The developer of the first ocean-based salmon-rearing tank says his system will prove that healthy salmon can be produced for about the same cost, and with less environmental damage, as salmon grown in marine net cages.

"I came out of the net industry and appreciate all of the issues of rearing salmon in net cages," said Richard Buchanan, CEO of Vancouver-based AgriMarine Holdings, citing disease, sea lice, fish escapes and waste deposits that contaminate shellfish.

In mid-January, the first of four massive fibreglass and foam tanks was installed near the Vancouver Island community of Campbell River.

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The tank was stocked with 50,000 15-centimetre Chinook salmon, which, over the next 16 to 18 months, will be raised to four kilograms at a cost AgriMarine estimates at $4.56 per kilogram, based on 2010 data collected at its freshwater salmon farm in China.

Raising Atlantic salmon for market in B.C. marine net cages cost $4.50 per kilogram in 2010, according to seafood company Marine Harvest.

The B.C. Salmon Farmers Association, representing 80 net farms, is skeptical about AgriMarine's declaration that fish can be raised in tanks as economically as in net pens.

"If I was running this project, I'd be careful about making claims," said Mary Ellen Walling, association executive director. "It's a positive step forward for that company, but the technology is not proven."

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Her organization is concerned that enclosed tanks, which are much smaller than net pens, will produce fish that are less healthy.

It's also very costly to convert to closed systems from nets, Ms. Walling said.

Mr. Buchanan, an engineer since 1967, has been developing closed marine tanks for a decade.

AgriMarine's four-tank Campbell River trial, conducted with the local Middle Bay Sustainable Aquaculture Institute, will cost $14.5-million.

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Sustainable Development Technology Canada, a federal agency, provided $2.5-million, the California-based Gordon and Betty Moore Foundation gave $3-million, the Coast Sustainability Trust added $200,000 and the remainder was raised by AgriMarine.

Of the $14.5-million, $7-million will cover operating costs for two years to raise an estimated 300,000 Chinook and Atlantic salmon.

The remaining $7.5-million goes toward development, research, testing and capital costs of the four tanks, Mr. Buchanan said.

It will cost about $700,000 to build and equip (anchoring, pumps, life support) one 3,000-cubic- metre tank that holds 50,000 fish, according to AgriMarine spokesperson Alexia Helgason. The tanks are expected to last 25 years.

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The first tank, built in China, is eight metres deep and holds three-million litres of sea water. It sits 15 metres deep in a protected bay.

Energy to run the pumps and other systems represent about 1 per cent of production costs, an expense open-net systems don't have. But energy costs are offset by lower feed costs, Ms. Helgason said

Feed is the single largest expense (approximately 40 per cent of the total), so savings in this area have a significant impact on total costs, she said.

Open-net farms meanwhile, cost about $5-million to set up and initially stock with about 400,000 fish, Ms. Walling said.

A typical open-net farm, often in remote areas of B.C., has eight to 10 pens, with each pen about 30 metres by 30 metres and roughly 20 metres deep, holding 30,000 to 50,000 predominantly Atlantic salmon, Ms. Walling said. Nets have to be replaced every five years.

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A complaint with open-net systems is that escaped cultured fish compete with wild stocks.

Mr. Buchanan said the tanks will be secured to the ocean floor with chains attached to pilings.

"The tank is designed like a boat. It can take waves over the top. It can't be swamped," he said.

The solid-walled tank will also keep out predators like seals and act as a disease barrier for both wild and cultured fish, he said.

The optimal water temperature of 12 to 14 degrees will be maintained via a pumping system that moves 50,000 litres of water per minute.

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Waste at the bottom of the tank is pumped out, unlike net pens; the solids will be collected and use to produce fertilizer.

"We create an environment that's almost ideal for raising salmon with our tank," Mr. Buchanan said.