Laine Welch
For the Journal

Alaska's future fortunes could soon be fueled by another oil boom - and it won't be from crude.

Fish oils are the biggest buzz in the bio-products world, said Peter Bechtel, a U.S. Department of Agriculture researcher at the University of Alaska Fairbanks.

“We're seeing almost a revolution right now. Everyone is interested in the health benefits from omega 3 fatty acids, and Alaska's cold water marine fish are an excellent source,” he said.

Several things are driving the bio-rally, especially in today's climate of “planet consciousness.”

“We have a huge amount of material in Alaska that isn't made into fillets or roe, and we need to do something with this. This is especially important to parts of the salmon industry in Southeast Alaska,” Bechtel said.

According to 2005 federal data, Alaska fishermen catch approximately 2.5 million metric tons of fish each year, yielding 1.3 million tons of waste.

A portion of that becomes fish meal or fertilizers. Bechtel said seafood companies are realizing there is lots more value in all that fish gurry.

“Almost anything that can be made out of these byproducts has increased in value tremendously in the last couple of years,” Bechtel said.

The material can be made into fish oils, fish meals, supplements, gelatins from skins, and ingredients for farm animals, even ingredients for the cosmetic industry. Bechtel said fish oils can also cut energy needs in rural Alaska.

“In Alaska a lot of fish oil can be made. The question is how much is it worth. The current price is the same as boiler fuel. It can be used to heat hot water and other things,” he said.

Bechtel said Alaska “is making tremendous strides in byproducts utilization - one fish part at a time.”

Federal dollars could help fuel fish oil projects for Alaska fishermen.

“Those would be value added products, because you're taking the fish and processing it into a new product. That absolutely would be eligible,” said Dean Stewart, director of Business Programs for the U.S. Department of Agriculture Rural Development program in Palmer.

Adding value can be as basic as heading and gutting, or chilling the fish.

“The result is intended to allow agricultural producers to receive more benefit from the products they produce, instead of just selling it in the raw form,” Stewart said.

More than $18 million is available for the program nationwide. Up to $100,000 is available for planning grants and up to $300,000 as working capital grants. Stewart said the money can be used for branding and marketing programs, and custom processing.

“Fishermen can contract for the processing. as long as they own the product and they get their own fish back. The cost of that processing is actually a working capital cost and can be a part of the reimbursement through the grant,” he said.

The value added grants apply to all active fishermen.

“We keep hearing about pockets of fishermen and family processing activities, and we really think there are good opportunities for us to support these projects,” Stewart said.

Stewart says the application process has been streamlined and simplified. Deadline to apply for the Value-Added Producer Grants is March 31. Questions? Call 907-761-7722 or www.rurdev.usda.gov/ak.

Cod farmers are scaling back on their predictions to be the next big boom in aquaculture.

A few years ago industry watchers hailed cod as the next aquaculture gold rush and said world farmed production could approach 500 million pounds within a decade. But now cod farming appears to be floundering.

Seafood.com editor John Sackton reports that fish growers in Norway, the world's cod farming leader, now say they will produce less than 10,000 tons of cod this year, not enough for a viable market.

Farmers are saying attempts to grow the fish commercially have hit some big biological roadblocks. A major problem is that farmed cod reach sexual maturity much more quickly than wild fish - sometimes within a year. That means when they reach market size 18 months later, the cod flesh has turned mushy, with no sales value. Selective breeding and other methods could solve the problem, but that takes money.

Sackton said even with record wild cod prices, costs for successful aquaculture are high, and the problems have discouraged investors.

Making farmed fish taste like a wild one is the latest investment of HQ Sustainable Maritime Industries, one of the world's biggest tilapia growers, has created “sea-flavored” tilapia.

HQ uses a secret mix of flavoring compounds and other high tech methods to “manipulate its farmed fish to taste like wild pollock.”

The company wants to break the hold that Alaska pollock has in the fast food and fish stick markets by better imitating the taste of wild fish. The Seattle-based HQ Maritime Industries, which touts itself as the leader in “zero toxin aquaculture,” operates in China, the world's largest tilapia producer.

The U.S. imports the most tilapia, and sales are growing at more than 30 percent a year. Worldwide, tilapia sales will likely top $4 billion by 2010.

Laine Welch, who lives in Kodiak, can be reached via e-mail at msfish@alaska.com.