The federal government closed another big chunk of the Gulf of Mexico to fishing Tuesday, fearful that oil from the Deepwater Horizon disaster had entered the loop current.
As the oil continued to spread, Moody's Investors Service warned that the potential impact of the spill on Florida could be worse than the effects of the recent recession.
"The state's high dependence on tourism dollars and jobs is significant and a gradually worsening disaster associated with any part of Florida's 1,197 coastline miles could likely have long-term implications even greater than the recent global recession or Hurricane Ivan in 2004," said Moody's Investor Service analyst and senior credit officer Edith Behr.
If the oil has entered the gulf's loop current it could show up as tar balls in the Florida Keys in eight to 10 days. There were several reports of tar balls in the Keys on Tuesday, but officials cautioned that they could have come from a number of sources.
Jane Lubchenco, a marine ecologist who is the administrator of the National Oceanic and Atmospheric Administration, said Tuesday that "a tendril of light oil" from the slick has been spotted close to the loop current and is "increasingly likely" to wind up being swept away by it.
That prompted NOAA to expand the fishing closure to include the area of the loop current itself, she said. An unprecedented 19 percent of federal waters in the gulf are now closed to fishing — up from 10 percent Monday. All commercial and recreational fishing, including catch and release, is prohibited in the closed area until further notice.
The shutdown, which covers more than 45,000 square miles, is accompanied by stepped-up scrutiny of all seafood coming out of the gulf, Lubchenco said. NOAA and the Food and Drug Administration are working together to test the seafood for contaminants.
That means sending ships into the gulf to take samples of shrimp and other edible species, as well as sampling what's being sold as gulf seafood in markets, Steve Murawski, director of scientific programs for NOAA Fisheries, said.
So far no members of the Southern Shrimp Alliance have caught any oily shrimp, said executive director John Williams. The area of the gulf that has been closed does not include areas used by the shrimpers, he said.
However, the spill has begun taking a toll on wildlife. Of 35 oiled birds that have been brought in so far, 23 were already dead, Murawski said.
Three times the usual number of sea turtles have washed ashore dead this month along the Gulf Coast, he said. Of the 156 dead turtles, most were juveniles of the rarest sea turtle species, the Kemp's ridley. However, tests are still going on to determine whether oil or some other cause killed them.
Wildlife isn't the only thing in danger as oil continues to gush from the BP well. According to the Moody's report, the impact of the spill could simulate a double dip to the economy in a state already struggling to emerge from one of the country's worst recessions.
Moody's rates the credit quality of borrowers. Florida, as well as Gulf Coast cities in Louisiana, Mississippi and Alabama, could see their credit ratings cut if tourism falls and property values drop. The spill may have "severe" effects if it reaches coastal communities on Florida's Panhandle because they rely so heavily on tourism and the state depends on sales taxes from the region.
"Cities, towns, school districts, and counties will likely experience a decline in property tax values, which will necessitate a reduction in services or an increase in other revenue to maintain current rating levels," said Behr, the Moody's analyst.
In turn, lower ratings may raise borrowing costs for state and local governments, Behr said, and school districts could see funding cut as tax revenues decline.
It all depends on the extent of the oil spill. And that, Behr said, remains too early to tell.
In other developments:
• BP said it was collecting about 84,000 gallons a day from a milelong tube drawing oil from the blown-out well to a ship on the surface. But it cautioned that increasing the flow through the tube would be difficult.
The company is planning to try to "kill" the well and stop the flow by pumping heavy mud into the well shaft as early as this weekend, officials said.
• In Washington, Interior Secretary Ken Salazar appeared before Congress for the first time since the well exploded a month ago. Salazar acknowledged that the Minerals Management Service, the Interior Department agency responsible for policing offshore drilling, had been weakened by corruption and lax enforcement of safety and environmental rules.
"We need to clean up that house," Salazar said in an appearance before the Senate Energy and Natural Resources Committee.
• The U.S. State Department revealed that Cuba called U.S. oceanographers last week looking for assistance in case the oil reached the Florida Straits.
Since then, the two sides have engaged in a low, technical level talks focused on environmental cooperation akin to earlier hurricane collaborations, the State Department said.
Times staff writers Craig Pittman and Robert Trigaux contributed to this report, which includes information from the Miami Herald and Associated Press.
TAR BALL FEARS: Tar balls were reported in several areas of the Keys, stoking fears that oil from the BP blowout had spread that far. Experts, however, say the mess is a probably from other sources. 8A
OUght to be a law: Some good could come out of an awful lot of bad that has happened since oil started pouring into the gulf, if it makes politicians and voters come to their senses, columnist Sue Carlton says. Tampa Bay, 1B
special report: For a look at the effects the spill may have on Florida's coastline and efforts to stop it, go to links.tampabay.com.