**WRITTEN TESTIMONY OF**

**VADM CONRAD C. LAUTENBACHER, JR.,**

**UNDER SECRETARY FOR OCEANS AND ATMOSPHERE**

**NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION**

**U.S. DEPARTMENT OF COMMERCE**

**HEARING ON H.R. 2010, THE NATIONAL OFFSHORE AQUACULTURE ACT**

**OF 2007**

**BEFORE THE**

**COMMITTEE ON NATURAL RESOURCES**

**FISHERIES, WILDLIFE AND OCEANS SUBCOMMITTEE**

**UNITED STATES HOUSE OF REPRESENTATIVES**

**JULY 12, 2007**

Chairwoman Bordallo and members of the Subcommittee, good morning and
thank you for the invitation to testify on behalf of the Administration
on H.R. 2010, the *National Offshore Aquaculture Act of 2007*. Before I
begin my testimony I would like to thank you for your leadership and for
the support you have given the National Oceanic and Atmospheric
Administration (NOAA). We appreciate your continued support for our
programs as we work to improve our products and services for the
American people.

Today I will discuss the opportunities and challenges posed by offshore
aquaculture and the Federal Government's role in setting the stage for
more robust commercial production of cultured seafood. This is an
important issue for the Administration. On behalf of the Administration,
I would like to thank the Chairwoman and Congressman Rahall, the
chairman of the Natural Resources Committee for co-sponsoring H.R. 2010.
We want to work with you to enact national offshore aquaculture
legislation in the 110^th^ Congress.

I also appreciate that Chairwoman Bordallo took time out from her busy
schedule to address the National Marine Aquaculture Summit held in
Washington, D.C. just a few weeks ago. This Summit was open to the
public and brought together representatives from industry, government,
academia, and non-governmental organizations to not only discuss the
opportunities and challenges for marine aquaculture in the United
States, but to focus on concrete actions that will help the industry to
advance in an environmentally, economically, and socially responsible
manner.

Summit participants agreed that there is a role for offshore aquaculture
in our Nation's seafood production future, and that we need national
offshore aquaculture legislation to provide regulatory certainty for
those considering investing in aquaculture development in federal waters
of the Exclusive Economic Zone. But we also heard a cautionary note from
aquaculture businesses and potential investors that the legislation
should not be so restrictive that it drives investment overseas. For
example, short permit duration (less than 20 years) may deter investment
by not affording a sufficient term to ensure financial returns.

I believe the Administration's bill strikes the proper balance between
aquaculture development and environmental protection and that it will
allow for timely permit decisions and adaptive management approaches in
the regulation of this new ocean industry. It also includes provisions
for research and development to support all types of marine aquaculture,
not just offshore technologies.

**The Need for National Offshore Aquaculture Legislation**

Before I get into the specifics of the bill, let me take just a minute
to put the need for national legislation in context.

Why do we need aquaculture? Study after study confirms the health
benefits of eating seafood and consumers in America and abroad have
gotten the message. Meanwhile, wild catch levels worldwide have tended
to remain relatively stable over the last 20 years after decades of
steady increases. Because wild harvests can no longer keep up with
growing demand, increases in the seafood supply will come from
aquaculture. We've done a good job managing America's marine resources,
but even the best managed wild fisheries can't meet the growing demand
for seafood. Aquaculture must fill the gap -- the only question is ...
whose aquaculture?

Worldwide, aquaculture is a \$70-billion-per-year enterprise, and almost
half of the seafood consumed worldwide is farmed. However, U.S.
aquaculture accounts for just 1.5 percent of the total global
aquaculture production. Experts say we'll need another 40 million tons
of seafood a year by 2030 just to meet current consumption rates. In
this large and growing market, the United States remains a net importer
of seafood---more than 80 percent of the seafood consumed in the United
States is imported from other countries, of which 40 percent is farmed.
Offshore aquaculture therefore presents tremendous opportunities for the
United States.

Enactment of H.R. 2010 will allow the United States to become more
self-sufficient in the production of healthy seafood by growing more of
it here at home. By laying the foundation for offshore U.S. aquaculture,
the bill will help create more jobs in coastal communities and help our
nation reduce its \$8 billion seafood trade deficit. The United States
must develop aquaculture as a complement to commercial fishing or it
will be forced to import increasing amounts of farm-raised seafood from
other countries.

Food safety is another issue. U.S. consumers want to know that their
seafood was produced in a safe and sustainable way, and many choose to
purchase local products when given a choice. Producing seafood locally
allows us to test and develop new technologies, equipment, and
alternative feeds. This makes us more competitive in the global market
and allows us to lead by example---our sustainable production will
encourage our trading partners to adopt best management practices,
thereby improving the quality of all seafood reaching U.S. consumers.

**An Important Opportunity for U.S. Coastal Communities**

For some time, many coastal communities have suffered from
overcapitalization and limited harvests in the commercial fishing
industry. With a more robust domestic aquaculture industry, boats used
for fishing could also service aquaculture operations, and seafood
industry infrastructure could process and distribute both cultured and
wild harvest fishery products. Domestic aquaculture could provide a
steady, year-round source of product and, in some locations, it could
prevent processing facilities from closing down altogether due to
insufficient harvest from wild fisheries.

Preliminary production estimates indicate that domestic aquaculture
production of all species (both marine and freshwater) could increase
from about 500,000 tons today to over 1 million tons per year by 2025.
The additional production could include 760,000 tons of seafood from
finfish aquaculture, 47,000 tons from crustacean production, and 245,000
tons from mollusk production.

In addition to creating new job opportunities at hatcheries and grow-out
facilities, environmentally sound expansion of U.S. aquaculture will
have a ripple effect on other aspects of the economy since the
aquaculture industry relies on other producers and manufacturers for
goods and services that support species cultivation. Those benefiting
from the expansion of U.S. aquaculture include soybean and grain
producers; equipment and technology providers; cold storage, transport,
marketing, and food service providers; and veterinarians. In turn, these
activities will strengthen the coastal communities in which the
businesses operate, and provide the health benefits to seafood
consumers.

Successes to date of aquaculture-related businesses demonstrate direct
economic benefits from an increase in domestic aquaculture production,
including offshore aquaculture. More and more communities are
recognizing that environmentally sound aquaculture can present
development opportunities for areas hit hard by job losses, natural
disasters, and other challenges. As interest grows, these communities
are beginning to integrate aquaculture into their economies. For
example, in the Hawaiian Islands, the U.S. Department of Agriculture
estimates the number of aquaculture enterprises has grown to over 100
farms, valued at \$28 million, supporting approximately 630 jobs in
2004. NOAA research and technology on the culture of oysters, mussels,
clams, striped bass, shrimp, abalone, moi, cobia, and salmon have helped
build a commercial marine aquaculture industry worth more than \$150
million a year. Stock enhancement of commercial and recreational
fisheries adds to the economic benefits accruing from U.S. investment in
marine aquaculture.

**Provisions of the National Offshore Aquaculture Act of 2007**

The National Aquaculture Act of 1980 declared aquaculture development to
be in the national interest, and required federal agencies to address
barriers to such development. Both the Department of Commerce (in 1999)
and NOAA (in 1998) have endorsed aquaculture policies in support of the
National Aquaculture Act, but additional statutory authority is needed
to establish a regulatory framework for aquaculture in the U.S.
Exclusive Economic Zone.

The *National Offshore Aquaculture Act of 2007* supports commitments
made in the U.S. Ocean Action Plan and responds to the recommendations
of the U.S. Commission on Ocean Policy to help promote the development
of environmentally sound offshore aquaculture. Specifically, H.R. 2010:

-   Authorizes the Secretary of Commerce to issue offshore aquaculture
    permits.

-   Requires the Secretary of Commerce to work with appropriate federal
    agencies, coastal States, and regional fishery management councils
    to establish environmental requirements for offshore aquaculture
    before permits are issued.

-   Requires the Secretary of Commerce to work with other federal
    agencies to develop and implement a coordinated permitting process
    for offshore aquaculture.

-   Exempts permitted offshore aquaculture from fishing regulations that
    restrict size, season, and harvest methods.

-   Authorizes a research and development program for all types of
    marine aquaculture.

-   Authorizes funding to carry out the Act and provide for enforcement
    of the Act.

The Act will be implemented through a transparent public process.
Relevant federal agencies and key stakeholders, including regional
fishery management councils, coastal states, and the public will be
provided the opportunity to contribute to the development of
environmental analyses, rulemaking, and permit decisions, including
details on environmental requirements and siting criteria. We will make
available information on proposed projects and potential environmental
impacts.

The Act will not duplicate, supersede, or substitute for existing
applicable statutes and regulations such as Environmental Protection
Agency authority over effluents and pesticides or Food and Drug
Administration authority over use of drugs. Similarly, NOAA is required
to comply with statutory requirements under other laws such as the
National Environmental Policy Act, the Marine Mammal Protection Act, the
National Marine Sanctuaries Act, the Endangered Species Act, and the
Magnuson-Stevens Fishery Conservation and Management Act. Specific
provisions are included to clarify how offshore aquaculture permitting
will be coordinated with Department of the Interior authority over
facilities and areas permitted under the Outer Continental Shelf Lands
Act.

**Environmental Requirements for Offshore Aquaculture Development**

Among its missions and stewardship responsibilities, NOAA protects and
preserves the Nation's living marine resources and their habitats
through scientific research, fisheries management, law enforcement, and
habitat conservation. NOAA is a leading voice for the economic benefits
that can be derived from sustainable use and conservation of living
marine resources. In seeking to move legislation forward that will
create a regulatory framework for offshore aquaculture, our goal is to
work with Congress and with our stakeholders to create an opportunity
for aquaculture in U.S. federal waters so we can ensure that the
industry develops in a predictable, environmentally compatible, and
sustainable manner that acknowledges the rights of other users of marine
resources and protects human health and safety.

Aquaculture, like all human activities and all types of food production,
has environmental impacts. The *National Offshore Aquaculture Act of
2007* directs the Secretary of Commerce to work with other federal
agencies to minimize negative environmental impacts and ensure that
aquaculture does not adversely affect wild stocks or the marine
environment.

The Act incorporates many of the recommendations of outside groups,
including the January 2007 report by the Woods Hole Marine Aquaculture
Task Force, the American Fisheries Society-sponsored article in the
December 2006 issue of *Fisheries* magazine, and the aquaculture policy
adopted by the Western Pacific Regional Fishery Management Council in
March 2007.

Key environmental provisions in the Act include:

-   Environmental concerns will be addressed through rulemaking and
    establishment of mandatory measures to minimize negative
    environmental impacts before any offshore aquaculture permits are
    issued.

-   Environmental requirements will address risks to and impacts on
    marine species and ecosystems, including natural fish stocks and
    fisheries, and provide safeguards to conserve genetic resources,
    prevent or minimize transmission of disease or parasites, and
    prevent escape. Use of any species other than native species will
    not be permitted unless a scientific risk analysis shows that the
    risk of harm from escape or predation is negligible or can be
    effectively mitigated.

-   Operations will be monitored and permit terms and conditions
    enforced.

-   The Secretary of Commerce could modify, suspend, or revoke permits,
    or take emergency action in response to unanticipated impacts.

-   Permit holders will be required to post a bond or other form of
    financial guarantee to cover unpaid fees, the cost of removing a
    facility at the expiration or termination of the permit, and other
    financial risks identified by the Secretary of Commerce.

-   The Act supports research to address environmental issues.

-   Offshore aquaculture development will comply with environmental
    requirements, all permit terms and conditions, and other
    requirements under existing environmental laws and regulations.

-   Offshore aquaculture will not be permitted off a State where it is
    not wanted by that State.

NOAA and others are working to answer many of the environmental
questions related to marine aquaculture. NOAA has strong stewardship
responsibilities and will implement this law in a way that protects
marine resources.

**Research and Development**

To help accomplish these objectives, the Secretary would be authorized
under the *National Offshore Aquaculture Act of 2007* to establish a
research and development program, which would further marine aquaculture
technologies that are compatible with marine ecosystems, in consultation
with other federal agencies. The Secretary of Commerce would be
authorized to enter research partnerships with permit holders. The
Secretary would also be required to collaborate with the Secretary of
Agriculture to conduct research to reduce the use of wild fish in
aquaculture feeds.

Feed -- which is formulated using fishmeal and fish oil -- is a major
component of the cost of production in an aquaculture operation.
Typically, feed accounts for over 60 percent of operating costs, so the
industry has strong economic incentives to develop suitable alternative
ingredients for feed formulas and become more efficient in converting
feed into product. As the price of alternative ingredients drops below
that of fishmeal, those ingredients will be substituted for fishmeal and
fish oil.

Not only will market incentives lead to reductions in the use of fish
meal in feed, NOAA has the responsibility to manage the harvest of
forage species under our strong fisheries management laws. Harvest of
forage fish is a fisheries management issue, not an aquaculture issue.

Further development of plant-based feeds also represents a huge
opportunity for American agriculture, as the United States produces an
abundance of high-quality proteins and fats that could be used in fish
production. Other meals such as canola, lupine, wheat gluten, corn
gluten, algaes, yeasts, and various plant protein concentrates -- many
of them grown in the United States -- have already been shown to be
palatable and digestible for fish. Feed experts believe meals made from
proteins and fats will be ideal for fish production, and increased
production is likely based on their promise. But it will also be
necessary to test the effect of these substitutions on the human health
benefits of consuming seafood, in order to preserve the nutritional
value consumers get from eating farm-raised fish.

It is important to note that the recently released National Science and
Technology Council report *Charting the Course for Ocean Science in the
Next Decade in the United States: An Ocean Research Priorities Plan and
Implementation Strategy* highlights the need to carry out research to
support efforts to sustain healthy marine ecosystems and to further
understanding of how the oceans play a role in human health; thus
research to support environmentally sound aquacultural production and to
understand the benefits and impacts to humans of consuming farm raised
seafood is completely compatible with the Administration's stated
national priorities in ocean science.

**Integration with Commercial and Recreational Marine Fisheries**

Although we are convinced of the benefits that will result from H.R.
2010, we must also consider its potential impacts, including the impact
on our Nation's commercial and recreational fisheries. Some have
expressed concern that offshore aquaculture will hurt wild harvest in
the United States. But if aquaculture is managed correctly, wild harvest
should not be affected. We recognize the expertise in the Fisheries
Management Councils and will consult accordingly with the Councils on
the interaction of marine aquaculture with wild fisheries.

Aquaculture products, whether imported or domestic, compete with
wild-caught fisheries. And this competition will exist with or without
domestic aquaculture. The marketplace is global and demand for seafood
products is growing. The United States cannot meet this demand through
wild-caught fishing activities alone. Seafood imports and other forms of
protein, such as beef and chicken, already provide significant
competition. The challenge is to integrate aquaculture into domestic
seafood production so that U.S. boat owners, fishermen, processors, and
marketing companies can benefit directly.

Recreational and commercial fishing will also benefit from hatcheries
and stock enhancement techniques developed for offshore aquaculture.
Currently, U.S. hatcheries grow finfish and shellfish to enhance
recreational and commercial fishing stocks with great success. For
example, recreational fishermen in Southern California and at the
Hubbs--SeaWorld Research Institute are cooperating on a white seabass
restocking program. This successful program helped rebuild and sustain
the valuable recreational fishery for seabass in California.
Rehabilitation work on oyster beds in the Chesapeake Bay, Louisiana, and
elsewhere provide additional examples.

The United States needs a strong commercial fishing industry
[and]{.underline} a robust aquaculture industry to meet projected
seafood demand and to enhance domestic stocks. While we look to
aquaculture to help meet demand, NOAA will continue to sustain
wild-capture fisheries with management programs, stock enhancement, and
marketing to channel high-valued wild-capture products to premium market
outlets. But we also need to supply that vast middle market that demands
a year-round supply of affordable, healthy, and safe seafood. We can do
this through domestic aquaculture.

**Conclusion**

Chairwoman Bordallo and members of the Subcommittee, the Administration
looks forward to working with you, the public, the fishing and
aquaculture industries, and the environmental community to craft a
regulatory framework for offshore aquaculture. We are confident that
offshore aquaculture facilities could operate without compromising wild
stocks, environmental quality, or people's livelihoods. In the long run,
U.S. fishing communities will be harmed more by foreign competition than
by a robust domestic aquaculture industry. Our challenge is to find ways
for the domestic fishing industry to benefit from the use of aquaculture
technologies to produce more seafood -- as fishermen are already doing
in some parts of the United States and in other countries.

Offshore aquaculture has the potential to contribute greatly to our
seafood supply and to the Nation's economy, but this potential will be
realized only if we can provide the regulatory certainty for businesses
to make sound investment decisions. H.R. 2010 will give NOAA the
authority it needs to provide that regulatory certainty. I appreciate
the opportunity to present the *National Offshore Aquaculture Act of
2007* to you today, and I will be happy to answer any questions.