Offshore Aquaculture Kept Afoat

With Government Funding
“Seafood contributes over $8 billion to the United States’
trade defcit. America imports 80 percent of its seafood
and almost half of that is from aquaculture. A robust
offshore aquaculture industry will help reverse this and
will help drive economic growth,”
1
said Secretary of Com-
merce Carlos Gutierrez in April 2007. However, while the
federal government has spent millions of dollars funding
offshore aquaculture research and demonstration proj-
ects on both U.S. coasts and in Hawaii and Puerto Rico,
the commercial viability of the fedgling industry has yet
to be proven.
The National Offshore Aquaculture Act, H.R. 2010 and S.
1609, would allow companies to place fsh farming cages
in federal waters, three to 200 miles from shore. How-
ever, this type of aquaculture, called “offshore” or “open
ocean” aquaculture, barely has been achieved on a small
scale and, in most cases, with signifcant government
support.
Randy Cates, president of the Hawaiian aquaculture com-
pany Cates International, admits that a signifcant invest-
ment of government funds would be needed to subsidize
the development of an offshore aquaculture industry in
the United States. “It will not make sense to pass [the Na-
tional Offshore Aquaculture Act] unless we are willing to
invest in this new industry,” Cates said. “I strongly believe
that we will need a level of around $50 million per year to
adequately satisfy needs on a national level.”
2
Although current demonstration projects are sited in
state waters, up to three miles from shore, the govern-
ment has presented them as models of eventual opera-
tions in the federal waters farther from shore.
Hawaii Projects
Hawaii hosts two operations in its waters. Cates Interna-
tional, born out of the Department of Commerce-funded
Hawaii Offshore Aquaculture Research Program, raises
Pacifc threadfn, also called moi, in four cages two miles
off the coast of Oahu. Cates produces 750 tons of fsh
annually, but hopes to acquire another ocean lease and
build a hatchery to scale up to 7,000 tons per year.
3
The second aquaculture venture, Kona Blue Water Farms,
produces amberjack, sold as Kona Kampachi
®
. The
operation, which registered $2 million in sales in 2006,
distributes to Whole Foods supermarkets and seafood
restaurants on the U.S. West coast.
4, 5
Kona Blue plans
to add 14 cages to the existing six that are moored a half
mile off the coast of Kona Island.
6
Both the Department of Commerce’s NOAA and NIST
agencies granted money to support offshore aquaculture
in the state of Hawaii:
T
he U.S. Department of Commerce strongly supports the National Offshore Aqua-
culture Act of 2007 and its purported promise for the nation’s economy. The
department manages marine resources through the National Oceanic and Atmo-
spheric Administration and promotes new technology through the National Institute
of Standards and Technology.
Fact Sheet
Juvenile cobia responding to a feeding pipe in an offshore cage off
of the island of Culebra, Puerto Rico. Photo by Brian O’Hanlon/Joe
Ayvazian/NOAA, 2001.
Offshore Aquaculture Kept Afoat With Government Funding 2
NOAA National Marine Aquaculture Initiative Grants
Related Institution(s) Year Description
Grant
amount
Oceanic Institute FY 2006
Hawaii Offshore Aquaculture Research Project:
Project goals include environmental and health
studies of Cates International and Kona Blue Water
Farms, and sharing information and technology with
programs in NH, FL, and MS.
$400,000
University of Hawaii, Cates International FY 2004 Hawaii Offshore Aquaculture Research Project $88,400
University of Hawaii FY 2004
Acquire data on rate of sedimentation around
offshore aquaculture cages
$20,000
University of Hawaii, Oceanic Institute FY 2002
Hawaii Offshore Aquaculture Research
Project: Research and development towards
commercialization of OOA
$205,650
University of Hawaii, Oceanic Institute,
Cates International
FY 2001 Hawaii Offshore Aquaculture Research Project $450,000
University of Hawaii FY 2000 Evaluate sites for open ocean aquaculture $118,682
University of Hawaii, Oceanic Institute FY 1999 Hawaii Offshore Aquaculture Research Project $150,000
Sources: “Recipients of the 2006 NOAA National Marine Aquaculture Initiative Grants.” National Oceanic and Atmospheric Administration,
September 2006. Available at: http://aquaculture.noaa.gov/pdf/nmaigrantrecipients2006.pdf; McVey, Eileen M. Personal email correspon-
dence. Aquaculture Librarian, NOAA Central Library, June 1, 2007.
NOAA Small Business Innovation Research Program Grants
Related Institution Year Description
Grant
amount
Cates International FY 2004
Test and evaluate automated fsh feeding system and add
telemetry and monitoring equipment
$97,762
Cates International FY 2003 Develop automated fsh feeding system $49,970
Sources: “Awards for Fiscal Year 2004.” Offce of Research and Technology Applications, National Oceanic and Atmospheric Administra-
tion. Available at: www.oarhq.noaa.gov/ORTA/; “Awards for Fiscal Year 2003.” Offce of Research and Technology Applications, National
Oceanic and Atmospheric Administration. Available at: www.oarhq.noaa.gov/ORTA/
National Institute of Standards and Technology Advanced Technology
Program Grant
Related Institution Year Description
Grant
amount
Kona Blue Water Farms 2001 Zooplankton harvesting for open ocean aquaculture feed $1,499,090
Sources: “Overcoming an Impediment to Marine Fish Hatchery Culture: Zooplankton Harvesting and Mesocosm Culture.” Advanced
Technology Program, National Institute of Standards and Technology. Available at: http://jazz.nist.gov/atpcf/prjbriefs/prjbrief.
cfm?ProjectNumber=00-00-4497
Food & Water Watch 3
From 1998 to 2007, Kona Blue or its parent company,
Black Pearls, Inc., received nearly $1.8 million, and
Cates received about $150,000 in grants from the
Department of Commerce. The department also granted
nearly $1.3 million for collaborative research in support
of offshore aquaculture in Hawaii.
Florida]Puerto Rico Project
Two miles off Culebra, Puerto Rico, Snapperfarm, Inc.
raises cobia in collaboration with researchers from the
University of Miami and the University of Puerto Rico.
The operation produces only 50 tons of fsh per year in
three cages but hopes to increase production and acquire
permits to add fve more cages.
8,9
However, University of Miami scientist Daniel Benetti
admits that “low survival rates due to disease outbreaks
both at the hatchery and at the growout stages are cur-
rently causing severe economic impact and compromis-
ing the commercial viability of the operations.”
10
The following Department of Commerce grants were used
to support offshore aquaculture in the Caribbean:
NOAA Saltonstall-Kennedy Grants
Related Institution(s) Year Description
Grant
amount
Black Pearls, Inc. (parent company of
Kona Blue Farms until 2001)
FY 2002
Rearing of deepwater snapper fry to be grown out in
nets pens and an offshore cage
$159,040
Black Pearls, Inc. FY 1998
7
Obtain an ocean aquaculture lease and promote state
level legislation to facilitate process
$99,540
Sources: Grable, Michael. “The Saltonstall-Kennedy Grant Program: Fisheries Research and Development. Report 2002.” Financial Services
Division, National Oceanic and Atmospheric Administration, Aug. 1, 2002; “The Saltonstall-Kennedy Grant Program: Fisheries Research
and Development. Report 1998.” Financial Services Division, National Oceanic and Atmospheric Administration, Aug. 1, 1998.
NOAA Small Business Innovation Research Program Grants
Related Institution Year Description Grant amount
Snapperfarm FY 2005 Predator exclusion from open ocean aquaculture cages $58,480
Sources: “Awards for Fiscal Year 2005.” Offce of Research and Technology Applications, National Oceanic and Atmospheric Administration.
Available at: www.oarhq.noaa.gov/ORTA/
NOAA Saltonstall-Kennedy Grants
Related Institution Year Description Grant amount
University of Puerto Rico FY 2002
Environmental Effects and Social Perceptions of Open
Ocean Aquaculture
$363,357
Source: Grable, Michael. “The Saltonstall-Kennedy Grant Program: Fisheries Research and Development. Report 2002.” Financial Services
Division, National Oceanic and Atmospheric Administration, Aug. 1, 2002.
Offshore Aquaculture Kept Afoat With Government Funding 4
NOAA National Marine Aquaculture Initiative Grants
Related Institution(s) Year Description of Grant
Grant
amount
University of Miami, Snapperfarm FY 2006 Environmental impacts of open ocean aquaculture $150,000
University of Miami, Snapperfarm FY 2006
Cobia open ocean aquaculture demonstration
project: Hatchery to Market
$400,000
SC Dept. of Natural Resources,
Snapperfarm
FY 2006
Aquaculture development; land-based
demonstration project
$356,337
University of Miami, Snapperfarm,
AquaSense
FY 2004
Hatchery & open ocean aquaculture for cobia and
Florida pompano (a type of fsh) in Puerto Rico
and the Bahamas
$69,800
University of Puerto Rico, University
of Miami, NOAA Fisheries Puerto Rico,
Snapperfarm
FY 2004
Measure environmental impact of open ocean
aquaculture in Florida and Puerto Rico waters
$69,800
University of Puerto Rico FY 2004
Environmental monitoring of open ocean
aquaculture
$15,000
University of Miami FY 2003 Hatchery production of snapper $60,000
University of Miami FY 2002
Geographic Information System siting for open
ocean aquaculture
$27,420
University of Miami FY 2002 Hatchery production of snapper $159,950
University of Miami, FL Dept. of
Agriculture, Puerto Rico Department of
Natural and Environmental Resources,
Puerto Rico Coastal Zone Program
FY 2001
Use Geographic Information System to identify
sites for open ocean aquaculture cages in
Caribbean and Florida
$60,000
University of Miami, Florida International
University, North Carolina State University,
Southland Fisheries Corporation, and
Florida Keys Community College
FY 2001 Hatchery production of mutton snapper and cobia $350,000
Puerto Rican Commercial Aquaculture
Research and Development Center,
University of Miami
FY 2001
Evaluate environmental, economic, and social
impacts of open ocean aquaculture in Puerto Rico
$200,003
Sources: “Recipients of the 2006 NOAA National Marine Aquaculture Initiative Grants.” National Oceanic and Atmospheric Administration,
September 2006. Available at: http://aquaculture.noaa.gov/pdf/nmaigrantrecipients2006.pdf; McVey, Eileen M. Personal email correspon-
dence. Aquaculture Librarian, NOAA Central Library, June 1, 2007; McVey, Eileen M. Personal email correspondence. Aquaculture Librar-
ian, NOAA Central Library, July 25, 2007; McVey, Eileen M. Personal email correspondence. Aquaculture Librarian, NOAA Central Library,
June 1, 2007.
Food & Water Watch 5
The following Department of Agriculture appropriations
did not specify whether the grants were offered to sup-
port offshore aquaculture research in Florida:
U.S. Department of Agriculture Appropriations
State Year Description Amount
Florida (unspecifed) FY 2006 Aquaculture research (unspecifed) $300,000
Florida (unspecifed) FY 2005 Tropical aquaculture research (unspecifed) $213,000
Florida (unspecifed) FY 2002 Tropical aquaculture research (unspecifed) $194,000
Florida (unspecifed) FY 2002 Aquaculture research (unspecifed) $490,000
Florida (unspecifed) FY 2001 Tropical aquaculture research (unspecifed) $198,000
Florida (unspecifed) FY 2001 Aquaculture research (unspecifed) $446,000
Sources: H.R. 255, 109th Cong. (2006); H.R. 792, 108th Cong. (2005); H.R. 275, 107th Cong. (2002); H.R. 948, 106th Cong. (2001).
From 1999-2007, Snapperfarm, Inc. directly received
close to $60,000 from the Department of Commerce for
offshore aquaculture. Researchers also received close to
$2.3 million in support of open ocean aquaculture in
the Caribbean. Additionally, Congress appropriated more
than $1.8 million of USDA funds for general aquacul-
ture research in Florida.
New Hampshire]New England
Project
Richard Langan, director of the University of New Hamp-
shire’s Atlantic Marine Aquaculture Center, has high
hopes for offshore aquaculture. “Certainly the potential
is in the many millions of dollars…,”
11
Langan said.
However, for the years 1997-2006, UNH sold only about
6,500 pounds of fsh raised in offshore cages, totaling
$23,711, despite receiving hundreds of thousands of
dollars in government subsidies. In 2005 and 2006, the
center made 11 sales of cod and one sale of cod guts to
fve Northeastern companies. Despite UNH’s statement
to NOAA that “halibut, haddock and cod – all of which
have been raised from offshore cages – have excellent
potential for commercial development,”
12
the center had
not sold any halibut or haddock as of 2006, according to
UNH invoices obtained by Food & Water Watch through
a public records request. Although UNH’s program is not
a commercial operation, these fgures indicate that in the
10 years since it was founded, the program has not dem-
onstrated that open ocean aquaculture is commercially
viable.
The New Hampshire hatchery, Great Bay Aquaculture,
provides UNH and Snapperfarm with juvenile fsh for off-
shore aquaculture. The company also plans to raise cod
in cages off the Maine coast. George Nardi, head of Great
Bay, echoes Cates’ request for more funding: “We need
$50 million, not $5 million.”
13
The following Department of Commerce grants were used
to support offshore aquaculture in New England:
Offshore Aquaculture Kept Afoat With Government Funding 6
NOAA National Marine Aquaculture Initiative Grant
Related Institution(s) Year Description Grant amount
Great Bay Aquaculture, University of New
Hampshire, University of Maine
14
FY 2006
Open ocean aquaculture of cod,
fsh feed
$248,952
University of Massachusetts, University of Delaware,
South Carolina Sea Grant, Delaware Aquaculture
Resource Center, MS/AL Sea Grant Law Center,
Policy Center for Marine Bioscience and Technology,
Coastal States Organization, Texas Sea Grant,
Moonstone Oysters, Sea Web
15
FY 2001
Legal rights and framework for
marine aquaculture
$44,634
University of New Hampshire FY 2000
Reducing the risk of open ocean
aquaculture to protected species
$50,619
Woods Hole Oceanographic Institution FY 2000
Improving regulatory framework
for offshore aquaculture
$91,000
Sources: “Recipients of the 2006 NOAA National Marine Aquaculture Initiative Grants.” National Oceanic and Atmospheric Administra-
tion, September 2006. Available at: http://aquaculture.noaa.gov/pdf/nmaigrantrecipients2006.pdf; “National Strategic Initiative Project
Summaries 2001.” Aquaculture Information Center, National Oceanic and Atmospheric Administration. Available at: www.lib.noaa.gov/
docaqua/nmai2001.html#framework; McVey, Eileen M. Personal email correspondence. Aquaculture Librarian, NOAA Central Library, July
25, 2007.
NOAA Small Business Innovation Research Program Grants
Related Institution(s) Year Description Grant amount
JPS Industries, University of New
Hampshire
FY 2005
Construct open ocean aquaculture cage to
be deployed at UNH
$299,854
Ocean Farm Technologies, University of
Maine
FY 2005
Harvest and fsh transfer methods for
open ocean aquaculture
$74,737
JPS Industries, GreatBay Aquaculture,
University of New Hampshire
FY 2004
Development of an open ocean
aquaculture cage
$74,796
Net Systems, Inc., University of New
Hampshire
FY 2004 Test automated fsh feeding system $200,000
Net Systems, Inc. Environmental
Technologies, UNH
FY 2003 Develop automated fsh feeding system $50,000
Sources: “Awards for Fiscal Year 2005.” Offce of Research and Technology Applications, National Oceanic and Atmospheric Administra-
tion. Available at: www.oarhq.noaa.gov/ORTA/; “Awards for Fiscal Year 2004.” Offce of Research and Technology Applications, National
Oceanic and Atmospheric Administration. Available at: www.oarhq.noaa.gov/ORTA/; “Awards for Fiscal Year 2003.” Offce of Research and
Technology Applications, National Oceanic and Atmospheric Administration. Available at: www.oarhq.noaa.gov/ORTA/
Food & Water Watch 7
From 1999 to 2007, Great Bay Aquaculture received
nearly $250,000 from the Department of Commerce
for open ocean aquaculture research. The agency granted
more than $1.7 million for collaborative research in
support of offshore aquaculture in New England.
California]Mexico Project
Hubbs-Sea World began trying to establish an open
ocean aquaculture operation in 1998, when it received a
NOAA grant to raise white sea bass offshore. However, at
this time, Hubbs raises sea bass in near-shore net pens.
16

In 2006, Hubbs received a grant from NOAA to grow
yellowtail amberjack in collaboration with a Mexican
company in a popular tuna aquaculture site off the coast
of Baja California, Mexico.
The following Department of Commerce grant supports
Hubbs-Sea World’s offshore aquaculture research:
NOAA Saltonstall-Kennedy Grants
Related Institution(s) Year Description Grant amount
University of New Hampshire, Heritage
Salmon
FY 2005
Evaluate salmon net-pen for potential
use in offshore aquaculture
$472,662
University of Rhode Island FY 2004
Reduce stress and improve health of
fatfsh in open ocean aquaculture
$72,793
Woods Hole Oceanographic Institution FY 2004
Economic Measures for Mitigating
Risk and Encouraging Development of
Offshore Aquaculture
$107,257
University of Rhode Island FY 2000
Study stress and health of fatfsh in open
ocean aquaculture
$69,979
Woods Hole Oceanographic Institution FY 1999
Economic and Legal Models for Offshore
Aquaculture Regulation
$92,935
Sources: Grable, Michael. “The Saltonstall-Kennedy Grant Program: Fisheries Research and Development. Report 2005.” Financial Services
Division, National Oceanic and Atmospheric Administration, Aug. 1, 2005; Grable, Michael. “The Saltonstall-Kennedy Grant Program:
Fisheries Research and Development. Report 2004.” Financial Services Division, National Oceanic and Atmospheric Administration, Aug. 1,
2004; “The Saltonstall-Kennedy Grant Program: Fisheries Research and Development. Report 2000.” Financial Services Division, National
Oceanic and Atmospheric Administration, Aug. 1, 2000; “The Saltonstall-Kennedy Grant Program: Fisheries Research and Development.
Report 1999.” Financial Services Division, National Oceanic and Atmospheric Administration, Aug. 1, 1999.
NOAA National Marine Aquaculture Initiative Grant
Related Institution Year Description of Grant Grant amount
Hubbs-SeaWorld 2006
Open ocean aquaculture of yellow tail on a tuna farming
lease site in Mexico
$505,553
Source: “Recipients of the 2006 NOAA National Marine Aquaculture Initiative Grants.” National Oceanic and Atmospheric Administration,
September 2006. Available at: http://aquaculture.noaa.gov/pdf/nmaigrantrecipients2006.pdf
NOAA Saltonstall-Kennedy Grants
Related Institution Year Description Grant amount
Hubbs-SeaWorld FY 1998
17
Offshore aquaculture of white sea bass $208,982
Source: “The Saltonstall-Kennedy Grant Program: Fisheries Research and Development. Report 1998.” Financial Services Division, National
Oceanic and Atmospheric Administration, Aug. 1, 1998.
Offshore Aquaculture Kept Afoat With Government Funding S
Hubbs-Sea World may or may not have used the fol-
lowing Department of Agriculture grant to support its
offshore aquaculture research, as the precise project for
this grant is not specifed:
U.S. Department of Agriculture Appropriations
Related Institution Year Description Amount
Hubbs-SeaWorld FY 2006 Aquaculture (unspecifed) $150,000
Source: H.R. 255, 109th Cong. (2006).
NOAA National Marine Aquaculture Initiative Grants
Related Institution(s) Year Description
Grant
amount
MS/AL Sea Grant FY 2000
Biological, engineering, environmental, and legal research
to develop offshore aquaculture in the Gulf of Mexico
$148,059
Source: McVey, Eileen M. Personal email correspondence. Aquaculture Librarian, NOAA Central Library, June 1, 2007.
NOAA Saltonstall-Kennedy Grants
Related Institution Year Description Grant amount
University of Texas at Austin FY 2000
Hatchery technologies for snapper to be used in
offshore aquaculture
$169,987
Source: “The Saltonstall-Kennedy Grant Program: Fisheries Research and Development. Report 2000.” Financial Services Division, National
Oceanic and Atmospheric Administration, Aug. 1, 2000.
Earmarks in Senate 200S Commerce Appropriations Bill
Related Institution Year Description Amount
University of Southern Mississippi FY 2008
Construction of the Center for Marine
Aquaculture
$11,000,000
(proposed)
Source: Ellis, Steve. “Alabama big winner in FY08 Senate Commerce, Justice, Science, & Related Agencies Spending Bill.” Taxpayers for
Common Sense, July 9, 2007. Available at: www.taxpayer.net/TCS/PressReleases/2007/07-09scjs.html
From 1998 to 2007, Hubbs-Sea World Research Institute
received more than $700,000 from the Department of
Commerce for open ocean aquaculture research.
Gulf of Mexico Projects
The Gulf Marine Institute of Technology owns an oil rig
complex in Texas state waters and plans to attach off-
shore aquaculture cages to the rig, where they would raise
cobia in cooperation with the University of Texas and
Texas A&M University.
18
The Gulf of Mexico Offshore Aquaculture Consortium
proposed to raise fsh adjacent to a Chevron natural gas
platform, but it abandoned the project when funding
expired in 2003.
The following Department of Commerce grants were used
to support offshore aquaculture research in the Gulf of
Mexico:
Food & Water Watch 9
From 1999 to 2002, the Department of Commerce
granted more than $300,000 for collaborative research
in support of offshore aquaculture in the Gulf of Mexico.
Conclusion
The Department of Commerce has made the past decade
of offshore aquaculture development possible through
millions of dollars in subsidies. Since 1999, the depart-
ment has granted close to $3 million to companies
involved with offshore aquaculture and funded nearly
$9.3 million in offshore aquaculture research.
19
However,
despite this investment of taxpayer funds, existing off-
shore aquaculture operations have not proven that their
industry is commercially viable, or that it will balance the
nation’s seafood trade defcit.
Endnotes
1
“Statement by U.S. Commerce Secretary Carlos M. Gutierrez on the
introduction of the National Offshore Aquaculture Act of 2007.” U.S.
Department of Commerce, April 24, 2007. Available at:
www.commerce.gov
2
Cates, John R. Testimony to the U.S. Senate Committee on Commerce,
Science, & Transportation at National Ocean Policy Study Hearing,
Offshore Aquaculture, April 6, 2006.
3
Hao, Sean. “Net gains for Hawai’i.” The Honolulu Advertiser, April 15,
2007.
4
“Kona fsh farm signs deal.” The Honolulu Advertiser, Dec. 19, 2006.
5
Durst, Sidra. “Problem No. 7: Overfshing.” Fortune International,
March 5, 2007.
6
Hao, op. cit..
7
Pending (in-progress) as of 1998 SK report. Prior reports not reviewed.
8
Bennetti, Daniel et al. “Demonstrating technological and economic
feasibility of cobia (Rachycentron canadum) aquaculture from hatchery
to market.” NOAA National Aquaculture Program, September-Decem-
ber 2006.
9
Thurston, Lawson D. “Snapperfarm looks to increase local production
from 50 to 750 tons.” Caribbean Business, Jan. 11, 2007.
10
Benetti, Daniel, D. “NOAA-Marine Aquaculture Program – Demon-
strating Technological and Economic Feasibility of Cobia (Rachycentron
canadum) Aquaculture from Hatchery to Market.” Sea Grant Project
Summary Form, National Oceanic and Atmospheric Administration,
United States Department of Commerce, Sept. 1, 2006.
11
Namuo, Clynton. “UNH testing is underway along New Hampshire
shores.” The Union Leader, March 25, 2007.
12
“Atlantic Marine Aquaculture Center: A Proposal to the Offce of
Oceanic and Atmospheric Research of the National Oceanic and Atmo-
spheric Administration.” University of New Hampshire, April 15, 2006.
13
Nardi, George. Presentation at “Aquaculture 2007: Making it Work for
America.” June 27, 2007.
14
This grant was awarded directly to Great Bay Aquaculture.
15
University of Massachusetts was the lead recipient for this grant.
16
“A Fisheries Enhancement Success Story.” Hubbs-SeaWorld Research
Institute. Available at: www.hswri.org/research/researchProgram.
cfm?reaID=17
17
Pending (in-progress) as of 1998 SK report. Prior reports not re-
viewed.
18
“The project.” Gulf Marine Institute of Technology. Available at: www.
gmitinfo.com/project.cfm
19
This number includes the $3 million paid to offshore aquaculture
companies.
For more information:
web: www.foodandwaterwatch.org
email: foodandwater@fwwatch.org
phone: (202) 797-6550
Copyright © November 2007 Food & Water Watch
A seacage with anchor being deployed off Hawaii. Photo cour-
tesy NOAA.