Legislature(2011 - 2012)BUTROVICH 205

02/13/2012 03:30 PM Senate RESOURCES


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Audio Topic
03:37:01 PM Start
03:38:34 PM SB192
03:40:38 PM Presentation: Five Year Look Back on Oil Industry Capital Expenditures by Category 2006-2010 & Access to Information
05:06:12 PM HB60
05:32:08 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 192 OIL AND GAS PRODUCTION TAX RATES TELECONFERENCED
Heard & Held
- Five Year Look Back: Oil Industry Capital
Expenditures by Category 2006-2010 & Access to
Information
Presentation by Commissioner Butcher, Dept. of
Revenue
HB 60 GEODUCK AQUATIC FARMING/SEED TRANSFER
Moved HB 60 Out of Committee
-- Testimony <Invitation Only> --
          HB  60-GEODUCK AQUATIC FARMING/SEED TRANSFER                                                                      
                                                                                                                                
5:06:12 PM                                                                                                                    
CO-CHAIR WAGONER announced the consideration of HB 60.                                                                          
                                                                                                                                
5:06:46 PM                                                                                                                    
CO-CHAIR WAGONER asked for a motion.                                                                                            
                                                                                                                                
5:06:55 PM                                                                                                                    
CO-CHAIR PASKVAN  moved to  bring HB 60,  version \A,  before the                                                               
committee for purposes of discussion.                                                                                           
                                                                                                                                
CO-CHAIR WAGONER objected for purposes of discussion.                                                                           
                                                                                                                                
5:07:20 PM                                                                                                                    
REPRESENTATIVE   PAUL  SEATON,   sponsor  of   HB  60,   said  he                                                               
appreciated the  timely effort the  committee was taking  on this                                                               
bill. He said it works  on trying to promote economic development                                                               
around the  coast of  Alaska where it  is difficult  to establish                                                               
new economic bases,  especially ones that won't  conflict in time                                                               
with salmon  and herring fishing. He  said HB 60 allows  for sub-                                                               
tidal farming of  geoduck clams. They average about  2.5 lbs. and                                                               
are  about  7  inches  long.  They are  filter  feeders  and  are                                                               
generally two to three feet down  in one place their entire life.                                                               
Their habitat  has worms  and tunicates,  a small  sessile animal                                                               
(naturally   immobile)   that   aren't  used   commercially   for                                                               
subsistence,  and  nothing  about  geoducks  has  been  found  to                                                               
inhibit their numbers.                                                                                                          
                                                                                                                                
His said his plan is necessary  because the ADF&G has an informal                                                               
policy of  not allowing  geoducks to go  to the  single certified                                                               
hatchery  in   the  state  in   Seward  for  raising   and  being                                                               
distributed to farms  anywhere other than where  they are already                                                               
occurring (only  in Southeast). The  recent geoduck  conflict has                                                               
been because wild stocks are  harvested by divers and people want                                                               
to put  farms in good habitat  which is where there  is already a                                                               
wild stock.                                                                                                                     
                                                                                                                                
He explained  however, that if  the species would  proliferate it                                                               
would be  a great bonus  for Alaska, because right  now fishermen                                                               
are getting $21  lb. for them. It is good  for communities around                                                               
the coast because  geoducks, unlike oysters or  muscles that have                                                               
to be  tended two  or three  times every summer,  are put  in the                                                               
sediment with  a small plastic  piece of pipe  with a net  on the                                                               
top to keep  out predators, two years later those  are taken off,                                                               
and in  about seven years you  are in harvest mode  without doing                                                               
anything else.                                                                                                                  
                                                                                                                                
5:11:13 PM                                                                                                                    
REPRESENTATIVE SEATON  began his  video presentation at  5:11 and                                                               
that ran until 5:14 p.m.                                                                                                        
                                                                                                                                
5:14:41 PM                                                                                                                    
REPRESENTATIVE SEATON  said HB 60  simply says you can't  use the                                                               
absence of  geoducks in an area  to deny a plan  permit. It would                                                               
be  for all  areas around  the Gulf  of Alaska,  Kodiak, Yakutat,                                                               
Chignik  and other  areas out  West, but  not including  Kachemak                                                               
Bay, which  is designated  a critical  habitat and  doesn't allow                                                               
bottom farming.                                                                                                                 
                                                                                                                                
5:15:18 PM                                                                                                                    
REPRESENTATIVE  SEATON  said  HB  60 limits  farms  to  sub-tidal                                                               
areas,  so there  is no  interference with  subsistence or  sport                                                               
fisheries. This is  a clean and renewable fishery;  it depends on                                                               
clean water so people will make sure no pollution comes in.                                                                     
                                                                                                                                
He said  the state has "larval  drift zones" to make  sure if you                                                               
are enhancing  a clam  species you  have to  take the  stock from                                                               
that same  area, raise the seed  and then replant from  that same                                                               
stock  so   you  don't  get   genetic  crosses.  And  HB   60  is                                                               
specifically for taking  clam seed to an area where  there are no                                                               
natural stocks in the first place to alleviate that worry.                                                                      
                                                                                                                                
5:16:44 PM                                                                                                                    
CO-CHAIR WAGONER asked what the  main predator for geoducks is as                                                               
they are being raised.                                                                                                          
                                                                                                                                
REPRESENTATIVE SEATON  answered when they are  juveniles it's the                                                               
star fish.                                                                                                                      
                                                                                                                                
SENATOR STEVENS asked how the red tide would affect geoducks.                                                                   
                                                                                                                                
REPRESENTATIVE SEATON  answered that geoducks are  filter feeders                                                               
and would  be affected by  a red tide  bloom. This bill  does not                                                               
exempt any farm  from all of the health and  safety criteria that                                                               
all Mari  culture farms must deal  with. So the geoducks  have to                                                               
be tested before they are sold.                                                                                                 
                                                                                                                                
5:17:59 PM                                                                                                                    
SENATOR STEVENS asked if there  are shellfish hatcheries ready to                                                               
supply the needs of this new industry.                                                                                          
                                                                                                                                
REPRESENTATIVE SEATON  replied the  problem with having  the only                                                               
shellfish hatchery  in the  state is that  its business  plan was                                                               
based on  sale of seeds  so it could be  self-sustaining. Geoduck                                                               
seed is  much more  valuable than oyster  seed and  without being                                                               
able  to  distribute to  more  farms  than just  in  Southeastern                                                               
Alaska  that  business plan  has  not  been realized.  This  bill                                                               
should make the shellfish hatchery self-sustaining.                                                                             
                                                                                                                                
5:18:35 PM                                                                                                                    
SENATOR WIELECHOWSKI  recalled concerns  from ADF&G and  asked if                                                               
they had been resolved.                                                                                                         
                                                                                                                                
5:18:56 PM                                                                                                                    
REPRESENTATIVE  SEATON answered  yes, and  the department  is now                                                               
neutral.  They were  concerned about  the larval  drift zones  in                                                               
terms of contamination and there is no question of that here.                                                                   
                                                                                                                                
5:19:31 PM                                                                                                                    
SENATOR FRENCH asked if he heard any opposition to the bill.                                                                    
                                                                                                                                
REPRESENTATIVE SEATON answered not since  ADF&G came out with its                                                               
concern.                                                                                                                        
                                                                                                                                
5:19:47 PM                                                                                                                    
CO-CHAIR WAGONER opened the public hearing.                                                                                     
                                                                                                                                
5:20:56 PM                                                                                                                    
PAUL FUHS,  Alaska Sea Farms,  said he  supported HB 60  and that                                                               
Alaska Sea  Farms is  the biggest  operation growing  geoducks in                                                               
Southeast. He said  if they pass this bill, it  won't be a wasted                                                               
effort. They  would go immediately  to a research permit  and get                                                               
some geoducks  in the ground  and see how they  grow, mortalities                                                               
and things  like that. Geoducks  are growing in  Resurrection Bay                                                               
right now.  He said "the  market has just  gone off the  deep end                                                               
for geoducks" and that $21 lb.  to fisherman makes it the highest                                                               
price  fish in  Alaska. It  takes seven  or eight  years to  grow                                                               
them, but once  you get them in  the ground that is  all you need                                                               
to do.  It's really good for  rural Alaska, but what  makes it so                                                               
simple is  the logistics: the  transportation, the  hatchery, the                                                               
PSP testing  is all there and  that is what Southeast  fights all                                                               
the time. So it could be even more successful in Southcentral.                                                                  
                                                                                                                                
5:21:53 PM                                                                                                                    
SENATOR STEVENS asked how a person starts a geoduck farm.                                                                       
                                                                                                                                
MR. FUHS explained that you get  a lease from the State of Alaska                                                               
and from  that you get exclusive  use of the clams  on your site.                                                               
They  don't worry  about people  coming and  taking them  because                                                               
they are not  a big item on  most people's menu. But  you have to                                                               
prove that  the water is  clean and take  over a year's  worth of                                                               
water samples; you  can't be anywhere near a  discharge line; you                                                               
have to stake  it off; you have  to get a permit  to transfer the                                                               
seed from  the hatchery, but  that's it.  The lease lasts  for 10                                                               
years and is renewable. They have  had some of these farms for 10                                                               
years and are just beginning to sell their first adult geoducks.                                                                
                                                                                                                                
5:23:04 PM                                                                                                                    
CO-CHAIR WAGONER asked about much a first-year geoduck weighs.                                                                  
                                                                                                                                
MR. FUHS replied about two pounds after seven or eight years.                                                                   
                                                                                                                                
5:23:46 PM                                                                                                                    
ROGER PAINTER, President,  Alaskan Shellfish Growers Association,                                                               
said they supported  HB 60. He said the geoduck  market is strong                                                               
and seems  to be  getting strong  all the  time. There  are major                                                               
geoduck  aquaculture operations  in  Puget Sound  that are  doing                                                               
very  well, and  two have  had  some interest  in investments  in                                                               
Southcentral.  And while  he thinks  they  should be  successful,                                                               
they won't really  know until the animals are put  in the ground.                                                               
They have been unsuccessful to  this point in convincing ADF&G to                                                               
do an experimental approach.                                                                                                    
                                                                                                                                
5:25:45 PM                                                                                                                    
SENATOR WIELECHOWSKI asked if someone for ADF&G was on line.                                                                    
                                                                                                                                
CO-CHAIR  WAGONER  said  no,  just  someone  from  the  shellfish                                                               
hatchery.                                                                                                                       
                                                                                                                                
SENATOR WIELECHOWSKI asked if it was run by the state.                                                                          
                                                                                                                                
CO-CHAIR WAGONER said someone indicated yes.                                                                                    
                                                                                                                                
SENATOR WIELECHOWSKI  asked Mr. Hetrick  (on line) if he  saw any                                                               
problems to the ecosystem with this, a disease or anything.                                                                     
                                                                                                                                
JEFF HETRICK, General Manager,  Alutiiq Pride Shellfish Hatchery,                                                               
Seward,   Alaska,  answered   no.   They   are  currently   using                                                               
Resurrection Bay water that is  filtered prior to coming into the                                                               
hatchery and  then they  chlorinate the  effluent prior  to going                                                               
back into  the bay. So  there should  be no disease  concerns. He                                                               
said  there  are other  clam  populations,  but sub-tidally  they                                                               
don't expect  any competition between geoduck  clams and anything                                                               
else.                                                                                                                           
                                                                                                                                
5:26:50 PM                                                                                                                    
SENATOR  WIELECHOWSKI  asked  how much  acreage  they  anticipate                                                               
leasing and how many geoducks they will allow per acre.                                                                         
                                                                                                                                
MR. HETRICK answered initially a  fisheries resource permit would                                                               
just be a small plot to  prove the concept and identify the sites                                                               
that would  be applicable.  The minimum  size for  a commercially                                                               
viable farm  for DNR and ADF&G  is two acres, but  he didn't know                                                               
exactly how many geoducks get planted  per acre - but hundreds of                                                               
thousands.                                                                                                                      
                                                                                                                                
SENATOR  WIELECHOWSKI  asked  if  there is  spacing  between  the                                                               
acreage.                                                                                                                        
                                                                                                                                
MR. HETRICK answered that the  acreage is fee-based, so you don't                                                               
want to  take more space  than you actually need.  But typically,                                                               
farms are contiguous; acreage would  be side by side. These sites                                                               
require specific habitat  and you wouldn't be  taking steep rocky                                                               
slopes,  for instance;  you'd look  for gentle  sandy bottoms  or                                                               
light gravel,  which are "minimized."  They are working  with the                                                               
Sea  Life Center  and  some  local dive  shops  to identify  some                                                               
locations for the first proof  of concept program in Resurrection                                                               
Bay. Perhaps others would step forward with other sites.                                                                        
                                                                                                                                
5:28:28 PM                                                                                                                    
SENATOR STEVENS asked how geoducks  are processed, since they are                                                               
off the road system.                                                                                                            
                                                                                                                                
5:29:04 PM                                                                                                                    
MR. FUHS  replied that they  are taken from remote  locations now                                                               
and delivered by the dock, but they  are sold live. So as soon as                                                               
they hit  the dock they  go into "chill  mode" and are  flown out                                                               
immediately. They experimented with  processing some of them, but                                                               
the market didn't want that. They wanted live geoduck.                                                                          
                                                                                                                                
5:29:39 PM                                                                                                                    
SENATOR STEVENS  asked if  geoducks can survive  for a  period of                                                               
time.                                                                                                                           
                                                                                                                                
MR.  FUHS answered  yes; they  found that  the farms  benefit the                                                               
smaller airlines and  ships, fuel, divers, and  all the ancillary                                                               
services that go around it.                                                                                                     
                                                                                                                                
5:30:18 PM                                                                                                                    
CO-CHAIR WAGONER  asked if some  of the Native  corporations want                                                               
to get into  the geoduck industry; Port Graham  would probably be                                                               
a  perfect place  because  it  doesn't get  a  big  surge and  is                                                               
shallow. Can they  be transported to Homer on a  boat and then be                                                               
put on the airplane in Homer?                                                                                                   
                                                                                                                                
MR. FUHS answered yes.                                                                                                          
                                                                                                                                
SENATOR WIELECHOWSKI  asked if geoducks  are handpicked  by SCUBA                                                               
(self-contained underwater breathing apparatus) divers.                                                                         
                                                                                                                                
MR. FUHS  replied yes;  they are  dug in so  hard that  the diver                                                               
puts a water  jet down in the  mud and it loosens it  up a little                                                               
bit to where the geoduck can  be wrestled out. It's tough work in                                                               
about 15-40  feet of water, but  a diver can harvest  about 1,000                                                               
animals a day.                                                                                                                  
                                                                                                                                
CO-CHAIR WAGONER asked if they use hookah gear.                                                                                 
                                                                                                                                
MR. FUHS replied yes, sometimes hardhat, sometimes SCUBA.                                                                       
                                                                                                                                
CO-CHAIR  WAGONER   closed  public  testimony  and   removed  his                                                               
objection. He asked  for a motion to move HB  60 out of committee                                                               
with individual recommendations and attached fiscal note(s).                                                                    
                                                                                                                                
5:31:57 PM                                                                                                                    
CO-CHAIR PASKVAN said  so moved. There were no  objections and HB
60 moved from the Senate Resources Standing Committee.                                                                          

Document Name Date/Time Subjects
SR 2 HB 60 Sponsor Statment.pdf SRES 2/13/2012 3:30:00 PM
HB 60
SR 1 HB 60 Hearing Request.pdf SRES 2/13/2012 3:30:00 PM
HB 60
SR 3 HB0060A.pdf SRES 2/13/2012 3:30:00 PM
HB 60
SR 4 HB0060-2-2-021611-DNR-N.pdf SRES 2/13/2012 3:30:00 PM
HB 60
SR 5 HB060-DFG-CFD-02-10-11.pdf SRES 2/13/2012 3:30:00 PM
HB 60
SR 6 HB 60 Article 02 Aquatic Farming.pdf SRES 2/13/2012 3:30:00 PM
HB 60
SR 7 HB 60 Interesting Geoduck Facts.pdf SRES 2/13/2012 3:30:00 PM
HB 60
SR 8 HB 60 Home page for three minute trailer for "3 feet under - Digging Deep for the Geoduck".pdf SRES 2/13/2012 3:30:00 PM
HB 60
SR 9 HB 60 Letter from Hatchery.pdf SRES 2/13/2012 3:30:00 PM
HB 60
SR 10 HB 60 Letter from City of Seward.pdf SRES 2/13/2012 3:30:00 PM
HB 60
SR 11 HB 60 photo - scale.PDF SRES 2/13/2012 3:30:00 PM
HB 60
SB192_DOR - 5 Year Look Back_2-13-12.pdf SRES 2/13/2012 3:30:00 PM
SB 192
SR 12 HB060-DNR-MLW-12-13-2011.pdf SRES 2/13/2012 3:30:00 PM
HB 60
SR 13 HB60-DFG-CFD-12-15-11.pdf SRES 2/13/2012 3:30:00 PM
HB 60
DOR - 5 years of forward-looking capital expenditure estimate.pdf SRES 2/13/2012 3:30:00 PM
SB 192