1 Site Visit Report Alaska Seafood Processing Industry Petition Response

Lindsay Guzzo Environmental Engineer U.S. Environmental Protection Agency Region 10 Permits Division guzzo.lindsay@epa.gov

206-553-0268 Betsy Bicknell Senior Environmental Engineer Eastern Research Group, Inc. (ERG) betsy.bicknell@erg.com

703-633-1612

Plant Name Alaska Protein Recovery

Plant Address Ketchikan, Alaska

NPDES Permit # (discharge through Trid ent, permit # AKG520491 )

Maintains a permit in the event the barge moves to another location or is required to discharge while at Ketchikan

Date of Visit Friday, August 13, 2010 People Contacted Sandro Lane , M.Sc., Founding Partner and CEO

Seafood processed Salmon heads, viscera, trimmings, and other processing

waste Products Edible-grade salmon oil Salmon protein hydrolysate Range of production volume (raw material processed) 250 MT seafood waste per day in 2010; upgraded to 300 – 350 MT per day for the 2011 season. Months of operation Salmon season (June through September) Discharge type Discharge clean up water via Trident’s outfall

Website http://alaskaproteinrecovery.com

Alaska Protein Recovery (APR) operations are located on a barge that was tied up outside of the Trident plant in Ketchikan at the time of the site visit. Figure 1 is a picture of the barge. APR uses a novel enzymatic process to produce salmon protein hydrolysate and also produces food grade salmon oil from salmon processing waste (heads, frames, trimmings, viscera, etc.).

Information presented in this report was obtained from discussions with Mr. Sandro Lane, APR Founding Partner, and CEO and re flects his opinions. The APR website was also consulted for some pro cess details and photographs.

APR History Sandro Lane operated a seafood pr ocessing facility in Juneau and sold the business in 2002 to start APR. His goal is to recover value from the 40% (or more) of harvested salmon that ends up as waste. Instead of bu ilding a plant on land in one processing center, Mr. Lane and his partners bought a barge and installed the by-products recovery equipment.

APR first began operations in Excursion Inlet and Petersbu rg in the first year of production (2003) and then moved to Sitka fo r the next three seasons. The salmon season2 in Excursion Inlet is short (one month) but as big as Ketchikan. Ocean Beauty operates a large cannery in Excursion Inle t, but because there is no place to tie up, the barge had to operate while at anchor.

Initially, the raw material was dark, sexually ma ture fish with no value (e.g., dark chum). In 2002-3 APR processed mostly these low value carcasses. In 2004 and 2005, while in Sitka, APR began processing more waste (h eads and guts) from salmon processing. The raw material changed but not the product:

 Whole fish are 3-4% fats and oil

 Heads are 10-15% fats and oil; and

 Viscera are 1% or less fats and oil.

APR operated the process in Sitka in 2004 – 2006. The processors in these locations did not appreciate the need to handle the salmon waste as a food grade product in order to produce high value by-products. They continue d to treat the waste as garbage. The processors trucked and tendere d the waste to the barge, but wouldn’t track the waste on their HACCP plans as a food item for further fo od processing on the barge. According to Mr. Lane, the some of the processors in Sitka may have been afraid of depending on someone else for managing their waste. A lthough the Best Management Practice Plans required by their NPDES permits say they will strive for recovery, they continue to discharge large amounts of fish waste into the harbor.

APR’s first salmon protein hydrolysate custom ers wanted to use it for shrimp feed; however, because of the high fat content in the heads and guts, the product contained too much fat to use in the shrimp feed. As a re sult, APR now removes the oil from the heads and makes protein hydrolysate from the remai nder. The oil is sold as a high value product. For retail, the oil is formulated as a soft gel and promoted for human consumption because of the omega 3 content. To start oil production, APR got some financing from Alaska Fisheries Marketing Board. They financed the decanter and centrifuge.

In 2007 APR moved the barge to Ketchikan. In 2008 Trident became a partner. Chuck Bundrant, owner of Trident Seafoods, invested [Confidential Business Information (CBI), removed from this report] . to connect the Trident Ketchika n cannery to the barge. This includes a system to manage heads as food gr ade product and pump them to the barge.

APR now takes 100% of the waste from Alas ka General Seafood and Trident Ketchikan (south) which are located immediately adjacent to the barge. Waste is pumped from

Alaska General to Trident and then from Trid ent to the barge. The heads are not chopped, but pumped to APR whole. Guts are ground pr ior to pumping. The salmon heads from Trident NorQuest (Ketchikan north) and E.C. Philips, two small plants located on the

other side of Ketchikan are trucked to Triden t and then pumped to the barge. At present, APR can’t take the guts from the two small plants because they decompose too quickly. Waste volume processed at APR is made up of heads (about 60%) and guts (30-40%).3 According to Mr. Lane, Ketchikan has tradit ionally been the largest salmon processing

center in southeast Alaska.

At the time of the site visit, APR had not found a market for the bone portion of their raw material. This waste is disposed of by Triden t, who transports the material by boat for off shore (at-sea) disposal. Bone represents about 3-5% of the raw material on a dry weight basis. The remaining 95% of the incoming fish waste is used in the process. Marketing the bone as a bone meal product would not be feasible. It would require a bone dryer which would generate a lot of odor and requi re more energy than the value of the bone meal product. Bone meal is a very low value pr oduct so it is not worth the cost of energy to recover and dry the bone as a separate product. Mr. Lane mentioned he would like to hire a consultant to identify a cost-effective use for the bone.

At the time of the visit Mr. Lane said th at the salmon oil is being marketed as a nutritional supplement, sold at Costco. As for hydrolysate, few companies produce this product and there is no established market for it. He first marketed hydrolysate to fish food manufacturers. The hydrolysat e was used to provide fish flavor to plant-based fish food so shrimp would eat it. As a resu lt of the 2008-2010 inte rnational economic recession, production of farmed shrimp declined significantly and fish food manufacturers are not receiving orders for shrimp food. Consequently, as of 2010 they were not buying salmon protein hydrolysate . APR began selling the hydrolysate to organic fertilizer manufacturers in 2009. In 2010 they will sell all of their hydrolysate production to a customer who sells it to Califor nia farmers for use as an organic fertilizer.

This customer will take all of the waste protein from the Trident Ketchikan cannery and

Alaska General Seafood.

It took seven years for APR to break even. In that time, they built a reputation for reliability. Mr. Lane believes that operati ng the hydrolysate proce ss requires different skills than seafood processing. For exampl e, by-product manufacturing has a control room while seafood processing does not.

Mr. Lane credits the fact that his plant is on a barge to his survival. The barge was useful to explore which area would work best. Mr. Lane concludes that if he’d built his plant “on the beach” in Sitka, he’d be broke.

Trident, Cordova By-Products Plant With the investment in APR, Trident has acce ss to their technology and used it to build a new by-products plant adjacent to their cannery in Cordova. Trident invested [CBI, removed from this report] . in the new plant. Trident will run the by-product plant and APR will market the products. Mr. Lane said that the plant is large enough that in time it will be able to take much (perhaps most) of the waste generated by the Cordova seafood

processors.

The oil recovered by the Cordova plant is marketed by APR. They are marketing hydrolysate themselves.4 Raw Materials APR only processes salmon. They can’t process halibut or black cod because many of the

heads have stainless steel hooks. The hooks are not magnetic and can’t be detected by the metal detector. They must be removed by hand which is too labor-int ensive (costly), so

APR does not use halibut or cod heads.

Tour of process A detailed description of the hydrolysate production process, including a process diagram, can be found on the APR website http://alaskaproteinrecovery.com/ (and appended to this report). Figure 2 provides an overview of the barge interior. Figure 3 shows the hydrolysate plant.

The protein product (hydrolysate) is not cons idered food grade. The oil product is food grade. The equipment in the barge (reaction ve ssels and piping) is stainless steel, so all APR processes meet food-grade sanitation requirements.

Fish heads and other waste are pumped as se parate streams into the barge from the Trident cannery. Fish heads are ground ( Figure 4 ) then warmed in a heat exchanger

. From the heat exchanger, product flows th rough a mechanical refiner to remove bones

and then to a horizontal centr ifuge (decanter). The decanter separates solids from liquids (oil and water). The liquid flows through a second centrifuge that sepa rates water and oil.

The oil is collected in a [CBI, removed from this report] . then passed through a high speed polishing centrifuge to remove any remain ing water or solids. After the polishing centrifuge, the oil is dispensed into SpaceKraft ® totes for storage and transport to Seattle.

The water from the decanter contains solubl e protein and is known as stickwater. The

stickwater is returned to the solids leavi ng the first centrifuge. Th e protein slurry is pumped into one of four 1600 ga llon mix tanks. Each tank holds [CBI, removed from this
report] material from about six totes (12,000 lb). Mr. Lane explained th at the digesters are currently the choke point in the process. To increase capacity he may install two to four

more tanks.

Using enzymes and under controlled pH, the pr otein in the slurry is partially hydrolyzed. The hydrolysate is pumped through a 2-effect ev aporator to reduce the water content of the hydrolysate to 56% - 58% in the finished product. The product is cooled and acidified. Finished product is stored in f our 750 metric ton ballast tanks located on the barge. The product is transporte d to Seattle when the barge leaves Ketchikan for the offseason (September – May).

The yield from 10 million pounds of fish wast e is approximately 3 million pounds salmon protein concentrate and 300,000 – 400,000 pounds of oil. Oil production and quality varies from year to year.

Raw material other than heads (i.e., guts) is ground ( Figure 5 ) then fed directly to the digesters via a separate overhead line. This material bypasses the initial heat exchanger

and deboner.5 The bone removed from the deboner is ground in an Autio grinder and then transferred to a boat for off-shore disposal. Blood and unrecove rable solids are discharged to a floor drain and flow the Trident grinder for di sposal via their waste disposal system.

Equipment and Crew The barge depends on shore side connections for power, water, and sewage. It is equipped with a back-up generator. The barge is run by two-three pers on shifts; with an extra two people on the night sh ift for clean up. The barge is towed to Seattle for the

winter. The crew also trav el to Seattle and works th rough the winter pumping and processing the product and getti ng ready for the next season.

Discussion There are no exhausts from the evaporators or heater. This closed system means little

odor.

When asked how small the process could be sc aled and be operable, Mr. Lane suggested maybe 1⁄2 the size of the current operation, but this size may not be sufficient to recover

the investment costs in a reasonable amount of time. For example, the APR process is not feasible for a processor th e size of Taku in Juneau.

For small plants, an alternative to building a recovery process may be freezing heads and transporting them to a central recovery ope ration. But freezing causes oxidation, and may degrade the oil. Although guts have some oil content, they decompose too fast (because of digestive enzymes and bacteria) and can’t be used for food grade products. Because of they contain acids, enzymes and bacteria, non-re frigerated guts must be used within 12

hours of their removal from the fish. Dewate red and iced, they may be usable for 1-2 days. An alternative to refrigeration may be pasteurization to kill bacteria and inactivate enzymes, possibly in an evaporator.

The barge currently stores an unused whole fi sh processing line (from the time they made hydrolysate from chum) and also equipment fo r roe processing purchased from a plant that went out of business. This equipment will be removed to make space for up to four more digesters that will be added for next year. NOAA fo recasts 2011 will be a very big year for pink salmon in Ketchikan.

Mr. Lane has not sought fi nancing from Alaska Industrial Development and Export Authority (AIEDA). They don’t provide grants , but guarantee loans. Interest rates on these loans are rather high.

Mr. Lane did not know of any facility that dige sted its fish waste to recover methane.

Using fish oil to make biodiesel generally is not cost-effective; howev er, using fish oil as a supplemental fuel makes sense in Akutan a nd other areas in the far western Aleutians where it is very expensive to ship diesel in and ship fish oil out.6 Energy use and availability Mr. Lane reports that the ba rge is not a huge power user. It is equipped with a small diesel-powered steam generato r for production which is not large enough to require an air permit. APR spends about $90/MT of product for diesel fuel for the steam boiler.

The new by-products facility at the Triden t Cordova plant has a higher energy demand because it is larger, operating several 100 hp mo tors while the largest motor on the barge is 50 hp. The barge draws approximately 500 amp. Electric power use does not vary with production.

Mr. Lane noted that for communities where diesel generators are used for electric power, the power requirements of a by-products plant may over-tax the system.

Future

Mr. Lane mentioned that Trident has several large processing plants including Naknek in Bristol Bay at which it may build by-products recovery plants. Also, if APR built a shorebased by-product facility in Ketchikan, the ba rge could move to another location where Trident operates a large cannery.7 Figure 1. View of the Barge (from http://alaskaproteinrecovery.com/venturer retrieved October 27, 2010)

Figure 2. Barge Interior Overview8 Figure 3. Overview of Hydrolysate Plant (from http://alaskaproteinrecovery.com/venturer retrieved October 27, 2010)

Figure 4. Grinding Salmon Heads9 Figure 5. Waste Grinding Overview10