Net Gains and Losses

In 2003, Danny the polar bear, a resident of the Cincinnati Zoo, was having severe skin problems.

The 800-lb. Arctic native's hide was itchy and inflamed; constant scratching wore away fur, exposing the lesions scrawled across the black skin underneath. He was, according to what had to have been the dumbest corporate press release of 2003, "unsuitable for public viewing." Listless and depressed, Danny "had lost interest in eating and interacting with other bears."


menhaden reduction industry

So zookeepers turned to the company that would subsequently issue that press release, Houston-based Omega Protein. The largest commercial harvester of an obscure fish called menhaden (men-hay-den), used mostly for fishmeal and fertilizer, Omega was hyping its more palatable product — refined fish oil. Rich in essential fatty acids, the oil was already FDA-approved for use in certain foods, including margarine, baked goods and baking mixes. Health-conscious people could also pop OmegaPure capsules.

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This fish oil, with its life-affirming long-chain omega-3 acids, was going to save Danny the bear.

Per the press release, zookeepers switched up Danny's regular meals and mixed in four ounces of fish oil. His "enthusiasm toward eating was restored almost immediately by his new and more appealing diet. Within two months, the animal was completely healed..." Shortly thereafter, zoos in Buffalo and Detroit added Omega Protein fish oil to their polar bears' diets.

Strangely, the press release failed to mention how polar bears in the wild are able to survive without Omega Protein's largesse. Perhaps it's because those bears don't live off frozen fish and horsemeat, feasting instead on seal and live mackerel. Of course, watching a polar bear gnaw on a seal might also be unsuitable for public viewing.

In trying to flex its atrophied public-relations muscles, Omega Protein — a company that wrings oil and profit out of an odious, slimy, inedible member of the herring family — announced its position as a conscientious corporation, ready to swoop in and nurse sick or dying animals back to health.

Omega's critics would have been flabbergasted. For years, conservationists — as well as recreational and sport fishers — have accused the company of overfishing menhaden in the Gulf of Mexico and along the Atlantic Coast. Critics say Omega, by far the largest commercial harvester of menhaden, is destroying marine ecosystems by upsetting the food chain and leaving certain waters plagued with oxygen-sucking algae, resulting in enormous hypoxic "dead zones." In 2009, the Texas Department of Parks and Wildlife instituted an annual cap on menhaden harvests along its coast; in 2006, Virginia enacted a five-year cap in its portion of the Chesapeake Bay.

Some critics who say these measures aren't strict enough blame government scientists and the heads of interstate coastal compacts for focusing only on whether the menhaden stock is healthy enough to sustain the industry, and not on the allegedly wide-ranging impact commercial fishing could have on the ecosystem. They call the menhaden "the most important fish in the sea" — and they believe a lone Houston-based company is plundering natural resources to get at them.

And in 2009, for what may be the first time, the government researchers who monitor menhaden populations have preliminary data indicating that the threshold for overfishing may be occurring.

But Omega says science is on its side. All the official reports, it says, indicate menhaden are not being overfished. And besides, why would the company want to fish itself out of business? The company says critics tend to fall into two camps — the cautious and the alarmist, and guess who gets more ink.

The debate is rife with incredibly complex marine biology, acrobatic statistics and impassioned rhetoric. There are more "scientific" reports than you can shake a disgusting fish at. Facts and figures are in abundance. The problem is deciding whose science — and whose truth — to believe.

Although Omega is headquartered in Houston, Omega Protein has a low profile here, and the board of directors like it that way.

None of the foul-smelling fish processing takes place here — only the cool-sounding stuff, like the "food science applications" that go on at the OmegaPure Technology and Innovation Center, where executive research chefs do weird things with lipids and break ground on "burpless" fish oil pill technology.

It's much more peaceful than the attention the company has gotten along the Atlantic, where the gross stuff goes on. Omega harvests much of its bounty in coastal Virginia waters and processes it in a plant in Reedville, Virginia. The rest comes from the Gulf and is processed in Mississippi and Louisiana.

Per its financial filings, Omega is "the largest processor, marketer and distributor of fish meal and fish oil products in the United States." It uses a process called "reduction," in which it reduces the menhaden into smaller parts, which then go into fertilizer, margarine, candy, lipstick, linoleum and the bellies of swine. This generated $177 million in global revenues for 2008.

For a fish no one eats, the menhaden is incredibly useful. In the latter half of the 19th century, oil from menhaden became popular as a cheap, abundant alternative to whale oil. The industry peaked in the 1950s, plummeted through the 1960s, rose again in the 1980s, but is now on the decline. And it's not just the overall abundance that's declining, but "recruitment" — the number of juveniles surviving long enough to enter the exploitable stock.

In the industry's heyday, there were more than 20 processing plants along the Atlantic Coast, with about 130 vessels trolling the waters. Now, the only major player is Omega.

Still, the combined Gulf and Atlantic menhaden harvests make it the second-largest commercial fishery by weight. Omega pulls about 30 million pounds of menhaden from the Gulf each year. From Virginia's portion of the Chesapeake Bay, the center of much Omega controversy, the company draws about 230 million pounds.

Omega has had a presence along the Gulf, in one form or another, since the 1950s, but its origins can be traced back to a guy named John Haynie, who established the John A. Haynie Company in 1878. In 1903, it became Haynie, Snow & Company, and then, perhaps fearing his company's name wasn't funny enough, he renamed it the Reedville Oil & Guano Company. In 1968, someone had the good sense to change the name yet again, this time to Haynie Products. Four years later, the company was purchased by the Zapata Corporation. (Critics love pointing out that Zapata was co-founded by George H.W. Bush, as if Bush himself cruised the Atlantic Coast in a speedboat, personally executing every menhaden with a pitchfork. In actuality, Bush sold his interests in Zapata long before).

By early 1993, Zapata's largest stockholder was Malcolm Glazer, a tycoon with an apparent fondness for diverse portfolios who invested in everything from fast food to trailer parks to motorcycles to the company that makes Formica. Two years after assuming control of Zapata, he went on a sports franchise shopping spree that netted him the Tampa Bay Buccaneers and, after a failed attempt to buy the Los Angeles Dodgers, he plunked down a $1.5 billion controlling interest in the Manchester United soccer team.

Omega went public in 1997; Glazer's son Avram was chairman and CEO from 1998 until 2006, when, after the one-two punch of hurricanes Katrina and Rita severely damaged Omega's Gulf plants, the Glazers sold their interest. Today, it's headed by Joseph L. von Rosenberg III, who's been with the company since 1997. He pulls in a relatively modest $1.1 million in salary and benefits, and says he pops about a dozen OmegaPure capsules a day. (When doling them out to his kids, he told one reporter, they're called "smart pills.")

Omega owns 58 fishing vessels and 32 spotter planes, although not all are in operation. Von Rosenberg has had a lot to contend with lately. Like just about every other company that didn't receive a government bailout, Omega had a rough third quarter in 2009 — revenues were down about $5 million to $49.9 million. The first three quarters totaled about $122 million, down nearly $16 million from the first three quarters in 2008.

Besides the recession, Omega had been battling state and federal bills it believed could seriously threaten or destroy its business. By the late 1990s, it seemed everyone wanted to pick on Omega, when all the company wanted to do was have its unsightly 200-foot steamers cruise near the shore, following the fixed-wing spotter planes overhead to those sweet, sweet menhaden.

Of course, those big vessels are just the beginning of the show. Here's what folks sunning on the sand or lazing on a bass boat with a cool brew get to see next: Two 40-foot purse boats shooting from the carrier vessel, each holding one end of a 1,500-foot net (called a purse seine) to scoop up the menhaden (and the occasional croaker, mullet or shark) and drag them back to the steamer, where they're suction-pumped into a below-board refrigerated holding tank. Then it's off to the processing plant, where they're steam-cooked and dumped into giant screw-presses that squeeze out the oil and water, resulting in a delicious-sounding tonic called press liquor. The remaining dry mass, resulting in the equally delicious-sounding fish cake, is then steam-dried and pulverized. (It's a huge undertaking, and while Omega says it's invested millions on systems to control pollution, Omega was fined six times between 1999 and 2007 for violating permissible discharge levels of wastewater containing cyanide and ammonia.)

It's an aesthetically unpleasant use of public waterways, which is why it angers charter-boat captains and the owners of beach-side hotels. But the people it really pisses off are members of recreational and sport fishing associations. For years, Atlantic anglers have complained that Omega was driving away their beloved striped bass and bluefish. And when those organizations band together, they make a powerful lobby — much more powerful than Omega, which is why clubs with names like the Recreational Fishing Alliance, the Jersey Coast Anglers Association, and the Salty Dogs were able to pressure politicians up and down the coast to limit or ban purse-seining. (These clubs didn't have a problem with the much smaller industry that harvests menhaden for bait — they specifically targeted the reduction industry.)

This resulted in a perception that 13 of the 15 states represented in the Atlantic States Marine Fisheries Commission banned Omega boats from their coasts for purely ecological reasons. It's a belief that really took off with the 2007 publication of The Most Important Fish in the Sea by H. Bruce Franklin, a Rutgers English professor and Herman Melville scholar best known for his books on Vietnam and science fiction (see "Net Gains and Losses: Red Herring").

The one state in the Atlantic States Marine Fisheries Commission where anglers didn't have enough power to ban purse-seining was Virginia, home to Omega's only East Coast processing plant. But they were able to apply enough pressure to the remarkably industry-friendly Atlantic States Marine Fisheries Commission to persuade the group to order a five-year cap on the fish Omega could pull from the Chesapeake's Virginia waters.

For years, anglers and conservationists claimed that the abundance of menhaden in the Chesapeake Bay was dangerously low. This, they speculated, cut down not only the number of predator species but, in some cases, those species' health. Fishermen in the bay, for example, had complained of underweight striped bass festooned with lesions caused by a nasty "wasting" condition called mycobacteriosis. Researchers haven't reached a consensus on cause, but many believe one factor might be stress, and some of that stress could be caused by dwindling numbers of their favorite fish snack.

This five-year cap would also ostensibly give scientists time to better understand the role of menhaden in consuming the nitrogen-rich phytoplankton, which contribute to the growth of oxygen-sucking algae.

The Atlantic States Marine Fisheries Commission kindly shot for the status quo: The annual cap was set at 105,000 metric tons — Omega's average catch from 2000-2005. But Omega still said it would virtually destroy business and drive those poor 200 people at the processing plant out of work.

Virginia Governor Tim Kaine stepped in with a more friendly offer: a cap of 109,000 metric tons. Plus, Omega could make up for any shortages from one year in the following year, up to 122,000 metric tons.

Picking up on this concern in the East, the Texas Department of Parks and Wildlife enacted its own cap on menhaden harvested in its portion of the Gulf. Texas is the only state of the five comprising the Gulf States Marine Fisheries Commission to regulate menhaden catch. Mike Ray, director of coastal fisheries for the Texas Department of Parks and Wildlife, says it's strictly a precautionary measure.

"Right now, the Gulf stock of menhaden is doing fine," he says, adding later, "some of the other state agencies in the Gulf were not particularly supportive of [the cap]." He also says that Omega has been "honest and forthcoming."

Aaron Viles of the New Orleans-based Gulf Restoration Network says that, even though the cap just maintains the status quo, it's encouraging.

"It exhibits an interest in the fishery that other states [in the Gulf] haven't really shown," he says, adding that the next step is to examine the menhaden's role in the Gulf, as they were supposed to have been doing in Virginia for the last five years. "Tougher questions need to be asked about the overall health of the ecosystem...but at a minimum, we don't think they should be catching more fish."

Viles would like to see Omega-funded, government-trained, independent observers riding on the fishing boats to collect data on the health of the stock as well as update the research on bycatch — the other species of fish that accidentally wind up in Omega's nets.

Historically, both Omega and government researchers say the bycatch percentage is an insignificant 1 percent — much smaller than bycatch in other fisheries.

"That small percentage...disguises a really big number," Viles says. "You know, when you've got a billion pounds in your fishery, even if it's 1 percent...you're talking about ten million to 20 million pounds of fish..."

But Omega spokesman Ben Landry says there is a lot of misinformation clouding the issue, spread by "anti-commercial fishing activists" who cherry-pick the data that supports their cause.

"I don't think it's as easy as some people think, that Omega Protein is bad, you know, close the book, that's it...There's another side of the story and in order to tell our side, you know, we have to dig into...the technical nature of the fishery, which, you know, the average person just kind of paying attention isn't going to do."

But if you're talking about cherry-picking, Omega might be doing that as well: Although Landry says Omega harvests only 20 percent of the menhaden, he's talking about menhaden of all ages. Alexei Sharov, of the Atlantic States Marine Fisheries Commission's Menhaden Technical Committee, says the company harvests well over 50 percent of adult menhaden ages three and up.

But whatever you want to do with numbers, Landry says, "It's never been about the science. I guess that's the unfortunate part of this whole debate...All of the available science about the health of the stock has proved that it's a healthy, sustainable, robust in some cases, stock that is not overfished, nor is overfishing occurring."

The stock is not overfished, nor is overfishing occurring.

This is the mantra of the Gulf States Marine Fisheries Commission and its counterpart in the Atlantic. Even as the overall abundance of menhaden declined over the last 50 years, these agencies have always considered the stock healthy.

The Gulf commission comprises 15 voting members, appointed by legislators, governors and state fishery agents. Working from data provided by the National Marine Fisheries Service, the Commission ostensibly monitors the abundance of a variety of species in the Gulf. But this data comes from commercial harvesters, in the form of monthly reports by ship captains on how many fish they pulled each day. The National Marine Fisheries Service conducts stock assessments roughly every five years, which are for the most part measuring the health of the stock as it applies to industry. It's a heartwarming example of government and industry hangin' out in bed, reading the Sunday paper. In fact, they snuggle so closely together it's difficult to tell where government ends and industry begins.

The Gulf commission's Web site, for example, contains a page on menhaden "perceptions" and "realities" that might be mistaken for an industry press release. And the National Marine Fisheries Service is under the auspices of the U.S. Commerce Department, which, through the Fisheries Financing Program, helps commercial fishers find federally backed low-interest loans. (According to Omega's 2008 annual report, the company has $28.4 million in loans through the program.)

And Joseph Smith, a researcher at the National Marine Fisheries Service, comes right out and says, referring to a 2006 report, "The last assessment said that the Gulf menhaden stock is not overfished, contrary to some of the propaganda you'll read."

Moreover, Smith says, there is simply not enough data out there to support or refute conservationists' claims that a dwindling menhaden population can upset the food chain.

"We really don't have an idea of the food webs — who eats who, if you will — in the Gulf," he says, adding later, "we have some of this rudimentary data on the Atlantic Coast — we have nothing like that on the Gulf Coast."

So what's going on in the Atlantic?

Preliminary results for the 2010 menhaden stock assessment suggest that recent harvesting is approaching the threshold of overfishing, says Sharov, of the commission's Menhaden Technical Committee. This means industry may not be able to rely on the rote "The stock is not overfished, nor is overfishing occurring" anymore.

But, as with any aspect of the debate, nothing can be as easy as it seems. The data points used to define overfishing are "somewhat arbitrary," Sharov says. The ASMFC sets "target rates" and "threshold rates" for fishing mortality and fecundity. Tweak one number, for example, and you might wind up with data saying the industry has been overfishing for 50 years. (Hell, tweak another number and you might find out menhaden are extinct.) These are the man-made numbers that some conservationists and anglers say are way off-base.

But regardless of this mathematical mucky-muck, the indisputable fact is that the total Atlantic menhaden population has dropped significantly since the 1950s, and the reduction industry's total landings — the number of fish brought ashore — have generally declined as well. (There were, however, tremendous rebounds in some years.)

It's because of these general declines that Omega, whether under its own name or via industry front group the Menhaden Resource Council, has vigorously fought any caps. When you factor in those declines with what the company's annual report calls "substantial amount of indebtedness," it becomes clear that Omega really needs to catch as many menhaden as possible, and to exploit every possible use the fish has. Every victory is important, such as when the U.S. Food and Drug Administration expanded the types of food menhaden oil can be added to from 14 to 29. Every new study that shows the health benefits of omega-3 fatty acids is an occasion to bone up on OmegaPure capsule advertising.

So when U.S. congressmen from Maryland and New Jersey introduced bills in 2008 to ban reduction boats from federal waters, Omega got busy. They hired John Everett, a former National Oceanic and Atmospheric Administration researcher, to do a study on whether menhaden were really all that beneficial to the ecosystem. Parts of the report suggested that not only is menhaden not the most important fish in the sea, but it can be a freaking nuisance. Everett testified before a House subcommittee studying the issue, and Omega also submitted Everett's report to Texas fisheries managers when they were discussing the Texas cap. Texas officials dismissed most of Everett's contentions, as did the technical committee for the Atlantic States Marine Fisheries Commission.

Even Omega CEO Joseph von Rosenberg came out to testify against the federal bills, characterizing some conservationists as zealots who've made the question of the menhaden's role in the ecosystem a political, rather than scientific, matter.

"These advocates come right out and admit their campaign is end-driven," he testified. "The goal had been decided upon, but they keep looking for what they called a 'smoking gun' to convince the public to shut the fishery down. This Alice in Wonderland, 'verdict-first' approach leads us to suspect that at least some groups thrive on controversy rather than solutions."

Not only that, von Rosenberg said, but these fanatics help perpetuate a caricature of the reduction industry "as avaricious, shortsighted, greedy and ultimately self-destructive," when "all they want is the right to make a living, in a reasonable and responsible manner, just like any other American."

He also talked about the employees in the Reedville processing plant and on the boats who would lose their jobs — many of whom are "second-, third- and even fourth-generation fishermen and plant workers in the menhaden industry."

Evoking the image of rabid so-called conservationists kicking the poor Gorton's Fisherman in the yellow rain slicker out on the curb, von Rosenberg talked about Omega's workers who "were raised by the income earned from menhaden, and today they feed and educate their children and support their churches, local businesses and civic institutions with wages this fishery provides."

Von Rosenberg conveniently left out the part about Omega historically hiring foreign workers with visas for seasonal labor. According to Omega's 2008 annual report, when federal legislators didn't renew an exception to the H-2B visa program, Omega "did not receive its historical allotment" of seasonal labor. With this sudden need to recruit domestic workers, Omega had to raise certain wages, offer sign-on bonuses and offer referral fees. Omega's "inability to secure sufficient domestic workers for its vessels or plants could have an adverse effect on the company's business," the report states.

Fortunately for Omega, the House bills to ban reduction fishing in Atlantic federal waters, which would have virtually destroyed the company, died.

Although the preliminary review of the 2010 Atlantic menhaden stock suggests the industry is reaching the threshold for overfishing, Omega will continue to draw the bulk of its stock from the Atlantic.

In the absence of an official overfishing decree or further state regulations, there is no need for the company to switch the focus to the Gulf. And it's unclear if an exclusively Gulf draw could even sustain Omega as it exists today. But if there's an increased Gulf harvest, Gulf conservationists and anglers are worried they might see the kinds of problems their Atlantic counterparts are fretting over.

However, the Gulf States Marine Fisheries Commission says that's just a "perception." The "reality" is that "the Gulf menhaden fishery has been relatively stable since 2001" and besides, most Atlantic reduction boats are "ill-suited" for the Gulf anyway.

And if you think Gulf menhaden are disappearing to the point where predator fish have nothing to eat, the commission will set you straight on that "perception" as well, because any fool knows that it's really the bay anchovy that holds things together in the Gulf.

For everyone's perception, there's a reality. The problem is just finding out which is which, before menhaden go the way of the dodo.


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