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Perils and promises of a land-based salmon farmer

Critical incidents at Atlantic Sapphire is a cautionary tale for those pushing to move all ocean-based salmon farms to land-based closed containment systems in BC.

By Fabian Dawson
SeaWestNews

Atlantic Sapphire – the go to example for those wanting to grow fish on land in British Columbia – is reeling from the impacts of an emergency harvest of 200,000 salmon which highlights the operational risks of a new industry.

The incident at the company’s land-raised salmon farm in Miami was caused by disruptive construction work that stressed the fish and caused an unspecified number of salmon mortalities, the company said.

The Oslo-listed salmon farmer also saw its share price drop sharply after the incident with analysts saying that the event has created further uncertainty around the financial viability and environmental sustainability of land-based fish farm operations.

This is the third such incident involving the company’s Land Based Recirculating Aquaculture System (RAS), which has pushed back some of Atlantic Sapphire’s targets.

Last March, Atlantic Sapphire lost about 227,000 fish after nitrogen levels spiked at its Hvide Sande facility in Denmark. In June 2017, the same facility lost 250 metric tonnes of salmon due to a hydrogen sulphide poisoning event.

The incidents experienced by Atlantic Sapphire is a cautionary tale for those pushing to move all ocean-based salmon farms in Western Canada to land-based closed containment systems, said Brad Hicks, a 40-year veteran fish farmer in British Columbia.

“Growing Atlantic salmon to market size in large numbers on land has not been commercially viable anywhere in the world,” said Hicks.

He said many of the RAS companies and start-ups use superficial blue-sky analysis lacking any critical review of the financial limitations of the proposed technologies.

“Look I am not against RAS…I installed the first RAS smolt rearing facility in British Columbia in the mid-1990s,” Hicks told SeaWestNews.

Salmon farmers in BC are among the world leaders when it comes to using RAS to raise smolts before the fish is moved to grow out in sea pens, said Hicks. Their fish spend more than half their lives in land-based hatcheries before being transferred to a natural ocean environment to grow to market size.

“I don’t know of any salmon RAS anywhere that is profitably producing market size fish and  there have been many failures here in BC and around the world,” said Hicks.

Hicks described the push in BC to replace ocean farming for land-based salmon farms as being fuelled by fantastical projections and cloaked in activism rather than financial realities and science.

 “All the hype here in BC about land based salmon farming so far has been about raising money. Very little about raising of fish.”

Atlantic Sapphire’s recent emergency harvest “once again shows the operational risk in land-based farming and every time you get such an incident you will get a risk premium… it is still difficult to get the systems up and running,” DNB Markets analyst Alexander Aukner told IntraFish.

Kepler Cheuvreux analyst Christian Nordby said the loss of fish does not mean much but “creates uncertainty about how things will go with a company that, in practice, will expand for another 10 years.”

Nordby emphasized in the Intrafish article that the risk in Atlantic Sapphire is much higher compared with a conventional salmon farming company.

“It is a new industry and one must endure that there will be a number of challenges.”

Atlantic Sapphire said it is currently assessing the complete financial impact of the event, including any insurance proceeds, and is still planning its first harvest from its Miami operations by the end of the third quarter.

Geir Myre, a global expert on aquaculture insurance said the Atlantic Sapphire incident proves an operational risk that is in line with “what we try to rate into the insurance premium for any RAS farm.”

“RAS systems on a general basis are more risky balancing on technical and biological challenges,” said Myre, AXA XL Catlin’s global head of aquaculture insurance.

 “But some offshore farms locations and offshore regions have proven to be of a higher risk than RAS so this is very individual. Generally, the typical mainstream offshore farms holds a lower grade of risk,” Myre told SeaWestNews.

Several studies have also shown land-based farms will leave a damaging ecological footprint due to high power consumption and land use or that growing just 75,000 tons of salmon would require 4.16 billion litres of water just to fill the tanks.

A global report on The Evolution of Land-based Atlantic Salmon Farms shows that farming Atlantic salmon in their natural environment — the ocean — is the responsible way to farm.

To move Canada’s current production to a land-based system would require 136 square kilometers of land, which could fit 28,000 Canadian football fields, it concluded.

In addition to a higher contribution to CO2 emissions, growing the global supply of salmon on land would require the same amount of energy per year needed to power a city of 1.2 million people.

Raising land-based Atlantic salmon also costs 12 times more than ocean farming.

Earlier this month, the Government of Canada announced that it will be providing about two million dollars to researchers at the University of BC (UBC) and fish farmer, Mowi, to come up with  a BC-based solution for growing larger, more physiologically robust Atlantic salmon smolts before they are transferred to the marine environment.

A longer production period on land for smolts in freshwater recirculating aquaculture systems (RAS) could lead to reducing the amount of time farmed Atlantic salmon spend in marine net-pens.

Correspondingly, that means less exposure to naturally occurring sea lice and algae blooms in the sea water phase.

The research grant is being awarded in the wake of a DFO report entitled “State of Salmon Aquaculture Technologies”, which evaluated new approaches for farming Atlantic salmon.

The study explored four technology options: RAS land-based closed-containment; floating closed containment; offshore technologies; and hybrid systems, which combine both land and marine-based systems.

The hybrid system, which involves extending the amount of time young fish spend in land-based hatcheries by up to eight months before being moved to ocean pens is particularly promising in the near-term for BC salmon farmers.

(Image courtesy of Atlantic Sapphire shows company staff at its Miami facility)

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