Thanks to Mr. Thurston for his excellent article.
A cutting-edge fish farm in the ocean off Culebra has packed up and moved to Panama less than a year after netting its maximum annual quota of 50 tons and reeling in profits of $500,000.
Snapperfarm Inc., one of the first open-ocean aquaculture projects of its kind in the world, slipped away from Puerto Rico after six years of operations marked by red tape and permit entanglements despite early promotion by the Puerto Rico Industrial Development Co. (Pridco). It was lured away by the promise of far bigger production in Panama at a time when aquaculture is catching on in a big way.
At issue were regulatory permits that the company applied for to increase production of cobia, a fast-growing and versatile fish raised in large spherical ocean cages submerged in the waters two miles off Culebra.
Under its original demonstration permits, Snapperfarm was allowed a maximum production of 50 tons annually. Since 2003, the company had tried in vain to get approval to increase its haul to up to 250 tons annually.
Finally, the company began scaling back operations in April 2008 as it sought to work out the permit issues.
Brian O’Hanlon, president & co-founder of Snapperfarm Inc., told CARIBBEAN BUSINESS at the time (CB May 1, 2008) that uncertainty over the permits had hobbled the operation and said the company would push harder to resolve the regulatory issues.
“Since 2003, the company has been seeking full commercial status from the various regulatory agencies (more than 20), but the process is still ongoing and a firm date for approval is still not in sight,” O’Hanlon said last May.
“Unfortunately, the permit process is taking too long and Snapperfarm’s board of directors has decided to temporarily stop operations in Culebra until the regulatory process can provide the company and its investors a higher degree of certainty. Over the coming weeks, operations will gradually shut down and, over the coming months, the company will intensify its efforts to overcome regulatory hurdles,” he said at the time.
According to O’Hanlon, his operation needed five core permits to operate, but the company had to consult with many more agencies to obtain them. A short list of the Commonwealth and federal agencies involved included the Department of Natural & Environmental Resources, Environmental Quality Board, Planning Board, Army Corps of Engineers, federal Environmental Protection Agency, U.S. Fish & Wildlife Service, National Marine Fisheries Service, State Historic Preservation Office and U.S. Coast Guard.
In the end, the permits never materialized. Company investors eventually gave up and threw in the towel on Puerto Rico just as open-ocean fish farming is gaining recognition as the wave of the future in aquaculture.
O’Hanlon, who is now operating in Panama under the name Open Blue Sea Farms, was granted a permit from the Panamanian government to produce 10,000 tons of cobia per year.
In a recent profile in Fortune Small Business magazine, O’Hanlon described the departure from Culebra as “a disservice to America.”
The U.S. already imports more than 80% of its seafood and runs an annual seafood trade deficit of $9 billion, second only to oil, the magazine noted.
“When we put a fish in the water, it’s worth $2,” O’Hanlon said. “When we take it out, it’s worth $50.”
Open Blue’s business plan calls for 2009 revenue of $4 million, which is expected to grow to $20 million in 2013.
With fish stocks dropping rapidly around the world and consumer demand insatiable, more than half the fish eaten now is raised commercially in shallow coastal areas, according to Fortune Small Business.
However, fish raised in coastal areas are more susceptible to disease and pollutants than those raised in the cleaner, but more challenging, open-ocean environments where O’Hanlon has been blazing a trail.
During the company’s time in Culebra, O’Hanlon developed and refined some of the most innovative technology in the field of aquaculture. The operation brought a host of marine science experts to Puerto Rico, including one of the world’s foremost aquaculture authorities, Daniel Benetti, of the University of Miami. It also brought worldwide attention to the island as the project was featured on ABC News, PBS, National Geographic, U.S. News & World Report and many other programs and publications.