Tough roe to hoe — Aquaculture association has history of taking on water

Editor’s note: This is part two in a series of stories examining the Cook Inlet Aquaculture Association. Last week’s story looked at a disease outbreak affecting sockeye salmon stock at the Trail Lakes Hatchery. This week’s story considers some of the other challenges CIAA has faced over the years. Last week’s story can be viewed at https://redoubtreporter.wordpress.com/2010/09/29/virus-strikes-salmon-fry-%E2%80%94-hatchery-loses-sockeye-stock-to-ihn/

By Jenny Neyman

Redoubt Reporter

There are few certainties when it comes to fishing, and even fewer in the realm of hatching, rearing, releasing and returning salmon successfully, both in terms of biological survivability and financial sustainability. For the Cook Inlet Aquaculture Association, one thing is for sure: Unfortunately, it’s the dominance of Murphy’s Law — whatever can go wrong, will go wrong.

“This, by far, has probably been the worst year we’ve ever had. We lost fish to IHN (infectious hematopoietic necrosis virus), fish didn’t come back, we couldn’t meet our cost-recovery harvest, and our sunset clause on our cost-recovery harvest priority is up for renewal. The timing couldn’t be worse,” said Gary Fandrei, executive director of CIAA. “I don’t know if there’s anything else that could have went wrong.”

After a tough summer of setbacks and more potential problems on the horizon, the CIAA board of directors met Sept. 7 to discuss whether to keep the hatchery program going, which is intended to boost salmon stocks for commercial fisheries. If the program fails, not only will the salmon run enhancements stop, but Cook Inlet commercial fishermen will be left on the hook to pay off the association’s millions of dollars in debts for many years to come.

Smooth sailing? Not for long

From its inception, CIAA has been buffeted by a stream of setbacks, bad luck, missteps, poor timing, steep learning curves and changing political currents.

“Have we had frustration? My gosh yes, one frustrating thing after another,” said Brent Johnson, president of the association.

CIAA started out by building the Eklutna Salmon Hatchery in 1982 for the production of pink, chum, silver and king salmon to enhance Cook Inlet common-property commercial fisheries. Expensive problems began to arise almost immediately.

“The construction company built it on frost, the ground settled and the building sank, causing a lot of damage. We sued but they lost the case, and lost $1 million or some crazy thing. It was bizarre,” Johnson said.

It also became clear that the hatchery couldn’t continue to use river water, as intended, because it carries the IHN virus. If the virus shows up in a hatchery, the Alaska Department of Fish and Game requires managers to clean out any unit in which it is found, which can mean entire raceways or incubators full of young fish must be killed. There went another half a million dollars or so to drill wells, Johnson said.

Still, with only the Eklutna hatchery to manage, the association was on an even keel in its early days, able to sustain itself on salmon

 

Photos courtesy of Cathy Cline, field assistant at the Bear Creek Weir. Cook Inlet Aquaculture Association net pens in Resurrection Bay hold over a million sockeye salmon smolt. The fish are supposed to return after two and three years at sea and be caught by commercial fishermen and CIAA for its cost-recovery fishery, but the fish from a 2008 release did not return this summer.

 

enhancement tax revenue.

When private nonprofit aquaculture associations were created in the state in the mid-1970s for the purpose of supplementing existing and creating new fish runs, conducting scientific study, and maintaining and improving salmon habitat in order to enhance commercial fishing opportunities, commercial fishermen were given choices in how they wanted to fund the associations. In Cook Inlet’s Area H, fishermen chose to have a 2 percent tax assessed on their fish sales. That salmon enhancement tax is collected by the state and granted back to CIAA.

The association also is eligible to apply for grants and can get revenue through direct contracts, where an outside entity wants to enhance a specific fish stock and pays the association to rear those fish. But historically, the salmon enhancement tax has accounted for the lion’s share, up to 100 percent, of the association’s income.

Up until the early 1990s, the salmon enhancement tax generated as much as $1.8 million to $1.9 million on a five-year average, which mirrored the association’s budget at the time, Fandrei said. That smooth sailing didn’t last long.

The state of Alaska began to divest itself of its hatchery operations around that time.

“The state decided to bail out of the hatchery business,” Johnson said. “We didn’t want to see the programs go away so we took over all those hatcheries and found out we just couldn’t afford to run them.”

In the space of a few years CIAA took over operation of Trail Lakes Hatchery in Moose Pass, Crooked Creek Hatchery at Tustumena Lake and Tutka Bay Lagoon Hatchery in Kachemak Bay, and absorbed some of the projects at the Big Lake Hatchery in the Matanuska-Susitna Borough, Fandrei said.

 

CIAA carries sockeye smolt hatched and reared at Trail Lakes Hatchery to transfer to net pens in Resurrection Bay.

 

“We were doing pretty well. But we recognized then that we did need to have some additional funding if we were going to take over these hatchery programs. If we were going to keep operating, we knew that the salmon enhancement tax wasn’t going to be adequate,” Fandrei said.

The association initiated plans for a cost-recovery harvest, where the association rears and releases salmon, then catches and sells the returning adult fish to raise money to fund operations.

According to theme, the cost-recovery fishery did not get started according to plan. The Alaska Board of Fish turned down the association’s first request. When the association did get permission to operate a cost-recovery fishery, the first returns in Resurrection Bay were weak. Even when the run strength improved, the association was restricted to harvesting after the commercial fleet got their crack at the run, and had to harvest in fresh water, which hurt quality and, therefore, price of the fish, so the catch didn’t generate much revenue.

Just as the association’s operations and costs took a huge leap, and efforts to boost revenue with a cost-recovery fishery were wallowing, the bottom fell out of the Cook Inlet commercial fishing industry, sinking the association’s salmon enhancement tax revenue along with it.

“About the same time the salmon enhancement tax started to decline. Reduced harvest in the inlet due to shortened seasons, allocation of fish away from the commercial fleet to other user groups, declining prices — it all kind of snowballed in Cook Inlet,” Fandrei said.

 

Smolt are carried through a tube for transport into the net pens.

 

By 2004, the five-year average revenue from the salmon enhancement tax was $320,000, about 15 percent of what it was at its highest point. Some individual years the tax generated less than $190,000, Fandrei said.

“One other region had a 50 percent decline in their enhancement tax, but in Cook Inlet we were by far the biggest decline,” Fandrei said.

“All those things just hammered us right at the time we were taking over those hatcheries,” Johnson said.

The association could see rough water ahead, but couldn’t readjust course fast enough to avoid it.

“The life cycle of sockeye is five years, so if you’re going to make adjustments to your programs to compensate for a change in your enhancement tax, the adjustment you make today is not going to be seen for five years, so we couldn’t keep up with those adjustments,” Fandrei said. “We knew this was happening even as early as 2000, 2001, but we couldn’t keep up.”

New course

To cut costs, CIAA began closing hatcheries until only Trail Lakes Hatchery was left in operation. Sen. Ted Stevens came through with federal money, about $1 million per year for seven years, starting in 2001. That was used to help cover operational costs and improve projects and facilities.

“And we did make some improvements and had some things going fairly well,” Fandrei said.

Again, not for long. In the 2000s, salmon enhancement tax revenue remained depressed and the cost-recovery harvest program, started in 1992, was still not bringing in revenue as hoped. And the Band-Aid of Sen. Stevens money was about to run out.

“We knew we were coming into a situation where we were going to be at a very high-risk position, and that’s why we went to the Board of Fish and said, ‘We need to establish this cost-recovery program,’” Fandrei said. “Because if something goes wrong over the next couple years, we’re going to be in pretty tough shape.”

Something didn’t go wrong. Many things went wrong, putting CIAA into a tenuous enough position that the board of directors met in early September to consider shutting down even Trail Lakes Hatchery.

CIAA requested that the Board of Fish grant an emergency ruling that would allow the association priority for its cost-recovery harvest, meaning first crack at the fish and the commercial fishermen get whatever’s left of the run, if anything, after the association meets its cost-recovery goal. The board agreed and in 2009 CIAA finally saw its cost-recovery plans materialize, to the tune of $1.4 million.

When it rains, it pours

Just when things were looking up, they took another nosedive in 2010. Trail Lakes Hatchery has struggled with outbreaks of the IHN

 

Terry Magee, Tom Prochazka and Jenny Mevissen, with the Cook Inlet Aquaculture Association, pick salmon out of a seine net, sorting males and females for broodstock to use at Trail Lakes Hatchery.

 

virus. Most years, the virus shows up early in the hatching process and managers are able to eliminate just one or two incubators to control the outbreak. In 2003, IHN broke out among fry in the raceways outside the hatchery, where it is much more difficult to control. This summer the hatchery saw another IHN outbreak in raceways, which resulted in managers having to kill 1.9 million sockeye fry — the entire stock being reared for release in Resurrection Bay — and another 250,000 fry slated to go to Tutka Bay.

The IHN problem isn’t anticipated to go away anytime soon. The virus can be passed horizontally, from fish to fish, but also vertically, from parent to progeny. As long as IHN exists in the brood stock used for egg takes, it could show up among the resulting eggs and fry.

CIAA is permitted to take eggs from sockeye at Hidden Lake and Bear Lake, and both carry IHN, with Bear Lake particularly hot with the virus. CIAA used to use sockeye from Tustumena Lake for egg takes, but a lawsuit prevented economic activities in designated wilderness areas and CIAA lost access to the Tustumena stock in 2004.

Fandrei said the association is spending considerable time and resources looking for a new source of sockeye brood stock, especially to use for its stocking program of Lower Cook Inlet Lakes — China Poot, Kirshner and Hazel lakes. Those lakes are currently stocked with sockeye from Hidden Lake stock, but the timing isn’t quite working out. The Hidden Lake sockeye spawn late, and by the time the hatchery can collect eggs, hatch and rear fry, and release them into the lakes in the spring, there isn’t enough time for them to thrive.

“They’re too small to survive successfully in the lakes. We’re just realizing that because we’ve now had three years of returns from Hidden Lake stock in lower Cook Inlet lakes and none of the returns have been very big at all. They’ve pretty much been nonexistent. So it’s not a good stock to use from a survival perspective, and also from an economic perspective,” Fandrei said.

Fish and Game wouldn’t allow CIAA to use Bear Lake brood to stock those lakes, which is probably good, Fandrei said, since that would mean virtually all sockeye stock would be coming from Bear Lake, so if there’s a problem with that brood, it could have disastrous, far-reaching consequences.

“It would not be the best choice in terms of having two separate stocks, which gives you less risk,” he said. “We are looking for other alternatives and are working very hard to get some different stock in there, but these things take time. If we change stocks it’ll be four or five years before we get a return off those.”

In the meantime, stocking programs for Resurrection Bay have gone distressingly awry. The IHN outbreak at Trail Lakes Hatchery this summer means there won’t be sockeye to stock with next spring, which will result in a big old goose egg in terms of cost-recovery harvest revenue that those fish were budgeted to represent.

To make matters worse, sockeye from recent releases are not returning. Sockeye fry released to Bear Lake out-migrated to Resurrection Bay in 2007, with 1,350,000 smolt counted as leaving the lake. Sockeye smolt in Resurrection Bay typically return after two and three years in the ocean, generally split about 50-50 as two-ocean and three-ocean fish.

“We saw essentially no 3-year-old fish come back this year. They were gone. We know they left the lake, and they weren’t there,” Fandrei said.

CIAA also stocked 1.6 million sockeye in net pens in Resurrection Bay and released those smolt in 2008. Half of those were expected to come back this summer as two-ocean fish, with the rest expected to return next year.

“We didn’t see any of those come back. Rather than securing the $1.4 million worth of cost recovery we were expecting in Resurrection Bay, we actually only saw $250,000,” Fandrei said.

The $250,000 came from returning sockeye from a small smolt out-migration from Bear Lake in 2008. But the smolt that out-migrated from Bear Lake in 2007 and from the net pens in 2008 simply didn’t return. Managers don’t know why. One theory is that sockeye smolt heading out to sea need to first imprint with a source of fresh water in order to find their way back to spawn. It’s possible the net pens failed because the fish didn’t get enough of a scent of fresh water to find their way back, but Fandrei noted that the pens are near the outlet of Spring Creek. It’s also possible something was wrong with the fish, that something happened to both the 2007- and 2008-released fish in the ocean, or that something went wrong in the release process.

CIAA also released sockeye from the Resurrection Bay net pens in 2009 and 2010, and now doesn’t know whether those fish will return. If they don’t, it will mean a loss of millions of dollars of revenue on which CIAA is counting. Without knowing for sure what went wrong, Fandrei said it’s difficult to make changes to the release program, especially because it takes four to five years to see if the change made any difference.

“The fear is that we don’t know if the fish we’ve been releasing from the net pens in Resurrection Bay are going to be successful or not,” he said. “But it’s really too early to tell because the first year we released them was 2008 and we didn’t get anything back as 2-year-old fish. They could all come back as 3-year-old fish, though I doubt it, that’s very optimistic thinking. Or there could have just been a problem with that very first release, so we may see fish there next year. Or not. We don’t know. We’re still up in the air on that one.”

Fishing for a turnaround

There are some glimmers of hope. When CIAA’s cost-recovery harvest in Resurrection Bay fails to meet its goal, as it did in 2010, the association can operate a cost-recovery fishery in lower Cook Inlet, which is looking promising. Though returns to stocked, lower-inlet lakes haven’t been robust, returns on sockeye released from net pens in Tutka Bay Lagoon have been successful for the past three years, and CIAA was able to raise another $250,000 in cost-recovery money off those fish.

But even this silver lining has a potential rust spot. CIAA’s allowance for cost-recovery fishing priority from the Board of Fish expires this year, so CIAA will need to ask for re-approval in November. That could prove difficult. Aside from perennial allocation battles between sport and commercial fishing interests, even commercial fishing support for CIAA may see a slump this year, since CIAA hasn’t been able to produce much direct financial benefit to commercial fisheries recently.

Fandrei said he hopes to see that turn around soon.

“If things go according to plan, I would say you could see a direct benefit to the common-property fishery as early as next year,” he said.

But, of course, there’s no guarantee.

“We’re talking about fishing, here,” he said.

Next week’s story will focus on CIAA’s plan for the future.