outweigh those of their street counterparts. And because the dock is floating in salt water, maintenance costs are extremely high. Additionally, because of safety reasons, fuel docks are full service operations; dock employees fuel the boats, rather than allowing boat owners to do it. The Coast Guard and the Department of Fish and Game have strict regulations in place for fuel docks in order to prevent spills.

“Also, if I could have a girl sitting behind a glass window selling cigarettes and soda pop, and it was completely self-serve like gas stations, yeah I could lower my prices big time,” Poole says.

In fact, business for the fuel docks has declined recently, and owners have struggled just like the fishermen who buy gas from them. Poole points out a cold spell last summer that limited the number of sportfishing boats going out on trips. Big boats mean big numbers, and High Seas offers discounts for volume, or what Poole considers to be a kind of transaction fee in order to keep customers.

Poole also says that he sold half a million gallons less of diesel in 2010 than he did in 2009. “In fact, I’m still owed a lot of money,” he says. “Not just from sport fishing guys, but from other companies with boats who couldn’t pay because it was such a horrible year.”

“As far as a gouging and a monopoly,” Poole continues, “There’s four fuel docks in San Diego Bay, and we’re all competing for business. A majority of the year, for about seven months, it’s pretty slim pickings. We fight tooth and nail for sales.”

Fuel Dock, San Diego Bay

 Poole also makes clear that if High Seas were the only fuel dock in San Diego Bay, he would have no problem lowering his prices, simply because of the increase of business it would create.

And while fuel costs are as high as they are, fishermen such as Riley are reliant upon markets such as Chesapeake Fish Company, where he often sells his catch, to set a price that reflects the costs he has to incur. And of course, there has to be a demand for what he catches in order to turn a profit.
The prices of certain species of fish are affected even more.

According to Sean Shannon, who owns El Pescador Restaurant and Fish Market in La Jolla, prices of harpooned swordfish will soon be on the rise. Swordfish caught this way require not just a boat, but also employ a spotter plane that tells the boat where to go.

Shannon has also noticed some fisherman not finishing a season, but instead dropping out when the fishing gets slower.

“They’ll say ‘forget it, I’m not going to go out there and spend one hundred fifty bucks on fuel and get ten lobsters, so they’ll just quit for the season. So that’s another effect that it has on us,” he says.
El Pescador, which opened in 1974, sells a great deal of locally caught fish from June to November.

“My prices will go up,” Shannon says. “But I’ll usually kind of absorb it for a period of time and maybe bump it.”

Riley, like many fishermen, has to be versatile in order to make a decent living, and also fishes other species.
From April to September, the off-season for lobster, he’s really a jack of all trades in the fishery.

According to another Port of San Diego study, commercial fishery-related workers earned an average of $40,026 in 2008, which is some $6,000 less than the average county worker.

“Right now I’m getting to the point of wanting to go out more,” Riley says. “You know, there’s a lot of fish coming up and a lot more stuff I can be doing, so gas is going to be a big concern for me.”

Despite the hazards of the job, and its many financial pitfalls, Riley reveals a deep-rooted passion for what he does, and doesn’t plan on letting anything stop him from taking the Caitibeth out for another trip to the grounds.

“I’d never do anything else,” he says with an enormous smile. “Nothing beats it. I love being out on the water, and I love being my own boss.”

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