Strained mussels: Causes of the first US offshore farm’s demise are up for debate

Jason Smith, the Americas editor of Undercurrent News, just completed an in-depth piece on the demise and rebirth of Catalina Sea Ranch, the first US offshore aquaculture operation

The dramatic flourish in the YouTube video occurs about six seconds in when the whales show up.

The 2017 video, titled “The vision of Jacques Cousteau is becoming a reality” (see below), starts off showing a picture of offshore mussel farmer Catalina Sea Ranch (CSR), the first such operation in US federal waters. Then, for around 30 seconds, viewers are treated to drone footage of three gray whales cavorting near the ocean’s surface as John Denver croons a line from his 1975 hit “Calypso” about Cousteau’s research vessel: “To sail on a dream on a crystal clear ocean; to ride on the crest of a wild raging storm”.

That gives way to images of CSR divers checking the ranch’s underwater long-lines laden with mussels. The video finishes with a Cousteau quote about aquaculture’s importance.

The 55-second video conveys the ambition and vision of CSR. The mussel farming pioneer succeeded in capturing industry and mainstream media attention, raising millions from private investors and another $2m in state and federal grants — before, ultimately, falling into bankruptcy in December.

The founder of the San Pedro, California-based firm, veteran entrepreneur Phil Cruver, told Undercurrent News that he believes the reason for the company’s demise is simple: onerous regulation.

“Catalina Sea Ranch didn’t make it because of the FDA [US Food and Drug Administration]. There’s just no question about that,” he said.

Cruver listed several factors he said were major contributors to CSR's downfall: large disparities between state and federal shellfish biotoxin testing, requirements that he said cost as much as 50 times what state growers face; difficulties in finding a lab that conformed to federal rules; a more than $146,000 loss due to allegedly faulty test-kits; and challenges in navigating an uncharted regulatory system.

The FDA takes issue with that account, asserting that it worked with CSR for four years to help it comply with existing shellfish safety requirements. 

Others who watched the rise and fall of a company with so much promise pointed to several reasons for CSR’s bankruptcy including a lack of capital and harvesting assets that were too small, site selection that lacked extensive data about biotoxin risks, and an alleged lack of “focus” on the company’s core mussel business. Other factors, such as a boater’s tragic death at the ranch and infighting among shareholders that made it difficult to raise more capital, reportedly didn’t help.

‘All the wrong boxes’

The venture’s future isn't over as Pacific Mariculture, a subsidiary of Long Beach, California-based investment partnership Pacific6, is set to buy CSR’s assets in a $1.75m deal. But CSR's impact thus far hasn’t been wholly positive on aquaculture, especially as the financial issues left its farm site in “disarray” and the company was once in danger of losing its crucial Army Corps of Engineers (USACE) permit, according to its bankruptcy filing. Additionally, according to the California Coastal Commission (CCC), CSR had promised to comply with extensive monitoring requirements and failed to do so throughout its operation, the CCC told Undercurrent.

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