Oyster farming: a true triple bottom line win

Editor’s Note: Chip Terry, is the founder and CEO of Oyster Tracker, a farm management provider for the growing shellfish industry. Oyster Tracker recently raised its first round of funding from Maine Venture Fund, Branch Foods, and others.

Ted Cooney started Madhouse Oysters in Maryland knowing that consumers would love his oysters. He was right. In the eight years since he started, he has shipped millions of oysters all over the country, partnered with numerous local watermen, and helped regrow an important industry on the Chesapeake. Ted’s success is part of a global trend. 

The number of oyster farms is growing rapidly and there are now over 2,500 in North America. The West Coast accounts for the majority with Washington leading the states with nearly 70% of bivalve production but the East Coast’s industry is growing fast; Maine approved 198 new oyster farm leases in 2018 and Maryland has been receiving between 80 and 100 lease applications every year since the state revamped its licensing in 2010. The latest estimates state that the US oyster farming industry generates over 16,000 direct and indirect jobs and an economic impact of over $2.2 billion dollars. Most of this development is in rural areas that have limited economic opportunities. 

This growth in oyster farming extends beyond North America to places like the Philippines, Latin America, Europe, Japan and China. A 2018 UN report concluded “[shellfish] production is increasing, but … not enough to completely meet the world demand, leading to growing prices in all major markets.”

Demand aside, there’s a fantastic business case for oyster farming and shellfish more generally — oysters, mussels, clams, scallops – as it does not require any of the typical agricultural inputs such as feed or fertilizer. This ticks many boxes for the increasing numbers of consumers all over the globe who are looking for high quality protein with a low carbon footprint. The potential to regenerate waterfront communities facing declining wild fisheries is an extra social benefit.

But there’s more.

Recent academic work has found that oysters and mussels — the key shellfish species that have been researched the most — remove nitrogen, phosphate and sediment from the water column.

How do they do this?

Scientists have documented three primary ways in which shellfish remove nitrogen and phosphate from the water.

1. Shellfish sequester nitrogen and phosphate in their shells and tissue. This is a natural part of their life cycle, has no impact on the health or safety of a shellfish and is removed from the water at harvest.
2. The algae on the surface of oyster shells turns nitrogen into nitrogen gas, which is harmless and released into the atmosphere.
3. Decaying matter beneath oyster farms sequesters nutrients in the anaerobic sediment on the bottom. 

The shell and tissue sequestration mechanism is the best-studied and the easiest to quantify.  Just using that measure, an average farm has the ability to remove several hundreds of pounds of nitrogen per acre–every year. A recent Canadian study found over 300,000kgs of nitrogen was being removed every year by shellfish farms in Prince Edward Island and New Brunswick. The average 3” triploid oyster in the Chesapeake removes .13 grams of nitrogen and .01 grams of phosphate. 

Why does this matter?

Over the last 100 years, the green revolution has more than doubled the productivity of our farmlands by using more fertilizer–especially nitrogen and phosphate. An estimated 50% of fertilizer runs off into waterways. At the same time the industrial revolution has grown our cities and industries and produced even more nitrogen and phosphate.

Excess nitrogen and phosphate leads to eutrophication, which is where plant life in and on the water grows incredibly dense reducing the levels of oxygen in the water. This causes hypoxia, suffocating the fish, killing their habitats and can lead to toxic algal blooms.

According to the Environmental Protection Agency (EPA) and the National Oceanic and Atmospheric Administration (NOAA), an estimated 15,000 waterways in the US suffer from excess nutrients. Local and state governments are mandated to deploy Best Management Practices (BMPs) to solve waterway pollution issues. Most solutions to-date have revolved around point source solutions–especially new and improved wastewater treatment plants that have had a significant positive impact. These solutions are reaching the limits of technical and financial feasibility. For example, New York and Connecticut have spent over $11.5 billion from 1995 to 2010 upgrading their treatment plants.

As solutions to point-sources – those emitted within waterways — have improved, an increasing percentage of the current nutrient pollution in our waterways is from nonpoint sources— most notably runoff from fertilized fields, suburban lawns, and atmospheric deposits. At the same time, the number of wild shellfish has decreased substantially in almost all our waterways.

Although shellfish and oyster farming will not be the entire solution to the environmental challenges of our waterways, they have the potential to be a big part of the solution. Virginia and Maryland have recently passed Nutrient Credit Trading laws that will allow oyster farmers to sell credits on state exchanges. Although the details are still being worked out, the potential is that farmers could see a significant revenue increase from nutrient credits. 

Bottom Line: Ted’s Madhouse Oysters is a triple threat.

1. 1. A profitable, growing business.
2. 2.He is employing folks with solid year-round jobs in an area with a structural employment problem.
3. 3. The last million oysters he harvested sequestered ~200lbs of nitrogen and 11lbs of phosphorus from the water. Enough to make up for the impact of 200 average size lawns.

That is a true triple bottom line impact that almost no other industry can touch.