Sam Asci Council staff Scallop AP/Committee September 13 th & - - PowerPoint PPT Presentation

Sam Asci Council staff

Scallop AP/Committee September 13th & 14th, 2018

Doc.6a

Recap of input to date

 Committee (March-18)

 Ranked priority, and recommended continuing work  PDT Tasking Motion

 Advisory Panel (March-18)

 Several motions on this topic – no consensus

 PDT (March-18 through August-18)

 Continued development of discussion document with supporting info (see

Doc.4b)

 Reviewed several rounds of economic analysis addressing Committee tasking (see

Doc.4c)

 Correspondence: For and against

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PDT progress re: Committee Tasking

Committee Tasking (March-18):

 Analyze the impacts of LAGC IFQ trip limit increases from 400 lbs to

1,200 lbs (in 200 lb increments).

Extensive PDT discussion/input around suite of analysis  detailed in materials/meeting summaries (Doc.6a-e). T

• days presentation will provide relevant take away points.

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Main objectives for today

1.

Review relevant information about the IFQ component.

• 2. Review results of PDT tasking.
• 3. Provide input on the direction of this

work priority.

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Discussion items for today

Review analyses addressing Committee tasking:

1)

Distribution of active LAGC IFQ fleet by:

a) vessel size b) lease activity c) crew size

2) Trip cost and fuel price trends

in LAGC IFQ fleet

3) Vessel baseline restriction info

3) Economic impact analyses

a) Scenario analysis—potential

impacts of changing trip limit on revenue and lease prices

b) Aggregate impacts of

changing trip limit on LAGC IFQ fishery

4) Potential impacts on scallop

resource, EFH, PR, non-target species

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LAGC IFQ permits

Universe of LAGC IFQ

permits (2010-2017)— active, inactive/CPH, and total.

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FY active permits inactive/ CPH total permits 2010 151 179 330 2011 138 192 330 2012 123 195 318 2013 118 198 316 2014 131 185 316 2015 128 185 313 2016 141 173 314 2017 137 178 315

trend line

Distribution of active vessels by size

 Council goal, A11: preserve

ability for vessels to participate in fishery at different levels—fleet of relatively small vessels.

Question: How has fleet diversity changed in terms of vessel size? PDT investigated distribution of active fleet, landings, and quota allocation by vessel size group (see Doc.4a, p.29)

 Size groups: Less than 50 ft, 50

to 74 ft, 75 ft or greater

Distribution of active vessels by size

Key points (see Doc.4b, p.29):

Number of vessels (see figure),

landings, and allocation by vessel size remained relatively stable

Smaller vessels (< 50 ft)

increasing over time Overall, diverse participation in IFQ fishery by vessel size across time period.

64 62 62 61 69 70 74 70 64 56 40 41 43 42 52 52 23 20 21 16 19 16 15 15 10 20 30 40 50 60 70 80 2010 2011 2012 2013 2014 2015 2016 2017 active LAGC IFQ vessels FY < 50 ft 50 ft - 74 ft ≥ 75 ft

Distribution of vessels by lease activity

 Increasing trip limit would

likely increase lease prices.

Question: How reliant is the fleet on leased quota/lease market? PDT investigated distribution of active fleet by amount leased (Doc.6c, p.8)

 ‘lease groups’ categorized

vessels by the proportion of total landings that were leased- in.

Reliance on leased quota/lease market

Key points:

• LAGC fleet has become

increasingly reliant on lease market.

• In most recent FY, roughly 40%
• f active vessels leased in 50%
• r more of landings

Over half of active LAGC fleet would be impacted by increased lease prices.

Ratio of net lease to landings 2010 2011 2012 2013 2014 2015 2016 2017 Grand Total <=25%

5% 4% 15% 8% 8% 9% 11% 6% 8%

25% to 50%

11% 12% 7% 16% 11% 7% 6% 9% 10%

50% to 75%

11% 18% 16% 14% 11% 8% 9% 10% 12%

>75%

19% 15% 23% 22% 28% 34% 38% 29% 26%

NO LEASE-IN ACTIVE 48%

43% 34% 21% 20% 23% 18% 22% 29%

LEASE OUT ACTIVE

6% 7% 5% 19% 21% 20% 19% 24% 15%

Grand Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 10 Doc.6c, Table 6. Number of active vessels that were net leasers as a percent of total active vessels

Crew size

Key points:

 Crew size varies (widely) at 600 lb trip limits  Majority of LAGC IFQ vessels are currently

around 50’ in length, and carry 3-4 crew members.

 vessel length related to crew size (i.e.

smaller vessel ≈ smaller crew, larger vessel ≈ larger crew).

PDT input:

 small increase of trip limit (i.e. 800 lbs)

likely won’t increase crew size, but a larger increase (i.e. to 1200 lbs) might.

 If vessel size increased, crew size would

likely increase.

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0% 10% 20% 30% 40% 50% 60%

2010 2011 2012 2013 2014 2015 2016 2017

percent of active LAGC IFQ vessels 2 or less 3 4 5 6 or more

Trip costs

Key points:

 Fuel price  driving factor in trip

cost (see Doc.4e).

 Increasing fuel prices were part of

Council’s rationale for raising LAGC IFQ possession limit from 400 pounds  600 pounds (2011).

 Observed fuel prices appear to

be increasing steadily since 2016.

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$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20172018

average observed fuel price (USD per gal) Average monthly fuel price from observed LAGC IFQ trips, 2007- May 2018 (see Doc.6b, p.37)

Vessel baseline restriction regulations

restrictions apply to all limited access fisheries in

NEFMC/MAFMC range, except for American Lobster, NEMS Handgear A, and LAGC IFQ.

Replacement vessel/upgrade may not exceed:

10% of baseline length 20% of baseline horsepower

baseline refers to length/horsepower of a vessel when it was

first issued a limited access permit.

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Vessel baseline restriction regs (cont’d)

 LAGC IFQ permits not held to baseline restrictions, unless in a permit

suite with other limited access permits that do.

 Ex.: Vessel with an LAGC IFQ and NEMS A permit is held to vessel

baseline restrictions associated with NEMS A permit.

 Limited access permits cannot be ‘separated’. LA permit suites must be

bought/sold/transferred as package.

 Ex.: Vessel could not sell NEMS A permit and retain LAGC IFQ

permit.

 Limited access permits can be relinquished.

 Ex: Vessel could relinquish NEMS A permit, retain LAGC IFQ permit,

and no longer be held to vessel baseline restriction.

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LAGC IFQ MRIs with restrictions

 The number of LAGC IFQ

permits limited by vessel baseline restriction in other fisheries (source: B. Galuardi, GARFO)

 Includes active/inactive/CPH

permits. Over half of LAGC IFQ permits subject to baseline restrictions.

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LAGC IFQ with baseline limiting permit LAGC IFQ without baseline limiting permit (i.e. LAGC

• nly or w/Lobster)

Total

168 134 302 56% 44%

Unrestricted LAGC IFQ MRIs

Of the 134 MRIs without baseline restrictions:

Roughly half were not

active (in CPH)

Majority were active in

both scallop and other fishery

Very few active MRIs did

not scallop

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10; 7% 7; 5% 49; 37% 68; 51%

LAGC IFQ MRIs without baseline restrictions (FY2017)

active in scallop fishery only active in other fishery only active in scallop and other fishery not active

Unrestricted active MRIs

49 unrestricted MRIs active in both scallop fishery and other fishery(s) (2017):

73% of total DAS were in

scallop fishery

2017 avg:

~44 DAS in scallop fishery ~16 DAS in other fishery(s)

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2,137; 73% 773; 27%

DAS from unrestricted MRIs active in scallop and other fishery (FY2017)

scallop DAS

• ther DAS

Baseline restricted LAGC IFQ MRIs

Of the 168 baseline limited MRI’s:

 30% not active (in CPH)  Majority were active in

both scallop and other fishery, or just other fishery

 Only 2% were active in just

scallop fishery Baseline restricted permits are being fished.

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4; 2% 48; 29% 66; 39% 50; 30%

LAGC IFQ MRIs with baseline restrictions (FY2017)

active in scallop fishery only active in other fishery only active in scallop and other fishery not active

Baseline restricted active MRIs

For the 66 baseline restricted MRIs active in both scallop fishery and other fishery(s) (2017):

 ~60% of total DAS fished in

• ther fishery(s)

 2017 avg:

 ~54 DAS in other fishery(s)  ~35 DAS in scallop fishery

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2,315 ; 39% 3,550 ; 61%

DAS comparison for baseline limited MRIs active in scallop and other fishery(s) (FY2017)

scallop DAS

• ther DAS

LAGC IFQ MRIs active in scallop fishery

Of 129 active MRIs in

FY2017, slightly less than half were not subject to vessel baseline restrictions.

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70; 54% 59; 46%

LAGC IFQ MRIs active in scallop fishery (2017)

with vessel baseline restriction without vessel baseline restriction

Other considerations of modifying trip limit

See Doc.6d

In addition to economic analysis/potential impacts  how could modifying the possession limit impact:

Scallop resource Essential Fish Habitat Protected resources Non-target species

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Key points

 Increasing limit will reduce number of trips needed to land quota

 would not change in allocation/landings/rotational management.

 range of LAGC fleet wouldn’t expand beyond areas already fished by

LA component.

 Vessels will continue fishing high-LPUE areas  area swept not

expected to increase

 little change in impact on resource, EFH, PR, Non-target species.

 Potential for increased rate of harvest in access areas

 not sure how/if this would impact resource

LAGC is 5.5% of fishery—any impacts expected to be minimal relative to entire fishery.

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Economic impact analysis (Doc.4c)

“Where the rubber meets the road.”

 Simulations were run to inform

relative impacts of modifying trip limit on active vessels, in terms of:

 Lease price  Trip cost  Fixed cost (i.e. maintenance)  Vessel revenue  Crew shares

 Simulations were done for two

scenarios: 1) ex-vessel price of $9 per lb, 2) ex-vessel price of $12 per lb.

 Impacts estimated for range of

lease activity (i.e. proportion of total landings a vessel leases in)

 Aggregate impacts on LAGC IFQ

fishery as a whole also estimated

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Economic impact analysis: Key assumptions

 Vessels land 30K lbs per year,

~60% from open area, ~40% from AAs (2016-2017 average; Doc.6c, p.5)

 Trip length (based on 2017

• bserver data average; Doc.6c, p.3):

 AA trips—more time spent

transiting than fishing 

• pposite for open trips

 Fishing time increases with

higher trip limit, transit time does not.

 Maintenance and repair costs

increase proportionally with trip length.

 Crew share lay systems, either:

1.

Crew pays lease cost, or

2.

Vessel and crew split lease cost

 Lease price  based on annual

lease price model using 2017 data

(Doc.6c, p.1)

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Interpreting findings

Simulation outputs should be considered in terms of

relative change (%) compared to the 600-pound limit—not absolute values.

Potential impacts follow similar overall trends across

scenarios—the magnitude of impacts depend on:

the trip limit (i.e. gains/losses are greater at 1,200 lb limit

compared to 800 limit).

Ex-vessel price (i.e. gains/losses lesser at $9 per lb, greater

at $12 per lb)

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Impact on costs, vessel revenue

Impacts are not expected be uniform for all vessels.

 Higher trip limit  fewer DAS expected for all vessels

 Reduction in maintenance and repair cost.  Reduction in annual trip costs.

 Lease prices expected to increase at higher trip limits, meaning:

 Vessels that do not rely heavily on lease market will benefit

(i.e. the less you lease in, the more you make).

 Net revenue expected to decrease at higher trip limit for

vessels that lease half or more of total landings (~40% of active fleet in FY2017).

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Active vessel lease totals in 2017

Total 2017 allocation = ~2.3 million lbs.

~1.4 million lbs leased by

‘lease-in’ vessels (62% of allocation)

~1.2 million lbs net lease

in 2017 active fleet (52%

• f allocation)

ACTVITY

• perc. total

landings leased number of permits Total net lease (lbs) ACTIVE <=25% 8 12,205 26% to 50% 12 109,181 51% to 75% 14 320,086 >75% 40 958,762 NO LEASE 30

• LEASE-OUT

33 -215,629 ACTIVE Total 1371,184,605

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2017 lease value

 Aggregate lease

costs (-) and earnings (+) by lease group at range of trip limits

 2017 total lease

value (at 600 lbs) = ~$5.6 million

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Lease grp/Trip limit 400 600 800 1000 1200 Lease out - not active $4,226,424 $4,717,571 $4,985,409 $5,153,774 $5,269,343 Lease out - active $769,319 $858,721 $907,474 $938,121 $959,158 Zero lease $0 $0 $0 $0 $0 <=25%

• $43,545
• $48,605
• $51,365
• $53,099
• $54,290

26% to 50%

• $389,535
• $434,802
• $459,488
• $475,006
• $485,657

51% to 75%

• $1,142,000
• $1,274,710
• $1,347,082
• $1,392,575
• $1,423,802

>75%

• $3,420,664
• $3,818,174
• $4,034,949
• $4,171,215
• $4,264,752

Total est. lease value $4,995,743 $5,576,292 $5,892,883 $6,091,895 $6,228,501

Impact on vessel owners

Reduction in DAS, trip cost, maintenance cost expected

with higher trip limit for all vessels.

 Vessels with little to no lease costs  vessel profits expected

to increase.

 Vessels that lease, and crew pays lease  vessel profits

expected to increase.

 Vessels that lease, and split lease cost with crew  vessel

profits expected to remain constant or decline.

 Vessels/owners that lease out only  profits expected to

increase

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Impact on crew shares

Crew pays lease cost:

vessels that lease little or no

quota—crew shares stay the same or improve at higher trip limit.

vessels that lease half or

more of landings—crew shares expected to decline. Vessel/crew split lease cost:

Crew shares expected to stay

the same for vessels that lease more, slight improvement possible for those with little to no lease cost.

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Considerations and Conclusions

 Cui bono—who benefits? Owners that lease out only and active

vessels/crews that do not rely on leased quota would benefit the most from a higher trip limit.

 How might LAGC IFQ fishery change? At 1,200 lb limit, average

trip length estimated to be 40+ hours. Over half of LAGC IFQ permits are eligible to upgrade vessel size without restriction.

 Participation at varying levels? Difficult to say, but it is possible

that lease price increases enough to make LAGC IFQ fishery no longer profitable for some.

 Magnitude of impacts increases with higher trip limits.

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