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 1                      TRANSCRIPT OF
 2            MARINE FISHERIES ADVISORY COUNCIL
 3                 HILTON HAWAIIAN VILLAGE
 4                       (Day Three)
 5                   Honolulu Suite # 3
 6                  Held in Honolulu, Hawaii
 7                            On
 8
 9               Thursday, January 13, 2005
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 1                        I N D E X
 2      Status of Program and Legislation             3
 3      First Commercial Offshore Aquaculture
 4      Operation in the U.S. - Randy Cates           10
 5      Oceanic Institute and HIMB - Sam Pooley       79
 6      NOAA Fisheries Acoustics Program - Brandon
 7      Southgall                                     86
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                                                       3
 1                                         (9:30 a.m.)
 2            (Thursday, January 13th, 2005)
 3            MR. OSTERBACK:  Good morning, everyone.
 4  We're back in our regular meeting.  Laurel is
 5  handing out one of the presentations.
 6            Before we get into that, I think Bill has
 7  some updates.
 8            (Status of Program and Legislation)
 9            MR. HOGARTH:  I just wanted to take a
10  couple minutes to let you know where the National
11  Offshore Aquaculture Act is.
12            We'd hoped to have the whole act here, but
13  as it happens in the way the Congress operates, last
14  year it went through OMB and got all the comments.
15  But then the 108th Congress adjourned.  So now we
16  have to go through the same process for the 109th
17  Congress.
18            It's out for comments again.  We've gotten
19  a couple comments this time from Interior.
20            But I do want to tell you the Bush
21  Administration's response to the Ocean Commission on
22  ocean policy states that, that in the 109th Congress
23  the Administration will propose the National
24  Offshore Aquaculture Act provides the Department of
25  Commerce clear authority to regulate offshore
                                                       4
 1  aquaculture.  The bill will empower the Department
 2  of Commerce to assist the private sector in
 3  obtaining the necessary federal agency approval for
 4  establishing an offshore aquaculture facility.
 5            The Department of Commerce has primary
 6  responsibility for the management and conservation
 7  of living marine resources in the EEZ; and as such,
 8  will ensure that offshore aquaculture enterprises
 9  operate in an environmentally-sustainable manner
10  that is compatible with existing uses.
11            So, basically, this bill has been drafted.
12  We will have to go through -- once and if -- and I
13  think that it is once, I think there is enough
14  support to see this bill passed.  But we'll have to
15  establish a regulatory structure then through the
16  rule-making.  This gives us the authority.
17            Then it will grant the Secretary the
18  authority to issue permits, which includes an
19  exemption from the Magnuson-Stevens Act definition
20  of fishing, but does not exclude it from the fishery
21  management restrictions.  So if you want size
22  differential and all, it can give you a smaller
23  size, that kind of thing.
24            But it does take it from the definition of
25  fishing, and provides for a streamlined permitting
                                                       5
 1  process, provide environmental and other safeguards,
 2  including environmental requirements, monitoring and
 3  enforcement, authority to suspend, modify and revoke
 4  the permits, bonds or other financial guarantees,
 5  consultants with the federal agencies, including the
 6  Fishery Management Councils, states and tribes, and
 7  a requirement for consistency with state plans.
 8            We'll support through R&D industry
 9  partnerships and collection of biological and social
10  production and economic data.
11            There's one comment that we're dealing
12  with now, but most all the comments of the agencies
13  have been addressed.  We'll send it back -- these
14  comments go to OMB, and then we'll be looking for
15  responses, and the exact timing that it will be
16  released.
17            It's got about 13 sections of it.  This
18  goes into definitions and permits and environmental
19  requirements, research and development,
20  administration, authorization of appropriation,
21  unlawful activities, enforcement provisions, civil
22  penalties and permit sanctions, criminal offenses
23  and forfeitures.  So it's a very comprehensive bill.
24            I will tell you as soon as I can get it to
25  be released, we'll send it to all the members of
                                                       6
 1  MAFAC.
 2            But it's bound for an extensive review.
 3  Michael Rabino, who is the Aquaculture Coordinator,
 4  he's been working extremely hard with the other
 5  agencies to get this moving.  So we do expect it --
 6  we see no -- you know, the federal agencies have
 7  really come together.  There's been no argument over
 8  the fact that the Department of Commerce has this
 9  authority from anybody --
10            MR. FLETCHER:  Is that a press release,
11  Bill?
12            MR. HOGARTH:  No.  It's a one-pager that I
13  put together with Mike Rabino, knowing I couldn't
14  release the whole bill.  Probably shouldn't even --
15  some people would probably get upset because I said
16  what I said, but I think MAFAC should know exactly
17  what's there.
18            The other thing that I've talked to some
19  people about that I would like to do, once this bill
20  is approved by OMB and we'll be able to move
21  forward, is to get a small group together to look
22  and have a game plan for success on how we can get
23  this moving.
24            I think we've got to make sure of several
25  things, that the commercial industry is comfortable
                                                       7
 1  and realizes that this is not an attempt to impact
 2  the wild harvest of fish, and it's a combination is
 3  what it's going to take to make this country
 4  sustainable in seafood, and to even supply more of
 5  what the health folks are telling us we need to eat
 6  in seafood.  So we have to make sure that we look at
 7  species and things like that, that we wouldn't be
 8  doing in aquaculture.
 9            And to make sure that people are
10  comfortable with the environmental conditions
11  surrounding it.  Because there has been a lot of
12  concern about environmental issues, and we need to
13  make sure we address those.
14            So there's a lot going on in aquaculture
15  abroad, and some in the U.S.  So we will probably in
16  the next few months hopefully be looking at some
17  pilot projects with others around the country to see
18  what we can do and what we can learn as we move
19  forward.
20            We think this is a part of managing this
21  fishery, the U.S. fisheries, for the future.  So we
22  are sort of excited about getting this moved
23  forward.  It's a great opportunity for us.
24            But we've got to make sure that we do it
25  in a manner that the U.S. citizens are comfortable
                                                       8
 1  with, and I think we can do that.
 2            But if you have any questions, I'll try to
 3  answer them.
 4            The thing to remember about this, they
 5  will take regulations.  So this gives us the
 6  authority to move forward, but we'll have to develop
 7  the regulations to implement it, similar to the way
 8  we do other things on the councils, only this will
 9  be done by the -- we need Secretarial regulations.
10  So everybody will have plenty of opportunity to
11  comment on the process.
12            We're having some workshops around the
13  country now.
14            Let me tell you, the MAFAC meeting in
15  Alaska, I thought there was an extremely good
16  discussion of aquaculture.  There's been a lot of I
17  think positive fallout from the meeting.  In fact, I
18  think we're going to have three workshops in Alaska
19  over the next few months as a result of that
20  meeting, as part of the explanation, as part of the
21  process.  So there's a lot of things going on
22  education-wise.
23            I really want to thank you for what we did
24  at that meeting.  I think that set the stage, and it
25  was an awfully good discussion to help us move
                                                       9
 1  forward.
 2            MR. OSTERBACK:  Okay.  Questions?
 3            MR. RAYBURN:  Does the bill establish the
 4  authority for NOAA Fisheries or NOAA to lease a
 5  water column?  Is that the legal entity that will be
 6  established with the authority, to lease a water
 7  column?
 8            MR. HOGARTH:  That's one of the
 9  possibilities, yes.  This will go through the NEPA
10  process.  It goes through the whole process.
11            MR. OSTERBACK:  Okay.  If there are no
12  other questions, then -- oh.
13            MR. HENDRIX:  Joe Hendrix, Gulf of Mexico
14  Fishery Management Council.
15            We're currently working on a generic
16  aquaculture permit.  How will this affect that?  Or
17  how is NOAA Fisheries looking at this?
18            We're making this in the form a generic
19  amendment with all of our fishery management plans.
20            MR. HOGARTH:  I think that would fit into
21  the way we were doing it.  We've talked about this
22  with Roy and we feel like it will be compatible with
23  what we're doing because the Councils still -- you
24  have fishery regulations, it will have to get
25  exempted from sizes, and things like that.  We
                                                      10
 1  haven't worked that out, seasons and things.
 2            That exemption from Magnuson fits with the
 3  definition.
 4            MR. OSTERBACK:  Okay.
 5            MR. BILLY:  Just quickly.  You mentioned
 6  the other day the new dietary guidelines.  I saw in
 7  USA Today they were released.  I think you ought to
 8  get access to that, it will form a very strong
 9  argument for new legislation.
10            MR. OSTERBACK:  I hope it says something
11  about two danish in there, because (laughter).
12            Any other comments or questions?  If not,
13  we'll go on to Randy Cates, who is here.  He's got
14  on offshore aquaculture operation, I think one of
15  the first ones.
16            I have met you before in Seattle during a
17  Marine Fishery Expo, I think when you were first
18  starting up, you came and were doing presentations.
19            (Brief time of people speaking at the same
20  time)
21            (Cates International, Inc.)
22            MR. CATES:  Thank you for having me here.
23  This band is not because I'm released from a
24  hospital, but I gave birth yesterday to our first
25  child. (Applause)
                                                      11
 1            So I came this morning a little
 2  unprepared.  I haven't thought about much this week,
 3  but I had two presentations and I flipped the coin,
 4  and one of them I had was the one when I spoke in
 5  Seattle this year, and it was directed towards
 6  Alaskan fishermen and basically stating the case for
 7  why they should go aquaculture, and some of the
 8  parallels of going from commercial fishing to
 9  aquaculture.  So that's not the one that I have.
10            This one that I used, this one is a little
11  bit lighter tone, I would say.  But I will probably
12  hit on some of the same points.
13            This one I gave about three months ago to
14  our ag industry here in Hawaii.  So that will
15  explain that.
16            Before I start, I'll give a little bit of
17  history -- there's a lot of new faces -- of who I
18  am.
19            I started my career working on the ocean
20  training dolphins for the Navy at a very young age
21  of about 15, part-time, while I was in high school.
22  When I got out of high school, I continued that for
23  13 years.  I was a tech rep with the EOD Seal Team.
24  That was my experience.  Nothing to do with
25  fisheries.
                                                      12
 1            But it took me a lot of places in the
 2  world.  Then when I had a choice in '91 to either
 3  move to San Diego, because they were closing the lab
 4  here, or stay in Hawaii.  I'd just gotten back from
 5  the Persian Gulf and so I said, I think I'm going to
 6  stay in Hawaii for a little while.
 7            So I got out of that, and went into the
 8  DIA, which is the Defense Intelligence Agency in
 9  marine-related issues, which took me back to the
10  Persian Gulf.
11            But it allowed a lot of time off.  When I
12  came back to Hawaii, I would be here for a month,
13  two months at a time, and I got into commercial
14  fishing.  Out of that, I grew a fish market.  I had
15  a fish market business, dive boat, and I went into
16  research.  So I had a business that basically
17  provided boats and divers for research and
18  commercial fishing.
19            That lead me to some projects with the
20  University of Hawaii Sea Grant, which was the first
21  Hawaii offshore project, that this is the site of.
22            What came out of that was we learned a
23  lot.  We made some mistakes, but I saw an
24  opportunity.  So I pursued how am I going to make a
25  business out of this.
                                                      13
 1            That required changing the state law,
 2  which took about a year.  I had to venture into
 3  politics, which I'm not a very big fan of.  But it
 4  required that.
 5            Then we got the law changed, and I became
 6  the first Pacific Open Ocean Lease in Hawaii and in
 7  the nation, and that's kind of how we started the
 8  business.  So that's my background.
 9            But as I go through, one of the things
10  I've learned about it is I've gotten some very
11  strong opinions about how we use our fisheries and
12  environmentalism, because I've had to engage with
13  the good and the bad and the ugly, so to speak.  So
14  I have some strong opinions.
15            And I encourage anybody to ask any
16  questions about it.  I'm not afraid of any question,
17  believe me.
18            This is just a quote.  Once again, this
19  talk was geared for an audience that didn't know
20  much about our fisheries.
21            But I will say that going from commercial
22  fishing to aquaculture, one of the biggest things
23  that drew me upon it was I wasn't taking anything
24  from the environment any longer.  I had control over
25  my product.  I could foresee my production many
                                                      14
 1  months in advance, and it was a much better life
 2  style than commercial fishing.
 3            I went home every night, which is a big
 4  plus.  Like I said, I wanted to think about having a
 5  family some day.  So that's one of the things that
 6  drove me to it.
 7            So when we first started, one of the big
 8  things, cage designs.  I think that was a big thing
 9  that changed.  We found a cage that could withstand
10  an open ocean environment, and that's proven to be
11  true.
12            When we first started, we were the first
13  ones to submerge a cage, and that actually happened
14  by accident.
15            The reason why we went submerged was we
16  had -- on a research scale, we had 16 permits to
17  obtain.  We thought we had all of them.  We ordered
18  the fish to start hatching the hatchery.  We had
19  about 70,000 in the hatchery, and we can't just stop
20  time.  At the last minute we found out that we were
21  lacking one permit.
22            So my motto at the time, and I guess it
23  still is today, it's easier to get forgiveness than
24  permission.
25            We decided to put it out there and sink it
                                                      15
 1  and get it out of sight, and we did that.
 2  (Laughter)
 3            And what we learned from it was, hey,
 4  that's the right place to be.  And everybody in the
 5  aquaculture industry fought us on it.  In fact, when
 6  it came time and we got the permit four months
 7  later, we had ferocious fights with Oceanic
 8  Institute and myself and Sea Grant to bring it back
 9  up, because the rest of the world farmed fish on the
10  surface, so that's the way we were supposed to do
11  it.
12            But we prevailed, and we made subsurface,
13  and there have been many advances to that.
14            Nowadays, I don't even hear of an open
15  ocean farm being proposed that's going to be on the
16  surface, whether it be in the U.S., China, Korea.  I
17  mean, all these governments are coming to us,
18  saying, we want this technology.
19            It's gone though hurricanes.  It's proven
20  itself.
21            So like I said, we had to change the ocean
22  lease.  We did that.
23            Community acceptance.  Being the first,
24  that was a difficult problem.  I had to prove to my
25  community that we could do it.  One of the things
                                                      16
 1  that allowed that was I had already done that on a
 2  research pilot project.  I could look at anybody in
 3  the eye and say, I know how to do it, I can do it.
 4            I didn't ask for exclusivity.  The State
 5  wanted to put exclusivity on my site and say,
 6  everybody stay out, because of liability.  I
 7  actually had to fight and say, no.  Let anybody come
 8  over it.  Let anybody fish around it.  Just respect
 9  not to go in and take our product.  That has worked
10  real well.  We haven't had one complaint in five
11  years from any fishermen.
12            They are now my allies.  We have people
13  that are there almost every day fishing in and
14  around the area that are my eyes and ears.  So it's
15  worked real well.
16            Also, that dictated the size that I was
17  going to be.  I basically built my business plan,
18  four cages was the minimum size to make a business
19  plan work.  But I had to go out there and prove it.
20  I wouldn't have done it that way to make a long-term
21  business, it's too small.
22            But we needed to prove to ourselves and
23  the community it was environmentally acceptable.
24  We're doing that now.
25            So the new farms, the new leases that are
                                                      17
 1  coming into the state, they're a little bigger,
 2  which is posing a problem for competition for me.
 3  My competition is going to be a bigger scale.  So I
 4  have to go back and try to get it.
 5            Financing.  Who on god's earth will loan
 6  me the money?  Anybody who knows me, I'm not a
 7  wealthy person.  I didn't have the means to do that.
 8  So I looked at financial institutions.  I looked at
 9  investors.
10            First, who is going to do that?
11            I went to the National Marine Fisheries
12  Service, thank god they had a loan program.  It
13  wasn't easy.  It was tough.  Looking back, it should
14  have been tough.  It's worked real well.  So I thank
15  National Marine Fisheries Service for financing us.
16  We took a several hundred thousand dollar loan, and
17  that's how we started.
18            How did we overcome each challenge?
19            Cage design.  We used Ocean Spar, which I
20  just went over.
21            State law.  We had to go and prove it,
22  that we could create a new industry.  Currently in
23  Hawaii, there are two leases issued.  Another one on
24  the way.  I'm the only operating one.
25            The next competition, they have four
                                                      18
 1  million dollars and private investment.  So I think
 2  it is working, that what we proved, now the private
 3  sector is looking at it, going, hey, there's an
 4  opportunity.
 5            Will they make money?  I'm not sure.  I'm
 6  sure people are going to lose money, but the smart
 7  ones will prevail and it will work.
 8            Community acceptance.  The DA process has
 9  worked.  It is working.  Many times it's abused.  It
10  is abused in Hawaii.  I see it abused around the
11  country.  People will just say anything without any
12  science backing it.  I see that more prevalently in
13  fisheries than any other industry.  I'm sure you
14  guys are all aware of it.
15            Financing, I went over that.
16            Interesting thing on the financing, I'll
17  get into that a little bit.
18            So new challenges for our company.  This
19  is our offshore site.  This is taking government
20  people and environmentalists out to look and see
21  what we're doing, whether it is the right thing.
22            The new religion of environmentalism.  I
23  really believe it is becoming a new religion.
24            My opinion of environmentalism, everybody
25  wants to be an environmentalist.  The general public
                                                      19
 1  wants to take care of the environment.  We want to
 2  do the right thing.
 3            But it's an area that is oftentimes
 4  abused, and when they're applying it to fisheries I
 5  don't think it's going the right way.
 6            I have engaged with a lot of
 7  environmentalists.  I have an open-door policy.
 8  I've taken them to my site.
 9            The one thing that occurs that I'll share,
10  it's just happened recently.
11            When I come down to my site, I sit them
12  down and I try to find a common goal, something that
13  we agree on.  Because we definitely have differences
14  of opinion.  They feel fish farming is bad.  I feel
15  it is the right way to go.  Let's find some common
16  ground.
17            The one thing that we all agree on is that
18  the demand for seafood is increasing, the popularity
19  of it is increasing, but wild-caught fishers are
20  kind of flattening out.  It's not doom-and-gloom
21  like maybe is reported, but we're definitely not
22  going to meet the demand for seafood from the
23  wild-caught fishery.
24            How do you solve that?  We agree on that
25  one thing.  How to the solve that, is where the
                                                      20
 1  difference is.  So I always put a piece of paper and
 2  a pen, and I say, by the end of the day, give me one
 3  suggestion how we're going to solve that problem.
 4            I have yet to hear one suggestion from any
 5  environmental group that's realistic.
 6            Can't just tell people not to eat seafood,
 7  that's not realistic.
 8            Development of commercial fish hatchery.
 9  That's our biggest obstacle.  We don't have one in
10  Hawaii.  I'm relying on Oceanic Institute, which is
11  a research facility, which is doing a fantastic job.
12  We're still developing the technology.
13            The good news is that I feel -- I'm in
14  negotiations right now for the site and the land,
15  I'm counting on National Marine Fisheries Service to
16  borrow the money, which I feel confident we can do.
17            Transferring the technology, I think the
18  things are falling into the right place.  I expect
19  this summer that we will be building a commercial
20  fish hatchery in Hawaii.
21            The hatchery is the biggest obstacle to
22  offshore aquaculture anywhere in the U.S.  Hands
23  down.  If you guys leave the room, one message is if
24  you're going to fund anything, let's fund the
25  technology to do this correctly.
                                                      21
 1            Marketing.  Marketing has been the easiest
 2  thing for me.  I thought it would be the hardest.
 3  My expectations were that we would do about 2,000
 4  pounds a week in Hawaii, and that I would kind of
 5  flatten out on that, and export the product.
 6  Reality has been -- I opened up some markets in
 7  California, Vegas, some in Chicago, with that
 8  anticipation.  The Hawaii market has basically
 9  consumed all my product.  I'm 8,000 pounds a week
10  production and have been for about a year.
11            It's not a cheap fish at all, which is a
12  surprise.  It retails right now for nine dollars a
13  pound.  So I wish I was making that, but.
14            What did we do?  We created a demand for
15  our product.  We get together with our local chefs.
16  It's a fish that has been wiped out in the wild
17  fishery.
18            In Hawaii, there are basically two
19  fisheries, pelagics and a nearshore fishery.
20  Pelagics are doing so-so.  Not bad as the media
21  might make it out to be.
22            The nearshore fishery is pretty bad.  In
23  my lifetime, in my commercial fishing days, I've
24  seen a tremendous decline.
25            In 1938 there was about 38,000 pounds of
                                                      22
 1  moi from the wild-caught fishery.  In 1998, there
 2  was zero from the wild-caught fishery and about
 3  38,000 pounds from aquaculture.  This year we'll do
 4  about a million pounds from aquaculture, zero from
 5  the wild-caught fishery.
 6            I'm concerned that there are so few fish
 7  from the wild fishery that getting the broodstock,
 8  I'm a proponent of stock enhancement just to keep my
 9  business going on.  Because there is not that much
10  out there.
11            Get to know your chefs.  Highly important.
12            Got to know who your customers are.  It's
13  not all tourism.  It's about 50 percent retail.  And
14  I never turn down a chance to promote my product.
15            Something along that line, when I was
16  going for my lease and I had a lot of opposition,
17  the opposition was based on race, because I was not
18  Native Hawaiian.  There was a lawsuit that was
19  thrown at me that to work from the shoreline to
20  three miles, you had to have Native Hawaiian blood
21  because of ceded lands.
22            The Native Hawaiian legal corporation that
23  funded this person to fight this lawsuit, who at the
24  end of the day dropped it at the very last minute,
25  last year came to me -- they forgot about that, I
                                                      23
 1  guess, and asked for a donation for a fundraiser.
 2  (Laughter)
 3            I gave $1,000 worth of product.  They
 4  enjoyed themselves, sent me a letter.  I sent a nice
 5  letter back reminding them that they had funded this
 6  person that was trying to stop us.
 7            My point is, never turn it down.  That in
 8  turn has brought me business, and it has been a
 9  positive thing.
10            I buy my own product at the retail level.
11  It's hard.  It would be easy just to take it home,
12  but I'm a firm believer that if I'm going to expect
13  someone else to pay for, I better pay for it and so
14  should my employees.  They don't like it too much.
15            So what are the challenges for us?
16            I'm going to talk a little bit about
17  Hawaii and nationwide.
18            Best management practices, something we
19  need to create.  Something I'm concerned about.  I'm
20  concerned about who comes in behind me, what they're
21  going to do, how they're going to do it.
22            In Hawaii, that's a challenging thing,
23  because the State wants to just promote and have
24  more farms.  I want to have a say in how they manage
25  their business, whether it's done right or not
                                                      24
 1  right.
 2            Many times it's often taken as we're just
 3  trying to keep competition out.  But the worst thing
 4  for me is to have another farm that does something
 5  wrong and it hits the papers.
 6            Recently, the PCBs in salmon, front page
 7  of the paper in Hawaii had a picture of my cage,
 8  articles about salmon and PCBS.  That morning my
 9  sales dropped 50 percent.  It took a month to come
10  back to what it was.  So we're a very small
11  community in aquaculture, whatever happens anywhere,
12  it affects everybody.
13            There was a research project in
14  Mississippi.  They had a cage.  They had a
15  single-point mooring.  I was wholeheartedly against
16  it.  I thought it was a bad idea.  I got my lease.
17  The cage broke loose, floated around two months.
18  State of Hawaii came back at me and upped my
19  insurance requirements, which costs me about an
20  additional $2,000 a year for the next 20 years.
21            Point being, whatever we do nationwide
22  affects business.  Business has to have some input
23  and some say in what we do anywhere else, because it
24  will affect us.  It will affect my profit.
25            Communicate with new potential business.
                                                      25
 1  I do that.  As I was giving birth yesterday with my
 2  wife I got a call from the next farm on the Big
 3  Island wanting to know how to do something, they
 4  don't have any idea yet.  It's a balance between
 5  giving your technology away, but making sure that
 6  what they do is the right way.  Like I just said.
 7            Where should fish farms be placed?
 8            That is an interesting thing.  It is not
 9  for every location.  It's not for every community,
10  and you need to be smart about it, because things
11  can go wrong.  In Hawaii, John Brogan (phonetic),
12  who is in charge of aquaculture development, says
13  there's all this ocean out here.  But when you
14  really pencil it down, there's very few places in
15  Hawaii that is the right place to do it.
16            We're learning that and we're learning a
17  lot.  My company and myself have gone to many
18  countries doing just that, deciding where is the
19  proper place to put some of these structures.
20            You've got to think about current, your
21  logistics.  I'm more into land-based infrastructure
22  now than I am into the ocean.
23            Many people stand on the shoreline, look
24  out to the water and say, man, I could have a
25  beautiful farm out there.  They don't think about
                                                      26
 1  what you need on land to support that, and that's a
 2  real important part.
 3            Technology transfer.  It is easier said
 4  than done.  We're really lagging in the U.S.
 5  Severely lagging.
 6            John and I were in Ireland a few months
 7  back.  They put in 400 million dollars a year into
 8  research.  In the U.S., I think people are at 2.4
 9  million, and it's now zero for offshore aquaculture.
10  Fifty percent of our product, seafood products,
11  that's eaten in the U.S. comes from aquaculture,
12  whether it is imported.  Yet, we're putting in very
13  little as to how to do it.
14            Part of that is because the industry needs
15  -- it's kind of new, we want to talk about the
16  offshore sector.  And to be a critic, I think the
17  research community can do a better job with what
18  money it has gotten and it is going to get in the
19  future.  I try to point that out, that we need to
20  use what money is there wisely.  The industry really
21  needs it.
22            Where are we with the rest of the world?
23            This is a picture of our cage there.
24  We're different.  We're different in many ways.
25  We're leading the way in the U.S.  I believe that.
                                                      27
 1  I think our company has done a lot of things.  We
 2  produce far more fish coming out of a cage, which I
 3  think is ultimately the goal.
 4            There are some research projects in New
 5  Hampshire and other areas.  A lot of bells and
 6  whistles, but are you really producing the fish and
 7  learning how to do that?  That's what the industry
 8  needs.  We need to be able to say, yes, we're doing
 9  it and this is how we do it.  Not just bells and
10  whistles.
11            We're leading the world as far as working
12  the offshore environment.  There are a lot of
13  countries coming to us, looking at that technology.
14  I believe the EU is counting -- their business plans
15  are counting on that we're not going to do it in the
16  U.S.  They flat-out told me that in Europe, that the
17  environmental community is going to prevent you from
18  being an aquaculture producer.  We're building our
19  business plans on it.
20            In the U.S., we have to make a decision,
21  are we going to just keep importing or are we going
22  to find another way to work together.  We're not
23  going to get rid of commercial fisheries.  It's
24  going to be there and it should be there, but it's
25  going to be hand-in-hand.
                                                      28
 1            We're lacking the species development.
 2  That's one thing we really need here in Hawaii and
 3  in the U.S.  And, of course, funding level.
 4            So in investing in the offshore, who is
 5  going to invest?
 6            Like I said, the private sector I think is
 7  starting to step up to the plate.  We need to get
 8  the right investment and serious investment.  This
 9  is not a get-rich-quick scheme.  I get many, many
10  people coming to me and say, what a great business,
11  I'm going to invest in this.  They think you're
12  going to make 60, 50 percent return in product in
13  the first few years.  That's not the kind of
14  investment it is.  It's high risk.  You better know
15  what you're doing.
16            It's not a get-rich-quick scheme.
17            It is self-rewarding.  I thoroughly enjoy
18  it.  It is the right thing to do.  It's
19  environmentally safe.  I'm not taking anything from
20  the ocean.  It's a lot more rewarding that just
21  going out commercial fishing day after day and
22  bringing it in.
23            So any interested investors you guys might
24  know in your community, my recommendation, give me
25  the money instead.  I'm starting a family, I might
                                                      29
 1  need it.  I'll use it wisely.
 2            So anyone still interested, I give my bank
 3  account number.
 4            On another note.  If I gave this talk
 5  three years ago, it would have been far different.
 6  I will say that open ocean fish farming is a
 7  reality.  It is going to happen in the U.S.  It will
 8  be -- it's really going to be up to this group's
 9  decision and the community's decision all around the
10  U.S.
11            If the decision is not to do it, I'll
12  still retire, hopefully a wealthy man from fish
13  farming, but I'll be one of very few.
14            If they do decide to do it, I hope it's
15  still the same, but I will be one of many.
16            It boggles my mind when I hear some of the
17  arguments for or against it.  The environmental
18  community, some of the things that come out, well,
19  you're using fish to feed fish.
20            What fishery do we have in the U.S. that
21  doesn't use fish to catch fish?  Very few.  The only
22  one I can think of is the trawls.  We all know that
23  trawling isn't the best means for an environmentally
24  correct way of fishing.
25            Lobster fishery, we use bait.  Longlining,
                                                      30
 1  we use bait.  We use fish for fishing.  That's not
 2  necessarily the evil of all evils.
 3            It's, can we do it correctly and can we
 4  manage it?  That's what it's all about, it's about
 5  management.
 6            Think about fish poop.  Well, they've
 7  spent over $600,000 looking for it on my site and
 8  continue to do so.  What they're finding is it's not
 9  nearly what it comes out to be.
10            Salmon farming, when I read all the
11  negative stuff about salmon farming, and in my early
12  days I used to stand up and give a presentation and
13  say, we're different from salmon.  We're doing it.
14  The reason was they were having all these problems
15  with salmon.
16            But the reality is, when I've gone around
17  to a lot of salmon farms all over the world I
18  haven't seen what is written in the press.  I've
19  dove underneath these cages.
20            And I've asked a lot of people that say
21  things for or against it, and I ask them, have you
22  been under the cage, have you seen the bottom and
23  have you done any of these things.  Well, no, I read
24  it on the internet or I've seen this.
25            I am here to say that I have done it.  I
                                                      31
 1  have been there.  I've seen some questionable
 2  things, but generally speaking, everything I've seen
 3  has been not so bad.  It's not been what I've read
 4  about.
 5            I've seen things in China that I probably
 6  wouldn't do, more in lines of what they're feeding
 7  it, trash fish and stuff.  But they're in survival
 8  mode.  When you go to China and you stand there and
 9  have the Governor of the Province of Shanghai say to
10  you, I need to find a way to feed 60 million people,
11  and I just closed 1,000 miles of my coastline.  When
12  I hear and see that, that's the window that I'm
13  looking at to our future unless we do things
14  differently.
15            When I go the mainland, Seattle, the
16  average person doesn't see the fisheries the way we
17  see it in Hawaii.  In Hawaii, tomorrow you drive
18  around the island you will see people going in and
19  out of the water, even though for us it's a very
20  cold day.  People constantly going in, and we see
21  the fishery.
22            In Seattle and other areas that I've gone
23  to, the general population, their experience of the
24  fishing industry is what they see in the
25  marketplace.  They're not going in.  The water is
                                                      32
 1  not clear.  It's very cold and they're not firsthand
 2  seeing it.  Yes, you're still catching fish and
 3  doing these things.
 4            So Hawaii is kind of the window to the
 5  fishery of the U.S.  What we're experiencing, I
 6  think you're already experiencing, but just not
 7  seeing it firsthand and it's not as prevalent as it
 8  is in Hawaii.
 9            If you ask anyone in Hawaii about our
10  nearshore fishery, you'll probably get a similar
11  response, that it's not the way it used to be ten
12  years ago.  It's harder to catch fish.  Everything
13  is just kind of changing.
14            So aquaculture is going to be a presence
15  in Hawaii.  It may not be in U.S. Mainland.  But the
16  average person here accepts it.  It's got a long
17  history, and it will help support some of our
18  demands.
19            We import 70 percent of all of our seafood
20  into Hawaii.  Whatever you eat tonight, seafood,
21  you've got a 70 percent chance that it's not from
22  here.  It will have a Hawaiian name on it, but it's
23  not from here.
24            So with that, I'll take any questions and
25  any arrows, any stones.
                                                      33
 1            MR. FLETCHER:  Randy, that was really a
 2  very interesting talk and I appreciate you coming.
 3            Two questions, just what is moi?
 4            Second, has there been any discussion
 5  about enhancement of the wild stocks to help bring
 6  back those nearshore fisheries?
 7            MR. CATES:  Moi is -- the English name is
 8  Pacific threadfin.  In the Hawaiian days, it was
 9  only fed to the alii, which were the royalty.
10            It's a fish that lives right near the
11  shore in the surf break.  If you ate it, you were
12  killed, basically.  So it has a story to it.
13            Growing up, it was a very rare thing to
14  catch it.  If you caught it, you basically took it
15  home to mom, it's that prized of a fish.
16            It's harvested at about a pound, pound and
17  a half.  That's the market size.  It will grow
18  bigger, but it's a whole fish.
19            The reason why I'm using moi is because it
20  was a stock enhancement fish.  There was no money,
21  and I don't know that there is any to this day, to
22  really develop an aquaculture fish.  All the federal
23  funding was stock enhancement.  So that's what we
24  had to work with.
25            There are other fish that I would like to
                                                      34
 1  raise.  Moi is a good fish, but there are better
 2  fish that I would like to do in Hawaii, but there's
 3  no research money to do it because it doesn't have a
 4  stock enhancement program.  So there is an ongoing
 5  stock enhancement program for it.
 6            MR. FLETCHER:  Is there -- you say there's
 7  no commercial harvest.  Is there recreational catch
 8  allowed?
 9            MR. CATES:  Yes, there is.  But it's at a
10  small scale.
11            If you are a recreational fisher, you
12  might catch eight or ten moi in a year if you go out
13  every week and fish.  It's about that much.  So if
14  you get a fishing magazine, you'll see it, it will
15  be there.  But it's a pretty rare thing.
16            That's it?
17            MR. KENT:  My name is Don Kent.  Thanks
18  for coming today.
19            For those of us that work in aquaculture,
20  you are kind of the example a lot of us point to on
21  how this can be done and can be done correctly in
22  our nation.  So congratulations on your success and
23  congratulations on the new member of your family.
24            MR. CATES:  Thank you.
25            MR. KENT:  It must be really frustrating
                                                      35
 1  -- and we're going to see why a little bit later --
 2  but there are regimes designed around producing
 3  product for you, or juveniles for you to stock in
 4  your cages.  So is this a species that will lend
 5  itself to year-round production in a hatchery?  Or
 6  are you going to be stuck in a seasonal mode?
 7            MR. CATES:  We are in a year-round
 8  production with it.  The numbers drop in the
 9  wintertime.  We get less of the spawns, but we do.
10  Basically, we're trying to get a ten run drop
11  (phonetic) in the hatchery twice a year.
12            It's not proven technology yet, and that's
13  been my biggest fear, is I have a business, I have
14  to be responsible.  I'm basically investing in a
15  hatchery that the technology is not completed yet.
16  But I don't have any choice.  Hawaii is not a
17  commercial hatchery, and it's not easy for them to
18  produce fish for me.
19            Now, technically, and business sense, it
20  would be easier for them to be just a research
21  facility that does research for the government, get
22  their paycheck and do their thing.  But I have kind
23  of forced them to be applied research and say, look,
24  if we're going to create an industry, you've got to
25  have the industry to go back and support more
                                                      36
 1  research and more dollars, and they're willing to do
 2  that and they are doing that, but it's a tough
 3  thing.
 4            I can tell you the University of Hawaii
 5  won't do that.  They want to be pure research.  But
 6  they see the importance of it.  We work
 7  hand-in-hand, basically.
 8            I pay for all my fingerlings.  I'm the
 9  only farmer in the State of Hawaii that has ever
10  paid for fingerlings.  It's always been a subsidized
11  product.  I've never had that.  And I don't believe
12  in that.  I'm not a big fan of covering my money, so
13  to speak.
14            I'm trying my best to totally -- if we're
15  going to do this as a business, it needs to make it
16  as a business.  If it can't, then I need to know
17  ahead of time and get out.
18            MR. OSTERBACK:  Okay.  You've got another
19  one?
20            MR. KENT:  Yeah, I've got lots.
21            Just a couple other things.
22            At WAS here in March, there is a report on
23  some of the environmental monitoring going on around
24  your cage.  Do you want to share the results of that
25  with the folks?
                                                      37
 1            MR. CATES:  Yeah.  I'll share you some
 2  numbers.
 3            Basically, I started my business with
 4  $300,000, which you couldn't do today.  But I had
 5  all of the equipment.  I had the boats.  I had
 6  knowledge.  I had the labor.  I had another
 7  business, a salvage business, that helped support
 8  it.
 9            We put in about 600,000 into environmental
10  monitoring.  In the beginning, we had our cages, and
11  the concern was basically fish poop.  I have an MPBS
12  permit.  So the researchers started out at about
13  1,000 yards and started monitoring up closer to the
14  cages, and they weren't finding it.  They were
15  getting very frustrated.
16            So because scientists always question
17  their data, whether it is going to stand up to
18  scrutiny if someone is going to accuse them of
19  something, that's really important.  Because not
20  only did we have an independent source that is
21  analyzing it -- I would open the door, you guys do
22  your thing.
23            What ended up happening, they moved in
24  right next to the cage, right at the cage rim, at
25  peak poop time.  (Laughter)
                                                      38
 1            Now, peak poop time in a land-base tank
 2  might be different than a cage.  So we had the guys
 3  go, you know what, Dr. Helsey (phonetic), why don't
 4  you just go in the cage and let's find out when peak
 5  poop time is.
 6            So basically we've done that.
 7            What we learned is, inside the cage at
 8  peak poop time, yes, you can get a measurement, but
 9  the numbers are so minute, it doesn't even exceed
10  the MPBS permit, it doesn't even come close.
11            At 50 feet from the cage rim, you cannot
12  no longer basically get a signature.  And that
13  frustrated the scientists and the water quality
14  people, and they couldn't understand it.
15            But when you start thinking about the
16  environment, you've got to remember there's algae
17  that's on the cage that's consuming a lot of this.
18  Many times the nitrate levels is such that up
19  current it was higher above than below the cage.
20  There's a lot of interesting things going on.
21            Water quality is not an issue.
22            What we now need to think about is
23  benthics.  Benthics is the issue.  That's what we're
24  looking at now.
25            My response is that if you're going to
                                                      39
 1  have an aquaculture facility in the ocean, you're
 2  going to have impact.  To say you're not going to
 3  have any impact is ridiculous.  If you go in the
 4  ocean and you have sun screen on, you're impacting
 5  the environment.
 6            This word "negative impact," what is
 7  negative and what is positive.  Right now we've
 8  spent 1.3 million dollars looking for negative
 9  impact on my site.  Not one dollar looking at
10  positive impact.
11            You've got to do both.  One person's
12  opinion will be negative and the other's positive.
13            What I think is happening when you -- it's
14  kind of like taking a grass field and planting apple
15  trees.  Under the apple tree, you're not going to
16  have the grass grow.  Is that wrong?  Is that bad
17  for the environment?  Most people will say no.
18            If you cut the trees down, the grass is
19  going to grow back.
20            What's happening under the cages,
21  organisms are moving in, some are leaving.  It's
22  changed a little bit.
23            It's not alarming.  It's not big and
24  scary, it's very, very small.  It's because we're in
25  an open ocean environment.  We're in 150 feet of
                                                      40
 1  water and you've got a big change between the bottom
 2  -- if I was in a bay and I only had a couple feet
 3  between the cage and the bottom, it would be
 4  different.  I'm sure it would be different.
 5            So benthics is the issue.  My question is,
 6  when we start taking about this legislation and the
 7  EEZ and all this stuff, at what point is it not an
 8  issue?  At three miles in two thousand feet of water
 9  are we going to be required to test the bottom?  Is
10  that an issue?
11            Some say yes.  Some environmentalists tell
12  me, oh yes, it is.
13            We, as a society, we're going to have to
14  figure it out -- you can't say it's not going to
15  have an impact, it's going to have an impact -- but
16  what is acceptable and what is not acceptable.
17            MR. OSTERBACK:  Okay.  John.
18            MR. FORSTER:  Thank you.
19            Thank you also, Randy.  Congratulations
20  for many things.
21            Would you comment on the engineering.
22  We've seen an awful lot of your operations in your
23  presentation, but comment a little bit on the nature
24  of the engineering components that you use now and
25  how you see those developing perhaps over the next
                                                      41
 1  five years; or what you'd like to see developed,
 2  knowing the structures themselves, and the support
 3  system that you use.
 4            MR. CATES:  That's a good question.
 5            Things are changing for me a little bit.
 6  I'm a firm believer in subsurface farms.  It's
 7  cheaper for me operating.  It's a lot less damage.
 8            When I mean cheaper, I've got to clean my
 9  cages less.  They're not on the surface, I'm not
10  getting that growth.
11            Feeding is a big thing.  Harvesting is the
12  easiest.  That's a piece of cake.  I don't worry
13  about harvesting.
14            Feeding.  I foresee each farm having a
15  buoy, might be a spar buoy, which is the Mercedes
16  Benz.  They work real well, but I don't know that
17  that's really what we need now.  Economically, that
18  might not be the best thing.
19            If you're in the Gulf of Mexico, where
20  they have hurricanes, probably you want that.  But
21  if you're in another area where there's less chance
22  of that, you might just need a platform to feed.
23            I see fish behavior, and where you place
24  the cage is going -- you've got to start thinking
25  about it.
                                                      42
 1            An example is amberjack.  We get a flat
 2  worm, when we put amberjack into the cage it doesn't
 3  have it because it's produced from the hatchery.
 4  The wild environment has got it.
 5            Now, amberjack in Hawaii stay pretty close
 6  to shore, and that's a problem.  If I'm far out in
 7  the ocean and that wild fish is not there, does that
 8  solve that problem?
 9            Going further offshore has its advantages,
10  and that's why I'm starting to think about placement
11  of things.
12            I don't see -- if this legislation passes
13  in the EEZ zone, I really don't see a gold rush to
14  farms going far out.  It's not proven yet.  It's
15  kind of like a step right now.  We need to be close
16  to shore because of the economics of it.
17            But there might be a reason to be further
18  offshore.  I definitely don't see any farm being 30,
19  40 miles off that's going to be in business in a
20  year or two years.
21            Oil platforms is appealing to me, being
22  able to utilize that.  But you have to look at the
23  economics of it.
24            I'm looking at going deeper.  I would like
25  to be able to see about whether we put fish in the
                                                      43
 1  cage and put it down deep.  I mean deep, hundred,
 2  two hundred feet.
 3            What advantages does that bring us?  In
 4  some species, that brings us great advantages.  That
 5  will require a lot of technology on getting your
 6  warts out, best management practices, things like
 7  that.
 8            When you're ready to harvest, there you
 9  go.
10            If you folks are here next year and I give
11  this same talk, it will be a lot different because
12  my feeding will be automated.  My harvesting right
13  now, I don't have any reason to automate it, but
14  there's no reason I can't automate it.  It's pretty
15  simple for us.  We harvest, three men, four thousand
16  pounds in the fishhold in about eight minutes.  I
17  don't see really improving that right now.
18            So -- but I want to sit in my office and
19  turn on my computer and see my fish, that's my goal
20  between now and next year.  I'm investing in that.
21            MR. FORSTER:  Just a supplementary.
22            In terms of costs and production, given
23  the developments that you foresee and maybe some
24  further offshore siting, or whatever other
25  adaptations you make to the process, how do you see
                                                      44
 1  your cost of production moving, and what are the
 2  biggest factors in cost of production?
 3            MR. CATES:  It is the biggest factor.
 4            The biggest cost of production right now
 5  is definitely feeding fingerlings in aquaculture
 6  product.  Fingerlings are way overpriced because I'm
 7  buying from someone else, and the technology is not
 8  there yet and it's scale production.
 9            I'm using a very high-priced feed.
10            But even at that, I can produce that fish
11  and sell it and make a profit.  My goal is, I need
12  to be at a level like salmon.  I'm not in business
13  to produce a prime rib.  I'm in business to produce
14  a piece of chicken.  Because the consumer wants to
15  buy a piece of chicken.  They want good quality
16  chicken, but they don't want prime rib every night
17  of the week.
18            That's what we need to think about in
19  seafood production.  If we're really going to do any
20  good, that's what we need to do.
21            So right now I'm at maybe $2.00, $2.10
22  cost of production.  I'm going to need to bring that
23  down continually, and that will be just scale of
24  volume.
25            I can tell you that what I sell is fresh
                                                      45
 1  quality fish.  And at the LA Seafood Show this year
 2  that was a big thing.  A lot of the buyers and
 3  high-end chefs that are coming up, they don't want
 4  frozen product.  To be honest, they're a little
 5  tired of salmon.  There's salmon everywhere.  They
 6  want something new.  They want white meat filet and
 7  they want it fresh and they want it consistent.
 8  That's what aquaculture offers.
 9            In five years I've missed three harvests
10  due to mechanics or weather.  I harvest twice a
11  week, every week for five years -- four years now.
12  I'm harvesting today, and it's not good weather for
13  us.  This is a bad direction of winds and stuff.  So
14  we're able to do that.
15            MR. OSTERBACK:  Mike.
16            MR. SISSENWINE:  Just a quick comment to
17  reiterate the point of the limited nature the
18  hatcheries and broodstock and fingerlings.
19            In New England there are a number of
20  developments at attempts for hand-raised cod,
21  essentially the whole industry is dependent on
22  broodstock from our laboratory, which was been using
23  them for experimental purposes for two decades.  But
24  there's essentially no other source.  That is
25  clearly a limiting factor for the whole industry.
                                                      46
 1            MR. CATES:  We've spent a lot of money
 2  talking about aquaculture policy, than we do as to
 3  how to make it happen.
 4            I mean, there's a conference in New
 5  Orleans I think next week that I was asked to go to
 6  and I said, basically, I don't want to go because
 7  I've heard the same presentations for five years,
 8  people talking about how we're moments away from
 9  doing this.
10            When you really look at it, what is
11  holding it back.  Well, what are you going to put in
12  the cage, and that's the bottom line.
13            The industry will put a farm out there,
14  but what are you going to put in it.
15            MR. OSTERBACK:  Scott.
16            MR. BURNS:  Thanks, Randy.  Again,
17  congratulations on the event yesterday.
18            What species do you think has the most
19  potential for the future here in Hawaii?
20            MR. CATES:  The best one I know is --
21  currently is amberjack, we call it in Hawaii.  It's
22  a fish that is not caught from the wild at all.  It
23  has a lot of worms in it.  But you don't get that in
24  aquaculture, because the worms comes at the hatchery
25  stage.  We've proven to eliminate it.
                                                      47
 1            There are other issues with it, though
 2  that we haven't proven yet.
 3            I got interested in that fish about five
 4  years ago when I was in Japan.  One of the things, I
 5  didn't just put cages out there and put fish in it
 6  and say I'm going to grow this fish.  Actually, I
 7  thought I was a little smarter about it.
 8            I did a couple things.  First thing I did,
 9  I flew to Seattle and I met with John Forster and we
10  sat down one day, it was the first time I met him
11  and I said, what are all the problems in
12  aquaculture, all the failures that have happened.
13            We listed them down and we X-ed out what
14  wouldn't happen in Hawaii, like ice flows, and
15  different things.  (Laughter)
16            But another thing I did was that I said I
17  want to find out where to market this fish.  There
18  was a land-based facility there that was producing
19  this.
20            I was buying fish from this land base and
21  trying to market it.  I went to California.  I went
22  to Japan.  Because everybody said Japan is the
23  marketplace.  So I went to Japan.  I started to
24  market this fish.
25            The tough part was production.  It was
                                                      48
 1  inconsistent and I didn't have enough of it.
 2            But while I was in Japan I started looking
 3  at other species.  One of the things I found was
 4  kahala, which is amberjack.  Over there, at the
 5  time, five years ago, it's call kampachi.  Kampachi
 6  is a grade above hamachi.  I met with a broker.  You
 7  had to have a license to import it into Japan.
 8  There were only several licenses there.
 9            So it required another trip.  Long story
10  short, I made four trips there and I started
11  negotiating a deal before I even had a product,
12  which really upset the Japanese.  Don't ever do
13  that.  They thought I had it, and I didn't.
14  (Laughter)
15            He wanted an order of 30,000 pounds a week
16  -- 30,000 pounds a day, six days a week, at 12
17  dollars a pound U.S. from Hawaii.  So I came back
18  and I thought, I'm Bill Gates.  (Laughter).  That
19  was the high I was on.
20            Then I went, okay, let's work on this, and
21  get this fish done.  That's when I learned there is
22  no money there.  There is no stock enhancement.
23  That's the politics and the trouble I started in.
24            I went to National Marine Fisheries
25  Service and I said, I got it, man, I've got a gold
                                                      49
 1  mine.  But there was no money to develop it.
 2            We developed a little bit of it.  But it's
 3  not a commercial product yet.  So kahala is still my
 4  gold mine.
 5            Opakapaka, which we import about 10,000
 6  pounds a week of Hawaii, it's a high-priced fish.
 7  But that's a difficult one.  It's a deep-water fish.
 8            Originally, I thought opakapaka was the
 9  gold mine.  But an interesting note is, today I sell
10  more moi at a higher price in Hawaii than we do
11  opakapaka in Hawaii.  So it's changed a little bit.
12            My thinking now is if we can produce a
13  good white meat filet from aquaculture, you can
14  really market it, and put it on the table, and you
15  can compete head-to-head with some of these other
16  fish.
17            Opakapaka is our signature fish in Hawaii.
18  You go anywhere in the world and eat tuna, mahimahi,
19  ono.
20            Hawaii, you go out to dinner and you see
21  onaga or opakapaka if it's a high-end restaurant.
22            MR. OSTERBACK:  Vince.
23            MR. O'SHEA:  Thanks, Randy.  I'm Vince
24  O'Shea from the Atlantic States Fisheries
25  Commission.
                                                      50
 1            I have two sort of technical questions
 2  real quick.  One is give us a size -- an idea of the
 3  size of your cage.  And the other you mentioned a
 4  couple of times, cleaning the cage of algae and
 5  marine growth.  How do you do that and how much
 6  labor is involved in that?
 7            MR. CATES:  Each cage is about 50 feet
 8  tall, 80 feet wide, about 3,000 meters.  I can raise
 9  about four million moi in each cage.
10            How we clean it?  Basically, the bottom
11  line is powerwash.  There's a lot of gizmos out
12  there that say they will do it.  I've tried a lot.
13  They're all in the closet.  I'm hoping we can
14  develop technology to do it easier.
15            Basically, it's a turbo head.  It takes us
16  -- I clean each cage thoroughly every three months.
17  It will take two divers maybe a week to clean the
18  cage, top to bottom.
19            The more fish you put in, changes that.
20  You get more growth.  Less fish, not so bad.  So
21  it's really a matter of how much fish you have in
22  there.
23            I can see that being automated some day.
24  That won't be too difficult.
25            MR. O'SHEA:  Some kind of scrubber, just
                                                      51
 1  --
 2            MR. CATES:  Yeah.  Because it's round, you
 3  have a pipe that basically just goes around, and the
 4  cleaner just goes up and down.
 5            A lot of these things, I don't see it
 6  being rocket science to develop automation.  It's
 7  just, who's going to do that?  For me right now, I'm
 8  focusing on other things.
 9            But I'm also a believer in not too much
10  automation.  Better be at your site every day.  This
11  is not something you can put out and leave it alone
12  and come back when it's time to harvest.  You need
13  to be there and you need to look at your fish and
14  you need to have a presence.  That's today.
15            What I see happening as the industry is
16  learning these things in the nearshore, then we're
17  going to apply -- get a little bit more advanced
18  level offshore.
19            As well as the policy talk about the EEZ
20  zones, to me, it's a little bit down the road.  But
21  seeing how long it's taking, probably by the time it
22  gets passed, realistic, maybe business won't be
23  there.
24            MR. O'SHEA:  Thanks.  Thank you, Mr.
25  Chairman.
                                                      52
 1            MR. OSTERBACK:  Tony.
 2            MR. DILERNIA:  You clearly have integrated
 3  yourself and you're serving all of your needs.  As
 4  you see a need arise, you've developed a way to
 5  address it.
 6            Why would you want to try traditional --
 7            MR. CATES:  Oh, I am.  It's been -- my
 8  biggest obstacle has been the State of Hawaii and
 9  where to do it.
10            Land zoning.  Finding the space to do it
11  has been, for three and a half year, an endeavor.
12            MR. DILERNIA:  Could you give me an idea
13  of an example of objections that they would have?
14            MR. CATES:  Zoning and price of land.  I
15  need to be near a harbor, somewhere I can drill
16  water.  I need to be concerned about my neighbors
17  for environmental concerns.
18            We're really limited with that.  There is
19  space, but I've looked at prices of $60,000 a month
20  in rent for an acre.  That's just not our business.
21  We're not going to be able to do that.  So it's been
22  a real struggle.
23            There's been a lack of education on our
24  State's part to say, we're going to put these
25  businesses out there and not support the
                                                      53
 1  infrastructure on land.
 2            I think I'm making some headway on that.
 3  I think I've found a place, and I'm getting the
 4  support now.  But that's the only reason.
 5            I had the financing.  I've had it and lost
 6  it a couple times.  But I don't even bother with
 7  that until I know where I'm going.
 8            MR. OSTERBACK:  Ralph.
 9            MR. RAYBURN:  I'm interested in the lease
10  dealing with the aquaculture business.  The lease
11  that you have from the state, is it the bottom you
12  lease, the bottom and then you -- so the water
13  column is not involved in your lease?
14            MR. CATES:  The water column is involved
15  in the lease.
16            MR. RAYBURN:  So it's from the bottom to
17  the surface?
18            MR. CATES:  Yeah.  But you're getting into
19  the legal issue of what does the State have the
20  rights over.  I'm not a lawyer, thank god.  I don't
21  pretend to be one.
22            But basically, the way it's -- there's
23  been a couple test cases.  They have the rights to
24  the bottom from the shoreline to three miles.
25  They've actually won a case out to twelve miles, but
                                                      54
 1  that was for harvesting corals and stuff.
 2            But it does encompass the bottom and the
 3  water column.
 4            Now, every other potential farm behind me
 5  has come in and wants exclusivity.  Every time I've
 6  heard that I've gone to testify, saying, that's a
 7  bad idea.  You shouldn't just give exclusivity
 8  unless the farm needs to prove that it needs it, and
 9  if you're subsurface, you don't need that.
10            I'm not a big fan of telling somebody to
11  stay out just to stay out.
12            So that's -- and that's why it has worked
13  here.  In fact, Kona Blue Water, if you go on the
14  web, you'll see in the early days they were asking
15  for that, and I objected to it.  They've changed and
16  now their business is going to work.
17            Because if you don't have community
18  support, you can make all the rules and regulations
19  on land.  It ain't going to work out there.
20  Somebody will come and mess with you.
21            The law of the sea is way different.
22  (Laughter)
23            MR. RAYBURN:  If you do have a poaching or
24  a trespassing issue, does your lease include the
25  State's responsibility to enforce that lease?  Or do
                                                      55
 1  you challenge that?
 2            MR. CATES:  No.  It doesn't make them
 3  liable in any way to enforce that.
 4            I've thought about that issue, and that's
 5  a good issue to think about.  Because I've thought
 6  about what is going to happen if someone does go and
 7  poach, who do I go to.
 8            I know what I would do.  (Laughter)
 9            MR. RAYBURN:  That seems to be an issue
10  with the bill, too.  We have a national bill.
11            But that at least should include enforcing
12  that lease, enforcement of that lease would give you
13  the --
14            MR. CATES:  This issue came up when I was
15  going through my lease, and this is the way I
16  approached it.
17            I don't know this for a fact, but I've
18  been told when I was in Key West, Florida in the
19  lobster fishery, lobster pots.  Now, I know what the
20  law says, but I know what happens if you go in there
21  and take somebody's lobster pot.  But my
22  understanding is there are fisheries rules and regs
23  that protect that.  There's no difference in my
24  opinion between that and going into my cage and
25  taking product.
                                                      56
 1            As long as you don't go in it, you can do
 2  all you want.  But as soon as you go into it, then
 3  we've got some issues to talk about.
 4            MR. RAYBURN:  Seems like you have to have
 5  the sheriff come and get them.  I mean, if it was
 6  your house or any other property --
 7            MR. CATES:  Right.  So if we have the
 8  rules and regs on the books now -- there's another
 9  thing that you've got to remember.  The U.S. Coast
10  Guard, this is what I have done.
11            This cage is nothing more than a vessel.
12  It is a vessel, period.  It floats.  It carries
13  cargo and holds cargo.  You go in the CFR, it is a
14  vessel.  So whatever rules protect that vessel can
15  be applied.
16            Now, depends on who you ask at the Coast
17  Guard that, but I have had the Coast Guard official
18  say, when I open that CFR and it says right here,
19  yes, it qualifies as such.  So that would be one way
20  to get protection.
21            In the Homeland Security days, the Coast
22  Guard might not want to be the enforcer, but that
23  would be one way.  There's no -- I can tell any
24  business how to deal with it.
25            MR. HOGARTH:  Real quick.  That varies
                                                      57
 1  state to state.
 2            In North Carolina we lease the bottom and
 3  the water column, and we enforce it.  In North
 4  Carolina, we would lease the bottom for aquaculture
 5  for clams.  So we would lease the water column.  We
 6  enforce any trespassing or stealing or enforcement
 7  that I have enforced.  So it varies from state to
 8  state.
 9            MR. RAYBURN:  I wasn't aware of any legal
10  regime that gives the jurisdiction over the water
11  column as such.
12            The bottom, maybe this state could
13  establish that from the territorial sea, but I
14  wasn't aware of that.
15            MR. CATES:  I do have a couple other
16  comments real quick.
17            A lot of my discussions on aquaculture,
18  I've had very few controversies with fishermen.  I
19  have spoken to a lot of them in Alaska, Seattle,
20  here in Hawaii, all over the place.
21            Only reason I can say there's a difference
22  is because I'm a fisherman and when I talk on these
23  things I'm down at their level.  It bothers me when
24  you have somebody from Minnesota who writes a lot of
25  stuff about your business who's never been there and
                                                      58
 1  seen it.
 2            Fishermen, I think, understand.
 3            The other thing is, the government and
 4  agencies, whether it be the Pew Report, Ocean
 5  Commission, all this stuff, they always say they
 6  include industry.  I've always been puzzled when
 7  they say offshore fish farming, and they've got a
 8  shellfish grower representing offshore.
 9            It is new, but if you really go out there
10  and seek it, you will find that there are people in
11  that business.  Find those people and have them
12  represent us.  Because it's kind of insulting to
13  have someone who doesn't understand our industry.
14  They can be supporting you, but they don't
15  understand it.  They don't have a grasp on it.
16            We're growing.  There are individuals.
17  John is a great one, for example, that understands
18  what we're doing.  That's real important for us.
19            MR. OSTERBACK:  He's been really quiet
20  about it, too.
21            MR. CATES:  Call me up when is he quiet,
22  and I'll light a fire under him.
23            MR. RAYBURN:  So you've used the
24  government direct loan program for your financing.
25  Is capital construction also available to you if you
                                                      59
 1  do make a profit and you want to hold back -- or I
 2  mean, within the aquaculture bill, do you know
 3  whether or not there are incentives, but it seems
 4  like certainly a clear understanding that these
 5  types of benefits that are available to the
 6  commercial fishermen should also be available to the
 7  aquaculture.  Do you find that the case?  Or are you
 8  still struggling with what is available to you and
 9  what is not?
10            MR. CATES:  We got our loan from National
11  Marine Fisheries Service finance loan.  It was
12  incredibly difficult in the beginning.  Hugely over
13  -- we had to over-secure our loan.  Almost double.
14            MR. RAYBURN:  Is that a direct loan?  Or
15  is that guaranteed mortgage?
16            MR. CATES:  Direct loan.
17            But I would say that it was the wrong loan
18  for us at that time, only because I was only
19  borrowing $300,000.  It was designed to be for
20  borrowing large amounts.  It cost me $10,000 in
21  legal just for the signing and closing.
22            Having said all that, Sean Barry
23  (phonetic) and those folks in D.C. is probably the
24  most favorable government agency that I've worked
25  with since.
                                                      60
 1            Now that we've gone out there and proven
 2  ourselves a little bit, now they're getting an
 3  understanding of the type of business we are.  So
 4  I'm very encouraged that we can go back to them for
 5  any other business and say -- they have a better
 6  understanding now.
 7            In the beginning, it was new.  You know,
 8  what do you mean you're not going to harvest
 9  product, you're going to wait eight months.  It's
10  just different.
11            So I think that is an important key.  If
12  we're going to make this industry happen, it's
13  educating those folks and you folks.
14            I mean, I can go out and talk to the
15  public all day.  But educating the finance people
16  and government people about what we're doing.
17            One of the things that I will share with
18  you is I went to D.C. and met with Sean Barry and
19  had coffee with him.  I learned more in two hours
20  from that individual than I have from almost anybody
21  else in fisheries.
22            One of the things that I need to give you
23  guys is, if you're going to discussions or
24  conferences, get those finance people to the
25  business people.  There is a tremendous wealth of
                                                      61
 1  information from fisheries that have succeeded and
 2  failed, and I've learned more from other failures
 3  than I do success stories.  But that is a vital,
 4  vital thing.
 5            But I'm getting the support that we need.
 6            I think that -- don't go tell any other
 7  people because I don't want them to go -- that's the
 8  place to go for financing.
 9            MR. RAYBURN:  Does that Sean Barry work
10  for Mike --
11            MR. REISNER:  Yes.  Sean Barry works for
12  my group.
13            MR. CATES:  Believe me, they're doing a
14  good job.  They have a very good understanding of
15  how our business works.
16            But we should be able to get the same
17  financing as commercial fishing.  I don't understand
18  why we wouldn't.
19            MR. REISNER:  You mean from the private
20  sector, as opposed to --
21            MR. CATES:  No, I mean from federal.
22            MR. RAYBURN:  Same program should be
23  available.  But right now you don't feel that they
24  are?
25            MR. CATES:  No, I feel that they are.
                                                      62
 1            My experience so far has been that they
 2  are.  But it wasn't easy.
 3            MR. RAYBURN:  You were breaking the ice?
 4            MR. CATES:  Yes.
 5            MR. REISNER:  Each of the long sets are
 6  evaluated and subsidy rates are created for each
 7  separate set of loans.  So when we get a new type of
 8  industry that we're going to be financing, it makes
 9  it difficult, and we can't put that in with our
10  regular loan portfolio and average it out.  We have
11  to keep it separate.  So that might be why some of
12  the startup problems occurred.
13            MR. CATES:  Yeah.  And I've got to give
14  credit where credit is due, too.  I mean, it was
15  tough, but I went back to them on several issues and
16  I got all the support I needed, and that was a good
17  piece of mind.  It was a scary time, I would say,
18  okay, this is our situation, this is what we're
19  doing.
20            They understand that.
21            Like I had said, I'll reiterate it again,
22  my point is, it's important to get those people to
23  business and talk with each other.  Communication is
24  the key.  If we learn from those things, it's big.
25            When I went to him and said, I'm
                                                      63
 1  interested in financing a hatchery, what do you
 2  think.  He understands about fully integrating the
 3  business.  He understands and he gave me advice.
 4  It's good business sense.
 5            MR. OSTERBACK:  Okay.  We've got Ken,
 6  Kate, Bob and then we have to move on.
 7            MR. ROBERTS:  Thank you, Mr. Chairman.
 8            (Brief time of people speaking at the same
 9  time)
10            MR. ROBERTS:  I don't want to ask a
11  question, just an observation, and maybe some
12  guidance.  Go back to your slide on best management
13  practices, interest in self-regulation.
14            I'm going to give you two cases in
15  Louisiana where we think in the leadership
16  concerning -- not so much in aquaculture, but in
17  best management practices.
18            The forestry industry in Louisiana has a
19  Best Certified Master Farmer Program.  You follow
20  the best management practices and implement them on
21  your business, you can sell timber and lumber in
22  Louisiana to a Louisiana processing plant.  If
23  you're not a Certified Master Farmer certified to
24  use the best management practices, the mill will not
25  buy your lumber.  That's one way.  Leave the
                                                      64
 1  government out of it.  That's the way it's done
 2  without the government.
 3            The other thing is this past August, the
 4  Outstanding New Piece of State Legislation Award by
 5  the Council of Governors was awarded to a Louisiana
 6  lawmaker who wrote a bill on presumptive compliance,
 7  it's called, that if you pursue best management
 8  practices, and are a Certified Master Farmer in
 9  Louisiana, you're presumed to be in compliance with
10  State water quality requirements.
11            Landmark type approaches.  Something
12  probably down the road if the industry gets bigger
13  and you get other people in it, concerns of
14  reflecting on your own business, you could either do
15  it through agreements with individual buyers, buyers
16  will not buy unless you follow certain certified
17  practices.
18            Or the other one in Louisiana, is the
19  State Commissioner of Agriculture certifies people
20  as master farmers, and you get presumed compliance
21  of that process.  So best management practices have
22  saved businesses a lot of money.
23            MR. CATES:  I will share something with
24  you on that.
25            Right now in Hawaii we have an Aquaculture
                                                      65
 1  Development Program.  They are the agency that the
 2  State legislature relies on for opinions, and they
 3  support businesses.
 4            One of the problems I'm seeing is because
 5  they are a state agency, they don't have any
 6  funding.  They don't travel around and learn from
 7  other areas.  There is a site on Kona being proposed
 8  for a fish farm.
 9            Another guy wants to put a fish farm a
10  mile away.  So you're going to have two fish farms
11  about a mile away.
12            The state agency, ADP, was supporting this
13  saying, this is going to be okay.
14            I raised a big objection.  I said, wait a
15  minute, that's a bad idea.  Let's look at Europe.
16  Would Europe allow two competing businesses right
17  next to each other?  No way.  So I'm stepping in
18  basically telling two potential businesses to spread
19  apart.  You get a disease over here, who's blaming
20  who, who's suing who?  Don't do that.
21            So it's always a struggle between trying
22  to learn from other regions what's worked and what
23  hasn't worked and applying that here when you have
24  an agency that doesn't have the budget to really get
25  out there.
                                                      66
 1            So one of the things I'm doing is whenever
 2  I go somewhere, like to Ireland, I bring back as
 3  much information and I meet with ADP and I go, here,
 4  this is what I've heard, this is what they do, this
 5  is reality.
 6            I hope that continues on, because what we
 7  need to do, the salmon industry has a wealth of
 8  experience.  We need to learn from that.  It's not
 9  all bad.  There is good and bad there.  They've made
10  some mistakes.  I wouldn't be here today if they
11  didn't make those mistakes.  But I don't want to
12  repeat them.
13            That's what I mean by self-regulating.
14  Let's learn from all this, apply it, and every area
15  will be a little bit different.  Where you place
16  these farms, best management practices, how we do
17  things will be a little bit better, I believe.
18            MS. WYNNE:  Kate Wynne from the University
19  of Alaska.
20            I have a couple simple questions about the
21  design of the trap -- or the cage.  What material?
22  Is it a netting?  Or is it metal?
23            MR. CATES:  It's both.
24            MS. WYNNE:  Do you have any predators that
25  try to enter the cage itself?
                                                      67
 1            MR. CATES:  Yes.  The answer is yes.
 2            First part is basically the center has got
 3  a three-foot diameter pipe, about 60 feet long and
 4  where the netting part is about 50 feet.  It's
 5  called the spar, and it's got flotation in it.
 6  You've got a metal rim that is 80 feet in diameter.
 7            From the top to the bottom, you have got
 8  netting which is made out of Spectra (phonetic), and
 9  it's about as strong as steel, but it's a net
10  material.
11            The big difference between this and
12  gravity cages, which most people are familiar with,
13  is it's got a weight on it so that when it drops
14  down, it's very taut.  It's like this table.  So a
15  turtle or anything can't get stuck in it.  It's not
16  gravity, it's not loose.
17            Sharks can't really bite it.  They can
18  bite it, but it's difficult for them to bite it
19  because it's tight.
20            But predators are all kinds of predators,
21  like an octopus is a predator.  Eels are predators.
22  believe it or not, sea urchins.   I had one time on
23  the bottom of my cage a colony of sea urchins that
24  came in to spawn, and I had gazillions of sea
25  urchins.  (Laughter).
                                                      68
 1            And you've got to deal with each one.
 2            So I'm not a big fan of gravity cages.
 3   If I had a gravity cage in the offshore
 4  environment, I don't think it would last long.  But
 5  I know for a fact we'd have a problem with sharks
 6  that can grab the netting, because I've seen it.
 7  I've been to other areas where they've applied
 8  gravity cages and there have been problems.
 9            So you've got to be wise about it and you
10  have to sure what it is you're dealing with.  Some
11  of the areas in the world, sharks aren't a problem.
12  You don't have to have that.
13            But I'm confident we can overcome and
14  apply technology to any region now.
15            MS. WYNNE:  My second question, being from
16  Alaska, I was sort of hoping to see your other
17  presentation, too.  I would like some information to
18  take back to comfort people in Alaska that have
19  concerns about aquaculture.
20            MR. CATES:  I don't know if my
21  presentation would comfort them.  (Laughter).
22            MS. WYNNE:  Well, at the very least, could
23  you suggest -- our problem is we have too many fish
24  in a lot of cases, and no market for them.  Can you
25  suggest species that you would consider good
                                                      69
 1  marketable, farmable fish up there that would be
 2  something new, that would be a heartening kind of
 3  message to take them.
 4            MR. CATES:  I have a couple comments.
 5            I've had people from Alaska come to me and
 6  actually approach me and say, we're looking at doing
 7  something.  Then they say, are you kidding me, you
 8  can't do that in Alaska, there's a law against it.
 9            Well, we'll try.  We have our different
10  opinions on that.  So there are people that are
11  looking at it.
12            I haven't been to Alaska.  I've only seen
13  it -- I've been to Seattle and engaged with
14  fishermen in discussion, and such.
15            But my answer would be, any species you're
16  catching from the wild, you can build that into your
17  business plan.  Take salmon.  Do you harvest salmon
18  year-round?  I don't think so, that I know of.
19            Why wouldn't you have an aquaculture
20  facility.  When your fishing season is on, that's
21  when you're catching.  When you're not catching,
22  you're harvesting.  Then you're in year-round
23  production mode.
24            The interesting thing that I've learned
25  and I've learned from the Japanese is, the market
                                                      70
 1  for Alaska salmon, a major part of it is in the
 2  Japan marketplace.  But the Japan market has
 3  increased -- I want to say it's like 700 percent,
 4  it's huge -- in the last ten years of salmon.
 5            The wild-caught fisheries, kind of like
 6  here, and they're buying a bunch of wild -- farmed
 7  salmon.  So you can't say that all the negative
 8  publicity that Alaska fishermen are doing, targeting
 9  the U.S., PCBs, all this stuff, their market is in
10  Japan.  When you go to Japan and you talk about
11  farmed fish quality, farmed fish is a superior
12  quality.  No matter what fish it is; whether it is
13  tuna, snapper, hamachi, you're going to get a higher
14  price for farmed fishing than you will from the
15  wild.
16            You are not going to change that mindset,
17  that's the way they think.
18            How do you build a business plan to
19  incorporate that.  I wouldn't necessarily say we're
20  not going to grow salmon, we're going to grow these
21  other species.  Be realistic.  If you're going to
22  enter into the marketplace, how can we work
23  together.  That's the first thing I would say.
24            Do some other species.  I would include
25  salmon, and I would include salmon only when you're
                                                      71
 1  not catching from the wild, because you're not going
 2  to compete with that.
 3            The other thing is, I have a suggestion
 4  for fishermen in Alaska.  If they're worried about
 5  this legislation in the EEZ Zone, just put
 6  restrictions on landing.  That solves it.  If you're
 7  worried about a farm being three miles offshore,
 8  just say we're not going to have any farmed fish
 9  land in our ports.  Done.
10            I haven't heard of a business yet that is
11  interested in farming fish in Alaska.  I wouldn't go
12  there if my community didn't want it.  That would be
13  the last place I would be.
14            So I think their fears are a little -- not
15  realistic.
16            But Alaska, I've had government officials
17  at my site, diving on my cages, from Alaska, and
18  they've told me privately, this is a great idea, but
19  it will never happen in Alaska.  That's kind of
20  reality.
21            But I think opinions might change.  You
22  have to learn how to market their fish differently.
23            If I was a fishing community in Alaska, I
24  would definitely look at aquaculture.  You have
25  every thing you need right there.  You have a wealth
                                                      72
 1  of hatcheries.  You have the boats.  You have got
 2  the infrastructure.  You have everything you need
 3  right there.  So I would be pushing it.
 4            I wouldn't get rid of my fishing fleet at
 5  all.  But I would say, we're going to do this in
 6  this month.  When we're not supplying -- our
 7  commercial fishery is closed, we're going to do
 8  this.
 9            MR. OSTERBACK:  Okay.  Two quick ones.
10  We've got Bob and Joe.
11            MR. FLETCHER:  Really quick.
12            Randy, you talk about the 50-by-80 foot,
13  are you thinking about making it bigger?  Is the
14  ability for you to build that bigger cage there?
15  Would that make sense economically?
16            MR. CATES:  Definitely make sense
17  economically.  But -- it can be done.  There are
18  other cages out there that I think could work.
19            I just go back to the hatchery, we don't
20  have enough fish to put in them.  There's no
21  hatchery in the U.S. that has enough fish to put in
22  them.
23            The other thing is there's something to be
24  said with the cage I'm using and the scale of it and
25  the durability.  This cage was in the Bahamas when
                                                      73
 1  the hurricane went over it, sat over it for 26 hours
 2  with 140 mile an hour winds, and it didn't have --
 3  no damage, no loss of fish.  That is tremendous.
 4  That's a proven concept to me.
 5            Thank god it was there and not here.
 6            But when that event happened, people
 7  started asking questions from all over the world.
 8  It was the hottest thing that happened.  The Korean
 9  Government is buying these cages.  China played with
10  it, and now they're kind of coming back to the
11  table.  Spain.  Everywhere else is going, hey, this
12  is the way to go.
13            Making it bigger would be better.  I'm not
14  in the position to develop that technology.  I think
15  Ocean Spar can do it, though.  I know John has been
16  pushing them on it.  I certainly am, too.
17            MR. HENDRIX:  Randy, Joe Hendrix from the
18  Gulf Council.
19            With all of the new fishery management
20  plans going into place, and in the process
21  unfortunately displacing a lot of commercial
22  fishermen from the industry, do you see
23  opportunities from your experience for commercial
24  fishermen in this new developing industry?
25            MR. CATES:  I think it's the only people
                                                      74
 1  that are going to do the work.
 2            I said earlier that the new businesses
 3  coming along, some of them are going to make money,
 4  some of them are going to lose money.  The ones I
 5  see so far are going to lose money.  The number one
 6  reason is who's doing the work.
 7            You've got to get people that are used to
 8  that environment and want to work in the
 9  environment.  Because it is not easy and it's not
10  fun.
11            If you don't do that, it's not -- like I
12  said, it's not a dot-com, get-rich-quick thing.
13  It's down-and-dirty work.
14            I have a part-time guy that works
15  weekends.  He decided to go back to college, which I
16  encouraged.  I had a guy from NOAA that comes off
17  one of the research boats, that's in for three
18  months.  He's got a degree.  He goes out on a NOAA
19  ship in the Northwestern Hawaiian Islands.
20            He came out on our site and he lasted two
21  days.  He was seasick all day long.  Didn't like the
22  smell of fish feed.  We kind of giggled and went,
23  well.
24            So who's going to do the work.  It's going
25  to be fishermen.  Hands down.  It's going to be
                                                      75
 1  people that work on the water, that know the ocean.
 2  And in Hawaii, it should be people from that
 3  community.
 4            There is a proposal going in on Maui from
 5  a mainland company right now.  They're not from that
 6  community.  They don't know that environment.  To
 7  me, that's wrong.  They need to get in the community
 8  and get some people from there.
 9            In Hawaii, we have a saying, ahupaua'a
10  (phonetic), which is, from the mountain to the sea,
11  and you've got to incorporate everything.
12            It's a classic case of, in my opinion, a
13  mistake.  Here is this guy standing on the
14  shoreline, looking out at the ocean, going, that's
15  where we're going to put our farm.
16            I've been asked my opinions on that.  I
17  said, that's not what you do.  You go out to the
18  site, turn right back around and look at the land,
19  you go, this is where I'm at, am I in the right
20  spot.
21            If you are out on the site and you look
22  back on land and you've got two giant volcanoes and
23  you're in between the two, and there's a low valley,
24  and that's where they're going to put their site,
25  first question I ask is, what happens when it rains.
                                                      76
 1            Has anybody thought about that, what is
 2  going to happen when it rains.  You've got all this
 3  erosion from both mountains.  Now, is this the right
 4  site?  Have you guys been here at all to look at
 5  what is in the water when it rains.
 6            Someone from that area would know.  A
 7  fisherman would know that when it rains it's a mud
 8  pit right here.  You don't want to be here.  You
 9  want to be over here or over here.
10            That's the experience I try to tell
11  people, get people from your area, your community,
12  and it's going to be fishermen.
13            If I went to the Gulf of Mississippi,
14  first thing I would do is get fishermen to say, is
15  this area good, are the currents good, will I get
16  red tide, will I get all these different things.
17            So the businesses that are going to
18  succeed will be those businesses that include those
19  type of workers.  Hands down.  Nobody else.
20            No matter where you go in the world, you
21  can see it.
22            Go to Ireland and you can see who is
23  working the farms.  Go in the bar and you're
24  drinking with them, and they're just like any
25  commercial fisherman anywhere in the world.  Rough
                                                      77
 1  and tough.  Bottom line.
 2            MR. OSTERBACK:  Thank you for your
 3  presentation.  (Applause).
 4            MR. HOGARTH:  One final question.  How
 5  many people do you employ?
 6            MR. CATES:  I employ five people on my
 7  site, and I have a hatchery, which employs about
 8  eight.  Then my distributor employs quite a bit.
 9  That's not including my business side, CPA, my
10  bookkeeper and stuff.
11            I hate paying my work comp insurance every
12  year.
13            But when I build my own hatchery, I
14  perceive having 15 to 20 people within two to three
15  years.  I'm not looking forward to that headache,
16  but I probably will.
17            MR. HOGARTH:  Thanks.  Thanks a lot.
18            Okay.  Then next section of this sort of
19  accomplishes two things.  I think one is that, we're
20  really doing a lot internally on acoustics, and it's
21  become quite controversial; low level sonar, mid
22  level sonar, and all this.  But we have a lot going
23  on there.
24            Some work is being done on that over at
25  the University of Hawaii.
                                                      78
 1            Also, we have set up a region, our newest
 2  region is here.  Both Bill Robinson, as the RA, and
 3  Sam Pooley is the head of the Science Center here.
 4  There's been a lot of requests from the Hill about
 5  better coordination of science here.  Senator Inouye
 6  puts a lot of money into Hawaii but he's not sure
 7  that he's getting the best results.
 8            I think if you listened to Randy about the
 9  Oceanic Institute, transferring that technology into
10  actual aquaculture and that stage in between.  We've
11  been asked to try to do more, to try to get the
12  scientists together in Hawaii and do a better job of
13  spending the money, so to speak.
14            This afternoon we felt like part of this
15  trip here would be good to go out to the Oceanic
16  Institute to look at what they've done.  They've
17  done a lot of work with a lot of different species,
18  and continue to do so.  Then to go to Coconut Island
19  to look at the acoustics work.  So the next two
20  presentations are from NOAA.
21            Sam Pooley is the Science Center Director
22  here.  He'll talk about what's going on at the
23  Oceanic Institute and other things here.
24            Then Brandon Southall, who is with us and
25  works with the Acoustics Program, will go over what
                                                      79
 1  our sort of role is and where we're going in the
 2  acoustics internally, and to explain to you what is
 3  going on at the University of Hawaii.  It is
 4  extremely interesting.
 5            This is really a controversial issue and a
 6  tough issue for us.  I think between Roger and
 7  Brandon, we have really got two excellent PhDs that
 8  are really working hard in this area and have done a
 9  lot to educate the public, having workshops and all.
10  I think they both deserve a lot of credit.
11            Brandon has been on the road as much as I
12  have lately, if not more, trying to have workshops
13  to talk.
14            Sam, are you going to start off, then turn
15  it over to Brandon?
16            MR. POOLEY:  Let me just introduce who we
17  are and what you're going to see this afternoon.
18            Pacific Islands Fisheries Science Center,
19  we like to think of it as NOAA's living marine
20  resource laboratory in the Pacific.  We've been here
21  for 50 years as a laboratory.  We've just become a
22  Science Center within the NOAA frame of things.
23            We do a lot of work in Hawaii, obviously.
24  But we also cover American Samoa, Guam, Northern
25  Marianas, and the remote island areas.  So in that
                                                      80
 1  sense, we're the largest Science Center in the
 2  country.
 3            But we're also the smallest.  We have
 4  about 150 staff, half of whom are federal employees
 5  and half of whom are shared with the University of
 6  Hawaii through a cooperative agreement with NOAA.
 7            We have three fish divisions.  We do the
 8  typical fisheries kind of research that all of the
 9  National Marine Fisheries Service Science Centers
10  do.  We have got quite a bit of work on fisheries
11  oceanography, remote sensing, applying that to the
12  fishery problems in the sense of interaction with
13  protected species, adjust the location of swordfish
14  in the North Pacific and relationship with turtle
15  migrations.
16            Do quite a bit of work on fishery
17  interactions just in the experimental sense.
18            We have a Protected Species Division that
19  focuses on green sea turtles and on the Hawaiian
20  monk seal, which is an endangered monk seal that
21  lives primarily in the Northwestern Hawaiian
22  Islands, but also has begun populating the Main
23  Hawaiian Islands.  There are a lot of issues in the
24  sense of the science of that.
25            Finally, we have our newest research
                                                      81
 1  division that is called the Coral Reef Ecosystem
 2  Division.  It does an integrated assessment,
 3  monitoring and analysis of the Northwestern Hawaiian
 4  Islands, the Marianas Archipelago, which includes
 5  Guam and the Northern Marianas, as well as American
 6  Samoa.  Increasingly, we'll be doing work in Palmyra
 7  and other remote areas.
 8            It's probably our highest tech division,
 9  and it covers lots of things.
10            Having said all that, it sounds like a
11  lot, but actually it isn't that much.  We're really
12  in the development mode and ramping up.
13            We fund two major grants through us, one
14  of which is really an arm's length grant, and that's
15  with the Oceanic Institute.
16            It's not an arm's length in the sense of
17  like that, but we have not been in the aquaculture
18  development area at all historically, at least not
19  in the last 20 years.
20            We were the first place in the world to
21  raise tuna in captivity.  But we caught the tuna and
22  threw it in a tank.  We have done some of the rest
23  of that kind of stuff.  But that's really not the
24  direction we have gone.
25            Oceanic Institute -- Randy gave as good an
                                                      82
 1  introduction, as well as I could.  So I won't even
 2  bother, really.
 3            As he said, they get congressional
 4  appropriation for doing stock enhancement and
 5  related development of technology work.  But they're
 6  not in the production side of things.  They view
 7  themselves as a research institute, and I'll just
 8  let them speak for themselves this afternoon.
 9            They've got lots of interesting stuff.
10  We're working on ways in which we can collaborate
11  more.  But really, they do different kind of stuff
12  than the people we have at our laboratory do, and
13  that's okay.  We just keep informed of each other.
14            So some of the questions are, what kind of
15  species, what does it take to grow out some of these
16  species that the mariculture industry is interested
17  in, and I think those are good questions.
18            As I said, I'll let them speak for
19  themselves.
20            We give a second grant to the University
21  of Hawaii Pelagic Fisheries Research Program, which
22  covers primarily research on tunas and related
23  aspects.
24            With the Hawaii Institute of Marine
25  Biology, which is separate, we have a number of
                                                      83
 1  relatively small projects.  We have some -- NOAA has
 2  an advanced tech working group within that.  The
 3  Deputy Director of our Laboratory, Mike Seki, has
 4  some acoustics work with the people in HIMB, and
 5  we'll let them speak for themselves on that.
 6            Also, Joanne Leong is the Director of
 7  HIMB.  She's brand new.  She's put a lot of emphasis
 8  on genetic research, and we're working with them on
 9  genetic identification of primarily bottomfish, but
10  other species within the Hawaiian Islands.
11            Our Coral Reef Division has a couple
12  graduate students working on complementary issues.
13            But again, they are doing a different kind
14  of work than we are doing.  One of the reasons,
15  they're very much an academic laboratory-based kind
16  of facility.
17            One of the reasons is that we don't have
18  any laboratories anymore.  We have a 50-year-old
19  building that -- we cannibalized the laboratories
20  and turned them into office space for computers
21  because so much fishery science is computer-based.
22  So we're primarily either desk jockeys or computer
23  nerds, whatever you want to call us, or people who
24  go out on the research vessel, the OSCAR ELTON
25  SETTE, and do work that way.
                                                      84
 1            We've got charters with the fishing
 2  industry to do work with them.  So we're sort of
 3  doing that, but we're not doing the high tech work.
 4  We rely on OI and HIMB to do that.  So that's a real
 5  quick introduction to the kind of stuff we do.
 6            I think Wendee will probably say at the
 7  end of the morning how you guys get there, how we
 8  all get there.  Otherwise, that's it.
 9            Any questions?
10            MR. HOGARTH:  Don't stop on that note.
11            We are building a new laboratory here.
12  We're in the process now of building a new office.
13  This will probably be -- not any of us are very
14  happy with where it may be located, but that's
15  beside the point.  It will probably be the first
16  region that will be consolidated into a NOAA
17  facility with all NOAA activities in one building.
18  It will be built here.
19            It won't be built before I leave, I'm
20  sure.  I'm not sure it will be built before Sam
21  leaves.  But it is on the drawing board.
22            We ran into the same problem that Randy
23  talked about, the price of property is just almost
24  prohibitive to build and buy property in this area.
25  So it looks like it's going to be out towards Pearl
                                                      85
 1  Harbor, part of the Navy Complex out there.  But it
 2  will be a very good laboratory.  We'll get them back
 3  into the science.
 4            We're very happy to see this region come
 5  into existence and to operate.
 6            MR. POOLEY:  Thanks for finishing my
 7  thought, because that's why I actually brought up
 8  the 50-year-old building, was to say -- I started by
 9  saying, we wanted to be NOAA's living marine
10  resource laboratory, not just the National Marine
11  Fisheries Service.  So I guess now we can be called
12  the NOAA part that deals with fisheries, taking the
13  Admiral's idea from the other day, involved with
14  NOAA.
15            We're also working very close with NOS and
16  the Sanctuary Program on cetaceans and in the
17  Northwestern Hawaiian Islands.  We have a cruise
18  going out in the Main Hawaiian Islands on their
19  behalf, actually.  Won't be anybody from NOS on
20  their boat, but we'll be doing their research, and
21  that's fine with us.
22            Hawaii Institute of Marine Biology got a
23  one and a half million dollar congressional
24  appropriation this year to do marine work in the
25  Northwestern Hawaiian Islands, on behalf of the
                                                      86
 1  Northwestern Hawaiian Islands research.  So I'll
 2  leave it at that.
 3            When we take a break at the end of the
 4  day, end of the morning, we'll figure out where
 5  we're all going and how to get there.
 6            MR. HOGARTH:  Brandon.
 7            As I said, I've listened to this
 8  presentation a couple times.  I think he's condensed
 9  it quite a bit for ya'll here today.  But it's a
10  very excellent presentation, as I said, on a very
11  controversial issue that we have to deal with seems
12  like on a daily basis.
13            He'll talk about what we're doing and
14  where we're going.  I think he does an excellent
15  job.
16           (NOAA Fisheries Acoustics Program)
17            MR. SOUTHALL:  Thanks very much.  I really
18  appreciate Dr. Hogarth inviting me here.  Not only
19  because I get to come back to Hawaii, which is
20  always nice, but it gave me a chance to learn about
21  this group and some of the things that you've done.
22            At the end of the presentation we have
23  maybe not necessarily a formal request, but
24  something for you to consider possibly for this
25  group to be involved with, with some of the work
                                                      87
 1  we're trying to do to more completely manage the
 2  issue of sound produced by people and its impacts on
 3  marine life.
 4            So let me start by telling you a little
 5  bit about our program, and then I'll talk about the
 6  issue as a whole for those of you that are not
 7  familiar with some of the potential impacts of sound
 8  that people make on marine life.
 9            Then I'll talk about our efforts to try to
10  develop more sophisticated criteria for managing
11  these issues, and then some of the research that's
12  going on at Hawaii Institute of Marine Biology,
13  which is fed directly into some of these -- the
14  development of these criteria, and they're also
15  doing some really interesting things with new
16  technologies out there.
17            My name is Brandon Southall.  I work with
18  Roger Gentry.  Those of you who have been around may
19  know who Roger Gentry is.  He basically did a whole
20  career's worth of work on Northern fur seals in the
21  Pribilof islands, wrote a book called Fur Seals, a
22  lot of work on behavior and diving physiology and
23  maternal behavior.
24            In 1995 or so he went to work for NOAA in
25  Washington.  They were increasingly having issues
                                                      88
 1  related to military activities and commercial
 2  activities involving sound and impacts primarily on
 3  marine mammals.  You'll see that I also have a
 4  little bit of marine mammal bias.
 5            But this is very much becoming a fish
 6  issue, too.  I'll talk a little bit about fish,
 7  endangered species and pile driving is an issue that
 8  fish are increasingly facing.  But it was really
 9  marine mammals that kind of drove the Agency to
10  begin considering this issue.
11            For about seven years Roger was working on
12  this issue pretty much by himself with some of the
13  people in the Agency that are dealing with
14  acoustics.  Not so much in terms of impacts.
15            As you know, some of the techniques for
16  locating things and locating animals in the wild are
17  increasingly using acoustic techniques.
18            But from the national perspective, Roger
19  was working on this issue pretty much by himself.
20            On the program, a lot of its function has
21  been to advise regulatory decisions on permits
22  involving incidental or direct uses of sound,
23  investigating strandings that potentially have an
24  acoustic component to them, liaisoning with other
25  agencies in terms of funding research, NRC Panels
                                                      89
 1  that have dealt with the issue.
 2            I, during that period of time, finished my
 3  PhD at University of California at Santa Cruz.  Most
 4  of my work has been on seals and sea lions,
 5  especially elephant seals, looking at their acoustic
 6  communication systems, changes in natural
 7  communication based on background noise.
 8            We have a unique setup there because there
 9  is a lab where we have three species of seals and
10  sea lions, and you can work with all three of them
11  within about a half-hour drive.  I was on the beach
12  yesterday with elephant seals out at Ano Nuevo.  So
13  it's a unique opportunity to cross over between
14  those two.
15            So our program interfaces with -- there's
16  really four labs -- three or four, but three primary
17  labs that deal with measuring the effects of sound
18  on primarily hearing, but increasingly other systems
19  as well, of marine mammals.  One of them being the
20  one we're going to this afternoon, the Hawaii
21  Institute of Marine Biology.
22            U.C. Santa Cruz, where I work is one of
23  the others, and the Navy's lab in Point Loma in
24  Southern California is the third.
25            So that sort of encompasses a lot of the
                                                      90
 1  things that we do.  As Dr. Hogarth said, we've been
 2  doing a fair amount of public education recently,
 3  going to aquariums.  We had a lecture series where
 4  we went to 14 different aquariums and marine labs.
 5  We invited people -- different scientists in.  Dr.
 6  Nachtigall from HIMB came and he and I spoke at U.H.
 7  Manoa as one in a series.
 8            It's a very complex issue, and I'll hint
 9  at some of the complexities a little bit.  It's
10  difficult for the general public to sort of grasp
11  some of the relevant critical complexities.  We see
12  in the media some inaccurate representations of
13  this.
14            Going to the Society of Environmental
15  Journalist Conference this year and try to talk to
16  people in the media.
17            What has happened is that the issue has
18  become sort of myopically focused on one small part
19  of it, which is the stranding of marine mammals from
20  military sonar activities.
21            It's an important consideration, and one
22  that a lot of people are working to try to resolve.
23  But there are broader considerations that have
24  gotten left out, at least in terms of the media
25  coverage, and consequently the public's perception
                                                      91
 1  of the issue that we've tried to in this lecture
 2  sort of incapsulate.
 3            So that's sort of an overview of our
 4  program and the history of it.
 5            I'll start with this slide because it
 6  drives home the point that when you're talking about
 7  sensing of information over any reasonable distance
 8  under water, you're really limited to acoustics.
 9  You're really limited to sound.  So on this axis is
10  range in kilometers, up to 45 or so kilometers, and
11  depth.
12            What this shows is the red is loud and the
13  blue is quiet.  So imagine you had a sound source of
14  some type that was about here, and it was making a
15  sound in the environment.  This is sort of a slice
16  through the water column.  It's a picture of what
17  the sound field looks like.  You can see it is very
18  complex.
19            But on a really clear day, maybe off the
20  Big Island or the Leeward side of this island, maybe
21  you can see something like this.  So if you were
22  right here at the source, you could see 100 meters,
23  that would be really great visibility.
24            If you were physically in the water here,
25  a person could hear that sound 10, 15 kilometers or
                                                      92
 1  so away.  A dolphin might be able to hear it out to
 2  40 or 50 kilometers.
 3            If you took a different kind of sound
 4  source, like an earthquake, you could hear it
 5  thousands of kilometers away.
 6            So the point of this is that really,
 7  anything over perceptible distance, in terms of
 8  sensing in the marine environment, you are talking
 9  about sound.  That has had really important --
10  nature has not ignored this fact.  Animals that have
11  been involved in this environment rely on sound for
12  almost every aspect of life history.
13            I've got mostly marine mammals up here.
14  This is true for fish, as well.  Sounds are used in
15  attracting mates, in navigating, in locating
16  predators.
17            You probably know that certain species of
18  dolphins and porpoises have an active echolocation
19  system.  They use it like bats to find prey items.
20            Some of the other animals don't have that
21  kind of a system, but they probably use sound for
22  foraging as well.  So they've not ignored the fact
23  that if you want to do any sort of remote sensing of
24  information, primarily do it with acoustics.
25            Most marine life is sort of acoustocentri,
                                                      93
 1  it's the primary modality, whereas for many land
 2  mammals it's vision or it's olfaction.  For most
 3  marine life, not exclusively, not to say the other
 4  senses aren't important, but acoustics is the
 5  primary modality for animals in water.
 6            Now, people do a lot of things in the
 7  marine environment that generate sound, either
 8  intentionally or unintentionally.
 9            These five pictures up here sort of
10  encompass the five major sources of sound in the
11  marine environment.
12            The military uses sound, both
13  intentionally, in the form of sonar systems, and
14  unintentionally.  This is a ship shock trialer, they
15  blow up a lot of large explosions to test how strong
16  the hull of the vessel is.  So there's explosions in
17  the context of these kind of tests testing the hull
18  strength of vessels.
19            Also, the testing ranges of explosions and
20  the incidental noise associated with the ships.  So
21  the military is one source of sound in the marine
22  environment.
23            This is a picture of what is called an air
24  gun.  The oil and gas industry used sound for
25  locating oil under land that is under water, much
                                                      94
 1  the same way they use seismic signals to image for
 2  oil deposits on land.
 3            They tow big arrays of these.  It's
 4  basically a big tube that has two air pockets and
 5  they release the air and it creates a big bang,
 6  basically.  They pull these things behind boats in
 7  arrays and they shoot them all at different times
 8  and they all add up to make one big bang.  The big
 9  bang goes through the water, into the bottom and
10  bounces back off the floor, and they image for oil
11  and gas deposits.
12            Incidental to that operation, animals in
13  the water column are exposed to those kinds of
14  sounds, which are very different than the sound of a
15  ship or Navy sonar.  It's like a bang, it's like a
16  slamming door.  Those, they have very low frequency.
17  It has very different kinds of effect and sort of
18  impacts certain groups of animals more so than
19  others.
20            This is a picture of what is called the
21  ATOC source, Acoustic Thermometry of Ocean Climates.
22  Researchers, academic, government and military
23  researchers use sound to image the environment.
24            In this case, they're wanting to measure
25  the temperature of the Pacific Ocean and changes
                                                      95
 1  over time in the temperature profile of the Pacific
 2  Ocean.  It's a lot easier to do it with something
 3  like sound over long distances than dragging -- or
 4  having a whole bunch of devices remotely monitoring
 5  temperature.
 6            Sound travels a different speed through
 7  water at different temperatures.
 8            So you make a source, and this is about as
 9  big as this.  That makes a low frequency sound.  You
10  put it off the Coast of California, or they now have
11  a variation of this off the Island of Kauai.  You
12  can measure the sound all over the entire Pacific
13  Ocean.
14            You can make a sound off California, and
15  you can measure it in Australia.
16            They did a similar experiment where they
17  put the source in the Indian Ocean, and you can
18  measure it off the Coast of Maine.  Sound can travel
19  long distances.
20            But it is a way of sensing that
21  researchers use to ask things about temperature
22  profiles and bottom profiling, and all sorts of
23  things you can do from a research point of view for
24  imaging.
25            But again, incidental to that, animals are
                                                      96
 1  exposed to those kinds of sounds.
 2            A big one that people have sort of left
 3  out of this, and a lot of the public emphasis really
 4  has been on the military activities, what we call
 5  the seismic industry, oil and gas, and researchers
 6  who are using sound.
 7            The shipping part of this has sort of been
 8  -- it's a background thing that is not a discrete
 9  activity.  It's something that is continuous and
10  it's been around for a long time.  There's 100,000
11  large vessels, commercial vessels, in the world,
12  many of which are just on circle routes of the North
13  Atlantic or North Pacific Oceans.  Very different
14  kind of effect.  I'll talk about a few effects.
15            But very different than a discrete -- an
16  event like this, we have one explosion and it's
17  over.
18            Ships, they're there.  They're there
19  basically forever.  And the sound is on -- lower
20  level sound is on all the time.  But definitely, a
21  component of the issue that has sort of not been
22  really that actively considered.
23            In May of last year we had the first
24  meeting with the shipping industry where we invited
25  them, and academics and military folks, the Coast
                                                      97
 1  Guard, and we brought them together and we said,
 2  look, we're not in the position or interested in
 3  enacting regulations on the shipping industry, but
 4  are there things we can find that may have mutual
 5  benefit.
 6            Sound is a form of energy.  If you're
 7  putting energy into the water, it's energy you could
 8  be using more efficiently.  Are there things like
 9  propeller designs that you could do to make the
10  ships quieter, but also might have benefits in terms
11  of things like fuel efficiency.
12            So we're just at the beginning stages of
13  that, but we've now engaged the shipping industry in
14  the issue.
15            Pile driving, the last one over there,
16  marine construction is kind of one of the other
17  issues.  But pile driving is one that's really kind
18  of in the forefront, it's an emerging issue in this
19  field.
20            Similar kinds of sounds to the area, bang
21  kind of sounds, rather than long-term, continuous.
22            You can see that all five of these are
23  critical things that people need.  These are
24  important.  They're important industries.  They are
25  things that all of us are involved with and rely on
                                                      98
 1  to some extent.  So the challenge really is, first,
 2  understanding what the full chronic and acute
 3  impacts are of human sound activities, how they
 4  relate to the natural noise that's in the ocean.
 5            The ocean is a very noisy place.  There
 6  are, I mentioned, earthquakes.  There's lightning
 7  strikes on the surface on the ocean that generate a
 8  whole lot of noise.  The animals themselves are
 9  loud.  Wind and waves, and all sorts of natural
10  sounds.  So understanding how these relate to the
11  natural forms of noise, and then what to do about
12  them, which sort of activities would rise to the
13  level of things that we need to try to modify in
14  some way or look at alternative locations for things
15  like ship shock trials.
16            So that's kind of the challenge that's in
17  front of us.
18            The field really is less than 25 years
19  old.  There was some research done in the '50s and
20  '60s on animal communication.  But really, in the
21  last ten years is when the information that's become
22  available about if you play sounds and the animal is
23  trying to hear at the same time, how does it change
24  their hearing, what level of sound does it take to
25  injure an animal, and other aspects of it.  It's a
                                                      99
 1  very new field.
 2            So the challenge is trying to take a
 3  fairly small amount of information and extrapolate
 4  it on a few individuals, and extrapolate it to whole
 5  populations.
 6            This is a cartoon that just sort of lays
 7  out some of what the effects are.  Imagine there is
 8  a source of sound in the middle of the figure here.
 9  We sort of think of these as zones.  You can tell
10  from that previous figure that I showed with the
11  sound profiles, that these aren't spheres.  The way
12  sound travels is very complicated.
13            But as a simplification, you can think
14  that the most serious sort of effects, like you
15  actually damage tissue or rupture eardrums or cause
16  lung hemorrhage or something like that, occurs
17  really close.
18            For most operations, the zone here is
19  really small, tens of meters, something like that.
20            A little bit farther away, you can cause
21  either temporary or permanent damage to the hearing
22  structure.  There are a range of nonauditory
23  effects.  But hearing really, in terms of sound
24  exposure, from what we know, appears to be the most
25  sensitive to -- it's the most sensitive system to
                                                     100
 1  being impacted by sound.  So in some range farther,
 2  the hearing loss could occur.
 3            This yellow zone is what we call masking.
 4  This is if you're talking with someone, and somebody
 5  drives by with a loud car radio, you can't hear them
 6  as well.  The cocktail party effect, it's
 7  interference.  I'll show you a slide of this, which
 8  probably will graphically explain it to you.
 9            But it occurs farther away from the source
10  than do the sort of more severe effects.
11            This green zone can really vary.
12  Behavioral disturbance, animals move away from the
13  sound source.  They get scared or they don't like
14  it.  It can go all the way out to the edge of the
15  blue, where the animals can't hear it.  Or it can go
16  all the way inside and maybe even inside the injury
17  zone.  It's very subjective.
18            The others here are basically a function
19  of the way the ear works.  The characteristics and
20  the frequency it's sensitive to, tissues and all
21  that.
22            The behavioral disturbance, and this
23  complicates life for us, because a lot of our
24  concerns have to do with how animal behaviors are
25  affected by sound, is highly context specific.  It
                                                     101
 1  depends very much on experience.
 2            If the animals hear something for the
 3  first time, they may be affected by it.  But over
 4  time, they may not.
 5            We have harbor seals living at the base of
 6  runways at airports, and if you go out in some
 7  remote areas they will take off when you're a long
 8  distance away.  We see huge variability in
 9  behavioral disturbance.
10            That's really one of the big challenges
11  that we have, is dealing with that context
12  specificity and how do you deal with habituation,
13  animals get used to sound.
14            We have some data from the field on that.
15  Some work that is being done in the lab is kind of
16  getting some of the controls a little bit better on
17  that.
18            I already alluded to this, discrete versus
19  chronic exposures.  All of these you can think of in
20  sort of both senses, whether it's single event, a
21  single noise exposure, or something that is on all
22  the time, you can have all of these things happen.
23            But they're very different questions.
24  Basically, it involves much -- if you have single
25  events, it takes more basically to cause injury or
                                                     102
 1  hearing loss than you would with something that's
 2  repetitive, over and over, on all the time.
 3            Now, in the sense of a masking, we're much
 4  more concerned about chronic exposure.  Something
 5  like shipping lanes going up and down one coast in
 6  areas where animals are breeding or traveling.  It's
 7  elevating the full background noise that the animals
 8  are trying to listen over.
 9            Think about being in a library versus
10  being in a restaurant.  If you had to live in one of
11  those two environments, you'd have to do things
12  differently if you were an acoustic animal if you
13  were in the restaurant versus in the library.
14            And I'll make a little bit of an
15  connection to aquaculture here.  My talk is sort of
16  way off the topic of what was discussed this
17  morning.  But from aquaculture we have some of the
18  only evidence available about some of the
19  physiological effects of noise exposure, of chronic
20  noise exposure.  There was some work done with
21  shrimp where they measured the noise levels in the
22  environment and they had matched environments for
23  these shrimps, sort of a high, medium and a low
24  noise environment.  Everything else matched
25  similarly.
                                                     103
 1            They had higher metabolic rates and lower
 2  growth rates in high noise environments versus low
 3  noise environments.
 4            The bulk of the data that we have on that
 5  for mammals comes from laboratory rats, primates,
 6  and also for people.  You see people are stressed in
 7  high noise environments versus low noise
 8  environments.  You see all sorts of things with
 9  stress hormones and indicators like higher levels of
10  violence near airports.  Odd things like that have
11  had to do with noise exposure.
12            We don't know those things about marine
13  mammals or fish.  There is some work on fish with
14  stress hormones.
15            But there's good indication from other
16  systems that chronic levels of noise exposure affect
17  a range of systems, from those affecting the immune
18  system, all the way to hearing.
19            So anyway, this is kind of the full range
20  of things that can happen.
21            Here's a picture of what it looks like
22  when a ship drives by when a whale is calling.  This
23  is time on this axis.  This is frequency or pitch.
24            So here's a blue whale.  This would be
25  probably -- you probably all know what blue whales
                                                     104
 1  sound like, low frequency, rumbling kinds of sounds.
 2  So the whale is calling here.   The whale continues
 3  to call.
 4            Then there's a vessel that comes by over
 5  time.  You can see the darker, the louder.  You can
 6  see as the ship comes by, it just sort of -- at
 7  least from where the underwater microphone is
 8  sitting, it gradually wipes out the call of the
 9  whale.  The whale is still calling, but it becomes
10  less and less evident because of the presence of the
11  ship.
12            Now, if you were talking about a dolphin
13  that was feeding in that same area, this chart would
14  be probably four floors up from here.  Way off the
15  chart.  Much higher frequency.  The ship could drive
16  on top of the dolphin and it wouldn't matter because
17  the frequency ban is where these things overlap.
18            So for things like masking from vessels,
19  we're much more concerned about whales than we are
20  for dolphins.
21            If you are talking about dolphins and
22  certain kinds of sonars that are used for high
23  frequency sonars, usually high resolution, then you
24  have an issue for dolphins, but not for whales.
25            So for masking, it's sort of much more
                                                     105
 1  specific to the type of sound and to the animal.
 2  But I think this figure sort of gets to the issue of
 3  masking graphically.
 4            Laurie Allen gave this slide at the Marine
 5  Mammal Commission's meeting last year.  I think it
 6  is pretty good, because it sort of outlines our
 7  whole philosophy on how we deal with this issue.
 8            There are a range of other agencies that
 9  are dealing with this.  The military, obviously, the
10  Minerals Management Service, the Marine Mammal
11  Commission, and others.  But our sort of purview of
12  this, or scope, is much broader than any of these
13  other agencies because we have to be concerned with
14  all forms of sound and all susceptible animals.  We
15  have much broader considerations.
16            Our goal is to really prevent or minimize
17  to the greatest extent possible acoustic injury,
18  hearing loss, death from acoustic exposure.  But
19  short of stopping all marine transportation and
20  exploration of offshore oil and basically every
21  other human activity in the ocean, some behavioral
22  disturbance from human activities is inevitable.
23            Our strategy in terms of managing is to
24  base all of our decisions on science to the greatest
25  extent possible.  I've explained to you a little bit
                                                     106
 1  about these acoustic criteria we're trying to
 2  develop.
 3            We have to say to the greatest extent
 4  possible here because there are some areas where
 5  science could point to solutions which in reality
 6  are untenable.
 7            But basing our decisions on science is our
 8  management strategy.
 9            Our approach is that there are certain
10  issues that must be resolved through formal
11  regulations, but many more of them are more
12  effectively solved in the long term through other
13  things, like partnerships and negotiation and
14  cooperation.
15            I mentioned the shipping symposium and
16  trying to work with the industry to find mutual
17  solutions to noise related to shipping activities.
18            So that sort of outlines where we are on
19  the issue.
20            I've gone through a lot of the
21  introductory stuff already, but in the rest of the
22  talk I want to talk specifically about these
23  acoustic exposure criteria that we're developing,
24  introduce you to some of the work going on that
25  we'll see out at Coconut Island later today and then
                                                     107
 1  talk a little bit about some of our planned
 2  activities in terms of research and management.
 3            Under the Marine Mammal Protection Act and
 4  the Endangered Species Act takes of marine mammals
 5  and protected species may result from exposure to
 6  sound.  So we are required to manage for acoustic
 7  exposures.
 8            This has been done in the past, both
 9  looking at incidental and intentional production of
10  sound with what you may have heard as 160/180 db
11  criteria.  So 160 decibels of sound is assumed to be
12  the onset of behavioral disturbance for marine
13  mammals, and 180 db exposure is estimated as the
14  onset of injury.  That was based on some information
15  that was available about five or eight years ago.
16            There is no difference based on species.
17  There's no difference based on where the operation
18  is occurring.  There is no way the time of exposure
19  is taken into account.  All of those we know are
20  critical components of this.  So what we have tried
21  to do is use some of the recent data that reflects
22  some of the availability.
23            We know that whales hear differently than
24  dolphins do.  We know that sea lions hear
25  differently than porpoises do.  We know some of the
                                                     108
 1  levels of the onset of hearing loss of these
 2  animals.
 3            So incorporate some of the recent advances
 4  and a panel of scientists -- beginning about five
 5  years ago Roger Gentry started this process before I
 6  was involved.  He brought a panel together to try to
 7  come up with science-based sound exposure criteria
 8  that integrates some of the new data that would
 9  serve as the basis for Agency guidelines to more
10  adequately meet our statutory obligations.
11            Two separate processes.  A panel of
12  scientists that's developing these criteria for
13  publication in the open literature and Agency
14  process for implementing new policy guidelines based
15  in part on those acoustic criteria.
16            No one has ever done this before for
17  animals.  No one has ever established noise exposure
18  criteria that say this level of sound means this and
19  this level of sound means that.  It's been done on
20  kind of ad hoc basis.
21            But what we're trying to do is similar to
22  the OSHA guidelines, things that are done for people
23  in the workplace.
24            The difference is, for people you have one
25  species, thousands of studies, tens to literally
                                                     109
 1  hundreds of thousands of individuals involved in
 2  those studies, and it took about 50 years to
 3  develop, and it's still going on.
 4            Specifically for marine mammals, we have
 5  125 some odd species, a handful of studies, most of
 6  which involve one or two individuals, and it's been
 7  going on for about five years.  So it's a pretty
 8  daunting thing to undertake, and a pretty bold thing
 9  to try to do.
10            The panel of people that are doing this is
11  trying to set it up in a way that it will be a
12  continually self-improving process, and the holes in
13  the criteria will point to research needs.
14            This will be something that will be being
15  improved when we're all gone, because it is a very
16  challenging thing to do.  Again, you have a 125
17  species.
18            But the panel is developing these
19  criteria.  The Agency then will move forward in
20  terms of policy guidelines.
21            Just two quick slides on what they look
22  like, if anybody wants to talk about them again.
23  But I don't want to get into the nitty-gritty
24  details.
25            There's four important subdivisions of
                                                     110
 1  them.  The animals -- and we're just dealing with
 2  marine mammals here.  I'll mention that we're
 3  looking at turtles and fish separately.
 4            But the marine mammals we split into five
 5  groups.  You have the cetaceans, the dolphins,
 6  whales and porpoises split into three different
 7  groups; a low-frequency group, a mid-frequency group
 8  and a high-frequency group.
 9            Then you have seals and sea lions split
10  into two.  Those in air and underwater, because
11  they're amphibious and they're very different.
12            The sound types, I mentioned the
13  difference between bang kinds of sounds and sounds
14  that are on all the time.  They have different
15  effects we know on hearing.  So we split them into
16  what we call pulse and nonpulse.  Then you can have
17  one and you can have a whole bunch.  So there's
18  multiple and single.  So there's four different
19  sound types.
20            We look at the onset of injury and the
21  onset of behavioral disturbance separately.  So
22  there's two different effect magnitudes.
23            And two different measurements of sound.
24  I mentioned the fact that the 160 and 180, it has no
25  reference to time.  You could have 159 for 24 hours
                                                     111
 1  and 160 for one second, and the 160 would trip it,
 2  and the 159 wouldn't.  That doesn't make any sense.
 3  The second -- but you have to take into account that
 4  first measurement, which is what we call sound
 5  pressure, the db levels that you're probably
 6  familiar with.
 7            But this second one here is really
 8  important because it's got this time in here.  It's
 9  got seconds built into the metric.  So that way, by
10  using this metric, the example that I just gave, the
11  159 for 24 hours would cross this threshold.
12            Whereas 160 or maybe even 180 or 190 for
13  one second wouldn't.  It equates in terms of time.
14            So these are the four breakdowns, and it
15  looks like this; five animal groups, four sound
16  types, two effect levels and two exposure metrics.
17            So you have a total of 80 possible
18  criteria instead of two.  So again, this is a pretty
19  daunting kind of task to undertake.  But -- and it's
20  a pretty large extension from a very simple criteria
21  to something which is much more complicated.
22            It says "possible" because some of these
23  probably for now are going to have X's in them.  We
24  just don't know enough to say this would be the
25  criteria under this condition for these group of
                                                     112
 1  animals.
 2            But ultimately, it will be filled out with
 3  information that we don't have.  Currently we have
 4  as many as eight.
 5            I'll just mention briefly a few things
 6  because I know I'm running short on time.
 7            I already alluded to pile driving.  The
 8  Department of Transportation in about six states,
 9  primarily under California, are having a series of
10  meetings where they're dealing specifically with
11  pile diving issues.
12            This is something that various states, not
13  just coastal states, also states that are driving
14  piles in fresh water, are dealing with pile driving
15  issues and endangered species.  It really is an
16  emerging issue that we're increasingly dealing with.
17            We are in the process of doing the same
18  development of criteria for fish and turtles.  This
19  is -- in terms of the Endangered Species Act, this
20  falls under our mandate.
21            But the criteria that would develop for
22  fish and turtles would be available to other people
23  who would be interested in considering acoustic
24  exposure beyond endangered species.
25            The criteria that I described a minute
                                                     113
 1  ago, they basically deal with single exposures.  We
 2  know that cumulative exposures and effects on whole
 3  ecosystems, if you affect fish or other prey items,
 4  you can have effects on higher levels.  So whole
 5  ecosystem level and population level effects.
 6            There are extensions of the current
 7  criteria, but we're basically at step one of about
 8  five, and we're having a hard enough time doing step
 9  one.  But we see that down the road there will need
10  to be consideration of ecosystems and populations.
11  So as the criteria is being developed, we're
12  recommending the kind of research you would need to
13  get to those levels.  We're not nearly there yet.
14            Another big issue that we're increasingly
15  dealing with is the change in the shipping industry
16  to what is called short sea shipping, rather than
17  making one major stop in a big port, making a number
18  of stops at smaller ports, as well as liquid natural
19  gas offshore sites that involve sound in the form of
20  construction, as well as operation costs.
21            Their habitat is used for other things
22  related -- not related to sound as well.
23            So these are some of the things that are
24  kind of on the horizon.
25            I want to give a highlight to some of the
                                                     114
 1  work that is going on at the University of Hawaii,
 2  Coconut Island, and explain how it fits into the
 3  criteria just briefly.
 4            This is a dolphin that is doing a hearing
 5  test in these floating pens that we'll see when we
 6  go out there.  They've done some work on what's
 7  called temporary threshold shift, or TTS.  This is
 8  something that happens in you.  It's something that
 9  happens normally in marine mammals.  But it's kind
10  of an indicator for the fact that you're using a
11  sound that's starting to affect the auditory system.
12            You're holding your two-year-old, your
13  two-year-old is screaming in your ear, your hearing
14  actually changes.
15            Or if you got to a concert, you come out
16  and your ears are kind of ringing a little bit, you
17  can't hear as well.  It comes back.  It's temporary.
18  There are structures in your ear -- they get tired,
19  basically, listening to sound and they change.
20            What has been done at the research labs
21  that are looking at this is you train the animals to
22  do a hearing test.  Then you train them to sit there
23  and listen to noise, and then you do another hearing
24  test, and then you look at the difference between
25  the data between them.
                                                     115
 1            Without belaboring the details too much,
 2  in this plot the colored-in ones are sessions where
 3  the hearing changed in that context, and the open
 4  ones are ones where it didn't.
 5            This is from a whole bunch of work, but
 6  the Hawaii Institute of Marine Biology work is out
 7  here.  This is duration on this axis, and a whole
 8  bunch of other loudness factors out here.  But the
 9  HIMB work is out there.
10            What you could do is by looking across a
11  whole bunch of durations.  So this is the noise is
12  on for less than a second, one second, and their
13  work was for 50 minutes.  Take the same animal,
14  bottlenose dolphins, do the exposures where it's
15  either very brief or very long, and then look at
16  what happens.
17            So here you can see if the sound is very
18  brief, it has to be loud to get an effect.  As it
19  gets longer, it doesn't have to be quite as loud.
20  the ear is getting tired in different ways.
21            Now this one, this is the metric -- this
22  is probably hard to see, but we have the time
23  factored in.  You can see that these things even
24  out.  This line, there's a flat line that connects
25  these.  So you have this line, you say, below here
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 1  you're probably not going to get hearing loss, and
 2  above this line you probably will.
 3            But you can see that without the HIMB data
 4  it would be sort of difficult to draw that line.  I
 5  mean, you could, but it gives you sort of more
 6  predictive power because they are the only ones who
 7  have dealt with these long-duration exposures.
 8            So their work has been really useful.
 9            This line, this figure right here, has
10  been incorporated in the criteria in making
11  predictions about hearing loss directly.  It's the
12  criteria, this 195 figure right here is one of the
13  criteria for cetaceans.
14            Another interesting kind of work they're
15  doing out there is what is called auditory brainstem
16  response.  This is done -- it looks kind of scary
17  because they have these electrodes all over the
18  animal.  You do this with human babies, where you
19  put electrodes on and play sound, and you measure
20  neural activity, you measure brain activity, and you
21  can get a sense for how the hearing system works
22  just by measuring the neural signals.
23            It is a new technique that is applied to
24  marine mammals, but they're doing some of the
25  primary work out here at HIMB on a variety of
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 1  cetaceans.
 2            This is a stranded sperm whale that they
 3  have here in Hawaii, and looking at these ways of
 4  measuring hearing.  The upside of it is you don't
 5  have to train the animal.  In this work the animals
 6  are trained.  So you can only have -- you're limited
 7  to a very few number of individuals.  It takes a
 8  long time to train them, but it takes a long time to
 9  do it.
10            In this sense you can obtain data in
11  minutes, a few hours, and the animals don't have to
12  be trained to do it.
13            There are some downsides to it, but we're
14  working and we're directly funding some of this work
15  to develop the ABR technique, at the same time as
16  continuing to enhance the behavioral methods.
17            So that's two of the interesting things
18  that have gone on under Dr. Nachtigall.
19            Whitlow Au also at HIMB has done some
20  really important work.  He wrote a book called,
21  Sonar of the Dolphin.  He's the primary -- one of
22  the leading researchers on sonar systems in
23  dolphins. and made some other interesting
24  measurements of sounds from humpback whales and
25  things that fit into predictive models for
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 1  estimating impacts.
 2            So I'll kind of close here by identifying
 3  some future research and ongoing stuff that we are
 4  involved with.  A lot of this is partnerships with
 5  ONR, the Office of Naval Research funds the majority
 6  of work on acoustics and marine mammals.  We have a
 7  small part to play, the National Science Foundation
 8  increasingly, and other funding agencies.
 9            There's ongoing work, including here at
10  HIMB, to improve the acoustic criteria by measuring
11  direct effects of sound on hearing and increasingly
12  things like stress hormones in lab animals.
13            Now, this is kind of all really future
14  research.  It might surprise you that there is not a
15  coherent effort, a systematic effort, underway to
16  measure sound under water and how it may be changing
17  over time.  There are bits and pieces happening in a
18  range of different context for people -- that are
19  using passive acoustics to measure underwater sound.
20            But in my view, this is one of the
21  greatest needs in the field, to systematically
22  measure -- place acoustic devices to measure
23  underwater sound.  This could be used to assess the
24  magnitude and trend in ambient noise.
25            Do we know that ambient noise is
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 1  increasing because of humans?  Some people assert
 2  that.  There's not very much evidence for it, but we
 3  haven't done this systematically.
 4            Doing what we call acoustic budgets, where
 5  you say this percentage of the noise in this area
 6  comes from these sources, human and natural, how are
 7  they changing over time.
 8            There would be a lot of advantages to this
 9  in terms of other things you would develop.  We've
10  seen this.  The Navy developed this system called
11  SOSIS, an underwater surveillance system that was
12  integral in the Cold War in submarine activities,
13  detecting Russian subs, and things like that.
14            They've turned over some of the data that
15  they obtained to marine biologists.  A wealth of
16  information.  You put devices out there and there's
17  a lot of things you can do in terms of sensing
18  animals who are vocalizing that currently the
19  comprehensive test band in the Indian Ocean has a
20  lot of devices out there for monitoring underwater
21  nuclear explosions.  They've turned some of that
22  information over to marine biologists.
23            The point is, you develop a system for
24  passive acoustics and there is a lot of things you
25  can do with it, but no one is comprehensively doing
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 1  it right now.
 2            Doing modeling to get the cumulative
 3  effects and population model effects is an important
 4  next step.
 5            We're trying hard to develop a sort of
 6  more comprehensive science program in acoustics that
 7  would involve a range of different components within
 8  NOAA.  A lot of the capabilities of measuring
 9  effects of noise on marine mammals right now are in
10  academia.  So we just raise the question, does NOAA
11  need to enhance its own expertise, possibly in
12  conjunction with scientific partners or other
13  government partners.
14            But I think we have some momentum in NOAA
15  going to develop our own scientific techniques.  I
16  think we realize that this is an issue that's not
17  going to go away.  It's an issue that's going to be
18  facing the Agency for decades, and we're really
19  trying to move forward with it proactively.
20            Here is where we are in the criteria and
21  here is where you all potentially come in.  This is
22  sort of a two-part effort.  The science panel is
23  going along on its track, which looks like this.
24  The criteria, as I said, has been going on for about
25  five years.  I know that a lot of people are pretty
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 1  anxious for it to come out.
 2            They're having another meeting at the end
 3  of March with the goal of coming out of that meeting
 4  with manuscripts submitted sometime a few months
 5  after that, that would be published.  We've already
 6  worked with the Journal of Acoustical Society of
 7  America that publishes a special publication, that
 8  would go pretty quick in terms of the publication
 9  scheme.  It would undergo a whole host of peer
10  review and would be released in the open literature.
11  It would be free for anybody, for any government,
12  anyone to use.  It's separate.
13            This is the way that this was done in the
14  human literature.  There was a science process and
15  there was a policy process.  We have the same thing
16  going on here.
17            Under the policy guidelines, next week and
18  the week after we have four public scoping meetings;
19  San Francisco, Seattle, Boston, and Silver Spring.
20  So that's the beginning of that process.  If the
21  Agency were to base its changes in policy on these
22  acoustic science-based guidelines, what would that
23  look like.  What would be the considerations that
24  you would have to take into account.
25            We expect a Draft EIS by the end of the
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 1  year, or possibly early next.
 2            Laurie Allen asked me to make this
 3  following point, when the public review of the Draft
 4  EIS is going on, would this committee, or some
 5  version, some subgroup of this committee, consider
 6  reviewing the Draft EIS.
 7            Expect the Final EIS sometime in 2006, and
 8  then implementation of the policy guidelines.
 9            I think that's it.
10            MR. HOGARTH:  We would request that this
11  group really take a look at this.  We think it is
12  important that we sort of -- a milestone in some of
13  this work, MAFAC would be the place to have this
14  review.  So we can well expect some controversy
15  surrounding it.  But MAFAC is sort of set up for it
16  and this group would very good to take a look at it
17  and give us your comments to help us through this
18  process.
19            MR. OSTERBACK:  Okay.  My understanding,
20  you're going to be on the bus with us?
21            MR. SOUTHALL:  Yes.
22            MR. OSTERBACK:  So I think what I'll do is
23  have a question-and-answer session on the bus on the
24  way out, because I know everybody has been up since
25  before five this morning and we want to have some
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 1  lunch before we leave at 12:30.  So if that's okay
 2  with everyone.
 3            Laurel has a couple announcements to make
 4  before we break.
 5            (Brief logistical announcements)
 6            (Meeting adjourned for the day at 11:42
 7  a.m.)
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