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Project Name: Alaska Seafood Processing

TELEPHONE CALL RECORD

Outgoing Call Date: July 2 3 , 2010 Time: 5:45

– 6:11 PM

Company Name: Alaska Fisheries Development Founda tion Contact Name: Jim Browning

Phone No.: (907) 276

- 7315

Name: Betsy Bicknell, ERG

GENERAL SUBJECT : Appointment for in person meeting to discuss EPA’s seafood processing study



### TOPICS DISCUSSED AND ACTION TAKEN

Mr. Browning and I agreed to meet at 11 AM on Tuesday, August 10 at his office in Anchorage. He will have a speaker

phone so we can teleconference Don Anderson and other interested EPA folks. I explained that EPA’s study was focused

on the processors located in non

- remote areas and that ERG is tasked with estimating the cost for processors in those areas

to comply with the BPT regulations for TSS and O&G. I also explained that we plan to analyze two approaches:

screening and hauling for ocean disposal and by product recovery. I a lso mentioned that EPA had sent a questionnaire to

9 seafood processing companies that operated in the non

- remote areas.

Mr. Browning was not familiar with the study and I told him I would send him the pdf for the Fact Sheet and a blank

questionnaire.

I asked if he planned for anyone else to join us. He hadn’t planned to, but after we talked he mentioned that he would

contact some producers to see if they could come to the meeting (it is the season, so it may not be possible).

Mr. Browning suggeste d that our tour of the southeast AK seafood processing centers should include Sitka. He described

a planned byproduct recovery project, called Mountlake Mining Process (contacts: Peter Stitzel 206 579

- 3075 and Pete

Nicklason 206 683

- 8403, both in Seattle ). Financing for the project was first supposed to be the USDA Rural

Deveopment (AFDF was going to participate). At this point, funding will be provided by Alaska Industrial Development

and Export Authority ( http://ww w.aidea.org/ ). They are providing $3.5 million for conversion of a portion of the

abandoned timber mill on Sawmill Bay in Sitka. Silver Bay Seafood is already operating on the site, but the new facility

will be cooperatively owned and take waste from th e 3 major processors in Sitka Sound, as well as the many charter boat

operations. The project is expected to generate $0.5 million/year in revenue. The plant is supposed to be operating by the

2011 fishing season.

The project is expected to handing 16 m illion lb/waste per year. The airport and FAA are behind the project because the

Sitka airport has the highest incidence of bird strike in the country. The proposed process is a modified silage process,

using low temperature acid hydrolysis (propionic ac id). The waste will be acidified soon after it is generated and then

stored in tanks and processed further later. Products would include meal and oil. Possibly also bone meal and

chondroitan sulfate from the fish heads. Supposedly, products made via thi s low

- temperature process are superior to those

made in high temperature processes.

Mr. Browning said the market for fish byproducts is global. There is some market in Alaska. Salmon fish hatcheries will

use meal from herring waste (not salmon; salmon w on’t eat salmon). Herring season is March/April. Mr. Browning noted

that prices for byproducts have increased dramatically in the last 5

– 7 years, with the price of meal increasing by 4X (i[ tp

$1500/MT) and the price of oil “ exorbitantly .”Need to return call by / at/between and

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Mr. Brown ing mentioned that AFDF had requested a federal appropriation through the office s of Congressmen Begic h

and Young and Senator Murkowski . This would be another cooperative, but for the Bristol Bay (Naknek) area. Browning

didn’t predict whether t his money would come through.

I asked about seafood processors in the Anchorage area. He thought that Copper River was just warehouse and business

offices (their processing facilities are in Cordova). He mentioned Great Pacific and a second one I couldn ’t understand

(sounded like Basbeo or Vasbeo).Need to return call by / at/between and

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Project Name: Alaska Seafood Processing

TELEPHONE CALL RECORD

Outgoing Call Date: July 22, 2010 Time: 4:00 PM

Company Name: U of AK Fishery Industria l Technology Center Contact Name: Scott Smiley

Phone No.: (907) 942

- 0184

Name: Betsy Bicknell

GENERAL SUBJECT : Schedule a meeting on August 17, 2010 and



### TOPICS DISCUSSED AND ACTION TAKEN

Scott Smiley and I planned to meet at 10 AM on Au g 17. I asked if there was anyone else that I should meet with at FITC

and he suggested Peter Bechtel, who works for USDA Ag Research Center, located at the FITC. We agreed that Peter

would join us for the meeting.

I described EPA’s focus on the “non

- remote” areas in southeast Alaska. Dr. Smiley commented that the type of fish

processed in SE (mostly salmon) is completely different than the type processed in Kodiak. Smiley said the Kodiak

fishmeal plant processes 1600 tpd of wet waste and that we’d n ever see that amount in the “non

- remote” locations. He

mentioned two byproducts plants in the southeast and recommended we visit them:

Icicle, Petersburg

Seward plant (I’m not sure of the operator)

I asked what processes were available for the small SE producers. Smiley mentioned that there was a wet reduction

process by Alfa Laval (Illinois manufacturer of dairy equipment) designed for 25

– 250 tpd. He didn’t think this was a

good process.

I asked what was available for the smallest processors. Smil ey suggested enzymatic hydrolysis (not acid). The product

from acid hydrolysis is low value

– only usable for fertilizer. Not for animal feed because it is too bitter. Value doesn’t

even pay for hauling it to Seattle.

Enzymatic hydrolysis is in commerc ial use, but not in Alaska. It can be used for <25 tpd facilities. The product is better

tasting and can be used for animal feed.

Smiley recommended that I read the proceedings from the 2003 Alaska Sea Grant byproducts conference for more

background in formation. He said that the proceedings from the 2009 conference weren’t out yet, but are due this summer.

There is very little market for by

- products in Alaska. Most is sold to Asia under long

- term contracts.

Smiley cautioned that there is a lot of hyperbole about the quality of products made from fish by

- products, but no facts or

testing. There are no standards of purity.

FITC is attempting to study by

- products economics but has difficulty getting production information. He mentioned that

even th e National Marine Fisheries Service has trouble getting information out of the processors. I explained that EPA

had distributed a questionnaire and the recipients are legally required to respond. He was skeptical that they would

respond unless they thoug ht it was in their best interest. Smiley noted that there is already a lot of chatter among the

processors about the changes to the general discharge permits.Need to return call by / at/between and

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Project Name: Alaska Seafood Processing

TELEPHONE CALL RECORD

Outgoing Call Date: July 22, 2010 Time: 5:45

– 6:11 PM

Company Name: Alaska DEC Contact Na me: Sharmon Stambaugh

Phone No.: (907) 269

- 7565

Name: Betsy Bicknell, ERG

GENERAL SUBJECT : Appointment for in person meeting



### TOPICS DISCUSSED AND ACTION TAKEN

Sharmon Stambaugh will arrange for me to meet with her and several other ADEC people . We will teleconference with

Don Anderson and others. We agreed on a meeting from 9

– 10:30AM on August 11, 9, or 10. She will check her

colleagues ’ schedules and let me know the day that works best for ADEC.

Sharmon asked who I was meeting wi th at the Fishery Industrial Tech Center in Kodiak. I explained I was meeting with

Scott Smiley and Peter Bechtel. She had planned to meet with Bechtel at some point but hasn’t scheduled it, yet.

She mentioned that she had attended the seafood conferen ce that was held in Anchorage in May and had atten ded many

presentations about other countries are using seafood waste. She noted that I planned to meet with Gunnar Knapp, an

economist at U Alaska Anchorage (UAA). She said she liked his presentation, tho ugh his discussion of the current

discharge regulations was not completely accurate. She mentioned that at some point A DEC may need to contract with

Institute of Social and Economic Research (IS ER ) at UAA, and it would be good for him to better understand the regs.

I confirmed that the visits that Lindsay and I plan to make to seafood processors are NOT inspections and have nothing to

do with enforcement.

Sharmon discussed the fact that ocean dumping requires a discharge permit (not an NPDES permit) an d there is not an

easy way for facilities to get a permit. She suggested that we meet with Chris Meade, EPA Reg 10, Juneau, when we are

in Juneau, to learn more about permitting ocean dumping.

When I asked how far off shore dumping was required to take p lace, Sharmon explained the regs said at least 120 feet

deep, 1 mile from shore, and with the vessel moving at 5

– 6 knots. She mentioned the complicating factor of what is a

state water vs an US water. For example, Cook Inlet is all state waters.

Becau se it was mentioned by James Browning, of Alaska Fisheries Development Foundation (seafood trade association) I

asked Sharmon if she was familiar with the report done be the Prince William Sound Science Center in Cordova about the

impacts of various sized fish chunks . They basically found that fish waste macerated to less than 0.5” accumulated on the

bottom and became anoxic while big chunks were either eaten or degraded faster . She admitted she wasn’t a biologist,

but she had heard from divers who observe d large piles of undegrad ed macerated waste. She was inclined to think big

chunks were better.

I emphasized that the current study is only focused on the response to the petition about the ELGs for non

- remote

processors. I concluded that I would avoid d iscussion of the PWSSC study when I speak to Browning and focus on

byproducts.