Fishing for a future | A Searsmont entrepreneur's aquaculture innovation is welcomed in foreign waters while the U.S. plays catch up

In the dingy shipyard of Guaymas, Mexico, several men gather around a black, geodesic cage large enough to encapsulate a Hummer. The men, in their T-shirts and jeans, bolt one triangular section to another as the black sphere continues to take shape. Covered in a fine black wire mesh, the panels offer welcome shade on a scorching afternoon in November. On the other side of the yard sit two giant domes made of the same triangular panels, two halves of a cage that dwarfs the one the men are working on now.

The black panels, stacked chest-high around the yard, took a cross-continental trip from a small manufacturing facility in Searsmont, Maine, to get to this patch of sandy soil on the Sea of Cortez, the body of water on the west coast of Mexico separated from the Pacific by the Baja Peninsula.

Now nearly empty, the Guaymas shipyard once bustled with activity. It built the fleet of trawlers that has hunted the Sea of Cortez’s abundant shrimp populations for the past few decades. Today, the rusting hulks of abandoned cranes — appearing like something out of “War of the Worlds” with their blue steel legs meeting the ground a hundred feet below cabins where pigeons now roost — tower above these workers building something new.

Most of those shrimp trawlers sit rusting like the cranes. Nearby, there are roughly 20 trawlers tied to a dock, alongside piles of what looks to be years’ worth of trash. The fishermen who congregate on the docks, some fixing nets, others smoking cigarettes and socializing, seem unconcerned that it’s the middle of shrimp season. Out of all the trawlers, only one crew is busy stocking their ship to prepare for a trip to sea.

One of those idled fishermen could have been Oscar Valdez, if it wasn’t for those cages from Maine. Valdez, a lean, dark-skinned man with silver-streaked black hair and a mustache, began fishing when he was a young man and slowly built a small fleet of trawlers. His company, Pesquera Delly, grew to a peak of 11 trawlers, and also spun off another company to build a seafood processing plant. But as shrimp fishing grew more difficult as more boats competed for an exploited resource, Valdez started searching for alternatives. What he found was a novel method to farm shrimp instead of hunt for them. Farming shrimp in artificial ponds onshore is common along the coast of Sonora, the Mexican state where Guaymas is located. But when Valdez’s eye settled on the AquaPod, he saw untapped potential for farming shrimp in the open ocean.

Ocean Farm Technologies is the company in Searsmont, Maine, that is quietly manufacturing the AquaPods, designed to withstand the rough conditions of the open ocean and allow entrepreneurs like Valdez to raise their livestock several miles offshore as opposed to conventional fish farming on land or in near-shore areas.

Ocean Farm Technologies Inc.
114 Higgins Rd. N., Searsmont
Founded: 2005
Founder and president: Steve Page
Services: Aquaculture equipment, including offshore containment systems
Employees: 9
Revenue, 2009: $1 million
Contact: 1-888-540-5554
www.oceanfarmtech.com
 

Valdez used a Mexican government program to trade in four of his shrimp boats for $100,000 apiece and used the money to buy three AquaPods, which cost approximately $140,000 each. With the AquaPod, Valdez figures he will be able to harvest 30 tons of shrimp per cage per cycle, of which there could be as many as three a year. He says his trawlers never brought in that amount per year. But trading in his traditional boats for new-fangled fish cages was still a gamble. “It was necessary to take the risk because I’m having problems with the fishing. I’m not making business,” Valdez says, sitting on a recent morning in his office inside his company’s seafood packaging plant in the industrial section of Guaymas. “We are lots of boats, so obviously I had to take a decision of what to do. Right now we are in times to initiate something before this collapse and we have more serious problems. So, you got to start generating those options of what to do. So I thought, well, it’s the moment to change.”

Steve Page, founder and president of Maine’s Ocean Farm Technologies, visited Mexico in November to help Valdez’s company deploy the cages now under construction. Page stands next to one of the giant domes of the AquaPod with Valdez and another man, a veteran of the region’s shrimp farming industry, which has traditionally operated onshore in artificial ponds. The men talk about the size of the mesh to ensure the smallest shrimp can’t escape and about the doubts some have about farming shrimp in submerged cages. While some claim shrimp need to rest on the ocean bottom — or the bottom of an artificial pond — Valdez believes that’s not the case. Page agrees. “It’s a good business,” Page says about farming shrimp onshore. “But this is a better business.

“I hope so,” Valdez says with a laugh. His company’s significant investment in this relatively untested technology depends on it.

Growing pains

Pesquera Delly already has one of its 3,600-cubic-meter AquaPods deployed two kilometers off nearby San Carlos that has produced one harvest of approximately 13 tons, or 130,000 adult shrimp. Unfortunately, the expected yield was supposed to be closer to 40 tons. The culprit? Hurricane Jemina, which hit this part of Mexico in September. No one is sure how the shrimp escaped from the cage, though it seems the hurricane’s strong currents got the best of the AquaPod, leading Page’s team to design a new mooring system.

Page designed the AquaPods to farm seafood in offshore environments. What “offshore” means, however, is open to interpretation. At its basic level, it means a fish farm exposed to the elements of the open ocean, and is used to distinguish it from conventional ocean aquaculture, which typically involves surface net pens in the shallow water of sheltered bays and coves. But, offshore aquaculture is so new that there are no absolutes — for instance, Page didn’t have shrimp in mind when he conjured the AquaPods — and Ocean Farm Technologies finds itself in a position to revolutionize the industry. “I think this has a very good chance of working out, but it does point out that we should not be limited in looking at what species of seafood can be grown in these containment systems,” Page says. “Part of my dream all along has been not only to grow fish, but also grow shellfish on the containment system itself … lobsters, other crustaceans and seaweeds. The ocean farm of the future will not be just one species or another. It’s going to be polyculture. It’s going to be … sea vegetables and seafood.”

Last year marked a watershed moment for aquaculture. For the first time, aquaculture supplied half the world’s seafood, approximately 60 million tons (or 50.8 million tonnes, also known as metric tons) valued at $70 billion, according to a study in the Proceedings of the National Academy of Sciences. The portion of that farm-raised seafood that comes from the United States, however, is minuscule, less than 1.5%. China, on the other hand, produced 70% of that 60 million tons. Despite its vast coastlines and marine heritage, the United States has fallen behind in producing its own seafood. The United States imports 81% of the seafood consumed here, nearly seven million tons a year, resulting in a seafood trade deficit in 2008 of $9.4 billion, the country’s third-largest trade deficit behind oil and automobiles. With the demand for seafood expected to increase over the next several decades and wild fish stocks struggling from overfishing, it appears that aquaculture’s role in providing seafood will continue to increase. The United Nation’s Food and Agriculture Organization expects aquaculture to supply 60% of all seafood by 2020.

Regulatory roadblocks

But whether a domestic industry will contribute to that increase is anybody’s guess. Aquaculture has been present in Maine’s coastal waters since the 1800s, and the first laws governing aquaculture in the state date to 1905, according to the Maine Department of Marine Resources, the regulatory body that oversees Maine’s aquaculture industry. Aquaculture as we know it today began in Maine in the 1970s.

Maine’s aquaculture industry, which mostly takes the form of farm-raised salmon and mussels, harvested roughly 10,200 tons in 2008, according to DMR. A 2003 economic impact study estimated the industry generates $82 million in direct sales and revenue annually, and has a $130 million impact on the state’s economy, according to the Maine Aquaculture Association. But despite Maine’s existing aquaculture industry and its traditional working waterfront, Page has had very little luck selling his AquaPods in his own backyard. “Why do I have to travel to all these Third-World places to sell my product?” Page asks. “Why isn’t Maine doing this?”

Page, a veteran of Maine’s salmon-farming industry, says lack of a federal regulatory framework for permitting fish farms in federal waters, which extend from three to 200 miles offshore, and an almost certain litigious process means investors shy away from pursuing an offshore fish farm in Maine or the rest of the United States. The fact that no one has proven that raising fish in capital-intensive offshore farms in the cold waters of the North Atlantic is an economically viable business model only adds to investors’ wariness. “I’m optimistic in the long run. I’m pessimistic in the short run,” Page says while standing under the half-completed AquaPod in the Guaymas shipyard, hammers and wrenches working away in the background. “I really don’t see it happening anytime soon. It’s going to be a long, long legislative process to enact legislation, and once legislation is enacted it’s going to be a long, long regulatory process to do the rule making. So, I really don’t see anything happening in the U.S. for four to five years.”

For this reason, Page realizes his best growth opportunities lie outside the United States, where governments have been more open to the prospects of offshore aquaculture. Since 2008, Ocean Farm Technologies has shipped AquaPods to companies in Puerto Rico, Panama, Mexico and South Korea. Interest has come from all over the world. Turkish businessmen paid Page a visit during a snowy day last winter to check out the AquaPod. And within the last couple of months, the governments of Ecuador and Indonesia have inquired about using the smaller cages, dubbed MicroPods, to help struggling fishermen become farmers, a potential use that has been recognized in Maine, as well. “The transition from informal fishermen to fish farmers is really catching on worldwide right now,” Page says. “It just seems to be an idea whose time has come.”

While the tools may be new, the idea of farming the oceans is not. That prescient explorer of the deep blue, Jacques Cousteau, promoted farming the oceans in the early 1970s. “With Earth’s burgeoning human populations to feed, we must turn to the sea with new understanding and new technology,” Cousteau said in his 1973 television show “The Undersea World of Jacques Cousteau.” “We need to farm it as we farm the land.”

Pushing limits

One pioneer of the offshore aquaculture movement close to fulfilling Cousteau’s vision is Brian O’Hanlon, a 30-year-old New Yorker who grew up in a family of seafood dealers. O’Hanlon became interested in aquaculture young, hatching red snapper in his parents’ basement when he was 17. Now, 13 years later, O’Hanlon is in a motor boat heading through the Caribbean harbor of Puerto Lindo, a small fishing village on Panama’s north coast. It’s here that O’Hanlon, president and founder of Open Blue Sea Farms, has chosen to literally test the waters with what he claims is the largest offshore fish farm in the world. Since last August, Open Blue Sea Farms has been farming cobia, a white fish similar to halibut, nine miles off Panama’s coast in submerged cages designed by OceanSpar, a Washington-based competitor of Ocean Farm Technologies. It is the most remote and exposed offshore fish farm in the world, O’Hanlon says. On this day, O’Hanlon isn’t heading all the way to the farm, which is a long, bumpy motor boat ride over the horizon. Instead, he’s checking on a large cargo ship that’s preparing to tow three more OceanSpar SeaStations out to the farm site.

On the way to the rusted blue hull of the “Pristine Oceans,” O’Hanlon’s motor boat passes four of Page’s MicroPods, which are almost totally submerged in the bay. One is full of young cobia, another is made with a copper mesh netting that O’Hanlon is helping Page test for better performance in reducing the amount of algae and seaweed growth on the cages. O’Hanlon began his quest to develop a successful offshore fish farm several years ago with a demonstration project using AquaPods in Puerto Rico. The demonstration project succeeded and he began looking for sites for a commercial-scale project in 2005. Puerto Rico, a territory of the United States, is governed by U.S. law. O’Hanlon says it was a good place for the demonstration project, “but in the end it didn’t turn out to be a great place to build a large-scale operation. There was a lot of bureaucracy. Too many agencies involved. No clear permitting process or framework for the permits.”

Pesquera Delly
Director: Oscar Valdez
Project site: Two kilometers off the coast of San Carlos, Sonora, Mexico
Species farmed: Shrimp
Size of farm site: 248 acres
Use of AquaPods: The company has deployed one 3,600-cubic-meter AquaPod and is preparing to deploy two more. The company also intends to deploy eight smaller MicroPods stocked with shrimp.

Open Blue Sea Farms
President: Brian O'Hanlon
Project site: Nine miles off the coast of Puerto Lindo, Panama
Species farmed: Cobia
Size of farm site: 2,500 acres
Use of AquaPods: The company has deployed six MicroPods at a near shore site
 

In addition, Puerto Rico’s transportation and labor costs were high and, perhaps most importantly, the availability of suitable deep-water sites was limited. Not to mention its location in hurricane alley. “Panama, on the other hand, has a very small government, very clear process for permitting, very supportive government and many available sites for building these farms outside the hurricane region, so we can build larger facilities without the risk,” O’Hanlon says, also noting the country’s inexpensive transportation options and lower labor costs.

One of O’Hanlon’s goals is to create a farming system that can be replicated around the world, including off the coast of Maine. But, while O’Hanlon says his company is the closest to proving the economic viability of an offshore farm (he estimates reaching profitability by the end of 2011), he says there’s still a lot of work that needs to be done, especially around automating processes.

But even if the model were ready, O’Hanlon doesn’t think the United States will be for five to 10 more years. First, the United States needs to create a regulatory framework that balances industry growth with environmental and conservation concerns. Then it needs to address groups within the country that are opposed to the expansion of ocean aquaculture. “We’re really trying to produce a fish in a sustainable and responsible way and I think the U.S. itself has a responsibility to — in one way or another — produce more seafood rather than rely on the rest of world for it,” O’Hanlon says while sitting under a gazebo on a hill overlooking the Caribbean.

The opposition O’Hanlon’s referring to comes from groups such as Food & Water Watch, a Washington, D.C.-based group ardently opposed to the expansion of ocean aquaculture (see “Offshore aquaculture detractors,” page 14.) Marianne Cufone, director of Food & Water Watch’s fish program, agrees that the United States should produce more seafood, but says ocean aquaculture is not the answer. Instead, Cufone touts land-based aquaculture systems as a sustainable model for supplementing the domestic seafood production without the risk of disease, fish escapes and pollution. “We’ve been struggling for so many years to try and make [ocean aquaculture] work, and it simply hasn’t been working well,” she says.

O’Hanlon’s ideal solution would be to invite all who oppose offshore aquaculture to his farm to see it firsthand. “I’ll be the first to admit, we’re not perfect, but the point is that what we’re trying to do here is do it better and fix the problems that do exist and do remain,” he says.

For the moment though, O’Hanlon is focused on making sure everything is ready to tow the cages out to sea. He heads the motor boat out of the harbor to test the currents that could potentially drag the SeaStations toward shore. He has brought a white plastic bucket attached to a buoy and a GPS system. At three pre-designated spots, O’Hanlon fills the bucket with water and lets it sink, weighted by an attached metal shackle. O’Hanlon marks the spot on his GPS, then waits as the boat and buoy drift on the current toward shore. After 10 minutes, O’Hanlon fetches the buoy, marking the GPS waypoint to see how far the bucket has traveled. There are more sophisticated methods of testing the strength of a current, but O’Hanlon says this method works just fine for now. The irony isn’t lost on him. “Believe it or not, you’re looking at one of the most advanced fish farms in the world,” he says.

While O’Hanlon pursues the long-term viability of offshore fish farming, Oscar Valdez needs more immediate returns. His nearly dozen shrimp trawlers were bringing in fewer shrimp every trip, while at the same time his costs were increasing. He needed to make a decision. “I have two options in fishing, to produce more and sell cheaper, or just to lower my cost to the ground. I can do none of those things now,” Valdez says. He explains that a boat costs about $500,000. “If the boat costs me that, how much shrimp must I capture to pay for the boat? I cannot pay for the boat. Instead, the cage cost me $140,000 and with some time I’ll be able to pay for it.”

Gustavo Valdez, Oscar’s son and operations manager for Pesquera Delly’s nascent aquaculture division, sheds a bit more light on the predicament that shrimp fishermen face in the Sea of Cortez. “Usually the best part of a season is the first three or four months of a six-month season, and here we are two months down the road from the start and half the fleet is already tied to the docks because it’s just not economically viable to continue fishing,” he says. “So, it’s a matter of whether you sit around and leave your boats, your assets, to do nothing for the rest of the year or you find a way to keep producing in a way that allows you to be economically viable.”

It’s that economic reality that Gustavo Valdez believes will drive the aquaculture industry’s movement offshore. “If you’ve been involved in fishing your whole life and you have all your experience in that type of business, the next logical step is aquaculture.”

Whit Richardson, a writer based in Friendship and former Mainebiz editor, reported this story through a World Affairs fellowship from the International Center for Journalists in Washington, D.C., funded by the Ethics and Excellence in Journalism Foundation. Fishing for a Future Part 2 looks at aquaculture’s impact in Maine as traditional fishing transitions to fish farming.