Offshore Aquaculture Plan Brings Opportunities to Industry, Poses Conflicts for Competing Offshore Developments

After five years of development and public hearings, last month, the Gulf of Mexico Fishery Management Council (the “Gulf Council”) approved the Fishery Management Plan For Regulating Offshore Marine Aquaculture in the Gulf of Mexico (the “Gulf Aquaculture Plan” or the “Plan”). The Plan would open federal waters in the Gulf to large-scale commercial fish farms by creating the first offshore aquaculture permitting system in the United States. By opening the door for operations between three and 200 nautical miles offshore in Gulf Coast waters, the Plan could transform the aquaculture industry from an amalgam of finfish and shellfish farms in state waters, to massive offshore fish farms producing over 60 million pounds of seafood. It could also lead to conflicts with other offshore development interests, including established commercial fishing industries, oil and gas, and tourism, as well as emerging offshore wave and wind energy development. The Gulf Aquaculture Plan is currently under review by the Commerce Department.

To avoid a piecemeal approach to offshore permitting and management, the Gulf Council’s action could force the federal government’s hand on offshore aquaculture regulation. Past aquaculture bills have failed. House Resources Chairman Nick Rahall (D-W. Va.) recently stated that, in light of the Gulf Council’s approval of the Plan, Congress may look at national aquaculture standards. Dr. Jane Lubchenco, President Obama’s nominee for Under Secretary of Commerce for Oceans and Atmosphere and NOAA Administrator, stated during Senate confirmation hearings that she is “not prepared to put off the table offshore aquaculture at this point," but will also not move ahead unless NOAA is “convinced” that offshore aquaculture can be performed in a "scientifically grounded” and sustainable manner.[1]

Jurisdictional Issues Relevant to Offshore Aquaculture

Under the Submerged Lands Act of 1953, most states have jurisdiction over ocean waters out to three nautical miles from their shorelines. Under the Submerged Lands Act and associated case law, the maritime boundaries of Florida and Texas extend nine miles.[2] Under the Outer Continental Shelf Lands Act and a 1983 presidential proclamation, the federal government has jurisdiction over 197 nautical miles from the boundary of state waters (200 nautical miles from shore), within the United States’ exclusive economic zone (“EEZ”).[3]

There are currently no commercial finfish aquaculture operations in federal waters. Thirteen entities hold permits for live rock aquaculture in the EEZ. Many aquaculture industries operate in state waters, including off the coasts of California, Washington, Maine, Hawaii and Florida.[4] Most of these operations farm shellfish and finfish. Globally, as of 2005, aquaculture accounted for nearly 30% of the total world seafood supply.[5] In Washington, the Department of Natural Resources (“DNR”) can lease the beds of all navigable tidal water to any person for aquaculture uses (regardless of whether the lease holder owns the abutting shorelands).[6] Revenues from these operations, although small in comparison to those anticipated for offshore locations, are significant to some states. In Washington, for example, DNR recently collected $11 million from leasing land for an annual four-million pound geoduck harvest.[7]

Pollution from aquaculture is not geographically confined by jurisdictional boundaries, nor are broader implications to ecosystems.[8] The offshore industry has been described as “a predictable regulatory orphan,” due to the fact that “‘no primary regulator exists or has reason to step forward,’ given that “‘[t]he broad potential harms of aquaculture are unlikely to befall any one jurisdiction.’”[9]

Developments in Federal Management of Offshore Aquaculture

NOAA Fisheries requires an “exempted fishing permit” to conduct aquaculture in federal waters, but the permit is “of limited duration and is not intended for commercial production of fish and shellfish.”[10] Despite NOAA’s assertion that it “has a strong statutory basis for the promotion and regulation of marine aquaculture” and its responsibility for permitting aquaculture activities within the EEZ, no federal statute governs offshore aquaculture permitting.[11] Federal agencies’ general influence is limited to NOAA’s exempted fishing permit, a nonbinding and outdated NOAA policy from 1998, an even older memorandum of understanding between the Departments of Agriculture, Commerce and Interior, and an assortment of laws and programs under which the agencies conduct research and development.[12]

Still, federal agencies have significant regulatory authority over distinct elements of aquaculture. For example, NOAA Fisheries also has jurisdiction over activities and species potentially affected by aquaculture under the Fish and Wildlife Coordination Act, the Endangered Species Act, the Magnuson-Stevens Fishery Conservation and Management Act (the “Magnuson Act”), the National Environmental Policy Act, and the Marine Mammal Protection Act.[13] The Council itself is authorized to make recommendations to NOAA Fisheries about the management of marine aquaculture, which constitutes “fishing” under the Magnuson Act, in the EEZ. The Army Corps of Engineers permits offshore aquaculture facilities under Section 10 of the Rivers and Harbors Act, and the Environmental Protection Agency requires point source pollution discharge permits for marine aquaculture operations in the open ocean under Section 318 of the Clean Water Act. The Minerals Management Service leases sites for minerals development on the Outer Continental Shelf, and is currently developing regulations under the authority of the Energy Policy Act of 2005 that would apply to alternate uses of oil and gas platforms, enabling transfer of structure ownership from oil and gas lessees to other parties. The Coast Guard, Food and Drug Administration, and Fish and Wildlife Service also have jurisdiction over various activities and species affecting or affected by aquaculture.[14]

Notwithstanding its potential to regulate, there is no comprehensive federal regulation of offshore aquaculture. Two bills were introduced to the 110th Congress that would have created such a regulatory framework and established NOAA as the lead agency for permitting offshore aquaculture.[15] Neither bill made it out of committee,[16] and no new federal legislation has been introduced to the 111th Congress that would address the industry.

Offshore Commercial Fish Farms in the Gulf? – Specifics on the Gulf Aquaculture Plan

According to the Gulf Council, offshore aquaculture is the “rearing of aquatic organisms in controlled environments (e.g., cages or net pens) in federally managed areas of the ocean. Federally managed areas of the Gulf of Mexico begin where state jurisdiction ends and extend 200 miles offshore.”[17] The Gulf Council endorses the offshore location for aquaculture for two primary reasons: (1) fewer competing uses, compared to uses closer to shoreline; and (2) deeper and stronger water flows, which the Gulf Council determined will facilitate the mitigation of environmental impacts like nutrient and organic loading.[18]

The Gulf Council developed the Plan under the Magnuson Act in order to meet growing consumer demands for seafood and to reduce American dependence on seafood imports. According to the Gulf Council, the current regulatory environment renders offshore development “impracticable.”[19] Therefore, the purpose of the Plan is to develop a regional permitting process of offshore aquaculture within the Gulf EEZ. Under the Plan, aquaculturists could develop large fish farms of native species (such as snappers and groupers) in underwater cages. Operations are expected to require up to $10 million in start-up costs to develop. The Plan would allow the issuance of five to 20 permits for offshore operations in the next ten years, which the Council expects could produce up to 64 million pounds of seafood.[20]

The Council’s preferred alternative would authorize permits for the following actions: deployment and operation of allowable aquaculture systems for grow out, harvest of broodstock; operation of a hatchery in the EEZ; and possession, transport, and sale of allowable aquaculture species. Dealer permits would be required to receive cultured organisms and would be non-transferrable. Aquaculture permits would be transferable and eligibility limited to U.S. citizens and permanent resident aliens.[21] The Council’s preferred alternative would establish permit operational requirements and restrictions governing, among other things, application submission, allowable aquaculture systems and equipment, harvest certifications, and certifications that no genetically modified or transgenic species will be used for culture.[22] The Plan would authorize aquaculture permits with a 10-year duration, with renewal options every five years thereafter. It would allow for cultivation of only native species, except shrimp and coral. It would also prohibit marine aquaculture in marine reserves and other protected areas, and would set up a restricted access zone for each facility in which no fishing may occur – the size of which would be determined based on the approved siting permit. The Plan would require recordkeeping and reporting, and set overfishing definitions contained in other management plans as proxies for assessing wild stocks affected by excessive aquaculture production.[23]

Impacts

Aquaculture supporters argue that domestic fish farming reduces pressure on wild fish stocks, creates jobs, reduces dependence on foreign seafood, and increases recreational fishing. Critics argue that it causes extensive pollution in the form of fish waste and uneaten food, spreads disease, negatively affects wild stocks, and eliminates more jobs than it creates.[24] Environmental groups also contend that the Gulf Aquaculture Plan lacks environmental safeguards because it does not set specific pollution discharge limits or provide details on appropriate fish farm siting.[25] Nearly 200 environmental, recreation, and conservation groups have already voiced disapproval of the Plan, and some are considering legal challenges.[26]

Aside from environmental impacts, offshore aquaculture raises a host of jurisdictional, regulatory, and economic issues, and the industry could conflict with other economic uses of offshore areas. These include established commercial fishing industries, mineral and metal exploration, oil and gas, and tourism, as well as emerging offshore wave and wind energy development. In Canada and other countries with more developed offshore aquaculture programs, new interests have already experienced conflicts with traditional offshore sectors over the allocation of resources and space.[27] In the United States, wind power is growing rapidly, and significant offshore wind resources exist close to densely populated coastal regions in the United States.[28] Like aquaculture, offshore wind developments – which often use the largest turbines developed and proven for onshore use – require a significant amount of ocean.[29] Given the scope of potential commercial offshore aquaculture operations, resource conflicts appear inevitable. Still, some of these industries have identified mutually beneficial strategies. For example, both aquaculture and wind developers have suggested using decommissioned oil rigs for wind turbines and aquaculture facilities, at a cost benefit to all parties to the transaction.[30]

As for the Gulf Aquaculture Plan, it must still get through two public comment periods and receive approval from NOAA – a process that will likely take at least a year.[31] There may be lawsuits that delay it further, and there could also be Congressional action. Earlier this month, Representative Rahall wrote a letter NOAA voicing his opposition to the Plan. He argues that Congress did not intend to authorize NOAA Fisheries and regional fisheries management councils to regulate offshore aquaculture as fishing under the Magnuson Act, and that offshore fish farming outside of a federal regime could significantly damage the ocean environment. Like Dr. Lubchenco, he wants offshore aquaculture conducted under a “national framework of laws and policies” governing siting, permitting and operation, not a patchwork of fisheries management council plans.[32]

For more information on offshore developments, contact Jessica Ferrell or any member of the Natural Resource practice group.