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Meeting Report : Alaska Fisheries Development Foundation , Anchorage, AK. 8//10 /2010 11:00 AM to 12:20 PM Participants James Browning, Executive Director Alaska Fisheries

Development Foundation Don Anderson U.E. EPA Washington, DC Zaya 

### Ponomareva AFDF Betsy Bicknell ERG Glenn E. Reed, President Pacific Seafood Processors

Association, Seattle Kathleen Wu ERG, Chantilly, VA Doug Donagan Environmental Consultant,

representing several processors Anne Jones ERG, Lexington, VA Mark Sheer Attorney, repr esenting

several processors Mike Clutter Icicle Seafoods Chris LaCroix Copper River Seafoods Chris Norris Icicle Seafoods Slim Jorgen Yard Arm Knoll (?) Betsy Bicknell (ERG) provided Jim Browning, AFDF, with these notes for his review. No comments were received from AFDF and the notes were finalized as delivered on Octob er 25, 2010. Betsy Bicknell (ERG) met with Mr. Browning, Ms. Zaya, Mr. Reed, and Mr. Donagan in person on Tues day morning, August 10 2010. Other participants listed above joined the meeting by phone. Prior to the me eting ERG had provided a list of potential discussion topics (attached)

. D **on Anderson (EPA/OW/EAD) began the meeting by providing a retrospective of the national regulations that apply to seafood processing faciliti**  **es in Alaska.** In 1974

- 5, EPA established regulations for seafood processing in the U.S., including regulations that were specifically crafted for Alaska. For certain parts of the Alaska seafood processing industry, EPA set two levels of limits. Less stringent limits required that waste be ground to less than 0.5” prior to discharge. For seafood processing centers, called “non

- remote” areas in the regulations, EP A set limits for TSS and oil and grease, based on screening solids from the wastewater and th eir off

shore disposal. Mr. Anderson explained that Alaskan seafood processing industry representatives challenged the regulations in court. The court upheld EPA. In 1980, exercising its right to petition, industry petitioned EPA to change the regulati ons because they were too costly. EPA suspended the regulations in 1980, while considering the petition, and has never lifted the suspension. In January 1981, EPA published a proposed a response to the petition. In the proposal, EPA found that Juneau shou ld be reclassified as “remote,” while Ketchikan, Petersburg, and Cordova should retain the classification of non

- rem ote and the more stringent regulations. While evaluating the petition, EPA evaluated two alternatives for managing the seafood processing w astes: 1) screening and barging for ocean disposal and 2) byproduct recovery. EPA Region 10 developed a General Permit for seaf ood processing industry in 2001. Comments on the proposed permit encouraged EPA to respond to the 1980 petition and encourage waste recovery through byproduct recovery. EPA has started the re

- evaluation process, beginning with collecting information reflecting the current state of the industry. In April 2010, EPA sent a questionnaire to nine seafood processing companies with ope rations in Ketchikan, Petersburg,

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Cordova, and Juneau. EPA requested information about costs, revenues, technologies, and related issues. EPA will use this information to evaluate the economic impacts of reinstating the suspended regulations. EPA will e valuate primary economic impacts, such as loss of profit, line closures, plant closures, and job losses. EPA will also evaluate secondary economic impacts on the communities in which the processors are located and foreign trade. Responses to the questionn aire are due October 1. To supplement the information collected by the questionnaire, EPA is conducting a series of meetings and site visits in Alaska, August 9

– 19. Betsy Bicknell, from ERG an EPA contractor, and Lindsay Guzzo, EPA Region 10, will vis it seafood processing and byproduct recovery plants in Ketchikan, Petersburg, Juneau, Cordova, and Kodiak They will meet with other stakeholders (industry, Alaska government, academic). Mr. Anderson explained the timeline for the response to the petitio n. EPA plans to publish a Notice of Data Availability (NODA) in the Federal Register in January 2011. In addition to describing the data that EPA has collected, Mr. Anderson that the NODA will describe EPA’s anticipated response to the 1980 industry peti tion. The NODA will be open for comment. Mr. Anderson hopes that EPA will be able to publish a response (including implementing regulation) to the 1980 petition by August 2011. Mr. Browning asked about the timing of the EPA information collection activi ties, May

– October, the busiest time in the seafood processing industry. Mr. Anderson responded that he understands the industry cycle and appreciates that the industry will provide the good data that EPA needs to make good decisions. Mr. Clutter, from Icicle Seafoods (which operates three seafood byproduct recovery facilities integrated with seafood processing) commented that he appreciated the opportunity to provide industry perspective. He appreciates that EPA will give weight to comments from folks who have been in the business over the years. He noted that there is not a one

- size

- fits

- all approach to managing seafood processing waste. Ms. Bicknell noted that prior to the meeting, Mr. Reed asked if locations to which the regulations for “remote” areas apply might be re

- classified to “non

- remote.” Don Anderson explained that Kenai and Dutch Harbor could be reclassified as non

- remote. EPA would need to publish its intent and take comment on the proposed change, before any change would take affect. Although this would be a separate action from the petition response, it would likely be done at the same time. Ms. Bicknell explained that the existing regulations are effluent guidelines for total suspended solids (TSS) and oil and grease (O&G). The se guidelines are used by the permitting authority (in this case, ADEC) to develop permit discharge limits. Ms. Bicknell noted that permit limits may be more stringent than the guidelines (and include limits for additional pollutants) as needed to protect water quality. She also noted that although the limits are based on technologies that EPA has determined are technically feasible and economically achievable, facilities may use any approach they can devise to meet their permit discharge limits.
Mr. Do nagan asked if EPA was considering changing the effluent guidelines for remote areas. Mr. Anderson responded that it is possible, but not likely. The focus of the current effort is response to the 1980 industry petition, that is, the guidelines for land

-based non

- remote facilities.

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Mr. Reed asked if the criteria for what is remote or non

- remote are included in the Clean Water Act. Mr. Anderson explained that the CWA requires EPA to consider factors such as the age and location of facilities as it devel ops guidelines . The criteria EPA used to classify Alaska seafood processing centers as “remote” or “non

- remote” are discussed in the 1975 Development Document. They are also discussed in the 1980 Industry Petition and the Agency’s proposed response. The se documents are on the seafood processing questionnaire website. EPA’s response to the industry petition will not change the criteria. Mr. Reed commented that most of the questions on EPA’s list of discussion topics seem focused on the economics of the byproducts production. He encouraged EPA to get specific information from the few stand

- alone by

-products plants about their economics. He asked if EPA would account for price fluctuations in its analysis of the economic achievability. Ms. Jones expla ined that EPA will conduct numerous analyses of the sensitivity of the analysis outcome to price fluctuations and other factors. Mr. Anderson discussed the current planned visits to secondary by

-products plants. The visits could be followed with tailo red information requests, similar to the questionnaire sent to seafood processors. He noted that information provided by the industry may be claimed as Confidential Business Information (CBI). The industry needs to protect its information, but other stakeholders want to know how EPA made its decision about the petition. Sometimes, when there are limited numbers of facilities, EPA must screen the information it releases even more. Mr. Reed expressed a concern that during the plant visits the production people will tell EPA that they can do anything, without considering if it is economical. Mr. Browning asked if the economic analysis would include energy and transportation costs. Mr. Anderson confirmed that it would. Mr. Reed noted the impact of inc reased energy demand might be different in small Alaska communities than elsewhere. This is because the electric power in coastal towns is generated by diesel powered generators. Increased energy demands would require burning more diesel (to generate ste am or to generate electricity). Meeting participants discussed additional permitting requirements of changing current disposal practices. Ocean disposal of screened wastes will probably require an ocean dumping permit. By

-products production is not ze ro discharge and will require a modified NPDES permit (with limits developed from the byproducts subcategory). Air permits may also be required. All participants noted that rendering processes generate obnoxious odors, so odor control must be taken into account in the development of byproduct recovery facilities. Mr. Reed noted that the scale of facilities for southeast Alaska will be quite different than Kodiak, where they have 54,000 tons input He also mentioned that production information is publicly available at seafood.com Doug Donogan agreed that investments would be required for odor control. He also suggested that EPA account for the impact of additional byproducts (oil and meal) into the word markets. Would adding Alaska production increase th e supply enough that prices would be depressed. Mr. Reed suggested that EPA research Omega Protein. Itconsidered starting a meal production plant 10 years ago, but did not do so because it didn’t “pencil out.”

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Mr. Browning recalled a panel discussion that took place at the February 2009 conference in Portland, OR, focused on fish processing byproducts. He recalled some of the panelists (Joel Cougor, Aleutan Protein; Tony Bimbo, seafood economist) declared that the Alaskan seafood processing industry wa s “sitting on a goldmine.” The industry participants in the meeting scoffed at this characterization of seafood processing wastes. They noted that there is a resource, but the size of the waste stream is critical in determining if byproducts can be recov ered economically. They noted Dutch Harbor has 350 million pounds per year in a 10 month season (white fish and salmon), vastly different than the amount of fish processed in the non

- remote processing centers in southeast. Mr. Anderson mentioned that E PA will compare the cost of screening and barging for ocean disposal to the cost of byproduct recovery. Because byproduct recovery has some payback, it may be a lower cost waste management alternative, even if it doesn’t pay for itself. Mr. Reed stressed that if the seafood processing facility doesn’t operate in the black it will not be operating. Ms. Bicknell asked if the meeting participants were aware of other uses of fish processing waste. Mr. Browning mentioned that someone in Sitka had used fish waste to produce biodiesel. They found that this biodiesel production required more energy than it produced. None of the meeting attendees was aware of the anaerobic digestion of fish processing waste to generate methane. Ms. Jones asked what critical factors determined if seafood processors produce byproducts from their processing waste. Mr. Clutter explained that the volume of waste and the length of the season are critical factors. In terms of location, he noted that in the non

- remote locations that are the focus of EPA’s study, when they are processing salmon it overshadows any other species. Icicle operates three byproduct plants. They produce both meal and oil. They have found it is not economically feasible to produce meal without oil.
Mr. Reed suggested that most processors think about producing byproducts every year, but if they can’t do it profitably, they won’t do it. Location: tidal flow moves effluent away versus a sheltered bay, like Sitka, where the wastes accumulate.

Mr. Clutter noted that EPA’s discussion points asked about a processor sending its waste to another facility or take waste from someone else. He felt both approaches had elements that were outside the processors control and for this reason were not likely to be pursued. What would a producer do if the other facility had an equipment breakdown or other event and refused to take their waste? If they were taking waste from another facility, they would have little control of its quality (e.g., freshness, whether i t had metal contaminants that could harm the processing equipment), The group discussed other impediments to by product recovery: odor issues, possible need for an air permit (because of burning more diesel). After the meeting broke up, Mr. Browning mentioned a byproduct recovery project planned for Sitka, called Mountlake Mining Process (Pete Nicklason’s project). He said that Alaska Import Export Development Authority (AIEDA) was close to committing funds to finance the project and that AIEDA was doing its “due diligence.”