Russ: This is a BusinessMakers WebXTRA continuation of the radio interview with Bill Spencer, founder and CEO of Hawaii Oceanic Technology. Well, as we wrapped up that last segment, Bill, the topic of environmentalists came up. Tell us about that more. I'm certain that you are being watched by environmentalists, but as you have already portrayed, you certainly want to have a clean operation, clean technology, and environmentally friendly aquasphere. Share with us all the aspects of that.

Bill: Well, first I think it's important to know that in Hawaii our environment is of the highest order of importance.

Russ: Right.

Bill: You know our tourism industry depends on people who want to come to Hawaii to enjoy a pristine environment. So, to us the most important thing in addressing fish farming at a high level as we are is to be respectful of the environment, to be good ocean stewards, to develop best practices. Now in the case of ahi farming or ahi aquaculture, most aquaculture involving tuna is done in what we call a catch-and-fatten approach. Wild tuna are caught at a relatively early age, in some cases before they have had a chance to reproduce. They are put into large pens and fattened, if you will, much like a feed lot for cattle or pigs.

Russ: And these are pens that are still in the ocean...

Bill: They are in the ocean, but relatively near shore. This is practiced in Mexico and Southern Australia and in the Mediterranean. In fact, this approach in the Mediterranean has been going on for many years; it dates back to almost ancient times. The problem, of course, is you're still stripping the fishery. And what's worse is, in the case of bluefin, which is the most stressed of all the tuna species, you're taking them out of the life cycle at a young age. And this just can't go on. So our whole premise is we have to have a closed loop system. And by closed loop, what we're intending on doing is growing our ahi from eggs. This biological capability has actually been the holy grail of scientists for many years, and there is successful research that has been going on as part of the Inter-American Tropical Tuna Commission in Panama where yellowfin ahi have been spawned in captivity for the last 12 years. So we're going to adapt this proven technique and carry it out in Hawaii at our hatchery there.

Russ: You focused almost exclusively in our discussion on ahi tuna and tuna in general. Could these aquaspheres just as easily raise other sorts of fish?

Bill: Absolutely. There is no limit to the type of seafood that can be grown in this environment. It just so happens that the pelagic species such as ahi are the most highly stressed, so this is why we put a priority on it. It's also endemic to Hawaiian waters; both bigeye and yellowfin tuna are sort of local species. Our fishing industry in Hawaii has suffered because of the depletion of this fishery. So all these things point to an opportunity for us. Not to mention the fact that there is just an insatiable world market for ahi.

Russ: Okay, interesting. Now, in your focus on clean technology and being environmentally friendly, I assume that has a lot to do with also the way that you're actually going to power the aquasphere.

Bill: That's right.

Russ: And you've touched on that, the thermal aspect. Describe that in a little more detail. I mean, obviously, the water at lower levels, at deeper levels is cooler than warmer, so how do you actually turn that into energy?

Bill: Another priority in being environmentally responsible is to reduce the carbon footprint. Among the kinds of foods that we eat in the world, seafood has a relatively high carbon footprint because boats have to go out and spend weeks at sea, and the food has to be shipped from exotic places, so we're trying to reduce the carbon footprint and also make this more economically viable. So what we've decided to do is take advantage of the technology known as ocean thermal energy conversion, which had originally been developed as a source of power. The problem was that you have these OTEC plants in the middle of the ocean, and you have to have a power cable going back to the power grid. And that just didn't make sense. The other option, or course, is to pump up cold water from the ocean to a land-based power generator, and there is still a lot of potential in that, especially for applications like seawater air conditioning. But in our case, it really unlocked the possibility of having these very large aquaspheres stay on station and be powered by this OTEC approach. And so you're exactly right. What we do is we take advantage of the temperature differential between the depths, at 200 meters in our case, and the surface, and that gives us just enough of a differential to power a special type of engine that operates in a non-oxygen environment on a principle of expansion and contraction of the gas. That provides enough power to power our pumps, the ballast systems, the telemetry,which are essentially going to be battery based, but it will recharge the batteries, and really give us all the power we need and not cost us a dime of fossil fuel.

Russ: Now my research indicated that there are either patents that you have already won or patents that are pending or applied for, I assume. Do many of those have to do with this energy and the power approach?

Bill: That really is the secret sauce of our operation. We have 21 separate inventions incorporated into our patent application, which is due to be published just about any day now.

Russ: Cool. Now, before I let you go, you know this is a show where we have entrepreneurs who tune in and listen to other entrepreneurs, so I know you're at early stage-in fact, you're still in the fundraising stage, is that correct?

Bill: That's right. We actually were founded in 2006 as a Delaware C corporation. We've raised a significant amount of funding, mostly from angels. About 1/3 of our funding is from professional venture capital based in Hawaii and San Francisco and 2/3 is from Hawaii-based angel investors.

Russ: Cool.

Bill: At this point, we are using the funds we've raised to do all the design engineering, establish our hatchery operation, and get our permits. So by the end of this year we feel that we will be in a good position to price out some of these aquaspheres and raise what we hope to be enough money to put 2 or 3 of these things in the water by the end of 2009.

Russ: Well, Bill, I really appreciate you sharing the story with us. It's a fascinating idea, and this is one where I think we all benefit if you're able to pull this thing off and execute the plan.

Bill: Well, I think we've got a good shot. There have been failures in aquaculture, and investors are a little gun shy, but as I say, this is an imperative. The food shortage and the way we've abused the ocean can't go on. It's time to use our brains, use technology, and come up with a solution that will help address the insatiable demand for seafood.

Russ: Great. Well thanks again for being on our show.

Bill: My pleasure, and as we say in Hawaii "Aloha."

Russ: Aloha. We've been talking to Bill Spencer, the founder and CEO of Hawaii Oceanic Technology. That wraps up this BusinessMakers WebXTRA. You've been listening to The Businessmakers Show, heard here and online at thebusinessmakers.com