KODIAK - A new state loan program to encourage fishermen to upgrade their engines is gaining momentum in Kodiak.
With a 3 percent interest rate, the Engine Fuel Efficiency Program provides financing at a cheaper rate than an older, larger state program that loans fishermen money for everything from buying quota shares to updating their gear.
Since it became available Aug. 20, 57 loans have been granted statewide, five for Kodiak boats.
Charlie Madsen, owner of Kodiak Diesel Services, said he had been selling more new engines for the last three years, since fuel prices went up, although the new loan program has not hurt.
"A lot of guys were going to do it anyway, but (the loan program) gives them more incentive," he said.
An engine upgrade usually costs between $25,000 and $60,000. For much of the local fleet, he said, updating engines from the 1970s pays for itself in a few years. He estimated replacing an old engine for most boats will save between 25 and 30 percent on fuel.
One improvement touted by Madsen is the fuel consumption data new engines produce.
"I had a boat I was doing a sea test on the other day and I saw that increasing the boat speed slightly was increasing the fuel consumption by something like 50 percent," he said. "In the old days we wouldn't have known the difference."
Aaron Sutton is one of the fishermen who chose to upgrade his engines before the loan program. Two years ago he put $40,000 into three new John Deere engines on the 68-footer Miss Linda, which he uses to crab and longline.
He does not qualify for the Engine Fuel Efficiency Program because he made the switch more than 12 months ago.
He plans to make back his investment in three years of fuel savings.
"I'm just amazed every time I fill up," he said.
Some of the savings comes from more efficient diesel consumption, but in his case engine oil is the major factor.
Sutton used to add $13,000 in oil to his engine every year - not counting the oil used for oil changes. Now he seldom adds oil between oil changes.
Between the savings and a drop in emissions and engine noise, Sutton said he has not looked back since making the change. But he understands one reason many fishermen stay with old engines.
"A lot of guys in the fleet are afraid of technology and I was too," he said. "When you rely on something to get you home, it's scary to put in something you don't really know how to use. Change is difficult sometimes, but sometimes you have to change."
The Engine Fuel Program Upgrade interest rate is pegged to 2 percent below the prime interest, but can go no lower than the current 3 percent minimum. The larger Commercial Fishing loan program charges 2 percent above the prime rate with a 10.5 percent maximum.
The state now has about $65 million in outstanding loans for commercial fishers. The new Engine Efficiency Upgrade Program accounts for 4.6 percent.
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