[From the U.S. Government Printing Office, www.gpo.gov]




     Final Programmatic
     Environmental Impact Statement




     Fish Culture in Floating Net-Pens
     Washinnton Department of Fisheries



                                    LT











                                           Technical Appendices

     January 1990



                                                                                      SCHOOL?


                                           TECHNICAL APPENDICES


             PLEASE NOTE:

             The following technical appendices are intended to provide additional information on the
             subject of fish farming. There has been no attempt to include information on all facets
             of fish farming, nor has there been any attempt to evaluate the information presented
             here. A determination has not been made concerning the applicability of the information
             to the situation in Washington. Several comments on the Draft EIS requested additional
             information on fish farming. When possible, the requested information was included in
             the appendices. The purpose of these appendices is solely to provide information to aid
             in the ongoing discussion of the fish farming industry. In addition to the appendices, a
             list of sources of recent information on fish farming is included on the following page.
             The following is a list of the titles of the appendices:


             A         Assessment and Prediction of the Effects of Salmon Fish Farm Culture on the
                       Benthic Community

             B         Modeling of Particulate Deposition Under Salmon Fish Farms

             C         Phytoplankton and Nutrient Studies Near Salmon Fish Farms at Squaxin Island,
                       Washington

             D         Infectious Diseases of Salmon in the Pacific Northwest

             E         The Economics of Salmon Farming

             F         Permits That May Be Required for Aquaculture Projects

             G         Viral Hemorrhagic Septicemia

             H         Norwegian and British Columbia Information

             I         Land-Based Tank Farms

             J         Legislation Authorizing the EIS

             K         Effect of Fish Farms on Surrounding Property Values

             L         Economic Aspects of Salmon Aquaculture


             NOTE:     Appendices A and E were completed under separate contracts with the
             Department of Fisheries.


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                                                              Property Of
                                                  NoAA Coastal Services center
                                                                Library











             ADDITIONAL REFERENCES

             Further information on fish farming can be obtained from the following sources:

             Alaska Finfish Farming Task Force. 1989. Report to the Alaska legislature, draft for
                public comment. 26p.

             B.C. Ministry of Environment. 1988. Environmental monitoring program for fish farms.
                Prepared by Waste Management Branch and Water Management Branch, British
                Columbia Ministry of Environment. 77p.

             B.C. Ministry of Environment. 1989. Environmental procedures and guidelines for
                marine fish farms. Draft report. 41p.

             Institute of Aquaculture, University of Stirling. 1988. The reduction of the impact of
                fish farming on the natural marine environment.              Prepared for the Nature
                Conservancy Council: Scottish Headquarters: Edinburgh. 167p.

             Institute for Environmental Studies, University of Washington.            1989.   Focus on
                aquaculture. The Northwest Environmental Journal. Vol. 5, No. 1.

             International Council for the Exploration of the Sea. 1988. Cooperative research report
                no. 154. Report of the ad hoc study group on "environmental impact of mariculture."
                Copenhagen, Denmark. 83p.

             Nature Conservancy Council. 1989. Fishfarming; and the safeguard of the natural marine
                environment of Scotland. Nature Conservancy Council: Scottish Headquarters,
                Edinburgh. 136p.

             Standing Committee on Fisheries and Oceans. 1988. Aquaculture in Canada. Report
                to the House of Commons. 129p.







































                                   APPENDIX A


                           ASSESSMENT AND PREDICTION
                   OF THE EFFECTS OF SALMON FISH FARM CULTURE
                           ON THE BENTHIC COMMUNITY

























                     ASSESSMENT AND PREDICTION OF THE EFFECTS OF
                  SALMON NET-PEN CULTURE ON THE BENTHIC ENVIRONMENT







                                          by

                               Donald P. Weston, Ph.D.

                            School of Oceanography, WB-10
                               University of Washington
                                  Seattle, WA 98195

                                         and

                               Richard J. Gowen, Ph.D.

                        Scottish Marine Biological Association
                       Dunstaffnage Marine Research Laboratory
                                       PO Box 3
                                Oban, Argyll PA34 4AD
                                       Scotland










                                    Prepared for:

                          Washington Department of Fisheries




                                    November, 1988














                                   TABLE  OF CONTENTS





            Acknowledgements  . . . . . . . . . . . . . . . . . . . . .
            Abstract  . . . . . . . . . . . . . . . . . . . . . . . . .   iv
            INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . .     2
            MATERIALS AND METHODS . . . . . . . . . . . . . . . . . . .     4
            RESULTS
               Clam Bay site  . . . . . . . . . . . . . . . . . . . . .   10
               Squaxin Island site  . . . . . . . . . . . . . . . . . .   27
            DISCUSSION
               Clam Bay site  . . . . . . . . . . . . . . . . . . . . .   48
               Squaxin Island site  . . . . . . . . . . . . . . . . . .   49
               Assessment techniques  . . . . . . . . . . . . . . . . .   50
               Model evaluation . . . . . . . . . . . . . . . . . . . .   51
            LITERATURE CITED  . . . . . . . . . . . . . . . . . . . . .   60












                                  ACKNOWLEDGMEWTS

           The authors appreciate the assistance of many individuals
           and organizations for providing information or logistical
           support essential to completion of this project:

           ï¿½  The farm operators provided feed rate and production
              information required for the analyses. The Squaxin
              Island Tribe was particularly helpful by providing boats
              and operators on several occasions. This work would not
              have been possible without the cooperation and assistance
              of tribal staff.


           ï¿½  The National Marine Fisheries Service assisted these
              studies by providing boats for use in Clam Bay.

           ï¿½  The collection of samples in Clam Bay was made possible
              by the help of Mr. Dwayne Karna, Mr. Dave Terpening and
              other members of the EPA Region 10 dive team.

           ï¿½  The Washington Department of Fisheries provided patrol
              boats for deployment and recovery of current meters.

           ï¿½  The prompt analytical services provided by Dr. Donald
              McLusky of the University of Stirling are much
              appreciated.

           ï¿½  Finally, the we are grateful to Mr. Ron Westley and Mr.
              Eric Hurlburt of the Washington Department of Fisheries
              for their support, patience and review of the draft
              report.











                                       ABSTRACT


                 Sediment chemistry and macrofaunal communities were
            examined in the vicinity of two salmon mariculture facilities
            in Puget Sound. The Clam Bay farm is a relatively large
            operation containing 200 to 400 tons of salmon, and has been
            in operation for about 13 years. Deposition of feed and feces
            beneath the pens has created an area characterized by high
            levels of organic carbon and nitrogen and depressed sediment
            reduction-oxidation potentials. This area extends under the
            pens and out to a distance of 15 to 60 m from the farm
            perimeter. The macrofaunal community shows dramatic altera-
            tions in this area including the disappearance of most species
            characteristic of the natural community and high abundances of
            nematodes and an opportunistic polychaete. More moderate
            changes in the infaunal community extend at least 150 m from
            the farm.
                 The Squaxin Island farm is a comparatively small facility
            (20 to 40 tons of fish on site) and has been operating only
            since early 1987. Unlike the Clam Bay site, there was little
            effect of the farm on sediment chemistry, even directly under
            the pens. The infaunal community shows evidence of disturb-
            ance in an area extending from the pen perimeter out to a
            distance of 6 m. Within this zone the community appears to
            have been undergoing gradual change over the 18 months of farm
            operation.
                 On the basis of these investigations, macrofaunal
            community composition appears to be a more sensitive indicator
            of benthic impacts than measurement of sediment chemical
            parameters alone. Among the sediment parameters evaluated,
            redox potential appears to be a valuable tool for rapid and
            cost-effective impact assessment, at least in coarse-grained
            sediments.
                 A model which predicts dispersion of feed and feces
            from a farm site was tested for agreement with actual
            conditions at the Clam Bay and Squaxin sites.   The model was
            found to be reliable to within a factor of two  or less in
            predicting the magnitude of organic loading to  the seafloor.
            At the Clam Bay site and, to a lesser extent, at Squaxin
            Island the areas which the model predicted to receive the
            greatest input of feed and feces were the same areas showing
            the highest degree of sediment enrichment. On a broader
            scale, the model appeared reliable in identifying the areal
            extent of impact from net-pen culture. After tests at eight
            farms the model has predicted enhanced carbon fluxes up to
            70 m (and usually less than 30 m) from the pen perimeter.
            These predictions are consistent with the results from this
            study and other investigations. The model is useful in
            identifying sites that would be clearly unsuitable for
            culture or others where environmental impacts are likely to
            be negligable. There are, however both inherent unknowns
            and oversimplifying assumptions in the model, which should
            be recognized to avoid indiscriminant application of the




                                         iv









            model and misinterpretation of the results. The data base
            of current velocity and direction on which model predictions
            are based is rarely, if ever, available for siting
            decisions, but would be valuable both to environmental
            managers and farm operators.




















































                                        V






















                    ASSESSMENT AND PREDICTION OF THE EFFECTS OF

                  SALMON NET-PEN CULTURZ ON THE BENTHIC ENVIRONMENT














                                      INTRODUCTION




                 Cultivation of salmon in estuaries and coastal embayments
             generates substantial quantities of particulate organic wastes
             consisting principally of feces and uningested feE!d. It has
             been estimated that the production of 1 kg of salmon generates
             0.5 to 0.7 kg of particulate waste (Weston, 1986; Gowen and
             Bradbury, 1987). For large farms, which produce several
             hundred tons of salmon annually, the quantity of particulate
             waste settling to the seafloor is considerable. Accumulation
             of organic waste on the sea bed has been found to alter some
             aspects of sediment chemistry and benthic macrofaunal commun-
             ity composition in the vicinity of salmonid culture opera-
             tions. The changes in sediment chemistry include increases in
             carbon, nitrogen and phosphate content (Hall and Holby, 1986),
             depression in sediment reduction-oxidation potentials (Brown
             gt al., 1987), and changes in the rates of nutrient cycling
             (Kaspar et al., 1988). Shifts in the species composition and
             relative abundances of benthic macrofauna have been reported,
             occasionally with an azoic zone directly beneath the farm
             (Pease, 1977; Brown et al., 1987). Waste accumulation on the
             seafloor can have implications for the viability of the farm
             itself. The release of hydrogen sulfide from anoxic sediments
             and/or related changes in water quality can adversely effect
             the health of the cultured fish (Arizono, 1979) and has been
             the reason for the closure of some operations (Braaten et al.,
             1983).
                 At the present time there is a rapid growth in the farm-
             ing of salmon. The results of this growth will be the expan-
             sion of existing farms, some to an annual production of 2,000
             to 3,000 tons, and the establishment of multiple farms in
             individual embayments. As development proceeds potential
             pollution problems require careful scrutiny, and it has
             recently been stated that there is a need for models which can



                                         2










            be used to predict ecological impact before establishment of a
            farm (Rosenthal et al., 1987). The development of such
            models, together with an understanding of the effects of
            organic wastes on the benthos, is essential to ensure that
            this form of mariculture does not cause broad ecological
            change. An additional application of such model would be in
            resource management, to ensure that farming is not conducted
            in areas which, through ecological change, can not sustain the
            long-term use of the site.
                 This paper describes an assessment of the intensity and
            spatial extent of impact on the benthos of two farm sites in
            Puget Sound, Washington. The sites chosen for study differ
            greatly in physical conditions, farm size and duration of
            operation, and potentially offer a broad range in the scale of
            impact. The study was also intended to further test a
            sedimentation model designed to predict the dispersal of solid
            wastes from fish farms (Gowen et al, in press). A preliminary
            test of the model (Gowen et al., 1988), using sediment redox
            potentials as an indicator of organic pollution, suggested
            that the model could be used to predict the spatial extent and
            severity of ecological disturbance of the benthos and in the
            selection of suitable sites.












                                   MATERIALS AND METHODS




                Field sampling and model verification was performed at
           two salmon net-pen operations in Puget Sound. The Clam Bay
           farm is a large operation with an annual production of 617
           tons and containing 200 to 400 metric tons of salmon at any
           given time. The farm has been in operation at the same site
           continuously since the early 1970's. The Squaxin Island farm
           holds 20 to 30 tons of salmon and has only been in operation
           since 1987. There are 53 additional pens located 2,50-500 m
           south of the Squaxin Island-farm. These pens are used to hold
           juvenile salmon on a seasonal basis, and were largely unused
           during the period of investigation. Physical characterisics
           of each site and details of the Clam Bay and Squaxin farms are
           given in Table 1.
                Sampling stations were established at each farm at prede-
           termined distances along 3 transect lines extending out from
           the pens, varying in length from 30 to 165 m (Figure 1).
           Field activities included deployment of current meters and
           sediment traps, collection of sediments for chemistry and
           grain size analysis, measurement of dissolved oxygen in near-
           bottom waters, and sampling of benthic macrofauna.


           Current measurements - Two Aanderaa current meters were
           deployed at each of the farm sites, and set to record at 15
           minute intervals for a period of 60 days. The meters were
           placed 2.5 and 5.5 m above the seafloor at the Squaxin Island
           and Clam Bay sites, respectively.


           Sediment traps - Sediment traps were constructed of PVC pip-
           ing, 15 cm in diameter and 45 cm in length. An array of three
           traps were placed under the pens and at each station along
           transects CB1 and SQ1. The distances between the sea bed and
           the mouths of the traps were 0.5 and 5.5 m at the 115quaxin and
           Clam Bay sites, respectively. Prior to deployment 250 g



                                        4












                                          Table 1
                          Physical characteristics of the farms
                                and surrounding environments




                  PARAMETER                    CLAM BAY         SQUAXIN ISLAND

           Depth of water                      10 - 26            4.7 - 5.0
               (m at mean lower low water)

           Distance between bottom of
               pens and sea bed                 6 - 22            1.7 - 2.0
               (m at mean lower low water)
           Area of cages (m2)                   14,560              1,184

           Duration of operation (years)          13                 1.5

           Biomass held on farm               200 - 400            20 - 30
               (metric tons)
           Feed provided (kg-day-1)         2200  - 5900          400 - 600

























                                          5





             mo@@5ester                       0      '100   200
              EPA Lob.                                  Omm"
                                              Scale in Meters






                             Ed




                                          0     Transect
                                                CBI


                                                    HHHHHHM
                                                                                M
                                                                HHHHH!

                                                                            Transect
                                                     Transect               CB2
                                                     CB3
                                    -480
                               Everett N





                             Seattle








                           GCOMO
                -J-                                       Transect
                                                          S03      0
                    I ympla           47
               1230W              12               0   0 0
                                                Transect
                                                SQ2                 9




                                                         Transect
                                                         S04





                      0           50          400

                      Scale in Meters




           Figure 1.     Locations of the two Puget Sound farm sites investi-
                         gated. Sampling stations are indicated by dots under
                         the pens and along three transects at each site.
                         Locations of the Aanderaa current meters indicated by
                         M symbol.


                                                   6










            of reagent grade salt was added to each trap to retard micro-
            bial activity and reduce loss of material by resuspension.
            The traps were deployed for 9 days at the Clam Bay site and 15
            days at Squaxin Island. Mercuric chloride was added to the
            traps at the time of recovery to inhibit microbial activity
            prior to analysis. The total amount of particulate material
            retained in the traps was estimated by filtering duplicate
            aliquots of the homogenized trap contents on to combusted and
            preweighed 45 um silver filters. The material retained on the
            filters was analyzed for carbon and nitrogen in a Carlo Erba
            Model 1106 CHN microanalyzer following vapor phase acidifi-
            cation to remove inorganic carbon (Hedges and Stern, 1984).


            Sediment sampling - The upper 1 cm sediment stratum was
            collected by SCUBA diver (Clam Bay) or Van Veen grab (Squaxin
            Island). The sediment was analyzed for carbon and nitrogen
            content in the same manner as the sediment trap material,
            except that a Perkin Elmer 240 elemental analyzer was used.
            Sediment redox potentials were measured in diver-collected
            cores following the method of Pearson and Stanley (1979).
            Grain size analysis was performed by dry sieving followed by
            pipette analysis of the silt and clay fraction.


            Dissolved oxygen - Near-bottom water samples were collected 5
            to 10 cm above the sediment-water interface by SCUBA divers,
            and analyzed by the Winkler titration method (Strickland and
            Parsons, 1972).


            Benthic macrofauna - Macrofauna samples were collected at each
            farm site in connection with independent investigations. The
            Squaxin samples were collected as part of the operator's
            routine monitoring program which was scheduled so as to sample
            concurrently with the present investigation. The Clam Bay
            samples were collected as part of an EPA-funded study by the
            University of Washington to examine the effects of organic
            enrichment on benthic communities (Weston, 1988).



                                        7










                  At the Squaxin Island farm macrofaunal samplE!S were
             collected at each station along transect SQ1. Three 0.008-m2
             cores were collected by diver at each station. The contents
             of two of the cores were washed on a 1.0-mm screen, while the
             third core was washed on stacked 0.5 and 1.0-mm screens. The
             Clam Bay macrofauna samples were collected one year prior to
             the present investigations at stations closely approximating
             those of transect CB1. Three samples were collected at each
             station using a 0.06-m2 spade corer, and washed on a 0.5 mm
             screen sieve.



                  The predicted dispersal of feed and feces from the net-
             pens was determined using the sedimentation model of Gowen
             -et al. (in press). The model uses a value of 4 crft-sec-1 for
             the settling velocity of feces (Warrer-Hansen, 1982), and a
             settling velocity for uneaten feed that was determined in a
             settling column using feed from the specific farm,. The area
             occupied by the farm was divided into a grid of 1 m squares,
             and waste production was assumed to be evenly distributed over
             the farm area. Solid waste production (in units of g organic
             carbon-m-2-hr-1) was calculated as a proportion of the feed
             provided. The amount of waste feed was assumed to be 15%,
             although the actual wastage varies greatly among farms and is
             generally unquantified (see p. 54 for complete discussion).
             The fecal production was estimated to be 30% of the ingested
             feed (Penczak et al., 1982). Hourly values of current veloc-
             ity and direction were used to calculate the horizontal
             displacement of feed and feces in each array element using the
             equations:


                                        (D) x (V cos 0)

                                      +

                                               U










                                          8












                                       (D) x (V s in 0)

                                    +

                                             U



             where I and J are the co-ordinates of the waste within the
             array at the start of each hour. D (water depth under pens)
             divided by U (settling velocity of feed and feces) determines
             the time during which horizontal displacement takes place.
             V cos 0 and V sin 0 provide the components of the horizontal
             displacement of a particle. Thus, the above equations give
             the X and Y co-ordinates of a particle on the sea bed in
             relation to the position of the farm at the end of each hour.
             The model was run using current data over one or more spring-
             neap tidal cycles and integrated the dispersal and input of
             organic carbon waste over this time period.































                                         9












                                         RESULTS



            CLAM BAY SITE



                 Fourteen stations were sampled in the vicinity of the
            Clam Bay farm site, ranging from directly under thE! net-pens
            to a distance of 165 m from the perimeter of the complex
            (Table 2). The bottom topography at the farm site was steeply
            sloped, with water depths increasing to the north and east.
            Water depths near the southwest corner of the cage complex
            were 10 m at MLLW in comparison to 26 m at the northeast
            corner. Sampling in the deeper areas was not possible by
            SCUBA diving, thus all samples were collected at depths of 19
            m or less. Seawater temperature and salinity of near bottom
            waters were 130C and 30 ppt, respectively.
                 Sediments were primarily medium sands (0.25 - 0.5 mm
            diameter) to the east and south of the pen complex with finer
            sands (0.125 - 0.25 mm) to the northwest. Silts and clays
            comprised less than 5% of the sediment throughout the study
            area. Shell and gravel comprised a large fraction of the
            sediment (19%) only at stations to the east of the farm site.



            Water Currents



                 Two current meters were deployed near the Clam Bay farm
            site. The first was positioned 100 m east of the net-pen
            complex, 5.5 m above the seafloor and 23.5 to 27 m below the
            surface (depending on tidal stage). The second was located
            100 m northwest of the farm, 5i5 m above the seafloor and 9.5
            to 13 m below the surface. Data collected during the period
            July 6 through August 4, 1988 were analyzed and presented in
            Figure 2. The current regimes showed pronounced differences
            at the two sites as a result of either depth-related differ-
            ences in current flow, or, more probably, local variations
            attributable to the close proximity and curvature of the
            shoreline.




                                        10












                                    Table 2
                           Clam Bay station summary


           Station or    Distance from   Water depth
            Transect      net-nens (m)   (m at MLLW)       Substrate


              A                 0            15


           Transect CB1
                                0            16
                               15            16
                               30            16
                               60            15
                               165           15       0.3% shell/gravel
                                                      95.7% sand
                                                      4.0% silt and clay


           Transect CB2
                                0            13
                               15            14
                               30            15
                               60            19       19.4% shell/gravel
                                                      77.1% sand
                                                      3.5% silt and clay


           Transect CB3
                                0            13
                               15            12
                               30            11       1.8% shell/gravel
                                                      98.2% sand
                                                      0% silt and clay
                               60            10








               STA RT




                                    100 m east
                      X@            of form                                              N





                                                              `100 m northwest
                                                              of farm
                                                            1W                            START


                                               k,              11 In
                        FINISH                                        ly










                                                                                             @FINISH


                  Figure 2. Progressive vector diagrams based on the two current meter
                             records from,the Clam Bay site. X symbols indicate 24-hour
                             intervals.










                 The current data are presented in the form of progressive
            vect@or diagrams. These diagrams were created by drawing a
            vector for each of the 690 current observations such that the
            oreintation of the vector corresponds to the direction of the
            current and the vector's length corresponds to current
            velocity. The vectors are then arranged in a head-to-tail
            fashion with "start" and "finish" indicating the first and
            last records, respectively. East of the farm site (Figure 2)
            most of the vectors were oriented to the southeast, indicating
            current flows primarily in this direction with little evidence
            of tidal oscillation. The constancy factor at this site was
            94.7%. (A constancy factor of 100% would indicate currents
            consistently in one direction; a constancy factor of 0% would
            indicate that currents flowed in all directions with equal
            frequency). The mean current velocity over the period of
            observation was 9 cm-sec-1, although velocities as high as 36
            cm*sec-1 were recorded. These current data were collected to
            model the dispersal of solid wastes sinking from the pens, so
            the measurements were taken at a depth of about 25 m. Current
            velocities at the depth of the net-pens (0-4 m) are likely to
            be somewhat different.
                 Northwest of the farm site there was a strong tidal
            influence with currents flowing alternately to the northwest
            and to the south. The net current flow was to the west with a
            relatively low constancy factor of 65.6%. Current velocities
            were slightly lower than those recorded by the other meter.
            Mean velocity was 6 cm-sec-l with a maximum of 31 cm-sec-1.


            Sediment chemistry


                 Total organic carbon and total nitrogen in surficial
            sediments exhibited similar patterns of enrichment throughout
            the study area (Figures 3 and 4). The highest levels of
            enrichment were found under the southern perimeter of the farm
            site (CB3-0 m) and 15 m east of the site (CB2-15 m). To the
            east of the farm site (CB2) the area of enrichment extended to



                                         13








                                                                      N             '10-
                              Transect                                              -0
                              C B 4                                                 0-
                                                                                    r-  8-
                                                                                    0

                               0
                                   HHHHH                 MD        A                    6'

                                                            77: 0
                                                               Transect                 4.
                                     Transect  '9              CB2                  0
                                     C83
                                                                                                                   C83
                                                                                    12

                                                                                               0    15 iO           @0
                                                                                              Distance from  Farm (m)



                          io.


                      o   8-

                      .2  6,   CBI                                                                                         C B 2

                          4-
                      0

                      @0  21
                                                                                           Y
                                                                                                    T JA
                             165                                    @0         iO     i5           -Pen; 0      15   30         60
                                                                     Distancefrom Form(m)
                         Figure 3. Total organic carbon concentrations in                       sediments surrounding
                                         the Clam Bay farm. Range bars are not                  shown if less than the
                                         size of the mean symbol. Open circles                  show data collected
                                         one year earlier as part of a separate                 investigation.











                                                                                                  to
                                                                             N

                          0       Transect
                                  CB4                                                          _0 0.8-

                                   0                                                           0L_ 0.6-

                                                                                               Z
                                                                      0                        -6 0.4-
                                                                                               O.-
                                         Transect                    Transect                  12                             CB3
                                         CB3       0                 CB2                          0.2.


                                                                                                            0    15 30             60
                                                                                                          Distance from Farm (m)



    CTI                    1.0,


                           0.8
                        0

                        10 0.6. CB1                                                                                                        CB2
                        Z
                        -6 0.4-
                        I...                                                                                0             0
                        12
                           0.2


                                                               0
                               i65                                        @0           3'0    1@         Net-Pens" 0      15    30          60
                                                                          Distance from Farm (m)

                              Figure 4. Total nitrogen concentrations in sediments surrounding the
                                               Clam Bay farm. Range bars are not shown if less than the
                                               size of the mean symbol. Open circles show data collected
                                               one year earlier as part of a separate investigation.










            a distance of at least 30 m (nitrogen) to 60 m (carbon). To
            the south enrichment was limited to within 15 m of the net-
            pens. Northwest of the farm nitrogen showed a statistically
            significant enrichment to a distance of 30 m (Kolmogorov-
            Smirnov two-sample test among all possible sample pairs, a <
            0.05), but carbon levels remained uniformly low throughout the
            transect. The area northwest of the net-pens had also been
            sampled in July 1987 as part of an independent study (Weston,
            1988). The results of the current sampling were generally
            similar to the results from the previous year except in close
            proximity to the net-pens. Within 45 m of the farm. carbon and
            nitrogen concentrations were substantially reduced relative to
            their levels one year earlier. This reduction is not due to
            stocking density since the total biomass of fish in the farm
            was actually 20% greater during the present investigation than
            one year earlier, but other factors such as small differences
            in station location or sampling artifacts (diver vs. box
            corer) may explain this apparent decrease.
                The reduction-oxidation potential (Eh) is a quantitative
            measure of the reducing or oxidizing intensity of sediments.
            Positive Eh values are generally characteristic of sediments
            which have a large grain size, are well oxygenated, and/or are
            poor in organic matter. Negative Eh values are measured in
            sediments which are rich in organic matter, consist. largely of
            fine sediments, and/or are poorly oxygenated. Sed-iments
            receiving high inputs of feed and feces from an aquaculture
            facility would be expected to have more negative Ej., values
            relative to background conditions assuming grain size is
            comparable.
                At the Clam Bay farm site trends in Eh values closely
            mirrored gradients in total organic carbon and total nitrogen.
            Background values were generally about 350 mv at the sediment
            water interface and 250-300 mv at a depth of 4 cm in the
            sediment column (Figure 5). With increasing proximity to the
            pen site, Eh values were reduced throughout the sediment
            column. The area of depressed potentials extended from 30 m



                                        16






                                                                                          400-                            0
                                                                         N                3004                            +
                         0     Transect                                               E                0     +
                               C 8 4                                                  . I
                                                                                          200,         +

                                0                                                     4-
                                                                                      4'   100-
                                                 till till I U111114t]                0
                                                                                      a-                               CB3
                                                               9  0                   0      0-
                                                                                                   0
                                                                 Transect
                                      Transect                  CB2                       -100
                                       C83

                                                                                         -200
                                                                                                   0    15 iO            @O
                                                                                                Distance from Form (m)




                         400.
                                                                        0                                                           0
                         300-                                           +                                    0                     +
                      E                                                            0     0    0                           0
                         200-                                                            +
                                                                                   +                         +
                                                                                              +
                      2    100.
                      0                                                                               0                   +
                      (L
                      X      0.

                                                                                                                   0
                         _i00         CBI                                                                                   CB2
                         -200
                               i@5                                     io           so  i5    e    Net-Pens" U     10     30        60
                                                                     Distance from Farm (m)


                           Figure 5. Reduction-oxidation potentials in sediments surrounding the
                                          Clam Bay farm. Open circles represent potentials at the
                                  IM9
                                                                                              LZ24











                                          sediment-water interface; cross symbols represent potentials
                                          at a depth of 4 cm in the sediment.









             northwest of the net-pens, to 36 m east of the net--pens, to
             15-30 m south. Reducing conditions at the sediment-water
             interface were evident only 15 m east of the net-cage complex
             and directly under the southern perimeter.


             Dissolved oxygen


                 Dissolved oxygen concentrations at a height of 5 to 10 cm
             above the sediment-water interface were uniformly about 8
             mg-1-1 throughout the study area (Figure 6). The dissolved
             oxygen sampling design was necessarily.less than ideal, since
             the various stations were sampled over a 6 hr. period and it
             is not possible to differentiate between upcurrent and down-
             current sites. Nevertheless the data should.show if the
             enriched sediments caused a dramatic depletion in dissolved
             oxygen of the overlying water as has been observed elsewhere
             (Brown et Al., 1987). No such depletion was evidE!nt, presum-
             ably because of the high current velocities of thE! site.


             Sediment traRs


                  Seven sediment trap arrays were deployed along transect
             CB1, but because of limitations in bottom time and air supply,
             the divers were only able to retrieve one array directly under
             the net-pens (Station A) and the array at the farra perimeter
             (CBI-O m). Duplicate samples from the three traps within each
             array were analyzed, resulting in six estimates of deposition
             rates at each station.
                 Directly under the net-pens the estimated sedimentation
             rate was 52.1 kg dry wt.-m-2.yr-1 (range of six samples = 46.6
             - 55.2). At the pen perimeter the sedimentation rate was 29.7
             kg-m-2.yr-3- (range 27.8 - 30.8). The particulate material
             collected directly under the net-pens was approximately twice
             as enriched in organic carbon as that collected in the trap at
             the farm perimeter (25.9% and 12.0%, respectively). The





                                         18













                                                                    N

                       0      Transect                                                 INO-
                              C84
                                                                                          8                0

                                                                                       X
                                                                                          6-
                                   HIM
                                                                                       (D

                                                                                       0
                                                              Transect                 U)
                                    Transect                 CB2                                                    CB3
                                    CB3                                                   2



                                                                                                 0    15 30           60
                                                                                                Distance from Form(m)


  ko
                         12.


                      M 10-
                      E

                          8-

                      0   6-
                                     CBI                                                                                   CB2
                      75  4-
                      W





                                                                                        0
                                                                                           L










                            165                                   60         3b    ;5        Net- Pens  0   Z    30         @O
                                                                   Distance from Form (m)


                             Figure 6. Dissolved oxygen concentrations in near-bottom water
                                            surrounding the Clam Bay farm site.










            estimated flux of organic carbon to the seafloor was 13.3
            kg C-m-2.yr-1 under the net-pens and 3.6 kg C-m-2.yr-1 at the
            perimeter.



            Macrofauna



                 Macrofauna were collected one year earlier at four
            stations along transect CB1 at points close to but not
            identical to those sampled during the present study (i.e.,
            distances from the farm perimeter of 0, 45, 90, 150 and 450 m
            vs. 0, 15, 30, 60 and 165 m in the present study). Extensive
            data analysis is still in progress, so preliminary conclusions
            are limited to assessment of abundance, biomass, species
            richness and the density of indicator species.
                 Figure 7a illustrates typical qualitative changes in
            species number, biomass and species abundance along a gradient
            of organic enrichment (Pearson and Rosenberg, 1978). At low
            levels of organic input, a transition zone develops in which
            abundance, biomass and species richness gradually decrease
            from levels typical of the unpolluted environment. In this
            transition zone there may be a slight species richness and
            biomass peak attributable to a phenomenon known as "biostim-
            ulation". In this area the organic input provides a rich food
            source, yet the rate of input is not so great that it inter-
            feres with the mechanics of suspension feeding nor causes
            serious oxygen depletion. At a somewhat higher rate of input,
            total macrofaunal abundance attains a maximum value. Biomass
            may also be slightly elevated, but the number of species is
            very low. The increased abundance and biomass results from
            the proliferation of a few opportunistic species. With still
            higher rates of organic input there is a complete absence of
            benthic macrofauna. The rate of organic input is so great
            that oxygen levels in bottom waters and sediments decrease (or
            sulfide levels increase) to such an extent that aerobic
            organisms can not survive.




                                        20







                               Opportunistic
                    Azoic        Species                Transition           Reference
                 Conditions      Dominate                 Zone                Conditions









                                                                                Species
                                                   X-1                  %@____Biomass
                                                                              Abundance












                               120-
                 5000-   150-                                                       .10

                              EiOO-                              species
                 4000-        0
              W)       CU     C;
              0          1E   &
                              0.80-                                     /----Biornass
                         0i0O_
                 3000-        Z
                         01                                        JI
              -.2*:!          to  60-
                              co                                 4*
                         co   W         1                       J
                         0    C
                         E
                 2000-   6
               C                                                          Abundance
                                 40-
                         50-

                 4000-        (0  20-


                                     IF
                                     0 45 @O         150                            450
                                                     Distance from Farm (m)


            Figure 7.    Trends in species richness, biomass and macrofaunal
                         abundance along gradients of organic enrichment.
                         (A) Generalized trends based on Pearson and Rosenberg
                         (1978); (B) Data collected along transect CB1 at the
                         Clam Bay farm site. Inter-replicate variability is
                         not shown in order to simplify the graphical presentation.

                                              21










                  Trends in species number, abundance and biOMELSs are shown
             along transect CB1 for comparison with the ideal model (Figure
             7b). Total macrofaunal abundance was elevated 4-fold at the
             perimeter of the net-pen complex, and decreased to near back-
             ground levels within 45 m. This peak in abundanCE! was due
             almost entirely to the contributions of nematodes and the
             polychaete Canitella cf. capitata. Areal species richness
             increased consistently along the length of the trELnsect.
             Biomass was much reduced to a distance of at least 45 m from
             the pens, for despite the high density of individuals, the
             organisms were relatively small. Moderate biomass levels were
             found between 90 and 150 m. The highest biomass was observed
             at 450 m from the pen site due to the appearance of several
             large deep-burrowing organisms including bivalves, sipunculans
             and echiurans.
                  Capitella cf. capitata is widely recognized as an
             indicator of organic enrichment and has been found in the
             vicinity of net-pens throughout the world (Kitamori, 1977;
             Pease, 1977; Ervik et al., 1985; Brown, 1987). The species
             was present in densities of over 12,000 indiv.-m-'! adjacent to
             the net-pens, and remained in high densities up to 150 m or
             more from the farm site (Figure 8).
                  The macrofaunal data from Clam Bay are generally consis-
             tent with the ideal model of changes along an enrichment
             gradient. No azoic conditions were observed, although no
             samples were collected directly under the pen complex. The
             data indicate dramatic community alterations beneath the
             facility perimeter, including the disappearance of most
             species characteristic of undisturbed Clam Bay habitats.
             Moderate disturbance with gradually improving conditions was
             evident between 45 and 150 m from the farm. Normal conditions
             were reached at some point between 150 and 450 m from the

             farm.










                                          22








































       C@j
         10000-
        E



        C







          5000-
        0


        A-_
                            J6









                0    45    90       150                                      450
                                      Distance from Form (m)




                Figure 8.   Density of the opportunistic polychaete Capitella
                            cf. capitata along transect CB1 at the Clam Bay
                            farm site. Vertical bars represent range of the
                            three samples at each station.










                                         23











             Dispersion model



                  The sedimentation model was run based on the data of
             Table 3. Standing stock and feeding rate were provided by the
             farm operator, and based on monthly mean values of' these
             parameters over the previous twelve months. The organic
             carbon content of the feed was measured directly as was the
             settling velocity of the feed pellets. Settling velocity of
             feces was taken from the literature (Warrer-Hansort, 1982).
             Literature values of feed wastage range from 1 to 30% (VKI,
             1976; Penczak, gt Al., 1982; Braaten, gt al., 198-3; Gowen,
             et al., 1985), and lacking a measurement specific to the Clam
             Bay facility, a wastage of 15% was assumed arbitrELrily.
                  The dispersion model predicted that the area directly
             under the net-pens would be subject to the greatest rate of
             solid waste deposition (Figure 9). Areas to the north and
             west of the farm should recieve very little feed and fecal
             matter, with the vast majority of the material moving towards
             the south and east. The area delimited by the 1 kg C-m-2.yr-1
             isopleth extends 70 m from the farm at its most distant point.
                  There is extraordinary agreement between the rate of
             organic carbon flux predicted by the model and thELt measured
             in the sediment traps. Directly under the net-pens at the
             trap location the predicted rate is 11.1 kg C-m-2.yr-1, in
             comparison to the measured rate of 13.3 kg C-m-2.yr-l. At the
             northwest corner of the farm site the predicted and measured
             rates were 2.5 and 3.6-kg C-m-2-day-1, respectively.
                  The dispersion model predicts a deposition rate, and thus
             a rigorous test of the model would also require rate measure-
             ments, such as those obtained from the sediment traps. In the
             strict sense, a static measurements such as organic carbon
             concentration or redox potential can not be used to test the
             model since no information is available on in sitzi post-
             depositional processes. Nevertheless, since sediment trap
             data were so limited, the assumption was made that- post-





                                         24











                                     Table 3
              Data used in dispersion model at the Clam Bay farm site




           Farm size: 280 m by 52 m with long axis oriented east-west

           Depth of pens: 4 m

           Standing stock: 352 metric tons
           Feeding rate: 4409 kg-day-1

           Organic carbon content of feed: 48%

           Feed wastage: 15%
           Settling velocity of feed: 10 cm-sec-1
           Settling velocity of feces: 4 cm-sec-l

           Water depth (approx. average of MLLW and MHHW along sampling
                transects):  18 m

           Current data: July 6 - August 4, 1988; meter located 100 m
                east of farm site.




































                                       25












                                                                          0       50       100
                                                                                         mom=
                                                                          Scale in meters

                                                            N









                                             2                   2                 2


                                              - - - - - - -     - - -




                                                               aZ@   Z- @x    d.- --8

                                                                         4


                                                                       2





                 Figure 9. Model predictions of organic carbon loading to the seafloor
                             at the Clam Bay farm site. Contour units are kg C*M-2.yr-1.
                             Dots indicate locations of sampling stations used for model
                             verification.









            depositonal processes (e.g., mineralization, resuspension)
            were uniform throughout the study area, and a test was made of
            the model's ability to identify areas of greatest organic
            enrichment (Figure 10). There was a significant correlation
            between predicted deposition rates and measurements of both
            sediment organic carbon content and redox potential (Spearman
            rank correlation, a >> 0.01). The model, therefore, performed
            well in identifying those areas surrounding the Clam Bay farm
            which experienced the greatest degree of organic enrichment.


            SQUAXIN ISLAND SITE



                 Sixteen stations were sampled in the vicinity of the
            Squaxin Island farm site (Table 4). Water depths in the area
            were uniformly 5 m at mean lower low water. The bottom of the
            net-pens were 2 m above the seafloor at this tidal stage and
            approximately 6.5 m above the seafloor at mean higher high
            water. Seawater temperatures were approximately 150C;
            salinity was 30.5 ppt.
                 The substrate was principally silt with varying amounts
            of sand (14 - 30%) and shell fragments (1 - 40%). Shell
            debris was so dense at some sites that the collection of
            undisturbed sediment cores was difficult or impossible. There
            was no visible evidence of culture-related disturbance on the
            sediment surface (e.g., Beggiatoa mats, feed or fecal
            material).



            Water Currents



                 Current meters were moored 60 m to the south and to the
            north of the eastern end of the net-pen complex. Both were
            positioned 2.5 m above the seafloor and 2.5 to 7 m below the
            surface (depending on tidal stage), and left in place from
            June 6 to August 5 1988.
                 Both meters showed strong north-south tidal oscillations,





                                        27








               8-  0 Under pens
                   0 CBI
                   A C62

                    C63

               6.

            C
            0




            E  4-


            0
            z



               2-




                   000       0 a
                                                        28 -1      @O
                                 Predicted deposition (kg C-rTf yr



             300
                    0




             euu"
                     0
                   0

         4-                  0
         0   100.


         C
         4)
         0
         Q.

         9
         0
         ,a
         (D
         cr -100.



            -200.
                          2         4         6                    1'0
                                 Pred icted d eposition kg C - rn-2. yr 4)

             Figure 10. Comparisons of predicted carbon deposition based
                          on the sedimentation model with field measurements
                          of total organic carbon and redox potentials at
                          the Clam Bay farm site.
                                          28












                                       Table 4
                           Squaxin Island station summary


            Station or   Distance from    Water depth
             Transect     net-ipens (m)   (m at MLLW)       Substrate


                A               0              5
            Transect SQ1        0              5       1.1% shell/gravel
                                                       14.3% sand
                                                       84.6% silt and clay

                                6              5       11.2% shell/gravel
                                                       13.6% sand
                                                       75.2% silt and clay

                               15              5       3.1% shell/gravel
                                                       16.9% sand
                                                       80.0% silt and clay

                               30              5       2.8% shell/gravel
                                                       18.0% sand
                                                       79.2% silt and clay

                               60              5       46.4% shell/gravel
                                                       32.2% sand
                                                       21.4% silt and clay

                              100              5



            Transect SQ2
                                0              5
                                6              5
                               15              5
                               30              4       41.2% shell/gravel
                                                       29.8% sand
                                                       29.0% silt and clay


            Transect SQ3
                                0              5
                                6              5
                                15             5
                                30             5
                                60             5       0.4% shell/gravel
                                                       17.3% sand
                                                       82.3% silt and clay







                                         29









            with the southerly flow predominating (Figure 11). A signifi-
            cant westerly component was evident only in the meter located
            south of the farm site. The constancy factors were 90.9 and
            83.3% for the northern and southern locations, respectively.
            Current velocities at the northern site averaged 6 cm-sed-1
            over the 60 day deployment with a maximum recored velocity of
            31 cm-sec-1. Current velocities of 15 to 18 cm-sec-l were
            generally observed at least twice daily. Currents at the
            southern meter location were slightly slower, averaging
            7 cm-sec-l with a maximum recorded velocity of 23 cm-sec-l.


            Sediment chemistry


                 Sediments at the Squaxin Island farm were much finer-
            grained than at the Clam Bay facility, and thus had consid-
            erably greater levels of organic carbon and total nitrogen.
            Sediment carbon concentrations were typically 2 to 3% at the
            Squaxin site in comparison to 0.3% in undisturbed areas of
            Clam Bay. The Squaxin site   also differed from Clara Bay in
            that there were no gradients in sediment carbon or nitrogen
            concentration that could be attributed to farm activities
            (Figures 12 and 13). The degree of sediment enrichment was
            more or less uniform throughout the study area, and the slight
           ,variations were unrelated to farm proximity. There was no
            evidence of sediment enrichment above background levels even
            directly under the net-cages. One sample collected at the
            southern pen perimeter showed an organic carbon concentration
            approximately triple typical values, but this high concentra-
            tion was not reflected in the two other samples at the same

            station.
                 Sediments at a depth of 4 cm (and probably much shal-
            lower) were highly reducing due to the fine grain Size and
            reduced porosity of the Squaxin Island sediments (Figure 14).
            Reduction-oxidation potentials at the sediment-water interface
            ranged from 50 to 425 mv. This extreme variability is prob-
            ably a consequence in the sharp gradient of redox potentials




                                         30















                                                       START




                  N

                               60 m north
                               of farm                                 START




                                                          kV


                                                                   60 m south
                                                                   of farm

















                                       X









        FINISH                       FINISH
                                                                  P4



                                   )F I r@

          Figure 11. Progressive vector diagrams based on the two current
                      meter records from the Squaxin Island site. X symbols
                      indicate 24-hour intervals.



                                         31












                                                                                                                 6.
                                                                                      N
                                                                       A                                     -0-0
                                                  Transect
                                                  S03                                                        C
                                                                                                             0
                                                                                                                4
                                      Transect    T 1
                                      S02


                                                                                                             0   2-
                                                 Transect                                                    -6
                                                 S04                                                         4-                            SQ2
                                                                                                             12


                                                                                                                        0         Iii       io
                                                                                                                   Distance from Form (m)


                                 6-




                              0

                                 4-

                              .2


                              0  2-                        0
                              -6

                                              SQ 3                                                                                               SQ1
                                     6'0                  so         1@    9 'N e 't-P e Ins 6     115       io                  60                         16o
                                                                                        Distancefrom Farm(m)

                            Figure 12. Total organic carbon concentrations in sediments surrounding
                                                                                                                   L




















                                                 the Squaxin Island farm. Range bars not shown if the range
                                                 is less than the size of the mean symbol.












                                                                   N

                                       Transect                                       1.0-
                                       S03                                          O-e
                                                                                      0.8-

                              In..t
                              S02                                                     0.6-
                                                                                    Z
                                                                                    76


                                      Transect
                                      SQ4                                             0.2-                       SQ2


                                                                                                     15      30
                                                                                          Distance from Form (m)



                        1.2-


                     -  to -
                     0-0-

                     C
                     &  0.8-
                     0

                     Z  0.6-
                     -6                                                                              1
                        0.4-                                                         0

                        0.2
                                    SQ3                                                                       SQi
                             60              3b       ib      'Ne 't'P 'en s 1@      3b             6b                    16o
                                                               Distance from Farm (m)

                        Figure 13. Total nitrogen concentrations in sediments surrounding the
                                        Squaxin Island farm. Range bars not shown if the range is
                                        less than the size of the mean symbol.













                                              0
                                                                                  400.
                                                                 N                            0
                                     Transact 0                                   300-           0
                                     S03      0                                E
                                                                               -6200-
                                0 190                                          C
                             Transact                                          a)
                             S02                                               0  100-
                                                                               Q_

                                                                                     0-
                                     Transact                                  4)                                SQ2
                                      SQ4                                      Cr            +
                                                                                  -100.


                                                                                  _200-
                                                                                      " 9        ib     30
                                              0
                                                                                      D i sto nce f rom Fa rM (m)


                       400-                                                                                          0
                                             0             0
                                                    0
                    >   300-                                              0
                    E

                    _6  200. 0
                    .0-
                    C                                   0            0
                    20  i0o.                                                                     0
                    CL                                                                                              +
                    X
                    0                        4-
                          0. +
                                                                  +
                       -100.                                              +                     +
                      _200- v   SQ3                     +  +                                                     SQi
                             60                             'N et -te 'ns 1@      3             6b                  1 0
                                                             Distance from Form W

                        Figure 14. Reduction-oxidation potentials in sediments                 surrounding the
                                       Squaxin Island farm. Open circles represent potentials at
                                       the sediment-water interface; cross symbols represent
                                       potentials at a depth of 4 cm in the sediment.










           in the upper few millimeters of the sediment column, and thus
           the measured potential can vary widely depending upon whether
           the probe is held a millimeter or two above or below the ill-
           defined "interface". Variability of the redox potential at a
           depth of 4 cm is probably due to the difficulty of collecting
           an undisturbed core with the high concentration of shell
           fragments, compounded by the difficulty of inserting the probe
           into the core without encountering an obstruction and further
           disturbing the core.
                Redox potentials showed no pattern among the sampling
           stations that could be attributed to the presence of the farm.
           Unlike in Clam Bay, redox potentials were not consistently
           lower near the net-cages, except perhaps along transect SQ3.


           Dissolved oxygen


                Dissolved oxygen concentrations at 5 to 10 cm above the
           substrate were typically about 10 mg*1-1, and showed no
           depression near the farm site (Figure 15). Two samples had an
           unexpectedly high dissolved oxygen concentration indicative of
           either analytical error or an abrupt gradient in dissolved
           oxygen with distance above the seabed. The same qualifica-
           tions expressed at Clam Bay regarding non-synoptic sampling
           apply here as well, but it does appear that farm activities
           are not depleting oxygen in the near-bottom waters.


           Sediment traps


                Seven sediment trap arrays were placed at the stations
           along transect SQ1, but only four could be recovered after the
           15-day deployment (Table 5). Results from the array directly
           under the pens are problematic in that these traps captured
           only half the material of the other traps, and the material
           retained was comparatively low in organic carbon content.
           Since the mouths of the traps were only 1.5 m below the bottom
           of the net-pens at MLLW it was expected that a large amount of



                                        35










                                                   Transect                                N                      10.
                                                                                                              N,
                                                   S03 0                                                      C71
                                                                                                              E
                                                                                                                   8-
                                                                                                              4)
                                        Transect                                                              (M
                                        S02                                                                   X    6-
                                                                                                              0
                                                                                                              '0
                                                                                                              >    4'
                                                  Transect
                                                  S04
                                                             9                                                                                SQ2

                                                                                                                                   1@         io
                                                                                                                     Distance from Form(m)


                                   12-


                                   10.

                               E
                                   8-


                                   6-
                               0
                               V
                               0
                               a   4-
                               0
                               U)
                               An
                                   2.         SQ3                                                                                                   SQ1
                                        6,0                 iO        1 *5       "N "et "-P "en"s    ;5       iO                  @O                         460
                                                                                             Distancefrom Form(m)


                                        Figure 15.          Dissolved oxygen concentrations in near-bottom water
                                                            surrounding the Squaxin Island farm site.











                                         Table 5
                  Sediment trap contents at the Squaxin Island farm
                           (Six measurements at most stations)



               Distance    Sedimentation    Nitrogen     Carbon       Carbon
              from pens        ra@e         content     content          flux
                                                                         2.yr-1
                 W         (kg-m- *yr-1)       M                  (k M        Ll

            under pens         62.8            0.75        6.12          3.8
                               65.2            1.29        7.85          5.1
                               59.4            0.56        5.02          3.0
                               58.0            0.63        5.19          3.0
                               38.9            0.85        7.43          2.9
                               41.1          -0.99         7.62          3.1
                      MEANS    54.2            0.84        6.54          3.5




                0             115.7            0.49        4.58          5.3
                               88.0            0.43        3.95          3.5
                              113.4            0.99        8.72          9.9
                              119.7          -0.66         6.23          7.5
                      MEANS   109.2            0.64        5.87          6.6
                                  1



               15             109.1            0.42        4.71          5.1
                              118.4            0.39        4.21          5.0
                              116.9            0.51        4.40          5.1
                              111.3            0.64        4.15          4.6
                               99.4            0.85        6.79          6.7
                              106.0            0.60        5.20          5.5
                    MEANS     110.2            0.57        4.91          5.3




                30            112.4            0.47        3.95          4.4
                               98.9            0.35        2.13          2.1
                              106.9            0.40        3.70          4.0
                              108.7            0.48        5.22          5.7
                              109.2            0.34        2.57          2.8
                              107.7          -0.27         1.64          1.8
                      MEANS   107.3            0.39        3.20          3.5














                                            37









            organic-rich material would have been collected. It is
            Possible that this array may have become entangled in its own
            rope or in the nets during a very low tide, and turned on to
            its side at some time prior to recovery. This was the only
            array retrieved by a rope rather than by diver, and thus it is
            not known if it was properly positioned at the time of

            recovery.
                 On the basis of data from the other sediment traps, the
            sedimentation rate was about 110 kg-m-2.yr-1 in the area from
            the farm perimeter to a distance of 30 m. 'Lacking data from
            greater than 30 m from the farm, it is difficult to establish
            whether the measured sedimentation rate reflects natural
            conditions or an enhanced sedimentation due to the presence of
            the farm. The organic carbon and nitrogen content of the
            trapped material was significantly different among traps
            (Kruskal-Wallis one way analysis of variance, a < 0.05), and,
            in fact, the traps nearest the pens contained solids with a
            higher concentrations of both organic carbon and total
            nitrogen.
                 In comparison to the Clam Bay site, sedimentation rates
            at the Squaxin Island farm were two to three times greater (30
            to 52 kg*m-2.yr-i vs. 107-to 110 kg*m-2,yr-l). The collected
            material at Squaxin Island, however, contained only half the
            carbon and nitrogen concentration of the Clam Bay material.
            The fact that Clam Bay traps contained material with a
            relatively high organic content (30 to 100 times greater than
            backgr ound levels in surficial sediments) suggests that the
            collected material was largely farm-derived. At the Squaxin
            site the measured sedimentation rate was relatively high, yet
            since the organic content of the trapped material was only
            slightly greater than background concentrations in surficial
            sediments (1.5 to 2-fold), it is likely that the bulk of the
            collected material originated from natural sources.








                                         38












            Macrofauna



                Macrofauna samples have been collected at most stations
            along transect SQ1 as part of routine monitoring by the farm
            operator. Baseline samples were collected in January 1987
            after installation of the pens but prior to stocking with
            fish. Additional samples were collected in August 1987,
            January 1988, and August 1988. Intercomparisons among
            sampling events is complicated by variations in sample design
            between sampling periods and between replicates. In January
            1987 each station was sampled with 3 cores of 5 cm diameter,
            each of which was sieved through a 0.5-mm screen. In all
            other sampling periods 10 cm diameter cores were used, two of
            which were sieved on a 1.0-mm screen and one of which was
            sieved on stacked 0.5 and 1.0-mm screens. Therefore, when
            comparing among sampling periods it should be recognized that
            the January 1987 sampling would tend to under-estimate species
            richness and abundance because of the smaller area sampled,
            but over-estimate these parameters because of the finer mesh
            size. All data are expressed on a "per three sample basis"
            which, in all but the January 1987 sampling, should be inter-
            preted to include the material retained on a 1.0-mm screen in
            two samples per station and on a 0.5-mm screen in one sample.
                 The baseline samples (1/87) and those collected after 6
            months of operation (8/87) demonstrated that the five moni-
            toring stations were comparable in species richness and faunal
            composition and thus suitable for inter-station comparisons
            (Figure 16). In January 1988 after 12 months of operation
            there was a dramatic decrease in the species richness and
            abundance at the station under the perimeter of the pens and,
            to a lesser extent, at the station 6 m from the pens. This
            same decrease near the pens relative to the other stations
            along the transect was evident again after 18 months of
            operation (8/88). At this time macrofauna present under the
            pen perimeter included only the polychaetes Capitella cf.
            capitata (4 individuals), Neyhtys cornuta fransiscana



                                        39









                         20-


                       1U)

                       CL
                       E                                                                                         8/88
                       u'  15-
                                                       ........ .......                                          8/87

                       CL



                       z

                       ,n  10-
                       (P
                       C
                                                                                                                 I/ae
                                                                                                              -04/87


                          5-
                       CL






                                  0       6          15                 50                                     60
                                                     Distance from Form (m)
                       200-


                                                                                                              ,P 1 /87
                                                                                                             J#



                   u)  150 -
                   CL                                                                                           08/87
                   E




                   .E  100

                                                           %
                                                            %
                                                             A.                00
                                                            '--.w,                                               1/88
                   C                                               %
                                            ...........                     01                                   8/88
                   .0

                        50-







                                  0       6          45                30                                      60
                                                     Distance from Form (m)
                                                                                  .0












                Figure 16. Trends in                 species richness and macrofaunal abundance
                                    along transect SQ1 at the Squaxin Island farm site.
                                    Inter-replicate variability is not shown in order to
                                    simplify the graphical presentation.

                                                                   40










             (3 indiv.) and Glycinde Pict (1 indiv.). The depauperate
             fauna 0-6 m from the pens, an area which was formerly
             comparable to the other sites, indicates a localized impact of
             farm operation.
                 The distribution of Capitella cf. calpitata (Figure 17)
             also suggests enrichment 0-6 m from the pen perimeter. No
             C. capitata were found throughout the sampling transect during
             the baseline sampling (1/87). In all subsequent sampling
             periods, however, the species has been found in high densities
             at the 6 m site and at much lower densities at the pen
             perimeter and 15 m. Maximum density (945 individuals per
             three replicates, or 1875 indiv-m-2) was obtained in the most
             recent sampling (8/88).


             Disipersion model


                 The dispersion model was run using the data of Table 6.
             The standing stock value used was based on the biomass present
             at the time of sampling. This value may seasonally vary by up
             to 50% depending on stocking and marketing cycles. No data
             were available on the actual amount of feed provided, so it
             was assumed that the fish were fed at a rate of 2% of their
             body weight per day, a rate typical of salmonid net-pen
             culture and the target rate of the Squ*axin pen operators. All
             other model parameters were determined as described for the
             Clam Bay farm.
                 As a result of the shallow water depths, the sedimenta-
             tion model predicted that the vast majority of feed and fecal
             waste would reach the bottom directly under the pens or within
             5 m of the farm perimeter (Figure 18). A maximum loading rate
             of 14 kg C-m-2.yr-1 was predicted for most of the area under
             the farm. Lesser rates of deposition were predicted to the
             north and south, with essentially no accumulation of wastes to
             the east and west. Loading rates of 1 kg C-m-2.yr-l or
             greater were limited to the area 15 m north and 28 m south of
             the farm site.




                                         41
























                50-




             CL
             E 40




                30-               8/88

                   1 /88


             CL
                 20-


             0                      8 /8 7


                 10-





                       T    I
                       0    6     0           50                      60
                                      Distance from Form (m





         Figure 17. Density of the opportunistic polychaete Capitella
                      cf. canitata along transect SQ1 at the Squaxin Island
                      farm site. Inter-replicate variability is not shown
                      in order to simplify the graphical presentation.
                                    8


































                                          42












                                     Table 6
                       Data used in dispersion model at the
                             Squaxin Island farm site



           Farm size: 74 m x 16 m with long axis oriented east-west

           Depth of pens: 3 m

           Standing stock: 20 metric tons
           Feeding rate: 400 kg-day-1

           Organic carbon content of feed: 50%

           Feed wastage: 15%
           Settling velocity of feed: 14 cm-sec-l
           Settling velocity of feces: 4 cm-sec-l

           Water depth (approx. average of MLLW and MHHW along sampling
                transects): 7 m

           Current data: June 6 - August 5, 1988; meter located 60 m
                north of farm site.



































                                       43








            0       10      20    30

             Scale in meters


                                             N








                                                                           2


                                                          4   0                 4

                                                           6                   -6


                                                           '17









                                               xz 11Z 1-Z 1-1 1-Z 1-.1 X@@ X-11 N, zzz 1-Z






                                              4                    4








                                                                          2







                 Figure 18.  Model predictions of organic carbon loading to the sea-
                             floor at the Squaxin Island farm site. Contour units are
                             kg C'm Z-yr-1. Dots indicate locations of sampling
                             stations used for model verification. Stations 60 and
                             100 m from farm are not shown.










                The predicted carbon fluxes at 0, 15 and 30 m south of
           the farm were 5.7, 2.5 and <1 kg C*m-2.yr-1, respectively.
           Over the same distance actual rates of carbon flux as measured
           by the sediment traps were 6.6, 5.3 and 3.5 kg C-m-2.yr-l. it
           should be recognized, however, that the model predicts
           deposition of solid wastes originating from farm activities,
           whereas the sediment traps do not differentiate between
           farm-derived particulates and deposition unrelated to the
           culture operation. It was noted above that the bulk of the
           material collected in the traps at the Squaxin Island site
           probably originated from natural sources such as resuspension
           of bottom sediments or terrigenous run-off. A true test of
           the model would require that the contribution of the natural
           sources be subtracted from the total material retained in the
           traps. The strength of the natural "noise", however, is so
           great compared to the pen "signal", that many more traps would
           have to be deployed to discriminate between these two sediment
           sources. The traps located farthest from the farm (60 and 100
           m), which presumably would best represent the natural carbon
           flux, were not recoverablet so the magnitude of carbon flux
           typical for the area may be substantially less than the 3.5
           kg C-m-2.yr-1 measured at at the 30 m trap. Model predictions
           vary from actual measurements by a factor of about 2 or less,
           depending on the particular trap and the assumed magnitude of
           the natural carbon flux.
                The model was further evaluated by comparing predictions
           of deposition with sediment organic carbon concentration and
           redox potential (Figure 19). It should again be recognized
           that this comparison requires that the untested assumption be
           made that post-depositional processes are similar at all
           sampling sites. There was no significant relationship between
           model predictions and sediment carbon content, although
           predicted carbon flux was correlated with sediment redox
           potential (Spearman rank correlation, a > 0.05). This correl-
           ation was largely attributable to the influence of the 0 and 6
           m stations along transect SQ-3, an area which the model



                                        45












             3.4                                             0 Under pens
                                                             OS01
             3.2                       0                     A S02
                                                             oSQ3
             3.0
           0

             2.8-


             2.6-


           0 2.4

             2.2           0
                                0

             2.0
                                                         ib     i'p-     W
                                                      -2  -4
                                Predicted deposition( KgC-m -yr





             i0o


          E

          FE


                0

                                0

          C
          CD               0
          t  -i0o -

          0

                                                                   0

             200
                          2      4                       ib      f2      14
                                Predicted deposition K g C - rn-2. yr-1


             Figure 19.   Comparisons of predicted carbon deposition based
                          on the sedimentation model with field measurements
                          of total organic carbon and redox potentials at
                          the Squaxin Island farm site.



                                          46









           predicted to be among the most enriched and which also was
           found to have the lowest redox potentials.




















































                                       47












                                       DISCUSSION





             CLAM BAY SITE



                  The various chemical parameters used to measure the
             effects of the farm operation on the sediments of Clam Bay
             showed good agreement, and provided a clear picture of the
             areal extent of impact. The culture of fish at the Clam Bay
             site has resulted in a measurable enrichment of the sediments
             directly under the pens and to a distance of approximately
             30 m from the perimeter of the pens. The exact distance of
             impact depended upon the direction and the chemical parameter
             used as indicator of impact, but in all cases varied from 15
             to 60 m. Within this area deposition of feed and feces has
             resulted in increased concentrations of total organic carbon
             and total nitrogen. Degradation of these organic wastes has
             depleted pore water oxygen, resulting in more negative
             reduction-oxidation potentials. At a few sites reducing
             conditions were found throughout the entire sediment column,
             although at most stations oxidizing conditions persisted to a
             depth of at least 4 cm. The enriched sediments did not
             measurably decrease oxygen concentrations in the overlying
             water at a height of 5 to 10 cm above the seafloor, although
             this does not exclude the possibility that reduced dissolved
             oxygen levels may be observed if measurements had been made on
             a scale of millimeters rather than centimeters.
                  The biological data (available only to the northwest of
             the farm) showed a severely disturbed community at the pen
             perimeter. This assemblage was comprised almost entirely of
             nematodes and Capitella cf. capitata. If the assumption could
             be made that a similar fauna existed wherever organic carbon
             concentrations were comparable (and given similar substrate
             type), then such a community might also be found 15 to 30 m
             south of the pens and at least 60 m to the east. Beyond this
             zone of severe disturbance, moderate effects of the farm were




                                         48











           evident in communities 45 to 150 m from the site. This area
           was characterized by reduced species richness, biomass, and
              capitata densities in excess of 5000 indiv.-m-2.
                All previous studies of the benthic effects of net-pen
           farming have reported localized impacts comparable to those
           found at Clam Bay. Brown et al. (1987) found normal condi-
           tions appearing at some point between 15 and 120 m from a farm
           in Scotland. In a survey of numerous Scottish farms, effects
           such as depressed reduction-oxidation potentials and appear-
           ance of Beggiatoa were commonly found up to 30 m from the farm
           site (Earll et al., 1984). Doyle et al. (1984) found effects
           extending 25 to 45 from a site in Ireland. The extent of
           effects at the Clam Bay site is comparable to these earlier
           studies based solely on sediment chemistry as a measure of
           effect. The biological indicators of disturbance, however,
           suggest effects extended to at least 150 m from the farm,
           approximately five times the distance typically reported.


           SQUAXIN SITE



                The effects of the Squaxin Island site on the benthos
           were more subtle and evident almost entirely on the basis of
           the biological data alone. There was little or no evidence of
           farm effects in the sediment organic carbon, nitrogen, redox,
           and dissolved oxygen data. One of the three samples collected
           below the southern pen perimeter showed a three-fold enrich-
           ment in organic carbon, but since such enrichment was not
           evident in the other samples at this site, the effects were
           presumably very patchy. The best physical/chemical evidence
           of farm impacts was provided by the elevated concentrations of
           organic carbon and nitrogen in material collected by the
           sediment traps nearest the pens. The macrofaunal data indi-
           cated reduced species richness and/or abundance from the pen
           perimeter to a distance of 6 m, and a peak in C. canitata
           abundance at a distance of 6 m. C. capitata, an indicator of
           enriched sediments, first appeared in the area 6 months after



                                        49









             culture began, and was increasingly abundant 12 and 18 months
             after the initiation of culture. For comparison, Brown et al.
             (1987) reported changes in sediment chemistry and appearance
             of C. capitata 3 months after initiation of culture in a
             Scottish loch. Mattson and Linden (1983) monitored benthic
             conditons after installation of mussel longlines and found a
             period-of 6 to 15 months were required for replacement of the
             original fauna with an assemblage characteristic of enriched
             conditions.
                 The limited measurable physical/chemical effects of
             culture and the highly localized biological effects at the
             Squaxin site are suprising given that the bottom of the pens
             are only 2 m above the seafloor at low tide. There are two
             possible explanations for this observation. First, the
             current velocities at the Squaxin site are suprisingly high,
             and only slightly less than near-bottom currents at Clam Bay.
             The 15 to 18 cm-sec-l measured twice daily at the Squaxin site
             may promote dispersal of the solid wastes, particularly if the
             narrow distance between the nets and the seafloor promotes a
             channeling effect and an acceleration of currents directly
             under the pens. Secondly, the Squaxin pens have only been in
             place for 18 months in comparison to approximately 13 years
             for the Clam Bay farm. Benthic conditions at the Squaxin site
             may continue to deteriorate with time, but a recent change in
             farm operation may slow or halt this deterioration. The
             operators of the Squaxin site have recently decided to curtail
             aquaculture operations and use the pens primarily for delayed
             release. The seasonal nature of use should minimize further

             effects on the benthos.



             ASSESSMENT TECHNIQUES



                 It should be noted that at both Clam Bay and the Squaxin
             sites, the macroinfaunal data showed evidence of alteration in
             areas where sediment chemistry data failed to show farm
             effects. Biological data appeared to be a more sensitive



                                         50










           indicator of disturbance, and therefore suggest that chemical
           information alone can not adequately define the extent of
           benthic impacts from net-pen culture. The biota are certainly
           better integrators of temporal variation, and they also
           undoubtedly are responding to chemical and physical parameters
           unmeasured in conventional surveys.
                The reduction-oxidation measurements proved valuable,
           particularly at the Clam Bay site where redox potentials
           closely mirrored gradients in organic carbon and nitrogen.
           Redox measurements have several advantages over carbon and
           nitrogen analysis, most notably the fact that results are
           obtained in the field immediately after sampling and there are
           no analytical costs once the pH meter and redox electrode are
           acquired. Redox measurements worked well in the sandy
           sediments of Clam Bay where vertical gradients in sediment
           redox potentials were gradual, but were more problematic in
           the muddy sediments of the Squaxin sediments. In these fine-
           grained sediments much of the vertical change in redox poten-
           tials occurs in a thin veneer of sediments at the sediment-
           water interface. Measured potentials (and the identification
           of culture effects) become highly susceptible to minute
           variations in the extent to which the probe is inserted.
           Conventional redox probes are approximately 1 cm in diameter
           and do not permit the fine-scale resolution necessary in muddy
           sediments. Micro-electrodes are available, but are expensive
           and subject to frequent breakage.



           MODEL EVALUATION



                The dispersion model was tested on its ability to
           predict: 1) the absolute loading of particulate wastes; and
           2) the relative loading among numerous sites. The former
           evaluation was done by comparing the quantity of material
           retained in the sediment traps with the quantity that the
           model predicted would accumulate at the trap location. At the
           Squaxin site natural deposition made discrimination of the pen



                                       51









             contribution difficult, but the predicted loading appeared to
             differ from measured values by factors of 2 or less. In Clam
             Bay the predictions were in good agreement with the measured
             loadings, differing by factors of 1.2 and 1.4 in the two trap

             arrays.
                  It should be recognized that there are inherent diffi-
             culties of measuring actual carbon flux and there are many
             potential artifacts associated with the use of sediment traps
             (Butman, 1986). Nevertheless, if the sediment trap data can
             be taken as an accurate representation of actual carbon flux,
             then model errors of only 1 to 2-fold demonstrate remarkably
             good predictive capability of the model.
                  The second test of the model was to compare predicted
             loadings at all stations with measured values of sediment
             carbon content and redox potential. At both farm sites the
             model predictions of carbon flux showed a statistically
             significant correlation with redox potential. Sediment carbon
             content was correlated with model predictions only at the Clam
             Bay site. The better model performance at Clam Bay than at
             Squaxin Island was probably due to the greater amount of
             sediment resuspension at the latter site. The sediment trap
             data and the lack of pronounced physical/chemical gradients
             with distance from the farm both suggest a high degree of
             sediment transport and resuspension. Under such conditions it
             is not suprising that the sites predicted to have the greatest
             carbon input rate failed to show the highest levels of
             sediment enrichment. This illustrates the shortcomings of
             using static measurements (sediment carbon concentration) as a
             test of rate measurements (model predictions of carbon flux).
                  The model predictions were correlated with sediment redox
             potential at both of the sites examined, and with carbon
             concentration at one of the two sites. The performance of the
             model in Puget Sound is in general agreement with tests of the
             model in Scotland where, out of six farms, the model
             predictions correlated with measured redox potentials at all
             six farms and with carbon at two farms (Gowen et al., 1988).



                                         52










                Ideally, the model should be capable not only of
           predicting the extent of chemical change in sediments but also
           the degree of biological disturbance. Such predictions are
           much more difficult for the biological effects of a given rate
           of carbon flux is likely to be habitat specific. Communities
           of sandy substrates may not respond to a given flux in the
           same manner as mud bottom communities. The model has not been
           refined to the point where reliable biological predictions are
           possible, but some preliminary observations have been made.
           In model tests in Scotland, it was found that severely
           disturbed sites, defined as containing four or fewer macro-
           faunal species, had predicted loadings of at least 1.8 to 4 kg
           C'm_2.yr-l (Gowen et al., 1988). At the Squaxin Island farm
           four or less species were found where the predicted loading
           was 5.7 kg C-m-2.yr-1 and undisturbed communities were present
           where predicted loadings were 2.5 kg C-m-2.yr-1 or less. At
           Clam Bay the fewest number of species (9) were found where the
           predicted deposition was 2.5 kg C-m-2.yr-1, although more
           moderate impacts were evident at lower rates of carbon flux.
           other than order-of-magnitude approximations, the existing
           data base is inadequate to determine a threshold carbon flux
           beyond which biological effects are likely. Nevertheless,
           such estimates may be possible with additional refinement of
           the model and recognition of the habitat-dependence of
           biological impacts.
                The model has performed well in both Puget Sound and
           Scotland, yet it has inherent limitations which should be
           recognized:


           1)   As discussed earlier,. the model does not take into
                consideration any post-depositional processes that may
                occur, or differences in the rate of these processes
                among sites. For example, the model only predicts the
                point at which a settling particle impacts the bottom and
                not any reuspension or,transport that may occur later.
                Model predictions would be invalidated if the degree of



                                        53









                 resuspension varied throughout the study area as might be
                 the case with differing substrate types or pen-related
                 alteration of current flow.


            2)   The model, as currently formulated, is incapable of
                 coping with variations in bottom topography. At the Clam
                 Bay site a single water depth (18 m) had to be assumed
                 despite the fact that water depths varied from 10 to 30 m
                 over the predicted area of depositon. The net effect is
                 that in shallow areas the model over-estimates the
                 lateral extent of depositon, and under-estimates the
                 lateral extent in deep areas. This shortcoming could be
                 remedied but would dramatically increase the computa-
                 tional requirements of the model.


            3)   An arbitrary assumption had to be made that feed wastage
                 at both farm sites was 15%. Puget Sound farm operators
                 typically claim a wastage factor of about 5%. The
                 magnitude of predicted organic carbon loading to the
                 bottom is dependent upon the degree of wastage assumed as
                 demonstrated by Figure 20. (Note also in this figure the
                .depth-dependence of the loading with reference to the
                 limitation under point #2 above.) A reduction in the
                 wastage factor from the 15% employed in this analysis to
                 the 5% claimed by Puget Sound operators would result in a
                 decrease in predicted organic carbon loading of about
                 15%. In fact, there is probably no reliable estimate of
                 wastage in Puget Sound or throughout the industry in
                 general. Until there are reliable estimates of feed
                 wastage, neither this nor any other model will be able to
                 predict loading with a high degree of accuracy. The
                 wastage-dependence of loading shown in Figure 20 also
                 illustrates the effect that the operator's feeding
                 practices can have on waste production, and the environ-
                 mental benefits to be gained by reducing wastage.





                                         54










                                                 -13-0


                                                   - 12-0
              14  DINO
             13. LOA                                      =10-0


                                                                         8.0






                                                                   -6.0
               7





               3.


               4.
                                                       4.0
               3.
                                                              %
                 DEPTII [M)                        0 WA STA
                                                FOO







           Figure 20. The relationship between food wastage, depth and
                       organic loading to the sediment for a hypothetical
                       set of current data. Loading rates are given as
                       g C-m-2-day-l. (From Gowen et al., 1988).









                                          55









            4)   The model requires the designation of a single settling
                 velocity for feed and a second settling velocity for
                 feces. As noted by Thomson (1986), however, the size and
                 density of particulates released from a net-pen are
                 likely to depend upon the species and size of the fish,
                 the type and pellet size of the feed, and the amount of
                 physical disturbance induced by either water current or
                 fish activity. In additon to these potential variables,
                 particulate wastes are not uniform in size or density,
                 and thus can not be adequately characterized by a single
                 settling velocity, or even the two velocities of the
                 model. Settling velocities of culture wastes are best
                 described by a frequency distribution, and the model
                 therefore requires that a major oversimplifying assump-
                 tion be made.



            5)   It is not possible to describe variations in the flow
                 field attributable to the presence of the pen structures,
                 and how these variations may influence depositon. If the
                 model is used for siting in a pre-development stage, the
                 installation of the pen structures may modify the
                 predicted magnitude and distribution of waste loadings.
                 The effect of pen installation on waste dispersion is,
                 however, likely to be small in most cases particularly
                 when the pens occupy a small proportion of the total

                 water column.



            6)   The hydrographic input to the model is based on current
                 records at a single point, and there is no allowance for
                 changes of the flow field along a particle's trajectory.
                 The current velocity and direction measured at the meter
                 mooring may not be representative of current regimes on
                 other sides of the farm complex or over the entire area
                 of deposition. At the Clam Bay farm the two current
                 meters gave very different pictures of current patterns.
                 The model was run using data from the eastern meter since



                                        56










                this site would be less subject to the complications of
                bay geomorphology, but the model results would have been
                somewhat different had data from the other meter been

                used. The effects of lateral variation of currents on
                model predictions are especially pronounced at Clam Bay
                because of the atypically large size of the farm and
                shoreline effects on current patterns. At the Squaxin
                Island site and at other farms of small to moderate size
                the effect of lateral variations in current patterns may
                be negligable and ignoring these variations in the model
                may be justified.


           7)   The model, as presently formulated, is incapable of
                dealing with depth-related variation in current flow.
                With increasing water depth, the probability increases
                that currents measured at a single depth are unrepresen-
                tative of the multiple current regimes a particle
                encounters during settling to the seafloor. In the
                present study the meters were positioned at a depth
                approximating half the distance between the bottom of the
                pens and the substrate. In some situations multiple
                current meters at several depths may be necessary to
                accurately predict waste dispersal.


           8)   The model has no mechanism by which to consider duration
                of culture. The magnitudes of organic carbon loading
                were comparable at the Squaxin and Clam Bay sites,.yet
                the effects on sediment chemistry were much greater at
                Clam Bay. This difference, which may be due to the short
                period of time that the Squaxin site has been in use, can
                not be incorporated into the model.


                Despite the limitations of the model, it represents the
           best means currently available to predict the magnitude and
           extent of culture impact on the seafloor. The model has
           performed well both in the present study and in previous tests



                                       57










            in Scotland, yet because of its limitations and the necessary
            simplifying assumptions, the model should be used cautiously
            as a predictive tool. As indicated by the probable high
            degree of transport and/or resuspension at the Squaxin Island
            site, consideration must be given to site-specific conditions
            which violate model assumptions and therefore make predicted
            loadings subject to error. on a fine scale (predicting carbon
            flux at a specific point), model loading predictions appear to
            be reliable to within a factor of two in most cases. While
            this is generally adequate for site assessment, the potential
            error should be recognized and compensated for in identifying
            areas of potential impact.
                 On a broader scale (predicting the affected area), model
            predictions appear very reliable, for at five sites examined
            in Scotland, the model predicted that the 1 kg C-m-2.yr-1
            isopleth would extend up to 15 to 30 m from the farm
            perimeter. In the present study, the model predicted this
            rate of loading up to 28 and 70 m from the Squaxin and Clam
            Bay sites, respectively. Areal extents of impact of this
            magnitude are consistent with observations from the present
            study and other studies reported in the literature.
                 The current information collected as input to the model
            is extremely useful both from the perspectives of environ-
            mental protection and farm husbandry. The current meters
            deployed in this study measured velocity and direction every
            15 minutes for a period of 60 days. Such information is
            invaluable not only to predict the dispersal of solid,wastes
            but to determine mooring requirements, rates of water renewal
            in the pens, and duration of slack water (which may be the
            limiting water quality parameter in maintaining suitable
            growing conditions).
                 The model is useful in condensing a massive data set of
            current measurements into a single summary figure interpret-
            able by non-specialists. It should therefore be helpful in






                                        58










           explaining probable impacts in public hearings and similar

           forums.
                The model is also helpful in identifying sites which
           would be clearly unsuitable for culture. Given the current
           state of knowledge it is not possible to define the impacts of
           a given loading rate, however severe biological disturbance
           has been observed in Scotland where predicted loadings were as
           low as 1.8 kg C-m-2.yr-1. At some unquantified level below
           this loading, development of a site is unlikely to have
           significant effects on the benthos. At most farms examined in
           Washington and Scotland, loading rates directly under the pens
           range from 6 to 14 kg C-m-2.yr-1. Where loading rates are far
           in excess of these values, the generation of hydrogen sulfide
           by enriched sediments and the consequent effects on the
           cultured fish themselves would be of serious concern.










































                                        59














                                  LITERATURE CITED

            Arizono, M., 1979. Disease control in mariculture, with
                  special reference to yellowtail culture. In G. Yamamoto
                  (ed.), Proceedings Seventh Japan-Soviet Joint Symposium
                  on Aquaculture, Tokai University, Japan, pp. 78-88.

            Braaten, B., J. Aure, A. Ervik, and E. Boge. 1983. Pollution
                  problems in Norwegian fish farming. ICES, C.M.
                  1983/F:26. 11 pp.

            Brown, J.R., R.J. Gowen and D.S. McLusky. 1987. The effect
                  of salmon farming on the benthos of a Sottish sea loch.
                  J. Exp. Mar. Biol. Ecol. 109:39-51.

            Butman, C.A. 1986. Sediment trap biases in turbulent flows:
                  results from a laboratory flume study. J. Mar. Res.
                  44:645-693.

            Doyle, J., M. Parker, T. Dunne, D. Baird and J. McArdle.
                  1984. The impact of blooms on mariculture in Ireland.
                  International Council for the Exploration of the Sea,
                  Special Meeting on the Causes, Dynamics and Effects of
                  Exceptional Marine Blooms and Related Events.
                  Copenhagen, 4-5 October 1984.

            Earll, R.C., G. James, C. Lumb and R. Pagett. 1984. A report
                  on the effects of fish farming on the marine environment
                  of the Western Isles. Report to the Nature Conservancy
                  Council.


            Ervik, A. P. Johannessen and J. Aure. 1985. Environmental
                  effects of marine Norwegian fish farms. ICES, C.M.
                  1985/F:37. 13 pp.

            Gowen, R.J. and N.B. Bradbury. 1987. The ecological impact
                  of salmonid farming in coastal waters: a review.
                  Oceanogr. Mar. Biol. Ann. Rev. 25:563-575.

            Gowen, R.J., N.B. Bradbury and J.R. Brown. 1985. The
                  ecological impact of salmon farming in Scottish coastal
                  waters: a preliminary appraisal. ICES, C.M., 1985/F:35.
                  6 pp.

            Gowen, R.J., N.B. Bradbury and J.R. Brown. in press. The use
                  of simple models in assessing two of the interactions
                  between fish farming and the marine environment. Proc.
                  European Aquaculture Symposium.







                                         60










           Gowen, R., J. Brown, N. Bradbury and D.S. McLusky. 1988.
                 Investigations into benthic enrichment, hypernutri-
                 fication and eutrophication associated with mariculture
                 in Scottish coastal waters (1984-1988). Report to the
                 Highlands and Islands Development Board and others.

           Hall, P. and 0. Holby. 1986. Environmental impact of a
                 marine fish cage culture. ICES, C.M. 1986/F:46. 19 pp.

           Hedges, J.I. and J.H. Stern. 1984. Carbon and nitrogen
                 determinations of carbonate-containing solids. Limnol.
                 Oceanogr. 29:657-663.

           Kaspar, H.F., G.H. Hall and A.J. Holland. 1988. Effects of
                 sea cage salmon farming on sediment nitrification and
                 dissimilatory nitrate reductions. Aquaculture 61.

           Kitamori, R. 1977. (Changes in the species compositon
                 (principally benthic organisms)]. In Japanese Soc.
                 Scientific Fisheries (ed.), Senkai Yoshoku to Jika Osen
                 [Shallow-Sea Aquaculture and Self-Pollution], Suisan-gaku
                 Shirizu 21 (Fisheries Series 211. pp. 67-76. Koseisha
                 Koseikaku, Tokyo.

           Mattson, J. and 0. Linden. 1983. Benthic macrofauna succes-
                 sion under mussels, Mytilus edulis L. (Bivalvia),
                 cultured on hanging long lines. Sarsia 68:97-102.

           Pearson, T.H. and R. Rosenberg. 1978. Macrobenthic
                 succession in relation to organic enrichment and
                 pollution of the marine environment. Oceanogr. Mar.
                 Biol. Ann. Rev. 16:229-311.

           Pearson, T.H. and S.O. Stanley. 1979. Comparative measure-
                 ments of the redox potentials of marine sediments as a
                 rapid menas of assessing the effect of organic pollution.
                 Mar. Biol. 53:371-379.

           Pease, B.C. 1977. The effect of organic enrichment from a
                 salmon mariculture facility on the water quality and
                 benthic community of Henderson Inlet, Washington, Ph.D.
                 thesis, University of Washington. 145 pp.

           Penczak, T., W. Galicka, M. Molinski, E. Kusto and M.
                 Zalewski. 1982. The enrichment of a mesotrophic lake by
                 carbon, phosphorus and nitrogen from the cage aquaculture
                 of rainbow trout, Salmo gairdneri. J. Appl. Ecol.
                 19:371-393.

           Rosenthal, H., D.P. Weston, R.J. Gowen and E.A. Black. 1988.
                 Report of the ad-hoc study group on environmental impact
                 of mariculture. ICES, Cooperative Research Report 154,
                 Copenhagen, Denmark. 83 pp.




                                       61










             Strickland, J.H.D. and T.R. Parsons. 1972. A practical
                  handbook of seawater analysis. Bull. Fish Res. Board
                  Canada, No. 167, 31 pp.

             Thomson, D.E. 1986. Determination of the effects of fish
                  size and feed pellet size on the settling characteristics
                  of rainbow trout (Salmo gairdneri) culture cleaning
                  wastes. M.S. Thesis, University of British Columbia,
                  Vancouver.


             VKI. 1976. Vandkvalitetsinst. & Jydsk Teknologisk Inst.:
                  Forskellige driftsparameters indflytelse pa forureningen
                  fra dambrug. [The influence of different operational
                  parameters on the pollution from fish farms.] Rapport
                  til Teknologiradet. Horsholm, Denmark.

             Warrer-Hansen, 1. 1982. Evaluation of matter discharged from
                  trout farming in Denmark. In J.S. Alabaster (ed.),
                  Report of the EIFAC Workshop on Fish-farm Effluents.
                  Silkeborg, Denmark, 26-28 May 1981. pp. 57-63. EIFAC
                  Tech. Pap 41.

             Weston, D.P. 1986. The environmental effects of floating
                  mariculture in Puget Sound. School of Oceanography,
                  University of Washington, Seattle. 148 pp.

             Weston, D.P. 1988. Measuring the effects of organic and
                  toxicant inputs on benthic communites. In Proceedings
                  First Annual Meeting on Puget Sound Research. Puget
                  Sound Water Quality Authority, Seattle, Washington.
                  pp. 552-566.


























                                         62






































                                  APPENDIX B


                   MODELING OF PARTICULATE DEPOSITION UNDER
                              SALMON FISH FARMS



















                           MODELING OF PARTICULATE DEPOSITION
                                  UNDER SALMON NET-PENS









                                               by:

                                       William P. Fox, P.E.

                                         Parametrix, Inc.
                                          P.O. Box 460
                                       Sumner, WA 98390








                                               for:

                             Washington Department of Fisheries, AX-11
                                  115 General Administration Bldg.
                                       Olympia, WA 98504










                                        Job No. 35-1747-02




                                         October 31, 1988











                                                INTRODUCTION

            one of the observed effects of some salmon net-pen facilities on the environment has
            been organic enrichment of the underlying soils from the deposition of fish feces and
            uneaten feed. Under separate report to the Department of Fisheries, Drs. Donald
            Weston and Richard Gowen have examined deposition rates, chemical changes and
            biological impacts under two net-pens sited in Puget Sound. Their evaluation included
            a predictive deposition model developed by Gowen.

            A separate modeling approach has been used in the evaluation of several proposed net-
            pens recently by Parametrix, Inc.     The purposes of this report are: (1) to run the
            Parametrix model for the same sites modeled by Gowen and comment on the
            comparative results, and (2) modify configuration, orientation and density of the pens and
            evaluate the sensitivity of predicted deposition rates to these variables.


                                            MODEL DESCRIPTION

            The Parametrix model is a modification of a model developed by EPA (1982) to predict
            the deposition of particulates from sewage treatment plant outfalls in coastal waters.
            This model has already been applied to several proposed net-pens in the State of
            Washington. The model relies on average speed and frequency along the principal and
            minor axes to predict excursion distances from the pens and areal deposition rates for
            settleable materials of distinct settling velocity. A sloping bottom can be accounted for
            in the model. Comparison of the Parametrix model with Gowen's model will be saved
            for the Discussion.

            The Parametrix model includes evaluation of post-depositional processes related to decay
            of the organic material. The organic material will decay as it accumulates on the sea
            floor. When the rate of deposition matches the rate of biodegradation, a steady-state
            accumulation of organic material will result. Decay of organic material will create an
            oxygen demand in the bottom waters in the vicinity of the net-pens. The EPA methods
            are used to predict the resulting steady D.O. depletion in the near-bottom waters.


                                          RESULTS: CLAM BAY SITE

            Currents Like Gowen's model, the Parametrix model is based on the current meter
            located 100 m east of the farm site (#F2053). The current rose from this meter is
            shown in Figure 1. Each of the current measurements has been catalogued into one of
            eight 45* directional "bins." 'ne percentage of currents failing within each bin and the
            average speed of those currents are indicated by the rose. The length of each rose petal
            is proportional to the percentage of currents in that direction. The current rose for the
            Clam Bay site used in the model indicates the predominant current direction falls witbin
            the bin from 90' to 135' (ESE). Tbe average currents along the major and minor axes
            of the net-pens used in the model are adjusted for the frequency and strength of currents


                                                         1









              in each direction (for example, the fastest currents occur from 315' to 360' but are not
              very frequent, thus are not weighted as high as the easterly currents).

              Wasteload and Settling Velocities. The method of determining wasteload and settling
              velocities used by Gowen is different than that used for this model. Ile wasteload
              assumed for this model study is consistent with the wasteloads assumed in earlier
              modeling efforts by Parametrix for net-pens in Puget Sound (Harding Creek, Discovery
              Bay, and North Skagit Bay). The Gowen model is based on a carbon mass balance,
              whereas the Parametrix model accounts for total solids. The results modeled herein are
              converted to carbon for comparison with Gowen's results in the summary results, based
              on 48 percent carbon content for feed, and 80 percent for feces.

              The wasteload and settling velocities assumed for the Parametrix model are based on an
              annual production of 617 metric tons, Gowen's published data for European farms, and
              other European researchers (Gowen 1987). Lost feed would be about 10 percent of the
              total feed. The data used in this modeling are tabulated below:

                         Waste            Total Solids Total Carbon                 Settling
                       Component          Loading       Loadin        Percen         Veloci


                     Uneaten Feed           430 kg/d    206 kg/d        40%           10 cm/s
                     Large Feces            325         260             30             5
                     Small Feces            325         260             LO            2
                     Total                1,080  kg/d   726 kg/d        100%

              By comparison, Gowen's model assumed 317 kg C/day lost feed and 540 kg C/day feces,
              for a total loading of 857 kg C/day.

              Model Runs. The model was run for the existing pen size and orientation and four
              other configurations as summarized below:

                     Run                           Description

                      1            Existing pen size and orientation
                      2            Rotate existing pens 90'
                      3            3 round pens with same total surface area
                      4            Increase pen width by 50 %
                      7            Decrease fish production 50 %

              The results of each model run are summarized below and in the Figures attached at the
              end of this report (except Run 7 which would have the same areal coverage as Run 1,
              with 50 percent of the deposition rate). The table below includes only the maximum
              predicted impact, which would be concentrated directly under the pens.                 Total
              accumulation is based on a steady-state decay of organic material. The model output is
              provided at the end of this report for all runs.


                                                           2









                                      Total           Organic                  Total                 D.O.
                                      Deposition Deposition                 Accumulation          Depletion
                      Run             kg/rr? /yr    kg C/rr? /yr               kg/n?                 mg/L


                      1                 14.7            9.3                     4.0                  0.13
                      2                   9.8           6.1                     2.7                  0.04
                      3                 10.6            6.5                     .2.9                 0.08
                      4                 10.8            6.9                     2.9                  0.11
                      7                   7.4           4.6                     2.0                  0.07



                                                RESULTS: SQUAXIN SITE

              Currents The model runs for the Squaxin site are based on the meter #F2057 located
              60 meters north of the existing pens. The current rose for this meter is shown in Figure
              2. The rose reveals a predominant NNW by SSE current axis. The SSE component is
              slightly less frequent, but much stronger than its counterpart. Current speeds used in the
              model are handled similar to the Clam Bay site.

              Wasteload and Settling Velocities, The Squaxin site is much smaller than the Clam Bay
              site. The assumed wasteloads and settling velocities are tabulated below:

                                        Waste                         Mass                 Settling
                                      Component             Loading        Percent         Velocity


                                      Uneaten Feed           40 kg/day        40 01o       10 cm/sec
                                      Large Feces             30               30           5
                                      Small Feces             30             -30            2
                                      Total                  100 kg/day       100 'Yo


              Model Runs. The model was run for the pen configurations as summarized below:

                      Run                             Description

                       5              Existing pen size and orientation
                       6              Rotate existing pens 90'

              The results of each     model run are summarized below and in the figures and printouts
              attached at the end     of this report.






                                                                3










                                       Total                   Total                       D.O.
                                     Deposition            Accumulation                  Depletion
                      Run             kg/m2/yr                 kg/rr?                      mg/L


                       5                11.9                    3.3                        0.02
                       6                17.2                    2.7                        0.05



                                                       DISCUSSION

               Comparison with Gowen Model. The basic calculation in both models, horizontal
               displacement of settleable particles, is governed by the same function of settling velocity
               and current velocity. However, Gowen's model simulates individual particle trajectories
               for each current velocity from the current meter data, whereas the Parametrix deals only
               with averages. Accordingly, the Gowen model requires more input data and is capable
               of a producing a larger number of sediment contours and more precise deposition
               pattern.

               Unlike the Parametrix model, Gowen's model does not consider sloping topography,
               multiple settling velocities or post-depositional biological processes. However, Gowen's
               model could certainly be modified to include these additional features. Although these
               features are @esireable, the uncertainties regarding wasteload and post-depressional
               processes exceed the precision achieved by these features.

               Neither model accounts for dissolution, suspension or rp-suspension of particles by high
               currents.   However, a very detailed field investigation of the spatial distribution of
               currents near each site would be necessary to predict impacts at remote locations if
               material is resuspended. Resuspension and maintenance of fish feces in suspension under
               turbulent conditions would be a valuable future research topic.

               Comparison of Model Results. Gowen's model produces a more detailed map showing
               deposition contours ranging from 0 to 12 kg C/ri?/yr for Clam Bay, with 1 kg C/n?/yr
               intervals. The Parametrix model reveals only 3 contours, with an average of 9.3 kg
               C/d/yr centered under the pens (Run 1). Gowen's assumed wasteload was greater than
               that assumed for the Parametrix model. Given the uncertainties regarding wasteload
               assumptions (discussed below) and the greater resolution possible with Gowen's model,
               the results appear compatible.


               As discussed in the model description, the Parametrix model accounts for the post-
               depositional process of decay. The assumptions made are generally conservative, but may
               be useful for management uses. The accumulation mass and thickness would be masked
               in areas where natural deposition is also occurring. In each case modeled, the predicted
               D.O. impact would be negligible, which is consistent with the observations of Weston.
               The D.O. function in the model would be useful to flag potential problems, but could
               not be relied on for an accurate prediction if oxygen problems are anticipated.

                                                              4









             Sensitivi1y Analysis. The results of Runs 1 through 4 and 7 indicate the sensitivity of
             deposition to various factors. Runs 1 through 4 represent an equal number of fish, or
             wasteload. Run 7 reveals that the most effective way to reduce deposition is to reduce
             the wasteload.

             For a given wasteload, the greatest mitigation is achieved by orienting the pens
             perpendicular to the predominant 'current direction (a reduction of 33 percent in this
             case: see Runs 1 and 2). In this respect, the Squaxin site is already mitigated, as
             evidenced by a like increase by rotating the pens by 90 degrees (see Runs 5 and 6). Of
             course, engineering and navigation considerations may not allow this mitigation measure.

             Separation of the pens into several pods may also mitigate deposition. Essentially, the
             impact would be spread over a greater area. In this example, a reduction of 28 percent
             would be achieved by the configuration chosen for Run 3. The reduction at any
             proposed site would be site specific and a function of the size and separation of the
             individual pens.

             Run 4 increased the dimension perpendicular to the predominant current by 50 percent.
             A reduction in deposition of approximately 25 percent is anticipated.            Again, the
             reduction obtained at any site would be specific to that site.         An increase in the
             dimension parallel to the predominant current would have little effect.

                                                  CONCLUSIONS

             The primary    conclusions of this analysis follow:

                    1.      Gowen's model produces a deposition map of better resolution than the
                            Parametrix model. The Parametrix model crudely accounts for uniformly
                            sloping bottom topography and post-depositional decay, and can accept any
                            number of settling speeds or vertical variation of current speed.

                    2.      Improvements could and should be made to both models regarding
                            suspension and resuspension of depositional materials.

                    3.      Current speed  and direction relative to the pens are critical to deposition.
                            Fecal material from the pens may remain suspended at some threshold
                            current speed.   If current speeds are below this threshold level, pen
                            orientation to the axis of predominant currents is critical.

                    4.      The greater resolution of Gowen's model or any other modeling
                            improvements   (such as multiple settling velocities or complex topography)
                            are secondary  to the need for more defined criteria regarding wasteload,
                            as discussed below.

             The most settleable particles are the uneaten feed. However, lost feed ratios reported
             in the literature range from 1 to over 30 percent of the applied feed. Run 7 revealed

                                                          5








            the importance of the predicted wasteload in predicting deposition rates. Until more
            accurate criteria for wasteload are developed, which seems unlikely, less subtle
            improvements to the models are ineffective. The models may provide useful management
            tools, particularly when comparing alternative sites and pen configurations, or establishing
            best management practices to limit feed wastage.


                                               REFERENCES

            EPA. 1982. Revised Section 301(h) Technical Support Document. Prepared for U.S.
                   Environmental Protection Agency by Tetra Tech, Inc. EPA Pub. No. 430/9-82-
                   011.

            Gowen, R.J. and N.B. Bradbury. 1987. The Ecological Impact of Salmonid Farming in
                   Coastal Waters: a Review. In: Oceanogr. Mar. Biol. Ann. Rev., 1987:25.

            Weston, D.P. and R.J. Gowen. 1988. Assessment and Prediction of the Effects of
                   Salmon Fish Farm Culture on the Benthic Community. Report to the Washington
                   Department of Fisheries, Olympia, Washington.




























                                                      6












                                                                                                       315460-
                                                                                                        7.2%                                                                                       3odL45s
                                                                                                       12.9 cm/**c                                                                                 2.9%
                                                                                                                                                                                                   8.2 cmisoc


                                                                                                                                                                                                                                                                            4dL00-
                                             2700-3150                                                                                                                                                                                                                      4.9%
                                             9.2%                                                                                                                                                                                                                           7.7 CM/Sec
                                             10.4               cm/soc


                                                                                                                                                                                            ...........................................
                                                                                                                                                                                                                                               ...............
                                                                                                                                                                                                                                                          a            . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
                                                                                                                                                                                                                                                                                   :::::::::  ::::::; : : : : : : : : : :       :::: ;:::: : ::::::::::::::::::                : 4:::::::: : ::::::::::::::::::::: :::::::!:::: : :::::         :::: :: :: ::: : : ::::;;;:: : : :: :a
                                                                                                                                                                                                                                                                                                                                      ::i::

                                                                                                                                                                                                                                                                       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
                                                                                                                                                                                                                                  . . . . . . . . . . . . . . . . . . . . . . . . . .:tt@ 4 ; ; ; 1 : : 1 t 1 t j ; ; :
                                                                                                                                                                                                                         . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
                                             225!-2700
                                                                                                                                                                                                                                                                            ...........
                                                                                                                                                                                                                                                                                         .....................................................................................................................
                                                                                                                                                                                                                                                                                                                                                                                       ....................................
                                             4.5%                                                                                                                                                                                                                                                                                                                              ..........

                                                                                                                                                                                                                                                                                                                                ............................
                                             8.5 cm/soc
                                                                                                                                                                                                                                    ..........
                                                                                                                                                                                                                              ...............
                                                                                                                                                                                                                                               ...................     .......................     ...............                                                             ............ .............       ....... ...
                                                                                                                                                                                                                                                                                                                                      .......................
                                                                                                                                                                                                                                                                                                                                      ..............................
                                                                                                                                                                                                                                                                                                                                                                               ............................
                                                                                                                                                                                                                                                     ..........
                                                                                                                                                                                                                         . . . ..............                                                                                                                                                              .............
                                                                                                                                                                                                                         . .. . .. .                                   ...I.......................................                                                                                                                              .....................
                                                                                                                                                                                                                                                                       ..........

                                                                                                                                                                                                                                                                       ...........                                              ............
                                                                                                                                                                                                                                                                                                     .......................
                                                                                                                                                                                                                                                                                    ...........                                                                                ................. ..........................
                                                                                                                                                                                                                                                                                                .................                                                                      ............        ;:::::::::::::::::::::::::::::::::::::.
                                                                                                                                                                                                                                                                                                                                                                                                           ................. ............
                                                                                                                                                                                                                                                                       .........................................
                                                                                                                                                                                                                                                                                                                                                                                                                                                ...........
                                                                                                                                                                                                                                                                                                                                11.0 cm/sec
                                                                                                                                                                                                                                                                                                                                                                               .................                                                ...................
                                                                                                                                                                                                                                                                                                                                ......................................
                                                                                                                                                                                                                                                                       .........................   .................                                                                                                                            ..........
                                                                                                                                                                                                                                                                                                                                ............................................
                                                                                                                                                                                                                                                                                                                                                                                                                                                .............
                                                                                                                                                                                                                                                                       ..........    ................................
                                                                                                                                                                                                                                                                                                                                ....................................................
                                                                                                                                                                                                                                                                                                                                                                                       ..............................
                                                                                                                                                                                                                                                                                                                                                                                                                                                ...........
                                                                               I Se-2250                                                                                                           13e- 1806
                                                                                                                                                                                                                                                                                                                                ........................................
                                                                                                                                                                                                                                                                                                                                                                               .......... .............    .....................
                                                                                6.4%                                                                                                               18.7%
                                                                                4.3 cmisec                                                                                                         9.0 cm/sec
                                                                                                                                                                                                                                                                                                                                .........................................
                                                                                                                                                                                                                                                                                                                                ...................................
                                                                                                                                                                                                                                                                                                                                                                               .....................
                                                                                                                                                                                                                                                                                                                                .................................



                                                                                                                                                                                                                                                                                                                                                                               ..................................
                                                                                                                                                                                                                                                                                                                                                                               ..........................
                                                                                                                                                                                                                                                                                                                                                                               Ht .........................


























                     Note: Current Rose Indicates                                                                                                                                                                                                                                                                                                                              Figure 1:
                                             Percentage and Moan                                                                                                                                                                                                                                                                                                               Current Rose For
                                             Speed of Currents Within
                                             Directional "Dine Length                                                                                                                                                                                                                                                                                                          Clam Bay Site,
                                             of Ross, Is Proportional                                                                                                                                                                                                                                                                                                          Meter F2053
                                             to Percentage.















                                                                    316-3600
                                                                   30-7%
                                                                          cm/Goc




                                                                                 ...                              . ......




                                                                ......                                            .......
                                                                .....                                             . ....






                                                                                                            . . . . . . . . . .%.........@@@@@@@-..'.'@@...'..f

                                                                                                            .......-                   -454
                                                                                                                                360


                                                                                                                               3-1     cmisec



                                                                   270-3150


                                                                  3.4 cmJ&*c                                                                      5.8 cm/see

                                                                                                ..........


                                                                                                                ... . ........
                                                                             225-270
                                                                             3.7%
                                                                             2.6 cmJw:c                                                                                      90-1350

                                                                                                                                                ..... ........

                                                                                                                                                  .... .......

                                                                                                                                                .... ......
                                                                                     190-2260
                                                                                     7.7%
                                                                                     4.3 calaac

                                                                                                                             . ....... . .





                                                                                                                                    .......                    .......

                                                                                                                                                    ... . .......
                                                                                                                                                   ............




                                                                                                                                                  135-1800
                                                                                                                                                  27.31%
                                                                                                                                                  10.0 cm16*C















             Note:       Current Roe* Indicates
                         Percentage and Mean                                                                                                                                 Figure 2:
                         Gpood of Currents Within                                                                                                                            Current Rose
                         Directional *Sine." Loingth                                                                                                                         For Squaxin Site,
                         of Roe* Is Proportional
                         to Percentage.                                                                                                                                      Meter F2057

























                                                       Not Pens (280 m x 50 m)


                                                                  2                   2
                                                       14.7 kqj m /yr)    (7.1 kq C/m ./yr)


                                                                 2                    2
                                                       4.9 kg /0 /yr)     (3.3 kg CIM /yr)
                                                       2.5 kglm 2/yr)     (1.2 kq C/  M2/ y r)





























                   Scale In Motors                                                   Run 1:
                   F--LJ-----]                                                       Clam BaY.
                  0      50     100                                                  Existing Configuration



















                                                                                                 4.2 199/021
                                                                                                 (2.0 Ito clyl,")


                                                                                                01.3 k9l 2
                                                                                                        m
                                                                                                (0.6 Itoc a /Yr)




        Not Pons
        (50m X 280m)







        9.8
       4.7 kq C/m lyr)






















                     Scal* In Motors                                                               Run 2:
                     FLJ---@                                                                       Clam Bay
                     0      50    100                                                              Rotate 900





















                                                                              4.4 k91021yr
                                                                              (2.1 kq C/021yr)





                        10.6 kilim2lyr
                        (5.1 kq C/M21yr)




                                                                              1.4 kg/02/yr
                                                                              (0.6 kq C/02/yr)







                        Not Pen
                        (3 x 77m Dia.)






















                  seal* In Motors                                                           Run 3:
                  F-L-F--@                                                                  Clam Bay,
                  0     so     100                                                           Round Pens

































                      Not Pona
                      (280 in x 75 m)                                              2'0 k91021yf
                                                                                   (0.9 ko Cloglyr)










                                       ----------------------------------








                                                                                   10A k91n2iVr
                      6-3 kgjfg2jyr                                                (5-2 kv C1=21yr)
                      (2.5 ka CIM21yr)




















                       Scale In Motors                                                          Run 4:
                                                                                                Clam Bay,
                       0      50     100                                                        Double Wide Pens


















                                                                                              11.9 ILgd,&2, F
                   Not Pons                                                                  (6.7 Ito C/mil/yr)
                   (75 m x 17 M)












                                        -----------------------------------------------





                                                                             IILUJ I














                   L2 kols2lyr
                   (2.5 kg Cjm2lyr)

                                                                                             (0.9 ks Cla2lyr)












         117@     Scale In Motors                                                       Run 5:
                    FLJ--@                                                              Squaxin,
                    0     10   20                                                       Existing Configuration


























                                                                                             Not Pans
                                                                                             (17m x 76m)

                                                                                             17.2 kq /nFi-yr
                                                                                             (8-3 Its C/ie/yr)



                                                                                             8.3 kq Jlm@@
                                                                                             .0.0 kq C1 lvr)




                                                                                             3.0 ko wi'@Jyr
                                                                                             (1.4 kg C /O/yr)




























                                                                                      Run 6:
                    Scale In Motors                                                   Squaxin Rotate 90*

                     0    10    20






































                                  APPENDIX C


                     PHYTOPLANKTON AND NUTRIENT STUDIES
                          NEAR SALMON FISH FARMS AT
                          SQUAXIN ISLAND, WASHINGTON















                                   FINAL REPORT





                        PHYTOPLANKTON AND NUTRIENT STUDIES


                                NEAR SALMON NET-PENS


                           AT SQUAXIN ISLAND, WASHINGTON


                                        by



                                 John E. Rensel
                                 Rensel Associates
                                Seattle, Washington



                                        for


                       The Washington Department of Fisheries
                                      and the
                            Technical Appendices of the
                   Programmatic Environmental Impact Statement:

                         Fish Culture in Floating Net-pens








                                September 11, 1989










          Fisheries Scientist, American Fisheries society Certified

         Present Address: College of Ocean and Fisheries Sciences,
                          University of Washington, WH-10
                           Seattle, Washington 98195

















                                     Table of Contents


            List of figures   ........................................  iii

            List of tables   .........................................  iii

            Abstract   ...............................................   iv


            INTRODUCTION   ...........................................    1

                 Prior studies: primary production and near net-pens      2

                 Study site selection   ..............................    3

                 Site description and hydrography    ..................   6

                 Experimental design   ...............................    9

            METHODS   ................................................    9


            RESULTS   ................................................   11

                 Experiment A   ......................................   12

                 Experiment B   ......................................   21

            DISCUSSION   .............................................   23

                 Experiment A: effects-on phytoplankton    ............  23

                 Experiment B: effects on near-field water quality . 26

            LITERATURE CITED   .......................................   30



            APPENDICES

                 Appendix A-1.   Productivity data from Squaxin Island
                                 on May 25, 1988. 2 pp.

                 Appendix A-2.   Productivity data from Squaxin Island
                                 on June 21, 1988. 2 pp.

                 Appendix B-1.   Summary of recent, near-field nutrient
                                 studies at net-pen sites. 2pp.










                                     List of Figures


          Figure 1.   Map of the Puget Sound region with Squaxin
                      Island net-pen site located in South Puget
                      Sound within oulined box  . ..........................   4

          Figure 2.   Location and vicinity map of Squaxin Island net-
                      pens and surrounding area  . .........................   5

          Figure 3.  Dissolved nitrogen concentration before fish release
                     (top, Fig. 3a) and after most of the fish were
                     released (Fig. 3b) . ...............................    12

          Figure 4.  Chlorophyll a concentration before fish release
                     (top, Fig. 4a) and after most of the fish were
                     released (bottom, Fig. 4b)  . ........................  17

          Figure 5.  Primary productivity before fish release (top,
                     Fig. 5a) and after most of the fish were released
                     (bottom, Fig. 5b) . .................................   19



                                     List of Tables


          Table 1.   Sampling parameters and number of replicates per
                     depth . ............................... ...............   8

          Table 2.   Partial results of experiment A-1 from May 25, 1988..13

          Table 3.   Partial results of experiment A-2 from June 21,
                     1988 . ..............................................   14

          Table 4.   Total nitrogen and phosphorus concentration, and T:N
                     molar ratio . .......................................   15

          Table 5.   Summary of cell counts from Peale Passage in cells
                     per milliliter . ....................................   20

          Table 6.   Results of experiment B from May 25, 1988   . ......... 22













                                      Abstract

         The effects of a salmon net-pen farm on dissolved nutrient
         concentration, phytoplankton density and growth rate were
         investigated in a shallow passage of southern Puget Sound, near
         Squaxin Island, Washington. If background levels of dissolved
         nitrogen were sufficiently low for long enough periods, excreted
         nitrogen from the fish could enhance the growth of phytoplankton.
         The net-pen complex was the largest in western Washington located
         in surface waters that are depleted of dissolved nitrogen for at
         least some period of the time. Accordingly, the site constituted
         a "worst-available case" for net-pens in western Washington.

         Two experiments were conducted. The first involved measurement
         of phytoplankton density and growth rates at the farm site during
         a period of maximum net-pen fish biomass and one month later
         during similar tidal and weather condition, but after release of
         60% of the fish. Monitoring of reference stations at both ends
         of the passage, beyond the immediate area of the net-pens, was
         conducted to assess source water conditions and provide a
         comparison to the net-pen site.

         The results of the first experiment suggest no consistant and
         significant effect of the net-pens, however natural variation of
         dissolved nitrogen concentrations confounded possible correlation
         between phytoplankton density/growth rate and the net-pens or
         reference stations. Moreover, only 2 of 12 samples were
         collected when major dissolved nutrients could have been limiting
         to phytoplankton growth. Therefore, most of the time
         phytoplankton cells were not limited by the Ambient nitrogen
         concentration and addition of nitrogen from the pens could not
         have had a stimulating effect on their growth.

         Although the timing and conditions were appropriate to maximize
         the effects of the net-pens on phytoplankton, and some patterns
         were observed, most of the statistical tests indicated that
         phytoplankton growth rate did not significantly vary among
         stations or times except during one monitoring period. The first
         experiment further serves to illustrates the complexity of
         monitoring phytoplankton in the field which involves a number of
         potentially rapid fluctuating variables.

         The second type of experiment involved near field monitoring of
         nitrogen produced from the net-pens. During the period of
         maximum fish biomass, minor increases in dissolved nitrogen
         (NO3+N02+NH4+) were seen downstream of the pens during one tidal
         period, but not during the next. Total ammonia was significantly
         elevated within the pens compared to ambient concentrations, but
         concentrations were well below the chronic exposure concentration
         for salmonids and other sensitive coldwater fish. At a distance
         of 30 m downstream approximately 80% of the ammonia had been was
         in the form of nitrate, presumably oxidized through microbial
         nitrification.














                                    Introduction

       Salmon reared in marine net-pens produce solid and dissolved wastes
       including various forms of nitrogen. Dissolved nitrogen wastes from
       salmon are as much as 60 to 90% ammonia, with lesser amounts of urea
       and amino acids (Stickney 1979). Nitrogen is the nutrient most
       likely to be limiting to the growth of marine phytoplankton.
       Therefore, the potential for localized nutrient enrichment and
       increased algal abundance near salmon farms exists, and will depend
       mainly on the total size of the farms in the restricted water body
       and existing hydrographic conditions (Gowen et al. 1985, Gowen and
       Bradbury 1987).

       Nutrient limitation of surface waters is a key consideration of the
       State of Washington's Recommended Interim Guidelines for the
       Management of Salmon Net-pen Culture in Puget Sound (SAIC 1986).
       That document conservatively, but somewhat arbitrarily, designated
       the nutrient limitation status of sub-areas of Puget Sound based on a
       threshold of 0.1 mg/l, two and one-half times greater than one recent
       literature value of 0.04 mg/l (0.6 uM, URS 1986a). As discussed
       below, simple measurement of dissolved nitrogen concentrations is
       inadequate to determine if nitrogen is adequate for algal growth, N:P
       ratios also must be considered.

       There are numerous difficulties in determining perturbations of
       phytoplankton from fish-farms or from other of man's activities.
       Foremost, as discussed above, once the net-pens are established,
       there is usually no adequate means to establish baseline conditions.
       Although nutrient uptake by phytoplankton may be rapid, there is a
       lag time of up to a day or so between the addition of nutrients and a
       measurable increase in phytoplankton biomass (Parsons et al. 1984).
       Knowledge of local hydrodynamic processes of dispersion, such as
       distance of tidal excursion, are required for interpretation of these
       types of data. Simply monitoring upstream and downstream of a net-
       pen farm site may reveal near-field nutrient effects, but may not be
       adequate to monitor the relatively slow response of phytoplankton
       populations to the increased nutrient concentrations. Monitoring of
       phytoplankton abundance and dynamics in the field is also difficult
       due to natural variations in time and space of the phytoplankton. A
       number of discrete or loosely interacting measures of water column
       ecology must be assessed, as no single measure provides all the
       necessary information.

       Nitrogenous wastes from net-pen reared fish or other sources are
       unlikely to increase phytoplankton abundance in most of the main
       channels of Puget Sound since nitrogen is already in abundance
       (Collias and Lincoln 1977, Anderson et al. 1984, SAIC 1986).
       Accordingly, this study focused on a worst-available-case of nutrient
       enrichment from net-pens in what appeared to be nutrient-depleted
       waters, at least during some tidal, seasonal and weather conditions.
       To establish baseline conditions, the present study was conducted
       before and after the release of large numbers of fish at a public









                                         2


       benefit, salmon rearing and release net-pen site. In addition to
       having spatially separate reference areas, "before fish release"
       water quality samples were used as the experimental data, and "after
       fish release" monitoring served as a baseline.

       There have been relatively few attempts to monitor nutrient
       enrichment near salmon net-pens and even fewer studies of the effects
       upon phytoplankton dynamics. Prior studies of nutrients from net-
       pens strongly suggest there is little measurable effect beyond the
       immediate area of the pens (near-field). While nutrient
       concentrations are relatively easy to monitor, phytoplankton studies
       (far-field second and third order effects) are more difficult to
       conduct and have typically relied on measurement of chlorophyll -4
       concentrations, the primary photosynthetic pigment in phytoplankton.

       Prior Studies of Primary Productivity Near Net-pens

       In one early study conducted in the Pacific northwest on this topic,
       Pease (1977) surmised that no measurable impact on phytoplankton
       populations occurred under worst-case conditions. The study area at
       Henderson Inlet, Washington had limited circulation during summer
       months, exacerbated by the net-pen site location within a shallow log
       dumping and storage area. Intense dinoflagellates blooms occurred at
       the site during the summer of 1974 which killed farmed salmon and
       prawns (Rensel and Prentice 1980). The 1974 blooms, which appeared
       to be exceptional in abundance, occurred throughout portions of
       southern Puget Sound and also killed salmon in net-pens at Squaxin
       Island. These conditions were not seen in the previous year at
       either Henderson Inlet (Snyder et al. 1974) or in several previous or
       one later year at Squaxin Island (Fraser 1976).

       Pease (1977) found increased density of phytoplankton (chlorophyll A)
       during summer months with increasing distance into the log rafting
       area. The net-pens were located near the outer, seaward edge of the
       log rafting area. Reference areas (controls) were located in the
       main channel of Henderson Inlet, outside the log rafting area, and
       further inside the log rafting area. From my analysis of his monthly
       dissolved nitrate data (Table 5 and Fig. 8 of Pease 1977), it appears
       that nitrogen-depleted conditions could have occurred only in July
       when some of the samples had a concentration of less than 0.04 mg/1
       dissolved nitrogen and adequate phosphate concentrations. A
       generalized, inverse correlation between dissolved nutrient
       concentrations (nitrate and orthophosphate) and phytoplankton density
       was apparent over the entire summer period.

       Phytoplankton standing crop during Pease's study was consistently
       greater at an reference station inside the log rafting area and at
       the net-pen site, compared to an outside, midchannel reference area
       in the open water of Henderson Inlet. However, Pease (1977)
       concluded that there were no abnormally high concentrations of
       phytoplankton anywhere in the area, and that phytoplankton activity
       throughout the inlet was unrelated to the net-pen rearing.









                                        - 3 -



        The second conclusion is possible, but neither supported or refuted
        by his data, as the inside reference area was too close (a few
        hundred feet) to the net-pens to be considered as separate and
        unaffected. Since water currents are weak and often imperceptible at
        the Henderson Inlet site, the inside log-rafting reference areas can
        not be considered as separate from the net-pen site, with regard to
        phytoplankton populations. These criticisms do not invalidate
        Pease's conclusions regarding other water quality conditions, but
        suggests that a greater standing stock of phytoplankton existed near
        the net-pens and that the effect of location and nutrient impact of
        the net-pens could not be sorted out given the experimental design.

        Several years after removal of the Henderson Inlet facility Rensel
        (unpublished data, 1988) found that chlorophyll p concentrations in
        midchannel were about twice those found at the now vacant net-pen
        site, opposite the condition that prevailed throughout Pease's year
        long study (2.72 versus 1.71 ug Chl. _q, SD = 0.273 and 0.412
        respectively, n = 6). However, these samples were taken too late in
        the fall to be representative of optimum algal growing conditions and
        indicated relatively low phytoplankton density at both areas.

        Recent studies in Scotland (Gowen et al. 1988) focused on
        phytoplankton density and growth rates in a restricted, fjordic sea-
        loch that had slow water movement (maximum flow of 16 cm
        sec 1) and a single, large salmon net-pen farm. Additionally, water
        exchange into the 50 meter deep Loch Spelve is restricted by a 4
        meter deep shallow sill. Study results indicate no measurable effect
        of the farm on phytoplankton density, although localized
        hypernutrification (elevated ammonia) was seasonally observed
        immediately around the net-pen farm. Carbon-14 isotope productivity
        data did not show any effect of the farm, althoughthe authors felt
        that this portion of their study was based on insufficient data. In
        spite of slow water flow near the net-pens, the residency time of
        water was too brief to allow measurable increases in phytoplankton
        density or growth rates.

        Study Site Sglection

        The criteria for selection of net-pen location for the present study
        involved finding a net-pen site in western Washington that was
        located in nutrient depleted waters, while still having relatively
        large fish production. Based on the authors experience with these
        facilities, the best site was located in Peale Passage, southern
        Puget Sound. This site, located just east of Squaxin Island (Fig.
        1), is operated as a cooperative Washington Department of Fisheries
        and Squaxin Island Indian Tribal sponsored program. Coho
        (Oncorhynchug kisutch) and other species of salmon have been reared
        at the site since the early 1970's (STOWW 1974) and the 'nearby
        beaches have abundant littleneck clam and planted oyster populations.
        The Squaxin Island net-pens are presently the largest public benefit
        facility in Washington state and produces substantial numbers of fish
        for commercial and sport fisheries (Rensel et al. 1988).









                                           4





                         200                       2
                                 U30W     40'              422*    49*




                                                 BELLINGHAM



                 04
                                                                 -400
                400




                                      NACORT


                           VICTORIA

                2&                                                 20'

                   srRAIr oF .1uAN DE FvcA





                                                                   480
                 8                                       .EVERETT
                 N                                                 N

                      OLYMPIC




                     PENINSULA
                40#                                                40'
                                                        @TTLE

                    SQUAXIN ISLA
                      NET-PEN    SITE
                           -Nil
                 201-                                              20'
                                                  ''TACOMA






                                                    0  110 20 30
                                                    a   .- . W=mj
                 47,*                     @A          KILOMETERS   47*

                          20'    1230W     400      20,     4220
                149

























           Figure 1. Map of the Puget Sound region with Squaxin Island
                       net-pen site located in South Puget Sound within
                       oulined box.






















                                                                                                            TAOOMA


                                                                         iHELTOh             0
                                                 PEALE
                                                                                         Ik         SOUAXIN ISLAND
                                               PASSAGE                                                 NET PEN
                                                                                                        SITE
                                                                                      INLEF

                                                                                           MET
                             G)
                                                                                         OLYMPIA
                                                                                                        Vicinity Map




                                              SOUAXIN
                                              ISLAND                                   HARTSTENE
                                                           NET-PEN$                      ISLAND
                                                                #3

                                                                 #2




                                                                              FLOOD




                                                                         EBB







                                                                                SOUTH
                                                                                PEALE
                                                                               PASSAGE

















                                   Figure 2. Location and vicinity map of Squaxin
        SCAM IN FM                                   Island net-pens and surrounding area.
        r_1_F___1
        0     1,wo   um








                                         6 -


      There are three adjacent sets of net-pens, two for delayed release of
      salmon and, in recent years, a third rearing facility to the north
      operated by the tribe for normal commercial purposes (pen system 3 in
      Fig. 2). All of the fish reared at the first two facilities are
      destined for release into Puget Sound, and are held in the net-pens
      for only a few months of the year after attaining smolt condition.
      This final condition allowed for comparison of water column
      conditions before and after fish release, during similar tidal
      conditions discussed later.

      Site DescriRtion and Hydrography

      Peale Passage is a shallow tidal channel connecting Dana Passage on
      the south and Pickering Passage to the north (Fig. 2). The Squaxin
      Island Indian reservation forms the west boundary of Peale Passage,
      Harstene Island the east boundary. The source waters for Peale
      Passage are relatively well-mixed by strong tidal currents, although
      only one year of sampling data were available for the Dana Passage
      sampling station (unpublished WDOE water quality data DNA001). These
      data indicate low dissolved nitrogen in surface waters occurred 15%
      of the period April to November. Pickering Passage data show low
      dissolved nitrogen in surface waters about 39% of the time (SAIC
      1986).

      Recent studies of circulation and nutrients in deep southern
      Puget Sound (URS 1986b) indicate that additional source waters for
      Peale Passage are the inlets at the west end of Dana Passage,
      especially Budd and Eld Inlets, due to clockwise circulation of
      surface and deeper waters in western Dana Passage. These inlets both
      exhibit strong vertical stratification and nutrient limitation during
      clement weather and undoubtedly influence Peale Passage surface
      waters at times during calm weather.

      An early study of hydrographic conditions in southern Puget Sound
      measured vertical profiles of physicochemical parameters in Peale
      Passage on a few occasions (Oclay 1959). Moring (1973) noted that
      there was little background information concerning water quality in
      the Peale Passage area. His studies provide some basic information
      concerning conditions at the net-pen site. In subsequent years, fish
      culturists of the Squaxin Island Tribe collected additional
      information at the site that, combined with the earlier information,
      is adequate to characterize the vicinity. These data indicate that
      the area is well-mixed in the late fall to spring months but has a
      gradual thermal gradient and very minor salinity gradient in the
      clement weather periods of summer. There are no significant
      freshwater sources in Peale passage and no sharp discontinuities of
      water column characteristics.

      Unpublished drogue (drift object) data collected for this study and
      recording current meter data collected for a related study (Weston
      and Gowen 1989) suggest that water passing through the net-pens does
      not exit Peale Passage on a moderate tide. This situation
      potentially could lead to an increased abundance of phytoplankton,








                                        - 7 -



        since phytoplankton will rapidly assimilate dissolved nitrogen during
        periods of nitrogen depletion.

        With an average depth of about 5.0 meters at mean lower low water
        (MLLW), depths in the vicinity of the net-pen site are shallow
        compared to other existing net-pens in Western Washington. Mean
        water current velocity near the most northern set of net-pens is
        about 6 to 7 cm sec-1 with a net directional flow to the south
        (Weston and Gowen 1989). Currents diminish an undetermined amount in
        the vicinity of the other two net-pens and may be affected by the
        presence of a small cove that tends to slow water movement and form a
        gyre, particularly on the flood tide (unpublished survey data of B.
        Wood, Squaxin Island Tribe, 1982).

        Although no historical nitrogen data were available from Peale
        Passage, two days prior to the first sampling date of this study I
        found dissolved nitrogen concentrations less than 0.04 mg/l, and a
        dissolved nitrogen to phosphorus (N:P) ratio of about 1:1, indicative
        of nitrogen limitation. Use of a single numerical value of dissolved
        nitrogen may be misleading for representation of the actual threshold
        of nutrient depletion (Welch 1980). Examination of both the
        dissolved nutrient concentration and the N:P ratio, sequentially, is
        more useful in determining if nitrogen depletion exists. Recent
        studies in nearby Budd Inlet suggested that nutrient limitation in
        surface waters occurred during summer months when the concentration
        of dissolved nitrogen was less than 0.04 mg/l and dissolved molecular
        N:P ratios were 5 to 1 or less (URS 1986a).





















          Table 1. Sampling parameters and number of replicates per depth.

                       14 Carbon Chloro- Dissolved Dissolved Secchi Temper.- Phytop. Total
                         isotope phyll a nutrients oxygen          Disc    Salinity counts     N & P
                         ------    ------     -------   -------    -----    -------  ------    ------


          Experiment A-1:   pens versus reference areas, May 25th, before     fish release

            Low Tide        3        1          1         1          1        1                   1
            High Tide       3        1          1         1          1        1         1         1


          Experiment A-2:   pens versus reference areas, June 21st,   after   fish release

            Low Tide        3        3          3         1          1        1         1          1
            High Tide       3        3          3         1          1        1         1          1


          Experiment B: upstream and downstream of pens, May 25th

            mid-flood       -                  3          1          1        -         -          3
            early ebb      -                   3          3          1                             1


          Codes: 14Carbon isotope     primary productivity assessment, phyto. counts
          microscope identification and enumeration of phytoplankton, total N
          and P = total nitrogen and phosphorus (sum of dissolved and particulate)
          Total N and P from center of the net-pens only on ebb tide, experiment B.
          pH was sampled concurrent to collection of nutrient samples.








                                          9



        Experimental Desl'_qn

        Two types of experiments were conducted. The goal of experiment A
        was to investigate rates of primary productivity near the net-pens
        and at reference areas, as measured by the uptake of radiocarbon
        isotope C-14. Reference area stations were selected to be remote
        enough from the net-pens to avoid having waters that had passed
        through the net-pens on any single, moderate amplitude tide.
        Sampling was conducted during morning and early afternoon hours that
        coincided with the early and late portions of the flood tide,
        essentially low and high tide. The experiment was conducted before
        and after release of most of the delayed-release fish (experiments A-
        1 and A-2, respectively), about a month apart, during similar tidal
        exchange and timing. Both dates had relatively calm, warm weather
        and were during the peak algal growing season in Puget Sound (Winter
        et al. 1975, URS 1986a). Other direct measures of phytoplankton
        density (chlorophyll a and species cell counts for relative
        abundance) as well as indirect, surrogate measures (Secchi disk depth
        and dissolved oxygen concentration) were made as time allowed.

        During sampling in late May 1988, the three sets of net-pens had a
        total of 118,600 kg of fish distributed 38% within system number 1,
        45% in system number 2 and 17% in system number 3. Most of the fish
        in system one and two were released in early June. During the second
        sampling date in late June there was approximately 47,200 kg of fish
        in the net-pens, 55% within system number three and 45% in system
        two.

        Experiment B was an assessment of water quality upstream and
        downstream of the net-pens, similar to nutrient monitoring described
        in the Interim Guidelines (SAIC 1986). The monitoring was conducted
        at low and high tide in late May, before release of the fish. The
        goal of experiment B was to monitor the near field effect of the net-
        pens on nutrient and ammonia concentrations. Table 1 summarizes the
        measurements and replication conducted for experiment A and B.

        Worst-possible-case conditions were ensured by timing the experiments
        during a period with: the greatest amount of fish in the pens
        (experiment A-1) and with relatively small tidal exchange. The mean
        tide for nearby Dofflemeyer Point is 10.4 feet, and the diurnal range
        is 14.4 feet. Sampling on May 25 and June 21st was conducted on the
        beginning and end of 6.3 and 4.9 foot flood tides, respectively.

                                       Methods



        Water velocity at the net-pen site was measured with a Scientific
        Instruments Price Meter, fitted with an Swoffer optical sensor and
        remote, digital readout unit. Surface drift sticks and 2 meter deep
        drogues were used to monitor current direction immediately downstream
        of the net-pens. Salinity and temperature were measured with a YSI
        SCT-33 meter carefully calibrated to standard seawater solution. All
        water samples were collected with a 2 liter Scott-Richards sampling









                                       - 10 -



       bottle. Dissolved oxygen was measured by a modified Winkler
       titration method with an accuracy of 0.02 mg/l. pH was recorded in
       the field using a VWR model 55 probe. Chlorophyll a samples were
       collected by filtering 50 ml of water through Whatman GF/F filters.
       Filters were folded, packaged and iced for analysis later the next
       day.

       Nutrient samples were collected in acid washed and sample-water
       rinsed, polyethelene bottles, iced and frozen later the same day. No
       filtering or acidification was conducted to avoid introduction of
       broken cells and other artifacts, and to avoid destruction of nitrite
       (APHA 1985). This is standard research methodology used for
       dissolved nitrogen analysis of seawater samples at the University of
       Washington.
       Determination of dissolved nitrogen (defined as N03+NO@+NH4+) and
       orthophosphate was conducted at the University of Washington Routine
       Chemistry Laboratory using a technicon autoanalyzer. Dissolved
       nutrient results were reported both as mg/l (ppm), for ease of
       comparison to Weston (1986), as well as ug-at./l units (micromoles
       also referred to as uM) for comparison to other of other studies
       using such ratios. Identification and enumeration of larger
       phytoplankton (greater than 5-10 microns) was conducted by an
       experienced phycologist using sedimentation chambers to concentrate
       samples and an inverted microscope (Unesco 1978).

       Relative rates of phytoplankton production were estimated using a
       modification of the carbon 14 productivity method (Steemann Nielsen
       1952), using water from the same water bottle cast that provided
       chlorophyll a, nutrients and other measures mentioned above.- Samples
       were collected, during the morning and afternoon, from 2 m at three
       sites: directly next to the net-pens and at the north and south
       entrances to Peale Passage (Fig. 2). Triplicate 120 ml samples were
       put into acid-cleaned 125 ml BOD bottles and transported in the dark
       to the net-pens for incubation.
       On May 25, 1988, 1.1 ml of the 14C stock (20 uCi/ml NaHC03 solution)
       was added to each sample, and then 100 ul was immediately removed and
       placed into a liquid scintillation cocktail containing phenethylamine
       for total activity determination. The BOD bottles were incubated
       next to the pens at 2 m depth within 20 minutes of sample water
       collection. Care was taken to insure that the incubating samples
       were never shaded by the pens. At the end of the incubation period
       (5.67 hrs for the morning samples and 2.67 for the afternoon
       samples), duplicate 20 ml aliquots were removed from each BOD bottle
       and placed into a glass scintillation vial containing 1.8 ml of a 37%
       formalin. Upon return to the laboratory, the formalin-killed
       aliquots were filtered onto glass fiber filters (Whatman GF/F), fumed
       over 12 N HCL for 15 seconds, and placed in scintillation vials.
       Seven ml of liquid scintillation solution was added to the vial, and
       shaken overnight. The samples were counted in a Beckman LS1800
       liquid scintillation counter for 15 minutes. Carbon uptake was
       calculated according to Strickland and Parsons, (1968). Reported
       values are not corrected for time-zero controls or dark bottles.












         On June 21, 1988, the same initial procedures were followed.
         Additionally, single aliquots for time zero controls were removed and
         placed into glass liquid scintillation vials containing 1 ml 6 N HCL.
         At the end of sample bottle incubation, duplicate 5 ml aliquots were
         removed from each BOD bottle and placed into glass scintillation
         vials containing I ml of 6 N HCL. Upon returning to the laboratory,
         8 ml of liquid scintillation solution was added to the vials, and
         they were shaken overnight. The samples were counted in a Beckman
         LS1800 liquid scintillation counter for 15 minutes. Reported values
         were corrected for time zero controls but not for dark bottles.

         Statistical analysis of hydrographic data utilized one way and two-
         way analysis of variance and T-test procedures (Zar 1984).





                                        Results



         Experiment A

         On sampling dates before and after the fish were released all
         stations had weak thermal stratification with little difference
         between the salinity at the surface and bottom (Tables 2 and 3). The
         highest water temperatures usually occurred at the southern entry to
         Peale Passage, not at the mid-channel areas near the net-pens. No
         trends in dissolved oxygen concentrations were seen on either
         sampling date. Secchi disk values (water transparency) were slightly
         lower at the net-pen site on both sampling dates.









                                                            12 -











                                               Nitro      CN03+NG2+NH4)
                                             Before ?11:@ Reloom Noy 25

                     Nitr"M (29/1)
                             LB                                                            LM Tide
                             L25                                                        RgWIP TId.

                             L2



                             LIS



                             LI



                             LOS



                             a
                                   L PmIs Pm&          Obt PO         L P"Is Pm&







                                            After Fish Releam June 21


                             LB-                                                          LM Tlds
                             L25                                                       RgHISP Tid.

                             LZ



                             LIS



                             LI-



                             L05


                             01  1     b-VVF"
                                  L PmIe Pm&          ftt Pa          L Pwle
                                                          M                 91






                                                  -177--Z


            Figure 3. Dissolved nitrogen concentration before fish release
                             (top, Fig. 3a) and after most of the fish were released
                             (Fig. 3b). Standard deviation bars are omitted due to
                             the very small amount of variance.









                                                                        - 13 -






                          Table 2. Partial results of experiment A-1 from May 25, 1988. Sampling
                                     times noted for each tide.



                                                        Seccb! Dissolved Percent                  Dissolved
                                     Depth  Temp. Sal. Disk      Oxygen      oxygen     Chl. a    Nitrogen
                          Station (m)       (C)     PPT   (a)     mg/l      Saturation ug/l        mg/l
                          ----       ----   ---- ---- ----- -------         --------     -----   ----------


                          LOW TIDE: 0940-1030 hours


                          South      0      13.5  28.9    5.8
                          Peale      2      13.5  29.0           10.8         124%       6.81      0.09
                          Passage    5      12.0  29.0
                                     10     11.4  29.1


                          Net-       0      13.1  2%.0    3.6
                          Pen        2      12.2  29.0             8.7          98%     23.91      0.17
                          Site       5      11.4  29.0


                          North      0      12.1  28.9    4.0
                          Peale      2      12.1  28.9           10.3         116%       6.52      0.24
                          Passage    5      11.9  29.1



                          HIGH TIDE:   1305-1400  hours


                          South      0      15.1  28.1    4.5
                          Peale      2      13.5  28.4           13.7         158t      13.58      0.06
                          Passage    5      12.5  28.7
                                     10     11.1  29.7           14.1         155%      15-25      0.70


                          Net-       0      13.1  29.0    3.5
                          Pen        2      12.2  29.0           12.1         134%      15.56      0.15
                          Site       5      11.4  29.0


                          North      0      13.6  29.0    3.9
                          Peale      2      12.9  29.0           10.4         119%       9.76      0.08
                          Passage    5      12.1  29.0









                                                                          14




                        Table 3. Partial results of experiment A-2 from June 21, 1988. Standard
                                   deviation shown in parenthesis. Sampling times shown for each tide.


                                                       Secchi Dissolved Oxygen                   Dissolved
                                 Depth    Temp. Sal. Disk       Oxygen    Saturation Chl. a       Nitrogen
                        Station (a)       (C)    (PPT) (in)     (mg/1)     Percent      (ug/1)     (mg/1)
                        ----     ----     ---- ---- ----- -------          --------     -----   ----------
                        LOW TIDE: 0830-0928 hours


                        South      0      14.9   29.2   3.9
                        Peale      2      13.8   29.1             9.6        116%       6.99       0.13
                        Passage    5      13.0   29.0                                   (0-082)    (0.019)
                                 10       12.6   29.0


                        Net-       0      15.1   29.3   3.8
                        Pen        2      14.9   29.0           12.0         143%       4.73       0.02
                        Site       5      14.1   28.8                                   (0.759)    (0.004)

                        North      0      15.0   29.0   3.4
                        Peale      2      14.4   28.9             9.6        129%       6.84       0.10
                        Passage                                                         (0.799)    (0.005)
                                   5      13.8   28.7


                        HIGH TIDE:   1209-1310  hours


                        South      0      15.3   29.0   3.7
                        Peale      2      14.8   29.0           11.8         141%       3.95       0.01
                        Passage    5      13.5   29.0                                   (1.777)    (0.001)
                                 10       12.8   29.0                                              0.49


                        Net-       0      17.5   29.1   3.0
                        Pen        2      15.0   28.8           12.1         144%       4.20       0.07
                        Site       5      14.1   29.0                                   (0.950)    (0.006)
                                   9      13.8   28.9


                        North      0      16.4   28.5   3.5
                        Peale      2      15.2   28.5           11.0         131%       5.47       0.03
                        Passage    5      14.0   28.7                                   (1.800)    (0.006)
                                 10       13.6   28.8









                                                                        15 -






                          Table 4.   Dissolved nitrogen and phosphorus concentration, molecular
                                     nitrogen to phosphate (N:P) ratios and probable nitrogen
                                     limitation of diatom phytoplankton. Threshold of nitrogen
                                     limitation for diatoms is about 0.04 mg/l dissolved nitrogen or
                                     expressed in molecular value, about 0.65 ug-at/l. If dissolved
                                     N was <0.65 ug-at/1 and N:P ratio < 5, nitrogen limitation was
                                     probable. Phosphorus limitation could occur at N:P ratios >10-15.

                                                                                            Probable
                                               Concentration in ug-at/1       X:P Ratio     Nitrogen
                                 Site          Dissolved N     Dissolvgd P    (atomicl      Limitation

                          Experiment A-1: before fish release on Nay 25, 1988.

                          Low Tide
                                   south Peale                                                 no
                                   net-pen site    3.09           1.20            2.6          no
                                   north Peale     4.37           1.15            3.9          no

                          High Tide
                                   south Peale     1.24           0.87            1.4          no
                                   net-pen site    1.85           1.05            1.7          no
                                   north Peale     1.24           0.87            1.4          no

                          Experiment A-2: after  fish release on  June 21, 1988.

                          Low Tide
                                   south Peale     0.06           0.86            0.1          yes
                                   net-pen site    3.21           1.07            3.0          no
                                   north Peale     0.87           1.02            0.8          no

                          High Tide
                                   south Peale     3.11           1.10            2.8          no
                                   net-pen site    0.54           0.94            0.6          yes
                                   north Peale     2.08           1.23            1.7          no









                                         16 -



       Nutrients: In general   dissolved nitrogen concentrations (previously
       defined as N03+NO2+NH4   were less after fish release than before at
       all three sampling stations (Fig. 3, tables 2 and 3). Nutrient
       limitation of diatoms growth was probably not in effect in any of the
       samples collected before the fish were released, due to the
       relatively high ambient dissolved nitrogen concentration (> 0.04 mg/l
       threshold value for diatom growth limitation previously discussed,
       table 4).

       Large differences were noted between the concentration of dissolved
       nitrogen at low and high tides for 4 of the 6 bar clusters in figure
       3 and proved significant for the period after fish release (p <0.05).
       Significance testing could not be acertained for the period before
       fish release due to lack of sample replication, but there was likely
       no difference at the net-pen site or at the south Peale station.
       This judgement is based on the excellent precision normally seen in
       nitrogen measurements conducted at the university's laboratory, as
       found in the June samples discussed below.

       It is important to note that the between tidal variation was
       obviously unrelated to the net-pens, as it occurred at both the net-
       pens and the reference stations, at least part of the time. Since
       experiment A was predicated upon having nutrient limitation at all
       times, this result complicates the later interpretation of of
       radiocarbon productivity measurements. Changes in productivity could
       have been related to fluctuating nutrient concentrations, masking any
       effect that the net-pens would produce. There are, however, some
       important bits of information to be gleaned from the rest of this
       experiment.

       There were some possible trends of nutrient concentration, such as a
       a gradient of increasing dissolved nitrogen from south to north at
       low tide before the fish release, but without further sampling
       between stations, it is not possible to conclude that the trend was
       real. Considered alone, dissolved nitrogen to phosphorus ratios
       (table 4),were indicative of nitrogen limitation (Redfield 1958,
       Ryther and Dunstad 1971, McCarthy 1980, URS 1986a), but the apparent
       imbalance is totally overshadowed by the absolute concentrations of
       nitrogen, which indicated no nitrogen limitation before fish release
       and only partly after the fish release.

       The precision of the measurements was very good since variation among
       replicates nitrogen samples was very small. The variation among
       replicates so small that it was graphically impossible to represent 5
       of the 6 error bars in figure 3b.

       Chlorophyll a: In general, increased chlorophyll -4 concentrations
       were observed at all stations before fish release, matching the
       greater concentration of dissolved nitrogen at that time (compare
       Figs. 3 and 4). The concentration of chlorophyll o was much greater
       than reference stations at the net-pens at low tide on May 25, but
       only slightly greater by high tide (Fig. 4a). Since replicates were
       not obtained, statistical significance is not known. However, the
       concentration at low tide near the net-pens was nearly four times









                                                     - 17









                                                Chloro"11 0
                                        Before Fish RGIGUM NOY 25

                        US/I                                                         LAw TWO
                                                                                  3MSh Tide
                        20








                         10



                                 L PSGIG Pam&       met Pe        L POGIG Pam





                                          AftAr Fish Relecaft June 21

                         WS/I
                          25                                                          Low TWO
                                                                                    Dip Tide
                          20




                          Is




                          in




                           5


                                  L PMIQ PM&                        L PM16 Pam
               Figure 4. Chlorophyll A concentration before fish release (top-
                             Fig. 4a) and after most Of the fish were released
                           Al I FS


                            L7kjnE-7A-

                             (bottom, Fig. 4b).










                                       - 18 -



       greater than the reference areas and likely to be significantly
       greater.

       After most of the fish were released, on June 21 (Fig. 4b), there was
       significantly less chlorophyll a (p <0.05) at the net-pen site,
       compared to reference stations at low tide. However, by high tide no
       statistical differences were apparent as suggested by the overlapping
       standard deviation bars of that tide shown in figure 4b. These
       results suggest that tidal related natural variation of phytoplankton
       density occurred at the net-pen site.

       Primary Productivity: Statistical analyses of the raw data
       (appendices a-1 and A-2) indicated that there were significant
       differences in primary productivity between the net-pen site and the
       reference areas at low tide, but not at high tide (p < 0.05). Due to
       methodological differences in processing the samples, there could be
       no comparison of absolute values between sampling dates.

       A similar general trends among stations and between tides was
       apparent as seen in figures 5a and 5b. Increased productivity near
       the net-pens during the morning low tide was noted on both dates.
       Since there werer few statistical differences, this trend can only be
       noted and not interpreted as significant. Note that standard error
       bars were shown here, to save space, not standard deviation bars.
       Standard error is the standard deviation divided by the square root
       of the number of replicate measures. If standard deviation was shown
       on figure 5b, there would be greater overlap of bars.

       There were no statistical differences among stations or times of
       sampling on June 21. Variance within replicate samples was fairly
       high, as is common for radiocarbon data from the field. Some of the
       replicate samples could have contained statistical outliers (see
       replicate values in appendix table A-2, pens). However, this data
       was not excluded from the analysis.

       The results of the productivity experiment indicate significant
       tidally related variation at the net-pens before the fish were
       released, although rates of primary productivity were not
       significantly different among stations. On there own, these data
       suggest that the net-pens did not produce a significant effect, but
       since dissolved nitrogen concentrations and chlorophyll a results
       varied significantly among some of the stations and times, it is
       impossible to conclusively state that there was no effect. This is
       typical in all field studies, where correlative data is the norm.








                                                                              19







                                                                 Primary Productivity
                                                            Before Fish Releases May 25

                                   C/ M a/ tr.
                                        is -
                                        14                                                                             L&u Tide
                                                                                                                       Hip Tide
                                        Iz


                                        10










                                                L Peale Pose.            WRt-Perw            IL Peale Page.






                                                                 Primary Productivity
                                                            After Fish Releases June 21

                               P9 C/ m m/ hr.
                                        so -
                                                                                                                    El Low Tide
                                        71D                                                                         22 High Tide
                                        so





                                        40





                                        20


                                        10



                                               L Peale Pase.                                 K Peale Poes.






                   Figure 5. Primary productivity before fish release (top.,
                                        Fig. 5a) and after most of the fish were released
                                        (bottom, Fig. 5b). Standard error bars are shown where
                                        appropriate. N = 6 for each station.,










                                                                    - 20





            Cell Counts: A summary of the species assemblage present during
            portions of the study is shown in table 5. On both sampling dates
            diatoms were by far the dominate phytoplankton. During the May
            sampling Coscinodiscus sm. and Thalassiosira spD., common chain
            forming species were prevalent. By late June Chaetoceros, also a
            very common diatom group, were most abundant. The Chaetoceros sm.
            present were members of the subgenus Hyalochaete, thought not to be
            directly responsible for fish kills in net-pens in the past as have
            been members of the subgenus Phaeoceros (Gaines and Taylor 1986).
            However, reports from Canada (Bell et al. 1974) and studies in
            Washington State (Rensel et al. 1989), indicate that these species
            may contribute to mortality of net-pen salmon when abundant. There
            were not enough phytoplankton samples to make a rigorous comparison
            between tide stage or to other environmental factors. However, the
            slightly greater number of cells at the net-pens versus the reference
            station on May 25 appeared to correlate with nutrient and chlorophyll
            a values at high tide. The net-pen site had greater counts at high
            tide of June 21, which correlated with increased nutrient
            concentration, primary and specific productivity, but not with
            chlorophyll a concentration.



                             Table 5. Summary of cell counts from 2 m depth in cells per ml.


                             BEFORE FISH RELEASE: Hay 25, 1350-1420 hr.

                                                                 S. Peale Pen site N. Peale
                             Chaetoceros Hyalochaete spp.           51           0       not
                             Coscinodiscus ongusta-lineata         118        191        sampled
                             Thalasslosira ï¿½M.                      24          16
                             total diatoms                         231        278
                             total dinoflagellates                  22        131
                               --------------------               ----        ----
                             total phytoplankton (c/ml)            536        664

                             AFTER FISH RELEASE: June 21, 1220-1310 hr.

                             Chaetoceros Hyalocbaete spp.          536        1,639        740
                             Skeletonema costatum                    6           25          80
                             Misc. pennate diatoms                    2          59          22
                             total diatoms                         645        1,825        952
                             total dinoflagellates                  28           52          52
                               --------------------                ----         ----       ----
                             total phytoplankton (c/ml)            806        2,069        1,109









                                        - 21 -




        Experiment B

        During the morning flood tide, the concentration of dissolved
        nitrogen immediately upstream of the net-pens averaged 0.07 mg/l
        (table 6). The dissolved nitrogen (DN) was composed of nitrate (78%)
        and ammonia (22%). Just downstream of the net-pens, the
        concentration of dissolved nitrogen had doubled to 0.15 mg/l, which
        was significantly greater than upstream (p <0.005). However, most of
        the dissolved nitrogen was in the form of nitrate (N03 = 86% of DN),
        not ammonia (NH4 + = 12% of DN). A similar picture emerges if the
        data is viewed on a gram atom weight basis; the downstream nitrate
        was about 2.5 times greater than the ambient concentration. There
        was no statistical difference in the concentration of ammonia during
        this tide (on either unit basis) from upstream to downstream, but
        nitrate was significantly greater downstream (p <0.001).

        Total ammonia concentration in the plume of the net-pen during the
        morning flood averaged 0.0163 mg/l which is equivalent to an un-
        ionized ammonia concentration of 0.00037 mg/l at pH 8 and temperature
        13 C. The EPA (1986) chronic exposure criteria (four day average
        concentration) for un-ionized ammonia under these conditions is 0.030
        mg/l, about 80 times greater than the concentration observed
        downstream from the net-pens.

        During the early portions of the ebb tide, the concentration of total
        dissolved nitrogen was significantly greater within the net-pens
        compared to upstream values (p <0.001 for NH + and N03, p <0.005 for
        N02). However, there was no significant dMerence in the upstream
        and downstream values of total dissolved nitrogen. Within that
        total, there was a significant increase in the concentration of
        ammonia (table 7). The proportion of toxic, un-ionized ammonia in
        the downstream area was about 90 times less than the EPA's (1986)
        chronic exposure criteria.

        The concentration of un-ionized ammonia within the center of the net-
        pens during the ebb tide was 23 times greater than the upstream,
        ambient concentration. However, this amounted to only about 10% of
        the chronic exposure criteria mentioned above. The within-pen
        results were from the widest set of net-pens (three pens abreast),
        under maximum loading, and minimal current conditions. Ammonia
        loading within other net-pen systems at Squaxin Island was probably
        less due to the two abreast configuration which allows greater
        dilution with surrounding waters.









                                                          22 -












             Table 6. Results   of experiment 8 from May 25, 1988. All date collected
                        from 2 meters depth where the water temperature was 12.2 C *. pH
                        remained at 8.0 throughout this sample collection.


                                                        Dissolved
                             Dissolved      Oxygen      Nitrogen** Total Un-ionized Current
             Tidal Stage      Oxygen       Saturation (Mean & SD) Ammonia        Ammonia    Velocit
             & station        (mg/1)          W          (mg/1)       (mg/1)   (mg/1)      (cm sec-@)
             ----------     ---------       --------    --------    --------   --------    --------


             MID-FLOOD:  1200-1300 hours

             upstream:        11.7           132%     0.07 (0.020) 0.0155      0.00036        11.4

             downs-           11.6           131%     0.15 (0.011) 0.0163      0.00037        5.2
             stream



             EARLY-EBB: 1500-1625 hours

             upstream:       12.2           137%      0.03 (0.006) 0.0069        0.00014      8.1

             within pens*** 10.4            117%      0.23 (0.006) 0.1606        0.00337      3.0

             downstream       12.6          142%      0.03 (0.015) 0.0155        0.00033      7.9

                 Total net-pen salmon biomasss was 118,600 kg for the flood and 97,970
                 kg for the ebb, due to differing sampling location. Ebb tide samples
                 were collected downstream (south) of the larger WDF pens (number 2).

                 Dissolved nitrogen values represent the total of nitrate, nitrite and
                 ammonium. Nitrogen limitation for diatoms may occur below 0.04 mg/l.

                 within pens site was In center of the pen system (number 2, WDF) that
                 were 3 cages wide by 11 cages long with 52,640 kg of fish.








                                                                        - 23 -






               Table 7. Mmonia concentrations at the Squaxin Island net-pens during the upstreat/downstreas
               analyses (experiment B). Distance to downstream sampling station was 30 m from facility number 3.
               Percent change in concentration is relative to ambient, upstream concentration. chronic exposure
               concentration is the four day average recommended by EPA (1986).


                                                             Total Mmonia Concentration (mg/1)
                                                             with standard deviation in parenthesis
                        Tidal           Influencing          --------------------------------------
                                       Fish Biomass (Kg)        Upstrea    Within Pens Downstream

                        Flood tide      118,600 kg               0.0155        ----         0.0163
                                                                (0.00686)                  (0.00202)

                        percent increase of total  ammonia                                  5.01
                        percent increase of un-ionized ammonia                              2.3%
                        percent of chronic toxicity concentration                           1.2%


                          --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---


                        Ebb tide        97,970 kq                0.0069         0.1606      0.0155
                                                                (0.00038)     (0.00337)    (0.00262)

                        percent increase of total  ammonia                      2,337%      224%
                        percent increase of un-ionized ammonia                    2.1%      2.1%
                        percent of chronic exposure concentration                11.2%      1.11




                                                                    Discussion


               EXperiment A: Effects on Phytoplankton

               Phytoplankton abundance and the growth rate at the net-pens varied
               significantly with the stage of the tidal cycle or the time of day.
               The most striking feature of this analysis was the very similar
               pattern of primary productivity seen before and after fish were
               release from the pens (Fig. 5). There was a general trend toward
               increased phytoplankton density (chlorophyll a) and C-14 productivity
               at the net-pens during the morning ebb tide, with no significant
               difference during the afternoon flood tide, regardless of the
               sampling date and amount of fish held in the net-pens (compare figs.
               5a and 5b).

               Dissolved nitrogen to phosphorus ratios (table 4) indicated that
               growth was not limited due to nutrient depletion during the period
               before fish release, when greater phytoplankton density and
               significantly greater primary productivity was observed at the net-
               pens. Thus, the observed increased chlorophyll a during one tidal









                                        24 -



      period of maximum fish biomass was not the result of nutrient
      production from the net-pens, but may be related to the natural
      hydrodynamics of Peale Passage.

      The reference areas used in experiment A were selected to be within
      the same passage, but as remote as possible from the net-pens. These
      areas were near the source waters of Pickering and Dana Passages,
      which are both subject to fairly intense horizontal and vertical
      mixing (URS 1986b) compared to the shallow Peale Passage area. It is
      likely that vertical mixing, and accordingly, light limitation for
      phytoplankton cells in both of the source areas is much greater than
      in Peale Passage. By the time source waters bearing nutrients and
      phytoplankton seed stock reach the middle portions of Peale Passage,
      a day or longer has passed, allowing for significant growth to occur
      in the water column, which is entirely within the euphotic zone.

      Although similar trends in C-14 primary productivity were similar on
      both sampling dates (figures 5a versus 5b), there was no statistical
      difference among sites on the later sampling date, and only on one
      tide of the earlier date.   Further, the absolute values were
      different between sampling dates due to methodological differences
      and thus no comparison of primary production rates is possible
      between sampling dates.

      Dissolved nutrient concentrations appeared to be roughly correlated
      with chlorophyll a values and were lower at all stations after most
      of the salmon were released. As discussed previously, Pease (1977)
      found an inverse relationship between the two throughout his study of
      Henderson Inlet. No causal relationship between these factors at the
      Squaxin Island net-pens is likely, due to the remoteness of the
      unperturbed reference areas, the relatively small amount of dissolved
      nitrogen contributed by the net-pens (theoretically about 33 kg/day
      total dissolved nitrogen) and results of nutrient sampling over the
      tidal cycle discussed below.

      Most of the dissolved nitrogen concentrations at all stations during
      this study were greater than the threshold of limitation for diatom
      growth (0.04 mg/l; URS 1986). To show maximum effects, this study
      should have been conducted when surface waters were nearly depleted
      of dissolved nitrogen, if it ever occurs in the area, to test the
      possibility that the pens could cause or sustain a phytoplankton
      bloom. These results and pre-experiment nutrient sampling indicated
      that dissolved nitrogen values at the pens fluctuated regularly,
      above and below the 0.04 mg/l growth limitation threshold. This
      value obtained for nutrient limitation of diatoms is not absolute and
      should be used with caution because growth limitation also depends
      upon the concentration of phytoplankton cells and organic matter in
      the water, rates of remineralization of the organic matter to
      dissolved inorganic nitrogen (Harris 1986), and the type and size of
      phytoplankton (Redfield 1958, Ryther and Dunstad 1971, Eppley 1972,
      McCarthy 1980, URS 1986a).









                                          25 -



        On May 25, during the period of maximum fish biomass, increasing
        concentrations of dissolved nitrogen were seen at low tide on a South
        to north, long-channel axis (Fig. 3a). This observation suggests
        that nutrient-rich waters were entering from the north end of the
        passage at that time. Due to the location of the net-pens relative
        to the ebb tide flow (Fig. 2), it also suggests that nutrients from
        the net-pens were not the major source of the higher concentrations
        of dissolved nitrogen seen at the north end of the passage. Later
        that day during the flood tide, a similar concentration of dissolved
        nitrogen, about 0.07 mg/l (versus 0.09 mg/1), previously seen at the
        south end of the passage was observed immediately upstream of the
        net-pens in the results of the upstream/downstream analyses
        (experiment B). If time and budgets allowed, additional sampling
        between stations would have been useful to examine the trends more
        closely.

        The elevated level of chlorophyll A at the net-pens prior to fish
        release and during the morning low tide (Fig. 4a; 24 ug/1), was
        nearly 4 times that of the reference stations. This non-replicated
        value was near the maximum values seen in two years of sampling in
        central Puget Sound (e.g., Anderson et al. 1984), but was much lower
        than summer values seen in nearby Henderson Inlet at control and
        experiment stations by Pease (1977). By high tide', the concentration
        of chlorophyll a had diminished at the Squaxin Island net-pen site.

        After the fish release, there was significantly less chlorophyll a
        at the net pens on the morning low tide, but no difference by the
        afternoon. Compared to the period prior to fish release, and if one
        disregarded other data collected in this study, this suggests an
        effect due to the pens. However, the fact that dissolved nutrients
        were not limiting to phytoplankton growth prior to fish release is a
        more important factor and discounts any possible effect suggested by
        the increased chlorophyll a.

        Another factor to be accounted for is the biomass of fish stock on
        hand before and after fish release. As previously mentioned, about
        40% of the initial biomass (47,200 kg, both delayed release and fish
        for commercial purposes) was still on hand during the June 21
        sampling date. However, this amount of biomass is small relative to
        the maximum amount of biomass that a typical two acre net-pen farm
        could maintain (up to 250,000 kg, J. Lindberg, pers. comm. in Weston
        1986). 1 would have preferred that more of the fish had been
        released for the later sampling date, to provide a more
        representative experimental control, but that was not possible.

        These results suggest that tidal stage, time of day and ambient
        nitrogen conditions were more important determinants of phytoplankton
        conditions at the net-pens and that nutrients from the net-pens did
        not produce a significant, measurable effect on the phytoplankton
        production. If time and materials allowed, several sampling stations
        midway between the pens and the reference areas would have been
        useful to search for a gradient of effects. Nevertheless, given the
        natural excess of total and dissolved nitrogen that existed
        throughout the study area at the time of the study, no effects from









                                         26


      the pens were possible. Nitrogen may be limiting in the study area
      later in the summer, but most of the salmon have generally been
      released by that time.

      Experiment B: Effects on Near Field Water Ouality: Ammonia

      This experiment involved measurement of nutrient levels upstream and
      downstream of the net-pen cages on May 25, when the maximum amount of
      salmon was present in pens. Divergent dissolved nitrogen results
      were seen between the two tidal stages monitored; the morning flood
      showed significantly elevated levels of dissolved nitrogen
      downstream, but only a very small, statistically insignificant
      increase in ammonia concentration. Monitoring during the afternoon
      ebb showed no significant difference in dissolved nitrogen
      concentration, but within that measure, the total ammonia
      concentration increased greatly as a percentage of upstream, ambient
      levels. However, the maximum concentration of un-ionized ammonia was
      only about 10 % of the EPA (1986) chronic exposure level for
      11salmonids and other sensitive coldwater species" and far below acute
      toxicity criteria.

      The results of the flood tide analyses suggest that very rapid
      nitrification of ammonia occurred in the plume of the net-pen,
      consistent with general concepts of marine chemistry (Harris 1986).
      Most of the dissolved nitrogen was in the form of nitrate (N03 = 86%
      of dissolved N), not ammonia (NH4+ = 12% of dissolved N) a distance
      of 30 m downstream of the third net-pen system.

      The concentration of dissolved nitrogen was the same at the upstream
      and downstream stations on the afternoon ebb (0.03 mg/1). Total
      ammonia was about 52% of the dissolved nitrogen in the downstream
      samples, compared with 70% inside the pens. In addition to
      nitrification, reduced ammonia downstream was apparently due to
      dilution during the ebb tide measurements.

      The rate of ammonia nitrification can be approximated as follows,
      using the flood tide data. Assuming that 70% of the dissolved
      nitrogen within the pens was ammonia, as it was on the ebb, and given
      the average current velocity of 8.3 cm sec-1, the mean distance from
      the center of all three net-pen systems to the downstream sampling
      location was 290 m. Accordingly, ammonia within the cages was
      converted from 70% to 12% of the total dissolved nitrogen
      concentration within about 1 hour. By then, the concentration of un-
      ionized ammonia was far below the exposure criteria for sensitive
      species such as salmonids (EPA 1986).

      It has previously been conservatively assumed that all dissolved
      nitrogen produced by the net-pen fish was in the form of ammonia or
      urea, not nitrate (Weston 1986). While this is apparently true
      within the pens, the results presented here substantiate that
      nitrification converts the ammonia to nitrate over very short time
      periods, rapid compared to the doubling time of phytoplankton
      populations (minutes versus hours or days, respectively). The
      dominant dissolved nitrogen compound measured immediately downstream









                                          27 -



        of the net-pens is nitrate. Nitrate is less preferred by
        phytoplankton cells, and its uptake rate is slower than that of
        ammonia.
        The calculated production rate of dissolved nitrygen from the net-pen
        should be at least 0.22 to 0.28 g kg_1 fish day- greater than the
        ambient concentration. These values represent the sum of nitrate and
        ammonia produced by salmon (SAIC, 1986 and Weston 1986,
        respectively), multiplied by 0.87, the soluble fraction. Using the
        greater figure to be conservative, on the flood tide there should
        have been a net increase of 33.2 kg/day or 0.384 gram sec-1 nitrate
        and ammonia in the plume of the net-pen (118,600 kg x 0.28 g divided
        by 86,400 seconds per day). When spread over the average cross
        sectional area of all the pens (93.6 m long x 4 m deep = 374 m2), and
        dispersed with the current (0.083 m sec 1), this is equivalent to
        0.012 mg/l greater than_the upstream, ambient concentrations (37.9 kg
        divided by 31.04 m3 sec 1)@ The observed downstream concentration
        was 0.08 mg/l, about six times greater than ambient dissolved
        nitrogen, but less than an order of magnitude different. Variation
        among sample replicates was very little, lending credibility to the
        results. Using similar calculations for the ebb tide results, there
        should have been a similar predicted increase of dissolved nitrogen
        concentration downstream, but none was observed.

        The lack of any measurable increase in dissolved nitrogen on one
        tidal phase and the increase on the other could be due to tidal
        hydrodynamics of the site and fish physiology. I have conducted
        similar studies at several other locations and have found increased
        concentrations of ammonia within or immediately downstream of the
        every net-pen system monitored (appendix B), but total nitrogen
        values have been more variable, sometimes even less than the upstream
        values.

        Measured increase of nutrients that exceed predicted concentrations
        can be explained by several factors. The predicted increase was
        based on literature from freshwater hatcheries, not from marine net-
        pens. The Squaxin Island net-pen systems is mostly used for delayed
        release of relatively small (<40 g) coho salmon that require more
        rearing space per pound of fish than larger fish typically held in a
        commercial grow out facility. Accordingly, there-is more netting and
        floats for growth of fouling organism, that may contribute nutrients.
        In addition, the net-pens are not removed and cleaned at the delayed
        release facility during the rearing period. The nets in a delayed
        release facility are installed in late winter and left in place until
        late spring to early summer. By the initial sampling time of this
        study (late spring), there was a considerable accumulation of
        invertebrate and algal fouling organisms on the nets. This condition
        is tolerated since the nets are removed in early summer for the
        remainder of the year. To determine the contribution of nutrients
        from floats and invertebrates growing on the nets, it would be useful
        to measure nitrogen concentrations at the Squaxin Island net-pens
        after the salmon were released, but before the nets are removed.









                                         28 -



       Finally, there is a inverse relationship between fish size and rate
       of metabolite production. Clark et al. (1985) found rapidly
       decreasing rate of ammonia production with increased fish size, about
       a 50% reduction from the 10 gram to 200 gram mean weight. The
       dominance of small fish at the Squaxin Island delayed release net-
       pens would therefore result in proportionately greater nitrogen
       discharge than a grow out facility with fish ranging in size from 20
       grams to 10 kg or larger.

       The lack of increased dissolved nitrogen downstream of the net-pens
       on the ebb tide could be due to dilution or unknown and irregular
       water motion. A one m deep drift stick placed immediately downstream
       of the net-pens moved very little for 20 minutes prior to the ebb
       tidal sample. From this observation, and numerous other observations
       by the author at some other facilities during low velocity periods of
       water movement, there appears to be an area immediately downstream of
       some net-pen facilities that may temporarily exhibit lack of water
       movement or anomalous patterns of water flow.

       Other recent data collected to more accurately predict expected
       dissolved nitrogen concentrations downstream of net-pen facilities
       (appendix B) are insufficient in quantity at this time for regression
       analyses. The following narrative describes some of the recent
       studies.

       Studies conducted near the world's largest net-pen facility, Domsea
       Farms, Inc., found no measurable effect on downstream water quality
       (D. Damkaer, KMFS, unpublished data cited in Weston 1986). Tidal
       flows in that area are greater than at the Squaxin Island net-pen
       site and annual production was approximately 8 times greater than at
       Squaxin Island.

       Milner-Rensel Associates (1986) found similar results for ammonia
       production in a study of water quality near a relatively small net-
       pen system in Port Angeles Harbor (see appendix B). The pens
       contained 27,000 kg of fish and there was mean current velocity of 7
       cm sec 1 during sampling. The concentration of ammonia increased
       within the net-pens, but immediately downstream the ammonia was
       converted to nitrate and diluted. The concentration of total ammonia
       inside the net-pens at Port Angeles was 0.020 mg/l, compared to 0.007
       mg/1 in the ambient, upstream water. The total ammonia concentration
       had diminished 30 m downstream of the net-pens to 0.011 mg/l, or
       0.004 mg/1 greater than the ambient, upstream value. Downstream
       nitrate increased 0.049 mg/l over ambient, although there was a
       fairly high variance within replicates. As the site was so near the
       Strait of Juan de Fuca, total dissolved nitrogen was much higher than
       at Squaxin Island and was 97% nitrate, the remainder being mostly
       ammonia.

       Two years later in Port Angeles Harbor there were 192,000 kg of fish
       on hand with a current velocity of about 8 cm sec I (Rensel,
       unpublished data). In spite of the relatively large size and minimal
       currents during sampling, the concentration of toxic un-ionized









                                        - 29 -



        ammonia was less than 6% of the EPA (1986) four day chronic exposure
        level for I'salmonids and other sensitive coldwater species".

        Another upstream/downstream analysis was conducted at a very small
        facility in the first year of operation at north Skagit Bay. The
        results indicate extremely minor increases of ammonia (0.001 mg/1
        increase in total ammonia downstream), and total dissolved nitrogen
        levels actually decreased downstream (Rensel 1988).









                                       - 30 -



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                                          31 -



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                                        - 33




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                                   Acknowledgement


        The author wishes to thank the following individuals for their
        assistance as noted. Mr. Richard Davis, University of Washington,
        for C-14 work, field assistance and preliminary manuscript review.
        Dr. Dale Kiefer, University of Southern California, and Dr. Donald
        Weston, University of Washington for manuscript review. Ms. Jan
        Downs, University of Washington for chlorophyll A analysis. Dr. Rita
        Horner, University of Washington, for phytoplankton identification
        and preliminary manuscript review. Mr. Richard Cromega for figure 1,
        Ms. Beth Haskins for figure 2.











                                                                        Appendix A
                                    Appendix Table A-1. Productivity data from Squaxin Island
                                                                  on May 25, 1988.


                               Total Activity
                      SAMPLE        CPM        H#       DPM
                        LA1         45322     126.3     48385
                        LA2         40302     107.3     42667
                        LA3         41287     105.7     43688
                        LA4         41640     105.3     44056
                        LAS         43032      105      45525
                        LA6         37755     104.3     39934
                        LA7         44236     105.3     46803
                        LA8         41820     104.3     44234
                        LA9         40342      104      42667
                        LAIO        34420      105      36414
                        LA11        30763     105.7     32552
                        LA12        29903     104.7     31632
                        LB4         34385      105      36377
                        LB5         45706     103.3     48331
                        DA10        37593     104.7     39768
                        LBIO        42070     104.3     44499
                         L-         40516      107      42890
                        DA12        39540     103.7     41816
                   mean & sd                            41791       4877


                      Sample        Cpm        H#        dpm     MgCIMA3 MgC/MA31h site mean st dev
                      N. Peale      11117     152.3     12098       35.09          6.19           7.37         2.36
                      1100 h        14557     141.7     15701       45.53          8.04
                                    6355      144.3     6869        19.92          3.52
                                    12779     144.7     13816       40.07          7.07
                                    16809     149.3     18244       52.91          9.34
                                    18191     143.7     19651       56.99          10.06
                      NP dark       4681      144.3     5059        14.67          2.59           2.49         0.13
                                    4350      140.3     4687        13.59          2.40
                      S. Peale      6411      146.3     6940        20.13          3.55           3.96         0.64
                      1100 h        8969      140.0     9661        28.02          4.94
                                    5904      144.0     6379        18.50          3.26
                                    6374      141.7     6875        19.94          3.52
                                    7269      144.7     7858        22.79          4.02
                                    8044      142.3     8680        25.17          4.44
                      SP dark       5286      143.3     5709        16.56          2.92           2.77         0.21
                                    4740      143.7     5121        14.85          2.62
                        Pens        24502     142.7     26448       76.70          13.54          14.10        3.40
                      1100 h        34093     143.3     36819       106.78         18.84
                                    19775     143.0     21350       61.92          10.93
                                    25980     155.3     28352       82.22          14.51
                                    30384     146.7     32904       95.42          16.84
                                    18019     144.3     19475       56.48          9.97
                      Pens dark     6009      141.0     6478        18.79          3.32           2.74         0.82
                                    3918      139.7     4220        12.24          2.16













                                     Appendix Table A-1 Continued
                        Pens       7065       140.7     7615       22.08           8.28           7.33        0.83
                      1420 h       5805       141.3     6259       18.15           6.81
                                   5461       144.3     5902       17.12           6.42
                                   6984       138.7     7516       21.80           8.17
                                   5574       146.7     6036       17.50           6.56
                                   6585       143.0     7110       20.62           7.73
                     Pens dark     5023       143.0     5423       15.73           5.90           5.98        0.11
                                   5151       144.7     5569       16.15           6.06
                      N. Peale     8788       143.0     9488       27.52          10.32           9.83        2.3 5
                      1420 h       7746       141.3     8353       24.22           9.08
                                   10884      142.7     11748      34.07          12.78
                                   6095       142.7     6579       19.08           7.15
                      NP dark      5074       142.7     5477       15.88           5.96           7.57        2.29
                                   7823       143.7     8451       24.51           9.19
                      S. Peale     9809       142.7     10588      30.71          11.52           12.59       3.90
                      1420 h       10953      144.0     11835      34.32          12.87
                                   15027      145.0     16250      47.13          17.67
                                   7061       142.7     7622       22.10           8.29
                      SP dark      8513       142.7     9189       26.65           9.99           10-63       0.90
                                   9567       147.3     10366      30.06          11.27











                                                 Appendix Table A-2. Productivity data from Squaxin Island
                                                                                              on June 21, 1988.


                                        Total Activity                                                                               Time Zero
                            SAMPLE CPM                       H#          DPM                                       SAMPLE                CPM               H#           DPM
                                I-Al         30709           97.7        32431                                     LA1                 12914            187.3           14640
                                LA2          32320           97.3        34130                                     LA2                 17286            188.0           19615
                                LA3          40114           96.7        42355                                     LA3                 23496            191.3           26792
                                DA2          31354           97.7        33112                                     DA2                 15559            190.0           17707
                                LA4          42788           100.0       45209                                     LA4                 14053            191.3           16025
                                LAS          33342           98.0        35213                                     LAS                 15352            191.0           17497
                                LA6          32321           97.7        34134                                     LA6                 19196            191.3           21888
                                DA4          57645           97.3        60872                                     DA4                 15914            190.0           18111
                                LA7          35327           96.7        37300                                     LA7                 23220            190.7           26454
                                LAB          41635           97.3        43966                                     LAB                 18071            189.7           20558
                                LA9          56040           92.3        59131                                     LA9                 20634            189.0           23449
                                DA6          46998           97.0        49626                                     DA6                 28962            188.7           32899
                                LA10         34203           98.3        36125                                     LA10                13760            189.7           15653
                                LA11         32854           97.0        34691                                     LA11                17595            189.7           20015
                                LA12         30044           97.0        31725                                     LA12                20718            190.7           23604
                                DAB          36880           99.3        38961                                     DAB                 16791            190.3           19118
                                1-131        33806           98.7        35709                                     1-131               15999            190.7           18227
                                1-132        44646           98.0        47152                                     L82                 23215            190.0           26420
                                L83          55483           96.7        58582                                     1-133               31380            191.0           35766
                                DA10         35420           97.0        37401                                     DA10                38891            187.7           44114
                                LB4          31400           96.7        33154                                     LB4                 45703            187.0           51788
                                1-135        41051           95.7        43337                                     1-135               26202            188.3           29746
                                1-136        38103           90.3        40196                                     1-136               35817            190.7           40805
                                DA12         47776           111.0       50643                                     DA12                20863            189.7           23733

                          -nean & sd                                     41465                              mean & sd -                                                 25193
                                                                         8848                                                                                           9650
                                                                                     Inc Time 1 -                  6.42
                                                                                     Inc Time 2 -                  3.00
                            SAMPLE             CPIVI         H#          DPIVI       Mg C/MA3 Mg                   C/MA3/h site means st err
                             N. Peale        39926           190.7       45486          240.17                     37.41               42.42            4.96
                             1020 h          35680           190.7       40649          182.93                     28.49
                                             40080           189.0       45547          240.91                     37.52
                                             42000           188.7       47709          266.48                     41.51
                                             43650           189.3       49626          289.18                     45.04
                                             52944           189.3       60193          414.24                     64.52
                                dark         24044           189.5       27344            25.46                    3.97                -6.09            10.06
                                             14498           187.3       16435          -103.65                    -16.14
                             S. Peale        47033           189.0       53449          334.43                     52.09               31.07            5.86
                             1020 h          44343           189.3       50414          298.51                     46.50
                                             31438           190.0       35778          125.29                     19.51
                                             33980           188.3       38576          158.40                     24.67
                                             31870           190.0       36271          131.11                     20.42
                                             33273           188.7       37795          149.15                     23.23
                                dark         31688           190.0       36063          128.65                     20.04               10.94            9.10












                                   Appendix    Table A-2. Continued

                               23020    189.7   26187        11.77          1.83
                      Pens     30478    189.7   34671        112.18         17.47          67.39      16.82
                    1020 h     29487    189.3   33524        98.60          15.36
                               59108    190.0   67270        497.99         77.57
                               76650    187.3   86893        730-24         113.74
                               65200    189.0   74094        578.77         90.15
                               65085    189.7   74039        578.12         90.05
                      dark     31450    189.3   35756        125-02         19.47          22.09      2.62
                               33914    190.0   38597        158-65         24.71
                    N. Peale   29780    190.7   33927        103.37         34.46          51.66      16.51
                    1330 h     43497    191.3   49598        288.85         96.28
                               44550    188.7   50605        300-77         100.26
                               35031    188.7   39793        172.80         57.60
                               22695    189.7   25817        7.39           2.46
                               26412    188.3   29985        56.71          18.90
                      dark     25720    190.0   29271        48.27          16.09           0.40      15.69
                               18724    190.3   21319        -45.84         -15.28
                    S. Peale   25636    194.7   29384        49-60          16.53           65.47     18-93
                    1330 h     22595    188.3   25651        5.43           1.81
                               '48384   191.7   55204        355.19         118.40
                               41857    189.7   47615        265-38         88.46
                               43607    188.7   49534        288.08         96.03
                               38120    189.3   43339        214-77         71.59
                      dark     12257    190.0   13950        -133.07        -44.36        -22.69      21.67
                               21942    189.0   24935        -3.05          -1.02
                      Pens     25096    189.3   28532        39.52          13.17           31.80     12.34
                    1330 h     25007    189.0   28419        38.18          12.73
                               28747    190.0   32716        89.04          29.68
                               22293    187.7   25287        1.12           0.37
                               40063    189.0   45528        240-68         80.23
                               34303    190.0   39039        163-88         54.63
                      dark     21967    190.3   25011        -2.15          -0.72           15.55     16.26
                               29307    188.0   33256        95-44          31.81











                                    Appendix B


        A number of studies have been conducted in Washington state to
        assess the nearfield effects of net-pen operation on nutrient and
        dissolved oxygen concentration in marine waters. Several of
        these studies have been conducted in accordance with methods
        outlined in the State of Washington's Recommended Interim
        Guidelines for the Management of Salmon Net-pen Culture in Puget
        Sound (SAIC 1986). Other studies, conducted prior to the
        guidelines, were essentially the same, although within net-pens
        sampling stations were utilized instead of the the first
        downstream sampling station.

        All of the near field studies (Appendix Table B-1) have shown
        increased concentrations of ammonia immediately downstream or
        within the net-pens. Total ammonia values have increased from 3
        to 2,327%. However, the amount of un-ionized ammonia increased
        only a few percent of the four-day maximum chronic exposure level
        recommended by EPA (1986), ranging from 0.9 to 11.2%. The
        maximum increase (11.2% of the recommended chronic exposure
        value) was found within, not downstream, of the largest of three
        net-pen systems at Squaxin Island. These pens were configured to
        have three pens wide by 10 pens long, causing significantly
        reduced water flow within the center pens, where samples were
        collected. As the concentration of any waste nutrient is greatly
        dependent on tidal flow rate, and the samples were collected in a
        worst case area at only a few cm per second flow, this appears to
        be a worst-available-case analysis. To compensate for reduced
        flows and possible reduced growth, fish culturists at that site
        have reduced fish loading within the center pens.

        Studies of nutrients in "upstream" and "downstream" waters
        immediately adjacent to net-pens in Washington state have also
        indicated that relatively rapid rates of nitrification occur,
        i.e., ammonia (NH4+) is oxidized by microbial action to nitrate
        (N03): A typical scenario involves elevated concentrations of
        ammonia within the net-pens but a short distance downstream, the
        ammonia has been converted to nitrate.


        The data has been included here to illustrate the amount of
        ammonia produced by a wide variety of pens, of differing size.
        The results show that adverse effects are minimal, even at
        relatively large facilities. The continued collection of this
        data will eventually allow more precise calculation of the total
        dissolved nitrogen produced from marine net-pen reared salmon,
        the fouling organisms on the nets and floats and the fish
        associated with the net-pen facility. Such data will allow more
        precise calibration of numerical models that are designed to
        assess the possible cummulative effect of salmon net-pens in
        restricted embayments. Presently the only data available for
        this purpose is from freshwater hatchery culture of relatively
        small fish.













           Appendix Table B-1. Summary of dissolved nitrogen, total and un-
           ionized ammonia production from marine net-pen farms in
           Washington state compared to maximum recommended four day
           exposure concentration (EPA 1986). Percent change in
           concentration is relative to upstream concentration.


                                        Concentration (mg/1) & Percent Change
                                          -----------------------------------
           Site - Data Source &                                     30 meters
           Instantaneous loading (Kg)        Upstrea  Within Pens Downgtream
           PORT ANGELES HARBOR l/ 27,000 kg

           Total dissolved nitrogen-->       0.832        0.882       0.887
           Total Ammonia             __>     0.0074       0.0201      0.0119
           NH4 + percent increase relative to ambient -> 272%            62%
           percent of ammonia that is toxic (NH3)     -->    1.8%         1.8%
           percent of chronic toxicity concentration ->      1.5%         0.9%


                --- --- --- --- --- --- --- --- --- --- --- --- --- ---


                                                      6 meters     30 meters
                                            Upstream Downstream    Downstream
           SKAGIT BAy 2/ (Lone Tree Pt.) 4,300 kg

           Total dissolved nitrogen-->       1.067        1.131       1.139
           Total Ammonia             __>     0.0277       0.0303      0.0287
           NH4 + percent increase relative to ambient ->     9%           3%
           percent of ammonia that is toxic (NH3)     __>    0.3%         0.3%
           percent of chronic toxicity concentration ->      1.9%         1.8%


                --- --- --- --- --- --- --- --- --- --- --- --- --- ---

           SQUAXIN ISLAND 3/ (Peale Passage) 118,600 kg

                                                      6 meters     30 meters
                                            Upstream Downstream Downstream

           Total dissolved nitrogen-->       0.07         ----        0.15
           Total Ammonia             __>     0.0155       ----        0.0163
           NH4 + percent increase relative to ambient ->                    5%
           percent of ammonia that is toxic (NH3)     __>                 2.3%
           percent of chronic toxicity concentration ->                   1.2%


                --- --- --- --- --- --- --- --- --- --- --- --- --- ---











          Appendix Table B-1, continued


               --- --- --- --- --- --- --- --- --- --- --- --- --- ---

          SQUAXIN ISLAND 4/ (Peale Passage) 97,970 kg

                                        Concentration (mg/1) & Percent Change
                                         -----------------------------------
                                                                    30 meters
                                           Upstream Within pens Downstream

          Total dissolved nitrogen-->       0.03         0.23          0.03
          Total Ammonia              __>    0.0069       0.1606        0.0155
          NH4 + percent increase relative to ambient ->2,327%          225%
          percent of ammonia that is toxic NH3        __>     2.1%       2.1%
          percent of chronic toxicity concentration ->      11.2%        1.1%


               --- --- --- --- --- --- --- --- --- --- --- --- --- ---

          PORT ANGELES HARBOR 5/ 192,500 kg
                                                      6 meters     30 meters
                                           Upstream Downstream     Downstream



          Total dissolved nitrogen-->       1.4869       1.6688        1.6207
          Total Ammonia              __>    0.0343       0.0873        0.0516
          NH4 + percent increase relative to ambient -> 254%           150%
          percent of ammonia that is toxic (NH3)      __>   1.5%         1.5%
          percent of chronic toxicity concentration ->      6.4%         3.8%


               --- --- --- --- --- --- --- --- --- --- --- --- --- ---

          PORT ANGELES HARBOR 6/ 192,500 Jkg
                                                      6 meters     30 meters
                                           Upstream Downstream     Downstream


          Total dissolved nitrogen-->       1.5862       1.5771        1.4992
          Total Ammonia             __>     0.0122       0.0642        0.0336
          NH4 + percent increase relative to ambient -> 526%           275%
          percent of ammonia that is toxic (NH3)      __>   1.5%         1.5%
          percent of chronic toxicity concentration ->      4.7%         2.4%


               --- --- --- --- --- --- --- --- --- --- --- --- --- ---


          Data sources and downstream velocity: 1) Milner-Rensel
          Associates 1986, 8.0 cm sec-1 @ 30m downstream; 2) Rensel 1988,
          38.8 cm sec 1 @ 6m; 3) See main text, f   Iood tide, 5.2 cm sec-1;
          4) See main text, ebb tide, 7.9 cm sec- . 5) Rensel unpublished
          on flood tide, 8.2 cm sec -1; 6) Rensel unpubished on ebb tide,
          8.4 cm sec 1.

























I






















                                   APPENDIX D


                         INFECTIOUS DISEASES OF SALMON
                            IN THE PACIFIC NORTHWEST










                                                  FISH DISEASES


              Metazoan Parasites. External copepods (Lepegphtheiru salmonis and Caligu sp.) and
              monogenean gill flukes Laminiscus sterkowli are the only metazoan parasites that have
              been observed in sufficient intensities to be considered significant pathogens of net-pen
              reared fish in Washington (Kent and Elston, 1987b; L W. Harrell, NMFS, Manchester,
              WA, pers. comm).
              Protozoans. Diseases due to marine protozoan parasites are common in net-pen reared
              salmon. These include Parvicapsula sp. (Myxosporea: Myxozoa) which causes kidney
              disease in pen-reared coho salmon (Hoffman 1984; Johnstone 1984, Kent and Elston
              1987b) for which cod is the likely reservoir for infection (Johnstone, 1984); Paramoeb
              12emaquidensis, a ubiquitous, normally free-living amoeba which infects gills (Kent et al.
              1988b); an unidentified protozoan (rosette agent) which infects inflammatory cells of
              maturing chinook salmon in net-pens (Elston et al. 1986; Harrell et al. 1986); and a
              microsporidan protozoan which infects blood-forming cells of chinook and causes severe
              anemia (Elston et al. 1987).

              Freshwater protozoan pathogens may also be transmitted with fish when they are
              introduced to net-pens. Kent and Elston (1987b) observed infections by a microsporidan
              similar to Loma salmonae (Microspora) in the gills of coho salmon held in net-pens.
              These infections were apparently contracted in freshwater. Ichiyobod (Costi ) is a
              common flagellate protozoan pathogen in freshwater which can apparently survive and
              cause disease in fish after seawater transfer (Ellis and Wooten 1978) and it has
              occasionally been associated with gill disease in pen-reared salmon in Washington.

              Bacteri . Renibacterium salmoninarum, the causative agent of bacterial kidney disease
              of salmonids, is widespread in net-pen reared salmon in Washington State, as well as
              British Columbia, and is a serious threat to the industry (Evelyn 1988). Salmonid fishes
              are the primary hosts for this obligate pathogen but herring (Clul2e harenLyu ) and black
              cod (Anol2lom fimbria) can be infected experimentally by injection of the bacterium
              (rraxler and Bell in press). It is believed that the organism is not part of the normal
              bacterial aquatic microflora (Austin and Austin 1987) and salmon are the likely reservoir
              for infection (Fryer and Sanders 1981).         The disease can be transmitted either
              horizontally (from fish to fish) or vertically within eggs (Evelyn et al. 1984), and it is
              often exacerbated after infected fish are transferred to seawater (Banner et al. 1983).
              The bacterium can be detected in pen-reared salmon several months after transfer to
              seawater and the disease can be transmitted to other salmon in adjacent net-pens (Evelyn
              1988). The bacteria persist in wild fish in seawater (Banner et al. 1986) and it is
              probable that wild brood stocks are a source of infections in some fish farms (Evelyn
              1988).

              It is difficult to treat fish with clinical disease so prevention is the most common control
              method. Prevention strategies include screening brood stock and discarding eggs from
              positive females and screening smolts prior to seawater introduction.          Erythromycin
              injection of females prior to spawning appears to induce high enough levels of the
              antibiotic in eggs to reduce vertical transmission to the fry (Evelyn et al. 1986) and this
              practice has been initiated at several fish farms.









             Furunculosis, caused by the Gram-negative bacterium Aeromonas salmonicid , often
             causes severe disease in freshwater fishes. Although the bacterium often originates in
             freshwater, it can apparently survive and spread in seawater (Scott 1968), and it has
             been recognized as a pathogen in seawater in Washington (Novotny 1978). As with
             Renibacterium, epizootic disease in salmon with latent infections occurs after transfer to
             seawater (Cox et al. 1986; Smith et al. 1982).        Though the disease is most often
             observed in salmonid fishes, it has also been reported in several non-salmonid marine
             and freshwater species (Elliot and Shotts 1980; McCarthy 1975; Morrison et al. 1984).
             Furunculosis is usually treated with oxytetracycline or Romet 30. There is active research
             on an effective bath immersion vaccine, but this is not routinely used in production
             facilities.

             Vibriosis, caused by marine bacteria Of the genus Vibrio, is a cosmopolitan disease
             infecting many fish species. It frequently occurs in net-pen reared fish in Washington
             State (Novotny 1978) and British Columbia (Evelyn 1971). Though several Vibri spp.
             have been incriminated as agents of disease in cultured fishes, only three species are well
             documented pathogens of salmonid fishes; Y. anguillarum,.Y. ordalii and V. salmonicida,
             (Egidius 1987). Only the former two species have been reported in fish from Washington
             (Novotny 1978). Vibri anoillarum is ubiquitous in the marine environment (Muroga
             et al. 1986) and can survive without a fish host for several months (Toranzo et al. 1982).
             Therefore, V. anguillarum is considered a facultative pathogen and does not require a
             fish host to survive in the marine environment (Muroga et al. 1986). Whereas V.
             angLifflaruin. infects over 40 fish species and has been isolated from wild as well as
             cultured fishes, V. ordalii has only been isolated from pen-reared salmon.

             A newly identified Vibrio sp., Y. salmonicida is the causative agent of Hitra disease in
             net-pen reared Atlantic salmon in Europe (Egidius et al. 1986; Wiik and Egidius 1986).
             Vibrio salmonicida has not been detected in salmon reared in North America. No
             Vibri spp. pathogenic to man have been associated with disease in salmon and human
             health concerns with 'Vibrio spp. have been restricted to warm water aquaculture (Egidius
             1987). Unlike R. salmoninarum, Vibrio infections usually occur only after seawater
             transfer. Vibriosis is usually an acute systemic disease and fish which recover show
             strong immunological protection against reinfection. Effective vaccines are commercially
             available which protect fish from V.'angpillarum and V. ordalii infections and the disease
             is prevented by vaccinating fish prior to seawater introduction.

             Viruses. Though several viral diseases are important in salmon during their fresbwater
             phase of development, none have been reported from salmon in seawater. Infectious
             hematopoietic necrosis (IHN) is of most concern in the Pacific Northwest. This virus is
             a persistent problem in fry and fingerling chinook salmon at several hatcheries.
             Apparently only fingerlings and returning salmon in freshwater are infected with IHN and
             it has not been isolated from fish in seawater. In vitro studies by Pietsch et al. (1977)
             and Toranzo et al. (1982) indicate that the virus survives poorly in seawater.









           Idiopathic Diseases. Kent and Elston (1987a) observed a condition similar to pancreas
           disease in Atlantic salmon reared in Washington. 'Ihis disease has previously been
           described in Atlantic salmon reared in Europe during their first year in seawater
           (Munro et al. 1984; McVicar 1987). Fish become emaciated and histological examination
           reveals diffuse necrosis and atrophy of the exocrine pancreas. The cause is unknown.
           Researchers in Scotland have proposed various etiologies; Ferguson et al. (1986)
           suggested that the condition may be related to vitamin E and selenium deficiencies,
           whereas Munro et al. (1984) reported epizootiological evidence consistent with an
           infectious etiology. If the cause of this disease is an infectious agent, it is of marine
           origin with no link to freshwater or stock origin (McVicar 1987). An infectious etiology
           is also indicated in a study by Ferguson (1986). Fish from the same egg lot were
           transferred to two sites. Fish at the site where the disease was enzootic developed the
           disease while fish transferred to a site with no history of the disease remained unaffected.








































                                 APPENDIX E


                      THE ECONOMICS OF SALMON FARMING































                          THE ECONOMICS OF SALMON FARMING:






                                  ROBERT L. STOKES






                           REPORT TO THE WASHINGTON STATE
                               DEPARTMENT OF FISHERIES






                                    OCTOBER 1988










                                            EXECUTIVE SUMMARY


            This report examines three economic issues arising from recent growth in Washington's
            salmon farming industry. The first issue is potential gains in output, income and
            employment to the economies of the state and of selected counties. The second is
            impact on revenues and expenditures of state government. The third is implications for
            real estate values of various (externally provided) assumptions concerning visual impacts
            of salmon fanning facilities.    The report concludes with a benefit-cost analysis of
            hypothetical siting decisions.


            The report examined neither the universe of policy issues elsewhere addressed in the EIS,
            nor the subset of those issues amenable to economic analysis or comment. Hence, the
            reader is referred other sections of the EIS for discussion of the effects of environmental
            wasteloadings and fish disease; consequences for sport fishing, and marine recreation; and
            economic effects of public perception concerning environmental quality. An article by
            James A. Crutchfield (Appendix L) also provides a useftil overview of the entire salmon
            farming issue from an economic as well as policy perspective.


            Washington's salmon farming industry is a segment of the world's rapidly growing
            mariculture industry. After some years of concentration on Pacific salmon (pan size
            coho), industry interest has shifted to production of mature Atlantic salmon. Several sites
            have been established in the past two years and many more are in various stages of
            planning or application for permits.


            The combination of favorable water temperatures, sheltered waters and infrastructure
            make Washington's Puget Sound one of the prime sites in the U.S. for salmon farming.
            Current operators compete favorably with Norwegian and Scottish producers for U.S.
            markets, and industry leaders feel that the combination of domestic and Japanese
            demand provides a market base for extensive future growth. The following are this
            authors general conclusions concerning the economic consequences for Washington state
            (and selected counties) of permitting or encouraging expansion of the fish farming
            industry:









                     The economic impacts of such growth were determined by assuming that a
                     representative Atlantic salmon facility (1,000,000 lbs production, $5,000,000
                     revenue) was sited in each of Clallam, Jefferson, Kitsap, San Juan, and Skagit
                     Counties. Conclusions of that analysis were that the state economy would gain
                     (from all 5 sites) $38-$48 million in output,.$11-$21 million in household income
                     and 257-303 jobs. Average County impacts for a single site were output $5.8-
                     $6.8 million, household income $1.1-$2.1 million and 40-51 jobs.


                  ï¿½  These economic impact results provided the basis for estimates of state fiscal
                     (revenue and expenditure) consequences. Depending on the economic impact
                     values used and method of relating economic impacts to fiscal consequences,
                     salmon farming would contribute $.36-$2.26 million to state revenues and $1.08-
                     $1.48 to state expenditures.


                  ï¿½  Property values were examined by collecting and statistically analyzing 335 current
                     real estate listings and assessed property valuations. T'he average front footage
                     price of $409 had a standard deviation of $290, approximately half of which could
                     be accounted for by general location (County), land type (high/low bank), and
                     improvements (water, sewer, etc.). The remaining or "residual" price variation was
                     presumed to result, at least in part, from variations in visual aesthetic quality.


                  ï¿½  Finally, benefit-cost and sensitivity analyses were used to relate gross economic
                     gains (household income) to potential losses (adverse property consequences).
                     Sixty-four benefit-cost ratios were calculated to reflect all combinations to data
                     input ranges and necessary subjective judgments, the latter including opportunity
                     costs of labor, interest rates, degree and geographic extent of adverse visual
                     impact, and interest rates. All ratios (including those most unfavorable to the fish
                     farming industry) exceed unity, suggesting net statewide economic gains from
                     salmon farming.     Average r  esults for all sensitivity calculations and results
                     calculated under assumptions favorable to the industry indicated substantial net
                     economic gains.









             These results should, of course, be interpreted in terms of the limited scope of the study.
             They suggest favorable balances between the benefits and costs calculated in the course
             of accomplishing the three study tasks; regional input-output analysis, state fiscal analysis,
             and property value analysis. Also, as noted, each result depends on assumed rather than
             estimated adverse visual effects on property.        Overall assessment of the economic
             consequences of salmon farming for Washington must also include consideration of
             numerous other economic issues, including, in particular, the economic implications of
             issues addressed from an environmental or policy perspective in the main body of this
             EIS.

















                                     TABLE OF CONTENTS



                            SECTION                                   PAGE

           ---------------------------------------                  -------


                INTRODUCTION                                             1


           I.   THE SALMON FARMING INDUSTRY                              2


           II.  INPUT - OUTPUT THEORY                                    5


           III. THE REPRESENTATIVE SALMON FARM                           13


           IV.  REGIONAL ECONOMIC IMPACTS                                18


           V.   STATE AND LOCAL FISCAL IMPACTS                           28


           VI.  PROPERTY VALUES                                          40


           VII. BENEFIT COST ANALYSIS                                    53


                NOTES                                                    61


                REFERENCES                                               62


                APPENDIX 1. PROPERTY VALUE SURVEY                        63


















                                    LIST OF TABLES


                 NUMBER                                            PAGE

                -------                                             ---


                 2.1  Clallam County Transaction Table               8

                 2.2  Clallam County Technical Coefficients          9

                 2.3  Clallam County Economic Impact               10
                      Illustration


                 2.4  Clallam County Impact Illustration           11
                      First Round Calculation


                 3.1  The Representative Atlantic Salmon           15
                      Farm: Revenues and Costs


                 3.2  The Representative Atlantic,Salmon           16
                      Farm: Regional Distribution of
                      Expenditure

                 4.1  Summary of Impacts                           19

                 4.2  Detailed Impacts: 5,000,000 lb Atlantic      20
                      Salmon Farm: Washington State

                 4.3  Detailed Impacts: 1,000,000 lb Atlantic      21
                      Salmon Farm: Clallam County

                 4.4  Detailed Results: 1,000,000 lb Atlantic      22
                      Salmon Farm: Jefferson County

                 4.5  Detailed Results: 1,000,000 lb Atlantic      23
                      Salmon Farm: Kitsap County

                 4.6  Detailed Results: 1,000,000 lb Atlantic      24
                      Salmon Farm: San Juan County

                 4.7  Detailed Results: 1,000,000 lb Atlantic      25
                      Salmon Farm: Skagit County

                 4.8  Average County Impacts                       27

                 5.1  Distribution of 1982 Washington State        29
                      Revenues and Expenditures

                 5.2  Statistics Used to Relate Regional           33
                      Economic Impacts to Washington State
                      Revenues and Expenditures











                 5.3 Washington State Economic and Fiscal Data      34
                     1970 - 1985



                 5.4 Algorithm for Calculating State Revenues       35
                     and Expenditures From Regional Economic
                     Impacts

                 5.5 Impacts of a $25,000,000 Salmon Farming        38
                     Industry on Washington State Revenues
                     and Expenditures

                 6.1 Puget Sound Waterfront Property                42
                     Front Footage Values

                 6.2 Puget Sound Waterfront Prop erty               43

                 6.3 Clallam County Waterfront Property             44

                 6.4 Jefferson County Waterfront Property           45

                 6.5 Kitsap County Waterfront Property              46

                 6.6 San Juan County Waterfront Property            47

                 6.7 Skagit County Waterfront Property              48

                 6.8 Regression Analysis of Puget Sound             51
                     Waterfront Property Values

                 7.1 Input Parameters to Sensitivity                54
                     Analysis

                 7.2 Sensitivity Analysis Algorithm and             59
                     Illustrative Calculation


                 7.3 Sensitivity Analysis Results                   60

                 A.1 Puget Sound Waterfront Property Survey         63
















                                    LIST OF FIGURES




                NUMBER                                             PAGE

                -------                                            ----


                  2.1 Schematic Representation of                  6
                      Input - Output Analysis

                  5.1 Schematic Description of Fiscal             30
                      Impact Calculation
















                                    INTRODUCTION



              This report, prepared under contract with the Washington

         State Department of Fisheries, examines selected economic aspects

         of the Washington salmon farming industry. The stimulus for this

         study is a general review of siting policy currently being

         conducted by the Washington Department of Fisheries and other

         state agencies.



              Several of the issues referred to in recent salmon farm


         siting decisions have been economic in nature. These include

         potential gains in state and county income and employment, fiscal

         impacts on state and local governments, and adverse consequences

         for waterfront land values in the vicinity of proposed sites.


              Each of these issues is addressed below.     A brief history

         and description of the salmon farming industry is provided in

         Section   I, followed by a discussion of regional input-output

         theory (Section II) and discussion of the economic data used to

         characterize salmon farming in input-output terms (Section III).

         Section IV reports input-output results (state/county employment,

         income, etc.) which are applied to the calculation of state

         fiscal impacts in Section V. Section VI deals property values and

         Section VII assembles the preceding economic data into a benefit-

         cost model. sensitivity analysis.






















                            I. THE SALMON FARMING INDUSTRY





               Salmon farming is emerging in Washington State as part of a

          rapidly growing world mariculture industry. Mariculture is the

          cultivation of marine organisms for harvest, as distinguished

          from capture fisheries, the harvest of naturally occurring fish,

          and   aquaculture (the cultivation of freshwater organisms).

          Historically, mariculture has been a major world producer of

          shellfish and finfish. Washington State has long participated in

          mariculture as one of the primary US oyster producers.





               Much of the science and technology which now underpins

          private  salmon mariculture was initially developed to support

          Pacific Northwest public hatchery programs. In the past several

          decades research supporting those hatchery programs has focused

          on all five species of Pacific salmon, as well as on Atlantic

          salmon. Early research on the hatchery production of Atlantic

          salmon was done at the University of Washington US and Norwegian

          biologists working in cooperation.





               Transfer of Pacific salmon production technology to the

          private sector was initiated by, among others, the Weyerhauser



                                           2









         Corporation in Oregon and Domsea Farms (Cambell Soup Co.) in

         Washington.    The first private production of Atlantic salmon

         began in Norway in 1971, leading to a booming Atlantic salmon

         farming industry in that nation, and later in Scotland as well.



              In the Pacific Northwest, British Columbia has seen the

         greatest growth in salmon farming. The first major British

         Colombia site was licensed in 1973, with major production

         beginning in about 1985. Today (1988) 128 sites produce 900

         metric tons of chinook, coho, and Atlantic salmon, as well as
                                        1
         rainbow trout and arctic char.





              After many years of relatively stable production (1.5        to

         2.0 million lbs from 1979 to 1986) Washington State has become

         the scene of increasing interest in Atlantic salmon pen culture.

         There are now 15 sites operating in Puget Sound and North Puget

         Sound Counties, as well as 17 in the permit cycle.      Total 1987

         production of 3.4 million pounds consisted primarily of coho, but
                                                           2
         included 400 thousand pounds of Atlantic salmon.





              Puget Sound is the largest potential salmon farming site in

         the United States because of its desirable water temperature,

         sheltered waters, and good      economic infrastructure.      Salmon

         farms currently in production compete successfully with Norwegian

         and   Scottish imports on the US West Coast and in the Midwest.

         Industry   spokesmen    suggest that production      could    expand

         significanlty without saturating potential markets, particularly


                                          3








          if, for Japanese markets, Washington's geographic advantage over

          Europe can be exploited.



















































                                           4

















                              II. INPUT - OUTPUT THEORY



              Input-output theory is a widely used method of regional

         economic analysis, appropriate to the issues addressed in this

         report. Developed as a post World War II extension of       Keynsian

         national income analysis, input-output theory shares the    Keynsian

         assumption of an economy with slack producing capacity.    In such

         an economy output is, over moderate variations, determined by

         aggregate demand. This characterization fits the situation of

         flopen" regional economies, such as states and counties. In such

         open economies,     labor and other inputs are available           at

         relatively constant prices, and are employed in relatively fixed

         proportions to produce goods and services demanded by regional

         and external consumers (Richardson, 1972).


              Typical evaluation applications of input-output           theory

         include determinations of      the regional output, income and

         employment implications of specific industrial facilities siting

         decisions.     Planning   applications    have   included    studies

         anticipating the public   infrastructure requirements of economic

         growth, and    more recently, studies assessing regional energy

         requirements  and environmental waste loads.


              The   general procedures by which input-output analysis

         extracts estimates of regional output, income and employment from

         externally provided estimates of final demand are traced in

         figure 2.1. Economic information on the entire regional economy



                                          5









                   Figure 2.1 Schematic Representation of Input - Output Analysis







                  TRANSACTIONS TABLE                                  APPLICATION DATA
                   (REGIONAL ECONOMY)                                  (SA.11-ION FAR14ING)
                                                                 f









                                                TECIRNICAL
                                              COEFFICIENTS











                                                                                APPLICATION
                                              INPUT - OUTPUT                       SPECIFIC
                                               CALCULATION                        COEFFICIENTS









                       STANDARD                                         APPLICATION
                      INPUT - OUTPUT                                     SPECIFIC
                         RESULTS                                            RESULTS













                                                        6










          (usually obtained from background studies) is recorded in a

          transactions table, from which a table a technical coefficients

          is computed.    Data on the industry or facility under analysis is

          then collected (as part of the specific application)                   and

          introduced as a column vector of final demands. These final


          demands are aggregated into the same catagories as those used in

          the transactions table. Matrix multiplication of the final demand

          vector    and   the    technical coefficients table          (and    side

          calculations as necessary), produce the desired results.


               These procedures conform to specific accounting principles

          and technological assumptions, which are illustrated with the

          Clallam County input-output model. That model and structurally

          identical ones for Washington State; and for Jefferson, Kitsap,

          San Juan and Skagit Counties were developed for this study from

          data found in the US Forest Service IMPLAN system. These models

          necessarily reflect 1982 economic conditions. This is because

          1982 is the effective year of IMPLAN, and is also the effective

          year of the most recent complete census of manufactures. The

          reader interested in the detailed mechanics of the input-output

          procedures employed here is invited to trace the calculations

          reported in tables 2.1 to 2.4 (U.S. Forest Service, 1988).


               For the more general reader,            we offer the following

          observations on the appropriatness of input-ouput analysis to the

          task a hand. An assumption crucial to the application of input-

          output analysis is that the inputs and outputs of regional

          industries can be varied in constant proportions,                 without

          altering prices, encountering physical resource constraints, or


                                              7











                                                                                    Tablc- 2.1 Clallam County Transac-tion Table
                                                                                    (thousand dollars;)

                               1  RgriculturQ, Fisheries. Fisheries                                                    7 Retail Trade                                                                      PH   Value Added
                               2  Mi ni n-j                                                                            8 Finance, Inseirancr-. RQal E:.3t-a+.Q                                           IMF    I mplrt5
                               3  Construction                                                                         9 Servicer.                                                                       PCE    Per-@@;onal Consumption
                               I  Manufacturing                                                                      10  FcedQr-al Gov4rnmont                                                              FD   Final Demand
                               5  Transport, Comm, Public Utilities                                                 11   State and Local Government                                                           r Total
                               6  Wholezalo Trade

                                                 1               2                :3                 14                5               6                 7                a                  9             1.0              11     PGE'             FD               T

                               1            16 1                 0               61              7?6                   1               3,                1            2-39              3-113                 1               2              ?95            5137.1           86C.0
                               2                 0               0                1                  7                 0               0                 ri               0                  0                0               0                  0              52               6--)
                               3              99                 0               64           4403               1619                  0             111             160.1            166.3                   1           17F12                 0        29650             -1-4322
                               1              56                 0           200-3           57097                2 1 12             15           1.478               3136            1692                    2             14.4           1639        311085            3?571S
                               5            221                  2             993            851.1             7WIS                 18           1'?8,3              586                                     9            400             0132          2461.4            57371
                               6                 1               0                9                .49                 3               0                 1                a               15                  0               0                35           1U6?              1181
                               ?              23                 0            1.930              G-qI             145                                  73             113               291                   1             211                                            59-365
                               a            is?                  1             2.16           1310                555                1F1          1501               355A             29-45                   3             31          3560,:;          5821?           10l 1?2
                               9            ill                  2           Il -3 1          5690               V20                 ??           17,63              1512             6276                 21               115         -5775--1         02031           1385 11
                            10                   0               a                6                1.3               1?                0                 3            190                 11               12                 1              1-15             :35?              756
                            11                11                 0               -17          1012                255                  21            111)             131                4 1                  1             IS             1509          611,1914          68022
                            VA            3250                 -jq          16616          12271130          2 -4 7 --". ?          786          43037             8IB22            ?3261                .458          63392                     0          791?         138 110
                            IMP           1215                 22          21053           173:399           20 I.-JO             2 -")'- q       9169             11525            4N.72.               2411             1608         -:013995                   0      620261
            00              T             OF,60                62          .41'1;22        375?19             573111              1181           S9365           101172            138511                756           68022           130110          620261           1916511










                                                                                                           Tablo 2.2 Clallan Courity                             Ter-hroical CoQfficients-
                                                                                                           (thousand dollars)

                                                            I  ftriculture, Fisheries, Fishr-ri,-:!-,                                                        ?   Rrtaii rrad-;,                                                                            VA Value fidded
                                                            2  Hi rd rig                                                                                     E,  Firianci-,, Insurance, RQ,-%l Est.-Ai-                                                  PCE Pqrsonal Ccjr,5
                                                            3  Con5truction                                                                                  '3  Svr,.,i ces                                                                                   T  Total
                                                            I  Manufacturing                                                                                10   Fodcral GovrerrsmQrit
                                                            5  Trarcsport, Comm, Public Utilitie@,                                                          11   St.&to and Local Goverrihh-nt
                                                            6  Wholozalc- TradQ

                                                                                1                  2                                      11                 S                   6                   7                   8                   9                                  11               PCE

                                                            1      0.09--112           0.0000              0.001-1            0.13021                 0 0 fir)        0.0009                   FJOOO         0.002'.)            0.0025           0. Orl 11)             .0000            0.1-10111:
                                                            2      0.0000              0.0021              0.0001                 .00130          1).0000             0.0000             ff. 13000           O-OIjuO             0-0000           U. 01:101.)         0-01300             0.1-10011
                                                            3      0.0102              0.130M              OXON               0.0117              fs.02!@-2           LI.00?1            A. 00711            0. 01-12            0.0120           O.OrJl;'     -      C1.02P.2            0.0000
                                                            -1     0.0065              0.0012              0. 01152           0.1520              0 . Oil) 3 V        0 . 0 1-,@; I      I'l. 1)2-19         0.0038              0.0122           0. 0027             0.0006              cl. 003?
                                                            5      0.0258              (1.0-322            0.022-9            0.0227              0.                  0.0-10-4           0.0301              0 - 0056            0.02:38          0. 0 116            0.0()Tn             0. 1:1 18b:
                                                            6      0.0001              0.0000              0.0002             0.0001              U. NO 1             0.0001                 .0000               .0000           0.0001           0. ON I                -01.11-A)        I-1.1-joul
                                                            ?      0.0026              It. 00 0            0.0-113            0. 00 17            fi. 0025            CAU15              0. OU 12            0.0011              0. 001-@ 1       0. CIO I S          0 . u 1) 0 '-;1     cl. 0189
                                                            a      0.0216              0.0180              0.013-49           0.0036              Ij. 009?            cl. f) 1118        0.0253              0.0,1111            0.13213          0.00-15             0 . 0005            0. 138 I-J
                                                            9      0.0132              0. 0-3 19           0 .032-3           0.0151              0. 0300             0. 0652            0.0297              0.01.15             0. 0153          0 . 0'--' Is!:-,       . 1) 0 1 -1.,    0.0862
                                                          10           .0000           0.0000              fi. fifio I           . 0000           0.0003              0.0002             0. 000 1            0.0018              0-0001           0.0161                 .0000            0.000-@:I
                                                          11                           A. 00 2 1.          0.0006             0.002?              1). 00-14           0.0016             1-1. 00 18          0.0013              0.0025           0.0010              U-000?              0.0036
                                           1) A                    0.3753              0. 55 11            0.3756             0 .'--;2U'I         0. 1      10        0.6659             0.7250              0. ?1307            0.5289           0 - 6058            0.939---i           0.0000
                                            r                      0.5099              0.619-4             0.5255             0 .                 13.6-491            0. 9 IN            1-1.8-155           0.8991              0.6558           0. 6$11G            0. 9?F--q           0.21115










                                                                                   Table 2.3 Clallas CGuntq Econoiiic Impact illustration
                                                                                   (thousand dollars)

                                         I Agriculture, Fisheries. Fishories-                                               ?    RG-tail Trade
                                         2 Mining                                                                           8    Financ-re, Insurance. Real Estatq
                                         3 Constructi on                                                                    'I   Srervi cros
                                         I Manufacturing                                                                    10   Fodcoral Government
                                         5 Transport, Comm, Public Utilities                                                11   State and Local Government
                                         6 Wholasalcp Trade                                                                VFI   Valuo Rdded
                                                                                                                            T    Trital


                                 ROUND          -------------------------                       SECTOP       ------------        -----------------------------------------------------------------------------------
                                                         1                2                3                14              5                 6                7                a                9               10               1.1             VFI                  T

                                         1      S20.16             S.00           S11.53           S19.31           S86.17           $0.25          $92-50,          S162.??         S 180. 53            SO.72            S-9. 19      5368. 15           S98-4.15
                                         2      $2.69              S.00          $13.52            $15.11          S29. 79           $0. 07         ;@ 19. 613'       $13. 17          $49.13             SO.48            -';'@2. ? 1  $365. 0?           $511.38
                                         3      $1.08              S.00            $3.79            $5.66           $13.92           SO.ClIq        11w 1:3. 69        S3-1.15         $36.51             S 0 . L'2        $1.72        $1013.67           $2 15. -qE-
                                         1      $0.413             S.00            $2.56            52.50            $5. 87          110 . 0 1        S5.26             10 . ?1,       $12.02             SO.11            $0.61           $?Q.20          S1.10.3-4
                                         5      $0.21              S.00            $0.98            S1.10            $2.82           $0. rI 1         $3.60             $6.55            $7.21            SO.05            SO.i;lq         $23.69            $16. 'q?
                                         6      SQ.09              S.00            $0.51            S0.51            $1.2-1            SAW               1. Z3          S2.43            S2.71            SO.02            &-0.11         S 13. Be           S22. 76
                                         7      SO.01              S.00            $0.20            50.23            SU. 513           $.CIO          $0.71             $1.32            $1.15            $0.01            SO.O?            $5. 29             $9.92
                                         a      SO.02              S.00            410.10           SO.11            50.26             $.CIO          SQ.27             $0.53            SCI.59              S.00          $0.03            $2.81              S4.73
                                         9      $0.01              $.Do            $0.01            Sri .05          $0.12             5.00           $0. 11            $0.27            50.30               5.00          $0.01            $1.15              S2.10
                                      10           S.00            S.00            $0. L12          50.02            So. 01:1          S.00           S13-06            SO . 11          $0.13               5.01)         S0.01            S0.58              $0.99
                                         T     S24.75             $0.01          S-46.14          $74.60 5110.82                     $0.39        S 11`12. 19        $261.08          $290.38             $1.62           $1.4.84       $951.49         51,938-30










                                                                                                 Table 2.1 Clalla" County Ecr-%nomic Impact Illustratioki
                                                                                                 First kaund Calculation



                                                                                                                                                                                                     5


                                     Fi r-st
                                     Round >                         300                           0                          0                            250                                                                     0
                                     Iriput
                                                         1           300    X   0.0532           # 0   X   0. 0000         +  0     X   0 . 0 Fj 1 -1   +  2 5 0     X      0.0021         +  251.)      X@    0.0000          +   0      X 0.0009
                                                         2           300    X   0.00011          + 0   X   0.0021.         +  0     X   0. F100 I       +  251.1     X      0.0000         +  2513       X     0.0000          +   0      X 1.) - OCICIO
                                                         3           300    X   0.0102           + 0   X   0.0076          +  0     X   0.0011          +  2 5 fj    X      0.0117         +  251)       X     0.0282          +   0      X 0.0071
                                                         .q          300    X   O.OCIE65         + 0   X   0.0042          +  0     X.  0.0452          4  250       Y      0. 1520        +  25 fj      'A    0.00-57         +   0      'X, 0.0131
                                                         5           300    X   0.0250           + 0   X   0.0322          +  0     X   0 . 0'--, 2 1   +  250       X      0.022?         +  250        X     0 - 1392        +   0      X 0.0-40-1
                                                         6           300    X   0.0001           + 0   x   ri.13000        +  0     '-.' 0.0002         +  2 5 C,    X      0.0001         +  250        '.-:  0 . 0 0 r) 1    +   0      X 0.0001
                                                         7           300    X   0.0026           + 0   X   0.000-S         +  0     X   0. 011 @@       +  250       x      O.0Ul?         +  250        X     0-0025          +   0      w. 0. 00 15
                                                         8           300    x   0.02,16          + 0   x   0.0180          +  0     X   0.0019          +  250       X      0. 003.6       +  @51)       .1.0  0.009?          +   0      X
                                                         9           300    x   0.0132           + 0   X   0.0319          +  0     X   0. 0`23         +  250       X      0. 0 151       +  250        X     0.0300          +   0      X 0 - OF, 5,2
                                                      1.0            3110   X   0. 0000          + 0   .4  0.0000          +  U     X   0.01-101        -+ 250       X      0.01)(10       +  250        '.-:  0.0003          +   0      X O-OC102
                                                      3.1            300    X   0. 00 1:3        + 0   X   0.0021.         +  0     X   0. 0006         +  250       X      0.0027         +  250        X                     +   0      X 0. 00
                                                      VF1            300    X   0. 3?5.-j        + 0   X   rl. 55 11       +  0     X   0. -j?56        +  250       9      0.3268         4  250        X     0.1310          *   0      'X. U. 6E.513








                                     Sector                              7                         8                                                            1 L)                               11                              PCE                         Fir:st Round Ou
                                                                                                                                                                                                                                                               SQcrind Round I
                                     Fi rst
                                     Round >                         0                             0                          125                          0                                  11                                   1050.
                                     Input
                                                      I.     +       0      X   0.0000           f 0   X   ri.002.-:i         125X      0. 0025         +  0         1%,    0.0019         +  A          X     O.OOCIU         4   105.4    0.0018         =      20.16
                                                      2..    +       0      X   0.0000           + 0   X                   i  125X      0.0000          +  0         X      0.0000         +  0                0.00130         +   105X     0. 0000        =          .00
                                                      3:     +       0      X   0.0071           + 0   X   C1.0-142        +            0.0120          +  0         X      0.0012         +  0          X     0.0262          +   185 X    0.0001)        =      1-1.53
                                                      11,    +       0      X   0. 0219          4 0   X   C1.0030         f  1@*SX     0.0122          +  13        x      0.002?         +  rl         X     0. 01106        +   185X     0.0037         =      19.31
                                                      5:     +       0      X   0.0@01           + 0   X   0.005E.         +  125X      U.0208          +  0         N      0.0116         +  0          V     0.00?0          +   185X     0.0186         =      06. 17
                                                      E'.    +       0      X   0.0001)          + 0   X   0. 0000         +  1215X     0.0001          +  0         X      0.0001         +  0          X     0. 0000         +   18SX     0.0001         =
                                                      (1:    +       0      X   0.0012           + 0   'A  C1.0011         +  12SIX     0.0021          +  0         X      0.0015         +  0          Y,    0.013113        +   185@0    0. 0189        =      92.58
                                                      R .1   +       0      X   0.0253           + 0   X   0. 03111.       +  125X      0.0213          +  0         X      0.00115        1  C,         X     l).U005         +   185X     0. 00 1:1      =   162'. 7?
                                                      4:     +       0      X   0.029?           + 0   x   0.0115          +  12sx      0.0-153         +  U         x      U - 0355       +  Cl         x     0.001?          +            0.0,162            180.33
                                                   10 -.     +       0      9   0.0001           + 0   x   0.0010          +  12sx      0.0001          +  0         *%     0.010          +  Cl         x     0. 0000         4            0. 0003                 0.?2
                                                    11.      +       0      X   0 . 0 ri 181     + 0   X   0. 00 1.-:1     +  125X      0.0025          +  0         X      0.0010         +  0          X     0.000?          +   IOSX     0. 0036                 9.11.)
                                                    VA.      +       0      X   0.7251)          + 0   X   O.?80T          +  125X      0.5289          +  0         X      0.6058         +  0          x     0.9391,         +   105X     0.0000             368.15










          otherwise    changing base period economic and         technological

          conditions. These conditions are reasonably well satisfied in

          this application. This because the current and proposed salmon

          farming industry is small in relation to the economies of

          Washington State and its coastal counties.       One exception to

          this expectation of constant technical coefficients is the

          possibility that a growing salmon farming industry might lead to

          import substitution.     That is, instate suppliers may avail

          themselves of opportunities to provide specialized inputs that

          are now imported. This possibility is addressed by means of

          sensitivity analysis (maximum and minimum impact calculations)

          described in sections III and IV.



               Another important assumption is that the accounting stance

          of relevant decisionmakers coincides with the scope of the input-

          output model. Such a coincidence would seem to exist for this

          evaluation of state and county siting policy.       Even within a

          regional accounting stance, though, input-output results cannot,

          without modification, be interpreted as net benefits in the

          benefit-cost sense. This qualification is addressed in section

          VII,   where input-output results are given a net benefits

          interpretation, but only after subtraction of opportunity costs.














                                          12















                         III. THE REPRESENTATIVE SALMON FARM



              To analyse the regional economic impacts of an activity like

         salmon farming requires that it first be described in terms of

         total revenue/expenditure and the allocation of each among sec-

         tors of the regional economy. Of greatest importance to accurate

         impact assessment is the division of revenues between export and

         local sales, and of expenditures and net incomes between regional

         and non regional recipients.

              This step in the analysis was accomplished by interviews

         with   several salmon farming industry        participants.    These

         individuals provided both information on their own operations, as

         well as a general overview of what, in their view, the future

         salmon farming industry would look like.


              Production and financial profiles of several salmon farms

         were obtained from their owners or managers.        In some cases

         intervewes provided exact revenues or expenditures, and in other

         cases general planning factors, "Feed is $.90 per finished

         pound.", "Sales cost is 5% of gross revenue.", etc. Confiden-

         tiality commitments preclude identifying the firms supplying this

         data, or given the fewness of firms, publication of specific

         data in even masked form. Instead, the revenue/cost profile of a

         representative operation (table 3.1) was built from the data

         provided. By design, this profile describes the industry in

         general, but no firm in particular. In addition, while estimates

         of   profit are sufficiently accurate for regional economic



                                         13









          analysis, they should not be considered reliable for investment

          planning or other purposes.


               Industry interviews also suggested that production will

          include pan size and mature coho, chinook and Atlantic salmon,

          but that mature (about 9 lb round weight) Atlantic salmon will

          gain in significance over time. Hence, the profile described in

          table 3.1 describes the production, revenues and expenditures of

          a 1,000,000 finished pound Atlantic salmon production facility.

          This production is assumed to sell entirely into out of state

          markets at $5.00 per pound. The disbursement of the resulting

          $5,000,000 in annual revenue is allocated among phases of

          production (hatchery, fish farm, administration) and among input

          types (feed, labor, etc).


              The extent to which these inputs4'are supplied locally or

          from outside the region is the primary determinant of the

          facilities indirect and induced regional economic impact. The

          local/import supply factors used here are reported in table 3.2.

          For some inputs the pattern of regional/import supply was either

          obvious, or could be reliably determined by interview. Labor is

          necessarily supplied from within the state and, for the most

          part, the subject county. Processing of fresh round fish is most

          conveniently done nearby, certainly in Washington and most likely

          in the subject county.      Packaging materials,    freight, and

          brokerage services for fish shipped out of Seattle will most

          likely by supplied by in-state, but not in-county firms.


               Sources of other inputs are less certain, and may vary over



                                         14














                    Table 3.1 Representative Atlantic Salmon Farm
                    Revenues and Costs (thousand dollars)


                            Production and Revenue

          Finished pounds                      1,000,000
          Price                                    $5.00
          Gross revenue                       $5,000,000



                                    Expenditures
                  ------------------------------------------
                            Item               Amount      $/lb

                 ----------------------        -------     -------
                 Hatchery: Eggs                $300,000     $0.30
                 Hatchery: Labor               $250,000     $0.25
                 Hatchery: Other                 $50,000    $0.05
                 Hatchery: Employment                  8
                 Fish Farm: Labor              $500,000     $0.50
                 Fish Farm: Other              $450,000     $0.45
                 Fish Farm Employment                 20
                 Feed                          $900,000     $0.90
                 Processing                    $250,000     $0.25
                 Packaging                     $100,000     $0.10
                 Freight                       $250,000     $0.25
                 Brokerage                     $250,000     $0.25
                 General Administration        $250,000     $0.25
                 Administrative Employment             5
                 Debt Service                  $350,000     $0.35
                 Equity Return                $1,100,000    $1.10
                 TOTAL                        $5,000,000    $5.00

























                                                 15



















                       Table 3.2 Representative Atlantic Salmon Farm
                       Regional Distribution of Expenditures


                                               In County              In State
                                           ----------------- -----------------
                                                 Max       Min       Max       Min

                                           -------- -------- -------- --------
             Hatchery: Eggs                      100%        0%      100%       50%
             Hatchery: Labor                     100%      100%      100%      100%
             Hatchery: Other                       50%       25%      75%       50%
             Fish Farm: Labor                    100%      100%      100%      100%
             Fish Farm: Other                      50%       25%      75%       50%
             Feed                                  0%        0%      100%       50%
             Processing                          100%      100%      100%      100%
             Packaging                             0%        0%      100%      100%
             Freight                               0%        0%      100%      100%
             Brokerage                             0%        0%      100%      100%
             General Administration                50%       25%      75%       50%
             Debt Service                          0%        0%      100%         0%
             Equity Return                       100%        0%      100%         0%




























                                                16









          time with the size of the industry, and with other factors. The

          following maximum and minimum local input factors were adopted

          for these inputs. Currently, the preponderance of feed is

          provided by Moore Clark of LaConner (Skagit County) Washington,

          with some feed imported from Oregon. Washington feed supply is

          set at 100 % to 50 %, a factor which will depend, among other

          things,   on    the future competitive position of Washington

          suppliers. Egg costs are set at either 100 % Washington and 100 %

          county (local production) or 50 % Washington (external purchase).

          other expenditures and administrative costs are set at 75% to 50%

          Washington and 50 % to 25 % county supply.      Debt service is set

          at 100 % and 0 % Washington (in or out of state financing), and

          equity return is set at 100 % Washington 100 % county (local

          ownership) or 0 % Washington 0 % county (out of state ownership).
































                                           17














                            IV. REGIONAL ECONOMIC IMPACTS



               Regional Economic impacts are computed by allocating the

          expenditures of the representative salmon farm to appropriate

          model catagories, and then performing the calculations described

          in tables 2.3 and 2.4. All results vary depending on whether

          minimum or maximum state/local supply assumptions are used.

          County results vary further (although only slightly) as a result

          of each counties different economic structure.        Results are


          reported in summary form in table 4.1, and in more detail in

          tables 4.2 (statewide), table 4.3 (Clallam Co.), table 4.4

          (Jefferson Co.), table 4.5 (Kitsap Co.). Table 4.6 (San Juan Co.)

          and table 4.7 (Skagit Co.).


               Statewide impacts were based on an industry expansion equal

          to 5 of the representative salmon farms discussed in the

          preceeding section. County impacts were based on one such

          facility in each county. Because of the liniar nature of input-

          output analysis, the computation of impacts for other industry

          sizes (combination of facilities) can be accomplished by simple

          multiplication of these results. That is 2 operations in a county

          would have exactly twice the county impact of one, and 10

          facilities would have twice the state impact of 5.



               As described in table 4.1, a 5 million pound Atlantic salmon

          farming industry (5 representative facilities) would contribute

          between $38 and $48 million to state output, between $11 and



                                         18



















                    Table 4.1: Summary of Impacts: 5,000,000 lb Atlantic
                    Salmon Industry in Washington, and Average Results
                    for a 1,000,000 lb Facility in Clallam, Jefferson,
                    Kitsap, San Juan or Skagit County ($ thousands)



                                   OUTPUT   INCOME    EMPLOYMENT


            Maximum
             State                  $48,395 $21,412          303
             County                  $6,812     $2,748        51

            Minimum
             State                  $38,227    $10,615       257
             County                  $5,775     $1,132        40
































                                            19



















                   Table 4.2: Detailed Impacts: 5,000,000 lb Atlantic
                   Salmon Production: Washington State (thousand dollars)
                                                       Direct              Total

                                                ------------------ ---------------
         Local Supply Sector                    Maximum Minimum Maximum Minimum
         ---------------------------            -------- -------- ------       ------
         Agriculture, Forestry, Fisheries          $1,500       $750   $2,362    $1,255
         Mining                                        $0         $0       $42       $30
         Construction                                  $0         $0      $476       $274
         Manufacturing                             $6,250    $4,000    $9,011    $5,682
         Transport, Comm,.Utilities                $3,125    $2,500    $4,897    $3,616
         Wholesale Trade                           $1,250    $1,250    $1,299    $1,278
         Retail Trade                                  $0         $0      $682       $342
         Finance, Insurance, Real Estate           $1,750         $0   $3,968    $1,083
         Services                                     $938      $625   $3,202    $1,869
         Federal Government                            $0         $0       $22       $10
         State and Local Government                    $0         $0       $86       $48
         Housholds                                 $9,250    $3,750    $21,412   $10,615
         Total Output                              $25,000   $25,000   $48,395   $38,227
         Employment                                    161       161       303       257


























                                                20





















                 Table 4.3: Detailed Results: 1,000,000 lb Atlantic
                 Salmon Farm: Clallam County (thousand dollars)
                                                      Direct             Total

                                               ------------------ ---------------
       Local Supply Sector                     Maximum Minimum Maximum Minimum
       ---------------------------             -------- -------- ------       ------
       Agriculture, Forestry, Fisheries             $300        $0      $325         $4
       Mining                                                             $0         $0
       Construction                                                       $36       $17
       Manufacturing                                $250       $250     $325      $307
       Transport, Comm, Utilities                   $250       $125     $391      $188
       Wholesale Trade                                $0        $0        $0         $0
       Retail Trade                                                     $142         $59
       Finance, Insurance, Real Estate                $0        $0      $261      $107
       Services                                     $125        $63     $415      $186
       Federal Government                                                 $2         $1
       State and Local Government                                         $15        $7
       Housholds                                  $1,850       $750    $2,801    $1,171
       Total Output                               $5,000     $5,000    $6,937    $5,858
       Employment                                     32        32        52         41































                                              21




















                   Table 4.4: Detailed Results: 1,000,000 lb Atlantic
                   Salmon Farm: Jefferson County (thousand dollars)
                                                       Direct             Total

                                                 ------------------- ---------------
         Local Supply Sector                     Maximum Minimum Maximum -Minimum
         ...........................             -------- -------- ------       ------
         Agriculture, Forestry, Fisheries            $300         $0      $321        $6
         Mining                                                             $0        $0
         Construction                                                       $45       $16
         Manufacturing                               $250       $250      $291       $281
         Transport, Comm, Utilities                  $250       $125      $348       $172
         Wholesale Trade                               $0         $0        $3        $1
         Retail Trade                                                     $140        $58
         Finance, Insurance, Real Estate               $0         $0      $230        $95
         Services                                    $125        $63      $369       $166
         Federal Government                                                 $1        $1
         State and Local Government                                         $16       $7
         Housholds                                  $1,850      $750    $2,786     $1,155
         Total Output                               $5,000    $5,000    $6,776     $5,770
         Employment                                    32         32        51        40




























                                                22





















                 Table 4.5: Detailed Results: 1,000,000 lb Atlantic
                 Salmon Farm: Kitsap County (thousand dollars)
                                                      Direct             Total

                                               ------------------ ---------------
       Local Supply Sector                     Maximum Minimum Maximum Minimum
       ---------------------------             -------- -------- ------       ------
       Agriculture, Forestry, Fisheries             $300        $0      $310         $5
       Mining                                                              $0        $0
       Construction                                                      $14         $3
       Manufacturing                                $250       $250     $286        $280
       Transport, Comm, Utilities                   $250       $125     $309        $154
       Wholesale Trade                                $0        $0         $1        $0
       Retail Trade                                                      $84         $35
       Finance, Insurance, Real Estate                $0        $0      $188         $79
       Services                                     $125        $63     $304        $139
       Federal Government                                                $16         $7
       State and Local Government                                          $9        $4
       Housholds                                   $1,850      $750    $2,615   $1, 080
       Total Output                                $5,000    $5,000    $6,361    $5,598
       Employment                                     32        32         42        36




























                                              23




















                   Table 4.6: Detailed Results: 1,000,000 lb Atlantic
                    Salmon Farm: San Juan County (thousand dollars)
                                                        Direct              Total

                                                 ------------------ ---------------
         Local Supply Sector                     Maximum Minimum Maximum Minimum
         ---------------------------             -------- -------- ------        ------
         Agriculture, Forestry, Fisheries             $300        @$o     $343         $8
         Mining                                                               $2       $2
         Construction                                                       $45        $19
         Manufacturing                                $250       $250     $313       $284
         Transport, Comm, Utilities                   $250       $125     $459       $218
         Wholesale Trade                                $0        $0        $29        $12
         Retail Trade                                                     $544       $225
         Finance, Insurance, Real Estate                $0        $0      $310       $127
         Services                                     $125        $63     $254       $119
         Federal Government                                                   $1       $1
         State and Local Government                                         $35        $14
         Housholds                                  $1,850       $750    $2,957    $1,225
         Total Output                                $5,000    $5,000    $7,518    $6,068
         Employment                                     32        32          67       46




























                                              24




















                 Table 4.7: Detailed Results: 1,000,000 lb Atlantic
                  Salmon Farm: Skagit County (thousand dollars)
                                                      Direct             Total

                                               ------------------ ---------------
       Local Supply Sector                     Maximum Minimum Maximum Minimum
       ---------------------------             -------- -------- ------       ------
       Agriculture, Forestry, Fisheries             $300        $0      $345        $10
       Mining                                                              $0        $0
       Construction                                                        $24      $10
       Manufacturing                                $250       $250     $403        $325
       Transport, Comm, Utilities                   $250       $125     $353        $172
       Wholesale Trade                                $0        $0         $3        $1
       Retail Trade                                                        $76      $30
       Finance, Insurance, Real Estate                $0        $0      $155        $60
       Services                                     $125        $63     $292        $130
       Federal Government                                                  $0        $0
       State and Local Government                                          $7        $3
       Housholds                                   $1,850      $750    $2,581    $1,027
       Total Output                                $5,000    $5,000    $6,466    $5,581
       Employment                                     32        32         44        37





























                                              25











          $21 million to houshold incomes, and would create between 257 and

          303 jobs statewide. Averaging results obtained from individual

          county models suggests that a single 1 million pound facility

          would contribute between $5.8 and $6.13 million to county output,

          between $1.1 and $2.7 million to county houshold income, and

          would create 40 to 51 jobs within the county
















































                                         26













                   Table 4.8: 1,000,000 lb Atlantic Salmon Farm, Average
                   County Results (thousand dollars)


                      Total Output       Housholds          Employment
                      ----------------   ----------------   ----------------
         County       Maximum Minimum    Maximum Minimum    Maximum Minimum

         ----------   -------- -------- ------     ------   ------     ------
         Clallam        $6,937    $5,858   $2,801    $1,171        52       41

         Jefferson      $6,361    $5,598   $2,615    $1,080        42       36

         Kitsap         $6,776    $5,770   $2,786    $1,155        51       40

         San Juan       $7,518    $6,068   $2,957    $1,225        67       46

         Skagit         $6,466    $5,581   $2,581    $1,027        44       37

         Average        $6,812    $5,775   $2,748    $1,132       $51       $40



































                                             27
















                            V. STATE AND LOCAL FISCAL IMPACTS



                The foregoing input-output anal,           lts provide a basis
                                                  ysis resu


           for, the comprehensive assessment of how an expanded salmon

           farming industry would effect state revenues and expenditures.

           The required extensions to the input-output model can              be

           identified    by examining the major items of revenue             and

           expenditure reported in table 5.1.


                There, we see that 71 % of state revenue arises from 4

           sources, sales taxes, gross receipts taxes, property taxes, and

           federal   grants,    with the remaining 29 %        qonsisting     of

           miscellaneous   taxes    and revenues.     Similarily,    71 %     of

           expenditures are for education (all levels) and human resources

           (including welfare), with the remaining 29 percent going to other

           catagories including general government. The general government

           catagory,    however,    includes   debt    service    and    pension

           expendituresf many of which could properly be allocated by

           function to education and human services as well.



                Thus, obtaining a fiscal analysis from input-output results

           involves relating 5 revenue types and 3 functional expenditure
           catagories to the economic changes described by"the above input-

           output analysis.    Figure 5.1 illustrates, in general, what must

           be done to accomplish this. The first steps, input-output

           analysis to produce impacts on output, houshold income and

           employment, have already been accomplished. This section is



                                           28
















       Table 5.1 Distribution of 1982 Washington State
       Revenues and Expenditures



                               REVENUE



                                                     Revenue or
       Item                            1982 $000   Expenditure
       --------------------            ---------   ---------------


       General and Selective                $1,901               30%
       Sales Taxes


       Gross Receipts Taxes                   $635               10%

       Property and In Lieu                   $628               10%
       Taxes


       Other Taxes                            $319                 5%

       Federal Grants                       $1,356               21%

       Other Revenue                        $1,550               24%

       Total Revenue                        $6,389



                               EXPENDITURE


       Education                            $2,751               44%

       Human Resources                      $1,647               27%

       Other Expenditures                   $1,796               29%

       Total Expenditures                   $6,194














                                              29









                   Figure 5.1 Schematic Description of Fiscal Impact Calculation













                                          INPUT - OUTPUT ANALYSIS
















                                                                       AVERAGE AND

                      EMPLOYMENT               VALUE ADDED               '11ARGINAL

                                                                       COEFFICIENTS























                                       REVENUES AND EYPERDITURFS

















                                                           30











         devoted to the remaining steps; examining possible relationships

         between   those economic variables and revenues/expenditures,

         choosing coefficients for calculation from among the examined

         possibilities, and, finally, using sets of chosen coefficients to

         calculate ranges of fiscal impacts.


              The underlying (though not readily observable)         economic

         processes that relate economic expansion (or contraction) to

         state revenue and cost are postulated to be as follows. Increases

         in gross output (with houshold income as a proxy variable)

         increase gross receipts taxes. Increases in houshold income

         increase consumption which, in turn, increase sales tax revenue.

         To the extent that both induce increases in taxable assets held

         by business and consumers, they increase property taxes as well.

         Depending on the their basis of application, other taxes and

         revenues also rise.



              Expenditures and federal grants are assumed to respond to

         economic change in a somewhat more complex way.         Input-output

         estimated increases in employment represent jobs filled by some

         combination of immigrants and unemployed current residents.

         Increased labor force participation has little, if any, effect on

         educational and general state expenditures, and may actually

         reduce human resource expenditures.       By contrast, increased

         population   will increase all three expenditure catagories;

         education due to the children accompanying new immigrants, human

         resources due to increased welfare and other case loads, and

         general expenditures for similiar reasons. Federal grants will



                                         31









          also increase, to the extent that federal funding formulas

          include general or targetpopulations.


               Figure 5.1 describes the calculations required to implement

          the above theory of fiscal effect.       Included among the standard

          input-output results are estimates of employment and houshold

          income (value added) resulting from the siting of salmon farms.

          The relationship between personal income and revenue is direct;

          changes in houshold income effect sales taxes, gross receipts

          taxes, property taxes, and other taxes and revenues. The degree

          of effect is determined by the estimates reported in tables 5.2

          (as estimated from table-5.3 data). The algorithm used to make

          those calculations is reported in table 5.4. The relationship of

          employment to expenditures and federal grants has two links;

          employment to population, and population to enrollment. Each of

          these is also estimated in table 5.2 and reflected in the

          algorithm in table 5.4.


               Two methods of relating economic change to fiscal magnitudes

          are reported in table 5.2. In both cases estimates are based on

          1970-1985 data, with financial magnitudes expressed in 1982

          prices. The first method is that of average ratios. For example,

          sales tax revenue averaged $.0078 per dollar of personal income,

          population averaged 2.43 per employee, school enrollment .42 per

          capita, and state educational expenditure $2,945 per school

          child.    The second method is that of marginal change, based on

          regression analysis. For example, the marginal change in sales

          tax revenue with respect to personal income was $.0014, the

          change in population with respect to employment was 1.52, and the


                                           32









                                            Table 5.2 Statistics Used to Relata- Regional Economic Impacts to Washington
                                            Stato Revenues and Expenditures

                                                                                                                              Rvr@,ragv           Coefficient (B)
                                            Ind,?p9rid-ant Variable Ml              Dopendant Variablfi, (Y)                  Ratio (Y/X)              (Y = R+B,'YiX)       T Statistic              R-2
                                            ---------------------                   --------------------------                ------------ ------------------- -----------                       ------
                                                 Pe@sonal Income                    Gross Receipts Taxes                              SCI.0078                 SO.0014           3. 1.q           0.92
                                                 Personal Income                    Gen a Sel Sal-:os Tax                             $0.0331                  50.0062           5.38             0.67
                                                 Personal Iricome                   Prop & In Lieu Tax                                $0.0071                  S0.0006           10.38            C1. 88
                                                 Personal Income                    Other Taxes                                       $0.0018                  50.0010           3.58             0-18
                                                 Personal Income                    Other Revenue                                     SO.016q                  S0.0052           2. 73            0.35
                                                 Employment                         Population                                            2.13                      1.52         1-1.96           C1. 9.4
                                                 Population                         Federal Grants                                        $311,                     SqO8         5.26             6. 66
                                                 Population                         Human Rpsources Exp                                   S355                      S,?r11       11.32               0.9
                                                 POPUlatiOn                         Other Expenditures                                    S119                      S?7.q        5.12             0.68
                                                 Population                         Enrol 1 merit                                         0.12
                                                 Enrollment                         Education Exp                                       S2,1345










                            Table 5.3 Washington Statq Economic and                                            Fiscal Data: 19?0 - 19S5 (1982


                              I   Population (000)                                                         '?  6reneral and Selactivo Salo-- Tax (millionz.                                                  13    Education (millionq)
                              2   Employment (000)                                                         13  6ross Rev.-oipt:r Tax rmillions)                                                              111   Human Res-ourcos (millions)
                              .3  Unemployment (000)                                                       'I  Propert4 and In-liou Exicos (millions)                                                        15    Total Expendituros (millions)
                              I   Childron (000)                                                          10   Total Ta;4 (millinn:O                                                                         16    CPI
                              5   DSHS casipload (000)                                                    11   Federal Grants (millions)                                                                     1?    Other Taxd?z 10-9-8-7 (millions)
                              6   Personal IncomQ- (billions)                                             12   Total Pevonue (millionf.)                                                                     le    Othor Povonue 12-11-Irl (millions)
                                                                                                                                                                                                             19    Other Expenditure 15-1-1-13 (millions)



                                         1         2      -3        1           5            E.            .?           a              9           la             11             12            13            1-1             Is            16                 17                 is                19
                            ?CI   31 B       1285      130     S 17     166.0         28.5,      1815.0        258.3          251.?       2291.6          896. -1      4076.8         19 10 - 7        997.7       4284. 8          0.925              166.2             890.8            13'?6. I
                            71    3,436      1259      1-12    805      200--I        29.8       163-3. 1      291.6          2-1S.0      2403. -?         859.2       3309.7         1831.5           956.-I      1107.2           0.965              226.3             6116.8           1319.4
                            72    :3430      129?      137     791      202.4         32.1       ISO-q. 1      276. 0         271.9       2-118. I       115?.?        -4523.8        1832. 1        1 1'3-3. 0               2     I.OUO              206. -;           91?.6            2169.0
                            73    3111       136?      11?     788      20-?. 9       36.5       1686.2,       307.6          255.1       2505.9         1094.3        .1275.0.       1731.?         1.070.9       -4191.1          1.058              257.0             675.6            1388.5
                            ?I    '3509      1120      109     785      206.3         11. 1      1665.3        329.2          161.0       2103.3         112-I.?       1515.6         1857. 1        1 1'1'0. 5    +412.0           1. 1614            24? . a           1017.6           138-1.1
                            75    3560       1-112     1149    784      211.5         16 . 31    16861.1       3,35. -q       256. 5      2551.6         204-1. 8      12-22.8        1725.2         1007.4        4098-6           1.253              2?1.3             626.4            1286.1
                            116   3635       I-q3I     140     780      253.2         51.9       1816.0        315.7          123.9       2809.0         12fiel. 2     5263.1         2248.5         1351.1        5030.3           1.317              3133.1            1090.2           143C.-I
                            ?'?   3? 15      1511      118     776      2-15.0        57.7       1?87.9        5-15.?         50?.2       3098.1         121-1. 1      19?6.2         2125.8         1277. ?       -4755.9          1.393              257.3             66-4.0           1352.1
                            ?a    3836       1681      121     769      2-11. 1       6?.:3      1981.2        59?.3          5:3? . 8    -.338-J. 1     17128. 6      5752.1         239?.3         I-q';S. .2    55,48.9          1. .490            [email protected]            IO-qO. q         1656.3
                            79    3979       1806      131     "161     2140. 1       78.0       19 3 8 . -:;  6-19.1         591.5       31Mq. 3        12113.3       5274.2         2198.2         1 -S7 1 . 0   508?. 9          1.625              2F,2.,q           611.7            1518.?
                            80    -4132      1826      156     757      269.1         07. E.     1950.5        6115.6         608.8       33514.7        1531.2        6 113.3        2729.8         3.715.9       6217. 3          1.7'30             249. 7            1227.1           1901.6
                            81    1227?      11306     1SO     719      299.6         98.1       17 7 ? . 2'   669.4          631.2       3320.1         2 I 0 9 . 2   5626.1         2512.2         15?9.2        5719. 5          1.9115             2142.5            896.6            1658.1
                            82    426-4      1779      215     739      251.8       102.9        1901.0        635.0          679.0       3535.0         1--:'-55.5    6.175.0        2751.5         1646.5        61.9,1.0         2.060              320.0             1181.5           VS6.0
                            83    1285       1838      231     736      2q9.4       10?.?        2232.6        768.6          721.3       1060.2         130?.3        6148.2         2653.6         IS87.9        5973.6           2. 1@16            3.31 .7           ?80.7            1?32.1
                            81    1320       1859      19-4    ?ql      272.0       113.9        2-1?0. .3     756.1          706. E-     427-J.3        1-409.9       ?097.8         2868.3         1EI64.2       7 194. 6         2.2U-4             310.2             111-1.6          2162.1
                            85    -4381      191?      170     719      29?.9       126.0        22?5.2        780.2          606.3       1081.3         13,18.1       6?86.4         2?12.1         1782.1        6878.9           2.305              339.6             1357.0           2351.1















                  Table 5.4 Algorithm for Calculating State
                  Revenues and Expenditures From Regional Economic
                  Impacts




                     PERSONAL INCOME DRIVEN VARIABLES


                  ITEM                              AVERAGE MARGINAL

                  ----------------------------      -------- --------
                  1. Gross Receip ts Taxes            $0.0078   $0.0078
                  2. Gen & Selective Sales Tax        $0.0331   $0.0331
                  3. Property & In Lieu Tax           $0.0071   $0.0071
                  4. Other Taxes                      $0.0048   $0.0048
                  5.Other Revenue                     $0.0164   $0.0164
                                                        0.0692    0.0692


                  6. Employment >> Population            2.43       2.43

                    POPULATION DRIVEN VARIABLES


                  7. Federal Grants                      $317       $317
                  8. Human Resources Expenditure         $355       $355
                  9. Other Expenditures                  $419       $419


                  10. Population >> Enrollment           0.42       0.42

                    ENROLLMENT DRIVEN VARIABLES

                  11. Education Expenditure             $2,945     $2,945


                  Revenue = VA*(1+2+3+4+5) + E*6*7


                  Expenditure E*6*((8+9)+10*11)

                  Net   Revenue - Expenditure


                     E   Employment
                     VA = Value Added = Personal Income










                                             35











          change in human resource expenditure with respect to population

          was $751.


               Both the average ratio and marginal change method are

          subject to error. For example, there is considerable evidence

          that housholds maintain a reasonably stable standard of living

          over the medium term, adjusting their savings (or dissavings)

          rate as well as their consumption expenditures in the face of

          short-term income changes. We would thus expect, (as is observed

          in table 5.2) that marginal changes in consumption based taxes

          will be less than average ratios. On. the expenditure side fixed

          program costs will not vary in direct proportion to population or

          caseload. Thus we again expect marginal effects to be less than

          average ratios.


               That this is not the case in table 5.2 points up the

          principal defect of the marginal approach. Estimates of marginal

          change, based on regression analysis can be, (as these estimates

          undoubtedly are) biased by neglected changes occuring during the

          period of estimation. Changes effecting revenue would include

          alteration of tax rates and the basis of their application, both

          of which have occured in the 1970 -1985 period., Most notably the

          removal of the sales tax from food.     On the expenditure side,

          bias can result from legislated changes in the scale of state

          programs and entitlement formulas, as well as changes in popula-

          tion structure. Increased state level school         funding, and

          declines in fecundity between 1970 - 1985 illustrate sources of

          potential bias in the marginal values reported in table 5.2.


                                         36












              The removal of these and other biases, if possible at all,

         would require data gathering and statistical analysis beyond the

         scope of this project. Hence, to give a range of possible fiscal

         effects we use both average ratios and marginal values          to

         compute fiscal effects. An exception is the exclusive use of

         average ratios to calculate changes in educational expenditure.

         Estimated marginal values (regression coefficients) relating

         children to population, and educational expenditures to children,

         were both illogical negative values. The first undoubtedly

         reflects declines in fecundity, and the second changes in the

         state funding formula.


              Table 5.4 describes the algorithm used to calculate fiscal

         effects. To calculate taxes and other revenues, average and

         marginal rates were multiplied by maximum and minimum estimates of

         the statewide    value added resulting from a 5,000,000 pound

         salmon farming industry. Federal grant revenue, human resource

         expenditures, and other expenditures were similarily calculated

         by multiplying maximum and minimum employment estimates by the

         product of population per employee and catagory expenditures per

         capita. Education expenditures were calculated in a similar

         manner, with the insertion of enrollment per capita.


              Results, reported in table 5.5, indicate that annual state

         revenues from a 5,000,000 pound industry could range from a high

         of $2.26 million (maximum impact, average ratio) to a low of $.36

         million (minimum impact, marginal value). Expenditures could




                                        37




















          Table 5.5 Impacts of a $25,000,000 Salmon Farming Industry on
          Washington State Revenues and Expenditures



             Case                    Revenues       Expenditures    Net
          ---------------- -----     ------------   -----------    -------


          Maximum Economic Impact

            Average Calculation           $2,257,105   $1,482,468    $774,637

            Marginal Calculation            $598,608   $1,273,621 ($675,013)

          Minimum Economic Impact

            Average Calculation          $1,201,216    $1,256,711    ($55,494)

            Marginal Calculation            $362,981   $1,079,668 ($716,687)




























                                               38









        range from a high of $1.48 million (maximum impact average ratio)

        to a low of $1.08 million (minimum impact, marginal value).



















































                                        39















                                  VI. PROPERTY VALUES



               The last empirical research task undertaken in this report

          is to investigate the economic implications of assertions that

          salmon farms will, due to negative visual aesthetics effects,

          reduce adjacent waterfront property values.

               It must be emphasised that it is the economic implications

          of assertions about aesthetic loss and price decline that      are

          being examined,     not the assertions themselves.       Where the

          existence of markets,      or other    circumstances permit    the

          observation of human behavior toward aesthetic resources,      the

          measurement of aesthetic values it theoretically possible      and

          occassionally attempted. However, employment here of the methods

          used in such empirical inquiries, such as consumer surveys and

          hedonic pricing, would require far more time and resources than

          are currently available.

               A simpler method is offered instead, which relies only on

          publically available property value data and simple regression

          analysis. The results of this analysis are, by means discussed

          below and in the next section,         combined with essentially

          arbitrary judgments about the aesthetic effect of salmon farms.

          The purpose of this exercise is to provide an analytical

          framework within which the results of other research into (or

          personal opinion concerning) aesthetic effects can be integrated

          with other economic data to inform siting decisons.


               The first step in implementing this approach was to collect



                                          40










         the types of data on waterfront property which are available from

         real estate firms,    multiple listing services,     and county

         assessors. Summary statistics on the 335 properties surveyed on

         this basis are reported in tables 6.1 to 6.7.   As indicated in

         table 6.1, the average value of the 335 properties surveyed was

         $409 per front foot, with a standard deviation of $209. The

         lowest average value was in Clallam County $271, and the highest

         was in San Juan County $506. This pattern, which coincides with

         views of consulted realtors and assessors, results partly from

         locational preference for the San Juan Islands, and partly from

         the greater predominance of lower valued "high bank" waterfront

         in Clallam County.


              Among the classes of values obtained, market values (asked

         or sold as reported by realtors and multiple listing services)

         were on average $223 per front foot higher than assessed values,

         $531 versus $303. This difference was also supported by the

         experience of realtors and assessors. Current, full market value

         is the legal standard for property assessment in Washington

         State. However, the fewness of transactions in rural waterfront

         areas often makes it difficult for assessors to keep values

         current in times of price inflation.


              Over the entire sample, values of low bank and no bank

         property were, as expected, the highest of the three catagories,

         $534 per front foot, versus $396 for medium bank and $312 for

         high bank.

              Finally, an index, called SCORE, was tabulated, as the sum

         of listed property improvements (other than buildings) and other


                                        41














            Table 6.1 Puget Sound Waterfront Property Front F      ootage Values

                                      Assessed   Market            All

                                     ---------   ----------        -------
                                                AVERAGE PRICE PER FRONT FOOT

            Puget Sound                     $303              $531        $417
            Clallam Co                      $223              $619        $271
            Jefferson Co                    $300              $451        $428
            Kitsap Co                       $437              $364        $425
            San Juan Co                      315              $614        $506
            Skagit Co                       $305              $489        $381


                                                           AVERAGE PRICE  PER
                                                N         FRONT FOOT

                                             ----     ---------------------------
            All                              335                          $409

            High Bank                        116                          $312
            Medium Bank                       50                          $396
            Low or No Bank                   100                          $534

            Score
                 0                           110                          $324
                 1+                          205                          $464
                 2+                          153                          $476
                 3+                          101                          $462
                 4+                           89                          $458
                 5+                           31                          $541






















                                                  42













                 Table 6.2 Puget Sound Waterfront Property


                 Item           Assessed    Market        All

                 ---------      ---------    ---------    -------
                 Number                 183          142            325
                 Front Footage
                   Maximum            3000          5348          5348
                   Average              408          198            316
                   Minimum                50           40            40
                 Acreage,
                   Maximum           206.00        264.00        264.00
                   Average            8.83          3.94          6.69
                   Minimum            0.33          0.17          0.17
                 Price
                   Maximum       $2,110,000    $3,000,000    $3,000,000
                   Average          $73,064      $140,223      $102,407
                   Minimum           $1,700       $10,000        $1,700
                 Price per  Front Foot
                   Maximum           $1,665        $1,525        $1,665
                   Average            $315          $531          $409
                   Minimum                $9         $72             $9


































                                           43

















                   Table 6.3 Clallam County Waterfront Property



                   Item           Assessed    Market        All

                   ---------      ---------   ---------     -------
                   Number of Prop           36             5            41
                   Front Footage
                     Maximum             1320            209         1320
                     Average               223           118           210
                     Minimum                62            80            62
                   Acreage
                     Maximum             11.71         2.00          11.71
                     Average             2.49          0.82          2.29
                     Minimum             0.50          0.17          0.17
                   Price
                     Maximum           $72,600     $100,000      $100,000
                     Average           $34,722       $60,800      $37,903
                     Minimum            $9,340       $30,000        $9,340
                   Price per  Front Foot
                     Maximum             $450         $1,050        $1,050
                     Average             $223          $619          $271
                     Minimum               $55         -$144           $55





























                                             44













                  Table 6.4 Jefferson County Waterfront Property



                  Item           Assessed   Market         All

                  ---------      ---------   ---------     -------
                  Number of Prop          10            35            45
                  Front Footage
                    Maximum              320           400           400
                    Average              147           146           152
                    Minimum               70            60            60
                  Acreage
                    Maximum            20.00         7.11          20.00
                    Average            4.48          2.55          3.35
                    Minimum            0.89          0.17          0.17
                  Price
                    maximum          $77,440      $105,000      $105,000
                    Average          $41,429       $58,794       $56,024
                    Minimum          $17,850       $17,500       $17,500
                  Price per Front Foot
                    maximum            $360          $907          $907
                    Average            $300          $451          $428
                    Minimum            $142          $175          $142


































                                            45













                   Table 6.5 Kitsap County Waterfront Property



                   Item           Assessed   Market        All

                   ---------      ---------  ----------    -------
                   Number of Prop          40             8            48
                   Front Footage
                     Maximum              540           330           540
                     Average              179           250           191
                     Minimum               50            80            50
                   Acreage
                     Maximum            11.14         5.03          11.14
                     Average            2.74          3.38          2.84
                     Minimum            0.44          0.30          0.30
                   Price
                     Maximum         $156,500      $150,000      $156,500
                     Average          $67,960       $73,000       $68,800
                     Minimum           $7,600       $29,000        $7,600
                   Price per Front   Foot
                     Maximum            $802          $900          $900
                     Average            $437          $364          $425
                     Minimum              $91         $150            $91































                                            46














                  Table 6.6 San Juan County Waterfront Property


                  Item          Assessed    Market        All

                  ---------      ---------  ---------     -------
                  Number of Prop          50            61           ill
                  Front Footage
                    Maximum              950          4500         4500
                    Average              304           339           323
                    Minimum              100            80            80
                  Acreage
                    Maximum            13.28        264.00       264.00
                    Average            3.75          10.38         7.39
                    Minimum            0.36           0.50         0.36
                  Price
                    Maximum         $304,890   $2,000,000    $2,000,000
                    Average          $97,711     $164,26A       $94,648
                    Minimum          $27,500       $28,500      $27,500
                  Price per Front   Foot
                    Maximum            $650         $1,525       $1,525
                    Average            $375           $614         $506
                    Minimum            $120            $72           $72
































                                           47















                    Table 6.7 Skagit County Waterfront Property

                    Item             Assessed    Market         All

                    ---------       ---------    ----------     -------
                    Number of Prop           47              33             80
                    Front Footage
                      Maximum              3000           5348            5348
                      Average                910            558            765
                      Minimum                60              40             40
                    Acreage
                      Maximum             206.00         114-00         206.00
                      Average              25.21          13.00          20.17
                      Minimum              0.33           0.21            0.21
                    Price
                      Maximum        .$2,110,000    $3,000,000     $3,000,000
                      Average          $165,883       $1210,470      $184,275
                      Minimum            4,$1,700       $10,000         $1,700
                    Price per  Front   Foot
                      Maximum             $1,665         $1,500         $1,665
                      Average              $305           $489            $381
                      Minimum                $9           $121              $9
































                                                48











          positive features. For example, SCORE 3 might be availability to

          the property of water, telephone and sewer. SCORE 2 might be an

          access road and included tidelands. No effort was made to assign

          relative value to the items that where added up to obtain the

          variable SCORE. Also, of importance to subsequent discussion,

          computation of SCORE was based entirely on features of the

          property itself. Comments on the general area (near the golf

          course, mountian view, etc.) were not counted.        Average value

          increased with the value of SCORE, from $324 for properties with

          SCORE = 0, to $541 for those with SCORE >= 5.


               The above summary statistics suggest a method of "backing

          into" an estimate of the value of visual aesthetics.                As

          mentioned, the average value of sampled properties was $417 per

          front foot, with a standard deviation of $290. This standard

          deviation estimate suggests that, among all properties from which

          the sample was drawn, about 68 out of any 100 should fall within

          a price range of $417 +/- $290, or between $127 and $707.


               The sample was drawn from areas throughout Puget          Sound,

          presumably including parcels overlooking a wide variety of     visual

          amenities, and disamenities. Thus, perceived differences       in the

          quality of nearby visual amenities must have given rise        to at

          least part of the reported variance in market value. Note,

          however, that part of the variance in value can also be explained

          by factors unrelated to view of the immediate area. Data in table

          6.1 suggests that such non-aesthetic factors include county,

          source of price information (assessor or realty firm), bank type



                                           49









           (high,low,medium) and SCORE (which by design reflected only the

          degree of land improvement and/or positive features confined

          within the parcel itself).


               Multiple regression analysis is a statistical procedure in

          which   overall variance in a dependant variable (here price per

          front    foot) is either explained by a computed regression

          equation, or assigned to the catagory of unexplained residual

          variance. The summary statistic R-2 measures the proportion of

          variance explained by the regression @equation, the statistic U -

          R-2) then measures unexplained residual variance.


               Multiple regression analysis was performed on the property

          value data set reported in Appendix 1, with the results reported

          in table 6.8. The regression equation R-2 of .52 suggests that 48

          percent of the overall variance in price per front foot remains

          unexplained.


               To express this result in terms of price ranges, consider

          the previously mentioned one standard deviation range around the

          overall average price per front foot, $417 +/- $290, or $127 to

          $707. If 76 percent of variance remains unexplained, then the

          unexplained, one standard deviation. range is $417 +/- .48*$290,

          or $278 to $556. Here we assume some portion of that variance

          results from differences in visual. amenities adjacent to the

          surveyed properties. In the next section we discuss how this









                                           50















    Table 6.8 Regression Analysis of Puget Sound Waterfront Property Values

    Dependant Variable: PFF = Price Per Front Foot,        R Square .52
                                        Standard Deviation of PFF     $290
    Independant
    Variables               Definitions                  Coefficient T Statistic

    ------------- ---------------                        ------------ ------------
                           STEPWISE INCLUDED


    Constant:                                                  453.05         17.24

    DPTl           Dummy  Variable for Asking Price            174.63          6.38
    FF             Front  Footage Per Property                  -0.38         -12.00
    PRICE          Price  Per Property                           0.00         11.37
    DC01           Dummy  Variable for  Clallam County         120.55          3.60
    DBNK1          Dummy  Variable for  High Bank              -167.61        -5.61
    DBNK2          Dummy  Variable for  Medium Bank            -177.81        -5.75
    DPT2           Dummy  Variable for  Assesed Price           152.9          2.66
    DC02           Dummy  Variable for  Jefferson County        64.78          2.21
                                                               453.05         17.24
                           STEPWISE EXCLUDED

    DC03           Dummy  Variable for Kitsap County             0.07          1.53
    DC04           Dummy  Variable for San Juan County          -0.05         -0.94
    ACRES          Acres  Per Property                           0.04          0.52
    SCORE          Index  of Property Improvements               0.08          1.72


























                                        51











          variance range can be combined with the results of regional

          input-output analysis to perform an overall benefit cost analysis

          of salmon farm siting decisions.



















































                                        52
















            VII.BENEFIT - COST ANkLYSIS OF SkLMON FkRM SITING DECISIONS



              In this concluding section we organize the foregoing results

         into   a   framework for evaluation (from a state           economic

         standpoint)    of salmon farm siting decisions. Two preliminary

         steps preceed development of an evaluation algorothim. The first

         is to convert previously developed economic information into

         comparable economic values. The second is to relate changes in

         these values to the specific circumstances of salmon farm siting.

         Each of these steps is accomplished by discussion of the

         parameter ranges reported in table 7.1.



              Regional economic benefits of salmon farming will accrue to

         state or county residents during each year of the facilities

         operation. kdverse visual effects, on the other hand, will cause

         a one time reduction in property values when the facilities are

         sited. However, any such reduction in capital value can be

         expressed as the loss of an annual-income equivalent by use of an

         appropriate interest rate. The economic logic behind making such

         a conversion derives from the observation that a property owner

         always has the option of    selling his property and earning       an

         annual income from it, as determined by earnings on investments

         available to him. That he   does not sell, suggest that he places

         at least this annual value  on the utility or satisfaction derived

         from the use of the land in recreational or residential use.



              What interest rate should be chosen to reflect this actual




                                         53












         Table 7.1 Input Parameters to Sensitivity Analysis

         PARAMETER
         NAMES           DESCRIPTIONS                             High           Low
         ------    ------------------------------                -------      -------

                             RANGES


         A =  HOUSHOLD INCOME                              $21,412,000 $10,615,000
         B =  OPPORTUNITY COST OF CURRENT EARNINGS                   50%          75%
         C =  VISUALLY EFFECTED MILES OF WATERFRONT                 25             50
         D =  SAMPLE STANDARD DEVIATION                           $285           $285
         F =  % CHANGE IN AESTHETIC INDEX                            10%           20%
         G =  INTEREST RATE                                           3%            8%


                             CONSTANTS


         D =  SAMPLE STANDARD DEVIATION                                    $285.
         G =  EXPLAINED VARIANCE (RQ2)                                     0.24






































                                            54











         or implicit annual income is a matter of considerable discussion

         among economists. one point upon which they agree, though, is

         that a "real" interest rate (i.e. financial rate less expected

         inflation) should be used. Deduction of expected inflation is

         necessary because the inflation premium in financial rates, which

         only maintains initial capital value, provides no estimate of

         actual net earnings.      As reported in table 7.1, we adopt a real

         interest rate range of 3% to 8% to convert property values into

         annual equivalents comparable to regional economic benefits.


               The different alternatives facing waterfront property owners

         and individuals benefiting from regional economic expansion point

         up     the   need    for    another    conversion.      Feasable     non-

         recreational/residental uses of rural waterfront property consist

         primarily of agriculture and forestry, activities that would

         support only a small fraction of prevailing market prices. Thus,

         the waterfront property owner has no realistic alternative to

         simply accepting any loss in value that results from diminished

         visual asethetics.



               By contrast, the houshold incomes earned due to local

         economic expansion represent payments for labor and other factors

         of production that have reasonably attractive alternatives. Most

         workers employed on salmon farms, or in industries supporting

         them,    could find employment elsewere. For these otherwise

         employable workers; incomes, working conditions or other values

         achievable in alternative.employment comprise a significant share

         of the value they place on their chosen employment.          Alternative



                                            55









            value is not, however, likely to exceed value in the chosen

            occupation, as in that case the rational worker would change

            jobs.


                 Alternative value will also fall short of the value of

            current employment, to the extent that there are costs (and

            delays) in finding alternative employment, and to the extent that

            some workers (such as the elderly or unskilled) lack viable

            alternatives. We adopt an opportunity cost range of 50% to 75%

            Ue an implicit net value of gross; income of 25% to 50%) to,

            reflect the sum of all these differences between gross regional

            income and opportunity cost.


                 We now address the task of -interpreting the preceeding

            sections statistical analysis of property values in terms of lost

            net economic value. For previously istated reasons,       we begin by

            restating our inability to determine, what, if any, negative

            aesthetic effects can be attributed -to salmon farms. The purpose

            of this report is to work out the economic implications of

            independantly provided assessments of visual impact, not to
                                                                   3
            directly estimate these in economic or other terms.


                 Recall the conclusion of section IV, which suggests that the

            front footage price       of 68% (one standard deviation)      of the

            properties from which the sample was drawn should fall within a

            range computed as follows:


            Actual price       regression calculated price             unexplained

            variance (.48)    standard deviation ($290)




                                             56









              For the purposes of this sections benefit cost analysis we

         posit an aesthetics index, ranging from zero to one, which

         explains all of that otherwise unexplained variation. By this

         formulation a property with a zero aesthetics index would fall at

         the bottom of the one standard deviation range, ie its price

         would be the regression calculated value less (.48*$290 = $139).

         A property with an index of 1.0, would fall at the top of that

         range (within which 68% of properties now fall),           ie. as

         calculated from the regression equation, plus $139. Were some

         event to change a properties aesthetics index from one (best) to

         zero (worst) the result would be a loss of $278 per front foot.


              We assume that less than a 1 to 0 change in this aesthetics

         index   would result from siting salmon farming facilities.

         Specifically our benefit cost calculations are based on a 10 % to

         20 % range of reductions. These values are, as previously

         mentioned, posited for illustration, rather than being offered

         either as the results of this research, or as the judgments of

         the author.


              In addition to a judgment concerning the degree of aesthetic

         loss (per effected front foot), we need a similar judgment

         concerning the geographic extent (feet or miles of coastline)

         over which that adverse effect will extend. Here we assume,

         subject to the same qualifications as above, a range of 5 to 10

         miles per site, or 25 to 50 miles of coastline for a 5 site

         industry.


              The final variable required by the benefit-cost algorithm is

         gross benefit to the state from economic expansion. For this


                                         57










           purpose we enter the statewide maximum and minimum value added

           estimates of $21.4 and $10.6 million.

                The benefit-cost algorithm used to perform sensitivity

           analysis over the above ranges is reported in table 7.2. Each

           calculation compares maximum beneficiary willingness to pay

           (numerator), with the minimum required to compensate loosers

           (denominator).    Maximum beneficiary willingness to pay in this

           case is the statewide value added contributions of 5 salmon

           farms,    adjusted    by an opportunity cost        factor.     Minimum

           compensation of losers is the loss of waterfront property value,

           calculated as discussed above.

                A six variable, 64 case, sensitivity model was used to

           calculate benefit cost ratios for all combinations of the input

           parameters listed in table 7.1. Results are reported in table

           7.3. For the input values and ranges adoped, all cases yield

           benefit cost ratios in excess of unity.         This suggests that,

           under all circumstances and judgments represented by table          7.1

           parameters, beneficiaries from salmon farm siting could more than

           fully compensate loosers.     The maximum ratio, resulting from the

           most favorable combination of range variables, is 97.11.            The

           least favorable is 2.26. Finally, high and low range results are

           calculated as the mean value of $21.06             +/- the standard

           deviation of $19.34. These results range from 40.41 to 1.72.

                Thus,    under all parameters and parameter combinations

           examined, siting 5 salmon farms would be in the states economic

           interest, as this was defined above in terms of beneficiary

           willingness to pay and amounts required to compensate loosers.



                                             58














              Table 7.2 Sensitivity Analysis Algorithm, and
              Illustrative Calculation


              BCR = ANNUAL BENEFITS/ ANNUAL COSTS =                     2.26

              ANNUAL BENEFITS = A*(J-B) =                         $2,653,750

              ANNUAL COSTS = 5280*C*2*D*(I-G)*E*F =              $1,175,962-


              WHERE:
              WHERE:
              A  =  HOUSHOLD INCOME                              $10,615,000
              B  =  OPPORTUNITY COST OF CURRENT EARNINGS                 75%
              C  =  VISUALLY EFFECTED MILES OF WATERFRONT                  50
              D  =  SAMPLE STANDARD DEVIATION                           $290
              E  =  % CHANGE IN AESTHETIC INDEX                          20%
              F  =  INTEREST RATE                                          8%
              G  =  EXPLAINED VARIANCE (RQ2)                            0.52

              Parameter values and ranges are reported in table 7.2.
              Full sensitivity results in table 7.3.































                                             59



















              Table   7.3 Sensitivity Analysis Results

                   F  .>>                      3%           3%            3%            3%
                   A  (millions)            $21           $21           $11           $11
                   B  >>                      50%         75%            50%           75%


              c    E    D             -----------------     BCR  ----------------------


               25   10%     $290         97.11         48.5,5       48.14         24.07
               25   10%     $290         97.11         48.5,5       48.14         24.07
               25   20%     $290         48.55         24.28        24.07         12.04
               25,  20%     $290         48.55         24.2;8       24.07         12.04
               50   10%     $290         48.55         24.28        24.07         12.04
               so   10%     $290         48.55         24.28        24.07         12.04
               50   20%     $290         24.28         12.1.4       12.04           6.02
               50   20%     $290         24.'28        12.1.4       12.04           6.02




                   F >>                        8%           8%            8%            8%
                   A (millions)             $21           $211          $11           $11
                   B >>                      50%          115%           50%           75%


              c    E    D             -----------------     BCR  ----------------------


               25   10%     $290         36.42         18.2.1       18.05           9.03
               25   10%     $290         36.42         18.9.1       18.05           9.03
               25   20%     $290         18.21          9.10          9.03          4.51
               25   20%     $290         18.21          9.10          9.03          4.51
               50   10%     $290         18.21          9.10          9.03          4.51
               50   10%     $290         18.21          9.10          9.03          4.51
               50   20%     $290           9.10         4.55          4.51          2.26
               50   20%     $290           9.10         4.55          4.51          2.26

              Average       21.06               High range                        40.41
              Standard      19.34               Low range                           1.72
              Maximum       97.11
              Minimum       2.26










                                                            60












                                       Notes



         1.    British Columbia data was provided by Jim Fraylick, British

         Columbia Ministry of Agriculture and Fisheries.



         2.    Washington data was provided by Robert Hoyser, Washington

         State Department of Natural Resources;       and Eric Hurlburt,

         Washington State Department of Fisheries.


         3.    Some data and an appraisers judgment concerning the degree

         and geographic extent of adverse visual and market effect is

         provided in Alpine Appraisers, 1988. The author of that document

         concludes that "floating net pens have no effect on upland

         property values in the areas studied (Peal Passage Mason County,

         and Rich Passage, Kitsap County).    Additionally, the appraiser

         concludes that "the pens will have minimal, if any, visual impact

         at distances over 2400 lineal feet.






























                                       61











                                       References




          Alpine    Appraisal Service.      "Influence of Floating Salmon Net

                    Pens on Residential Property Values." Report to the

                    Jamestown Clallam tribe, Sequim, Washington, August 30,

                    1988.




          Richardson, Harry W.      Invut Outiput and Recional Economics. (New

                    York: John Wiley and Sons, 1972).



          U.S. Forest Service (Portland Oregon). IMPLAN Data, (Reports

                    provided to the Author).



          Washington    State,    Office of Program Planning and           Fiscal

                    Management.   Pocket Data Guide. Olympia, WA 1983.





























                                            62





                                                    A.1 Puget             Sound      Waterfront Property Survey.
                                                                           FRONT                      PRICE PPRICE
                 COUNTY                  SITE                ACRES        FEET           PRICE        MONT FTYPE                BAM'    FEATURES                                          EWILOINGS SCORE                         SOURCE

              Clallan        Port Angeles                        1.50         100        S45, 000        $150    assessed       h       uater.pavv                                               6?960           4  Clallan      Cc  Assessor
              clallam        Discovery Bay                       1.00         136        S27.200         $200    assessed                                                                                        0  Clalla"      Cc  Assessor
              Clallan        Port RngolQs                        0.96         200        S35,000         S350    as-zossed      h       elec,mater.ph.pave                                                       -1 Clallam      Cc  Assessor
              Clallan        Discovery Say                       1.13         136        S2?.200         S200    assessed                                                                                        0  Cl &I I an   Cc  Assessor
              clalla"        Clalla" Bay                         0.50         102          $9,340           S92  assessed       I       tdl el ec,wat. saw, ph,road                                              6  Clallan      Co  fissassor
              Clallan        W. of Port Angeles                 11.26        1320        S721.600           SSS  assessed               erosion                                                                  0  Clallam      Co  Assessor
              Clallan        W. of Disc Bay                      1.09         105        513,650         $130    assessed       h       elec,ph,access                                              295          3  Clalla"      Cc  Assessor
              Clallan        W. of Disc say                      5.03         295        S60,670         S206    assessed       h                                                                  13?5          0  Clalles"     Cc  Assessor
              ClaLI14M       W. of Disc Bay                      5.03         2W         S63,670         5250    assessed       h       elec,ph                                                    1375          2  Clallan      Cc  Assessor
              Clallan        Cl al I a" Bay                      0-50         IL21       $21,320         S201    assessed       I       tdl,.Plac,wat,s&e&.ph,road                               48710           6  Clallars     Co  Assessor
              Clallan        Port Angeles                        1.16         100        $45.000         $450    assessed       h       al ac, pave                                                              2  Clallan      Co  Assessor
              Cl al I an     Clallam say                         0-50         1.50       S30,150         $201    assessed       I       tdl , &I ec, &set. seas. ph, road                                        6  Clallam      Co  Assessor
              Clallan        Port Angeles                        1.16         104        SAG,800         S150    assessed       h       el ec, seater, swepti c, ph. pave                        69700           5  Clallam      Cc  Assessor
              -_'Iallan      Clallam Bay                         0-50          62        S12.660         S;201   assessed       I       tdl,&Iec,&eat,sem,phroad                                 11820           6  Clallan      Ca  Assessor
              Clallan        Clallan say                         0.50          63        S12.6W          S201    assessed       I       tdI,elQ-r-,seat,s&s&,ph,ro&d                             30LW30          5  Clallam      Cc  Assessor
              '-Iallan       W. of Port Angeles                  9.05         560        S56,025         SIOO    assessed       h                                                                                0  Clalla"      Co  Assessor
              lialla"        Discovery Bay                       1-22         200        $27.335         $137    assessed       h                                                                                j) Clallan      Cc  Assessor
              clalla"        M. of Disc Bay                      5-03         2SS        $31,835         $125    assessed       h       elec, no park                                                            0  Clallam      Cc  Assessor
              Clallan        M. of Disc Bay                      1.75         175        S;22.?50        5130    assessed       h       elec,ph                                                     47S          2  Clallan      Cc  Assessor
              clalla"        M. of Disc say                      1.10         100        S13,000         S130    assessed       h       elec.ph,accoss                                                           3  Clallan      Cc  Assessor
              Cl al 16"      W. of Disc say                      5.03         255        S61.6dW         S212    assessed               elec,ph,access                                           61"             1  Clallan      Cc  Assessor
              clallam        W- of Port Angeles                  11-19        ;215       S21,500         $100    assessed       h                                                                                0  Clallam      Cc  Assessor
              Clallan        Clallan Bay                         0.50          63        S12,660         S201    assessed       1       elec.seater.sower.road                                   36270           A  clalla"      Cc  Assessor
              Clallan        Discovery Bay                       1-00         136        S22,000         S162    assessed                                                                                        0  Clallam      Cc  FIssessor
              Cl al I art    Discovory Bay                       1.09         1-36       S2?,200         S200    assessed                                                                                        0  Clallam      Cc  Assessor
              Clallan        Discovery say                       2-05         150        S52,500         5350    assessed                                                                                        0  Clallam      Cc  Assessor
              Malla"         W. of Part Angeles                 11.?l        1320        $72,600            $55  assessed               po-m- terrain                                                            0  Clallam      Co  Assessor
              Clallan        Port Angeles                        1.18          90        S40.500         SISO    assessed       h       e1&c.Matqr,Sept3LC,ph-P-                                                 5  Clallan      Cc  Assessor
              clallan        Port fingeles;                      1.44         100        $45,000         $150    assessed       h       elec,seater,septic.ph.paRlee                             51920           5  Clallan      Cc  Assessor
              Cl al 1 -an    U- of Port Angeles                  1.50         a3s        S33,535         SIOO    assessed       h                                                                                0  Clalla"      Co  Assessor
              clalla"        Port Angeles                        1.50         110        S:46. 750       S425    assessed       h       al ec. water. septi c' ph.pave                             1350          5  Clallan      Cc  Assessor
              z1alla"        Di scoverg Bay                      1-09         136        S2?,200         5200    assessed                                                                                        0  Cl al I are  Cc  Assessor
              Clallan        M. of Disc Bay                      1.23         100        S13,000         S130    assessed               access,easersent                                                         2  clalla"      Cc  Assessor
              Clallars       Port Angeles                        1-3?         2-31       S561000         S3?3    assessed       h       01 ec, water. --Aipp. ph, pave                           6?"0            1  Clallan      Cc  Assessor
              Clallan        Di scovery Bay                      1.00         200        S27.135         S136    assessed                                                                                        0  Clallam      Cc  Assessor
              clallan        Clalla" Bay                         0.50          99        S173,920        5-201   assessed       1       al ec, water. sawer, road                                66780           4  Clallam      Co  Assessor
              Clallan        W. Ediz Nook                        0.17         100        S50.000         $500    market         h       Buildable                                                                I  Sea Ridge       Realty
              Ciallan        The Place Beach                     0.75         ADO       S100.000      $1,000     market         1       lagoon                                                                   2  Sea Ridge,      Realty
              clallan        Freshwater Bay                      2.00         209        S30,000         5144    MWkQ-t         h                                                                                0  Sea Ridge       Realty
              Clallam        4 Seasons Ranch                     1.00          so        54H,000      S1,050     market         I       Drain field.planned dev,tdlnds                                           I  Sea Ridq&       Realty
              *:I al I an    Straits                                          100        -Sqfj. 000      S400    market         h       Building lot                                                             I  Sea Ridge       Realty
              Jefferson      Ft. Flagler                         0.99         100        S36.000         S360    as3Qssed       h       aasment                                                  330-15          1  Jefferson       Cc   Assessor
              Jefferson      Ft. Flagler                         1.91         200        ::-67,500       $338    assessed       h                                                                12125           A  Jefferson       Cc   Assessor
              )OffOrSOM      Squamish Harbor                     3-00          70        S17,950         S255    assessed       1                                                                                0  Jefferson       Cc   Assessor
              Wferson        Ft. Flagler                         1.13         100        S:36.000        S360    assessed               mater,dirt road                                                          2  Jefferson       Cc   Assessor
              Jefferson      Ft. Flagler                         1-93         2.10       S77,110         S323    assessed       m       poor access                                              21285           -1 Jefferson       Cc   fissassor
              Jefferson      Squarvish Harbor                    5.00         110        S28.050         S-155   assessed       1                                                                                0  Jefferson       Cc   Assessor
              Jefferson      Ft. Flagler                         0-92         100        $35,000         S350    assessed       m                                                                                0  Jefferson       Cc   Assessor
              Jefferson      Ft. Flagler                         5.04         120        11,43, 000      S358    assessed       m                                                                27030           -1 Jefferson       Cc   Assessor
              Jefferson      Squamish Harbor                    20-00         320        $1-5,395        S142    assessed       1                                                                                0  Jefferson       Cc   Pessessor
              Jefferson      Squanish Harbor                     5.00         1-110      S28,050         S255    assessed       h                                                                                0  Jefferson       Cc   Assessor
              Jefferson      E. Hood Canal                       0.61         100        SS8,000         5580    market         hn      septic,wator,voad                                                        3  Jefferson       Cc   Realtor
              Jof forson     North Beach                         0.26          30        SIM. 000        S500    narkot         h       water,ro-ad.sewar                                                        4  Realty World
              Jef forson     Hiddle Pt.                          5.02         121        S46,000         S390    market         h       po"'Or.road,need septic,need moll                                        2  Realty World
              .Jefferson     Squanish Harbor                     1.11         105        5;45.000        5"      market         In      sandy beach                                                              I  Jefferson Cc Realtor
              Jeff or --.on  riots hats Bay                      1.62         ]L'?O      $10,500         S250    market         he      ti del ands.power,&aell                                                  3  Realty World





                                              A.1 Puget Sound Waterfront Property Survey

                                                                     FRONT                  PRICE PPRICE
               COUNTY                SITE               ACRES       FEET         PRICE      FRONT FTYPE             BRINK  FEATURES                                      BUILDIMGS SCORE                     SOURCE

             Jefferson     Oak Say                         2.07        105       ST3,500        S567   nat-ket      n      ear-sownt                                                         I  Jefferson      Co  Realtor
             Jefferson     harroustone 1.                  2.32        148       S15,000        S301   "aricet             Po6for                                                            I  Jefferson      Co  Realtor
             Jefferson     Pt- Ludlou                      0.17         60       S-1-3.530      5725   narket       n      matot-,marina mgnts                                               2  Jefferson      Co  Realtor
             Jefferson     Hats "ats Say                   1.161       100       S?-q 1 000     S7-10  market              septi c                                                           I  Jefferson      Co  Realtor
             Jefferson     "adrrastone 1                   4.96        300       S65,000        S217   market                                                                                0  Jefferson      Co  Realtor
             Jefferson     Toandas Pon.                    2-63        1135      S".500         $269   nw-kot       M      power.fruxt troet;                                                2  Jefferson      Co  Realtor
             Jefferson     harroustone 1                   3.03        1.50      S-", 000       $327   narket              powor,septic                                                      2  Jof fors4m     Co  Realtor
             Jeffersort    QuilconQ                        2.70        100       S82,500        $825   narket       n      water, ti siber, beach                                            3  Jefferson      Co  Realtor
             Jof forson    harrastone 1                    3.26        290     S105,000         S-162  narket                                                                                0  Jefferson      Co  Realtor
             Jefferson     Cape Goorge                     0.57        1."       S48,000        S322   narket       h      uator.poiwer.tal,draiin field                                     I  Realty World
             Jefferson     Oak Bay                         0.95        100       S",500         $395   narkot                                                                                0  Jefferson Co       Realtor
             Jefferson     E. Hood Canal                   1.00        200       S%, 000        S560   narkpt       I      Mater.pomer                                                       2  Jefferson Ca       Realtor
             Jofferson     Hiddle Point                    5.20        121       $52.000        S430   narkot       h      rcod.neod u4i.11. ewped septic                                    2  Realty World
             Jefferson     Admiralty Inlet                 0.%         100       540,000        $100   narket       h                                                                        0  Jefferson Cc.      Real tor
             Jofferson     Hadlock                         5-01        400       S92, 500       S231   "arkat              ti dol ands, water, pomor                                         3  Jefferson Co       Realtor
             Jefferson     E. Hood Canal                   0.53         75       S68,000        $907   naw-ket-     h      eacsnont                                                          I  Jefferson Co       Realtor
             Jefferson     E. Hood    Canal                2.05        lie       S51,000        S132   narket       M      pork problem.                                                     0  Jefferson Co       Realtor-
             Jefferson     Hood Canal                      2.63        185       $15,000        S-M3   market              ti 091 ands. road, power. parks,                                  4  Realty World
             Jefferson     Strai ts                        3.00        136       S49,WO         S364   n-w-ket             Moll                                                              I  Jefferson Co       Realtor
             Jefferson     harroustone 1.                  0-86        100       S79.000        S750   ".w-kot      I      septi c                                                           I  Jefferson Co       Realtor
             Jefferson     Harroustone 1.                  3.36        200       M,500          S498   "arkot              P06"r                                                             I  Jefferson Co       Realtor
             Jefferson     Oak Head                        ?.11        200       Sfi% SOO       S319   narket       h      po"Or                                                             I  Jefferson Co       Realtor
             Jefferson     "arroustone 1.                  3.36        200       S99.500        S-198  narket              ti del ands, mol I , power. tel                                   I  Realty World
             Jefferson     Ifiddle Pt.                     5.30        121       S52, 500       5134   market       h      po*&or. road. need "oll.need septic.                              2  Realty World
             Jefferson     rarboo Bay                      1.23        100       S17,500        S IM   narket       n      spring                                                            I  Jefferson Co       Realtor
     0%      Jefferson     E. Hood Canal                   3-47        200       $18,000        5210   nar-ka-t     h      power                                                             I  Jefferson Co       Realtor
     4-      Jefferson     Gardiner                        3.20        171       S?9.000'       S462   narkot       h      pouor.ma-Ler,tinbor                                               A  Roaltq World
             Jefferson     Discovery Bay                   2.52        100       57s, 000       S?50   market       1                                                                        0  Jefferson Cc.      Realtor
             Jefferson     M ddl a Pt.                     5.02        121       $46.000        S-380  narkot       h      powor. road. rwpod "oll.nood septic                               2  Realty World
             jef                  C-eer-e                  0=40         90       S;4s_ @ 9 m_
                                                                                                55nn   nm-k-at      h      rMumor @ ual 1                                                    2  Jefferson      Co  Realtor
             Kitsap,       Poulsbo                         2.70        175       $52,500        S300   assessed     I.Q    ipRx                                                             3  Kitsap    Co   Assessor
             Kitsap        Fletcher     Say                4.67        220     $107,350         SIBS   assessed     h      BSP14FGX                                            62540         4  Kitsap    Co   Assessor
             Kitsap        Fletcher     Bay                0.88         70       S-*3.390       S577   assessed     le     xxmxzxx                                                           0  Kitsap    Co   Assessor
             Kitsap        Eglon                           0.46         so         S7,600       $152   assessed     h      XC-4"GX                                                           0  Kitsap    Co   Assessor
             Kitsap        Eglon                           0.56         60         5'9,120      $152   azsezsod     h      XSHWFGX                                                           0  Kit-sap   Co   Assessor
             Kitsap        Colvos Passage                  2.50        210       $42,000        S-200  assessed     h      6SH14FGE                                                          2  Kitsap    Co   Assessor
             Kitsap        Poulsbo                         0.53        100       $30.000        S300   assessed     le     GXP14FFX                                                          2  Kitsap    Co   Assessor
             Kitsap        Vinland                         1-39        155     S109,910         S?02   assessed     le     IW.CPC)CW3X                                         90860         5  Kitsap    Co   Assessor
             Kitsap        Vinland                         0.79        120       S%,240         $802   assessed     le     BX(PC)ICRGX                                         65360         5  Kitsap    Co   Assessor
             Kitsap        Fletcher Bay                    1.97        160       S32,090        5576   acssessed    le     GX(PC)CFGE                                          39M           5  Kitsap    Co   Assessor
             Kitsap        Colvos Passage                  5.07        330       550.160        $152   assessed     h      BCSWPUFGX                                                         3  Kitsap    Co   Assessor
             Kitsep        Tokiu Pt.                       5-97                  S97.150        $229   assessed     h      GSPCFGX                                                           2  Kitsap    Co   Assessor
             Kitsap        Vinland                         2.36                S110.400                assessad     le     BX(PC.)CPIGX                                        41430         5  Kitsap    Cc   fls-s"assor
             Kitsap        Poulzbo                         1.??        205     S138,?80         S677   assessed     le     BXCPC)Cfm                                           31M           S  Kitsap    Co   Assessor
             Kitsap        Colvos Passage                  5.09        112       $46,434        S32?   asses5od     le     GxtMGE                                                            2  Kitsap    Co Assessor
             Kitsap        Vinland                         3.914       2010    $100.100         5502   assessed     le     GX(PC)Cfi13E                                        @M 10         5  Kitsep,   Co Assessor
             Kitsap        Fletcher Bay                    1.17         73       M,020          S726   assessed     le     BXCPC)CFGE                                          95230         6  Kitsap    Co Assessor
             Kit-sap       Eglon                           1-88        100         S9,100         $91  assessed     h      XSM14FGX                                                          0  Kitsap    Ca   Assessor
             Kitsap        Eglan                           2.02        170       S21,250        $125   assessed     lo     DXNXXXX                                                           I  Ki tsap   Co   Assessor
             Ki tsap       Fletcher Bay                    3.00        210     S156,500         S715   assezsed     h      BSU"CpXFGX                                         146150         5  Kitsap    Co   Assessor
             Kitsap        Fletcher Say                    2.61        150     S101,050         S6-el  -assessed    le     6XCPM)XM4E                                                        4  Kitsap    Co   Assessor
             Kitsap        Vinland                         0.86        100       S80,200        SJ302  assessed     I*     WWCRGX                                             113380         4  Kitsap    Co   Assessor
             Kitsap        Tokiu Pt.                       8.49        300     S101.980         SMO    assassed     lo     6Y(PC)CRGX                                         182700         4  Kitsap    Co ftsossor
             Kitsap        Colvos Passage                  3.26        200       3.%),000       S200   --m essed    h      U.S#MFGE                                                          I  Kitsap    Co   Assessor
             Ki tsap       Colvos Passage                  8.18        220       $77,440        S352   aLssessed    le     MCPC)CFGE                                                         I  Kitsap    Co   Assessor
             Ki'tsap       Eglon                           2.38        260       1,31.200       $120   &-5sessed    h      XSNWGX                                                            0  Kitsap    Co Rssessor





                                                A.1 Puget Sound Waterfront Property Survey

                                                                        FRONT                    PRICE PPRICE
                 CDUMTV               51TE                 ACRES       FEET          PRICE       FRONT FTYPE              SAW     FEATURES                                       BWLOINGS SCORE                         SOURCE
             Ki t5ap        Fletcher Day                      1.61          39       5:59,260       S666    assessed      h       GS(PC)UFGE                                            69930          1  Kitsap     Cc   Rsse@ssor
             Kitsap         Tokiu Ft.                        11-1.4       510      S102,310         S199    assessed      le      GGX                                                                 I  Kitsap     Cc   Assessor
             Kitsap         Colvos Passage                    8.09        M          S86,070        $302    assessed      h       US@MGE                                                               I  Kxtsap     Cc   Assessor
             Ki tsap        Vi n1 and                         0.66        100        S80.200        S802    assessed      I*      BXCPC)CfiGX                                         131180           5  Kitsap     Cc   Assessor
             Ki tsap        Poulsba                           0.60        116        $;37.450       S323    assessed      le      GXCPC)CFRE                                            549100         5  Kitsap     Cc   Assessor
             Kitsap         Vinland                           0.59        Ila        SM,220         5.902   assessed      le      BXCPC)CFIGX                                           723;?Yj        S  Kitsap     Cc   Assessor
             Ki tsap        Colvos Passage                    2.27        100        S20,200        S202    assessed      h       USNWGE                                                               I  Kitsap     Cc   Rssossor
             Kitsap         Eglon                             5.30        510        S7.3,500       S 111   a2ssessed     h       XSNWGX                                                               0  Kitsap     Cc   Assessor
             Kitsap         Poulsba                           0.50          197      S43.210        5652    assessed      19      OX(PC>C6r3X                                                          5  Kitsap     Co   Assessor
             Kitsap         Poulsba                           0-60        130        S91,260        S702    assessed      I&      ot*PC')CGGX                                           252SO          5  Kitsap     Cc   Assessor
             Kitsap,        Poul sba                          1.30        100        S35,000        S350    azsassod      le      BXU31C)IcFftx                                         30356          5  Kitsap     Cc   Assessor
             Ki t5ap        Poulsba                           1-11        115        SW,5530        1-5700  asse@sed      le      BXCPC@0C6M                                          102990           5  Kitsap     Cc   Assessor
             Kitsap,        Poulsba                           0.14          190      S;36,000       S-400   assessed      I*      rv)WCFGX                                                             2  Kitsap     Cc   Assessor
             Kitsap         Poulsbo                           0.168       IGO        S61,000        SVO     azzo5sed      le      6XCM)CFFIX                                          114510           4  Kitsap     Cc   Assessor
             Kitsap         Stavis Day Road                   5.00        330        S419,500       S150    nairkot       he      phone, no alec:                                                      I  Coldwall      Banker
             Kitsap         Stavis Say Road                   5.03        BL30       $62,500        S189    markot        he      pomor,phonQ                                                          2  Coldwell      Banker
             Kitsap         Stavis    Day Road                5-00        330        S65,000        S197    market        he      *I ec. proone, no      "tar                                          2  Cold"oll      Banker
             Kitsap         Stavis    Bay Ro-ad               5.00        330      S150,000         SISS    market        I       power.phone,septic,mQll                                              I  ColdwQlI      Banker
             Kitsap         SlLavis Say Road                  5.00        3:10       $70,000        S212    market        he      elec,phone,no matec                                                  2  Coldmall      Banker
             1(i tsap       Big Beef Hairbor                  0.50        U"                000     S279    market                el&c,phone.needs swIl                                                2  Coldwall      Banker
             Kitsap         Rich Passage                      0.30          80       S7-2.000       $900    market        I       elec,phorw,mater                                                     3  Coldmall      Banker
             Ki tsap        Olympic View Road                 1.23        163        S06,000        S529    markot        he      elec,phone. no mater                                                 2  Ccl duel I    Banker
             San Juan       San Juan M.                       9.54        770      S301.850         S3%     assessed      to                                                            59-40          -q San   Juan    Co   Assessor
             ';4m Juan      Sham S                            1.38        310      S1113.050        53131   assess"       1       ti 601 ands                                           165M           1  San   Juan    Co   AssQssor
     0%      San Ju&n       Orcas                             1.56        2 10       S790,510       $431    assessed      m       tidelands                                                            I  San   Juan    Cc   Assessor
     Un      San   Juan     Sham N                            1-37        315        IM4.500        S300    assessed      1                                                             69720          11 San   Juan    Cc   Assessor
             San   Juan     Lopez M                           2.81        315        S91.500        $300    assessed      h                                                                            -1 San   Juan    Co   Assessor
             3an Juan       Sham N                            0.57        157        $5-1.950       S350    assessed      m                                                             212M           4  San   Juan    Co   Assessor
             San Juan       Lopez E                           0.43        270        S53.750        5125    assoss-ed     n                                                                            0  San   Juan    Co   Assessor
             San   Juan     Sham S                              4.9       7@W      SISS,500         S-1'10  assessed      h                                                             11690          4  San   Juan    Cc   Assessor
             Gan Juan       Orcas                             3-02        310        $6-1,000       S200    assessed      n                                                                            0  San   Juan    Cc   Assessor
             San   Juan     Lopez M                           12.7        4010       S:90.010       S225    asswssed      "                                                                            0  San   Juan    Cc   Assessor
             San Juan       San Juan SM                       1.91        213      S128.850         S605    assessed      n       ti del ands                                            7220          5  San   Juan    Co   Assessor
             San   Juan     Sham SE                           1.18        100        $60,000        5600    assessod      n                                                             250-40         1  San   Juan    Cc   Assessor
             San   Juan     Orcas E                           5-71        Z190       s9F"450        S333    aissessod     h                                                              16?0          0  San   Juan    Cc   flssess@w
             San   Juan     Sham N                            2.83        300        11-90,000      S300    assessed      m                                                             ?6910          1  San   Juan    Co   Assessor
             Lan   Juan     Sham SE                           1.84        1w         SO-1,400       5556    assessed      n       tidelands                                             13?00          5  San   Juan    Cc   Assessor
             San   Juan     Sham M                            6.44        665      SIGO.,290        52-11   assessed      1                                                              1280          0  San   Juan    Cc   Assessor
                   Juan     Lopez It                          0-38        Ito        S41.250        S375    assessed      "       ti del arpas                                          16750          5  San   Juan    Cc   Assessor
             San
             San   Juan     Orcas E                           5.09        360      S1,22,050        S311    arssessed     m                                                           121970           1  San   Juan    Co   Assessor
             San Juan       Lopez H                          12.29        T90      SIS-4.9%         S263    assessed      h                                                                            0  San   Juan    Cc   Assessor
             .1an Juan      San Juan M.                       2.OS        200      SIIQ,O(JC        S550    a@ssessod     h                                                                            0  San   Juan    Co   Assessor
             San   Juan     Lopez E                           0.68        120        SGG@720        S556    assessed      n       ti del aras                                           12410          5  San   Juan    Cc   Assessor
             ian Juain      Lopez E                             2.5       1110       SIM,000        S600    assa=sad      m                                                           133?%            4  San   Juan    Cc   Assessor
             San Juen       Lopez E                           0.36        100        S;2?.SW        S2?5    assessed      "                                                                            0  San   Juan    Cc   Assessor
             Gan Juan       Lopez S                           9.75        1,10     S150.200         S341    assessed      m                                                                            0  San   Juan    Co   Assessor
             San Juen       Lopez HM                            5.1       2190       S;7-1,550      S257    assessed      h                                                              2-60          0  San   Juan    Cc   Assessor
             San Juan       Sham M                            0-81        2100       S70,000        5350    azsossed      m                                                           1179,10          4  San   Juan    Co   Assessor
             San Juan       Orcas SE                          -4.01       Z65        "3,550         S-342   assessed      "                                                                            0  San   Juan    Cc   Assessor
             ian Juen       Shajw S                             2.7       950      S142,500         $150    assessed      h                                                                            0  Son   Juan    Cc   Assessor
             San Ju,.,n     Orcas; E                         10.65        535      S151,650         S203    assessed      h                                                                            0  San   Juan    Cc   Assessor
             San   juen     Orcas E                           1-62        1!50       S?8.?50        S525    assessed      h                                                             40260          1  San   Juan    Cc   Assessor
             San Juain      Lopez E                             2.2       100        W5,000         S6SO    assessed      m                                                             ?1430          4  San   Juan    Cc   Assessor
             San   Juan     San Juan M.                         1.0       160      SIO-4,000        SGSO    a--3s9zsed    n       tidelands                                             813W           5  San   Juan    Co   Assessor
             San   Juan     Orcas SE                          1q.02       250      S1.08.050        S132    assessed      m                                                              9226          A  San   Juan    Cc   Assessor
             San   juain    Sulam N                             2.1       5:10       @;G 1, 200     S120    assessed      m                                                              2550          0  San   Juan    Cc   Assessor





                                                   A.1 Puget Sound Waterfront Property Survey

                                                                            FRONT                      PRICE PPRICE
                  CGLJNTY                 SITE                RCRES        FEET           PRICE        FRONT FTYPE               BRW FEATURES                                               BUILDINGS        SCORE                  SOURCE

              San   Juan     San Juan M.                          2.23          210     S105,000          S500    assessed       h                                                                192730          1   San   Juan    Co   Rssessor
              San   Juan     Orc4s                                1.66          200       S86,200         S131    assessed       h       ti del arAis                                             1608-43         5   San   Juan    Co   Rssessor
              San   Juan     Sham N                               7.31          135     S130,500          5300    assessed       n                                                                88810           1   San   Juan    Co   A-ssessor
              San   Juan     Orcas N                               1.2          ISO       S?5.000         $500    assessed       1                                                                                0   San   Juan    Co   fissessor
              San   Juan     Lopez E                              0.83          135       S?5,060         S556    assessed       1       ti del ands                                                              I   San   Juan    Co,  ft:sses5or
              San   Juan     Sham M.                            13-28           2%      5 172. -100       $591    assessed       1                                                                651-40          4   San   Juan    Co   fissessor
              San   Juan     Lopez     M                          1.99          120       S61,290         5511    assessed       h                                                                21690           1   San   Juan    Co   fissessor
              San   Juan     Orcas     N                          3.11          165       S80,880         SliO    assessed       1                                                                                0   San   Juan    Co   Assessor
              San   Juan     Orcas     E                           5.1          -1k5    5 128. 760        $326    assossed       h                                                                992%            Iq  San   Juan    Co   Assessor
              San   Juan     Or-cAs    M                          0-166         2120      S33,000         S150    assessed       h                                                                                0   San   Juan    Co   fissessor
              San Juan       Lopez     N                          0.65          170       S52,050         5306    assessed       h                                                                156320          4   San   Juan    Co   Rssessor
              San Juan       Lopez     E                          3.15          300     5112.500          S375    assessed       1                                                                506110          1   San   Juan    Co   Rssessor
              San   Juan     Shaw M                               S.??          W-      S166.500          $138    assessed       m                                                                                0   San   Juan    Co   fissessor
              San Juan       Sk-aw S                              2.18          279     5113.000          5-W&    &:;sessed      I       ti xiel ands                                               4310          4   San   Juan    Co   fissessor
              San Juan       Orcas                                 1. q         355       S62,130         Sl?5    assessed       "                                                                                0   San   Juan    Co   fissessor
              San   Juan     Orcas E                               5.1          270       $9?.200         S360    assessed       h                                                                                0   San   Juan    Co   fissessor
              San   Juan     "osquito Pass                        5.00          367     $215,000          S586    market         1                                                                                0   Island CrA"tor Services
              San   Juan     Karwka Bay                           1.25          160     SIIO.000          5688    market                                                                                          0   Island Computer Services
              San Juan       Orcas, Diamond Pt. 264.00                        15W     $2,000,000          S-q-q4  market         hm                                                                               0   Dockside Property
              San   Juan     Vacht Haven                          0-70          1.10      $89.500         $639    market         n       pur,boach                                                                2   Island     Computer      Services
              San   Juan     Pew- Pt-                             1.19          184     $112.500          $611    market                 pw,utr                                                                   2   Island     Computer      Services
              San   Juan     Gr-i-ff in Bay                       3-?8          265     S224.000          SO-45   "arket                                                                                          0   Island     Computer      Services
              San   Juan     Sunset Pt.                           0.50          125       595.000         S760    market                                                                                          0   Island     Computer      Services
              San   Juan     Son Juan                             0.50          130       S61,500         Sl%     market                                                                                          0   Island     Computer      Services
              San Juan       San Juan                             2.30          240       S135.000        $396    market                 pur,wtr                                                                  2   Island     Computer      Services
              San   Juan     Moil Day                             0-711         100       S62,500         S62S    market         n       pGAr.&&tr.-.spt                                                          3   Island     Computer      Services
              San   Juan     Cape San       Juan                  0-50          so        $39.950         S199    market                 pr-c.pur,utr                                                             3   Island     Computer      Services
              San   Juan     Cape San       Juan                  0.50          ion       S69.500         SE95    market                 pr-c,pwr,spt                                                             3   Island     Computer      Services
              San   Juan     San Juan                             1.42          125     $120,000          S619    market         I       pmr,batr                                                                 2   Island     Computer      Services
              Safi  juar.          @-Lal
                                                                e0_95           SM      sns.wo         !51@325                           nouaq- . ma-ter. Dark. aravel beach                                      S   Oockzide Property
              San   Juan     Dozidman Bay                         5.10        1005      S 15?, SOO        5157    n-w-kat                                                                                         0   Island     Computer      Services
              San   Juan     Fr-iday Island                       0.70          1010      -q6q,5OO        S695    market                                                                                          0   Island     Computer      Services
              San   Juan     Garr-- son Baoj                    56.00           200     S225,000       S 1. 121-; market                 ti mber,pw                                                               2   Island     Computer      Services
              San   Juan     University Hei0ts:                 16.60           250     S139.900          S5&O    n-w-ket                                                                                         O,Island       Cottputar     Services
              San   Juan     Cattle Point                         1.00          165       S65.000         $391    market                 pmr,&4tr                                                                 2   1 sl and   Computor      Services
              San Juan       VacJvt Haven                         7-60        11?8        seq.5w             S?2  market         n       P"r                                                                      I   I sl and   Computer      Servi ces;
              San Juan       SJ, Friday Harbor                    3.00          q5O     S185,000          5111    market         In      boach/cove                                                               2   Dockside Property
              San   Juan     San Juan                             2-16.4        210       "5.000          5452    market                 pur,utr                                                                  2   Island     Computer      Services
              San Juan       San Juan                             5.46          3110    5110.000          S-324   market                 pur                                                                      I   I sl and   Computer      Services
              San   Ju       Roche Harbor                         1.2s          160     5209,000       S1,300     market         I       tkuorago                                                                 I   Island     Computer      Services
              San   Juan     University Heights                   0.50          100       S58,500         S585    market                 P64r,64tr,                                                               2   Island     Computer      Services
              San Juan       Stuart 1.                            9.92          Aw        S75,000         SIS6    market                                                                                          0   Island     Computer      Services
              San   Juan     Shaa4                                2.00          225     5100.000          5411    market         I       pwr                                                                      I   Isl and    Computer      Service--
              San   Juan     Mitir-hell Bay                       5.15          625     $290.000          SIGA    market                                                                                          0   Island     Computer      Services
              San   Juan     Uw-v--ott Bay                        0.50          100       S72.500         S?25    market         I       pbar , w tr                                                              2   Island     Computer      Services
              San   Juan     Roche Harbor                         2.00          175     S198.000       S1,131     market         I       Pur                                                                      1   Island     Computer      Services
              San   Juan     Eaigle Cove                          1.00          100       S57,500         55?5    nar-ket                pur.ph                                                                   2   Island     Computer      Services
              San   Juan     Cat-tl 9 Pt.                         0.88          120       S65.000         5512    market                 pur.wtr                                                                  2   1 al and   Computer      Set-vices
              San   Juan     11inwal. Heights                     0.50          I-qO      S33.000         S:236   market                 pmr,utr,                                                                 2   Island     Computer      Set-vices
              San   Juan     Daw-idson Head                       0.50          100       S75.000         S?50    market                 utr                                                                      I   Island     Computer      Services
              San   Juan     San Juan                             1.00          1-30      $85,000         S654    market         n                                                                                0   Island     Computer      Services
              San   Juan     Moil Bay                             0.62          200     S115.000       S1.150     market         n       pmr,utr                                                                  2   Island     Computer      Services
              San   Juan     Sit ww-t 1.                          1.00          112       S;28.500        S254    market         In                                                                               0   Island     Computer      Services
              San   Juan     Griffin Bay                          2-25          I-IS    S12-4.500         S859    market         n       pjwr                                                                     I   Island     Computer      Services
              San   Juan     Opadnan Bay                          5.30          780     S158.500          S203    market                 P14r                                                                     I   Island     Computer      Services
              San   Juan     Capo San Juan                        0.70          100       S79,000         5790    market                 dock,peal                                                                2   Island     Computer      Services





                                               A.1 Puget Sound Waterfront Property Survey
                                                                       FRONT                    PRICE PPRICE
                 COUNTY                SITE                ACRES      FEET          PRICE       FRONT FTYPE             BFW,    FEATURES                                       BUILDINGS SCORE                       SOURCE

              San Juan      Orcas                            0.50        100        S85.000        S850    narket               pmr.batr                                                             2  Island    Computer      Services
              San Juan      Eagle Cove                       0.80        150        5n, 500        SS3O    market       h       p&.er,utr                                                            2  Island    Computer      S*rvicQs
              San Juan      San Juan                         1.61        375      S210,000         S!%O    market       1                                                                            0  Island    Computer      Services
              San Juan      Rocky Bay                        3.11        240      S149,500         S623    market               Pwr                                                                  I  Island    Computer      Services
              San Juan      Griffin f%ay                     0.75        100        S09.500        S095    n-3rk-;-t            pmr.cova                                                             2  Island    Conputeq-     Services
              San Juan      Davidson Head                    0-50        100        575.000        S750    narka-t              pwr,setr                                                             2  Island    Computer      Services
              San Juan      Kwwsah Hei ghts                  1.00        200        S61.500        S3AS    narkrot              pr-c.pur.mtr,spt                                                     4  Island    Computer      Services
              San Juan      Mescott Bay                      0-50        wo         5;?6.500       S765    market               pu-.mtr.:spt                                                         3  Island    Computer      Services
              :San Juan     Reid Harbor                      5.12        300        S65,000        5217    "arkot       It      dock                                                                 I  Island    Computer      Services
              San Juan      "scptt Bag                       0.70        I'm        S75.000        5536    market       1                                                                            0  Island    Computer      Services
              San Juan      San Juan                        15.20        3630     S135,000         $355    market               pwr                                                                  I  Island    Computer      Services
              San Juan      Universitej keights              0.50        IJOO     S 120. 000    S1.200     market       1                                                                            0  Island    Computer      Services
              San Juan      San Juan 1                       5.00        700        S75.000        $107    narket                                                                                    0  Island    Computer      Services
              San Juan      San Juan                        ?19.25       360      S519.000      SI.525     market       m       pur                                                                  I  Island    Compo tQw     Services
              San Juawt     San Juan                         0.81        185      S18S.000      S1,000     market       n       P-C                                                                  I  Island    Computer      Services
              San Juan      San Juan                         3.97        6M       S180.000         S300    market       It      pmr.wtr.spt.                                                         3  Island    Computer      Services
              'San Juan     S. End                           1.00        200        5;76.500       S383    market               pur,setr                                                             2  Island    Computer      Services
              San Juan      Moscott gag                      5-00        755      S187,508         S219    mairket      I       bq;,ach                                                              I  Island    Computew      Services
              San Juan      Griffin     Bay                  1.50        120        S99,506        S829    market       "       pwr                                                                  I  Island    Computer      Services
              San Juan      Eagle Pt.                        6.17        375      S171,500         SIGS    market       h       pur 0 satr                                                           2  Island    Computer      Services
              I                                                                                                                 utr.pur                                                              2  Island    Coisputer     Services
              ...van Juan   Li nestone                       5.00        310      S217,000         $700    market
              Skagi t       E 6uamez Ch                         9.6      7100       S31,300          S-95  assessed     h       road                                                 312M            4  Skagit    Co   Assessor
              Skagit        Burroses Bag                          5     Z"          535,500          $18   assessed     h                                                                            0  Skagi t   Cc   Assessor
              Skagit        Padilla Bay                          26     16W         590,000          S56   assessed     h       read                                                                 I  Skagi t   Cc   Assessor
              S                                                                                                                                                                                      I  Skagit    Cc   fissossor
              Skagi t       Padilla Paq                     10.68       13aw        S181900          S;15  assossed     I       road
     0%       Skagit        Padilla Bag                         1.5      200          S11?00           $13 assessed     I       seater                                                  9000         1  Skagit    Cc   ftsessor
      4       Skagit        Ship Harbor                      7-09        SOO        V48.9w           $61   assessed     m       road.mator.s@eptic                                   75900           1  Skagit    Cc   Assessor
              Skagit        Padilla Bay                     'q?-?5      1600        536. 900         $23   assessed     h       &&ater.septic,road                                                   3  Skagit    Cc   Assessor
              4;kagi t      Bellingham Say                   3.?q        200        5;85.860       S429    assessed     I       seater.3eptic,road                                                   3  Skagit    Cc   Assessor
              Skagi t       Rosario St                       55-1       I-qw        saa. 930         Sfil  assessed     h                                                                            0  Skagit    Cc   Assessor
              Skagit        Sinclair 1.                     26-75       IGM       S11-9,390          $75   assessed     h                                                                            0  Skagit    Cc   Assessor
              Skagit        Sol I i "ham Ch                 19- 11       3;20       S38.200        S119    assessed     h       road                                                                 I  Skagi t   Cc   Assessor
              Skagi t       Padilla Bay                      35.8       19M       S2,49,270        S131    asses!wd     h       road                                                                 1  Skagi t   Co   Assessor
              Skagit        Padilla Bay                     314.?e      low         52G.Ow           S20   4354ssod     1                                                                            0  Skagit    Cc   Assessor
              Skagit        Rosari 0 St.                          .1     100        S45.800        S158    assessed     h       easnent,septi c, seater, road                        SIM             -q Skagit    Cc   Assessor
              Skagit        Rosario St                       0.38        IL 10      5:6(j. Sao     S550    assessed     I       road,saptic.seater                                   372M            4  Skagit    Cc   Assessor
              Skagit        Bellingham      Ch              2%.13           60      S". 900     S1,665     assessed     I       mater,road                                                           2  Skagit    Cc   Assessor
              Skagit        Sinclair 1.                     36.34       1300                       S 131   assessed     h       road                                                                 I  Skagit    Cc   Assessor
              Skagit        Guenes Ch                       114.52       410      S217.000         S-195   assessed     1                                                                            0  Skagit    Co   ft"zsor
              Skagit        Padilla Say                      5-15       1IT50       SZi.210          $I?   assessed     h                                                                            0  Skagit    Cc   Assessor
              Sk-agi t      Ro--,W-i o St.                       so     ifim        ses.850          S54   435055fod    1                                                                            d  Skagit    Cc   Assessor
              Skagi t,      Roswio St.                       0-65           ?9      S13,100        SS49    assessod     h       road,"&tQr,svptic.                                   29600           4  Ska%t     Cc   Assessor
              *agi t        Rosario St.                      0.33           163     S34.650        S550    as-sessed    I       eas"ent,septic,stater                                41100           4  Skagit    Cc   Fissessor
              Skagit        Bel I i ngham   Elay             2.1s        Ijw        S57,290        S573    assessed     1       water.septic,road                                                    3  Skagit    Cc   fissossor
              Skagi t.      Sinclair 1.                      30-8       1500        S77,WO           S51   assessed     h                                                                            0  Skagit    Cc   Assessor
              Skagit        Bellingham Smay                  2.72        L*22       5-6-1.990      S533    assessed     m       road                                                 930M            4  Skagi t   Cc   Assessor
              Skagit        Rosario St                       0.39        2-50     S300.000      S1,200     assessed     I       soptic,"ater,road                                                    3  Skagi t   Cc   Assessor
              Skagit        Bellingham      Ch              14.26       17W         -C-29. wo        S17   assessed             road                                                                 I  Skagit    Cc   Assessor
              Skagit        Sinclair 1.                      9.02        GIGO       S36,930          SSG   assessed     h       road,mater,septic                                                    3  Skagit    Cc   Assessor
              Skagit        E Guamws Ch                      10.5        4010       531.500          S?19  assessed     h       septic.6&ater                                                        2  Ska9z t   Cc   Assessor
              Skagit        Gue"es Ch                           0.6      L30      $122,100         "39     assessed     1       septi c,"atQr-, road                                 67700           4  Skagx t   Cc   Assessor
              Skagit        Si ncl ai r                           6      770        ---.-5,700       S98   assessed     h       road.water.septic                                    90800           1  Skagit    Cc   Assessor
              Skagit        Bellingham Ch                    18-6        'rA-       S-t6,WO        S103    assessed     h       road                                                                 I  Skagi t   Cc   Assessor
              Skagit        Sinclair 1.                     29.05       3800      S139,400           S16   &ssassod     h       road                                                                 I  Skagit    Cc   Assessor
              Skagit        Bel I i nghan Cb                26.41       11100     S106.1100          S?G   assessed     "       road                                                                 I  Skagit    Cc   Assessor
              Skagit        Padilla Say                          11      5100       51?,GW           S35   assessed     1                                                                            0  Skagx t   Cc   Assossor





                                                A.1 Puget Sound Waterfront Property Survey

                                                                         FRONT                   PRI CE PPRI CE
                COUNTV                 SIM                 ACRES        FEET          PRICE FRONT FrVPE                   ORNK FERWRES                                            BUILDINGS SCORE                        SOURCE

             Skagit         Burrows Bay                          206      1900   S2, 110,000 5 1, III       assessed      1       road,watar,saptic                                                      3 Skagit     Co  Rssossor
             Skagit         Bollingham Bay                     1.35         66        S20,860        $316   assessed      h       road                                                                   I Skagit     Co  Assessor
             Skagit         Si ncl ai r I .                  1.4-19       I'm         S35, -100       :;25  a3s"sed       m                                                                              0 Skagit     Co  Assessor
             Skagit         Secret Harbor                    10.75        11100       S26,800         S19   assessed      h                                                                              0 Skagit     Co  Assezsor
             Skagit         Bellingba" Bay                        3-1     -7,030      S37.-qOO        S16   assessed      I                                                                              0 Skagit     Co  Assessor
             Skagit         Padilla Bay                      13.60        1-M         S20,300         SIS   assessed      I                                                                              0 Skagit     Co  Assessor
             Skagx t        Guettas Ch                       1?.15         7'913    5514,500         SGSI   assessed      I       road                                                                   I Skagit     Co  Assessor
             Skagit         Bol 1 i ngha" 8@ay                 3-53        187        "2,090         S139   assessed      h       water,septic,road                                     2 1700           I Skagit     Co  Rsserssor
             Skagit         Burrows Bag                        3.92        1.15       S99,000        SIM    assessed      h                                                                              0 Skagit     Co  Assessor
             Skagit         Ship Harbor                          ?.S       1100       $15,000         S38   assessed      h       mater,septic,road                                                      3 Skagi t    Co  Assessor
             Skagit         Burrows My                         53.6       1400        $06.510         S62   assessed      I                                                                              0 Skagit     Co  Assessor
             Skagit         Ship Harbor                        8-86        SW         Sl?,700         $35   assessed      h       road                                                                   I Skagit     Co  Assessor
             Skagit         M. Fidalgo                         1.68        113?     S210.000      $1,066    "arkot        I                                                                              0 Caldwell Banker
             Skagit         Gus                               1-81        500        $71,000        51-42  narket        hm                                                                             0 Caldwell Banker
             Skagit         Coronet My                         0.90        I."        S60.000        $-II?  markot                                                                                       0 Skagit Co. "LS
             Skagit         Fidalgo                            41.00       Z25        S99,000        S-"O   narket                                                                                       0 Skagit Co. 11LS
             Skagi t        E. Fidalgo                         0.22         96        S65.000        56??   narkot        he                                                                             0 Caldwell Baonkor
             Skagit         Allen 1.                         20-00         660      5220,000         S-333  n-dw-ket      h"                                                                             0 Cal duel I Banker
             Skagit         Allen Island                     10-50         ?0O      $135,000         $193   market                                                                                       0 Skagit Co. "LS
             Skagit         M- Fidalgo                         0-60        1.33       S74,500        S%0    narket        he                                                                             0 Caldwell Banker
             Skagit         M.Fidalgo                          1.23        135      S134,500         S72?   narkot        M                                                                              0 Col dmel I Banker
             Skagit         Sinclair                           0.2-1        7S        S10,000        S133   market        hm                                                                             0 Caldwell Banker
             Skagit         Quiet Cove                         0.50        100        S7?,OOO        SM     "arkot        I       road,mater,tidolarods                                                  3 Fidalgo Realty
             Skagit         S. Gue"es                          2.30        100        S819,000       St"O   "ark-pt       h                                                                              0 Caldwell Banker
             Skagit         HE Gueries                         1.00        Z"       S110,000         S'500  market        M                                                                              0 Cal dual I Banker
     CY%     Skagit         M. Fidalgo                         0.55        ISO        S-58,000       S38?   market        H                                                                              0 Caldwell Banker
     Go      Skagit         Pear Tres Cowe,                    8-00        ?00        S85,000        S 121  nark.;.t                                                                                     0 Skagit Co- M-S
             Skagit         Fidalgo                          20-00        1100      S200.000         $182   narket                                                                                       0 Skagit Co. M-S
             Skagit         M. Fi dal go                       O-?8        184      $111.500         $622   narket        hm                                                                             0 Caldwell Banker
             Skagit         060104 Beach                       0-10        100        52?.066        S170   "arki",
                                                                                                                                       .d                                                                2 Caldwell Banker
             Skagi t        Sinclair                         4q.00        MO        =4, 500          S 160  narket        n                                                                              0 Caldwell Banker
             Skagit         Dec. Pass                          0.69        ISO        S75,000        S5300  market        he      tidelands                                                              I Coldmell 84nker
             Skagi t        Si ni I k Bamj                     0.21        100        S65,000        $650   narkot        h       mater                                                                  I Southside, Realty
             Skagit         M. Fidalgo                         2-09        100        S78,500        S785   market        hm                                                                             0 Coldmall Son or
             Skagi t        Fi d-A- go                         8.15        ?b-0     51?7,000         S236   mark,&-t                                                                                     0 Skagit Co. MLS
             Skagit         Sinclair E.                      82.00        13:36     5200,000         5150   market        h"                                                                             0 Coldmell Banker
             Skagit         Cypress                            5.00        330        549,500        $150   mark-i-t      h                                                                              0 Caldwell Banker
             Skagit         GLMMOS I.                          -4.00       -100     S136,500         S-311  market        I       beach                                                                  2 Fidalgo Realty
             Skagit         Skyline                            0.25         :30       S80,000     S1,000    flarket       I       extensive Prep. --hwelopnont                                           2 Skyline Realty
             Skagm t        Deception       Pass               0-30        130        575,000        S1,7?  ro-arket      h       Mater                                                                  I Southside Realty
             Skagit         Guenas                           114-00       5-- IS  $3,000,000         S561   r"rket        ho      timber                                                                 1 Caldwell Banker
             Skagit         Burroughs       Ray                8.00        375-     "25.000          S-?87  market        h                                                                              0 Southside Realty
             Skagit         Fidalgo                          86.00        22@39     S590,000         S-265  market                                                                                       0 Skagit Co. MLS
             Skagit         Fidalgo                            0.30         -10       S60,000 S1.500        narket                                                                                       0 Skagit Co. ILS
             Skagit         Sinclair                           0.22         75        510,000        -5 133 narkot        h"                                                                             0 Coldmell Banker











                                          RESPONSE TO COMMENTS



            1.     GENERAL

            Public comments on the appendix titled "The Economics of Salmon Farming" are grouped
            for response under appropriate headings of that document. Before turning to specific
            discussion, though, a comment is in order concerning the scope of the economic study
            that was defined by responsible Washington State officials and represented to the public
            in the lead paragraph of the executive summary.

            "The report examines.three economic issues arising from recent growth in Washington's
            salmon farming industry. The first issue is potential gains in output, income, and
            employment to the economies of the state and to selected counties. 'ne second is impact
            on revenues and expenditures of state government, and the third is implications for real
            estate values of various (externally provided) assumptions concerning visual impacts of
            salmon farming facilities."

            The report examined neither the universe of policy issues elsewhere addressed in the EIS,
            nor the subset of those issues amenable to economic analysis or comment. Hence, the
            reader is referred other sections of the EIS for discussion of                the effects of
            environmental wasteloadings and fish disease; consequences for sport and commercial
            fishing, marine recreation; and economic effects of public perception concerning
            environmental quality. An article by James A Crutchfield (Appendix L) provides an
            overview of the Washington salmon farming issue from an economic as well as policy
            perspective.

            2.     INPUT-OUTPUT ANALYSIS (Sections 11, 111,

            Regional input-output analysis was conducted according to theoretical principles
            articulated by Harry Richardson (Input- Output Analysis and Regional Economics,1972)
            and empirically implemented in the US Forest Service Implant System. Both these works
            are cited in the appendix and are generally familiar to practitioners of regional economics
            in the Pacific Northwest. Results were expressed in terms of gross revenues (in total and
            by sector), household incomes, and employment. Independent estimates were provided
            for Washington State and each examined county.

            One comment alluded to the need for independent replication of these results.
            Crutchfield provides a partial basis for comparison. Crutchfield reported 7 - 10 direct
            employees for a 500,000-pound facility,    or 14 - 20 direct employees per million pounds
            of production. 'ne representative (one     million pounds sold at $5/lb) fish farm used to
            calculated input-output results for this appendix assumed 20 fish farming employees.
            Additionally, the representative facility assumed 8 employees in an associated hatchery,
            and 5 administrative employees for the managing firm. It is unknown whether Crutchfield
            included either of these components in his estimate. Crutchfield also estimated that
            between 140 and 200 full-time jobs would directly or indirectly result from a 5 million
            pound industry selling its product at $4/lb. The reported low range estimate of 257 jobs
            best corresponds to Crutchfield's conclusions, by eliminating $1/lb of net profit from the
            regional income account.









               Responses to specific comments on input-output analysis are as follows.

               1.    Use of constant ratios (expenditures per dollar of revenue, etc) is standard
                     procedure in the input-output literature, as well as being reasonable in the current
                     situation where impacts are small relative to the magnitude of effected state and
                     county economies.

               2.    Independent county models do exist, as di-scussed above, those being derived
                     from the implant system.

               3.    State impacts were separately calculated from an independen      t state model, not
                     aggregated from county results.

               4.    The local economic impacts of import substitution (replacing imports with locally
                     produced fish) are essentially the same as for export of the same volume and
                     value of product.

               5.    Whether hatchery location, and thus employment, occurs in the same county as
                     the fish farm will vary in the individual case, with effects on county but not state
                     results. While collocation was assumed in this assessment of overall industry
                     development, case specific information should be introduced in the evaluation of
                     specific sites. The same comment pertains to case specific variations from the
                     representative facility in terms of production volume and/or facility mix (hatchery,
                     farm, administrative unit)

               3.    FISCAL IMPACTS (Section V)

               The analysis of fiscal impacts relied on the results of input-output analysis and published
               data on five categories of state revenue and three categories of state expenditure. For
               each category, fiscal factors were calculated that represented the relationship between
               state revenues and costs on the one hand, and input-output results (output, income or
               employment) on the other. Multiplication of fiscal factors by these input-output results
               produced the reported state fiscal results. Local government fiscal impacts, as well as
               site specific salmon farming costs, were too diverse and variable to permit similar
               estimation.

               The conclusion was ambiguous. That is, depending on the fiscal factors used, and the
               input-output results to which they were applied, the Washington State government came
               out ahead or behind on its own fiscal account.

               Concerning lack of emphasis on the fiscal analysis that was done, the executive summary
               reflects the ambiguous conclusion on cost account as follows:

                  "These economic impact results provided the basis for estimates of state fiscal
                  (revenue and expenditure) consequences. Depending on the economic impact
                  values used and the method of relating economic impact to fiscal consequences,
                  salmon farming would [annually] contribute $36 - $2.26 million to state revenues
                  and $1.08 - $1.48 to state expenditures."









            A reading of this paragraph should adequately alert the reader to the reports conclusion
            that, depending on method of calculation, the state government account comes out either
            ahead or behind.

            4.     PROPERTY VALUE (Section VI)

            DATA: Primary data on waterfront property was collected from county assessors, real
            estate offices, and multiple listing services. There were 335 listings in total and at least
            41 from each county. Descriptive summary tables indicated the range of variation in
            front footage value between counties and property classifications (high/low bank, degree
            of development). That data is useful only for its intended purpose and should not be
            regarded as a general purpose data base for other purposes.

            One commentor found Skagit County values different from her experience. I would need
            to examine both sets of data to evaluate this difference.

            STATISTICS: A multiple regression equation was estimated in order to isolate the
            effects of known variables (county, bank type, degree of development) from residual
            variance. The first step in determining impacts on property values was to assign all
            residual variance to aesthetic quality. This procedure maximized salmon farming impacts,
            relative to any apportionment of residual variance between aesthetic and other value
            determining factors.

            This simple statistical procedure for producing high range results was adopted over the
            more sophisticated hedonic pricing approach. In other environmental resource evaluation
            applications (such as sport fishery evaluation) hedonic        pricing is used to directly
            determine resource value impacts attributable to resource characteristics. An example
            would be the use of angler success rates as a partial determinate of total angler day
            values. Available financial resources and data fell far short of that required by the
            hedonic pricing approach.

            INTERPRETATION: The only direct information on the actual effect of salmon farms
            on property values was a cited appraisers report (Appendix K) which concluded that
            "floating net pens have no effect on upland property values in the areas studied [Peal
            Passage, Mason County, and Rich Passage Kitsap County]." Assumed losses were
            nevertheless included, as discussed below.

            5.     BENEFIT-COST ANALYSIS (Section VII)

            Benefit-cost analysis was performed in terms of statewide annual gains and losses. These
            were derived from the results of the foregoing estimation procedure by application of
            factors reported in Table 7.2. One of these adjustments factors was the 8 % real interest
            rate (financial rate less inflation) used to convert the asset value of waterfront property
            to annual terms.









               Salmon farming impacts on these asset values were included as costs, in spite of the
               above assertion of no discernable effect. This was accomplished by introducing into the
               benefit-cost analysis two additional factors reflecting the assumption that a defined quality
               index would decline from 10 to 20 percent over 5 to 10 miles of shoreline per site. This
               procedure was adopted to allow readers prepared. to assume adverse impact to readily
               examine the economic implications of their assumptions. Considerable emphasis was given
               to the fact that such reader provided assumptions were necessary to give meaning to this
               procedure.

               One commentor suggested that a better alternative to this quantitative approach would
               have been to rely on qualitative judgment of all identified impacts. The main body of the
               EIS, to which this appendix is supplementary, should provide the basis for such
               judgement.








































                                  APPENDIX F


                       PERMITS THAT MAY BE REQUIRED FOR
                             AQUACULTURE PROJECTS









             Permits which may be required for an aquaculture project.

             Federal Permits                                  Issuing AggnQ@
             Section 10 Permit                                Army Corps of Engineers

             Navigational Markings                            U.S. Coast Guard

             Marine Mammal Protection Act                     National Marine Fisheries Service
               Exemption


             State Permits
             Aquatic Land Lease                               Department of Natural Resources

             Hydraulic Project Approval                       Department of Fisheries or Wildlife

             Statement of Consistency with                    Department of Ecology
                                                                                      C7.1
               Coastal Zone Management Act

             Water Quality Certification                      Department of Ecology

             Water Quality Standards Modification             Department of Ecology

             National Pollutant Discharge                     Department of Ecology
               Elimination (NPDES) Permit

             Aquacultural Identification of                   Department of Agriculture
               Private Sector Products

             Registration of Aquatic Farmers                  Department of Fisheries

             Fish Disease Control                             Department of Fisheries

             Shellfish Certification                          Department of Health

             Finfish Import/Transfer                          Department of Fisheries


             Local Pgrmits
             Shoreline Substantial Development                County or City









































                                  APPENDIX G


                        VIRAL HEMORRHAGIC SEPTICEMIA









            Viral hemorrhagic septicemia (VHS), also known in Europe as Egtved disease (named
            after a town in Denmark where the disease was first recognized), is an acute to chronic
            disease, principally of rainbow trout, caused by a virus of the same name; i.e., VHSV.
            There is much concern in Washington State and North America because of the isolation
            of this virus here in 1988. Some people speculated that VHSV was introduced into
            Washington as a result of aquaculture and sea-water net-pen activity with Atlantic
            salmon. The scientific community has found no evidence to support this speculation.
            This paper presents information about VHSV, how and where it was found in North
            America and some suggestions as to the mode of introduction and potential impact.

            BACKGROUND AND BIOLOGY OF VHSV

            VHS is caused by a rhabdovirus. It occurs in continental Europe in the countries with
            intensive salmonid culture to include Denmark, France, Germany, and Italy.
            Observations of VHS have also been made in Poland, Czechoslovakia and is suspected
            to be in Russia (Wolf 1988). The disease was observed in a trout farm in Norway in
            the mid-1960s where rainbow trout had been imported from Denmark. The disease was
            eradicated from the farm and has not reappeared in Norway (Hastein 1968 and personal
            communication). VHS has never has observed in Finland or Great Britain.

            The virus is very similar in its characteristics to a virus which does occur in North
            America -infectious hematopoietic necrosis virus (IHNV). They both cause acute to
            chronic mortality in rainbow trout with fry being the most seriously affected and having
            the highest mortality. Species shown to be naturally infected by VHSV include rainbow
            trout, brook trout, whitefish, grayling, and pike (Wolf, 1988; Rasmussen, 1965). While
            researchers have been able to induce VHS in Atlantic salmon by an unnatural challenge
            (interperitoneal injections) they have been unable to induce disease by a water-borne
            challenge in the laboratory (Rasmussen 1965; deKinkelin and Castric 1982). In one
            challenge, deKinkelin was able to demonstrate in the laboratory the presence of VHSV
            in Atlantic salmon fry after exposure; however, the fish did not become diseased nor
            were the Atlantics able to subsequently shed the virus and infect sentinel rainbow trout
            in the same tank (deKinkelin and Castric 1982). VHSV has never reported to have
            been found in hatchery or wild Atlantic salmon stocks even though extensive surveys and
            certifications have been performed.      Coho and chinook salmon have both been
            demonstrated to be resistant to VHSV infection by both a water-borne challenge and
            interperitoneal injections (deKinkelin et al. 1974; Ord 1976).

            The manner in which viruses are isolated and broodstock are tested is also of interest.
            For salmon and trout broodstocks in Washington or stocks outside Washington wishing
            to enter the state, rigorous testing procedures are required. Samples of gonadal fluids,
            as well as a kidney and spleen are taken from a statistically significant portion of the
            population. The samples are assayed in a living tissue culture system using standard
            methods (Amos 1985). Personnel and laboratories conducting these certifications are
            inspected and approved by Washington Department of Fisheries personnel. Our staff and
            the Olympia Fish Health Center (USFWS) were using these standard techniques when
            they isolated VHSV in Washington state.


                                                       1









               The known method by which VHSV is transmitted from fish to fish is via the water or
               by ingesting infected material. This method of pathogen transmission is known as
               horizontal transmission. This process also takes place with IHNV. Another method by
               which virus may be transmitted is via the eggs or sex products. During spawning of
               susceptible species (rainbow trout) VHSV and IH14V have been found to be present with
               the sex products. When pathogens are transmitted from the parents to the offspring via
               the eggs or sperm, this is referred to as vertical transmission. True vertical transmission
               implies transmission of thepathogen within the eggs. This has never been demonstrated
               to occur. We have observed a phenomenon with IHNV which is more appropriately
               described as "egg-associated" virus transmission in which either through surface
               contamination or possibly within the egg virus subsequently causes infection. These
               observations were made on eggs incubated in well water so the assumption was made
               that the known infected parents were the source, of the virus which infected the eggs.
               The distinction between transmission on the egg or within the egg, is important as the
               surface of the egg can be exposed to disinfectant while the inside of the egg cannot be
               disinfected. Even though egg-associated transmission of IHNV has been observed, it is
               not a common event and has been observed only in sockeye salmon and rainbow trout.
               VHSV has never been observed as being egg-transmitted.

               ISOIATION IN WASHINGTON STATE

               Routine broodstock screening for virus in chinook salmon at Glenwood Springs (Orcas
               Island) and coho salmon at the Makah National Fish Hatchery (Neah Bay) yielded
               replicating agents which were identified to be VH:SV. This was a remarkable find in that
               VHSV had never been found previously in North America. Furthermore, contrary to the
               exisfing literature, VHSV had never been described in coho or chinook. As was
               previously stated, researchers in Europe were unable to induce infections in chinook or
               cobo.

               As a result of those isolations, an action plan was put into effect by the Washington
               Department of Fisheries. All fish and eggs at the affected hatcheries were destroyed and
               disposed of in a sanitary manner. The facilities were completely disinfected. Our intent
               was to eradicate VHSV. This was consistent with state and federal regulations and
               policies. Subsequent surveys and live box testing of the watersheds failed to find virus.
               Testing of fish in adjacent watersheds and also of feral fishes in the marine area failed
               to produce VHS virus. Because of the concern that commercial net pens might have
               been the source of the virus they were examined also. Consistent with ongoing testing
               and viral certification of commercial broodstocks in Washington, they were all negative
               for virus. In addition to testing, a thorough reiriew was made of introductions of fish
               from Europe. We were unable to find documentation of introduction of fish from VHSV
               endemic area into Washington. Since 1985 when commercial imports of fish came under
               the Washington Department of Fisheries' jurisdiction, very few imports of eggs have come
               to the state. These eggs have come from Norway and Finland, where VHSV is not
               known to exist. Furthermore, the broodstock which provided the eggs were carefully
               scrutinized. Records of the Washington Department of Fisheries and those maintained
               by customs inspectors and USFWS inspectors are in agreement.


                                                            2









           Virus inspections of 100% of the adult salmon returning to Glenwood Springs and the
           Makah NFH as well as extensive screening of public and private salmon stocks failed to
           isolate VHSV in 1989 broodstock with one exception to date (1/5/90). Coho salmon
           adults returning to spawn to the Lummi Island Sea Ponds (saltwater rearing ponds
           operated by the Lummi Tribe) were shown to be infected with VHSV. Only one pool
           of samples was demonstrated to contain virus which likely represents only one but not
           more than five individuals. As in 1988, this isolation was made from adults immediately
           leaving the straits which again suggests that infections took place in the Pacific Ocean/
           Puget Sound. Though WDF efforts to eradicate this virus from the Glenwood and
           Makah facilities appears to have been successful, the source or opportunity for infection
           seems to persist.

           Yet to be resolved is the source or the reservoir for infection of VHSV in Washington
           state. All the hatcheries are in proximity to the Straits of Juan de Fuca and all
           hatcheries are very close to sea water. The data suggests that the adult salmon were
           infected as they entered the hatcheries and were, therefore, infected in saltwater.
           Potential sources of infection could be: (1) unknown carrier fish in the ocean, which are
           circurnpolar in nature which came in contact with or were ingested by the salmon; (2)
           introduction of carrier fish or animals in bilge water discharged off the Washington
           Coast; (3) a condition which has existed in our salmon stocks for many years, but below
           detection level; and (4) the legal or illegal introduction of fish or fish products into
           Washington which, in turn, established a reservoir in some carrier animal in saltwater.

           Many questions remain to be answered such as: How is our VHSV similar/different to
           European strains? Does our isolate cause disease and if so, in what species? What is
           the reservoir for the virus?    Research to be conducted in 1990 will address these
           questions.

           SUMMARY

               ï¿½  VHSV was reported for the first time in North America in 1989 in coho and
                  chinook salmon adults in Washington state in 1988 broodstock.

               ï¿½  VHSV isolated in adult coho salmon in 1989 broodstock returning to Lummi Bay
                  Ponds, a new site.

               ï¿½  No disease or mortality was associated with the VHSV isolations in Washington
                  state.

               ï¿½  Extensive surveys failed to show the source of the infection.

               ï¿½  Infection of the adult salmon appears to have occurred in saltwater.

               ï¿½  No VHSV was found in fish from commercial net-pens.

               ï¿½  VHSV has never been reported to occur in Atlantic salmon.


                                                       3








                     VHSV has never been demonstrated to be transmitted via the eggs.
                     No evidence was found which indicated that import of eggs by public, private, or
                     Indian tribal entities was responsible for introducing VHSV.





































                                                       4











                                                 REFERENCES


            Amos, K.H., editor. 1985. Procedures for the detection and identification of certain fish
                pathogens. 3rd ed. Fish Health Section, American Fisheries Society. Corvallis,
                Oregon.

            deKinkelin, P. and I Castric. 1982. An experimental study of the susceptibility of
                Atlantic salmon fry, Salmo salar L, to viral haemorrhagic septicaemia. J. Fish Dis.
                5:57-65.

            deKinkelin, P., M. Le Berre, A. Meurillon, and M. Calmels. 1974. Septicemie
                hemorragique virale:      demonstration de 1'etat refractaire du saumon coho
                (Oncorhynchus kisutch) et de la truite fario (salmo trutta). Bull. Fr. Piscic. 253:166-
                176.

            Hastein, T., G. Holt, and J. Krogsrud. 1968. Hemorrhagisk virusseptikemi (Egtvedsyke)
                hos regnbueorret i Norge. Nord. Vet. Med. 20:708-711.

            Ord, W. 1975. Resistance of chinook salmon (Oncorhynchus tschawytscha) fingerlings
                experimentally infected with viral hemorrhagic septicemia virus. Bull. Fr. Piscic.
                257:149-152.

            Ord, W., M. Le Beffe, and P. deVinkelin. 1976. Viral hemorrhagic septicemia:
                comparative susceptibility of rainbow trout (Salmo gairdneri) and hybrids (S. gairdneri
                X Oncorhynchus kisutch) to experimental infection. I Fish Res. Board Can. 33:1205-
                1208.

            Rasmussen, C.J. 1965. A biological study of the Egtved disease (INUL). Ann. N.Y.
                Acad. Sci. 126:427-460.

            Wolf, K. 1988. Fish viruses and fish viral diseases. Cornell  University Press, New York.















                                                         5








































                                 APPENDIX H


                 NORWEGIAN AND BRITISH COLUMBIA INFORMATION













                   ICES 1988                          PAPER                      C.M. 1988/F:11




                   LENKA - A NATION-WIDE ANALYSIS OF THE SUITABILITY OF THE
                           NORWEGIAN COAST AND WATERCOURSES FOR AQUACULTURE.

                                    A COASTAL ZONE MANAGEMENT PROGRAM





                                                        by
                              Tom N. Pedersen". Jan Aure3', Bjorn Berthelsen",

                              Siri Elvestad", Arne S. Ervik" and HAkon Kryvi2l.



                   1)                                   2)
                   Institute of Marine Research         County Environmental
                   Division of Aquaculture              Protection Department
                   C. Sundtsgt. 37                      Walckendorffsgt. 7
                   N - 5004 Bergen                      N - 5000 Bergen

                   3)                                   4)
                   Institute of Marine Research         Ministry of Environment
                   Box 1870 - Nordnes                   Department of Natural Resources
                   N 5034 Bergen                        P.b. 8013 Dep.
                                                        0030 Oslo 1














                                                   ABSTRACT


                   A coastal zone management program called LENKA was started in 1987
                   and is to be terminated in 1989. The aim is to make an efficient and
                   standardized tool for coastal zone planning, which, pertaining to law, is
                   the responsibility of the county and municipality. The program aims to be
                   beneficial for both the environment and for the fish farmers. Considera-
                   tion is taken to all important existing utilization and judicial aspects
                   connected to the Norwegian coastal waters. This is done by a systematic
                   collection of all available data. systemized in such a way that they are
                   available for future planning.

                   A model for the evaluation of the holding capacity primarily for cage
                   culture based on both oceanographical and topographical criteria is put
                   forth. The coast is divided into three categories of recipient based on
                   topography. A central clue in this model is the evaluation of indices for
                   the quantity of aquacultural activities (measured as organic deposits into
                   the recipient) one may have per square kilometer in differently categor-
                   ized recipients.














                                                             2


                                                     INTRODUCTIO14



                     Aquaculture in Norway is based on salmon and rainbow trout. The growth
                     of the industry has been rapid, with an almost two fold production

                     increase every second year. The total production this year is expected to

                     be about 80 000 metric tonnes, but the continued growth is expected to

                     be slower. Up to now. the limitation has mainly been on the number of

                     smolts available, this situation is now reversed. partly due to the libera-

                     tion of smolt production permits.



                     There is a keen interest in the potential of cultivating marine species,
                     especially halibut and cod. Much effort is put into solving the problems
                     of the rearing of juveniles, and this seems to be solved for cod and
                     turbot. Other species of interest are arctic char. wolf fish. eel and lump
                     fish. Some shellfish are being cultured. mostly blue mussels and oysters.
                     in addition to experiments on scallops. Also and some experiments on

                     ranching of lobster is being performed.


                     The main asset in Norway for this rapid growth in the aquaculture
                     industry has been the access to vast amounts of water of good quality,
                     both fresh water and salt water. Space and water quality was not a
                     limiting factor to begin with, but is becoming so now. So far, the only
                     measurement available in the assessment of holding capacity, is the

                     amounts of organic waste from mariculture.


                     There is a need for a planning tool. consisting of directions and know-
                     ledge, to aid the development in such a way so that a high productivity
                     is maintained at the same time as conflicts with fisheries, conservation
                     interests, leisure activities and other utilization is kept low. The tool will

                     have to be standardized and rational.



                     Both county and local municipality have the need for a plan on how to
                     utilize the marine resources. The county plan is a guiding one, the
                     judicial binding is not persistent before   there exists a plan approved of
                     by the local municipality.


                     This paper, written by the expert group on marine environment, presents
                     the biological and oceanographical aspects of the project.














                                                       3


                 This is a description of an ongoing project where the guidelines are not
                 yet completed. As we believe that there is a considerable interest in

                 these matters, we find it appropriate to give some information on the

                 project at its present state.





                                                THE PROJECT



                 The project is a cooperation of three ministries, the Ministry of Fish-
                 eries, the Ministry of Environment and the Ministry of Local Government

                 and Labour. Its name LENRA is a Norwegian abbreviation meaning: A

                 Nation-wide Analysis of the Suitability of the Norwegian Coast and

                 Watercourses for Aquaculture.



                 The project aims to :



                      S To contribute to a continued positive development and growth of
                         the aquaculture industry with minimal conflicts with other

                         utilizational and conservational interests.



                      *  To contribute to the county and municipality planning in the

                         coastal areas and watercourses.



                      8 To contribute to the siting process of aquacultural activities.


                 The project is a planning tool, and not a plan in itself. Further, it does
                 not aim at the site as a working level, but handles larger areas as the

                 base unit, later referred to as LENKA zones.




                 Project organization



                 Figure 1 gives a schematic picture of the project organization.


                 The development of the working methods is done by the three expert
                 groups and the secretariat at the Ministry of Environment, while the
                 gathering of data. map work etc. is to be performed by the county
                 project organizations. The three expert groups are placed at the institu-
                 tions with the relevant competence. The group working with watercourses















                                                              4




                                                          Head of project

                                                                   1E
                                     3 expert                  Project                Contact persons
                                      groups              working group                  to other
                                                                               F      ministries and
                                   Marine environment                                     other
                                   Water courses                 7                      authorities
                                   Maps and computing        Secretariat


                                                          cou@ty project
                                                        11or2anization (17)



                    Figure 1:     The LENKA - project organization. The head of the Project consists
                                  of the Secretaries General from Lhe Ministries of Fisheries and
                                  Environment. The project Workini; group has 3 members from the
                                  Ministry of Fisheries, 3 from the Ministry of Environment and 1
                                  member from the Ministry of Local Government and Labour. The
                                  Secretariat is placed at the Ministry of Environment.




                    is placed at the Directorate for Nature Management. Trondheim. The
                    group working with maps and computing: is placed at the Norwegian
                    Hydrographic Service, Stavanger. The two latter's part of the project will
                    not be presented in this paper.



                    The group working with the aspects concerning the marine environment is
                    placed at the Institute of Marine Research, Bergen. In addition. the group
                    also has members from other institutions, such as the County Environ-
                    mental Protection Department, the Ministry of Environment and Nordland

                    College, Bodo.



                    The project has a total cost of 40 million NOK spread over three years.




                                           THE MAIN WORKING PROCEDURE
                                                  71

                                                                          C'
                                                                         ( A17

















                    The main working procedure of the project is shown in figure 2 (next
                    page).







                                       j
                                              Coas@al zone
                                              partitioning



                                              Typification


                                Environ           Existing on)      Infra-       g7al
                                ment              exploitati        structure          S ci
                                                                                       areas



                                                                         r,17@Z=ones of Fno@@
                                     C3       Sorting procedure




                                                                               Zones not to be
                                              Decision of further         7    further            ----- ON-
                                              investigations                   investigated


                                              furth@r
                                              investigations
                                                  i +
                               Environ-                             Infi-a-       d Special-
                               ment                     'on)        structure         areas
                                               _4    *         .4
                                              assessme    I
                                       9      Capacity nt

                                                                              Need for further
                                                                              investigations
                                              7oais
                                              p  ;ta
                                                 ti
                                                  on


                                              Ub


                                                    of f Dher__.o
                                                   .7ions




                                                 E -sting
                                                  xploi
                                              Te tati
                                              Cap;
                                              ss
                                       ,7a








                  Figure 2       The main working procedure of the LENKA              project.















                                                           6


                     ZONE PARTITIONING

                     In order to be able to deal with our 57 000 km long coast line in por-

                     tions of manageable size, a partitioning is necessary. The principle of the

                     partitioning is that each major water volume should be handled separate-
                     ly. Roughly, the coastal zone is divided into smaller areas (LENKA-
                     zones) each being either an archipelago, a fjord, a large sound or an

                     open fjord basin. The smaller areas will reflect the water bodies capacity
                     to handle the organic loadings received from both aquaculture and other

                     sources.



                     In order to separate the water volumes, the borders should to a large

                     extent as possible follow land. An exaTriple of how this looks like is
                     shown in appendix 1, where the partitioning of County Hordaland (where
                     Bergen is situated) is shown.




                     TYPIFICATION



                     Typification of zones is a registration of the environmental properties of
                     the area. In this project the aim is to collect and systemize the data that
                     already exist. For some parameters the data will be scarce.  This is taken
                     into consideration, and follows the description of the area. The compiled
                     information will be transferred to maps,. the result being a visualized

                     presentation of the environmental properties of the marine environment.
                     Similarly, this is done for the other three main groups of parameters,
                     Existing exploitation. Infraatructure and Special areas.



                     The following parameters and their significance were used for the typi-
                     fication of the zones. These are the major environmental parameters that
                     have influence on the utilization of the coastal areas for aquaculture. We
                     would like to note that we do not consider any technological devise that
                     frees the farming installment from the marine environment surrounding it.
                     This is mere a question of economy, and will not be considered in this

                     project.















                                                       7


                 ENVIRONMENTAL PARAMETERS USED FOR TYPIFICATION OF ZONES



                 Pollution :

                 The point in this connection is that the contamination of the environment

                 effects the health or the marketability of the fish raised in these waters.

                 Also, we distinguish between two categories of pollution-, toxins as one
                 kind and organic loadings as another. Most important are the massive

                 outlets from industry and agriculture. Some areas are severely polluted by
                 heavy metals and toxins from specialized industries. In addition there are
                 several smaller sources of various kinds of pollution with a more or less

                 restricted effect on the marine environment.



                 Temperature :
                 When considering temperature conditions in Norwegian waters, low
                 temperatures is the main hindrance of aquacultural activities, though
                 there are some problems with too high summer temperatures in some
                 parts of the country. Of interest are the extreme temperatures occurring
                 within a time span of 5 - 6 years (our definition of frequent). Areas
                 reckoned as unsuitable for aquaculture have regular long periods, that is
                 6 weeks or more, with temperatures below zero centigrade. Measurements

                 ought to be taken at depths of 2 to 5 metres.



                 Ice cover :

                 Of interest are the areas covered with ice at least every five years.



                 Exposure :

                 The actual parameter here is wave height. though current velocity also is

                 part of the exposure problem. Current in itself only occurs as a problem
                 locally, but infers on the wave height. Suitable areas for cage culture is
                 where the wave height does not exceed 2 m. For wind to generate such a
                 wave height, a stretch of 10 km open water is needed. Here we would
                 like to add that the general development of the aquaculture industry in
                 Norway has been towards more robust cage constructions, with cage
                 systems being able to stand up to wave heights of up to both two and

                 three metres.



                 Depth conditions

                 The depth required under the cages is dependent on the current velocity

                 to ensure that the wastes from the farm is spread. Also this is a way to














                    avoid possible eruptions of hydrogen sulf[de gas from the sediment that
                    often accumulates under the cages to reach the fish in the cages. As a
                    general rule we have set 20 m depth to toe a minimum criterion for cage
                    culture, with the possibility of adjustments to current velocity.



                    Basins

                    A basin is a water volume restricted from the outer lying larger water

                    masses by a threshold. A basin is defined ets where the depth of the basin

                    is at least 10 m deeper than the threshold. This water volume is sensitive
                    to organic loadings, causing a possible disturbance of the oxygen balance.
                    All thresholds shallower than 50 m have been registered.



                    Salinity :

                    The influence of freshwater causes several problems for the fish farms. A
                    layer of brackish water on top of the salt water resulting in a strict
                    stratification, may cause severe fluctuations in salinity and also fluctua-
                    tions in temperature. As a limit for whem the influence of fresh waiter
                    becomes a problem, we have put the salinity measurement to 25 ppt.



                    Other main groups of parameters
                    Under the heading of existing !@xploitati:)n we list the followings para-

                    meters

                              - effects on settlement patterns

                              - open air recreation life

                              - port development

                              - fisheries

                              - shipping traffic

                              - other factors



                    Further, there is a separate heading called infrastructure, dealing with
                    the particular requirements which should be met for an aquaculture

                    enterprise to succeed. Main parameters are

                              - road development

                              - distribution of manufactured foed

                              - processing facilities

                              - health service and guiding sex-vice

                              - offal disposal systems.



                    The last heading is special areas. conditions that might conflict with














                                                       9


                  further development of aquacultural activities. Examples here are

                            - spawning grounds for important fisheries species

                            - reserves for coastal birds and marine mammals

                            - others.





                  A MODEL FOR CAPACITY ASSESSMENT



                  Some imperative reservations :
                  With capacity we mean holdinic capacity, which is - the maximum produc-
                  tion limited by a non trophic resource. Or put in a simpler way, what

                  quantity of aquacultural activity is possible in an area without there
                  being damage caused to the environment. This is measured as deteriora-
                  tion due to organic overloading causing eutrophication, oxygen depletion

                  a.s.o..



                  This method of capacity assessment of LENKA zones is based on the
                  emphasis of two main considerations :
                            1) the environmental impact from mariculture
                           2) the marine environment's impact on the cultured organism.


                  It is by no means possible to give exact values on what loadings from
                  mariculture are acceptable, that is, how much organic waste from maricul-

                  ture is possible without any negative influence on the surrounding
                  environment. Some general recommendations are given in the State Pollu-
                  tion Control Act, the entire aspects are being dealt with by the Ministry
                  of Environment and the State Pollution Control Authority. The total

                  environmental impact from fish farms will manifest themselves several
                  years after the farm has started production.



                  To be able to assess any capacity for aquaculture, one has to take into

                  consideration the contribution from all major sources of organic loadings.




                  Elements of the capacity assessment :
                  Many parameters affect the capacity assessment. Not only the above

                  mentioned parameters are of importance. The LENKA - project takes into
                  consideration the elements shown in figure 3. and the working procedure
                  is shown in figure 4. As is shown, there are two main aspect in the















                                                                10


                            Local distribution,

                                                                            Conditions
                           economy a.s.o.                              Ohl.

                               Need for investments
                                                                       Opt- Permit decisions (size  and
                                and  enterprizes                            distances), technology,
                                                                            species a.s.o.
                                   Other exploitational    int.
                                   Occupied       Risk for expl.:
                                   areas          conflicts



                                                capacity
                                             vailable gross


                                       Available       Available
                                       capacity for    areal
                                       org. ioadings   capacity



                     Figure 3     Elements of the capacity assessment.




                     capacity assessment. One aspect is the evaluation of the capacity for
                     organic loadings in water body MENKA zone). This is done by treating
                     the zones properties as a recipient for organic loadings. The other aspect
                     is based on space. The water body. or more precise. parts of it, is
                     occupied by other activities as mentioned earlier. There exists a net area
                     available to aquacultural activities. One of these will set the limit to

                     aquacultural activities.



                     In our capacity assessment we have based the calculations on organic
                     loadings. and thereby neglected limitations set by factors such as risk for
                     spreading of diseases. use of chemicals and therapeutica etc. There exists
                     a veterinary regulation on distance betwe-en farms. this is set to 1 km.
                     Criteria as such may be altered as the knowledge increases.
                                                  'M ents                I

                                                  ta  tio nal int
                                                  isk  for expl
                                                  0n  fl icts













































                                                  The recipient capacity



                     Classification of coastal areas within the zones

                     Classification is based on topography. This            again reflects the water
                     exchange regime in the area, as well as being an indicator of the area's













                            Recipient                                                                                            Area
                                          A-areas                                     C-a7rpD
                                                                                      C
                                                                                         m
                                         km 2                                      17km

                              Capacity for                                                                           Unsuitable areas (envinomk.@
                              organic loadings
                              A-areas                                                                                -Shallowareas
                                                                                                                     -Temperature
                                                                                                                     -Salinity
                                                                                                                     -Ice cover
                                                  Minus:                                                             -Exposed areas
                                                 Existing fishfanns and
                                                 other sources for org. loadin S
                                                                                      9)                        r-unsuitable areas (culture
                                                                                                                     -Pollution
                            I'Mailable                     Available                  Available
                               capacity      r         (c.@apacity for                capacity for
                               org. loadii gs A              rg. loadin       s B (org. loadings @C
                                                                                                                     OLcupied areas



                                                                                                                     Net      A I B I C           D
                                                                                                                     areas



                                                                              Choose                                   Regulations on
                                                               the smallest                                            size and distances
                                                           of available capacity
                                                           for organic loadings
                                                                              areal
                                                           and available.
                                                             capacity for A-
                                                                              B- and C                            Available          A B C
                                                                                                                  areal capacity




                                                       Gross available capacity
                                                      A-capacity              Either capacity for
                                                   +B-capacity                organic loadings
                                                   +C-capacity                or available areal
                                                                              capacity
                                                           C-1,               he                                     n
                                                           or,
                                                                                                                     S
                                                                                                                     _T
                                                                                                                     -S
                                                                                                                     -it
                                                                                                                     E





                                                                                                                     Po 'u'ion


                                                                              it for
                                                                              D
                                                                              ing
                                                                              g.
                                                                              B
                                                                              71yd                              @Oc,'cupied jareas

                                                                              Icily
                                                                              ings


                                                                                                                   Availab
                                                                                                                     r      I
                                                                                         @@a eal -a
                                                                              ase
                                                                              t
                                                                              a -1 le ca
                                                                              coa
                                                                              Ire
                                                        @,u a' it liab        Ile
                                                                              C
                                                           fa  th             C,b
                                                               v.             I
                                                           for
                                                               org.           n
                                                             Id               'v,I
                                                             capacity         rorA
                                                                              BIndC




















                           Figure 4           Calculation of gross available capacity.















                                                            12


                     property as a recipient. An exact classification with illustrations is given

                     in Appendix 2.



                     For each recipient category A, B and C there is given an index for how

                     much aquacultural activity is recommended. This is expressed as a certain

                     production in terms of tonnes per square kilometre. Here we would like
                     to emphasize what care was taken before these indices were given. The

                     procedure was as follows :



                     From empirical data we were able to extract the general statement on

                     how large production one could have in & specific area without it causing

                     damage to the environment. The effects: were investigated by sediment
                     fauna monitoring. These levels of production were converted to production
                     per square kilometre. Again, based on facts about Norwegian fish farms,
                     these values were converted to organic loadings. expressed as oxygen
                     consumption, total phosphorous and total nitrogen.



                     As a correction factor one would have to adjust these figures for other
                     major outlets of organic waste. At the moment we are, together with the
                     appropriate institutions, giving a simplified method for estimating the
                     impact on the marine recipient based on key figures ready available. The
                     capacity is calculated in terms of organic waste, and is therefore in-
                     dependent on the technology being used.       New technologies resulting in
                     reduced outlets from the farms can easily be incorporated in the cal-

                     culations.



                     Further, when capacity is expressed as production as tonnes per kM2, this
                     sets restriction to the size of single farms and to the total activity in
                     larger areas. The values are not decided yet, but      the capacity will be

                     expressed as the following


                     A - categorized areas : a maximum production per (4x4) kms. but not
                     more than a lesser specifies quantity at a single site. A site is defined as
                     occupying a minimum of 1 km2. Where the recipient conditions are par-
                     ticularly good, and the number of sites available is restricted. one may

                     exceed these recommendations.



                     B - categorized areas : similarly as above, there is given a maximum
                     production per (4x4) kmz, and a lesser one at a single site.















                                                        13

                  The capacity per (4x4) kml will be in the magnitude within one thousand
                  metric tonnes for both A- and B - categorized areas.



                  C - categorized areas : these areas are basins and silled fjords, and

                  special care should be taken in such areas. Aure & Stigebrandt have
                  developed a model for the calculation of oxygen consumption in silled
                  fjords (Aure and Stigebrandt 1988, Stigebrandt and Aure 1988). and this

                  can in turn be used as a method for the calculation of capacity in terms
                  of organic loadings. The calculations can be done given the hydrographic
                  data and topographical maps.



                  Where there is oxygen depletion in the basin water, aquacultural activities
                  are not recommended in silled fjords. In basins within archipelagos one

                  should ensure that the water in the deeper layers of the basin does not
                  suffer from oxygen depletion. This means that in an area categorized as a
                  C grade recipient, no aquacultural activities are recommended before one
                  has sufficient data so that damage to the environment is avoided.


                  This method is dependent on a monitoring and control scheme, and this
                  will have to be a perpet-191 process, In this way there is the possibility

                  of adjusting the proposed capacity assessment, and at there is possibility
                  of keeping an eye on what is happening to the environment. The monitor-

                  ing and control schemes are not established.





                                             The ℜ capacity



                  Unsuitable areas :

                  Each LENKA - zone has a gross area divided into A, B and C type
                  recipients. Parts of these areas may be unsuitable for aquaculture, that
                  is. unsuitable for cage culture for as it is practiced in Norway. Unsuitable
                  areas consist of environmentally unfavorable areas from both natural

                  conditions and as a result of man's activities. The last case is mainly

                  pollution. and in this case pollution of toxicants that directly affect the
                  fish health and marketability.



                  The environmental parameters taken into account are : Shallow areas,

                  cold water. low salinity, ice cover and exposed areas.

                  In addition to these unsuitable areas there are certain areas that are















                                                          14


                  bound up by other activities. Such areas are

                         -    area already occupied by existing aquacultural activities
                         -    nature reserves and animal protection areas (both birds and sea
                              mammals)

                         -    security zones for salmonid fish
                  In addition areas are occupied for military purposes and for ship naviga-

                  tion.



                  Having subtracted all these areas, one is left with a net areal capacity
                  which can be compared with the recipient capacity. The smallest of these
                  will set the limit. All these calculations will. be performed by computers
                  as all the information is to be tabulated ready for a for this purpose

                  constructed work sheet.



                  Finally, we would like to mention the work initiated to eliminate the

                  interactions between wild stocks of salmon and trout and farmed fish.

                  The possibility of affecting the genetics and spreading of diseases has
                  been much debated. There is now suggested temporary protection zones
                  for salmonids. with a supporting research program. Further information on
                  this is available on request.



                  In addition to the names and addresses in the author list, there are a few
                  more names to add. If anybody should have any particular interests, the
                  following persons may be contacted




                  MAPS AND COMPUTING                    WATERCOURSES

                  Asbiorn Hiksdal                       Oystein )Ubu
                  Norwegian Hydrographic   Service      Directorate of Nature Management
                  P.b. 60                               Tungasle-fta 2
                  N - 4001 Stavanger                    N - 7047 Trondheim



                  PROTECTION ZONES FOR SALMONIDS


                  Bjorn Lindgren
                  Ministry of Environment
                  Department of Natural Resources
                  P.b. 8013 Dep.
                  0030 Oslo 1














                                                       15


                                                REFERENCES




                  Aure, J. and Stigebrandt, A., 1988 : An investigation of 30 fjords in
                            More and Romsdal : The field program and general oceanogra-
                            phical conditions (in prep.. in Norwegian).

                  Berthelsen, B. and Pedersen, T. N. (eds.). 1987 : Zone partitioning and
                            numbering of the coastal areas. LENKA - method 2       1 - 10.
                            (In Norwegian).

                  LENKA - Secretariat (eds.) 1987 : Typification of coastal areas.
                            LENKA - method 5 : 1 - 42. (In Norwegian).



                  LENKA - Secretariat and Marine Environment Expert Group, 1988
                            Capacity Assessment of LENKA zones. LENKA - method 9.1 : 1
                            - 35. (In Norwegian).

                  Stigebrandt, A and Aure, J.. 1988 : On the influence of topographic
                            factors upon the oxygen consumption rate in sill fjors basins.
                            Submitted to : Estuarine, Coastal and Shelf Science 88 : 01.















                            Appendix I






                                                            9

                                SOONESAEU  'A



                                                                           TIRE
                                          r
                                 FEW                FE   J0' E
                              HELLIS8V
                                      j%
                                                         LV %A       0


                                                                                     vt%so


                                                                   OSTYOYA
                                                                    10

                                                                                                                          ZI
                                         6; V.@-v r)
                                                                       SAMNA'GEM-
                                                                       Z
                                                                           R. N                                       VANO
                                                                        ,                            Zo         ULLEMSVANO
                                                    b!

                                                                                                               FJ.

                                   14ARST IN kt

                                                                                        cs-
                                                                                  by  I   I
                                                                                          'A ""Gelt
                                                   1141F                                   10j







                                 SLOT TEROY            S T
                                             .4 ,      ft
                                                                                 04ATMEIrJ


                                                                     IIALSNO
                                             J/0       1b                            AKRAF)DADEN


                                                             L Q  3Z
                                                                    oo oooo







                           Figure 5         Example of zone partitioning for the County Hordaland.

                                            Western Norway.














                                                           17


                   Append    2


                   Division  of the coastal zone into smaller areas based on assumed water
                   exchange  rate caused by topography.

                   A : Open coastal areas and large fjords where depth is larger than 50 m.


                        Ai         Open coastal areas where depth is larger than 50 m.
                                   Size and sills are not considered.


                        As         Large fjords where :
                                         Length of more than 10 km, and
                                         No presence of sills".

                   B   Other areas with good water exchange.

                        BiL        Open, sill - free areas as A, (archipelagos) and large
                                   fjords as As but where largest depth is less than 50 m.
                                         Length above or less than 10 km.
                                         Depth" is less than 50 m.
                                         No presence of sills.

                        Be         Smaller fjords, bays and inlets where
                                         Length is less than 10 km.
                                         No presence of sills.
                                         Depth is greater than 50 m.

                        Be         Large. silled fjords3) where :
                                         I ength is greater than 10 km.
                                         Presence of sills.
                                         Depth may be more than 50 m.

                   C  Small silled fjords an other siUed areas (archipelagos)
                                         Length of fjord less than 10 km.
                                         Presence of sills".
                                         Depth may be more than 50 m.

                  Examples are shown on the sketch on the next page.



                             A silled area is defined as an area where the inside basin is at
                             least 10 m deeper than the sill. Sills down to 50 m are regi-
                             stered.



                             Fjords are reckoned as shallower than 50 m when more than 60
                             % of the area fulfills this criterion.



                             Fjords and other areas with several succeeding sills is reckoned
                             as a "new fjord" when the succeeding sill is shallower than the
                             preceding one.



                             In sounds and basins within archipelagos with several sills, the
                             deepest sill is reckoned as the main entrance to the basin.




































                                                                      io

                                                              ..............
                    Ai
                                         A 2    L,,[Okm
                     IPSOm                       To 7 50 01,
                                                                                  BI
                                               -------------------------





                                                         17 to Ktn
                                                         TV 4
                                                 B3
                                                                        --17:




                                            4 10 It's
                                                                OT




                                   so


















                     V:A









                 Figure 6   Examples of division into categories A. B and C.
                             Legend   D = depth. L    length, Tv = threshold depth.











          BRITISH COLUMBIA
          AQUACULTURE LICENSING & REGULATIONS
                                                       September 27, 1989





                  AQUACULTURE LICENSING AND REGULATIONS - A SUMMARY

          Rationale for Provincial Aquaculture L'

          A large, completely new industry that is dependent on common
          property resources cannot exist in a vacuum of government
          involvement.   Appropriate government intervention is needed to
          protect the public interest, yet ensure that the economic
          benefits of the aquaculture industry accrue to British Columbia.

          The size and growth rate of aquaculture has threatened other
          interest groups. Thig significant new industry needs some
          regulation to ensure responsible growth and development and at
          the same time Provide a comfort factor for groups that feel
          threatened and would block further 9quaculture development,

          Aquaculture is currently administered by six different agencies
          in three levels of government (Appendix 1). There are two
          categories of approvals needed by an aquaculture operator. The
          first category is primarily approval to locate a facility and
          includes Crown land tenures, navigation compliance and zoning
          compliance. The second category is approval to operata a
          facility. The latter has been issued by the Department of
          Fisheries and Oceans (some marine sites) or Ministry of
          Environment (freshwater sites). The Ministry of Agriculture
          and Fisheries, as lead agency, proposes to consolidate and
          reduce the operational licences to one as provided for in
          recently signed agreements with both these agencies.
          Approximately 740 sites are currently authorized for
          aquaculture in British Columbia (Appendix 2).

          Licensing options Considered

          1. Status quo.

          2.  No licensing by any agency.

          3.  Consolidated Aguaculture Operation Licence    Approved in
              principle by Cabinet,

              Use an aquaculture "operational* licence as a registration
                    and use regulations to facilitate orderly industry
              development.









                                          2


          This option provides a balance between administrative
          simplicity and government intervention. There are several
          advantages to this approach:

          1.  Consolidates operations licensing within one agency,
              reducing the total number of government agencies directly
              licensing industry;

          2.  Establishes standard criteria for a licence and eliminates
              inequities in the treatment of different components of the
              industry that arise from multiple agency involvement;

          3.  Assists industry in obtaining operational financing.
              Licensing is a legal tool for identifying persons who may
              have a private property right in stock being cultivated;

          4.  Provides a framework to develop future controls, if
              necessary, to limit or restrict practices that become
              problematic;

          5.  Replaces the Federal Department of Fisheries and oceans and
              the Ministry of Environment in their industry licensing
              role while maintaining their input to the licensing process.

          6.  Establishes an equitable and efficient basis to determine
              eligibility for and issuance of sales tax exemptions;

          7.  Provides a systematic means of identifying all aquaculture
              operators for revenue and statistical purposes; and,

          8.  Establishes a uniform basis for identification of bona fide
              aquaculturists for other regulatory purposes including:

              - transportation and transplantation for cultured plants
                and animals;

              - purchase of therapeutants; and,

              - purchase of surplus salmon eggs from the Federal
                government.

          Fees will be charged to recover costs of administering the
          licensing system.

          Fisheries Act and Draft Aquaculture R:egulations-

          Relevant sections of the Fisheries A t and the current draft of
          the Aquaculture Regulations form Appendix 3.









                                         3


         It is important that the regulations be read in the context of
         the Fisheries Act R.S.B.C. upon which they are based and with
         which they mesh. Appendix 3 is therefore organized in two
         sections. The first is a compilation of those sections of the
         Fisheries Act relevant to aquaculture licensing, together with
         a commentary.  Material from the Act is given in bold type,
         while the commentary is shown in lighter type. This revision
         includes changes which came into force with the proclamation of
         specific sections of the Miscellaneous Statutes Amendment Act
         (No.21, 1907. which occurred in June 1989.--and in the
         Miscellaneous Statutes Amendment Act (Ng. 2). 1989. which was
         passed in July and was proclaimed by Order in Council in
         August 1989, The second section is the latest draft of the
         Aquaculture Regulations with commentary and explanatory notes.
         Proposed sections of the regulations are given in bold type and
         the commentary is in lighter type.

         This draft of the regulations, and particularly the commentary,
         includes revisions made on the basis of comments made on
         earlier drafts by aquaculture commodity groups, the Department
         of Fisheries and Oceans, the Minister's Aquaculture Industry
         Advisory Council, and from discussions with Legislative
         Counsel, Ministry of Attorney General.









                                            - 4 -


                                         APPENDIX 1.
                                   LICENSING AQUACULTURE

                      CURRENT SYSTEM                  PROPOSED SYSTEM

         A.     LOCATION APPROVALS

         i.     Ministry of Crown Lands           Where operations are on Crown
                                                  land, aquaculture licensing
                - issues leases and licences      will be administratively linked
                of occupation for aquatic         to the Crown land application
                land                              process to minimize industry's
                                                  paper burden.

         ii.    Federal Department of             No change
                Transport

                - issues navigation
                compliances for all marine
                and freshwater aquaculture
                operations where physical
                structures do not impede
                navigation

        iii.    Regional Districts,               No change
                Municipalities

                - may control the location,
                size, setbacks, etc., for
                aquaculture operations
                through zoning bylaws

        B.      OPERATIONAL APPROVALS

        iv.     Federal Department of             The federal government will
                Fisheries and Oceans              Withdraw from licensing
                                                  aquaculture under a
                - licenses salmon farms in        federal-provincial agreement
                freshwater and marine             recently signed.
                locations and invertebrate
                species other than oysters

        V.      Ministry of Environment (NOE)     MOE will withdraw from
                                                  permitting commercial
                - issues permits for              aquaculture activities under
                freshwater fish farms and         the recently signed agreement,
                hatcheries                        but will continue to control
                                                  the holding of live fish for
                                                  purposes other than
                                                  aquaculture.









                                             5


        v i    ministry of Agriculture and
               Fisheries

               - registers shellfish growers     Aquaculture licences will
               on Crown land                     replace this form of
                                                 registration.

                 issues Bona  Fide               The aquaculture licence will
               Aquaculturists Certificates       become a prerequisite for
               for tax exemption                 these certificates.

        vii.   No agency                         New aquaculture licences will
                                                 apply to all operations of the
               - some facilities, such as        industry, including those
               shellfish hatcheries and          operations that currently are
               some operations on private        not responsible to any agency.
               land, fall outside all
               existing jurisdictions










                                              6


                                         APPENDIX 2
                               BREAKDOWN OF AQUACULTURE SITES
                               BY TYPE AND LOCATION OF SITESI


                                  MARINE                    FRESHWATER
                           Existing Applications*     Existing    Appligations

          TYPE


          FINFISH


             Hatcheries      ---         ---               44           N/A

             Growout         211         266               62           N/A

          SHELLFISH


             Hatcheries        2            1             ---


             Growout         414         109


          MARINE PLANTS


             Growout           6            3             ---



          Subtotals          633         379              106           ---



          TOTAL EXISTING     739



          Total existing and applications = 1,118



               Includes Investigative Permits and applications for all forms
               of Crown land tenures.


               Based on March 1989 data.










                                        - 7 -


                                     APPENDIX 3
                                      Section 1


                                AQUACULTURE LICENSING

         A. RELEVANT SECTIONS OF THE FISHERIES AC (R.S.B.C.) AND
         COMMENTARY



         PART 1 - GENERAL PROVISIONS

         Interpretation

         1. In this Act

                   "conservation officer* means a conservation officer
                   under the Wildlife Act.

         Conservation officers may require aquaculture licenceholders to
         produce, upon request, the records referred to in Section 20 of
         the Act.

                   .fishm means the whole or any part of an aquatic
                   animal.

         "Fish" include all marine, brackish water and freshwater
         animals,  whether vertebrates or invertebrates, and includes
         finfish,  shellfish and crustaceans.

                   laquaculture" means the growing and cultivation of
                   aquatic plants, as defined in Section 12, or fish, for
                   commercial purposes, in any water environment or in
                   man made containers of water, and includes the growing
                   and cultivation of shellfish on, in or under the
                   foreshore or in the water.

         The growing of aquatic plants or animals for any non-commercial
         purpose (e.g. for personal use), and the holding of live
         aquatic plants and animals for research or display purposes, or
         in restaurants and seafood wholesale establishments for resale,
         do not constitute aquaculture and will not be regulated under
         this Act. The Ministry of Environment will be issuing Live
         Fish Permits for these purposes.

         2(3)      Every officer and constable of the provincial force as
                   defined in the Police Act, and every conservation
                   officer, is by virtue of his office an inspector of
                   fisheries under this Act and has power to act in that
                   capacity in every part of the Province.

         2(5)      An inspector under the Fish Inspection Act (Canada)
                   and a fishery officer or fishery guardian under the
                   Fisheries Act (Canada) is by virtue of his office an
                   inspector of fisheries under this Act.










                                         - 8 -

           By virtue of Section 2(3) and 2(5), every officer and constable
           of the provincial force (the R.C.M.P.), inspector of fisheries
           (provincial), fishery inspector (federal) and fishery officer
           (federal) can require aquaculture licenceholders to produce the
           records referred to in Section 20 of the Act.


           PART 3 - LICENSING OF AQUACULTURE FACILITIES, FISH AND AQUATIC
                     PLANT PROCESSORS AND FISH BUYING STATIONS

           Interpretation

           12.  In this Part

                     *aquatic plant" includes benthic and detached algae,
                     marine flowering plants, brown algae, red algae, green
                     algae and phytoplankton;

           This definition includes all aquatic plants except freshwater
           flowering plants.

                     "coastal waters' includes waters in the fishing zones
                     of Canada adjacent to British Columbia, all waters in
                     the territorial sea of Canada adjacent to British
                     Columbia and all internal waters of British Columbia.

           This definition covers all brackish and marine waters, but may
           not cover inland freshwater bodies. However, Section 13(4.1)
           clarifies that anyone carrying out the business of aquaculture
           *in the Province" or its coastal water must have an aquaculture
           licence.  Legal opinion is that "in the Province" includes all
           inland freshwater bodies.

                     oestablishmento means a place, including a place used
                     for the business of aquaculture, where fish or aquatic
                     plants are handled, processed, graded, stored, grown
                     or cultivated.

           Note:  This new definition will be added with the proclamation
           of the Miscellaneous Statutes-Amendment Act (1989).

           Licence Required

           13(4.1)   No person shall carry on the business of aquaculture
                     at any location or facility in the Province or its
                     coastal waters unless he is the holder of a licence
                     issued for that purpose under this Part and has paid
                     the fee prescribed by the Lieutenant Governor in
                     Council.

           This section provides the legislative prohibition against
           carrying on an aquaculture business unless authorized by a











                                         9

         location-specific licence issued for that purpose. It also
         allows the Lieutenant Governor in Council to establish a
         licence fee.

         Application for Licences

         14.       Every application for a licence under Section 13 shall
                   be made in writing to the minister, on a form to be
                   supplied by him, and on receipt of the application the
                   minister may issue a licence.

         The minister determines the format and content of an
         application. It is proposed that each application will include
         a development plan with different plans for different types of
         operations and species or species groups. Applications
         involving Crown land will employ the same development plans as
         used by the Ministry of Crown lands. Those based on private
         land will be simplified.

         For the initial round of licence issuance, we will be advising
         all active aquaculture operations of their application
         requirements.  These will differ depending on whether or not a
         Crown land tenure is involved, development plans exist and if
         these accurately reflect the current status of the operation.
         A non-refundable application fee will be required for all
         applications.

         Form of Licences

         16.       A licence under this Part shall set out

                   (a)  the name and address of the licensee,
                   (b)  subject to Section 15(2), the location of the
                        plant for which the licence is issued or the area
                        in which the licensed activity is to be carried
                        on, or both;
                   (c)  the effective date and the term of the licence;
                        and,
                   (d)  other terms and conditions as the minister
                        considers appropriate.

         Subsection (d) was added with the proclamation of the
         Miscellaneous Statutes Amendment Act (1989) in August 1989.

         A standard or general set of terms and conditions will be
         printed on the back of and apply to all aquaculture licences.
         Additionally, one or more approved development plans will
         constitute the specific terms and conditions of individual
         aquaculture licences.  Crown land based operations which
         already have development plans approved by the Ministry of
         Agriculture and Fisheries will not have to complete new plans










                                           10


           in the aquaculture licence application process. However,
           operations based on private land will have to complete and have
           approved development plans before aquaculture licences can be
           issued.


           Transfer of Licences

           17.      No licence issued under this; Part is transferable,
                    except that in the case of a change of ownership of
                    the plant the minister may agree to a transfer of the
                    licence to the new owner.

           As a matter of policy, it is proposed that the minister apply
           his discretionary power to refuse transfer of licences in
           f avour of the issuance of a new licence to the new operator of
           an aquaculture facility.

           Suspension or Revocation of Licence

           18(l)    Where the holder of licence issued under this Part
                    violates any provisions of this Part or the
                    regulations or a condition of a licence, the minister,
                    after due investigation and hearing, if a hearing is
                    requested by the licensee, and on proof to his
                    satisfaction of the violation, may in addition to all
                    other penalties to which the licensee may be liable,
                    suspend the licence and all rights of the licensee for
                    a period the minister thinks fit, or he may revoke the
                    licence.

           18(2)    The minister shall preside at the hearing, and shall
                    have the same powers as the Supreme Court for
                    compelling the attendance of witnesses and of
                    examining them under oath, and compelling the
                    production and inspection of books, documents and
                    things.

           Section 18(l) authorizes the minister to suspend, "for a period
           the minister thinks fit*, or revoke an aquaculture licence
           should the holder violate any provisions of Part 3 of the
           Fisheries Act (R.S.B.C.), any regulation made under Part 3 of
           the Act or any condition of the aquaculture licence.    It also
           clarifies that a licence holder may request a hearing before
           licence suspension or revocation takes place.   Section 18(2)
           outlines the minister's powers in the conduct of such hearings.

           Power to Refuse Further Licence

           19.      Where the licence held by any licensee has been
                    revoked, or where it is shoien to the satisfaction of











                                        - 11 -



                   the minister that a licensee has violated any
                   provision of this Part or the regulations or condition
                   of a licence, or has conducted the business of his
                   establishment in contravention of the spirit and
                   intent of this Part, the minister may, in addition to
                   all other penalties to which the licensee may be
                   liable, refuse after that to issue a licence under
                   this Act to that licensee or to any person for the
                   establishment of that licensee.

         This section outlines the power of the minister to refuse to
         reissue a licence which has been revoked.

         Records Kept by Licensees

         20(l)     A person holding a licence under this Part shall make
                   reports in the manner and form and at intervals
                   specified by the minister.

         This section provides for the reporting of such information as
         the minister may require (e.g. production, inventory,
         productive capacity, employment) at such time as the minister
         may require it. This information will be used to evaluate the
         performance of industry as a whole and the compliance of
         individual aquaculture licensees with the conditions of their
         licences. This amended wording will come into force with the
         proclamation of the Miscellaneous Statutes Amendment Act (1989).

         Offence and Penalties

         25(2)     A person who to contravenes a provision of the Part, a
                   regulation made under this Part or a condition of a
                   licence issued under this Part commits an offence.

         25(3)     On conviction for contravention of section 13 (1), (2)
                   or (4.1), the penalty is a fine of not less than $500
                   and not more than $10,000.

         25(4)     on conviction for contravention of a provision of this
                   Part other than section 13(l), (2) or (4.1), the
                   penalty is a fine of not less than $100 and not more
                   than $2,000.

         25(5)     on conviction for contravention of
                   (a)  a regulation made under this Part, or
                   M    a condition of a licence issued under this Part,
                    the penalty is a fine of not more than $2,000.

         25(6)     Each day an establishment is operated  'in circumstances
                   that constitute an offence under subsection (2)
                   constitutes a separate offence.











                                         - 12



          25(7)     In addition to other penalties or measures taken under
                    this Act or the regulations, all fish or fish products
                    or aquatic plants or aquatic plant products, whether
                    processed or not, on or aboult an establishment on or
                    after an offence occurs at that establishment, may be
                    seized by a Provincial constable as defined in the
                    Police Act or by an inspector of fisheries and, on     the
                    direction of the minister, be forfeited to Her Majesty
                    and sold with the proceeds to be paid into the
                    consolidated revenue fund.

          This section provides for fines of $500 - $10,000 for operating
          an unlicensed aquaculture facility, lesser fines of $100 -
          $2,000 for violation of other relevant sections of Part 3 of
          the Fisheries Act (R.S.B.C.) and fines up to $2,000 for
          violations of the regulations or conditions of a licence.
          Additionally, Ticket Administr-4tion Regulations and Ticket
          Information Fines Regulations under the Offence Act will, upon
          amendments and at the direction of the ministry, be used to
          issue tickets with "voluntary penalties" in the range of $50 -
          $100 for offences rather than pressing for court summonses.

          Further, Subsection 25(7) permits the seizure and sale by the
          Crown of fish and aquatic plants in addition to other penalties.

          Regulations

          26(l)     The Lieutenant Governor in Council may make
                    regulations.
          26(2)     Without limiting the generality of Subsection (1), the
                    Lieutenant Governor in Council may make regulations he
                    considers necessary or advisable:

                    (a) for safe and orderly aquaculture; and,
                    (b) for safe and orderly distribution of fish and
                         aquatic plants.











                                        - 13



                                APPENDIX 3
                                  Section 2


            B. AQUACULTURE REGULATIONS


            Interpretation

            1. in this regulation

                 "Act" means the Fisheries Act;

                 flaquaculture licence" means the licence referred to in
                 section 13 (4.1) of the Act;

                 glaquaculture facility" means an establishment where the
                 business of aquaculture is carried on;

                 "attachment structure$' means mollusc shell, rope,
                 netting, tubes and other structures provided as
                 substrate for the attachment of aquatic plants and fish
                 for purposes of aquaculture;

                 "containment structure,$ means net cages, net pens,,
                 tanks, troughs, raceways, natural or manmade ponds,
                 trays and other structures used to contain aquatic
                 plants and fish for purposes of aquaculture;

                 Ufin fish's means fish of the classes Agnathal
                 Chondrichthyes and Osteichthyes grown by a holder;

                 "bolder" means the person to whom an aquaculture licence
                 is issued;

                 "location's means

                    (a) a contiguous area of land that is owned, leased,
                    or otherwise lawfully occupied by a person, and

                    (b) areas of land whether contiguous or not that are
                    occupied under a single

                       (i) lease# or

                      (ii) licence of occupation

                    granted under the Land Act,

            "Contiguous" includes adjoining or abutting parcels of land,
            ie. the boundaries must touch. More than two contiguous











                                          14 -

             parcels of land may be considered a location for the purpose
             of this regulation. Parcels separated by any distance, no
             matter how small, are not considered contiguous and will
             require separate licences.

             "Leased" in (a) above includes private upland leased from its
             owner, as well as land under the jurisdiction of a Federal
             Port Corporation or Harbour Commission and occupied under a
             lease issued pursuant to the Port CorRoration Act (Canada) or
             the Harbour Commission Act (Canada), respectively.

             "Land" includes land under water. Lands occupied under
             authority of the Park Act are also included as are Reserve
             Lands under the Indian Act (Canada).

             Paragraph (b) above is included because of our wish to
             grandfather several operations that: have several parcels of
             land covered by a single Crown land tenure, and which are
             operated as a single production unit.

                  "manager" means the manager of aquaculture appointed
                  under section (6).

             Separate licence for each location

             2. No person shall carry on the business of aquaculture at a
             location without first obtaining an aquaculture licence for
             that location.

             The culture of different species or groups of species and the
             operation of several types of aquaculture facilities (eg.
             hatchery and growout to food market size) may be covered in a
             single aquaculture licence, provided they occur within the
             location defined in the licence. In such cases, several
             development plans will be attached to and become part of the
             aquaculture licence. This is in keeping with existing policy
             and procedure regarding Crown land tenures.

             Application for licence and licence renewal

             3. An applicant for an aquaculture licence shall make an
             application to the minister under Section 14 of the Act and,
             where the application is for a renewal of an aquaculture
             licence, shall deliver it at least 60 days before the term of
             the existing aquaculture licence expires.

             It is our intention to combine the application for renewal
             with the annual report required under section 20 of the Act.
             This has been the practise of the Ministry of Environment










                                         15


           with regard to the issuance of renewals for its Commercial
           Fish Culture Permits. This is expected to facilitate timely
           submission of annual reports. The combined renewal
           application-annual report form will be mailed to all
           licensees at least three months before licence expiry.
           Licensees will have at least one month to complete and
           deliver the form to the address given in the instructions
           which will accompany the form.

           "Delivered", in the Interpretation Act, with reference to a
           notice or other document, includes mail to or leave with a
           person, or deposit in a person's mail box or receptacle at
           the person's residence or place of business.

           Failure to deliver the application for renewal at least 60
           days before-licence eKRia will result in applicants havin
           to reapply for a licence; ie.-to submit an application form
           and fee in addition to the annual report form and licence
           fee. Thus, there will be a dollar savings for those who
           submit an aRplication at least 60 days before licence eXpiry.

           Staff will have two months to review and validate annual
           reports, determine eligibility for Bona Fide Aquaculturist
           Certificates (BFAC) and prepare licence renewals and BFAC's
           for mail out. Should government workload preclude renewing
           licences before the expiry date, the Common Law "Doctrine of
           Administrative Necessity" would ensure that holders would be
           legally able to continue under the old licence.

           Term of licence

           4. An aquaculture licence is valid for a 12 mouth period
           from the date on which it becomes effective.

           While licences are valid for one year, all licences will not
           have the same effective date. Licensing of existing
           operations will be spread out over as much as a six month
           period, with commodity groups (salmon, shellfish, trout)
           being licensed within consecutive two month periods.

           New operations will be licensed as the application reviews
           are completed.

           This will keep licence administration costs (hence
           application and licence fees) to a minimum, since fewer staff
           will be required to process the approximately 800
           applications which are anticipated.










                                        - 16 -

             While licence renewal and annual report forms will be
             submitted throughout the year, the requirement for production
             of calendar year-based production statistics still exists.
             Both needs will be met by amending the format and content of
             the annual report forms. It is anticipated that most data
             requests not directly related to regulatory requirements will
             be deleted, particularly for fin fish farming operations.
             Volume and value of product, by species, will be requested
             for each month. The first reportwill cover more than a 12
             month period. since it will have t) provide data from Januarv
             1989 to the licence effective date. Additionally. the first
             annual reports will cover the first: nine months of the
             licence valid period. Thereafter, the annual report will
             cover a 12 month period, including the last three months of
             the licence valid period of the first licence and the initial
             nine months of the first renewal licence. Applicants should
             therefore ensure that their-records keep track of the volume
             and value of product. by sRecies, on a month-by-month basis.
             Statistics regarding productive'capacity (eg. net cage or
             pond volume, meters of longlines) ZLnd livestock inventory
             will be requested as of a partiCU12Lr date, probably December
             31st each year.

             Dealing in fish or aquatic plants

             S.(1) A person shall not possess, buy, sell, introduce into
             the Province or transplant within the Province, fish or
             aquatic plants for the purpose of carrying on the business of
             aquaculture unless the person is a holder or is acting on
             behalf of a holder.

             This subsection clarifies that only those persons having a
             valid aquaculture licence, or their agents (including
             employees or brokers acting on behalf of a holder) or
             independent contractors, may possess, buy, sell, introduce
             into or transplant within the Province, aquatic plants or
             fish for purposes of carrying on the business of aquaculture.

             If a licensed aquaculture facility is placed in receivership,
             the Ministry of Agriculture and Fisheries will, as a matter
             of policy, treat the Receiver-manager as the holder for the
             duration of the licence term. Should the licence expire
             before another person has secured the right to occupy the
             location specified in the licence, the Receiver-manager will
             have to apply for a licence renewal. Subsequently, the
             Receiver-manager will have to request that the Minister
             transfer the licence to a new person once that person has
             secured the right to occupy the location specified in the
             licence.











                                       - 17 -

            In the more infrequent event of foreclosure of an aquaculture
            facility by a financial institution, the Ministry of
            Agriculture and Fisheries will, as a matter of policy,
            require that the holder and the financial institution apply
            to the Minister for a transfer of the licence to the
            foreclosing financial institution. Permission to transfer
            the licence will not unreasonably be withheld.

            Holders should note that this subsection does not authorize
            the introduction into or transRlanation within the Province
            of fish. An Import Permit og Transplant AyRroval issued
            under the Fisheries Act (Canada) are the authorizing
            implements for these activities. An aquaculture licence
            will, however, become prerequisite to obtaining such
            authorizations since it identifies persons as being
            commercial aquaculturists.

            A person in the business of transporting smolts or
            live-hauling salmon to a processing plant would not, for
            example, require an aquaculture'licence since the person's
            business is transportation, not aquaculture as defined in the
            Act. However, transport companies may not transfer live fish
            from one fish farm to another or to a processing plant unless
            authorized to do so by the Transplant Committee and must
            conform to section 9 of these regulations. The Committee is
            currently devising simple guidelines to accommodate this. By
            completing and signing a Transfer Permit, a holder will, in
            effect, transfer to a carrier the holders authority to
            transport live fish. A separate Transfer Permit, showing
            source, destination, species, carrier and pick up and
            delivery dates must accompany each delivery of fish.

              (2) Subsection (1) does not prevent a person who has taken
            the fish or aquatic plants as collateral for a loan from
            seizing or disposing of the fish or aquatic plants or
            otherwise realizing on the person's interest in the fish or
            aquatic plants to satisfy the obligations secured by them.

            This subsection was added to ensure that persons could take
            possession of and sell fish or aquatic plants which are given
            as collateral for a loan, without those persons requiring an
            aquaculture licence. Transplant Committee Approval would,
            however, be necessary for any transfer of the seized fish to
            a processing plant or another fish farm.

            Manager of aquaculture

            6. The minister may appoint a person in the Ministry of
            Agriculture and Fisheries as manager of aquaculture.












                                        - 18

             The manager of aquaculture will be named to provide holders
             with a key contact in the Ministry of Agriculture and
             Fisheries. The manager is the person to whom holders must
             report releases of fish or aquatic plants and the results of
             any recapture attempts (see section 7).

             Special proviso schedules attached to aquaculture licences
             will identify other instances where holders must contact the
             manager of aquaculture before or within a specified time
             after certain actions are initiated. For example, fish farm
             operators in the Sechelt Inlet system will be required to
             advise the manager before, or within one day of, initiating
             the relocation of netcages to designated "emergency
             relocation areas", as provided for in the Sechelt Inlets
             Coastal Strategy, in the event that heavy plankton blooms
             threaten to kill their fish stock.

             Release and escape

             7.(1) No person shall release aquatic plants or fish to
             fresh or tidal waters from an aquaculture facility or from
             containment or attachment structuros in an aquaculture
             facility unless authorized to do so by the terms or
             conditions of an aquaculture licence.

             This section prohibits the release into public waters of
             aquatic plants or fish from an aquaculture facility unless
             authorized to do so by a term or condition of an
             aquaculture licence. The provision for such an authorization
             is made because it is possible that deliberate release may
             be desirable in certain very specific circumstances. For
             example, it is already acceptable practise to release into
             public waters, for stock enhancement purposes, salmonid
             smolts raised in private sector hatcheries. Currently, the
             actual release may be conducted by government personnel but
             it is possible that commercial aquaculturists may effect
             releases in the future. Holders must ensure that they have
             obtained additional authorization-from the TransRlant
             Committee or any other prescribed governmental authority
             BEFORE effecting a release.

               (2) A holder shall take reasonal)le precautions to prevent
             the escape of aquatic plants and fish from the holderls
             aquaculture facility and from contakinment and attachment
             structures in the facility.

             A holder is expected to apply existing methods and equipment
             to prevent the escape of livestock,. Those found grossly
             negligent would be subject to prosecution.











                                        19 -

           Reporting escape

           8.(1) The holder, or person acting on behalf of the holder,
           who discovers an escape or evidence suggesting an escape of
           aquatic plants or fish from an attachment or containment
           structure in the holderfs aquaculture facility shall report
           the escape or evidence to the manager

                (a) verbally, within 24 hours of the discovery, and
                (b) in writing, within one week of the discovery, if
                requested by the manager.

           This section establishes both the requirement and the process
           for reporting escapement of aquaculture livestock, including
           fish, shellfish and aquatic plants. Holders will be
           responsible for ensuring farm staff are aware of this
           requirement and take the steps necessary to ensure that the
           manager of aquaculture is notified within the time limits
           specified above. This section does, however, make agents
           (including employees) and independent contractors who are
           operating the licensed facility for the holder responsible
           for reporting escapes.

           (2) A holder who recaptures or attempts to recapture
           aquatic plants or fish that have escaped from an aquaculture
           facility shall report in writing the results of the
           recapture, or attempted recapture, to the manager within one
           week of the recapture or attempted recapture.

           It is recognized that aquaculture liverstock may be
           intentionally (eg. by vandals) or accidentally (ie- due to
           human error, equipment failure or such natural events as
           severe storms or tsunamis) released.

           BEFORE attempting to recapture fin fish which escape from
           fish farms, holders MUST:

                1. notify the District Fisheries officer of the federal
                Pepartment of Fisheries and Oceans (DFO) of the-escape,
                and

                2. be issued a special Rermit by that Fisheries Office

           DFO advises that it will reggire notification of any escape
           within 24 hours of discovery.

           It is understood that the Department will issue these permits
           to particular vessels to effect the recapture. The vessels












                                          20

             could be owned by holders or their employees, or by
             independent contractors to the holder. Guidelines for
             issuance of these permits have yet to be established.

             Where fin fish escapes occur into freshwater, it is
             anticipated that the Ministry of Environment and the Ministry
             of Agriculture and Fisheries will be involved in the permit
             issuance process as well as in the guideline development
             process.

             It is acknowledged that bottom-cultured oysters and aquatic
             plants could, under certain rather unusual circumstances,
             "escape" from an aquaculture facility. Once beyond the
             boundaries of the facility such livestock become, in any
             practical sense, indistinguishable from wild stocks which are
             managed by the Ministry of Agriculture and Fisheries.
             Therefore, BEFORE a holder recaptures or attemRts to
             recapture oysters or acruatic Rlants which are carried, by
             such natural forces as heavy wave action and strong current
             flow, beyond the boundaries of a"n aquaculture facility, the
             holder MUST, in addition to notifvLng the manager of the
             release, obtain an oyster harvesti,-ig permit issued under the
             Fisheries Act Regulations ol: a licence issued under section
             24 of the Act. These may be obtained from the Ministry of
             Agriculture and Fisheries and are subject to payment of fees
             as required by regulation.

             Nothing in this section prevents a holder from retrieving
             containment or attachment structures and the aquaculture
             livestock contained therein or attached thereto, which have
             broken free of their moorings, and resecuring these within
             the boundary of the aquaculture facility.

             Transportation

             9. A person who transports aquatic plants or fish on, over
             or through fresh or tidal waters shall take reasonable
             precautions to prevent the escape of the plants or fish, as
             the case may be.

             This subsection requires any person who transports
             aquaculture livestock to employ due diligence, that is use
             available methods, equipment and surveillance, to prevent the
             escape of the livestock being transported

             Inspectors

             10.(1) The minister may appoint any person as an aquaculture
             inspector to investigate matters related to











                                          21 -

                 (a) the conduct of the business of aquaculture,    and

                 (b) compliance with the Act, this regulation and an
                 aquaculture licence and its conditions.

              (2) An aquaculture inspector may enter an aquaculture
            facility during normal business hours to investigate the
            matters referred to in subsection (1) and no person shall
            obstruct the inspector in the course of the inspector's
            duties.

            No person may obstruct the entry of an inspector to an
            aquaculture facility during normal business hours, nor may
            anyone obstruct an inspector as the inspector carries out
            his/her duties. Aquaculture inspectors will be uniformed in
            some way and will carry photographic identification cards.

              (3) At the request of an aquaculture inspector, an
            inspector of fisheries or a conservation officer, a holder
            shall produce for inspection a record that is required to be
            produced for inspection as a condition of an aquaculture
            licence.

            It will be a condition of all aquaculture licences that
            holders keep records sufficient to allow an inspector to
            determine whether or not the holder is complying with the
            development plans which are part of the aquaculture licence.
            Further, holders will, as a condition of licence, be
            required to produce such records for inspection within 24
            hours of an inspectors request.

            Fees


            11.(1) In Appendix I

                 "primary aquaculture product's means a fish or an aquatic
                 plant that is a product of aquaculture but does not
                 include a processed or manufactured product;

                 11production value'$ means the dollar value of sales of
                 primary aquaculture product in the previous licence
                 year, but where the terms and conditions of the
                 aquaculture licence contain a maximum volume of
                 production equivalent to a dollar value, it means that
                 dollar value.

            This definition creates a parallel between the eligibility
            criteria for Bona Fide Aquaculturist Certificates (BFAC)and
            the criteria for distinguishing between larger and smaller












                                          22 -

            scale aquaculture operations. Since BFAC's will not be
            issued for locations which produce less than $7,500 of
            primary aquaculture product each year, the lesser fees
            charged smaller scale operations are justified based on
            reduced administrative work load.

               (2) A person applyinq for a new aquaculturs licence, a
            renewal of an aquaculture licence or an amendment of an
            aquaculture licence shall pay the fee set out in Appendix 1.

               (3) Subject to the Financial Administration Act,, the fee
            for an application for a now aquaculture licence and the fee
            for a licence amendment are not refundable.












                                          - 23



                                 APPENDIX I


                              Schedule of Fees

            1. Application for initial licence                               $25
            2. Licence amendment                                             $50

            3. Licence and licence renewal for

                  a. aquaculture facility on private land,
                     production value at least $7500                       $100

                  b. aquaculture facility on private    land,
                     production value less than $7500                        $50

                  c. aquaculture facility on Crown land,
                     production value at leasp $7500

                       i. aquatic plants and fish other than
                          fin fish                                         $150

                      ii. fin fish                                         $200

                  d. aquaculture facility on Crown land,
                     production value less than $7500

                       i. aquatic plants and fish other than
                          fin fish                                           $50

                      ii. fin fish                                         $100










                      GENERAL TERXS OF AN AQUACEILTURE LICENCE

            1. For the purpose of this licence

            "Branch" means the Aquaculture and Commercial Fisheries
            Branch of the Xinistry of Agriculture and Fisheries, and

            "Development Plan" means a plan filed with and approved by
            the Branch for the species and location specified on the face
            of this licence.

            2. The holder of an Aquaculture Licence shall

            2(1) comply with the management and operating specifications
            in each Development Plan;

            2(2) apply for and have approved anendments to a Development
            Plan before (a) increasing or decreasing production or
            productive capacity by more than 20% from that currently
            authorized or (b) changing the mode of operation currently
            authorized;

            2(3) culture or husband only those species authorized by this
            licence, and only if importation and transplantation
            authorizations have been obtained from all competent
            governmental authorities;

            2(4) take reasonable precautions, to prevent the escape of
            aquatic plants or fish (a) if transporting aquatic plants or
            fish on, over or through fresh or tidal waters, and (b) from
            the holder's aquaculture facility and from containment and
            attachment structures in the facility;

            2(5) ensure that neither the holder nor any person acting on
           -behalf of the holder deliberately releases fish or aquatic
            plants from the holder's aquaculture facility, unless
            authorized to do so by the terms ai,,id conditions of this
            licence;

            2(6) ensure that the holder or a person acting on behalf of
            the holder who discovers an escape or evidence suggesting an
            escape of aquatic plants or fish reports the escape or
            evidence and the results of any recapture or recapture
            attempt to the Xanager of Aquacultiare;

            2(7) ensure that the aquatic plants and fish cultivated and
            husbanded in the holder's aquaculture facility are given care
            and attention consistent with their biological requirements
            for good health and well being;

            2(8) undertake at the holder's own expense, reasonable
            husbandry practises necessary for (a) preventative predator
            control and (b) prophylactic disease control and diagnostic
            disease treatment, including that required by competent









           governmental authorities;

           2(9) keep records adequate to allow an Aquaculture Inspector,
           an Inspector of Fisheries or a Conservation Officer to
           determine if the holder is complying with the terms of this
           licence including, but not limited to, those described in any
           Development Plans;

           2(10) make available to an Aquaculture Inspector, an
           Inspector of Fisheries or a conservation Officer, the records
           referred to in sub-paragraph 2(9) within 24 hours of a
           request being made;

           2(11) advise the Manager of Aquaculture within one week of
           any change in the holder's (a) address, (b) telephone, radio
           telephone or facsimile machine number, and (c) representative
           (contact person) and that person's telephone, radio telephone
           or facsimile machine number;

           2(12) deliver to the Branch, in the form and at the interval
           determined by the Minister, any information required to
           determine compliance by the holder with the terms of this
           licence, and any other information that the Branch requires
           to evaluate trends and practises of-the aquaculture industry
           as a whole;

           2(13) apply for and possess a valid processing licence before
           processing aquatic plants or fish within the location
           specified on the face of this licence;

           2(14) ensure that the aquaculture facility is operated in
           accordance with standards established by the Branch;

           2(15) comply with all laws, bylaws and orders of any
           competent governmental authority which affects the
           aquaculture facility described herein.

           3. If the holder of this licence fails to perform any
           obligations in this licence, the Minister may, in addition to
           other penalties in the Fisheries Act (R.S.B.C.) and the
           Aquaculture Regulations, suspend or cancel this licence and
           refuse to reissue an aquaculture licence to that holder or to
           any person for the establishment of that holder.

           4. This licence is not transferable except with the written
           permission of the Minister.

           5. This licence does not abrogate, replace, or derogate from
           any of the rights, powers or jurisdictions of the Province of
           British Columbia or the Ministry of Agriculture and
           Fisheries.







































                                   APPENDIX I


                             LAND-BASED TANK FARMS











                                         LAND-BASED TANK FARMS


            A recent development in the culture of salmon is the rearing of fish on shore in large
            tanks. Sea water is continuously pumped through the tanks or raceways and discharged
            back into adjacent marine waters. Experimental culture of Atlantic salmon in Iceland
            has demonstrated the feasibility of this culture method. However, wide-scale commercial
            operations are just being initiated. Thus, the method must be still considered experimen-
            tal, but one which may provide an alternative method of fish culture in some areas and
            situations.

            The primary advantage of tank farms to the fish grower is that he has much greater
            control over the water and the fish culture environment. By selecting the depth of the
            water source, the farmer can avoid noxious plankton, and have limited control of
            temperature, salinity, and dissolved oxygen. He can also control flow rates through the
            tanks to provide optimal growing conditions, and may add supplemental oxygen or air to
            the water to allow higher stocking densities and lower disease risks. Other advantages
            include the ability to work in any weather, avoidance of many of the potential conflicts
            with other water users, and avoidance of predator problems. Tank farms also provide
            the opportunity for treatment of the effluent in areas that may be sensitive to nutrient
            enrichment.

            Disadvantages of tank farms include the higher construction and operating costs to pump
            water, Perhaps the greatest disadvantage is the limited availability of suitable sites,
            which must be flat, near water, and close to sea level to minimize pumping require-
            ments.


            The following discussion briefly describes tank farms and the potential environmental
            impacts of this culture method which, in some situations, may provide an alternative
            method of fish culture to fish farms.

            The primary features of a land-based system include:

                ï¿½ An intake pipeline located subtidally to provide a constant supply of high qual-
                   ity water

                ï¿½  A pump and delivery system to circulate water through the rearing tanks

                ï¿½  A series of upland rearing tanks and/or raceways (circular tanks up to 20 m [66
                   ft] in diameter and 3 m [10 ft] deep appear to be the preferred tank design).

            Land-based sites low in elevation and near shoreline areas are preferred. Such locations
            reduce the length of the intake system, and maintain pumping efficiency by limiting the
            pumping head (the vertical height water must be pumped to supply the rearing ponds).
            In addition, tank farms should be located in areas free of plankton blooms and near
            relatively deep water where water can be drawn from below any blooms.


                                                         1









              The physiological requirements of salmon reared in tank farms are the same as those of
              salmon reared in fish farms. However, because of different rearing conditions and
              economic considerations, there are notable differeaces in the two technologies in terms
              of rearing densities and operation and maintenance procedures. These differences are
              projected to have a significant affect on the qualily of the discharge.

              The most notable difference between the two technologies may be the amount of feed
              required for production of an equivalent amount of fish. Average food conversion ratio
              (FCR) in net-pen facilities may vary from 1.5 to 1 (Hardy 1988, personal communica-
              tion) to 2.0 to 1 (Weston 1986). Recent work suggests that a FCR of 1.2 to 1.0 or less
              may be achieved (Asgard et al. 1988). This ratio accounts for conversion of feed to fish
              flesh (dry pellets of 10% moisture compared to fish flesh of 70% moisture) as well as
              loss of feed (a 0-20% loss of the feed depending on the site location, type of feed, and
              rearing practices), loss of fish due to mortality, or other reasons. Since onshore tank
              farms use circular tanks with controlled flow and oxygen conditions, proponents claim that
              salmon are able to feed and convert fish feed more. efficiently to flesh than in fish farms
              that are subject to variations in water velocity and existing oxygen conditions. As the
              FCR improves (lower ratio), the amount of waste food and total solids loss drops
              significantly.

              Other positive aspects of land-based tank farming include the relatively high quality of
              waste water that is a result of dilution by the large volume of water flow necessary in
              the tanks. Since self-cleaning tanks may be designed, "shock loads" due to sudden
              discharges of large amounts of organic waste during cleaning may be avoided. Stocks
              of fish may be separated for disease isolation and treatment. Routine addition of oxygen
              may improve dissolved oxygen levels relative to existing source water conditions. This
              extra oxygen allows higher stocking densities and reduced incidence of disease.

              Potential negative impacts of land-based tank farming include release of a more
              concentrated effluent than fish farms. Because large volumes of flow are necessary for
              land-based tank farms, the concentration of pollutants such as ammonia in the effluent
              may be low, but not as low as that seen from fish farms. The National Pollution
              Discharge Elimination System (NPDES) permit system administered by the Washington
              Department of Ecology requires that effluent receiving waters must have active
              hydrodynamics to allow dispersion of the solid and dissolved wastes. Due to salt content,
              solids isolated from onshore tank farms are not readily disposable on land as fertilizer
              or fill. Depending on its design and site, land-based tank farms may need to screen their
              intakes to prevent fish from being taken up in the intake.

              In general, land-based rearing of fish allows for tighter control over all phases of
              outgrowing (growth to marketable size) compared to fish farms. In a land-based system,
              water flow rates and dissolved oxygen concentrations (variables important to fish health)
              can be adjusted depending upon the fish rearing requirements. In addition, fish reared
              in tanks are easily observed and sampled. This accessibility to the fish helps develop
              efficient feeding schedules, identify stress and disease, and aids in the treatment of fish
              if a fish disease or parasite is identified.


                                                          2









            On the other hand, land-based tank farms are more costly to construct and operate than
            a fish farm system. Unlike fish farms, tank farms need intake and outlet structures, as
            well as rearing ponds. Greater operational costs also occur with tank farms due to
            maintenance of the rearing facilities and the cost of pumping and circulating rearing
            water.

            The successful operation of a land-based facility is, therefore, dependent upon efficient
            management and close control over the rearing process.              Compared to fish farm
            operations, land-based facilities can potentially increase overall survival, improving harvest
            rates, as well as improving feed conversion ratios which result in decreased feed costs.

            While there are no operating land-based tank farms in Puget Sound, upland systems
            have been proposed for Grays Harbor and Clallam Counties, and other areas of the
            United States and Canada. Saltwater tank farms are successfully operating in western
            Europe and Iceland. Upland tank farms are a new technology and have yet to be fully
            proven economically. They appear, however, to offer an alternative means of growing
            fish which may complement fish farming, and provide an alternative to fish farms in
            situations where fish farms would otherwise be impossible.

            Land-based tank farms must comply with all local, state and federal regulations pertaining
            to fish farms, with the possible exception of the ArmyCorps of Engineers permits
            concerning navigation. In addition, tank farms, as sources of point-source discharge, are
            subject to permitting requirements under the National Pollutant Discharge Elimination
            System.

            The following discussion briefly summarizes the possible environmental impacts of upland
            tank farms for the purpose of comparison with fish farm culture.

            1.         SEDIMENTATION

            Tank farms can introduce sediment into the marine environment through discharge pipes
            at an outfall. Unlike fish farms, the fish farmer can regulate the effluent from the
            facility. Feces and excess feed frequently will settle to the bottom of the tanks where
            they can be removed, or be collected in settling ponds.

            Any sediment which is discharged from a tank farm would affect the marine environment
            in a manner similar to the sediment deposited from a fish farm facility or similar
            discharges. Unlike fish farms, which by their size provide a vast area for dispersal, tank
            farm discharges are a point source which would concentrate sediment impacts without
            adequate sediment removal or adequate dispersal of the discharged material.

            A range of responses, similar to those described for fish farms, will occur at the effluent
            outfall. Where effluent is rapidly and effectively dispersed, the effects will range from
            local enrichment of the bottom community to no noticeable change. If dispersion is
            minimal, the effects will be substantial, as all of the sedimentation will occur in a
            concentrated area. Dispersion can be increased by placement of the discharge pipe in
            areas of high current flow, and through the use of diffusers on the end of the pipe.

                                                           3











               2.        WATER QUALITY

               The potential water quality impacts from land-b&,;ed tank farms will be like those from
               floating fish farms. Because of the relatively small volumes of water in tank farms, the
               dissolved oxygen concentration in the discharge water may be reduced. Data from 38
               fresh water tank farms in Europe were used to calculate an average decrease in dissolved
               oxygen of 1.6 mg/L through the facilities (Alabaster 1982). As a worse-case approxi-
               mation, a decrease of 2 mg/L through a land-based tank farm, and an initial concentra-
               tion of 6 mg/L would require a minimum dilution factor of about 10 to meet the state
               standard (5.8 mg/L in this case). A dilution factor of 10 would likely be achieved in
               close proximity to a land-based tank farm outfall. Tank farms also have the potential
               to aerate or oxygenate water entering and leaving the tanks. Tlis can improve the
               culture environment for the fish, as well as offse-t any oxygen demand from the fish or
               the discharged nutrients.

               Land-based tank farms are subject to the same nutrient enrichment considerations as
               floating fish farms. That is, restricted embayments with nutrient sensitivity should be
               avoided for both the good of the cultured fish due to dinoflagellate blooms, and for the
               possible enrichment effect upon algae or phytoplankton in the discharge waters. The
               three onshore tank farms proposed or being builtin Washington state are located in non-
               nutrient sensitive waters. As in fish farms, about 70% of the nutrients are discharged
               in solution. Retention time of water within the tank farms will generally be less than
               two hours, and the water is actively moving in the tanks and pipes. Both the period of
               time and movement of the water are not conducive for the development of optimum
               algal growing conditions. Site characteristics, especially the physical oceanography, depth
               of intake and discharge, and the density of water at both intake and discharge depths will
               greatly influence the fate of discharged waste water.

               Chemical usage in tank farms would generally be less than in fish farms, again because
               the tank farm operator has much greater control over the culture enviromnent.
               Antibiotic use would probably be less because the farmed fish will not be directly
               exposed to disease carrying wild fish, and the controlled culture environment reduces the
               probability of disease and permits easier control of any disease outbreaks. In addition,
               it is likely that tank farms would not use large amounts of antifoulant materials. The
               use of any chemical in tank farms would have impacts on the aquatic environment similar
               to those described in Section 5.4, Chemicals.

               3.        FISH AND SHELLFISH

               The primary impacts of fish farms on fish and shellfish are the possible smothering of
               sessile (immobile) organisms below the farms, if -the farms are located in shallow, poorly
               flushed areas, and the attraction of mobile fish and shellfish species to the site. Because
               tank farms would have a much more concentrated discharge, the area of bottom affected
               would be less than for fish farms, and the potential impact of sessile bottom-dwelling
               organisms would be reduced. Construction of the. intake and outfall structures, however,
               could destroy shellfish beds in the construction area. Because shellfish populations

                                                           4









             usually occur in discrete beds, proper site selection can avoid significant impacts for
             clams, oysters, geoducks, etc.

             In the absence of a significant structure in the water, the attraction of fish and shellfish
             to the site would be reduced or eliminated. Fish could be adversely affected if entrained
             in the intake pipe; therefore, proper screening of the intake will be necessary. It will
             also be necessary to avoid areas of intertidal herring and smelt spawning or important
             habitats for other fish species. Because the location of all these habitats is unknown,
             field observations will be necessary to determine which species use the area and if
             important habitats would be affected.

             'ne potential for fish to escape into the wild from tank farms is relatively remote
             compared to fish farms. Even in the event of a major catastrophe (for example, a tank
             ruptures during a large earthquake), most fish would be stranded on dry ground and die.
             If fish were to escape, the impacts to wild populations would be the same as for fish
             farms.


             4.        WILDLIFE


             Construction of each land-based tank- farm could result in the loss of several acres of
             upland habitat, depending upon the previous use of that land.

             Most of the habitat loss would be due to construction of the rearing tanks and support
             facilities such as operations buildings and new access roads. Clearing of vegetation
             would remove habitat, and may result in losses or displacement of small vertebrates such
             as mice, snakes, and frogs. Larger animals such as river otter, deer, raccoon, beaver,
             and birds may temporarily avoid construction sites. Noise generated by farm construction
             and operation may temporarily displace or disturb nearby wildlife. Consultation with fish
             and wildlife agencies during permit review is required to avoid affecting the habitats of
             any threatened or endangered species. Stretching netting over the top of upland facilities
             is an effective technique for keeping predators away from the fish.

             5. ODORS

             Operation of a land-based tank farm facility would be less likely to produce odors than
             would a floating fish farm facility because of the absence of nets and their associated
             fouling organisms, and the availability of enclosed storage areas for food. Minor odors
             could result from diesel engines used for emergency pumping during power outages, or
             from trucks servicing the facility. All odor impacts would be occasional and intermittent.
             As with floating fish farms, dead fish could create unpleasant odors if not removed from
             the tanks and disposed of properly. Because tank farms are located on shore, they may
             be closer to residents than fish farms. Consequently, any odors produced may have a
             greater effect on these residents.





                                                          5











              6.         NOISE

              Sources of noise at land-based tank farms would be similar for any small agricultural
              or commercial activity. Urge pumps and compressors would be required for aeration
              and pumping. These would be electrically powered and enclosed in buildings or located
              below grade, and would probably produce little detectable noise off the farm property.

              Land-based tank farms would be required to meet the relevant local and state noise
              standards. In rural areas with low existing noise levels, noise levels meeting state
              standards may be disturbing. In such areas, additional mufflers, sound enclosures, or
              buffer zones could be used to minimize any disturbance of nearby residents.

              7.         UPLAND AND SHORELINE USE

              Land-based tank farms have the same requirements for high quality water as floating
              operations, and will provide ongoing monitoring of water quality. Other shoreline
              activities adversely affecting water quality would harm. the fish culture operations. As in
              the review of any proposed activity, new projects near the tank farm would be evaluated
              for their effect on existing activities and their impacts on water quality and other
              elements of the environment.

              Activity levels associated with an upland tank farm will be similar to those of a small
              farm or commercial facility. Increased vehicle traffic from employees travelling to and
              from work, and from deliveries of food and other supplies and shipments of harvested
              fish will occur. In some cases, the farms may also attract visitors and tourists. The
              number of trips will depend upon the size of the facility and its proximity to suppliers.
              In addition, land-based tank farms may have other commercial elements, such as fish
              processing, which must be considered.

              8.         AESTHETICS

              The extent of aesthetic impacts resulting from tEnk farms will vary depending on the
              site, especially the existing activities and structures in the area, and the visibility of the
              facility to outside observers. Highly visible tank farms may be perceived as visually
              intrusive in rural or natural areas, yet be unobtnisive at sites surrounded by industrial
              or commercial uses.

              Aesthetic impacts in sensitive areas can be minimi:?,,ed by providing for adequate setbacks
              from adjoining properties and by providing landscaping to visually shield land-based
              facilities from nearby observers.

              9.         RECREATION

              Recreational activities would not be impacted by land-based tank farms, except where
              the facility displaced existing shore-based use.        If the beach is privately owned,
              recreational use by the public would be allowed only with the owner's permission. If the


                                                            6









           beach is publicly owned, intake and discharge pipes could be buried to avoid any conflict
           with existing use, except during construction.

           10.       LOCAL SERVICES

           The impacts of land-based tank farms on local services are expected to be similar to the
           impacts of floating fish farms and would not be significant. Tank farms would have more
           demand on local services such as electricity, roads, and fire protection. They would also
           be subject to local property and other taxes which currently do not apply to fish farms.




































                                                       7



































                                    APPENDIX J

                         LEGISLATION AUTHORIZING THE EIS







                                      WASHINGTON LAWS, 1987 Ist Ex. Sess.                    Ch. 7


                     General Fund Appropriation     .....................     S           602,000
                          The appropriation in this section is subject to the following conditions
                     and limitations: $182,000 is provided solely for carrying out the Puget
                     Sound water quality plan.
                          NEW SECTION. Sec. 309. FOR THE PUGET SOUND WATER
                     QUALITY AUTHORITY
                    General Fund Appropriation     .....................      S         2,910,000
                    Water Quality Account Appropriation      .............    S         1,100,000
                                 Total Appropriation   ..................     S         4,010,000
                         NEW SECTION. Sec. 310. FOR THE DEPARTMENT OF
                    FISHERIES
                    General Fund Appropriation----State      .............    S       47,465,000
                    General Fund Appropriation-Federal         ...........    S       14,057,000
                    General Fund Appropriatioh-Private/Local          .....   S        3,651,000
                   Aquatic Lands Enhancement Account Appro-
                        priation   ..................................         S         425,000
                                Total Appropriation   ..................      S      65,598,000
                        The appropriations in this section are subject to the following condi-
                   tions and limitations:
                        (1) $106,000 of the general fund         tate appropriation is provided
                   solely for carrying out the Puget Sound water quality plan.
                        (2) $40,000 of the general fund----state appropriation is provided
                  solely for the purposes of reintroducing an early coho salmon run to the
                  Tilton river and Winston creeL
                       (3) S587,000 of the genend fund----state appropriation is provided
                  solely for implementing the titnber@ fish, and wildlife agreement. If Senate
                  Bill No. 5845 is not enacted by June 30, 1987, the amount provided in this
                  subsection shaH lapse.
                       (4) $150,000 of the general fund-state appropriation is provided
                  solely for sheMh enforcement on Hood Canal.
                     .(5) $150,000 of the aquatic Iands c-              account appropriation
                 is provided solely for the preparation of an ecological impact statement on
                 thegWdel[inesforthe --m- __v no of salmon act pensin Pullet Sound.
                      (6) The department shall present to the natural resource committees of
                 the senate and house of sepiesentatives no later than February 1988 a re-
                 port on the department's watershed plan, with specific identification of the
                 benefits associated with the Queets hatchery and other Indian tribal
                 agreements.
                     (7) $194,000 of the general fund----state appropriation may be ex.
                pended for additional food for the Deschutes hatchery.
                     (8) $400.000 of the general fawf---state appropriation is provided
                solely for the purpose of a comy ehensive biological study conducted by the
                department in conjunction with the University of Washington and Grays

                                                    127111








































                                  APPENDIX K


              EFFECT OF FISH FARMS ON SURROUNDING PROPERTY VALUES






                       ALPINE APPRAISAL SERVICE
                                  REAL ESTATE APPRAISERS
                       150 S. 5TH AVE. SUITE 14 SEQUIM. WASHINGTON 98382
                                      (206) 683-7084




                         -REPORT   FLOATING SALMON NET PENS


         SITE #1: PEALE PASSAGE     Mason County, WA.
                    Township 20 North, Range 2W, W.M.

         DATES OF INSPECTION: August 10 and 11, 1988, February 15, 1989

         PURPOSE AND FUNCTION OF REPORT:    The purpose of this report is
         to determine the effects, if any, of floating salmon net pens on
         the surrounding upland property values. The function is to
         provide information useful in siting floating salmon net pens.

         CERTIFICATION AND LIMITING CONDITIONS: The Standard
         Certification and Limiting Conditions are attached.






                        ALPINE APPRAISAL SERVICE
                                   REAL ESTATE APPRAPSERS
                        150 S. 5TH AVE. SUITE 14 SEQUIM. WASHINGTON 98382
                                      (206) 683-7084




          AREA DESCRIPTION: Peale Passage is located between Squaxin
          Island and Hartstene Island in Mason County, Washington. The
          width of the passage varies from about, 500 feet at its north end
          to about 4300 feet in the vicinity of the existing fish pens.
          Squaxin Island, along the west side o4 Peale Passage, is an
          Indian Reservation and is basically undeveloped. Access is
          gained by boat-. Hartstene Island is t.o the east of Peale
          Passage and is connected to the mainland by a bridge built in
          1969. A majority of the residential development on the island
          has taken place since 1969 as a result. of the accessibility and
          the inflating property values of the mid to late 1970's in
          western Washington. Hartstene Island's development is mainly
          along the waterfront. The upland areats are for the most part
          still used as forest land.


          Because Squaxin Island is an Indian Reservation and Hartstene
          Island has only been readily accessible for the past 20 years,*
          much of the land along Peale Passage is still relatively
          undeveloped.

          Floating salmon net pens were first installed in Peale Passage
          by the Squaxin Indian Tribe in 1971. Additional floating net
          pens were put into operation by the Washington State Department
          of Fisheries and the Squaxin Tribe in 1982 and 1986.

          TOPOGRAPHICAL INFORMATION: The southwest portion of Hartstene
          Island has very low lying terrain with a maximum of 277' feet of
          e'levation in the area directly east o+ the net pens. I traveled
          most of the accessible roads in the Southeast portion of
          Hartstene Island and found no sites where the net pens were
          visible other than along the waterfront. These waterfront sites
          were all under 40 feet in elevation. The dense vegetation and
          lack of upland development precludes seeing the water in Peale
          Passage from other than along the shoreline.

          Squaxin Island was not visited by this appraiser.

          SIZE AND DESCRIPTION OF PENS: The most northerly pen complex is
          69.5 feet x 320 feet and covers about one-half acre of water
          surface.  The middle pens are 329 feei: x 110 feet and cover
          about .83 acres of water surface. The? most southerly pens are
          69.5 feet by 320 feet and cover about one-half acre of water
          surface.  There are several barges anchored near-the pens which
          serve as support structures for the pens. The elevations of
          these structures vary from 12.5 feet I:o 25 feet above the water
          surface.




                                          -2-






                       ALPINE APPRAISAL SERVICE
                                  REAL ESTATE APPRAISERS
                       150 S. 5TH AVE. SUITE 14 SEQUIM. WASHINGTON 98382
                                     (206) 683-7084




          VISIBILITY OF PENS FROM HARTSTENE ISLAND: The actual floating
          net pens were not visible from any of the sites visited on
          Hartstene Island. The orange anchor balls in the vicinity of
          the pens were visi.ble and the support structures were visible.
          From Hartstene Island it was difficult to tell if these support
          structure were floating or built on-shore.

          PROPERTY VALUES: Sales of both improved and unimproved real
          estate on Hartstene Island, from which the fish pens might be
          visible, were researched. Sales of similar properties from
          other areas of Hartstene Island were also researched. Mason
          County appraiser Darryl Cleveland provided information gathered
          by the County Assessor's Office in their recent re-evaluation of
          Hartstene Island. Several local real estate offices and
          individual property owners having "For Sale' signs were
          contacted to determine current asking prices far parcels in the
          area bordering Peale Passage as well as other similar areas in
          Mason County.

          CONCLUSION: The appraiser found normal variations in front foot
          values for waterfront lots based on the type of road access,
          availability of utilities such as a water system, height a+ bank
          at the waterfront, etc. The data gathered indicates that
          properties having similar characteristics sold +or similar
          amounts without regard to their location on Hartstene Island.

          Three new homes are under construction at the present time on
          the southwest side a+ Hartstene Island in the area nearest to
          the.floating net pen sites. This further indicates the pens
          have not inhibited the development of new homes in this area.

          Property values based on sales history show a rapid appreciation
          all over Hartstene Island in the mid 1970's. In the years
          between 1983 and l9e6 property values decreased uniformly all
          over Hartstene Island as they did generally in this part of
          Washington.

          In fact in 1987 the Mason County assessors office collected data
          on sales of low bank, medium bank and high bank waterfront from
          all areas a+ the island. As a result of this study the assessed
          value per front foot a+ waterfront was lowered in all three
          categories without regard to their location on the island.








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          After examining the comparable sales data from different areas
          of Hartstene Island and similar waterfront parcels in Mason
          County, it is the opinion of this appraiser that the Peale
          Passage floating net pens have had no effect on property values
          in this area.


          It is also the opinion of the appraiser after visiting various
          areas and taking photographs from these areas that there is no
          visual impact, good or bad, from these pens.
































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                                   SALES INFORMATION


              RESEARCH AREAS ON PEALE PASSAGE - SW SIDE HARTSTENE ISLAND


         CHAPMAN ROAD AREA - APPROXIMATELY 5400 LINEAL FEET TO PEN 12025


             Lot 1, Sunset Acres PN 22014-50-00001
                 Community Water - Individual Septic System

                 1974 - $17,500 as unimproved waterfront lot.
                 1975 - Building Permit $18,000.
                 1975 - Added to Assessor Rolls in 1975 as 1.5 story 1593
                        sq. ft. home with 484 sq. ft. garage.
                 1984 - Sold for $105,000.

             Lot 5, Sunset Acres
                 1976 Building Permit $30,000.
                 1976 Added to Assessor Rolls in 1976 as 1.5 story, 2048
                      sq. ft. home with 672 sq. ft. garage
                 1986 Sold for $125,000.






         MAPLES ROAD AREA - APPROXIMATELY 3300 LINEAL FEET TO PEN 11284


             Tract 3 Govt. Lot 2 and Tax 61-D and
             Tract 3 of S.P. # 426 100 FF WF
                 1979 - $29,500 unimproved waterfront lot.
                 1980 - Building permit $70,590.
                 1980 - Added to Assessor Rolls in 1980 as a 3 story 1974
                        sq. foot home.
                 1983 - Sold for $135,000.

             Tract 2 Govt. Lot 2 and Tax 61-C 100 FF WF
                 1988   New log home under construction at the present
                        time (photo).
                 1984   $55,000 unimproved waterfront lot.
                 1985   $63,500 unimproved waterfront lot.









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             Tract 4 of  Survey 6/5-6 135 FF WF
                  1981 - $65,575 unimproved waterfront lot.
                  1981 - $79,500 unimproved water-front lot.
                  1987 - $60,000 unimproved waterfront lot.
                  1987 - New home under construction.
                         Assessed value a+ improvements
                           Partially completed        $679280
                           Assess. value of lot       $60,700
                           Total                     $1279980

             Tract 6 of Survey 6/5-6 110 FF WF
                  1981 - $67,500 unimproved waterfront lot.
                  1986 - New home 50% complete.

             Tract 3 of  SP #1200 Govt. Lot 5 105 FF WF
                  1983 - $42,500 unimproved watet-front lot.
                  1987 - $39,700 unimproved waterfront lot.






          OLYMPIC VIEW TRACTS    4800-6900 LINEAL FEET TO PEN 11284





























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                RESEARCH AREA ON CASE INLET -E. SIDE HARTSTENE ISLAND


         E. SIDE HARTSTENE ISLAND - POINT WILSON
             Plat (28 lots) Sec. 20 Twp. 20N, Rge 1W, W.M.

             Tract 5 + Tax 1194-A and South 25' Tract 4 and Tax 1194-B-1
             Home built 1946
             125 FF WF Med. Bank (20 ft.+)
                 1977 - Sold for $33,500.

         This plat consists of older cabins and homes, two or three new
         homes and a few vacant parcels. There is similar sales activity
         to the Peale Passage side.

         PLAT OF ISLAND SHORES - Govt. Lots 2 and 31 Sec. 18, Twp 20N,
             Rge IW W.M.


             Tract 6 Island Shores 95 FF WF
             Med. Bank (30 1- 501) Brushy with clearing.
                 1973 - $5,000 unimproved waterfront lot.
                 1983 - $34,000 unimproved waterfront lot.

             Tract 7 Island Shores 100 FF WF
             Med. Bank (30' - 50") Brushy - level
                 1982 - $33,500 unimproved waterfront lot.
                 1983 - New construction 1272 sq. ft., 1.5 story with
                        deck.


             Tract 13 Island Shores 100 FF WF
             Med. Bank (30' - 501)
                 1978 - $20,000 unimproved waterfront lot.
                 1981 - $429800 unimproved waterfront lot.

             Tract 14 Island Shores 100 FF WF
             Med.-Hi. Bank (301 - 501)
                 1971 - $15,000
                 1981 - $34,500

             Tract 9 Island Shores Plat #2
                 1987 - $60,000 improved waterfront lot.






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                           REPORT - FLOATING SALMON NET PENS



          SITE #2: RICH PASSAGE - Kitsap Counte, WA.
                     Township 24 North, Range 2E, W.M.

          DATES OF INSPECTION: August 11, 17 and 18, 1988

          PURPOSE AND FUNCTION OF REPORT: The purpose of this report is
          to determine the effects, if any, of floating salmonnet pens on
          the surrounding upland property values. The function is to
          provide information useful in siting -floating salmon net pens.

          CERTIFICATION AND LIMITING CONDITIONS: The standard
          Certifications and Limiting Conditions are attached.







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         AREA DESCRIPTION: Rich Passage is located between the south end
         of Bainbridge Island and the Manchester area on the Kitsap
         Peninsula. It is the waterway used by the Seattle-Bremerton
         ferries and the U.S. Navy Shipyards at Bremerton and Keyport.

         A large portion of the south end of Bainbridge Island was the
         Fort Ward Military reservation for many years. Today part of
         the reservation is a Washington State Park and the balance was
         sold by the U.S. Government to a private party. There is a row
         of homes along the waterfront both east and west of the Fort
         Ward area.


         On the south side of Rich Passage the U.S. Government maintains
         a naval reservation. A Washington State Park adjoins the
         Reservation on its north boundary. The area north of the State
         Park is known as Wautauga Beach and is a single family
         residential area.

         Other than along the waterfront, the upland areas on both the
         north and south side of Rich Passage are largely undeveloped.

         According to information from the Washington State Department of
         Natural Resources Aquaculture Division, floating salmon net pens
         were first placed in Rich Passage in June of 1971 by the
         National Marine Fisheries Service. In March of 1972 Domsea Inc.
         leased a large area on the south side of Rich Passage for
         placement of net pens. Pens were placed an the north side of
         Rich Passage by Domsea Inc. in 1974, by Domsea Inc. in 1979 and
         by Passage Silver Inc. in 1987. Four of these pens are shown on
         the aerial photo exhibit attached to this report. The fifth set
         of pens was installed after these photos were taken and its
         location an the exhibit is approximated from lease information
         obtained from the Department of Natural Resources.

         TOPOGRAPHICAL INFORMATION: The south end of Bainbridge Island
         has a narrow level area along the waterfront, then a fairly
         steep brush and tree covered bank that rises to about 100 feet
         in elevation. The terrain then becomes a gradual slope to about
         200 feet in elevation in most areas. The highest point is about
         360 feet in elevation.











                                        -2-






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           The accessible areas on the south or Kitsap Peninsula side of
           Rich Passage have a much more gradual slope up from the
           waterfront with dense brush and tree cover in most areas.


           Photographs were taken from a variety of elevations and
           locations in an attempt to show the visual impact of the pens
           from different elevations and distances. All photographs were
           taken with a 50 MM lens.


           SIZE AND DESCRIPTION OF PENS: The fcur floating net pens as
           shown an the aerial photograph of Rich Passage scale as
           follows: Pen number 9780 is approximately 200 feet by 850 feet;
           Pen number 12584 is approximately 250 feet by 250 feet; Pen
           number 10237 is approximately 250 feet by 500 feet; the pen an
           the Environmental Protection Agency (EPA) dock is approximately
           200 feet by 150 feet, the Passage Silver Pen was recently
           installed and the only information regarding its size is the
           Department a+ Natural Resources list showing it covers .41 acres
           of water surface.


           These floating net pens in this area are made of a variety of
           materials ranging from wood to steel. Some of the pens are a
           mixture of both. The Bremerton East Quadrangle Exhibit has
           pictures taken of the pens which are attached to the EPA dock at
           Manchester. Below it is an 85 MM photograph taken from the end
           of the Domsea Inc. dock on the south end of Bainbridge Island.
           It shows an area a+ the wood pens # '10237 that are attached to
           the dock as well as Pen number 12584 near Orchard Rock which
           appears to be a steel pen. The EPA dock and pens are visible in
           the distance on the right hand edge of the photo as well as Pen
           number 9780 behind and to the right of the red channel marker.


           VISIBILITY OF PENS FROM DIFFERENT LA14D LOCATIONS AND ELEVATIONS
           ARQUND RICH PASSAGEt A portion of the pens were'visible from
           almost all the locations where there is a water view in this
           area. At or near the shoreline (under@401 in elevation) the
           floating net pens are hardly visible if over 2400 lineal feet
           away. Within 2400 lineal feet and especially at elevations of
           over 401 the pens are more visible. From an elevation of
           approximately 90 feet and 1800 lineal feet away the Orchard Rock
           Pen # 12584 is visible. The photos taken 6000 feet and 10,500'
           feet distant were both taken at approximately 185 feet in
           elevation. The floating net pens are a faint line at these
           distances.







                                          -3-






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         PROPERTY VALUES: The sales history of both improved and
         unimproved real estate in the Wautauga Beach area was
         researched. The floating net pens in Rich Passage are visible
         from a portion of these properties and not visible from others.
         A typical residence sale with a view of the pens was selected
         and compared to other similar residence sales in Kitsap County.
         I discussed the assessed values of properties in Kitsap County
         with Ida Mae Ryen of the Kitsap County Assessor's Office. She
         said the Rich Passage area was last valued in 1983 and is due
         for a re-evaluation next year. She indicated that they would
         examine every sale and check one against the other for any
         impacts fr-om the pens. She also said this had been done in the
         last valuation and so far no differences in value have been
         evident.


         CONCLUSION: After examining the comparable sales data from bc>th
         improved and unimproved properties, some with a view of the
         floating net pens and others with no view of the pens, it is the
         opinion of this appraiser that the Rich Passage floating salmon
         net pens have had no effect on property values in the two plats
         at Wautauga Beach.

         Based on observations of the floating net pens from a variety of
         distances and elevations it is my opinion that pens over 2400
         lineal feet distant are not visible enough to have any impact on
         property values. At distances closer than 2400 feet they are
         more visible. I could not locate any closed real estate
         transactions of properties within this 2400 foot distance;
         however, there is a new home on lot 10 in the plat of Sunset
         Ridge an South Bainbridge Island. This home was added to the
         Kitsap County Tax Rolls in 1988 at an assessed value of $28,380
         +or the land and $94,230, for the improvements for a total of
         $1229610.

         I located two pending sales of waterfront properties within 800
         lineal feet of dock pen number 10237 and 1500 lineal feet of
         dock pen number 12584. The realtor who has the property listed
         also indicated the 430 feet of waterfront adjoining the Domsea
         dock and pen number 10237 was on the market. The pending sales
         indicate to me that the existence of floating net pens has not
         inhibited the development and sales of properties within 2400
         lineal feet of the pens in this area.







                                        -4-






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                                     SALES INFORMA,rION


                      RESEARCH AREAS ON SOUTH SIDE OF RICH PASSAGE

           Wautauga Beach Plat - Volume 5, Page 13, Gov"t. Lot 3 & 41
                                   NE 1/4, Sec. 9, Twp. 24W, Rge. 2E, W.M.

                                  5200 - 5700 lineal feet to Pen No.
                                   12584 and No. 10237



           SALES ACTIVITY ON LOTS WITH NO VIEW OF THE FLOATING NET PENS.


              Lot  3 and Portion of Lot 4 plus Tidelands
                   2-23-77 - $48,000
                   6-20-88 - $124,000
                   Home was built in 1930; 1.0 + bsmt, remodeled 1978. Lot
                   has 100 FF WF.


              Lot  10 -
                   10-29-74    $3250
                   5-28-76   $30,000
                   B-11-78   $35,000

              Lot  15 -
                   11-5-82   $84,950
                   B-7-86 - $67,000

              Lot  17 -
                   10-24-73 - $11,500
                   11-6-74   $20,000

              Lot  4 -
                   2-4-88 - $72,000

           SALES ACTIVITY ON LOTS WITH A VIEW OF THE PENS.


              Lot  42 -
                   4-24-81   $100,000
                   10-1-87   $92,500
                   Mobile home placed on property in 1975 (cost $17,495)
                   1974 Commodore 24' x 601. 88.70 FT WF


              Lot  31 -
                   1-9-79    $60,000
                   7-20-87   $81,455






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             Lot  40 -
                  9-27-73 - $339000
                  1-27-84 - $989500
                  5-8-86 - $75,000
                  Home built 1946, remodeled 1971 and 1974 1, story.
                  88.70 FF WF


             Lot  43
                  5-18-77 - $84,500
                  12-7-79 - $1361500
                  Home built 1940, remodeled 1963 and major remodel
                  19135-86 including swim pool, boat ramp, and marine
                  railway

             Lot  35
                  4-25-77 - $599000
                  7-20-78 - $69,500

             Lot  29
                  6-10-76 - $11,500
                  5-2-77 - $75,000


          M.B. Crane's Waterfront - Addition to Manchester - Portion 13L
                                      5, Sec. 9, Twp. 24N, Rge. 2E, W.M.

                                    - 4700 - 5500 lineal feet to Pen No.
                                      12584 and No. 10237


          ALL LOTS IN THIS PLAT HAVE A VIEW OF THE FLOATING NET PENS


             Lot  5
                  B-8-74    $239500
                  B-28-75   $27,500
                  4-12-79   $909000
                  9-26-86   $789000 - Divorce-property settlement
                  Home built in 1941, remodeled 1975 (interior) 60 FF WF

             Lot  20
                  5-16-73   $8,500
                  1-8-75    $11,250
                  6-11-80   $117,000
                  Home built in 1975. Lot has 62 FF WF


             Lot  21
                  9-12-73 - $31.,000
                  6-24-85 - $105,000
                  Home built in 1963, 1 story. Lot has 64 FF WF

                                           -6-




                                                  I



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                        RESEARCH AREA ON N. SIDE OF RICH PASSAGE


           HOMES WITH VIEW OF FLOATING NET PENS. PLAT OF SUNSET RIDGE9
           VOL. 12,1 PG. 74.

           Approximately 1000 lineal feet to Pen No. 12227; approximately
           2000 lineal feet to Pen No. 12584.


              Lot 10 + Tidelands - 94 FF WF
                  B-27-73 - $19.250
                  3-22-77 - $27,000
                  1977 - Quit claim deed - Divorce settlement
                  1988 - New home on tax rolls
                          $122,,610 assessed value.

              Lot 9 + Tidelands - 97 FF WF
                  1985    New home on tax rolls, $106,490 assessed value.






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                          REPORT - FLOATING SALMON NET PENS
                        AND PROPOSED FLOATING SALMON NET PENS



          SITE   3: SKAGIT BAY - Skagit County, WA.
                     Township 34 North, Range 2E, W.M.

          DATES OF INSPECTION: October IS and 19, 1988, March 9, 1989

          PURPOSE AND FUNCTION OF REPORT: The purpose of this report is
          to determine the effects, if any, of the existing floating
          salmon net pens on the surrounding upland property values. The
          function is to provide information useful in siting floating
          sal mon net pens.

          CERTIFICATION AND LIMITING CONDITIONS: The standard
          Certifications and Limiting Conditions are attached.




                                                I



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          AREA DESCRIPTION: -Skagit Bay is located between Fidalgo Island
          and the north end of Whidbey Island. A portion of the bay is in
          Island County and a portion is in Skagit County. An existing
          floating salmon net pen is located in Skagit County.

          Hope Island and Skagit Island are located in Skagit Bay. These
          two islands are both part of Deception Pass State Park.

          The portion of Fidalgo Island bordering Skagit Bay an the east
          is part of the Swinomish Indian Reservation. The reservation in
          this area has a combination of lands in fee ownership, lands
          leased by the tribe and tribal owned lands. All tidelands are
          claimed by the tribe.

          Residential development in this area of the Swinomish Indian
          Reservation is mainly along the waterfront. The terrain here is
          a gradual slope from beach level to about 300 feet in elevation
          one-half mile inland.


          Whidbey Island on the west side of Skagit Bay is a combination
          of private ownership and Washington State Park ownership. The
          portion in private ownership is sparsely populated due to the
          steep terrain along the water.

          The interior of both the Swinomish Indian Reservation and the
          north end a+ Whidley Island are largely undeveloped.

          Skagit Bay has an existing floating salmon net pen complex
          approximately 1800 lineal feet north of Hope Island and 1200
          lineal feet west of the Lone Tree Point. According to
          information supplied by the Skagit Systems Cooperative,
          installation of these pens was begun in May of 1987.

          SIZE AND DESCRIPTION OF EXISTING FLOATING SALMON NET PENS: The
          existing floating salmon net pen lease? # 12356 is approximately
          100 feet by 480 feet and according to the Department of Natural
          Resources lease covers .66 acres of water surface.

          The pens appear-to be of steel constrLICtion when viewed from the
          share. There is a supply building, 10 feet by 20 feet by 10
          feet high, at the pen site as shown irk the photo exhibit.

          LOCATION AND DESCRIPTION OF PROPOSED FLOATING SALMON NET PENS:
          The Skagit System Cooperative is proposing to locate a 100 foot
          by 480 foot complex of floating salmon net pens about 1800
          lineal feet southeast of Hope Island and 4400 lineal feet due



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         west of Sunset Drive, a street in the Plat of Wagner's Hope
         Island Addition. These pens will be about 7400 lineal feet from
         the closest point on Whidbey Island and about 3100 feet
         southwest of Snee-oosh Point, the nearest land on Fidalgo
         Island. The pens are to be steel construction similar to the
         steel pens shown in the lower left hand corner of the Rich
         Passage exhibit. A small building, 10 feet by 25 feet by 10
         feet high, will be located at the site of the pens to provide
         protection for the employees and limited storage of food.

         VISIBILITY OF PENS FROM DIFFERENT LAND LOCATIONS AND ELEVATIONS
         AROUND SKAGIT BAY: Photographs (50 MM) were taken from
         different areas as shown on the Anacortes South quadrangle map
         exhibit. These areas were visited and photos taken of the
         proposed location of a new fish pen complex and the existing
         fish pens. Approximate distances from the pens and elevations,
         at the site are noted near each picture.

         PROPERTY VALUES: Sales of unimproved and improved real estate
         along the east shore of Skagit Bay were researched for the
         period of 1986, 19877 1988 and 1989. Two recent sales of homes
         with a view of the existing net pens have recently been recorded
         and a third sale is scheduled to close on April IQ), 1989. It is
         my opinion that these homes sold at Fair Market Value.

         CONCLUSION: The Skagit Bay area is presently providing the best
         information an property values as sales are recorded on homes
         less than one mile from an existing salmon net pen complex.

         Sales data from the area indicates that two homes with a view of
         the pens were recently sold at Fair Market Value. These homes
         are approximately 3000 and 3900 feet from the pen s*ite.

         There are several new homes under construction south of Snee-
         oosh Point. These homes will be approximately 4100 lineal feet
         east of the approved proposed pen complex.

         After examining the comparable sales data from areas without a
         view of the pens and the construction activity in the area of
         the approved new pen site, it is the opinion of this appraiser
         that the Skagit Bay existing floating net pens and proposed
         floating net pens have not affected property values in this area
         as as indicated by the recent market sales of homes at 1606 Snee-
         oosh Road and 1575 Snee-oosh Road.









                                        -3-






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                                      SALES INFORMA"riON


                 RESEARCH AREAS ON SKAGIT BAY - S(J SIDE OF FIDALGO ISLAND



           WAGNERS HOPE ISLAND ADDITION

               Lot 6 & N. 20' of Lot 5, BI . 4 (1740 Gol den View Dr.)
                   4/86    $120,000,, Residence built 1958

               Lot 31 BI   3 (1732 Sol den View Dr.)
                   11/86    $130,000, Residence built 1963

               Lot 2 and Ptn. Lot 19 B1.4 (1746 Golden View Dr.)
                   5/88    $85,000, Residence built 1969

           FAHLENS SNEE-OOSH TRACTS
               Lot 4 (1668 Reef Point)
                   8/86 - $178,500, Residence built 1969

           PLAT OF SNEE-OOSH
               Lot 65 (712 Chilberg Ave.)
                   7/136 - $115,000, Residence built 1927

           PLAT OF SHOREWOOD
               Lot 9
                   1/87 - $42,500, Unimproved lot

           PORTION OF GOV'T. LOT 1, Sec. 27, Twp. 34N, Rge. 2E, W.M.
               1606 Snee-oosh Road
                   10/6/8B - $2849000, Residence built 1979,

           PORTION OF GOV'T. LOT 1, Sec. 22, Twp. 34N,, Rge. 2E, W.M.
               1575 Snee-oosh Road
                   10/6/88 - $73,500, Residence built 1967















                                              -4-






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                      RESEARCH AREA SIMILK BAY - FIDALGO ISLAND



          SIMILK BEACH PLAT
             Lot 23 & Ptn. Lot 24, Bl. 6 (624 Satterlee Rd.)
                 G/GS - $61,000, Residence built 1920

          GIBRALTER AREA
             Ptn. G.L. 6 Sec. 19, Twp. 34, Rge. 2E (500 Gibralter)
                 8/88 - $120,000, Residence built 1973



                RESEARCH AREA SHELTER BAY - SE. SIDE OF FIDALGO ISLAND



          SHELTER BAY PLAT
             Lot 743, Shelter Bay #4 (743 Tillamuk Dr.)
                 8/88 - $130,000, Residence built 1972

             Lot 457, Shelter Bay #3 (457 Klickitat Dr.)
                 8/88 - $123,000, Residence bui-It 1973


                        RESEARCH AREA SKYLINE - FIDALGO ISLAND



          SKYLINE PLAT
             Lot 85, Div. 8 (5104 Kingsway)
                 7/88 - $98,700, Residence built 1970

             Lot 41,, Div. 11 (2205 Dover Drive)
                 7/88 - $125,000, Residence built 1980

















                                          -5-






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                           REPORT - FLOATING SALMON NET PENS



          SITE #3: DISCOVERY BAY - Clallam CoLinty, WA.
                     Township 30 North, Range 2W, W.M.

          DATES OF INSPECTION: August 19 & 20, 1988

          PURPOSE AND FUNCTION OF REPORTz To compare Discovery Bay with
          Peale Passage and Rich Passage. The i:Ltnction is to provide
          information UsefLil in siting floating salmon net pens.

          CERTIFICATION AND LIMITING CONDITIONS: The Standard
          Certifications and Limiting Conditions are attached.






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         AREA DESCRIPTION: Discovery Bay is a large bay situated between
         the Miller Peninsula and the Quimper Peninsula. A portion of
         the bay is located in Jefferson County and a portion is in
         Clallam County. The portion of the bay where the proposed
         floating salmon net pens are located is in Clallam County.

         Discovery Bay and Rich Passage are similar with areas of fairly
         dense development, areas of scattered homes along the
         waterfront, and some unimproved properties. Peale Passage is
         relatively undeveloped by comparison with only 4 or 5 areas
         where groups of waterfront homes are clustered near the end of a
         road.


         TOPOGRAPHICAL INFORMATION: Discovery Say has a much wider
         variety of terrain than either Peale Passage or Rich Passage.
         Discovery Bay has several no bank waterfront areas such as
         Diamond Point, Beckett Point, and Gardiner. It also has many
         medium to.high bank areas. Elevations near the waterfront range
         from 11' to 600' feet above sea level.


         SIZE AND DESCRIPTON OF PENS: It is my understanding that the
         proposed Discovery Say pens will eventually be 100 feet by 1000
         feet in area and are to be steel pens.

         I do not know what materials were used in constructing the Peale
         Passage Pens as they were not visible from any of the areas I
         visited. The Rich Passage pens are constructed from a variety
         of materials. Some were wood, others a combination of wood and
         steel, and others were steel.

         VISIBILITY OF PENS FROM DIFFERENT LAND LOCATIONS AND ELEVATIONS
         AROUND DISCOVERY BAY: Photographs (50 MM) were taken from
         different areas as shown an the attached Gardiner quadrangle map
         exhibit. These areas were visited and photos taken of the
         proposed fish pen location to make comparisons with the other
         areas visited. Approximate distances from the proposed pens and
         elevations at the site are noted near each picture.

         CONCLUSION: After visiting all three study areas and evaluating
         the information gathered in the field it is my opinion that
         areas over 2400 lineal feet from the floating net pens will have
         little visual impact and their property values will not be
         adversely affected. Residential areas less than 2460 lineal
         feet from the pens will have some Visual impact.






                        ALPINE APPRAISXL SERVICE
                                  REAL ESTATE APPRAISERS
                       150 S. STH AVE. SUITE 14 SEQUIN. WASHINGTON 98382
                                      (206) 683-7084






          In Peale Passage and Rich Passage floating net pens were
          originally located in areas with no residential development
          within 2400 feet of the pens. In the past 3 years two new
          waterfront homes with a view of the floating net pens were built
          on the north side of Rich Passage and several waterfront parcels
          adjoining the Domsea Dock and Pens in this same area are in the
          process of being developed and sold. Because of the lack of
          sales history for properties within this distance it is not
          possible to make any direct value comparisons, however, the
          building and development activity in the area indicates the
          impacts have been minimal. This is consistent with my personal
          experience as a real estate appraiser. Over the past B years, I
          have appraised many waterfront and water view properties in
          Jefferson and Clallam Counties. I have found that waterfront
          and marine activities do not adverse]y affect upland and
          waterfront property values.


























N,


















I









                                 APPENDIX L


                   ECONOMIC ASPECTS OF SALMON AQUACULTURE

0






                                                                                                     The Northwest Environmental journal, 5:37-52, 1989
                                                                                                     University of Washington, Seattle, Washington 98195


                                                                                                        Economic Aspects of Salmon Aquaculture

                                                                                                                           James A. Crutchfield'

                                                                                                                             Scope and Purpose
                                                                                                       Aquaculture, broadly defined, includes shellfish culture, ocean
                                                                                                     ranching (i.e., the hatchery production of selected stocks which are
                                                                                                     released to the ocean and harvested upon their returr), and pen-
                                                                                                     rearing of various species of finfish. This paper focuses on the ex-
                                                                                                     plosive and controversial growth in farming of salmon. Pen-rearing
                                                                                                     of salmon is definitely where the action and the emotions are cen-
                                                                                                     tered in Washington State, although controversy also has arisen over
                                                                                                     the proposed rearing of edible seaweed (nori) and the expansion of
                                                                                                     shellfish culture.
                                                                                                       The policy issues involved in the disputes over pen-rearing in
                                                                                                     Washington waters tend to be viewed as regional, but it is impossible
                                                                                                     to assess them without considering similar issues elsewhere in the
                                                                                                     world. Our local expertise and capital are drawn, in part, from abroad,
                                                                                                     and farmed salmon now are standardized items in world trade.
                                                                                                       The first part of this paper deals with the development and current
                                                                                                     economic situation of salmon farming in the broader setting. The
                                                                                                     second part discusses the potential role of Washington State in the
                                                                                                     global market and a number of factors that give rise to some pe-
                                                                                                     culiarly local problems. The term Puget Sound is used throughout to
                                                                                                     mean the area from the Canadian border, south to Clallam County
                                                                                                     on the Strait of Juan de Fuca.

                                                                                                       World Salmon Farming: The Norwegian Experience
                                                                                                       Pen-rearing is hardly a new toy in the fisheries world. Sophisti-
                                                                                                     cated pond culture has been carried on in China and Southeast Asia
                                                                                                     for centuries, and there are active brackish-water rearing enclosures
                                                                                                     in Gaeta, Italy, which once served the elite of Roman society. Ex-
                                                                                                     perimental and modest commercial production of pen-reared salm-
                                                                                                     on goes back to the 1970s. Indeed, much of the best research on



                                                                                                        Professor Emeritus, Department of Economics, Graduate School of Public
                                                                                                     Affairs, and Institute for Marine Studies, % Institute for Marine Studies
                                                                                                     (HF-05), University of Washington, Seattle, Washington 98195.






                 38              NORTHWEST ENVIRONMENTAL JOURNAL                                 Vol. 5:1                      1989               SALMON AQUACULTURE ECONOM[CS                                         39

                 rearing of salmonids has been carried on in Washington State for                                              TABLE 1. World production of Atlantic and Pacific salmon (in metric tons), 1987-
                 decades by scientists at the University of Washington and the Na-                                             1990.
                 tional Marine Fisheries Service. Nevertheless, large-scale commer-                                            Salmon          Country               1987           1988           19892          19902
                 cial production under controlled conditions is a relatively new de-
                 velopment. Catfish in the United States, yellowtail and shrimp in                                             Atlantic      Canada                    800          1,600          3,200          5,000
                 Japan, and shrimp in Latin America now support solidly established                                                          Faroe Islands           4,800          4,800          7,100          9,000
                                                                                                                                             Iceland                   800          1,800          2,500          5,000
                 industries. But nothing matches the excitement and the economic                                                             Ireland                 2,200          4,500          6,600          10,100
                 impact of the explosive growth of pen-reared salmon, which fol-                                                             Norwayl                 53,000         80,000         84,000         107,000
                 lowed years of limited success and experimentation in Washington,                                                           England                 13,900         15,000         20,000         25,000
                 British Columbia, Chile, and elsewhere.                                                                                     United States             800          1,700          3,200          5,200
                  Pacific salmon (coho and chinook) remain the mainstay of pen                                                                 Sub-total             76,300         109,400        139,400        166,300
                 operations in Japan, British Columbia, Chile, New Zealand, and the                                            Pacific       Canada                  3,200          8,400          14,600         23,000
                                                                                                                                             Chilel                  1,700          3,500          15,400         17,000
                 state of Washington. In a dozen years, the output of farmed coho                                                            Japani                  13,000         15,000         17,000         30,000
                 in Japan has risen to an estimated 15,000 metric tons (mt); Atkinson                                                        New Zealand             1,000          1,500          2,000          3,000
                 (1987) has forecast production of 30,000 mt by 1990. British Columbia                                                       United States           1,700          2,000          2,400          2,500
                 operations also are based largely on coho and chinook, and have                                                               Sub-total             20,600         30,400         51,400         75,500
                 grown very rapidly with relaxation of tight government restrictions.                                          Total                                 96,900         139,800        190,800        241,800
                 Between 125 and 160 licensed farms presently are active. New Zea-                                             I Figures for Norway, Japan, and Chile have been adjusted on the basis of more
                 land's farms are devoted to chinook, and Washington State's pen-                                              recent reports.
                 rearing operations are producing coho and a small quantity of chi-                                            Source: Cited in Anderson 1987.       Norway continues to expand (from a report by
                                                                                                                               JETRO quoting data by National Marine Fisheries Service (NMFS)I. Suisan Tsushin,
                 nook.                                                                                                         Tokyo. November 11, 1988. (Printed in Japanese.)
                   Except for Japan, however, change is in the wind. Washington's                                              2 Projected by above JETRO report quoting NMFS data.
                 largest coho farm was sold recently to Norwegian interests and will
                 st- : Ct lo A       C  salmon; --!! of the a-licatinne for nermitq nnw
                 IL11 L I.,        -                                 rr               ---              ---
                 before the State are for Atlantics. Recent investments in Chile and                                           unexpected problems-is expected to exceed 100,000 tons by 1990.
                 British Columbia by large European multinationals also will be de-                                            This spectacular record has not been without its bumps and chuck-
                 voted to that species. Japanese firms, on the other hand, continue                                            holes, however. The industry struggled in its early years to meet
                 to concentrate on coho in both production and imports, although                                               color and size requirements for its dominant European market. In
                 some New Zealand chinooks and Norwegian Atlantics are now                                                     1985, a temporary decline in prices caused some concern. In 1986
                 found in Japanese markets. At present, Atlantic salmon account for                                            and 1987, production was curtailed by an outbreak of disease. In
                 about 78 percent of world production.                                                                         1988, a massive onset of growth of algae required physical removal
                   As might be expected in this fluid situation, estimates of total                                            of many pens in Norway; though few fish were lost, the cost of
                 world production of pen-reared Atlantic and Pacific salmon from                                               moving them out of danger was substantial. Scotland also has suf-
                 different sources vary widely. The current forecast figures in Table                                          fered from algae blooms in recent years.
                 1 are believed to be reasonably reliable. All sources share a common                                            The success of the Norwegians in pen-rearing Atlantic salmon
                 theme, however: Very large increases in the supply of pen-reared                                              was not happenstance; it resulted from a combination of excellent
                 salmon will reach U.S., European, and Japanese markets in the next                                            natural endowments, supportive government policy, and an ener-
                 few years.                                                                                                    getic and well-organized industry (Lavin-Riely and Anderson 1986).
                    The real breakthroughs in rearing Atlantic salmon came first in                                            Atlantic salmon can be "grown out" in pens from smolt to desirable
                 Norway, where a strong government program of research and de-                                                 market size (2-6 kg) in about 18 to 24 months, and are less susceptible
                 velopment grew out of the need for new economic opportunities                                                 to disease than Pacific species. Despite general depletion of Atlantic
                 in the depressed coastal fishing areas. Table 2 tells a tale of almost                                        salmon after World War 11, Norway had a fairly good supply of
                 uninterrupted success. From a meager 3,500 metric tons in 1978,                                               genetically-diverse wild stocks from which to draw. Its long coast-
                 production is projected at nearly 80,000 tons in 1989, and-barring                                            line provided excellent water temperature regimes and an abun-





               40                  NORTHWEST ENVIRONMENTAL JOURNAL                                     Vol. 5:1                             1989                 SALMON AQUACULTURE ECONOMICS                                              41
               TABLE 2. Supply of farmed Atlantic salmon: Norway and other countries (in metric                                             tered areas in Maine. The British Columbia Ministry of Agriculture
               tons), 1978-1990.                                                                                                            and Fisheries estimates that there are more than 700 potential sites
                                          Other                                                    Percent of                               in British Columbia alone (DPA 1986).
                      Year             countries             Norway                Total               total                                  The "internationalization" of salmon farming certainly would
                      1978                   250               3,500                3,750              93.0                                 have occurred as a result of market forces alone. Another factor was
                      1979                   470               4,150                5,598              89.9                                 the availability of suitable sites in many parts of the world. But the
                      1980                1,445                4,153                5,598              74.2                                 process has been accelerated by Norwegian fishery policies. (For an
                      1981                1,133                8,422                9,555              88.1                                 excellent summary of these policies, see Bjorndal 1988.) Briefly stat-
                      1982                3,527               10,265               13,792              74.4                                 ed, the government's approach to the new pen-rearing industry has
                      1983                2,839               17,016               19,855              85.7                                 been dominated by two goals: (1) to place farms in regions with
                      1984                4,552               22,300               26,852              83.1
                      1985                6,500               28,655               35,155              81.5                                 limited employment opportunities (perhaps resulting in less mi-
                      1986                10,600              38,000               48,600              78.2                                 gration to large urban areas); and (2) to gear the pace of production
                      1987                14,700              50,000               64,700              77.3                                 to growth in the market for pen-reared fish and, thus, stabilize prices
                      1988                N/A                 80,000               98,000                                                   at profitable levels. These objectives were reflected in tight restric-
                      1989*                                                                                                                 tions on the number of smolt-rearing and feed-out farms (where
                      1990*               40,000             107,000               147,000             72.8                                 hatchery-raised smolts that have been moved to rearing pens-
               Source: The University of Stirling Institute for Retail Studies Market Reports, Volume                                       usually in natural saltwater-are fed in the pens); limitations on
               No. 2, pp. 42, 43. 1988 and 1990 estimates from trade sources.
                 Projected by the University of Stirling Institute for Retail Studies.                                                      farm size and multiple-site ownership; and insistence on industry-
                                                                                                                                            wide pricing, quality control, and the provision of genetically-strong
                                                                                                                                            eggs and smolt. The government also has subsidized the develop-
               dance of sites relatively free Of pollution. There was little public                                                         ment of a multi-mode transportation system linking fish farms and
               opposition to this new water use. Government aids, in the form of                                                            their suppliers (Mylchreest 1985).
               scientific research, capital funds, subsidies, and quality control, were                                                       These policies have, in general, achieved their goals, but they also
               used effectively. The industry rapidly developed marketing and                                                               spurred the export of Norwegian capital and expertise to other coun-
               production strategies that made year-round supplies of high-quality                                                          tries. Experience and technological progress brought an awareness
               fresh salmon widely available. Even if account is taken of the sub-                                                          that government restrictions were preventing the realization of
               sidies, salmon farming has proved highly attractive to Norwegian                                                             economies of scale in the size of individual farms, operation of
               investors. When 150 new permits were made available recently,                                                                multiple sites, and vertical integration of smolt production, feed-
               there were more than 1,500 eager applicants.                                                                                 out, processing, and marketing. Many of Norway's farms are smaller
                                                                                                                                            than the allowable 8,000 cubic meters. (The Norwegian government
                                               The World joins In                                                                           authorized a 12,000-cubic-meter limit but as of this writing, it has
                                                                                                                                            not been implemented.) Several studies (e.g., Bjorndal 1988; Sal-
                  The boom has become international, although Norway's share of                                                             vanes 1986) indicate that operations several times that size would
               the total production of Atlantic salmon was still over 70 percent in                                                         probably bring important reductions in unit costs. This, coupled
               1987 (Table 2). The United Kingdom, Canada, Chile, Japan, Iceland,                                                           with the sobering realization that Norwegian salmon farmers would
               Ireland, New Zealand, and the United States-together with five                                                               soon feel the pinch of stabilizing prices and increased foreign com-
               other nations, several of them long active at low levels-now are                                                             petition, lead to a continuing effort to bring Norwegian skills and
               expanding production rapidly.                                                                                                capital to locations free of these restrictions. In the U.S., Canada,
                  In addition, substantial quantities of farmed salmon may reach                                                            Chile, Scotland, and elsewhere, the dominant factor in salmon farm-
               U.S. and European consumers from small 11                     pockets" of good rearing                                       ing has been the Norwegian presence. (For an excellent summary
               sites that are favorably located near transportation and markets. For                                                        of Norwegian investment activity in the U.S. and Canada, see Parker
               example, New Brunswick is producing Atlantic salmon for sale in                                                              1988.)
               the U.S. and is reported to have the potential for as much as 10,000                                                            Norway provides an example of establishing quality controls
               tons annually       .. Substantial quantities may be forthcoming from shel-                                                  through a central agency (the Fish Farmers Sales Organization),





             42        NORTHWEST ENVIRONMENTAL JOURNAL                   Vol. 5:1                    1989           SALMON AQUACULTURE ECONOMICS                          43

             backed by government inspection and export certification. This ex-                      for sale in the imaginative plastic packaging developed for use in
             ample has been followed, through government or industry action,                         retail chains and supermarkets.
             by all major producing countries except the United States (Ringstad                      From the standpoint of the important European salmon-smoking
             1986). Given the reliance on high and consistent quality as a device                    industry, the ability to buy raw materials, as needed, significantly
             for market penetration, this type of control probably is essential to                   reduces holding costs (i.e., storage, freezer capacity, quality main-
             prevent "free-riding" by less scrupulous producers and marketers.                       tenance, and interest charges).
             In short, the U.S. development of pen-rearing potential must be                          Note the emphasis on continuity of supply of market-sized fish,
             accompanied by measures to assure industry-wide adherence to high                       a problem never completely solved in efforts to build a strong market
             quality standards.                                                                      for pen-reared coho. Few farm operations, even with multiple sites,
                                                                                                     can deliver farmed Atlantic salmon in fresh form through a full
                                                                                                     year, but the growing diversity of sources in both northern and
                                        Markets                                                      southern hemispheres means that the entire market can very nearly
                                                                                                     meet that goal. Skillful use of the freezer, and care in subsequent
             The phenomenal growth in farmed salmon production raises the                            handling, can bridge the remaining gap. For obvious reasons, mar-
             two obvious questions of where it is going and how markets can                          keting of farmed fish is heaviest in the eight months when fresh
             absorb such quantities.                                                                 wild salmon are scarce or unavailable. It also should be noted that
             The markets for salmon are highly segmented. The major markets                          some of the coho production is marketed at pan-size and competes
             (U.S., Japan, United Kingdom, Germany, and France) distinguish                          with trout rather than other fresh salmon.
             wild from farmed salmon; coho, chinook, and sockeye from Atlantic;                        In short, the growth in sales of farmed salmon to date reflects a
             troll-caught from net-caught Pacific fish; fresh from frozen; and                       number of real marketing advantages over wild fish in the high
             small from large fish. Cross-elasticities of demand (i.e., the sensi-                   quality fresh-fish-oriented segments in which they have concen-
             tivity of demand in one segment to changes in prices in another)                        trated. The ability to maintain a high growth rate, however, will
             are not identical, but are linked to some degree. Thus far, farmed                      require much broader penetration, probably with a wider variety
                           'ed into the rnarkets f0r. s-ahmo.-      -1A. -
             saimuit have I'M                                                                        of end products. With wild salmon landings holding fairly steady
             demand for fresh fish "out of season," and by edging into the Eu-                       at around 650,000 mt, farmed salmon will account for about 14
             ropean smoked salmon markets traditionally served by wild fish or                       percent of total supply by 1990. The figure is much higher for wild
             U.S. frozen fish. There is, contrary to one widely expressed view by                    Atlantics, Pacific chinook, and coho-the three species which com-
             salmon farmers, both direct and indirect competition with wild fish,                    pete most directly. There is a big marketing job to be done in the
             but farmed salmon clearly are making up the growth component.                           near future.
             The "white tablecloth" restaurants are by far the most important
             outlets for quality fresh salmon, and it is in this segment of the                                              Industry Structure
             market that farmed fish offer their greatest appeal. Restaurants can-
             not afford to promote a high-priced item like salmon without a                            The basic structure of salmon farming is essentially that of a
             guarantee of consistent supply. Unlike troll-caught chinook and                         marine feedlot operation. Selected salmon eggs are reared in a hatch-
             coho, farmed Atlantics are available in uniform sizes, quantities,                      ery and raised to smolts of 35-50 g in a second stage. The smolts
             and guaranteed freshness year-round. In particular, they fill the long                  then are moved to rearing pens, usually in natural saltwater envi-
             gap left by the highly-seasonal availability of wild salmon.                            ronments, and grown to marketable size (about 2-6 kg). The fish
             For the busy restaurateur, the ability to order by telephone to                         are harvested and bled on site for transportation to processors and
             meet exact needs, rather than touring fish markets to examine in-                       then are frozen or shipped by air or truck to export destinations.
             dividual lots, is an attractive feature that reduces costs and increases                Subsequent distribution in the United States is handled through
             menu flexibility.                                                                       established fresh-fish marketing channels, with a small quantity sold
             Uniformity of size and quality, and steady supply also may be the                       in frozen form. A rough estimate of price relationships in the U.S.
             principal characteristics that make farmed salmon a prime candidate                     at various states in the process is shown in Table 3.





           44           NORTHWEST ENVIRONMENTAL JOURNAL                    Vol. 5:1                      1989             SALMON AQUACULTURE ECONOMICS                            45
           TABLE 3. Cost structure for fresh farmed salmon from Norway, in dollars (USD).                  Some of these threats will doubtless be reduced by the sheer
                                                                    USD                                  pressure of the marketplace, but always at some additional cost to
                   Price FOB Norway                                 6.56/kg                              producers. And the number of unknown and uncontrollable loss
                   Air freight ex Norway                            1.74                                 factors will remain large enough to make pen-rearing a high risk
                   Margin of importer (7%-10%)                      0.83                                 business.
                   Selling price of importer                        9.13                                   Finally, the availability of high quality feed has been a recurrent
                   Overland freight                                 0.22                                 worry, particularly in newly developed salmon farming regions.
                   Margin of wholesaler Q0%)                        1.87                                 The fish meal industry is geared to a huge demand for poultry and
                   Selling price to restaurant                     11.22                                 animal feeds, which are not suitable for fish. In the intermediate
           Source: Ringstad 1986.                                                                        term, improved knowledge of nutritional requirements at each stage
                                                                                                         of development (from egg to mature salmon) and the growth in the
                                                                                                         size of the market for salmon feed will provide the market incentives
                                Biochemical Problems                                                     to meet the problem; in the interim, however, it remains an im-
                                                                                                         portant concern in some areas.
            The industry has struggled in its early phases with a number of
           economic problems. Smolt production has been carried on as a sep-                                           The Trend Toward Concentration
           arate operation in most cases, and often has fallen short of demand
           from the rapidly growing farm operations. The scramble for smolts                               It is not surprising that these unresolved biotechnical problems,
           has, in turn, added to the problem of straying of escaped farm fish                           together with better access to capital and markets, have tended to
           and genetic disruption of wild salmon stocks on which the Nor-                                push the salmon-farming industry toward fewer and larger units,
           wegian industry is still dependent. Briefly, this results from mixing                         better able to reduce risks through multiple-site operations and to
           of wild and farmed fish and the subsequent dilution of the complex                            tie successive input requirements (eggs, smolts, and feed) to con-
           set of genetic characteristics that tailor each wild stock to the specific                    trolled sources through vertical integration. This trend has been
           conditions of its river of origin. In Norway these problems have                              impeded by Norway's regulatory orientation, but is clearly evident
           been addressed by a centralized governmental research program to                              in other countries such as Canada, Scotland, and Chile. A study of
           develop brood stocks of appropriate diversity, as well as by careful                          British Columbia farms showed that about 60 percent of their pro-
           control of imports. These are inherent problems that must be ad-                              duction came from 15 percent of the farms (DPA 1986).
           dressed, by public or combined industry action, in any salmon farm-                             Geographic decentralization of the industry will doubtless con-
           ing area. In Washington State the permitting process requires careful                         tinue, not only because of Norway's restrictive policies, but also
           attention to the potential impact of salmon farmers on wild and                               because of high transport costs. Air freight to the U.S. from Norway
           hatchery stocks.                                                                              averages about $1.74/kg and up, which provides a substantial um-
             A major factor affecting costs of pen-rearing is the need to control                        brella for farmers located closer to consuming centers. Chilean fish
           disease and to improve survival rates. Like any other marine animal,                          are brought to the West Coast by one large U.S. firm in chartered
           diseases become more troublesome as stocking density increases.                               Boeing 707s-an outlay that can only be absorbed because of south-
           Drug treatment is expensive and raises questions about transfer of                            ern Chile's low wages and freedom from controversy about envi-
           potentially toxic material to other marine organisms or to human                              ronmental problems. Canada, of course, has a clear advantage with
           consumers. In Norway, the higher incidence of disease in older fish                           respect to transportation to U.S. markets.
           has at times restricted the size to which salmon can be grown; this
           runs counter to market preference for larger fish.                                                        Salmon Farming in Washington State
             There is always the risk of adverse developments in the complex
           marine environment on which pen-rearing depends. Changes in                                     Why has Washington been so slow in joining the pen-rearing
           salinity, temperature, algae blooms, and food web relations (not to                           boom? Washington has had some early experience in farming coho
           mention oil spills, waste disposal, and other human insults) pose                             salmon-some of it marginally successful and some disastrous. A
           contingent threats to salmon farms.                                                           great deal of sophisticated and practical research in rearing of sal-





             46          NORTHWEST ENVIRONMENTAL IOURNAL                       Vol. 5:1                         1989             SALMON AQUACULTURE ECONOMICS                               47
             monids has been carried on by the University of Washington and                                     of scenic values for shoreline and upland property owners, and
             the National Marine Fisheries Service. The state's potential sites                                 restrictions on quality water-based recreational activities, particu-
             have been investigated, largely by technically competent domestic                                  larly boating. Unfortunately, there is no operative price mechanism
             and Norwegian interests. Yet only 7-13 marine rearing operations                                   which would help establish a schedule of best uses for these waters.
             now are believed active, compared to some 125-160 in British Co-                                   But the losses are certainly very real to those directly affected, as
             lumbia.                                                                                            evidenced by the widespread opposition that has developed in the
             Proponents of aquaculture are quick to point a finger at the slow                                  greater Puget Sound region. Regional environmental quality is a
             pace of governmental site certification and the failure of the state                               composite of many things, and it is vulnerable to the "            nibbling"
             to provide firm guidelines for site approval and farm operation.                                   process that accompanies growth in population and industry. More-
             There is some measure of truth in their position. For example, there                               over, environmental losses are all-too-frequently irreversible.
             are definite conflicts between state agencies and local governments                                . It must be stressed that Puget Sound already is an intensively
             that must be resolved. The concerned agencies-the Governor's of-                                   utilized land/water system. Water transportation, commercial and
             fice and the departments of Agriculture, Fisheries, and Natural Re-                                recreational fishermen, pleasure boaters, beachcombers, and shore-
             sources-are strong supporters of rapid expansion of aquaculture.                                   line residents all compete in varying degrees for use of these        waters.
             Local governments are more exposed to the -direct heat of constit-                                 Virtually all of the desirable pen-rearing sites will put salmon farmers
             uents who are concerned about negative effects and are generally                                   in direct conflict with some other users.
             opposed to anything more than token pen-rearing. They argue,                                         Unlike other major sea-farming areas, e.g., the west coast of Nor-
             again with considerable justification, that they pay most of the ex-                               way, Scotland's north coast and islands, and southern Chile, there
             ternal costs and assume all of the environmental risks of salmon                                   is no logical argument that salmon farming is needed in isolated
             farming with extremely small economic benefits (see "Economic                                      areas of Puget Sound where unemployment and labor immobility
             Non-Issues," below). Coalitions of opposition groups originating at                                create serious social problems. The Puget Sound region is the most
             the country level have become increasingly vocal at the state and                                  prosperous in the state, and even the distressing condition of the
             local levels.                                                                                      commercial salmon fishery is largely offset by the ready availability
             it -,eems clear that the ratitious attitude of the state government                                of off-season employment. For most commercial fishermen. Wash-
             toward action, as opposed to rhetoric, is a response to real public
             concerns about the impact of a large pen-rearing industry on local                                 ington offers a vari@ty of better jobs than unskilled manual labor
             areas and on the state as a whole. Weston's studies (1987) and ex-                                 on salmon pens.
             perience in Norway confirm the likelihood of water quality deg-
             radation in limited areas from fecal matter and unused feed. But                                                          Economic Non-Issues
             how extensive or persistent these effects may be, particularly after                                 The real issues in the controversies over site approvals have been
             long periods of operation, remains an open question which can only                                 obscured by a number of economically faulty arguments put forth
             be answered on a site-by-site basis. If, for example, it turns out that                            by both sides. For example, proponents repeatedly have claimed
             the pens must be moved every few years, the unpleasant possibility                                 that a fully-developed Puget Sound salmon-rearing industry would
             emerges of continuous struggles over certification of new sites.                                   reduce the nation's serious international balance-of-payment prob-
              I am not qualified to assess the significance of other biological                                 lems. But in recent years, total salmon imports to the United States
             impacts, e.g., transmission of diseases to native fish stocks, straying                            amounted to less than one-tenth of one percent of the $150 billion
             and genetic damage, long-term effects of drugs and other chemicals                                 deficit in the U.S. balance of trade.
             on local biota and/or humans, and possible damage to birds or                                        The promise of major increases in jobs and entrepreneurial op-
             marine mammals. While it seems likely that the probability of cat-                                 portunities is equally suspect. A recent study by the State Depart-
             astrophic damage is small, the probability of zero damage is even                                  ment of Trade and Economic Development (Inveen 1987) suggests
             smaller. Whatever their level, biological impacts mean increased                                   that primary employment in a typical Puget Sound pen-rearing
             social costs-some that can be measured in dollars, others that can-                                operation would be eight to ten persons, with an average annual
             not.                                                                                               wage of about $19,000-ranging from $14,500, to $30,000 for the
              Probably the most important negative impact is the degradation                                    manager. Capital investment required would be about $750,000-





            48         NORTIIWEST ENVIRONMENTAL JOURNAL                  Vol. 5:1                      1989           SALMON AQUACULTURE ECONOMICS                           49

            $1,000,000, and annual operating expenses about $1,400,000 (feed,                          portion (26 percent) felt that frozen farmed Atlantics compete di-
            30 percent; labor, 14 percent; smolt, 12 percent; "other," 44 percent).                    rectly with frozen Pacifics, but this may change as more and more
            Assuming eight additional jobs in secondary activities, the total                          imports come in frozen form from sources such as Chile and New
            increase in employment from ten new salmon farms would be about                            Zealand.
            160-200, and the number of new firms would be something less                                There is general agreement that exports of wild salmon to Europe
            than ten: These are useful additions, to be sure, but not of major                         (about 10-15 percent, by value, of total U.S. production) will feel
            significance. These figures are consistent with estimates of labor                         the impact of farmed salmon most severely. European smokers, tra-
            inputs in the Norwegian industry (Bjorndal 1988).                                          ditionally the major purchasers of frozen troll-caught chinook and
            On the other side of the controversy, commercial fishermen have                            coho, have turned increasingly to Norwegian, Scottish, and Irish
            resolutely opposed any increase in salmon farming for two reasons:                         farmed Atlantics. (This comment is based on an unpublished paper,
            (1) the encroachment on fishing grounds or areas in which fish are                         "International Salmon Farming: Competition for U.S. Fishermen?"
            transferred to buyers (where boats anchor during closed periods);                          by Stephen M. White for a fall 1986 class at the Institute for Marine
            and (2) the adverse effects of farmed fish on market prices. The first                     Studies, University of Washington, Seattle.)
            point is a legitimate one, but it could be met by identifying and                            For obvious reasons, the impact of farmed salmon on prices and
            blocking out areas where pen-rearing activity would impact tradi-                          market shares for traditional fishermen is critically dependent- on
            tional fishing activities. This would, however, further restrict the                       the long-run breadth and depth of the overall market for salmon.
            number of sites that meet state guidelines.                                                There is probably some validity to the aquaculturists' position that
            The second point is more complex. Two questions are raised:                                year-round availability of salmon will boost demand for both farmed
            Would farmed fish actually compete with wild fish in the market?                           and wild fish in both restaurant and retail markets. The excellent
            if so, should traditional harvesters be shielded from such compe-                          job of quality control by marketers of farmed salmon may force
            tition? To some extent competition in the fresh market is limited                          badly needed improvements in the handling of wild salmon, which
            by timing. Wild salmon are available in fresh form only during a                           would add further strength. But a major, concerted promotional
            "window" of about four months (and for Washington trollers and                             effort will be required if forecasts of 200,000-300,000 tons  of farmed
            net fishermen, the window is even narrower); imports of farmed                             salmon annually come to pass and the estimated minimum whole-
            fish are heavier in the off-season. The boundaries are not that neat,                      sale prices of $3.50-$3.75 per pound are to be maintained.
            however. Atlantic salmon can be found on restaurant menus year-                              From the standpoint of Washington State policy, perhaps the best
            round, particularly in East Coast and Midwest markets. High quality                        response to the competition question is: So what? Consumer pref-
            frozen wild fish, which normally filled the winter/spring gap, are                         erences ultimately determine the relative place of different salmon
            directly competitive with farmed fish. If, as trade journals suggest,                      products in different markets, with price differentials serving as the
            more and more farmed salmon will be frozen as production expands,                          allocative mechanism. This is the way private enterprise economies
            competition with wild fish will broaden (Seafood Leader 1988).                             are supposed to work. Any effort to stifle production of a new or
             Pen-reared coho, in smaller sizes, are considered more comparable                         better product for the benefit of an existing segment of industry
            to farmed trout. Larger coho from Chile, however, are close substi-                        runs directly counter to the rules of the game, and would be doomed
            tutes for wild fish, as are chinooks from farms in New Zealand and                         to failure in time. Moreover, the additional output of Washington
            British Columbia.                                                                          farmed salmon, even under the rosiest assumptions, would have
             In aggregate terms, it is difficult to avoid the c    'onclusion that                     little or no measurable effect on prices that are determined by world-
            farmed salmon must either moderate price increases or actually cut                         wide supply and demand.
            real prices for domestically-harvested wild salmon. imports are much
            greater than the supplies of troll-caught chinooks and coho, which                                        Conclusions and a Look Forward
            are most nearly comparable in quality.                                                       We conclude with words about roses and the thorns that go with
             A recent study (Rogness and Lin 1986) offers partial confirmation                         them. First the good news:
            of this conclusion. Seventy-nine percent of the wholesalers and
            distributors responding to their survey felt that fresh farmed At-                            1) If market limitations do not intrude, there are ample areas for
            lantics were a direct substitute for fresh Pacific fish. A smaller pro-                    expansion of the physical production of salmon farming, even in






           50          NORTHWEST ENVIRONMENTAL JOURNAL                  Vol. 5:1                    1989           SALMON AQUACULTURE ECONOMICS                           51

           Norway where 700 pen-rearing operations are licensed. Chile, Brit-                       tracted, due to the long production cycle for salmon (Bjorndal 1988;
           ish Columbia, and-if political opposition is overcome-Alaska have                        Ringstad 1986). Anderson (1988), in a recent analysis of demand for
           hundreds of potential sites with suitable water and temperature                          farmed salmon, indicates that a supply of 125,000 mt could be moved
           conditions and little or no competition for land or water. Others                        only at prices about 20 percent below present levels.
           with growth potential include New Zealand, Ireland, Scotland, Ice-                        2) Salmon farmers in some areas are beginning to feel the pinch
           land, the Faeroe Islands (Denmark), and a few areas in New England                       as some previously "external" costs begin to fall on their shoulders.
           and the Canadian maritime provinces.                                                     These include, for example, the increasing incidence of local pol-
           2) Neither technical expertise nor capital appear to be limiting                         lution, which requires more stringent controls by the operators and,
           factors over time. The former can be purchased, and the latter is                        in some cases, shifts in location. Adverse effects of some of the most
           readily available from Norway and, increasingly, from multination-                       effective chemicals used to control disease and to retard fouling of
           al corporations (e.g., Unilever and British Petroleum).                                  pens may require use of less potent substitutes or location shifts.
            3) Thus far, the export marketers of farmed salmon have concen-                         Governments cannot reasonably be expected to subsidize the in-
           trated on dressed and whole fish in fresh form. New profit oppor-                        dustry indefinitely; eventually aquaculture must begin to contribute
           tunities for exploitation of new consumer portions, preparations,                        to the necessary costs of research and management, and to pay full
           and packaging have barely been touched. In addition to broader                           costs for all inputs.
           consumer appeal, these developments will integrate the marketing                           3) The combined effect of stable real prices and rising costs already
           of farmed fish that have established food marketing channels, with                       has begun to cause concern about the financial condition of many
           substantial savings in distribution costs. (The same avenues for im-                     marginal firms, even in Norway (Bjorndal 1988; Ringstad 1986). This
           provement are also available to wild fish, of course.)                                   has accelerated the search for new, low-cost production sites and
            4) Shellfish culture and shrimp, salmon, and catfish rearing are                        will strengthen the move toward larger, integrated firms and the
           by no means the end of the road for commercial aquaculture. Ex-                          linkage of fish farming to conglomerate international corporations.
           perimental work is underway in controlled rearing of a variety of                          4) Expansion of salmon farming in some areas (e.g.,.Washington)
           other popular species-cod, halibut, sturgeon, Arctic char, and tur-                      has met determined opposition from property owners adjacent to
           bot, to menti-n -nlv a fpw (Lavin-Riely and Anderson 1986). We                           the proposed pen sites, commercial fishermen, and some environ-
           are far from the situation in animal husbandry, where centuries of                       mental groups. This resistance can be expected to continue, and
           research, genetic modification, and field testing have identified the                    probably will prevent more than limited growth in areas close to
           most promising species and further modified them for human use.                          major markets. Obviously, if the concerns about adverse environ-
           Given the ubiquitous world need for more protein foods, there is                         mental effects turn out to be warranted, the restrictive pressure will
           every reason to believe that frontiers in the cultivation of marine                      become much stronger.
           animals will be pushed hard.
             Now for the thorns:                                                                      From the standpoint of all residents of the Puget Sound region,
                                                                                                    there seems to be no reason to rush headlong into pen-rearing.
             1) The trade literature reflects widespread uneasiness about the                       Fitting salmon farms into a heavily populated area with a wide array
           timing and effect of the inevitable industry stabilization process.                      of water-dependent industries, recreational users, and shoreside
           Markets do not expand indefinitely. As farmed salmon fill out their                      home owners will be a ticklish task. It will demand full public
           present niches in the fish (and wider animal protein) markets, the                       review and evaluation of the state environmental impact statement,
           relatively stable premium prices enjoyed since 1984 by farmers                           and detailed analysis of site-specific factors involved in each appli-
           and distributors must soften, if production continues its headlong                       cation. Salmon farming is a legitimate claimant on Washington in-
           growth. This "overrun" phenomenon, typical of new industries,                            shore waters, but it is only one of many. There is no apparent reason
           may be deferred and its impact softened if new and much larger                           why it should be given special priority.
           consumer groups can be reached (e.g., if high-volume chain retailers                       This cautious approach, essential if Puget Sound is to yield its
           begin to push farmed salmon after only moderate declines in real                         greatest overall economic and social benefits, may delay the entrance
           prices). If not, a painful shakeout period of considerably lower prices                  of Washington producers into the market. But what is lost? The
           and bankruptcies can be expected. This period could be quite pro-                        market will still be there and, hopefully, growing. Farmed salmon





              52              NORTHWEST ENVIRONMENTAL JOURNAL                              Vol. 5:1                      The Northwest Environmental journal, 5:53-69, 1989
                                                                                                                         University of Washington, Seattle, Washington 98195
              is an undifferentiated product, and no supplier is going to seal off
              the market to new entrants. If Washington producers can meet prices
              and quality standards of imported fish, they will sell readily. As                                            Effects of Phytoplankton Blooms on Salmon
              indicated above, the industry expects a fairly severe shakeout period
              in the early 1990s, and it may be to the advantage of late entrants                                            Aquaculture in Puget Sound, Washington:
              to plan investment and marketing strategies after that process is                                                                       Initial Research
              complete.
                                                                                                                            John E. Rensel,l Rita A. Horner,' and James R. PosteJ3

                                                References                                                                                                 Introduction
              Anderson, James C. 1988. Current and future market for salmon in the United                                   Marine salmon farming throughout the world is expanding rap-
                States. Aquaculturc International Congress and Exposition. Vancouver, B.C. In press.                     idly. The production of net-pen reared Atlantic salmon, Salmo salar,
              Atkinson, Clinton. 1987. The fisheries and markets of Japan with special reference                         leads the expansion because this species commands a high market
                to Salmon. Perspectives for Salmon Culture in Chile. Santiago de Chile: Fundacion                        value and is especially adaptable to culture conditions. Expansion
                Chile.                                                                                                   of Washington State salmon net-pen operations has slowly increased
              Biorndai, Trond. 1989. The Norwegian aquaculture industry: Industrial structure                            since 1970 with 14 private sites operating as of late 1988.
                and cost of production. Marine Policy Fall 1988, 122-141.                                                   In the early days of Washington State net-pen culture (1 970-1975),
              DPA Group, Inc. 1986. Industrial organization of the B.C. salmon aquaculture industry:
                Final report. Vancouver, British Columbia: Department of Fisheries and Oceans,                           losses of salmon were caused primarily by bacterial diseases, poor
                September 1986.                                                                                          siting practices, and phytoplankton blooms. The first two problems
              Inveen, Daniel. 1987. The aquaculture industry in Washington State: An economic over-                      have been lessened through the development of effective vaccines
                view. Olympia: Washington State Department of Trade and Economic Development.                            and the move to deeper areas with stronger currents.
              Lavin-Riely,PatriciaAnn,andjamesL.Anderson. 1986. ThestatusofAtlanticsalmon                                I  Phytoplankton problems, however, persist and there has been no
                aquaculture. Staff Paper 86-04. Kingston, Rhode Island: Department of Resource                           concerted effort to document or resolve them. In marine waters of
                Economics, University of Rhode Island.                                                                   western Washington, some net-pen systems have been removed due
              My1chreest, Russel. 1985. Norway's Atlantic salmon aquaculture industry. Vancouver,                        to phytoplankton-induced losses of salmon. In 1987, phytoplankton
                British Columbia: Regional Planning and Economics, Department of Fisheries and
                Oceans.                                                                                                  blooms in Washington were involved in the mortality of at least
              Parker, Peggy. 1988. Salmon farm investors. Seafood Business. May/June 1988. 7(3):                         250,000 Atlantic and Pacific salmon of all ages with monetary losses
                78-83.                                                                                                   over $0.5 million. Fish-farming industry officials in Washington
              Ringstad, Karl. 1986. World markets for farmed salmon. Unpublished document pre-                           State presently consider this problem to be their number one re-
                sented to Norwegian Trade Commission Fish and Farming Seminar, Seattle, Wash-                            search need.
                ington, June 5, 1986.                                                                                       Besides threatening the current production of approximately 9,000
              Rogness, Ronald V., and Biing-Hwan Lin. 1986. The marketing relationship between                           tons of Atlantic salmon per year in Washington State, the problem
                Pacific and pen-raised salmon: A survey of U.S. seafood wholesalers. Alaska Sea Grant                    hampers expansion of the industry because it compounds the risks
                Report 86-3. Fairbanks: University of Alaska.                                                            related to site development. Some private growers hesitate to con-
              Salvanes, Kjell. 1986. An empirical analysis of economics of scale in the Norwegian fish
                farming industry@ Discussion Paper No. 3, Institute of Fisheries Economics. Bergen:                      sider new sites because the costs of permit acquisition are high and
                Norwegian School of Economics and Business Administration.                                               untested sites may have unknown phytoplankton problems.
              Seafood Leader. Fall 1988. International aquaculture review. Seattle: Waterfront Press
                Company. 8(4):66-133.
              Weston, Donald. 1987. The environmental effects of floating mariculture in Puget Sound.                       'School of Fisheries (WH-10), University of Washington, Seattle, Wash-
                Seattle: College of Ocean and Fisheries Science, University of Washington.                               ington 98195.
                                                                                                                            14211 N.E. 88th St., Seattle, Washington 98115.
                                                                                                                            3School of Oceanography (WB-10), University of Washington, Seattle,
                                                                                                                         Washington 98195.


















































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