Russ: This is The BusinessMakers Show, heard here and online at thebusinessmakers.com. It's featured guest time on our show this morning, and my guest is Bill Spencer, founder and CEO of Hawaii Oceanic Technology. Bill, welcome to The BusinessMakers Show.
Bill: Hi, Russ. It's great to be here.
Russ: Tell us about Hawaii Oceanic Technology.
Bill: Hawaii Oceanic Technology is a company devoted to clean technologies for aquaculture. We believe that the next generation of aquaculture is upon us. The world's oceans are being fished out. The fact of the matter is, the oceans cannot meet the demand for seafood that the world is expressing, and in a very few short years, we really have to come up with some solutions to solve this problem because the fisheries are being depleted at a very rapid rate. The world has an insatiable hunger for seafood. It's a healthy product, and the demand is growing, especially in developing nations like China. China consumes about a third of the world's seafood resources, and that includes aquaculture. At the same time, the United States imports 85% of the seafood we consume...
Russ: Okay.
Bill: ...and half of that is aquaculture-based product grown in Asia, and as you might guess, the farmers in the aquaculture industry in the rest of the world don't necessarily adhere to the seafood and food standards that are imposed on farmers in the United States. So what we're looking to is a seafood security threat that really has to be addressed.
Russ: Okay.
Bill: So my company is focused on developing a technology that will allow us to domesticate seafood in the open ocean and in an environmentally responsible and economically viable manner.
Russ: Well, I couldn't help but think when you talked about 85% of the seafood being imported in the U.S. how similar this challenge seems to be to the oil and gas challenge.
Bill: It really is. And, oddly though, a lot of the venture capital in the United States that's going into clean tech these days has not really discovered this problem. And it's changing, but it's a problem that really needs to come to the forefront. It's actually more a near-term problem than global warming.
Russ: You use this term aquaculture, and I think I know what that means, but in case I'm off a little bit, why don't you give us that definition?
Bill: Well, aquaculture is a fancy term for fish farming. Fish farming has been done in Hawaii for centuries. The native Hawaiians actually were some of the first fish farmers. Anybody that's flown over some of the islands will see ancient fish ponds where the Hawaiian villagers actually grew fish as a way of sustaining their need for protein.
Russ: Okay. And that's what really makes Hawaii Oceanic Technology, your approach to aquaculture, quite a bit unique compared to all these other endeavors, because it's not necessarily land based.
Bill: Well, that's correct, and there of course is ocean and estuary and bay aquaculture, but what we're trying to do is take this to a new level. Hawaii has a 200,000 square mile exclusive economic zone, and the waters surrounding Hawaii are pure and pristine. There is no industrial pollution, and this gives us the opportunity to grow fish in a perfect setting and achieve a high quality that could almost be characterized as exceeding organic standards. Unfortunately, there is no organic standard yet for farmed seafood, but it is something we're working on.
Russ: Okay. But your company is Honolulu based.
Bill: We're Honolulu based, but our operations are expected to take place off of the big island of Hawaii, where the active volcanos are. One of the advantages we have in Hawaii is that we can be in very deep water within a few miles of the shore, and that's important especially to our technology, because we're trying to use the ocean's ability to generate energy by the difference in the cold water at deep levels and the warm surface water and do what's called ocean thermal energy conversion. This allows us to power our what we call aquaspheres, which are very, very large containers that essentially allow us to grow a tremendous amount of seafood in an environmentally responsible way.
Russ: Okay. Well, I'm going to want to get into the discussion and the description of an aquasphere. Having seen some of your videos and some of your photos, I've got to tell you, they're breathtaking devices and a real cool part of your endeavor. We're taking with Bill Spencer, founder and CEO of Hawaii Oceanic Technology, and we'll be back with more with Bill after this. You're listening to The BusinessMakers Show, heard here and online at thebusinessmakers.com.
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Russ: This is The BusinessMakers Show, heard here and online at thebusinessmakers.com. I'm in a real interesting exchange with Bill Spencer, founder and CEO of Hawaii Oceanic Technology. Well Bill, you just mentioned this term "aquasphere," and I talked about how cool the photos were that I saw. As a matter of fact, for our listeners, I would encourage you to go to thebusinessmakers.com, and we've got a couple of these on display right now. But for now, give our listeners a description of an aquasphere.
Bill: The aquasphere is essentially patterned after what is known in nature as the fullerene, which is a carbon molecule that has very strong structure. It is also more commonly known as a buckyball. In our case, the aquasphere is 62 meters in diameter—that's almost 2/3 of a football field—and has the capacity of 82,500 cubic meters. This gives us the ability to grow a very large amount of seafood. In our case, we're targeting what's known as ahi in Hawaii, or a sashimi-grade tuna, which is one of the most stressed fisheries in the Pacific Ocean. We expect to be able to produce at least 1,000 tons of ahi or 20,100-pound tuna in our aquasphere. And 1 aquasphere could generate as much as $20 million in gross revenues if you use the current pricing that the Tsukiji fish market in Japan. Japan is a tremendous market. They consume almost 400,000 tons of sashimi-grade ahi a year. Actually, Japan is probably the 2nd largest consumer of seafood behind China.
Russ: Okay, now let me ask a question. When you mentioned this capacity, that's an annual capacity that you can produce?
Bill: That's right. We'll grow our ahi from eggs, and they'll live in the hatchery for about 6 months, and then they'll be transferred to the aquasphere where they'll grow out for another 12 months to the 100-pound size.
Russ: Okay. For our listeners, my description of the aquasphere is a giant soccer ball, because it just looks like that with those 5-sided pieces coming together. It's spectacular looking.
Bill: Well, thank you. I think the key to our aquasphere though is found in the technology that we're bringing to bear here.
Russ: Okay.
Bill: First of all, we're using the ocean thermal energy as a source of power. Our aquaspheres reside in very deep water which creates a clean environment for the fish and also disperses the ethylene quite efficiently. But that requires that the spheres stay in geostatic position, much like a modern-day oil rig. So we have to have a power plant, and of course in these days, we don't want to power that with fossil fuels, so we're actually using the ocean's energy to power our system and provide the power for the pumps, the thrusters, and the automatic feed systems as well as ROVs, which are remotely operated vehicles which will remove mortalities, and our robotic feeding system.
Russ: What is the ideal depth that the aquasphere will stay at most of the time?
Bill: Well, the aquasphere will actually just stay below hull depth at about 60 feet below the surface. And then, as I mentioned, it's a 186 feet in diameter, and then our OTEC pipe will go down to a depth of 200 meters. So it's quite a big structure, and that's one of the beauties of our system: in the deep ocean, we have 3 dimensions to operate in. Unlike a land-based aquaculture system; they take up a lot of real estate, which we are running out of. So, to be able to operate in the ocean is a distinct advantage.
Russ: Okay. So when you first have these baby ahi tuna, does the aquasphere come up and they're loaded that way, and then it's brought down?
Bill: Exactly. There's a buoyancy control. This is really a vessel, in effect. So we can raise it to the surface, which we will do for maintenance, for replenishing the food supply, and for harvesting the ahi, which we will do on demand. We're not going to introduce thousands of tons of ahi into the market at one time; we're going to be able to actually go from our aquasphere to your dinner table in about 48 hours.
Russ: So that would be real fresh, right?
Bill: Very fresh. But what we know as fresh tuna these days has been on a long liner boat for a few weeks before it ever gets to market.
Russ: Right. So what is the skin made out of, of the aquasphere?
Bill: We're using a Kevlar-based netting material that we hope will keep the sharks out and the tuna safely inside.
Russ: Okay. And I guess the tuna would feel like they're in the normal ocean. They're not going to feel caged, are they?
Bill: They won't really. We're allowing for a very liberal stocking density, which doesn't really happen in estuary and bay aquaculture. So there will be a lot of room for these guys to move around, and we think that will improve their health and prevent disease. The other thing about aquaculture that's very important to know is that farm fish consume less food per pound of growth than they do in the wild, because foraging for fish takes up a lot of energy. So, it's about 15 pounds of food in the wild for every pound of growth compared to about 2-3 pounds in an aquasphere environment.
Russ: So exactly how will you feed them? I mean, how will you get whatever it is you feed them to them?
Bill: In the top part of our sphere we have a canister, if you will, that will hold a 2-week supply of food, and that will be dispersed with a pump that's pumping up water that we've sucked up from 200 meters, which is oxygen rich and pathogen free.
Russ: Okay. So that's another one of the needs for energy. I suppose another one is that you want to hold the aquasphere at a steady position so it's always sort of adjusting, and is it even perhaps being taken away by currents, potentially?
Bill: Actually, the currents help us. We will have thrusters internal to the sphere, and we essentially will manage it using sophisticated telemetry. It will have a topside buoy that has a GPS and WiMAX and all sorts of techniques that allow us to triangulate with a satellite and a land-based station and keep an eye on it 24/7.
Russ: Really cool stuff. Well, I want to talk more about that after this. We're talking with Bill Spencer, founder and CEO of this new startup called Hawaii Oceanic Technology, and you're listing to The BusinessMakers Show, heard here and online at thebusinessmakers.com.
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Russ: This The BusinessMakers Show, heard here and online at thebusinessmakers.com. And I'm in a discussion with Bill Spencer, founder and CEO of Hawaii Oceanic Technology, and man oh man, does he have a startup idea that underscores the value of innovation solving problems for the future. In our last segment, Bill, you were talking about your aquasphere, and you mentioned the term "robotics." Are you actually going to be employing robots in the operation of the aquasphere?
Bill: Well, I'm using the term somewhat broadly, but even modern-day oil rigs are robots, if you will. They're remotely operated, they're kept in geostatic position, and we're taking a lot of lessons from that. A lot of our technology utilized telecommunications to communicate, monitor, and observe the environment of our aquasphere. We'll use webcams, we'll use water quality monitoring, but we're also using robotic technology, if you will, for cleaning the aquasphere, for removing mortalities, which is important to maintaining fish health. The feeding system is robotically operated. We're using really some of the latest technology. This aquasphere is really something that is just a systems-integration project.
Bill: Much of the technology is off the shelf, but it's how we're putting it together that makes it special.
Russ: Will there ever be a regular need for a diver to go down and check it out, circle it, enter it, perhaps?
Bill: Yes. We'll have divers that will be required for physical observation, doing certain types of repairs, things like that. To the greatest extent possible, we'll have as much automation and robotics as we can. I told you how big they are—it takes special diving expertise to go down 180 feet, and so we don't want to put anybody at risk.
Russ: Right. Can just anybody go out in the ocean and create one of these and start working it? Or do you have to go after some sort of rights or something to do this?
Bill: Well, it's interesting that you mention that. Hawaii is the first state in the country that has actually allowed you to lease a water column in the ocean. It does require an environmental assessment and a careful review of the potential impacts of such an activity. But we actually have 2 open-ocean farms in near-shore environments out of 3 that are operating in the United States at the moment. So Hawaii is considered the Silicon Valley of aquaculture.
Russ: Interesting. Well, I'm real curious that this sounds like a real neat idea. How did it dawn on you? What motivated you to launch this endeavor?
Bill: My partner and cofounder, Paul Troy, is a PhD oceanographer, and he assures me that this challenge that we've faced is something that oceanographers have dreamed about throughout their careers. Jacques Cousteau, I think, could be credited as the 1st person who said that we really need to farm the ocean as we farm the land. It's not a new idea, but I think we've finally reached a point where circumstances are colliding, and the food shortage problem, the need to start being proper stewards of the ocean, and taking care of the ocean environment comes into play. You know, we can no longer be hunter/gatherers in the ocean. We can't act like primitive cavemen. We need to apply the sophistication of land-based farming to farming seafood.
Russ: Great, great. Well, look, Bill, I really appreciate you sharing this endeavor with us. We're actually out of time on our radio broadcast, but there's a lot more I want to talk with you about in the form of one of our BusinessMakers WebXTRAs. Can you stick around a little longer?
Bill: You bet.
Russ: Okay, so, I think most of you know the routine. There is going to be more discussion with Bill Spencer, founder and CEO of Hawaii Oceanic Technology. In fact, when we start that off, I want to ask you what the environmentalists think about you? I'm certain you know, do you not?
Bill: We do have a lot of issues to address that will need to satisfy the environmentalists, but we consider ourselves to be environmentalists as well.
Russ: Great, great. Well, we want to hear that on the WebXTRA. You've been listening to the radio broadcast interview with Bill Spencer, CEO and founder of Hawaii Oceanic Technology. And there's more at thebusinessmakers.com. Just go to www.thebusinessmakers.com and check out the Bill Spencer extra. You've been listening to The BusinessMakers Show, heard here and online at thebusinessmakers.com.
