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National Institute of Food and Agriculture

Small Business Innovation Research
Phase I Grant Proposal



Comparative Replacement of Comparative Replacement of Comparative Replacement of Comparative Replacement of
Conventional Fish Feed Components Conventional Fish Feed Components Conventional Fish Feed Components Conventional Fish Feed Components
with Algal Biomass in Florida Pompano with Algal Biomass in Florida Pompano with Algal Biomass in Florida Pompano with Algal Biomass in Florida Pompano

By

Gaiergy Corp.


Project Investigators





Jason Masters Nathan Brennan, PhD Kevan Main, PhD
President Staff Scientist Senior Scientist
Gaiergy Corp. Mote Marine Lab World Aquaculture Society
1610 North Ocean Blvd., #1205 1600 Ken Thompson Pkwy President
Pompano Beach, FL 33062 Sarasota, FL 34236 Mote Marine Lab
DUNS: 808480581 1600 Ken Thompson Pkwy
Sarasota, FL 34236
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Table of Contents
Abstract ................................................................................................................................................... 2
Project Narrative ..................................................................................................................................... 3
1. Response to Previous Review ....................................................................................................... 3
2. Responsiveness to USDA SBIR Program Priorities ......................................................................... 3
Energy Efficiency & Renewable Energy Connection .......................................................................... 3
NIFA Societal Challenges .................................................................................................................. 3
3. Identification & Significance of the Problem or Opportunity ........................................................ 4
4. Background and Rationale ........................................................................................................... 5
Previous Feed Trials ......................................................................................................................... 7
Algae Feed Formulation ................................................................................................................... 7
5. Relationship with Research or R&D .............................................................................................. 8
6. Technical Objectives .................................................................................................................... 9
7. Work Plan .................................................................................................................................... 9
Algae Production System ............................................................................................................... 10
8. Related Research or R&D ........................................................................................................... 13
9. Potential Post Application .......................................................................................................... 14
10. Satisfying the Public Interest .................................................................................................. 15
Strategic Goal 1 ............................................................................................................................. 15
Strategic Goal 2 ............................................................................................................................. 15
Strategic Goal 3 ............................................................................................................................. 16
Strategic goal 4 .............................................................................................................................. 16
Bibliography ......................................................................................................................................... 17
Equipment ............................................................................................................................................. 20
Letters of Collaboration ......................................................................................................................... 24



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Abstract

The opportunity exists to create better fish feed formulations at lower costs while reducing the
amount of fish meal incorporated into a formulation by producing, harvesting and pelletizing
high proteinaceous algae into species specific fish feeds. Total fish produced by aquaculture is
now surpassing the amount of wild caught fish. The feeds that are used for aquaculture though
are still comprised of 30% to 50% fishmeal. This means that as aquaculture continues to grow, it
will produce ever-increasing pressure on wild caught fish to be used for fish feed if no other
alternative was set in motion.

One of the current alternatives that have been set in motion is to replace fishmeal in fish feeds
with a higher percentage of terrestrial vegetative sources because it costs less and would relieve
overfishing pressure. There are two problems with this. The first is that the chemical compound
structures in fishmeal differ significantly from terrestrial vegetative sources, such that the
resulting feed fed to fish are not converted into fish biomass at the same per unit rate as a
fishmeal diet. Second, the fish meat resulting from a diet increasingly comprised from terrestrial
vegetative sources is increasingly lacking in essential fish oils and protein structures that make
wild caught fish a more beneficial food source versus an aquacultured fish.

Currently, algae production for biofuels has gained significant investment from the federal
government and private industry. One of the significant problems with the algae-to-biofuel
industry is what to do with the biomass that remains after the bioenergy is extracted from the
algae cell. Our research proposal can also address this since that residual biomass can be used
for fish feeds instead of fish meal or terrestrial vegetation.

Our proposal intends to research the production of specific algae species to be harvested and
impounded into a Pompano-specific fish feed and then test that fish feed against commercially
available fish feeds and previously researched unique Pompano feeds. The intent is to utilize the
algae's ability to produce high-quality proteins and essential marine oils and compounds to
provide a cheaper and more nutritious biomass replacement than either fishmeal or terrestrial
vegetative sources.

We conduct this research from the perspective of a small scale, rural aquaculture farmer. In
doing this we can establish the viability of small scale aquaculture to produce their own fish feed
at least as economical as a large-scale feed producer. We will grow enough algae to be harvested
on-site and processed into our Pompano specific formula and then fed to juvenile Pompano that
will be raised to a market size of approximately 1.5 pounds. The market-ready Pompano will
then be tested for their meat quality, lipid quality and marketability in the form of taste tests.

This research will provide conclusive evidence necessary for a proposed commercial Pompano
production facility to utilize algal-enhanced species specific fish feeds that project a 20% to 25%
reduction in input costs through the use of these algal-enhanced feeds.



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Project Narrative

1. Response to Previous Review
This is the first submission for this application so we have nothing to add to a response to a
previous review.

2. Responsiveness to USDA SBIR Program Priorities

Energy Efficiency & Renewable Energy Connection

There is significant work ongoing between the USDA, Department of Energy and the
Department of Defense regarding algal-based biofuels. These initiatives are making progress
towards a future where liquid drop-in fuels derived from algae could become a reality. Whenever
that future is actually realized, there'll still be an immense amount of biomass that needs viable
outlets. The one inescapable reality right now is that the algae industry mimics the oilseed
industry in that there is greater value in the biomass than in the oil. To that extent, the renewable
energy connection must identify with the fact that there is greater profitability on the biomass
side than on the transportation fuel side. This research has direct applicability towards bridging
the gap between the reality of today and the potential reality of tomorrow or that future when
algal biofuels become economically viable.
For algal-based biofuels to become energy-efficient and sustainable they must address the
residual biomass remaining after oil extraction. This work will help to show that the biomass
composition used in this research is either an appropriate use of biomass for aquaculture or
indicate a direction where a compositional shift might prove to be even more effective or that
algal biomass does not improve nor hinder growth characteristics of Florida Pompano given
today's resources.
NIFA Societal Challenges

In response to the application requirements regarding NIFA societal challenge areas, we will
address how our proposal addresses the four challenge areas listed below.
Global Food Security & Hunger
As our population increases combined with globalization and increasing climate change, the
price volatility of primary food products along with their availability is also increasing. To
combat the availability and security of food supply, the world population must begin to diversify
their food product origins even more than they are today. In the United States and most
industrialized countries, we have optimized our agricultural industries so that they are centralized
specific areas. But this leaves us vulnerable to specific climactic actions and terrestrial
limitations on soil, nutrients and water availability. The concept of building species specific fish
feeds means that aquaculture operations that cultivate indigenous fish populations would be
better served by a locally derived feedstock partially comprised of algae that the fish have
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genetically optimize themselves to utilize. This research is one specific step towards building a
specific feed for a specific fish.
The methods used here can be used in other aquaculture operations in first, second and third
world countries to increase fish production while decreasing input costs.
Climate Change
With regard to climate change, since algae are the largest group of primary producers on the
planet contributing over 70% of the world's oxygen, this proposal has a potential direct effect,
albeit very minor, towards curbing carbon dioxide emissions due to anthropogenic effects. For
large scale algae companies to be able to produce the algae in massive quantities over short
periods of time, they will need access to large concentrated sources of carbon dioxide. While the
algae could grow on atmospheric carbon dioxide concentrations, the timeframe in which they
would be able to utilize the atmospheric carbon dioxide would cause the initial profitability of an
endeavor such as this to be in doubt. Therefore, initial algae operations are being positioned
adjacent to CO
2
emitters such as coal-fired power plants and other industrial manufacturing
companies. The carbon dioxide that they emit is being sequestered, scrubbed for heavy metals
and then dissolved into an aqueous phase for photosynthetic conversion by the algae into fats,
proteins and carbohydrates.
The research conducted here could prove to be a marketable outlet for sequestered carbon
dioxide potentially shipped offsite for algae-farms or this research could be used as adjacent
business development for high CO
2
emitters. Both potentials become a positive influence toward
mitigating climate change.
Sustainable Bioenergy
With regard to sustainable bioenergy, the research conducted here complements the value added
to a bioenergy enterprise by creating a co-product that is currently a higher value than the
bioenergy commoditized product. While we are neither creating nor researching bioenergy,
algal-based biofuels must contend with the fact that approximately 50% of the algal cell will be
made up of proteins, fats and carbohydrates that cannot be used for biofuel. So for the bioenergy
production to be truly sustainable, it must have defined outlets for the specific types of residual
fats, proteins and carbohydrates that are left after the bioenergy portion has been removed from
the algal cell.
Childhood Obesity
This proposal does not have any direct relation to curbing childhood obesity other than
potentially providing more non-processed protein fish into the markets and restaurants.

3. Identification & Significance of the Problem or
Opportunity

As aquaculture production surpasses wild-caught fish, there is an increasing need to reduce fish-
feed costs while increasing fish-feed quality. Fish-feed quality primarily addresses palatability,
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digestibility, feed-to-biomass conversion and overall health of the fish. Current aquaculture feed
production efforts are pushing for more terrestrial vegetation sources to comprise the majority of
the meal, but this introduces new problems. The difference in the chemical structure of the
proteins and lipids in oilseed crops fed to fish result in slower growth rates, low biomass
conversion ratios, and a decrease in the beneficial lipids such as DHA, EPA and other
carotenoids (Rossi, 2011) (Rossi, Davis, & Rhodes, 2010) (Rhodes, et. al, 2012). Furthermore,
as oilseed crops prices continue to rise, a fish feed dependent upon oilseed crop prices does not
solve the need to lower fish-feed prices in the long-term. Between 2005 and 2009, the fish feed
input costs of soybean meal, fish meal, corn, wheat and rice rose by 67%, 55%, 284%, 225% and
180%, respectively (Rana, Siriwardena, & Hasan, 2009). The cost projections in 2012 for the
same basket of products are expected to double again due to weather related issues during the
2012 growing season.

A secondary problem exists in the bioenergy field, specifically with regard to algal-based
biofuels. This huge investment, including both federal and private funding into the algal-based
biofuel arena has been almost neglecting the fact that on average 50% or greater of the total
biomass of a non-genetically modified algal cell is non-bioenergy material. Most algae
companies have rushed to the assumption that the biomass will take care of itself. This is an
unfortunately ignorant position. Our proposal is but one of many necessary steps to provide a
diverse secondary market for the residual biomass created by algal-based biofuels.

A viable long-term solution would be to create species specific fish feeds based upon algal
biomass. Gaiergy Corporations SBIR proposal intends to conduct a comparative study using
conventional fish feeds versus algae-enhanced fish feeds fed to juvenile Florida Pompano,
Trachinotus carolinus, until they reach a market size of approximately 1.5 pounds. We will
choose at least two commercially available fish feeds and create at least 2 unique fish feeds
containing algae. From the various previous research using open fish-feed formulations and
documented conventional feed performance trials that did not utilize algae, we will create our
own unique feed by replacing those ingredients derived from terrestrial vegetation, meat &
poultry by-products and fishmeal with algal biomass that we will grow ourselves. (Groat, 2002)
(Hauville, Main, & Barrows, 2012) (Rhodes, Zhou, Davis, Chappell, & Hanson) (Riche, 2009)
(Rossi, 2011).

4. Background and Rationale

The Florida Pompano is chosen because there is a direct commercial profitability aspect related
to developing a species specific fish-feed for this species that is sustainable and cost effective.
Currently, the South Florida area market prices for Florida Pompano can reach anywhere
between $14 and $18 per pound. Considerable research has already been performed by Harbor
Branch Oceanographic Institution, Mote Marine Laboratory, the USDA and other established
aquaculture research institutions to prove that Pompano can be grown in shore-based
recirculating aquaculture systems (RAS) (Groat, 2002) (Hauville, Main, & Barrows, 2012)
(Riche, Weirich, Pfeiffer, Wills, & Davis, 2009). Since Pompano are considered to be continuous
spawners (Watanabe, 1995), Pompano are a good choice for aquaculture. When compared to
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growing tilapia, which receives anywhere between $3 and $5 per pound, a strict business choice
can be made to direct new commercial efforts towards growing and selling Florida Pompano.
The problem resides with rising feed costs making this type of aquaculture unsustainable.

When considering just the revenue case, raising Pompano for sale is an easy choice versus
another fish such as tilapia. But when you consider the costs involved in raising Pompano
including a salt water recirculation system and carnivorous dietary requirements, it becomes
clearly evident that lowering the current cost structure for raising this species is the limiting
factor why Pompano aquaculture has not taken off (Main K. , Resley, Rhody, Nystrom, Stevens,
& Adams, 2010). One of the problematic considerations towards growing Florida Pompano
revolves around the salinity concentration that the Pompano require to reach a healthy market
weight within a reasonable timeframe. (Riche & Williams, 2010) (Wills, Pfeiffer, & Riche,
2010). The other consideration is lowering feed costs while improving nutritive value.

While other researchers are continuing on researching water chemistry and physical containment
characteristics, including the two co-PIs working with Gaiergy Corporation on this proposal,
Gaiergy Corp. needs to focus on lowering feed costs while increasing nutritive value, because we
know feedstock costs are going to be continually increasing and a defined algal-based fish feed
has not been successfully developed for Florida Pompano when considering the future
overwhelming supply of algal biomass that will be coming to market as algal-based biofuels
become a reality.

Further rationale to support this type of research involves understanding the market pricing
dynamics involved with a fish meat that is highly desired, therefore highly priced versus a fish
whose labor is not as highly valued and its supply has to compete against cheap Chinese imports.
For our example we will again use tilapia. While there is wide market acceptance of this fish
and commercial aquaculture farms raising this fish do thrive, they have to compete against lower
production costs from Chinese-raised tilapia. This international competitive market pressure
drives the price per pound down to the import cost of the Chinese tilapia. While this market price
pressure is good for the consumer, is a barrier to entry for new aquaculturists.

To continue with this market pricing rationale discussion, it is important to understand how the
market will change regarding price and availability and how new higher-valued products
incentivize or lower the barrier to entry for new aquaculturists. When you first introduce your
product to the market, since it is in limited supply you can charge a relatively higher price, such
is currently seen with the price of Florida Pompano. This allows the new businessman to reap a
higher profit with a lower volume of product offerings for the first few years. And if the
businessman a smart, he/she either introduces new high dollar value items or increases the
production of its current product offering while lowering his cost of production through
increasing economies of scale. Through time, as the availability of the fish product increases due
to increasing production and other competitors entering the marketplace, the price that you can
charge now has to decrease since the supply is increasing. So this type of research proposal lays
the groundwork for small-scale, high-dollar value fish production that incentivizes new
investment into aquaculture due to the market pricing dynamics detailed above.

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The technical approach for our research is to utilize the previous research that has been
conducted on Florida Pompano using conventional feeds and unique feeds (Gatlin, et al., 2007)
(Cavalin & Weirich, 2009) (Groat, 2002) (Lazo, Davis, & Arnold, 1998) (Rossi, 2011), and then
adding a specific percentage of algal biomass to both feeds through grinding, mixing and then re-
extruding modified fish pellets. We will be utilizing previous research to establish reasonable
and defensible protein, lipid, carbohydrate and vitamin/mineral compositional percentages. This
will be the feed-starting point for our research.
Previous Feed Trials
It has been shown that juvenile Pompano are fairly indiscriminate feeders. Wild caught juvenile
gut content analyses have shown crustaceans, mollusks, amphipods and crab larvae (Armitage &
Alevizon, 1980). Feed conversion ratios, the amount of dry feed fed to a fish versus the wet
weight body mass gained, for Pompano have been indicated in the range of 3.5 for conventional
dry feeds (Williams T. , 2008). The effect of fish oil, specifically menhaden oil on weight gain
was shown to have the most beneficial results when the percentage of oil to total unit mass of
fish feed was between 4% to 8% lipid (Williams, Lovell, & Hawke, 1985). Diets that had oil
percentages higher than 8% showed decreasing digestible energy to digestible protein ratios.
This should not be confused with the total lipid content though.
Protein composition in fish-feed is typically between 40% and 55% depending on the
manufacturer, life-stage requirements and the species (www.skretting.us ,www.zeiglerfeed.com
or www.rangen.com ). The type of protein historically used in fish-feeds is fishmeal from
sources such as menhaden, anchovy and herring. Current research is turning more toward
terrestrial vegetative protein sources (Rhodes, Zhou, Davis, Chappell, & Hanson) (Riche &
Williams, 2010) as a lower cost alternative.
The majority of Pompano specific fish feeds created by researchers over the past 15 years have
protein concentrations ranging between 40% and the 55% protein, between 8% and 16% lipid,
about 2% or 3% vitamin and mineral mix while the rest can be variably assigned to ash,
carbohydrate and other binders (Lazo, Davis, & Arnold, 1998)(Riche & Williams, 2010) (Rossi,
Davis, & Rhodes, 2010) (Gonzales-Felix, Davis, Rossi, & Perez-Velazquez, 2010) (Main K. ,
Resley, Rhody, Nystrom, Stevens, & Adams, 2010).
Algae Feed Formulation

Since there are thousands of strains of algae, we needed to select just a few species of algae that
would be appropriate for our research. The basic criteria for our algae needed to be: 1. Simple to
grow, 2. High protein content, 3. Established previous research, 4. Wide tolerance to temperature
and salinity, 5. Similarity of lipids to wild stock composition, and 6. Enriched carotenoid
complexes. In Becker's book, Microalgae (1994), he constructed a simple table comparing the
chemical composition normal human food sources to a few algal species.

By comparing the protein percentages in the Table 1 to the protein percentages in the feed trials
and conventional feeds, the algae that we select for this research needs to have a protein
percentage greater than 50% of its dry weight biomass. It has to be higher than 50% because on
addition into our unique Pompano-specific formulation, the resultant protein percentage in the
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formulation needs to be maintained at the same or greater level to ensure that we are delivering
at least the same nutritional value to our Pompano subjects.

Table 1. Gross comparison of protein percentages from terrestrial and algal sources


The algae species that we will be using for our proposal include: Spirulina maxima, Dunaliella
salina, Chlorella vulgaris, Chlorella pyrenoidosa and Haematococcus pluvialis. We are
choosing a widespread of algae to ensure compositional diversity and increase the likelihood of
community competition dynamics that will mitigate potential community crashes or
contamination events usually seen in monoculture systems. While the D. salina species is
marine tolerant, the H. pluvialis is grown mostly in freshwater. We will not be growing these
two species in the same containment vessel at the same time. But we need the option, if we so
choose, to grow our algae in marine or freshwater. The H. pluvialis has been shown to be easy to
grow in small containment systems and is a excellent food source for the compound astaxanthin,
which is a beneficial aquaculture compound (Dominguez, Ferreira, Coutinho, Fabregas, & Otero,
2005).

5. Relationship with Research or R&D

The significance of this research has at least three direct effects:
1. the results of this research will be directly applied to creating a commercial aquaculture
firm in South Florida that provides Pompano grown on algal-enriched feeds.
2. The results of this research will be used to approach other current algal-based biofuel
companies as a potential joint venture or outright technology sale to grow the required
algal biomass that needs to be incorporated into species specific fish feeds.
3. Follow-on phase 2 proposals will analyze and hopefully normalize a wide diversity of
unique feeds previously used in feed trials on Florida Pompano so that future researchers
may utilize all previous research against a normalized platform.
4. Phase 2 proposals will also include research to build upon the current phase 1 results to
develop small, diversified, just-in-time (JIT) aqua feed production platforms so that this
Commodity/Algae Protein % Commodity/Algae Protein %
Baker's Yeast 39 Spirogyra sp. 6-20
Rice 8 Dunaliella bioculata 49
Egg 47 Dunaliella salina 57
Milk 26 Euglena gracilis 39-61
Meat Muscle 43 Prymnesium parvum 28-45
Soya 37 Tetraselmis maculata 52
Scenedesmus obliquus 50-56 Porphyridium cruentum 28-39
Scenedesmus quadricauda 47 Spirulina platensis 46-63
Scenedesmus dimorphus 8-18 Spirulina maxima 60-71
Chlamydomonas rheinhardii 48 Synechococcus sp. 63
Chlorella vulgaris 51-58 Anabaena cylindrica 43-56
Chlorella pyrenoidosa 57
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technology does not need to reside in large-scale feed producers. Rather, it can be utilized
by coastal agrarian populations for their aquaculture feed needs.


6. Technical Objectives

The goal of this project is to develop and test an algae-based high protein diet to improve the
growth performance of a high-value marine finfish, Florida pompano Trachinotus carolinus.
Our Phase I project will address this goal through the following technical objectives:
1. Produce suitable algae strains to be used in the marine finfish diet.
2. Develop an algae-based high protein finfish pelletized diet.
3. Compare growth performance of juvenile pompano fed algae based and traditional high-
protein diets of similar composition and physical properties.
4. Compare product quality and taste characteristics of pompano reared on the above diets.
5. Distribute market sized pompano reared on algae based and traditional diets to the
commercial market.
During Phase I, algae production will occur at The marine feed will be developed byPhase
I will allow us to evaluate the application of the algae infused diets in pilot commercial-scale
production trials based at Mote Marine Laboratory, Mote Aquaculture Park, located in Sarasota,
Florida. The animals will be reared in a zero-discharge integrated recirculating aquaculture
system which co-produces marine plant species as they process the finfish wastewater.


7. Work Plan

Objective 1: Order Necessary Feed Mixes, Equipment & Consumables

The equipment that is required is laid out of the following sections. Assuming that this project is
funded, Gaiergy Corporation will initiate purchasing all the required components, consumables
and perishables that are required for this project. The capital equipment that will be purchased
will be purchased only from vendors in the United States except for the small-scale fish feed
extruder. The longest leadtime for any specific piece of equipment is 2 months. The remainder
of the equipment can be purchased from local vendors, online retailers and mail-order catalogs.
All individual purchases will be below the 10% of total project cost threshold established by the
federal government.


Objective 2: Replicate Gaiergys Previously Deployed Algal Production System
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Algae Production System

The algae production system has already been designed and placed in-use by Gaiergy
Corporation for another private organization. The technology for the system is fairly simple and
has been used in various parts by multiple organizations for many years. For this particular
research though, a simple downsized modification will be used to produce the required amount
of algal biomass that needs to be incorporated into the fish feed.

For this purpose, the algae will be produced in simple translucent cylinders that are
commercially available. The number of cylinders that will be deployed in this study will range
between 6 and 15 x 80 gallon cylinders. The cylinders will be exposed to normal day light and
LED enhanced light. Gaiergy Corporation is done extensive testing on multiple algal species and
has found that an augmented light cycle produces high-density cultures in medium to large-scale
vessels in the shortest amount of time. With photon flux densities approaching 2000 mol per
square meter and algal densities increasing beyond 1 million cells per milliliter, the high photon
flux density does not negatively affect the algal community so long as sufficient circulation
exists in the containment field. With sufficient circulation, combined with variable shading
effects from other algae in direct line of sight to the light source, high algal densities (>15
million cells/ml) can be maintained in a confined environment under economical conditions.

Objective 3: Start Continuous Production of Small Scale Algal Batches

We will begin algal production within two weeks of gaining project approval. Water for the
system will be provided by a reverse osmosis. The algae strains will be obtained from any
number of commercially available sources such as the UTEX Culture Collection, The National
Center for Marine Algae and Microbiota, or Carolina Biosciences. Nutrients will be provided by
hand using a modification of F/2 Guillards medium. The LED light source will be focused in the
red and blue light spectrum emitted by LEDs with focal dispersions no greater than 45. Algal
densities will be monitored on a daily basis via a bright field/florescent algae counter that
Gaiergy Corporation has previously used for its algal studies. Temperature, pH and oxygen will
be monitored via a Hachs HQd bench top meter. Light intensity will be monitored by Li-Cors
LI-193a spherical underwater light sensor.

Objective 4: Harvest & Spray Dry Algae

Algae maturation can take anywhere between three and 16 days depending upon various factors.
Our algae will mature ready for harvest within 7 to 10 days. Harvesting/Gross De-watering of the
algae will be conducted through a simple solid bowl centrifuge. Gaiergy Corporation has already
conducted multiple harvest experiments using multiple technologies including dissolved air
flotation, agitated filtration, stacked disk centrifugation, electro coagulation and new centrifugal
methods developed by Evodos. For this research, the most economical choice will be a small
solid bowl centrifuge. Considering the realistic maximum potential biomass of algae as a
function of cylinder volume, a small conventional solid bowl centrifuge will provide the lowest
harvest cost per wet biomass unit.

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The algae will then be stored in nitrogen blanketed containment vessels at a temperature below
45F. The wet algal biomass will then be transported to a pharmaceutical, pilot size spray drying
system. There are four known commercial entities that have pilot spray drying capabilities. All
spray dried providers work on and as-needed basis. Therefore, when Gaiergy Corporation has
the wet biomass available, we will package that biomass immediately and ship it to the spray
drying contractor. Once the spray drying contractor has spray dried the algae into a powder, the
contractor will then either vacuum seal the algae into Mylar bags or place the dried algae into
rigid containers that are blanketed by nitrogen. The contractor will then ship the spray dried
algae back to Gaiergy Corporation.

Objective 5: Pelletize Algal-Enhanced, Pompano Specific Fish on As-Needed Basis
Utilizing the Meadow Stone Burr Grain Mill, we will create a flower from the conventional feed
that we purchased for our study. The grain mill is a commercially available appliance that
produces extremely fine-grained flour and will have little problem performing this task. The
spray dried algae will then be added to the pulverized commercial fish feed into different ratios.
We will make a 5% and a 20% algal addition. Since the feed rate for the Pompano will be
dependent upon body mass we will start by creating 2 x 100 pound batches of Pompano specific
fish feed.

The first 100 pound batch will have a 5% mix of algal-based biomass. Therefore, 5 pounds of
algae will be added to 95 pounds of pulverized fish feed. Since the average fish feed moisture
content is still between 10% and 15%, and the spray dried algae will have a residual moisture
content of approximately 3% to 6%, we will add about 20 mL of water to every liter of powder
so that the extruding process will work better, thus creating a pellet that floats. We assume
approximately 20 mL of water because we cannot specifically say how much moisture will be
entrained in the commercial feed at the time of pulverization nor can we specifically know what
the humidity will be like on the day of processing. It will have to be adjusted when the process
begins to create the best feed that we need.

The same process will be used for the second 100 pound batch except 20% of the biomass will
come from the spray dried algae. We do not anticipate a fourfold increase in the amount of water
necessary to create the proper expansion during pelletization, but we would expect it to probably
double due to the lower water content and higher additive percentage to the whole premix.
For the 20% algal-enhanced Pompano fish feed, we will experiment with a wet-harvest algae
incorporated directly into the pulverized commercial feed as a way to eliminate spray drying and
then re-adding water for the pelletization process. Since the pellet mill that we are using cannot
accept 100 pounds of product all at once, we can experiment with the wet-harvest production in
10 pound samples. In other words, we will take 2.2 pounds of wet algae and add that to 8 pounds
of pulverized conventional feed. We will mix that together and then send that through the pellet
mill. On average you can expect anywhere between 10% and 20% moisture loss through the
extruding process and subsequent drying as the temperature of the newly extruded feed cools
down.

One of the goals of this proposal is also to show that species specific fish feeds are high-quality
feeds that have a perishability attached to them. Since there is a perishablity associated with
producing fresh, high-quality feeds, we will not be producing all of the feed that we will need all
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at one specific time. Rather, we will be continuously producing small batches of our Pompano
specific fish feed mimicking what a shore-based Pompano aquaculture facility would also be
doing. In this manner we show that small-scale algae production can complement small scale
finfish aquaculture production.

This is not meant to eliminate large-scale fish feed producers, but it will provide an alternative
for aquaculture farmers to choose whether they want to produce their own feeds or rely upon a
commercial provider. This research may also be used by those same commercial providers to
improve their current feed offerings for those customers that may request Pompano-specific fish
feeds.

As a precaution against equipment failure, we have enlisted Dr. Sajid Alavi from the Kansas
State University, Department of Grain Science and Industry to collaborate with us on extrusion
technical efficiency and if needed, we can send our product to Kansas States extruder for
processing.

Objective 6: Compare growth performance of juvenile pompano fed algae based and
traditional high-protein diets of similar composition and physical properties.

Feed trials will be conducted in FH1 (Figure 1). This system is equipped with one 35.65 m
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rearing tank (tank 7 or T7) and six 8.9 m
3
rearing tanks (tank 1 or T1, tank 2 or T2, etc.)
connected to a common water filtration system (Figure 1). System water continually recirculates
through the fish tanks then flows through a series of filtration systems that includes solids
filtration, biofiltration, UV and ozone disinfection, foam fractionation, and liquid oxygen
injection. Because the system is a zero-discharge recirculating water system, wastewater will
be processed by three concurrent wastewater treatment systems (WT-1, GH-1, and GH-2, Figure
1) as part of a separate study.

In this study, experimental pompano will be reared in T1 T6, and each tank will be fitted with a
separately-controlled automatic feeder used to dispense the respective feed treatments. Rearing
salinity will be maintained at 11-15 ppt and water temperatures will be primarily controlled by
ambient weather, but maintained several degrees warmer than the outside temperature because
the system is situated both indoors and within a greenhouse. Water quality will be monitored
daily for dissolved oxygen (D.O., mg/l), Temperature (
0
C), salinity, and pH using a hand-held
meter. Dissolved oxygen and temperature will also be continuously monitored in each tank
using a pre-existing computer-controlled monitoring device that makes adjustments to the supply
of liquid oxygen to oxygen cones and/or oxygen concentrators. The system is also connected to
emergency oxygen supply lines and an automatic phone alert system if variables (D.O.,
Temperature, and water level) fall outside the desired levels. Ammonia and nitrite will also be
monitored twice every week to insure that these variables are within desired levels (<0.5 ppm
ammonia; <0.4 ppm nitrite).

Pilot work from USDA fellowship research conducted at MAP, has shown that growth juvenile
performance was better in the MAP commercial-scale rearing system compared with smaller
systems with fewer fish per experimental trial combination (Brennan et al., unpublished data).
Therefore, two weeks prior to the study commencement, each experimental tank (T1 T6) will
13

be stocked with 120 pompano, age 45 days post-hatch (dph). These fish will originate from on-
site larval rearing tanks and be acclimated from sea water to the study salinity prior to stocking.
Because of high variability in genetic growth performance with this non-domesticated strain,
experimental trial fish will include the fastest growing individuals of the cohort (e.g. largest 10%
of the cohort). Three replicates of each feed treatment will be conducted (i.e. T1-T6 will be
stocked accordingly). Additional pompano from the same larval rearing cohort will be stocked
into the larger 35.65 m
3
tank (tank 7 or T7) and will be used as additional source fish if
necessary.

Using the best available information to select a comparable commercial diet to the algae-based
experimental diet, pompano juveniles (60 dph, approximately 20g) in each experimental tank
will be fed one of the two above diets as extruded pellets at a rate of 3% mean body weight per
day. Adjustments to the daily feed rate will occur according to typical growth projections
obtained from previous pompano rearing experience. Optimal stage-specific pellet sizes and
feed delivery schedules, and evaluation schedules will be used appropriately throughout the
study based on findings from the USDA fellowship study. Growth parameters will be measured
at the beginning of the study, then at three week intervals throughout the study. During each
evaluation, measured variables will include body wet weight (g), total length (mm), fork length
(mm), standard length (mm), Fultons Condition Factor (K), size distribution (growth
uniformity), Specific Growth Rate (SGR) and Food Conversion Efficiency (FCE), where:

SGR = (ln(final mean fish weight) ln(initial mean fish weight))/days of study duration

FCE = Weight of feed delivered/(initial mean fish weight final mean fish weight)

Response variables (BW, fish length, K, SGR, and FCE) will be statistically compared using a
one-way analysis of variance in SAS software (SAS Institute, Inc., Cary, North Carolina) using
feed brand as a class variable and a least-squares means procedure to compare specific treatment
means. Statistical differences will be considered significant at the = 0.05 level. Size
frequencies of initial and final lengths and weights will be compared by length frequency plots.
All pompano in T1-T6 will be harvested upon completion of the study.

Objective 7: Conduct Taste Trials with Local Restaurants and General Public

Once all of the data is collected regarding objective six, then we will look towards arranging
taste trials at local restaurants. The fish will be donated to the restaurant or chef for simple
preparation for taste testers. Our one stipulation for accepting the donation is that we be granted
access to survey the patrons eating the fish.

8. Related Research or R&D

Significant work is being conducted on floor pompano by a multitude of different researchers.
The primary interest of the majority of these researchers though is in the improvement of
recirculating aquaculture systems (RAS), determining low salinity production parameters and
incorporating more terrestrial vegetative sources into fish feeds. The impetus behind researching
14

higher amounts of terrestrial vegetation feed sources comes from the need to find a replacement
for fishmeal and fish oil impounded into current fish feed formulations. As the oceans wild catch
continues to dwindle while the human population and its protein consumption continues to
increase, aquaculture feeds will not be able to depend upon wild caught fishmeal sources as an
affordable input cost into fish feeds.

Mote Marine Laboratory is one of the institutions that is at the forefront of pompano research.
The two co-PIs, Dr. Main and Dr. Brennan are both working on pompano research. The facility
at mote Marine laboratory is one of the highest quality research facilities for pompano.

Directly on the other side of state from mote Marine laboratory is Harbor Branch Oceanographic
Institute (HBOI). Before the USDA, agricultural research station closed down at HBOI,



9. Potential Post Application

Gaiergy was founded in 2006. It has operated as a boutique consultancy in the field of renewable
energy and oceanographic science. Mr. Masters has worked for The National Oceanic and
Atmospheric Demonstration (NOAA), the Department of Energy and various oceanographic
universities and private algae companies. Gaiergy has a developed business plan for commercial
pompano production with defined outlets for the sale of the fish into the South Florida market.
Using the research of local scientists, such as the co-PIs involved in this proposal, USDA
aquaculture scientists and HBOI scientists, Gaiergy developed a business plan that while it
shows significant profitability potential, there is also volatility risk that is too high in the current
economy's assessment to warrant funding. So, research must be conducted to provide answers
that will be able to be used in the business plan to lower the internal volatility risk associated
with fluctuating feed cost prices.

The results of this SBIR funding will be used to modify a business plan regarding whether or not
to pursue on-site fish feed production for a commercial pompano operation. The results are
anticipated to have a considerable cost-cutting benefit on the order of 20% to 25% cost reduction
over a 3 to 5 year. While current commercial products are offered by producers such as Cargill,
Rangan, Skretting, Zeigler and Star Milling, the products that they offer are not focused directly
on pompano. Some of the products are geared towards Marine finfish and even within that
product offering there are subset product offerings that vary protein, lipid, nutrient and
carotenoid percentages. But the reality is that those products are still to generalistic, thus
resulting in non-optimized conversion of feed into body mass.

There is a definite potential for this research to be used by the federal government. Currently, the
USDA, DOE and DOD are engaged in intense public/private funding for algal-based biofuels.
While there has been some success in creating algal-based biofuels, they have come at a cost that
cannot currently compete with petroleum-based fuels. There will be more success if the focus is
pushed more towards high dollar-value products from algae than commoditized fuels. This
research and subsequent commercialization will be one specific example of that.
15


This research is not to suggest to the federal government that they should abandon algal-based
biofuels, but it is a more prudent and profitable path for the federal government to pursue those
products that can reap a higher dollar value per unit sold in the short term while the industry total
volume output is allowed to grow over the next 5 to 10 years. If the volume output was allowed
to focus on these higher dollar value items begin with, then as volume output increases along
with time, the price for these food items will come down, thus allowing the algal oil to be pushed
into the biofuel market at a lower per unit production cost than if the federal government
continue down its current investment path where algal oil production costs are greater than $26
per gallon with no outlet for the algal biomass.


What advantages will the proposed research have over existing technology and application,
performance, technique, efficiency or cost?

10. Satisfying the Public Interest

The Florida Pompano is chosen because there is a direct commercial profitability aspect related
to developing a species specific fish-feed for this species that is sustainable and cost effective.
Currently, the South Florida area market prices for Florida Pompano can reach anywhere
between $14 and $18 per pound. Gaiergy Corporation already has significant interest from local
restaurants, fishmongers and grocery stores in the South Florida area that would carry Pompano
if there was a steady supply.

Strategic Goal 1

This research can satisfy the need to assist rural communities to create prosperity so there self-
sustaining and economically thriving, because if this research is funded, then the results can be
directly used for small, rural, coastal aquaculture interests. One of the specific goals of this
research is to developing means for on-site, species specific fish feed production. When over
50% of the total cost of production for aquaculture resides in the fish feed (Hasan & Halwart,
2009), and that fish feed is created from one of five production facilities, as transportation cost
increase combined with increasing feed input costs, small scale, rural aquaculture startups need
to be able to produce their own feeds when the economics justify it.
Strategic Goal 2

Our research addresses the strategic goal of enhancing our water resources, restoring and
conserving our private working lands by providing a business case to grow algae off of
wastewater or reclaimed water for the purpose of fish feed feedstock. One of the larger problems
in municipal wastewater treatment plants is the tertiary clarification of wastewater before it is
released back into the environment. At the point of tertiary treatment, the nutrient levels in the
wastewater clarifiers are appropriate for these types of algae growing operations. A secondary
16

point of research for a phase 2 SBIR will be to investigate using tertiary clarifier water as the
feedstock for algae growth.
Strategic Goal 3

This research will definitely be promoting agricultural bio production through aquaculture old
production of a much desired finfish. As our nation progresses into more globalized society that
is influenced more and more by climactic changes, we need to be able to diversify our product
offerings and methods to produce those product offerings. This research speaks directly to
increasing that agricultural/aquacultural production, by improving the quality of the aquacultural
product and diversifying the methods in which that product is grown.

Strategic goal 4

This research can lead to increasing safe, nutritious and balanced meals for children because the
product in which intend to grow, Florida Pompano, is a Marine finfish that not only provides
protein but also a healthy portion of omega-3 fatty acids including DHA and EPA. All of these
compounds, the USDA has promoted as part of their heart healthy lifestyle.



17

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