 Bingo, I'm Jay Fidel, four o'clock rock. We are having an interesting day today, we are learning so much. We have now Jesse Chen, she's a student of economics and also environmental management, a great combination. And we're talking about the economy and you, and we entitled this episode, the world is our oysters, potentially plural, okay? So Jesse, what's your training, what's your direction that we would be talking about oysters today? I like oysters. Well, my background is actually in ecology and evolution, but after undergrad I found that, but that kind of science was missing was more of a human element. And so I started thinking, you know, what's a good way to sort of combine, you know, big picture ecological science and humans. And so I started thinking about food, especially because I'm from California originally, and as you probably know, we're going through a historic drought right now. So it's got me thinking a lot about food insecurity. And I don't think there's anywhere more food insecure than the Pacific Island nations, including Hawaii as a state. And so I applied to the master's degree program at UH Manoa and found myself fitting into this project that I actually initially knew absolutely nothing about as far as I know nothing about oysters. I knew nothing about Hawaiian fish ponds, but my advisor, Dr. Ping Sun Leung decided to take a chance on me. He said he liked my application and invited me onto this project. And so I just, I just dived right in. And the more I learned about it, the more I realized how passionate I was about local food production. What school is this at UH? Is this at UH? Yeah, this is at UH. I'm in the, in the College of, let's see, CETAR, Tropical, College of Tropical Agriculture and Human Resources, specifically in the Department of Natural Resources and Environmental Management. Is CETAR active in this? Or are you the only one? Well, I'm the only student on the project, if that's what you mean. But I do have a team of PhD colleagues, my advisor, Dr. Ping Sun Leung, who's also in our department and is a top notch economist. I also work with Dr. Maria Haas at UH Hilo. And she is the expert on shellfish in Hawaii. And we also work with Dr. Quentin Fong, who's a marketing specialist, especially in seafood. And he works up in Alaska at the University of Alaska Fairbanks. So yeah, I've got a great team. I'm the only student on it. So I've been doing, you know, much of the work kind of on my own and with them also. What does it mean to be on a team like this? What do you have to do when you wake up in the morning? Well, luckily for me, you know, like I said, I had no experience coming into this. So you read books to try to get experience? Mostly journals, publications, Maria's research. Like what journals? Gosh, what have I read? Well, so all the publications coming out of UH Manoa pertaining to aquaculture, whether it's directly related to shellfish or other species like shrimp or moi, especially what I've been reading is literature on fish pond aquaculture. And so what I needed to know coming into this was why that hasn't been successful, at least not since, you know, they were used traditionally as a... So we're talking about aquaculture today, then, in Hawaii. And you know, if you spent any time looking at the aquaculture community industry in California, you know, some things are happening there. Some things. The East Coast too, for that matter. The East Coast is really big on shellfish aquaculture. So they're on the cutting edge, I think, them and Pacific Northwest. But sort of the problem coming out of California is people are so far removed from where their food actually comes from, you know, because most of California's big agriculture and even big fisheries. So if there is an aquaculture movement, it's probably pretty small scale. And I think it's more, you know, limited to probably academia. What's your characterization, perception of the aquaculture movement, if I could call it a movement? That's probably a misnomer movement in Hawaii. I don't think that's a misnomer. I think there definitely is a movement. It's definitely small, that's for sure. But because of the history of Hawaii and aquaculture, there's significantly less stigma on it. So if you ever go to, for example, a fisheries conference, you'll find aquacultures there too. And sometimes there's a bit of contention between the two groups because they're sort of competitors as far as producing food goes. But here in Hawaii it's... Why can't the cowboys in the rancher be friends? Like I said, it's competition. So the same area of ocean. Competition for resources, yeah. Especially now that we have offshore aquaculture. There's deep ocean, maybe not deep ocean, but say offshore, mariculture. And so they're competing for the same open ocean resources as these fisheries. Where is the Native Hawaiian movement, I'll call that a movement also? Where does that fit? I mean, just a vignette here is that somebody we all know got a lease from DLNR for an open ocean aquaculture of Kona, took a long time, took seven or eight years to get this lease. Yeah. And finally we got the lease. When you got the lease, the Native Hawaiian surfaced and created a contested case and they don't like it at all. It's not so much a competition for ocean space. They just don't want them there at all. The ocean is all theirs and they want to do what they want to do with the ocean and they don't want anybody doing aquaculture and they come up with all kinds of stuff about how the fish poop goes on the bottom and creates an environmental problem, which the experts tell you was just not the case. But surprised to say, I don't think you got it off the ground yet after all this time. And I'm wondering what statement that makes about aquaculture in Hawaii. Well, that's always going to be contentious because it's such a new thing, so there's really not a lot of research yet as far as what the environmental impacts are. And of course you have to understand, given the history of the state, there were certainly rulers if you're talking about the elite, but for the most part, things weren't privately owned the way we understand them in a Western context. So when you are allocating what people have for generations considered a public resource and then suddenly it's privately leased, then I think that's where that contention comes from. And like I said, there's the concerns about the environmental impacts. And even if there are studies that have shown that the effluent from this open ocean mariculture is relatively negligible, there's also this disconnect between I think Western science and cultural practices. And so I think that's where the problem comes from. So sovereignty is in this too, you know? Yeah. So this... It's the same thing as TMT. Don't build your telescope in our open ocean because we own the mountain and we own the mountain has significance for us culturally and it doesn't matter what the law is, it doesn't matter what the decisions have been, we're going to oppose you anyway for as long as we live and breathe, which is happening. Right. So I think the contention comes not so much from the actual act of the aquaculture and the mariculture. I think this stems all the way back to hundreds of years of contention between Hawaiians and Western influence, which I think is completely understandable. I try to walk a sensitive line between, you know... Okay, let's talk about... Let's focus in on what you're doing in terms of oysters. That's why we entitled this show, The World Is Our Oysters, because oysters are pretty popular and Kulo Ranch wants to have oysters or has oysters. They do. And the question is whether we can do it well there, do it other places, do we have the right environment, ocean environment, business environment, that's always a question, cultural environment, do we have the right market infrastructure, and you're making a study of this from a business point of view. Tell us about it. Sure. Well, I think it's a lot of business, but it's also a lot of what you mentioned about do we have the right environment, do we have the right people, is the state ready for this kind of thing? So where do you even begin? When you say ready, you imply that someday it will be ready. Well, so... I'm not sure I find that there's necessarily a readiness in the future here. The question is exactly what happens, you know, whether it lurches forward, falls off the side. I wouldn't say lurching, I'd say it's crawling forward. Thank you. It's crawling forward. I make my point. I have my point. Yeah. But the reason for that is, well, you sort of have to understand the history of why this isn't already existing, right? So why now? Well, let's find out. I mean, I can tell you, I've watched it over the years, and it's remarkable how little progress we've made. So why has it not flowered out? Isn't this a perfect place for all kinds of agriculture, both shellfish and fish, and every kind of agriculture you can think of? Sure. And that's a great question that almost everybody asks me. So I would say the biggest problem is actually permitting, because there are so many regulations concerning coastal waters. So you've got permits at the federal level, the state level, and the county level. So anything on water that's navigable is, you know, you need a permit for that. Why? I mean, if I make you queen, you can be queen. Do we need to have three levels of permits? Ooh, that is a good question. Do we need to have three levels? Ooh, I'm going to say yes, because I think when you have all three levels of jurisdiction, there's a balance of power. So if you ever, you know... That's a political question. I mean... I suppose, right? You want to satisfy all the political interests, the political constituencies and government sovereignty kind, but let me flip it a little bit and say, from the point of view of developing an industry, do we need three levels of permits? At that point, for the sake of the industry, I would think my personal opinion is probably most of that jurisdiction would fall within the state. State can handle that. I think so. Yeah. The Corps of Engineers really doesn't... Well, the federal government doesn't really have much of an interest in this. Yeah, not in particular, only because there's such a strong military presence here, which is, I think, why that level is involved. You mean the oysters could be a strategic military issue? More like the areas they're based out of. Okay. We're talking about extremely valuable coastal waters, especially bays, because bays are great for growing oysters, because you kind of want this protected area. And so, of course, when there are bays involved, those are usually strategic military points as well. Okay. But if I ask you from an environmental point of view, not that many issues. These oysters are going to be a problem environmentally. They're going to force out some other species. Are they going to create some kind of toxic product that will damage the rest of the environment? I mean, how many issues could there be? Is it going to have a negative effect on that area, that place in the environment? That's the only issue I can think of. Which is the one most people ask me. So how long does it take to get a permit? In my friend's case, it was seven or eight years, and it actually didn't help. In the case of TMT on the Big Island, it was seven or eight years, and that didn't help either. So how long does it take to get a permit for an aquaculture facility in Hawaii? It's so specific to each place. I would say you can definitely bank on a few years minimum for open ocean. Like you said, seven or eight years, that's because it's, I think, so much more complicated because that is open ocean. But in the case of, let's say, a privately owned fish pond, again, it's privately owned. So that avoids a few of those complications. If you have at least jurisdiction over the land, if not the water. So I would say you can probably, I really don't know, to be honest, how long it would take. Well, in the end, it is an economic question. When we get back from this break, we're going to talk to Jesse Chen, a student of, I guess, public policy, economics, and environmental management. We're going to talk to her about the world as our oysters. And I guess we're going to see about the economic feasibility from the point of view of the investor, the manager, the food producer. Is this a feasible thing to do? Or should we bring all of our oysters in from the Bolivia? We'll be right back. Hey, how are you doing? Welcome to Abachi Talk. My name is Andrew Lanning. I'm your co-host. And we have a nice program here every Friday at one o'clock on ThinkTech Studios where we talk about technology and we have a little bit of fun with it. So join us if you can. Thanks. Aloha. My name is Danelia D-A-N-E-L-I-A. And I'm the other half of the duo, John Newman. Welcome. We are co-hosts of a show called Keys to Success, which is live on the ThinkTech Live Network series weekly on Thursdays at 11 a.m. We're looking forward to seeing you then. Aloha. Hi, I'm Ceci Hayashi with the ThinkTech Hawaii show, Ceci to the Rescue, highlighting some of Hawaii's issues. You can catch it at ThinkTech Hawaii on Mondays at 11 a.m. Aloha. See you then. Bingo. And the regrettable thing is if you weren't here for our break where we got into some really interesting questions, which Ceci, Ken, and I are going to cover. So okay, so forget about the permits. I'm going to build a tank in my backyard and I'm going to run water, you know, sea water if you like through this tank and I'm going to grow those oysters as some aquaculture producers do, you know, in a tank on the land and great, great oysters, really tasty, maybe even pearls who knows what. So why can't I do that? So that would be utility costs. So they're- What do I need utilities for that? So if you've got a man-made system, the one that you just described, which is completely controlled, you're talking about constantly running water, you're going to need bubblers to oxygenate the water, you're going to have to grow the algae in an entirely separate system, which uses a lot of electricity and a lot of manpower. Well, that's not utility, first we're talking about utility. Just utility. So electricity and water then you're talking about and of course that's extremely expensive as everyone knows here. So I need water temperature of a certain range? You do, it depends on the species and I'm not a biologist so I can't tell you exactly, to be honest, but they do grow in the waters here off the coast so they can handle fairly good water. So whatever average sea water temperatures that would work. Yeah, it's actually quite good. Even if it's warmer than it is in, say, Maine. Definitely. Actually, so during winter they don't grow much, yeah. So the warm water is actually what makes them grow so fast here. We want that. Again, we could be a great center for growing oysters. To a certain extent, yeah. You don't want to cross the threshold. What was the point about labor? You said labor was a problem. Labor. So what we were talking about earlier was why doesn't this exist right now? Why is this just happening right now? So there have been oysters grown here in the past. I believe the last time oysters were actually documented as growing here was back in the 1980s on a land-based system and so all these land-based systems obviously didn't make it for one reason or another. Maybe not the sole reason, but a huge factor certainly was the cost of utilities. And so that kind of brings us to where we are today. So the advantage of growing them out in fish ponds is that it's relatively, it's labor-intensive as far as culling and sorting goes. Same labor-intensive, whether it's out in the ocean or on land. I would say quite a bit less labor-intensive. In the ocean. This way. Yeah, in a fish pond. Not in the ocean, but in a fish pond, because you don't need to grow the algae, so the oysters that are out there. That's food. So you have double work if you have to grow both the oysters and the culling. Exactly. Right. And so here in the fish pond, they're just growing out there naturally and they get pulled in to get sorted and cleaned and things like that. You're making me hungry. But yeah, you should try them, they're great. And so I actually, I hope you get a chance to go out and check it out someday. Well, what is it like? Let's talk about Kulowa for a minute. What have they got going and why is it feasible for them? So it's been feasible for them because they have so much resources to start off. So they've already got employees who are trained in aquaculture and they've already got the facility, most importantly. So a lot of fish ponds. And they've got a permit. And they've got all the permits they need. So they're doing everything by the book. And they've got this amazing fish pond, which also the key thing for them is they're in a great location. So one problem you might have with other fish ponds is runoff from urban areas. So above the fish pond runs into the ocean and contaminates the bed. Exactly. Yeah. So you're talking about runoff from vehicles or lawn fertilizers. They don't have that. They have a ranch right above the pond. Yeah. You know what? It's not been a problem for them. They've been tested. DOH comes down every month and tests the water and they're always in the clear. But I think they're far enough away in the country to where it's negligible. It's an amazing company. I must say. Koolore Ranch is just a brilliant company. They've done so many incredible things with that land. It's just an inspiration to all of us. Koolore Ranch. Yeah. And if you talk to them and you ask them, why are you doing this? You know, why aren't you using the pond for something else? They'll tell you the same thing that they're really interested in seeing the fish pond produce something, you know, viable. Could they produce more? More oysters or more anything? They produce other things besides oysters, as I remember. Yeah. They used to. I'm not sure about today. I know they're probably capable, but when you're talking about polyculture, it gets a lot more complicated. Because you have to make sure the one's not impeding the other. Right. Yeah. You have to know how the different species you're growing together. Chemical and biological issues. Sure. Yeah. Just oysters. Can they produce more oysters? Could they produce more? You know, I think that they are right now and they're working on it. So when I started with them, and I can't, you know, tell you how much because that's sort of sensitive, but I can tell you that in the last two years since I've been working on this project, they've already ramped up production. So what they started off with when their first oyster hit the market, they're definitely producing more now than what they did then. Okay. Let's say, and it sounds to me like they're having a good experience, let's say that, and that they've learned a lot of stuff, and you learn a lot of stuff, not only in terms of the biology, but also on the business end of it, to make it work, to make the expenses less than the market price. And you know, I mean, there's a real positive spin to say to somebody in a hotel in Waikiki, these are local oysters, they're clean, they're fresh. The water in Hawaii, never better, you know. And so why can't we cover the shoreline with similar facilities? Why can't we do, shouldn't we do that from a macro point of view now? Okay. Shouldn't we do that in Hawaii now? Why shouldn't we do that now? Absolutely, yes. I think we would love to see more. And personally, I think it's feasible. I think so. So I'll tell you a little bit about the economic studies. So, long story short, after collecting all the data and constructing sort of a model farm, so not Kulua exactly because they're kind of a special case, being such a large company. So I constructed a model case that was sort of more like Antion Uncle's fish pond that they're sort of running themselves with a couple of employees. And based off that model, the return is marginal, which means they're kind of on the borderline. So it's a little bit in the red based off my model. But the difference between breaking even and not breaking even is a few thousand oysters. And you can make that up. You can somehow make that up. Maybe you increase the price a little bit. Exactly. A little branding, who knows what. Which brings me to the, so another part of the study was figuring out what are the most sensitive parts of it. So what is it that's causing you to tip one way or the other? And so two of the most sensitive parts of your budget you're talking about are one, your yield and two, your market price above all else. Even more important than the cost of your labor or the cost of your utilities or even your rent, those are going to be the two things that you're going to want to focus on the most. And so at the moment, what we're trying to do is figure out, at least on the marketing side, is there a way to sort of play up the oysters so that they are sort of like a quality product over what you would get from the main land. You mean trying to show excellence, brand, marketing, premium quality. Yeah. Oh, we can do that. So I'd buy that. Sure, we could. Yeah, absolutely. So like you were mentioning about the sort of white table cloth restaurants in Waikiki, can you sell this quality to them? I think you can. I think absolutely you can. I think. And like Kona Coffee, you can make Hawaii oysters. And random is the best oysters in the world or something like that. I mean, we do that with the brood shrimp, the shrimp stock, and sell it to Thailand. And in Thailand and the fish ponds, they, you know, they generate all these fabulous shrimp off our brood stock. And our brood stock presented at Oceanica Institute. And it's really amazing what kind of reputation we have in the brood stock business. We can do the same thing with oysters. Absolutely, we could. So I think. What about the oyster seed? Can you produce oyster seed at Kualoa so that it's a high quality seed like the shrimp brood stock? So that's a good question. And even though we're talking about the same species and shellfish, the brood stock sort of operation isn't a completely different operation than growing them out. It requires completely different facilities and a completely different. It's a laboratory setting. Yeah, different knowledge base entirely. Because now you're talking about what you'll need is biologists. You know, you need people who maybe have a pedigree of really high quality brood stock. And the way you grow, the way you breed oysters and, you know, raise them in a nursery is completely different than the way you grow them out for market. And so that is, that requires a lot of capital. Yeah. Well, and what I hear, insulinia here is that we don't have that. We don't, on Oahu, we do in Kona. Oh yeah? We're doing oysters in Kona? So there are several oyster hatcheries at Nalha. I know there are shellfish out there. Seattle Company, I forget the name right now, has a big operation doing shellfish out there. There's actually quite a few oysters too, huh? Yeah. So here's my question to you, actually. Should you decide to answer it? Because we're about out of time. Oh, okay. Are we going to make it here? Are we going to have an industry for premium oysters that will be, you know, that the world will be the path to our door that we can ship, export elsewhere? Will we be able to stock every white table and brown table and green table restaurant and Waikiki with as many oysters as people would like to eat? Or is this going to go the way of so many other aquaculture, you know, enterprises over the past 30 years and ultimately not be feasible for us? So what's your answer? It's a combination of the two, sort of right in between. It is feasible, but not on the scale that you just described. Not, we're not probably not going to become a leading exporter of oysters, certainly. But can we at least satisfy some of the local demand? I think absolutely yes. It's going to be a small sort of niche market, at least initially, until we can really start competing with mainland growers. So right now I think the best opportunity for the local industry to stay on top is to market it as a specialty product, sort of to these, you know, more higher end restaurants that are looking for that really fresh, really local, one of a kind product. But I don't think we're at that point just yet anyway to be able to completely replace all that we're importing with locally grown. But, you know, every oyster is a step in the right direction. Well, if you keep working on it, maybe it'll happen. Yeah. All I can say is, you know, far, not a whole lot of foods that appeal to me as much as an oyster with some sharp oyster sauce and all that. Oh yeah, I can taste it now. I may go out afterward. And of course, as they do in Seattle, you put the oyster in a shot glass of gin. Gin. Potka. Yeah. Better than gin. This could be very popular. Thank you, Jenny. Thank you. Rather, sorry, I'm sorry. Jesse, thank you, Jesse. Thank you for having me.