Sitka Fish Waste Utilization

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					                                  Sitka Fish Waste Utilization
                                       December 07, 2009


Garry White, Executive Director – SEDA (Facilitator)
James Browning, Alaska Fisheries Development Foundation
Pete Nicklason, NOAA & Montlake Mining Company
Peter Stitzel, Montlake Mining Company
Phyllis Hackett, Assembly - CBS
Jack Ozment, Assembly - CBS
Dan Parrent, Juneau Economic Development Council
Scott Harris, Sitka Conservation Society
Jon Hickman, North Pacific Seafoods / Sitka Sound Seafoods
John Lotzgesell, Silver Bay Seafoods
John Stein, Sitka Sounds Science Center
Rich Riggs, Silver Bay Seafoods
Stan Eliason, Harbormaster - CBS
Dave Luchinetti, Sitka Airport / DOT
Jim Dinley, Municipal Administrator - CBS
Craig Shoemaker, Seafood Producers Cooperative
Keith Perkins, USDA Rural Development
Jim Nordlund, USDA Rural Development
Mike Miller, Sitka Tribe of Alaska
Seth Bone, Sitka Charter Operators
Polly Bass, Sitka Tribe of Alaska
Kerry MacLane, Sitka Local Foods Network
Chris Foley, Alaska Department of Environmental Conservation
Heather Brandon, Juneau Economic Development Association
Darwin Peterson, Office of Senator Bert Stedman
Paul Khera, Alaska DOT & PF – Airport Safety

1.     Introductions

2.     Current Situation
       a. Commercial Processors Overview

Rich Riggs stated that he would like to hear about the DEC and FAA regulations that relate to
the discharge of fish waste.

Jon Hickman said that identifying the jeopardies and possible solutions regarding disposal of fish
waste is the goal for this meeting.

Craig Shoemaker stated that SPC has been grinding fish waste and discharging into the channel
for 29 years, but is interested in achieving full utilization of the product and moving toward zero
discharge. Current SPC discharge is approximately 1.8 million pounds annually. The estimated
total of all fish waste discharged by Sitka processors is 17 million pounds annually.

       b. ADEC/EPA Issues

Chris Foley stated that the DEC is concerned with the accumulation of ground waste in the
channel. In 2008 the Alaska Department of Environmental Conservation took over the Federal
EPA’s permitting, compliance, and enforcement responsibilities that cover fish processors. This
includes NPDES permits and enforcement of the Clean Water Act. The EPA retains oversight
and compliance oversight responsibilities to ensure that the DEC following the requirements of
the Clean Water Act. The rules under DEC are virtually the same as they were under EPA.

Sitka is a 301 H waiver community and is therefore not required to meet secondary treatment
standards for discharge.

       Clean Water Act Section 301(h): Waivers from Secondary Treatment for Ocean Discharges

       … applicants that met the set of environmentally stringent criteria in section 301(h) would
       receive a modified National Pollutant Discharge Elimination System (NPDES) permit waiving
       the secondary treatment requirements for the conventional pollutants biochemical oxygen
       demand (BOD), suspended solids (SS), and pH.

       Among other things, the statute requires that the discharger:

          * Protect and propagate a balanced indigenous population of shellfish, fish, and wildlife
          * Meet water quality standards (or water quality criteria for pollutants without WQS)
          * Establish a monitoring program to assess impacts
          * Provide a minimum of primary or equivalent treatment
          * Have an approved pretreatment program and establish toxics controls
          * Provide enhanced urban area pretreatment,… serving greater than 50,000 population
          * Protect water supplies
          * Meet water quality requirements to allow recreational activities
          * Prohibit waivers in stressed estuaries

Chris Foley stated that the discharge permit for Sitka processors was administratively extended
while a new permit is being drafted. There appears to be lack of clear authorization for granting
the waiver.

Craig Shoemaker stated that the SPC permit expired in 2006 and was administratively extended,
for waters less than 60 feet deep. SPC applied for a waiver that has not yet been granted. This is
a concern.

Chris Foley said he would need to find out why the waiver application was not granted. The
DEC will work with local processors to come into compliance.

       c. AK DOT/FAA Issues

David Luchinetti explained that the FAA has become concerned over the number of bird strikes
at the Sitka airport. Fish by-products in the channel are considered to be an attractant for birds.
The airport runway is as stopover for the birds on their route to the channel.

To meet compliance requirements a discharge cannot create an attractive nuisance. The channel
is a problem area as the depth is less than 60 feet and there has been a decrease in circulation
since construction of the breakwater.

Regarding impaired water body classification. An impaired water body is one that does not meet
the water standards of the Clean Water Act. The channel area has not yet been determined to be
an impaired water body.

       d. Sport Fish
              i. Fish Cleaning Station Issues

Most charter operators take fish waste out to deep water for disposal.

Stan Eliason stated that the fish waste generated by non-guided sport fishing is a concern. There
needs to be a method for collection and disposal of this waste away from the harbors. The
amount of waste generated from this source could be determined from the ADF&G harvest

Kerry MacLane advised that he is working to develop a municipal compost facility that utilizes
available fish waste. MacLane supports the highest and best use of the fish waste generated by
the producers, but may take the sport generated fish waste for a smaller compost project or work
with another enterprise to utilize whatever they cannot use.

       e. Other Issues

3. Solutions/Opportunities

An experimental composting project run by the Sitka Tribe of Alaska was successful in creating
good quality compost from fish waste combined with wood waste.

       In 1997, the Sitka Tribe coducted a pilot study to determine the feasibility of processing
       locally-produced wood cnhips and fish waste into compost. Sitka Tribe sought to mix the
       fish waste with wood chips from a regional wood mill to create compost. Unfortunately
       there is no timber being cut locally and no large sawmills, so wood chips would have to
       be shipped to Sitka at a considerable cost.

With improvements in technology there is renewed interest in utilizing the fish waste.

There are currently four potential projects targeting Sitka’s fish waste.
   o Omega Sea – Denny Crews – fish food

   o Montlake Mining Company – Peter Stitzel - high value pet food, food grade fish meal
   o Sitka Local Foods Network – Kerry MacLane – composting
   o Other

Dan Stockel suggested extraction of fish oil to fuel boilers should also be considered following
the model used in Dutch Harbor.

James Browning stated that the AFDF has been working toward full utilization of fish since 1992
and recently held a third symposium on the issue in Portland, Oregon. There has not been a lot
of progress since 1992, however that seems to be changing as the value of the waste stream has

Headed and gutted salmon create about 30% waste while filleted salmon result in about 50%

A demonstration dryer was developed at Montlake laboratory in Seattle. AFDF provided $200k
in funding for the Montlake project from an earmark with about $100k remaining. The Montlake
project was selected from among six proposals due to the technology that addresses the issue of
handling peak loads. One of the major costs of equipment for processing fish waste is the need
to handle massive peak loads before the waste starts to rot. This same equipment is over-built
for running off-peak loads resulting in financial losses during low volume processing. Old
technologies would require continued subsidies to cover costs.

The solution requires a plant that can operate at about half the cost of the existing hydrolysate
technology. It must also produce a higher value product, handle low volume loads, and operate in
remote areas.

Shore based salmon waste would be targeted first and could produce approximately 100
thousand metric tons of fish meal and oil.

The value of fish meal has continued to rise with increased demand, however production has not
really increased in the past 20 years. Peru produces about 50% of the world’s fish meal.

Standard hydrolysate plants are located in the Aleautians (3), Kodiak, Seward, Petersburg, and
Prince Rupert. In Ketchikan there is a hydrolysate barge that takes only salmon heads for food
grade oil. There is a plant in Cordova constructed for waste disposal that runs at a financial loss.

The cost of a conventional hydrolysate plant that can handle a peak load of 450k pounds per day
is about $6 million. The cost of a Montlake Mining Company plant that can handle the same
volume could be less than $3 million, and as low as $2 million depending on the location.

Energy to remove water from the fish waste is a major cost of the process. The new Montlake
technology stabilizes the waste to allow for steady operation of the equipment. Stabilized waste
can be held in a tank farm for up to three months, however, the ideal is 10 days. A drum dryer
processes the ground up material into a thin sheet that is flaked and packaged as salmon flour.
This is food grade material as long the equipment is stainless steel.

Pet food products are the first step, however human food products could be developed, especially
for the Asian market.

Another benefit to the Montlake process is the short drying time of 25 seconds, versus 25
minutes for the standard technology. The shorter drying time results in a fish meal that is easy to
bind with water providing versatility in final use.

High value products include:
   o Chondroitin sulphate = $7.50 per kilogram
   o Fish oil = $1.20 per kilogram
   o High protein salmon meal = $1.5 per kilogram
   o Premium dog treats that could market for up to $30 per pound; equivalent to the price for
       Copper River salmon.

Producing fish oil for use in a boiler can be feasible depending on the cost of diesel vs. hydro
power and availability.

Non-salmon seafood waste can be processed into feed for Alaska’s salmon hatcheries. This
could be a $5-$6 million a year business.

Herring waste and spent barley from the Alaska Brewing Company were combined into a fish
food. An eight month test on coco fry showed that the salmon grew faster on this feed.

The cost to transport the fish waste from processor to the plant will be a large expense.

For sport fishing waste disposal an storage unit could be developed that would grind and
stabilize the waste and hold it in a tank until full. Once full it could be pumped out by a tanker

The Montlake Mining Company system has been designed in units that fit into mobile shipping
containers. Extra dryer capacity can be added to accommodate peak fisheries. The Bristol Bay
fishery could pay for the equipment and use if for the sockeye season and then move the unit to
Sitka for August.

The goal is to have zero fish waste discharge in five years.

An Montlake Mining Company plant could be constructed and functional in six to seven months
depending on the location. The equipment is in four to five shipping container vans. An
additional four to five thousand square foot building would be needed to house some equipment.

If a site and funding can be acquired, an MMC plant could be up and running for the 2011