### Source: SCIENTIFIC FISHERY SYSTEMS, INC. submitted to

PHASE II: RURAL COASTAL ALASKA FISH WASTE CONVERSIO N

PROJECT DIRECTOR: SIMPSON, P. K.

PERFORMING ORGANIZATION (N/A) SCIENTIFIC FISHERY SYSTEMS, INC. ANCHORAGE,AK 99524

NON TECHNICAL SUMMARY: The Alaskan fishing industry produces over one mil lion metric tons of by

product and waste annually. Rural coastal Alaska co mmunities have been using the grind and dump method for decades. There is an opportunity to expand exis ting onshore processing in rural coastal communitie s and provide additional economic value from fish waste a nd, simultaneously, reducing or eliminating the imp act of current fish waste disposal practices on the local community. There are more than 200 fish processing plants in Alaska, however, fish waste processing occurs at only ten of largest shore-based plants that extrac t fish meal and fish oil for use as aquaculture feed ingre dients for fish and shrimp and as livestock and pou ltry feed ingredients. These waste processing facilities proc ess 400 metric ton (400 MT) of waste per day, or mo re. The cost for these plants is several million dollars, t hey require a tremendous volume of fish that is onl y available at a small number of ports, and they are expensive to operate. In addition, the fish processing plants with waste recovery facilities focus the majority of the ir processing on Pollock and Cod, with only a fract ion of their throughput dedicated to salmon. The majority of the smaller processing plants are dominated by the sea sonal salmon processing, which makes the economics of the se ventures more difficult. For years there has bee n a need to develop fish waste processing equipment tha t is significantly smaller and less expensive than current systems, opening up the opportunity for more than 1 00 smaller seafood processing plants to extract gre ater value from their product. Despite many feasibility analyses that have been conducted over the past twe nty years, affordable fish waste processing equipment w ith a small footprint has not been introduced and demonstrated that can serve these smaller rural coa stal processors because of a combination of high ri sk and lack of capital. Recently, the prices for the two p rimary salmon byproducts, meal and oil, have increa sed dramatically because the marketplace places a premi um on human-grade salmon oil and salmon meal. The demand for Wild Alaskan Salmon meal and oil has cha nged the economic potential for processing salmon waste at lower volumes at the smaller scale seafood processing plants that serve rural coastal Alaska.

OBJECTIVES: During Phase I, Scientific Fishery Systems, Inc. ( SciFish) developed a plan that is economically viable for production of salmon waste at 25 MT per day, a sixteenth of the capacity of the current fis h meal/oil production facilities currently in place in Alaska. The concept of operations focuses on retaining foo d-grade processing of fish waste, which is not retained wit h the existing plants, hence limiting their markets to animal feed. The following technical objectives shall be a ddress during Phase II: Install and operate a 25 MT fish meal/oil plant in Cordova Alaska for two consecutiv e salmon seasons. Demonstrate that the quality of t hese products substantiates a premium price that justifi es the capital investment needed for future systems

. Develop an expansion plan that will allow the proce ss developed and demonstrated in Cordova to be appl ied at other similar size seafood processing plants acr oss Alaska.

APPROACH: SciFish has formulated a set of seven tasks to ach ieve the Phase II objectives. These tasks include the following: Task 1: Plant Installation T he purpose of this task is to install the 25 MT fis h meal/oil plant defined during Phase I and make the system op erationally ready for operations during the salmon season. Task 2: Plant Operations - Season 1 The pur pose of this task is to operate the fish meal/oil p lant for an entire salmon season - May 15, 2010 to September 15, 2010. Task 3: Evaluate Plant Performance The purpose of this task is to evaluate the performance of the meal/plant operation during the first seaso n and determine areas where improvements can be made. Tas k 4: Refine/Modify Plant & Operations The purpose o f this task is to identify areas within the existing fish meal/oil plant where further refinements could be made both to the plant and its operations that would res ult in improvements to the product, efficiencies in the processes, and ultimately increases in the economic feasibility this and future projects. Task 5: Plan t Operations - Season 2 The purpose of this task is t o operate the fish meal/oil plant for a second enti re salmon 

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4/7/2010 http://www.reeis.usda.gov/web/crisprojectpages/218654.htmlseason

- May 15, 2011 to September 15, 2011. Task 6: Expans ion Plan The purpose of this task is to begin

the process of expanding the number of 25 MT meal/o il plants to other locations across Alaska. Task 7: Reporting The purpose of this task is to report the progress of this project on a regular basis throug hout the duration of Phase II.

CRIS NUMBER: 0218654 SUBFILE: CRIS PROJECT NUMBER: ALKK-2009-01113 SPONSOR AGENCY: NIFA PROJECT TYPE: SMALL BUSINESS GRANT PROJECT STATUS: NEW MULTI-STATE PROJECT NUMBER: (N/A) START DATE: Sep 1, 2009 TERMINATION DATE: Aug 31, 2011

GRANT PROGRAM: SMALL BUSINESS AND INDUSTRY GRANTS GRANT PROGRAM AREA: Small Business

CLASSIFICATION HEADINGS KA608 - Community Resource Planning and Development KA403 - Waste Disposal, Recycling, and Reuse S3799 - Cultured aquatic animals, general/other F3010 - Economics G6.2 - Enhance Soil Quality for Productive Working Land s G3.1 - Economic Opportunities for Growth

RESEARCH EFFORT CATEGORIES

KEYWORDS: fish waste~fish oil~fish meal~rural economic development~a laska~salmon

PROGRESS: TO (N/A)

IMPACT: TO (N/A)

PUBLICATION INFORMATION: TO

PROJECT CONTACT INFORMATION CLASSIFICATION Knowledge Area (KA) Subject (S) Science (F) Objective (G) Percent

403 3799 3010 6.2 60%

608 3799 3010 3.1 40%

BASIC (N/A)%

APPLIED 100%

DEVELOPMENTAL (N/A)%

NAME: Simpson, P. K. PHONE: 907-563-3474 FAX: 907

- 563

- 3442 

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### Source: SCIENTIFIC FISHERY SYSTEMS, INC. submitted to

RURAL COASTAL ALASKA FISH WASTE UTILIZATION

PROJECT DIRECTOR: SIMPSON, P. K.

PERFORMING ORGANIZATION (N/A) SCIENTIFIC FISHERY SYSTEMS, INC. ANCHORAGE,AK 99524

NON TECHNICAL SUMMARY: The Alaskan fishing industry produces over one mil lion metric tons of by

product and waste annually. Rural coastal Alaska co mmunities have been using the grind and dump method for decades. There is an opportunity to expand exis ting onshore processing in rural coastal communitie s and provide additional economic value from fish waste a nd, simultaneously, reducing or eliminating the imp act of current fish waste disposal practices on the local community.

OBJECTIVES: Scientific Fishery Systems, Inc. (SciFish) has for med a team that will develop a production plan for storing and processing fish waste, predominantl y from salmon, into fish meal and fish oil. Initial ly the project will focus on methods of reliable storage o f fish waste coupled with an appropriately sized pr ocessing capability for sustained processing throughout the winter months to provide stable employment and redu ce capital equipment costs. Cordova Alaska will serve as the host for a pilot project demonstrating the c onversion of fish waste to fish meal and fish oil. The fish o il will be subsequently converted into biodiesel th at will be used to fuel the fish meal and fish oil production facility, resulting in a cost-effective fish meal p roduction plant. Cordova has an abundance of salmon each summ er that will be stored, stabilized, and processed throughout the winter months in a facility that is scaled to match the production throughput of annual harvests. A successful pilot effort in Cordova will then be replicated in other rural coastal Alaskan communities, such as Sitka, Kodiak, Valdez, Seward, Dillingham, and Homer.

APPROACH: SciFish has formulated a set of six tasks to achie ve the Phase I objectives. Task 1: Concept of Operations. The purpose of this task is to define h ow the fish waste will be captured, stored, process ed, marketed, and sold. To accomplish this task we will clearly define what resources will be needed to ac hieve a pilot production capability during Phase II. The em phasis of this task is to identify potential pitfal ls, including regulatory and local community issues and the mitig ation strategies for overcoming potential challenge s. Task 2: Fish Waste Capture. The purpose of this task is to refine the estimates of fish waste that is avail able for fish meal/oil processing, determine the cost of acq uisition for the waste, identify how the waste will be stored, explore how the waste can be stabilized for long-te rm storage to reduce the capital requirements for processing equipment, identify potential storage lo cations, and delineate the costs associated with th e storage and stabilization. Task 3: System Design. The purpo se of this task is to identify the processing plant components that will be needed to produce fish meal /oil in a pilot program during Phase II. Fish meal and fish oil vendors will be evaluated, processing throughpu t requirements will be established from the project ed amounts of available waste, and the costs associate d with the equipment, both capital acquisition and operations, will be established. Task 4: Pilot Depl oyment Plan. The purpose of this task is to create the pilot deployment plan. To accomplish this task we will co mbine the information produced from the first three tasks into a strategy for pilot production during Phase I I. The plan will outline what resources need to be in place and when to accomplish a Phase II demonstration. Si te preparation, storage, production, training, mark eting, and sales will be incorporated into the plan. At th e conclusion of this task we will have a guide that can be replicated by other coastal communities for fish wa ste production on a similar scale. Task 5: Feasibil ity Analysis. The purpose of this task is to refine the preliminary feasibility analysis that was conducte d earlier in this proposal to confirm the financial viability of fish meal/oil production for coastal communities. A summary review of other possible products will also be exam ined as follow-on efforts that would allow greater value to be extracted from the waste. At the conclusion of t his task we will have a business (commercialization ) plan that will be suitable for seeking additional financ ial support that would allow the pilot program to e xpand to full-scale production beyond Phase II. Task 6: Tech nology Transfer. The purpose of this task to establ ish a dialogue with the USDA SBIR program officer. To acc omplish this task, SciFish will provide a mid-term report, 

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4/7/2010 http://www.reeis.usda.gov/web/crisprojectpages/213523.htmla final report, and a commercialization plan.

CRIS NUMBER: 0213523 SUBFILE: CRIS PROJECT NUMBER: ALKK-2008-00219 SPONSOR AGENCY: NIFA PROJECT TYPE: SMALL BUSINESS GRANT PROJECT STATUS: TERMINATED MULTI-STATE PROJECT NUMBER: (N/A) START DATE: May 1, 2008 TERMINATION DATE: Dec 31, 2008

GRANT PROGRAM: SMALL BUSINESS AND INDUSTRY GRANTS GRANT PROGRAM AREA: Small Business

CLASSIFICATION HEADINGS KA403 - Waste Disposal, Recycling, and Reuse S0810 - Finfish F2020 - Engineering G6.2 - Enhance Soil Quality for Productive Working Land s

RESEARCH EFFORT CATEGORIES

KEYWORDS: fish waste utilization; biofuel; salmon byproducts; fish m eal; fish oil

PROGRESS: May 1, 2008 TO Dec 31, 2008 OUTPUTS: (1) A fish processing company, Copper River Seafo ods, has agreed to partner in the development and demonstration of a fishmeal/oil processing project duri ng Phase II. With processing plants in Anchorage, Cordova, Homer and Seward, and a track record of successful seafood ventures, th is firm makes an ideal development partner. (2) A comple te system design has been created and all of the components h ave been identified. The initial cost for the system has b een determined and a lease rate for the pilot project ha s been negotiated. (3) A pilot deployment plan has bee n developed with Copper River Seafoods that would place a pilot fishmeal /oil plant in Cordova Alaska, a rural Alaskan community th at is heavily dependent on the salmon industry. (4) A commercialization plan has been produced. This plan was favorably reviewed by Purdue University. The comments received during this review process have been integrated into the final commerciali zation plan that will be submitted with the final report. P ARTICIPANTS: Patrick K Simpson, PI; Richard P Mullins, M ember of Technical Staff TARGET AUDIENCES: Rural coastal Alaskan communities PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

IMPACT: 2008-05-01 TO 2008-12-31 (1) A concept of operations was developed that represents a paradigm shift from centralized processing to a distributed processing approach, a change that utilizes smaller volumes of fish waste tha t are better matched to the production rates found in small to mid-sized fish processing plants in rural coastal communi ties. (2) A feasibility model has been developed that indicates a 25 MT processing system can be produced and operated with a reasonable return on investment.

PUBLICATION INFORMATION: 2008-05-01 TO 2008-12-31 No publications reported this period

PROJECT CONTACT INFORMATION CLASSIFICATION Knowledge Area (KA) Subject (S) Science (F) Objective (G) Percent

403 0810 2020 6.2 100%

BASIC (N/A)%

APPLIED 80%

DEVELOPMENTAL 20%

NAME: Simpson, P. K. PHONE: 907-563-3474 FAX: 907-563-3442 

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