Green energy, marketing, technology , loans among funded projects
By TERRY HAINES for the Kodiak Daily Mirror
January 20, 2023
The American Rescue Plan, signed into law in March of 2021, was meant to “enable all Americans to respond to and recover from the impacts of COVID-19.”
A significant part of that $3 billion investment went to the EDA, or Economic Development Administration. The EDA then designed a number of competitive grant programs to help build a more resilient economy.
Diversity is a big component of a resilient economy, as tourism dependent communities in Alaska discovered during the pandemic and as fishing communities are reminded every time a stock crashes.
The largest of these EDA programs is the Build Back Better Regional Challenge, which awarded between $25 million and $65 million each to regional coalitions to “transform their regional economy by growing an industry sector.”
Nationwide, 529 applicants submitted proposals. Sixty finalists were given $500,000 to further refine their projects. On Sept. 2, the 21 winners were announced, and among them was the Alaska Mariculture Cluster, which received nearly $49 million.
This is an impressive achievement on the part of the Alaska mariculture cluster. The Southeast Conference led the charge, and will act as the lead going forward. They are the regional economic development organization for Southeast Alaska. Led by their executive director, Robert Venables, they herded together a colossal collection of cats, including:
• State of Alaska
• Prince William Sound Economic Development District
• Kenai Peninsula Economic Development District
• Southwest Alaska Municipal Conference, the administrative entity for the region that includes Kodiak. The regional lead for the cluster is Kodiak seaweed cultivator Nick Mangini.
• Central Council of the Tlingit and Haida Indian Tribes of Alaska
• Alaska Mariculture Alliance
• University of Alaska Fairbanks, including Alaska Sea Grant and the Mariculture Research and Training Center
• University of Alaska Anchorage
• University of Alaska Southeast
• Alaska Fisheries Development Foundation
• Alaska Longline Fishermen’s Association
Their successful argument stressed the tremendous potential of mariculture in Alaska, as well as its need for a boost of seed money. Alaska has 6,640 miles of coastline and, including islands, has 33,904 miles of shoreline. The estimated tidal shoreline, which includes islands, inlets and shoreline to head of tidewater, is 47,300 miles. So there is plenty of room for mariculture.
Plus, Alaska enjoys an excellent reputation for clean water and sustainable management, has an existing seafood processing infrastructure and skilled maritime workforce, and a robust and supportive regulatory structure is already in place. But a chicken-and-egg dynamic has always hampered the growth of the mariculture industry in Alaska.
Oyster farming in Alaska dates back to 1910, yet remains relatively small, with just $1.5 million in total revenue for 2019. It’s tough to sell a product that doesn’t exist yet, and hard to expand operations without expanding sales.
Likewise, potential demand for seaweed products like livestock feed is tough to demonstrate until it is actually produced at scale. As the overarching narrative of the mariculture cluster puts it: “Without the public investment by the EDA BBB grant, the mariculture industry will likely grow slowly and remain small scale.”
The mariculture cluster was able to rely on work done by the state of Alaska in the form of the Alaska Mariculture Development Plan, and its five-year action plan, to develop the projects that will be implemented using the grant funds.
The Equipment and Technology Project will seek to expand processing capacity, and perhaps more importantly, to expand hatchery and nursery capacity, “to resolve imbalances between supply and demand of both shellfish and seaweed seed.”
To that end they will be acquiring new oyster nursery equipment, and mobile containerized seaweed nurseries. They will also be purchasing lab equipment to enable testing for paralytic shellfish poisoning.
The Green Energy component will seek to provide power for mariculture through renewable sources, avoiding fossil fuels that “may become more expensive and less accessible in the future,” and minimize the greenhouse gas footprint of the industry.
The Market Development and Marketing component will seek to scale up demand, recognizing that “growth will require much greater market penetration outside of Alaska.”
The Mariculture Research and Development component will employ “targeted research for use in developing innovative seaweed and shellfish products, including carbon capture benefits,” and shelf-stable oyster products.
The Workforce Development component will attempt to meet the “training needs of the mariculture workforce as the sector develops and grows,” and “create a glidepath from training programs to a specific job through career awareness, outreach and job placement programs.”
And the Revolving Loan Fund component will “stand up the $10 million Alaska Mariculture Industry Cluster Revolving Loan Fund to address lending barriers within the industry and leverage capital to support rural and underserved communities interested in entering the industry.”
Because mariculture is a relatively young industry in Alaska, it is also relatively high risk. Conventional lenders have no historical record to fall back on to calculate that risk, and startup companies often lack initial capital and collateral.
The revolving loan fund will fill that gap, with an emphasis on “Alaska Natives and underserved populations, geographies, and persistently impoverished areas.”
Terry Haines was a commercial fisherman in Kodiak for more than 30 years. He now produces the Alaska Fisheries Report for KMXT and is a member of the Kodiak City Council. He can be reached at firstname.lastname@example.org