British Columbia: Massive Chinese shellfish hatchery near completion on Sunshine Coast

Guess they're just not into you that much anymore.

Licensed to grow seed for geoduck, 

Pacific oyster, scallop and urchin.

Risk to investors and banks is a relative thing.

Apparently becoming aware that being beholden to a few shellfish operators in the United States was not an economically sustainable model, the Chinese are nearing completion of Phase 1 of what ultimately will be among the largest (if not the largest) shellfish hatchery and farming operations in North America. It will compete directly with current shellfish operators such as Taylor Shellfish and Coast Seafoods, who to date have had little real competition to disrupt pricing and distribution models which have existed for decades. How investors and those financing expansion will react to what appears to be a disruptive event is not known, but risk to returns is certainly elevated.

Comparison of Taylor Shellfish to Hummingbird Cove

Investors rule of thumb: Invest in an industry where anyone can make money. 

Yesterday, the Times Colonist wrote that Phase 1 of a Chinese owned shellfish hatchery facility in British Columbia is nearing completion and will cover over 34,000 square meters (365,000 square feet). By comparison, the Nisbet (Goose Point) hatchery facility moved from Willapa Bay to Hawaii is 20,000 square feet. Another perspective is seen in the image above, showing Taylor Shellfish's Quilcene Dabob Bay hatchery facility. Overlying the Taylor Shellfish facility in red is the estimated size of Phase 1. The Vancouver Sun has reported that Phase 2 is expected to result in a facility able to grow and export mature shellfish by the year 2020. Last year, Hatchery International reported that Hummingbird facility was approved to expand within a 27 hectare (~66 acre) area, outlined in blue and orange, an area dwarfing current facilities.

This Christmas, be careful what you ask for. You may just get it.

The shellfish industry for years has been lobbying at the federal, state and local levels to minimize regulatory oversight. Their success has been seen in many areas, ranging from minimizing eelgrass protection to convincing Mason County that tidelands sold under the "Bush Act" should be considered as existing shellfish farms. All aimed at allowing for an increased expansion of operations, then supply, and hoped for profits. That the Chinese business leaders were not born yesterday and can see a market controlled by only a few, for the benefit of those few, has resulted in a multi-million dollar investment by one company in Canada. Others will follow. Those shellfish grown will not be for Canada, but exported. When combined with expansion efforts in the US, a deflating commodity balloon may be what comes for Christmas.

Seattle Shellfish Tries to Break Away with New Hatchery

Proposed location of

Seattle Shellfish hatchery.

(click to enlarge)

In an apparent attempt to break the ties to geoduck seed suppliers which Seattle Shellfish is dependent on they have proposed locating a new shellfish hatchery on Harstine Island's Spencer Cove. [click here for permit] Located adjacent to a small pocket estuary* the facility would allow Seattle Shellfish to better control its production and perhaps reduce costs.

(*The pocket estuary's ownership is in dispute. Washington never transferred the tidelands to private ownership. Previous owners assumed they had owned the pocket estuary's tideland area, and Seattle Shellfish assumed they had acquired them. However, this was not the case and is another example of tideland ownership challenges. DNR has yet to resolve the issue. From use of the area by Seattle Shellfish it appears they are happy to wait for DNR to act.)

Satellite view showing current use,

including bagged PVC pipes (lower left)

used for planting. The tidelands seen

in the right half are still state owned.

(click to enlarge)



There are currently a limited number of hatcheries which supply geoduck seed to Puget Sound growers. Taylor Shellfish and the Lummi Tribe are the dominant two. If they chose not to sell seed to a grower that grower is unable to "plant" geoduck during the limited windows when the south Puget Sound tides are at their lowest levels. Perhaps also driving the decision is the subtidal commercial geoduck farm proposed by the Detienne family and Chelsea Farms in Pierce County.

Subtidal area of Spencer Cove

owned by Seattle Shellfish.

In the case of Seattle Shellfish, they are one of the few tideland owners whose tidelands extend into the subtidal area. Those areas have not yet been exploited as they currently are in Alaska and Canada. Should Seattle Shellfish wish to expand operations into that subtidal area there most likely would not be a sufficient source of seed for them to do so. Should the Detienne permit in Pierce County be approved, or should the state require replanting after their subtidal harvesting, it would open significant areas for commercial subtidal planting leading to an increase in seed demand. When Combined with recent permit approvals likely to expand significantly the tideland areas growing geoduck it is easy to understand the concern Seattle Shellfish has over controlling seed supply.

Does Mason County Really Care About the Shoreline Management Act?

Where are the monitoring results of impacts which are supposed to be posted on Mason County's website as agreed to in November of 2010?

 

Spencer Cove Geoduck Nursery

and Barges

Seattle Shellfish

(click to enlarge)
 

In the picture above, taken in July of 2012, Seattle Shellfish's "geoduck nursery" facility and barges loaded with bags of PVC pipe are seen. Had monitoring of impacts begun? No.

 

Kiddie Pools in Spencer Cove's Intertidal Tideland

 (click to enlarge)

 

Background 

As a result of citizen concerns over adverse impacts from ~1,000 "kiddie wading pools" on the nearshore environment, those pools were removed. In their place a floating facility the length of a football field was proposed for which a permit application was submitted by Seattle Shellfish. The permit approval was appealed to the Shoreline Hearing Board by Case Inlet Shoreline Association (CISA) and an agreement was negotiated in good faith between Mason County, Seattle Shellfish and CISA in November of 2010. The case was dismissed and Mason County issued the permit November 24, 2010.

 

The November 2010 Agreement - Hire a consultant and post the results quarterly.

[click here for Agreement]

That settlement agreement and resulting permit resulted in a condition which required Mason County to hire a consultant to implement a five year monitoring plan. That monitoring plan would be paid for by Seattle Shellfish and required the County to post the results of that monitoring plan on its web site quarterly.

 

May 2012 - Where is the consultant? [click here for RFP]

In May of 2012 a Request for Proposal was issued by Mason County asking for qualified consultants to respond. After reviews of responses, Hart Crowser Inc. was selected and October 2, 2012 Commissioners Sheldon and Ring Erickson voted to approve signing the Professional Services Agreement. Commissioner Bloomfield, a Seattle Shellfish shareholder, recused himself.

 

January 31, 2012 - Where is the plan and where are the quarterly results?

Over two years after the settlement agreement was signed and agreed to, Mason County has yet to post anything on its web site except the RFP and the "Decision." [click here] In the mean time, Seattle Shellfish began installation of the floating facility in the Spring of 2012 with final completion in the late summer. A consultant who was to have been hired to determine the impacts had yet to be hired. How meaningful will the results be if there is no baseline to judge impacts from?

 

The Lesson: Get Involved in Mason County's Shoreline Management Plan - The shellfish industry has been for far longer than you know.

The meaningful result from this is Mason County's focus is not sharp when it comes to ensuring aquaculture will not result in harm to the near shore environment. It is why citizens of Mason County need to be aware of what is happening with the Shoreline Master Program update and be invovled. The shellfish industry has been invovled in crafting the update to their benefit since at least May of 2012, as seen in this comment from Arcadia Point Seafood to others in the industry: Mason County is working on its Shoreline Management Plan and Vicki [Wilson with Arcadia Point Seafood] is a member of their 20-member citizen advisor committee. They are currently discussing aquaculture policy.

 

The next meeting is at 411 N. 5th Street: February 11, 2012; 6:00 PM; Building 1-BOCC Chambers; Subject: Draft SMP Workshop 2

Commissioners may be contacted at [this site] 

Geoduck operation ever more invasive

Photo: 7/4/08  Tractor and "kiddie pool" geoduck nurseries on the tidelands of Spencer Cove in Case Inlet.

In 2008, without any type of permitting, Seattle Shellfish covered the tidelands in an area of Spencer Cove with plastic "kiddie pools" that contained geoduck seed.  Sometime after that these were removed and an on the water system was set up.

Now Case Inlet shoreline homeowners have appealed to the Shoreline Hearings Board the approval by Mason County for a more massive raft and boom system for a geoduck nursery in Spencer Cove.  The controversy is described in an article entitled "Geoduck operations still stuck in the mud" in the Mason County Journal. The project under consideration would add six 14-by-40-foot rafts and a 360-foot log boom supported by eight 12-inch diameter steel pilings to the existing nursery.

Industrializing pristine areas of the shoreline does not comport with the efforts to protect and restore Puget Sound. Following is an aerial view of the "kiddie pools" in 2008 to give an idea of the extent of the unapproved project as it existed at that time.