Texas Restaurants Brace for Higher Seafood Prices

July 9, 2010— -- It's just before noon at Perla's Seafood and Oyster Bar in Austin, Texas, and the lunch clientele are just beginning to file in.

The bartender is cleaning a few glasses while busboys scurry about, setting tables and cleaning up. One of Perla's owners, Larry McGuire, is sitting at the bar, glancing over the menu and taking a moment to relax before the lunch rush.

But for Perla's, and seafood restaurants across the state, anxiety levels are rising. Ever since the Transocean offshore rig explosion, which killed 11 people and dumped millions of gallons of oil into the Gulf of Mexico, federal officials have been forced to shut down large portions of the fisheries in the Gulf, leaving fishermen and restaurants in the coastal states to wonder about the future of their livelihood.

At Perla's, the dinner menu includes multiple selections directly from the Gulf, including various oyster and shrimp dishes, Gulf prawns, red snapper and Texas crab. Perla's will resist making changes to its menu or its prices for as long as possible, McGuire said.

"The truth is we do bring in a good portion of our menu from the Gulf, so I just don't know how long we can avoid price increases and continue to have access to the same volume of product [from the Gulf]," he said.

McGuire said he believes his restaurant may see shrimp and shellfish prices increase by as much as 50 percent in the summer months.

He wouldn't be alone. The prices at Massa's Seafood Grill in Houston have already jumped by 20 or 25 percent, owners say.

Fewer Fish For Wholesalers

The National Oceanic Atmospheric Administration has, as of July 4, closed 81,181 square miles of the Gulf's fishing grounds, which is 34 percent of the area's federal waters. The closure area extends from the Atchafalaya Bay (about 80 miles west of New Orleans) east along the coast to Panama City, Fla., and as far south as the tip of southern Florida.

Along with price increases, restaurants and seafood wholesalers from Austin to South Florida have seen less and less fish and shellfish coming in for purchase.

Seafood Availability Plummets in the Gulf

The Louisiana Seafood Promotion Board has reported that availability of Louisiana oysters and crab is about 40 percent of what it was before the oil spill. The shrimp waters off the coast of Louisiana and Mississippi have also been affected by the spill, making fresh shrimp much harder to come by.

"So far we are OK, but prices are going up," said Elizabeth Jones of Danton's Gulf Coast Seafood Kitchen in Houston. "Customers have been asking us about our oysters and, frankly, we just don't have very many. They are expensive and hard to come by now."

There may be a chance that fan favorites such as oysters and shrimp may never again be easy to come by. Marine experts are concerned that the millions of gallons of oil reaching the marshland and estuaries along the Gulf coastline may do permanent damage to the ecosystems.

Lee Fuiman, the director of the Marine Science Institute of the University of Texas in Port Aransas, said that the coastal marshes and estuaries are the most important nursery grounds for commercial fish and shellfish in the Gulf, and as the oil pollutes the waters, the entire ecosystem becomes at risk.

The oil on the surface creates low-oxygen dead zones, which can kill the plant life that serves as the bottom of the food chain in the marshes and provides the physical structure for the environment.

"If the toxicity of the oil in the water does not kill the young marine life, the quickly dying plants will," Fuiman said. "Without plant life, the organisms that serve as food for fish and shellfish cannot survive [affecting species higher up on the food chain]."

In the long term, Fuiman fears, oil that has seeped into the mid-depth waters further out into the Gulf may have crippling effects on many of the commercial fish that populate the area. While the oil may not be present in a high enough quantity below the surface to kill the fish, he said that the oil may create areas of lower-than-normal oxygen, which could have sub-lethal effects on fish, such as destroying their reproductive systems.

Waiting and Hoping

"Obviously, if the fish cannot reproduce at their normal levels, we will quickly see less and less of our favorite fish in local restaurants," he said.

Seafood restaurant owners in Houston are also trying to avoid price increases, menu changes and falling sales.

"Everyone is just sitting on the sidelines right now, watching the news and trying to relay as much information to customers as possible," said Rene Zamore, the executive director of the Greater Houston Restaurant Authority.

Zamore said that many owners are doing everything they can to communicate to their customers that the food they are eating is safe. At restaurants such as Brennan's, a popular Houston seafood restaurant, Zamore said, the chefs are constantly visiting with customers as a way to alleviate any fears they may have about the condition of their seafood.

On June 14, President Barack Obama issued a statement in Theodore, Ala. reassuring the country that both the U.S. Food and Drug Administration and the NOAA are stepping up their efforts to keep the food supply safe. State and federal agencies are monitoring fish caught near restricted areas to ensure that they are safe to consume, and the NOAA is conducting tests daily for various toxins in fishing waters.

"Now, we use many different styles and approaches to buy and cook our food," said Massa's Seafood Grill owner Joe Massa. "The international market for seafood has grown by leaps and bounds in the last decade or so, and we can get all types of seafood from around the globe."

Restaurant Sues BP

One major seafood restaurant based out of Houston has decided to strike back against BP, which operated the rig. Pappas Restaurants Inc. filed a lawsuit May 13 in Galveston County against BP, rig-owner Transocean, Halliburton, which cemented the drill into place, and others for current and future damages to their business because of the spill.

Pappas owns and operates eight different restaurants, three of which -- Pappadeaux Seafood Kitchen, Pappas Seafood House and Pappas Grill & Steakhouse -- have seafood on their menus. Pappas seafood restaurants have multiple locations in the Houston, Austin and Dallas-Fort Worth areas.

In its lawsuit, Pappas claimed that its business has suffered "irrevocable damages to their business as a result of the senseless deepwater Horizon explosion on April 20 and the ensuing oil spill."

Pappas also said it relies on serving sea food from the Gulf as both a staple and trademark of its business. Because of the leak, Pappas contended it has not been able to obtain the necessary food to serve at its restaurants and believes it will see a sharp increase in costs and a decline in customers, sales and overall business. It accuses the defendants of gross negligence and is seeking a trial by jury.

BP and Pappas officials declined to comment on the pending litigation. As of today, no other restaurants have followed Pappas lead.

So far, there is no definitive end in sight for the oil spill. Experts such as Fuiman of the Marine Science Institute have said that it is impossible to predict the impact on the Gulf's fish and shellfish population or the southern states' seafood industry.

For now, restaurant owners continue to wait, doing what they can to stay afloat.

ABCNews.com contributor Travis Measley is a member of the ABC News on Campus program in Austin, Texas.