Kona Blue Water Farms, which raises fish in open-ocean pens off the Kona coast on the Big Island, plans to farm its trademark Kona kampachi off Mexico.

The company will rear the fish known as kahala or Hawaiian yellowtail in the Sea of Cortez, also called the Gulf of California.

Kona Blue co-founder and president Neil Anthony Sims said the company will be able to reduce its carbon dioxide emissions by driving the fish to Los Angeles in a truck from Mexico rather than flying it from Hawai'i. This appeals to sustainability-conscious seafood consumers, he said.

"There is tremendous growth potential for Kona kampachi," he said. "But we are growing a sashimi-grade product that commands a powerful premium when it is fresh in the most isolated archipelago on the face of the Earth."

Even so, Sims said rumors that Kona Blue is leaving Hawai'i are untrue. The company moved its headquarters to San Francisco last year to put company executives closer to major markets and potential investors.

"We are rethinking how to make best use of the Hawai'i operation," he said. "Do we go frozen, supply the local market, or do we continue to send kampachi to the Mainland and ask the consumer to pay a premium for Hawai'i-grown fish?" he said.

Kona Blue had asked the state Land Board last year for permission to expand its operations off Keahole Point.

But the company ran into opposition from a Native Hawaiian organization that threatened to file for a contested-case hearing and demand that the company prepare a costly environmental impact statement.

"We pulled our application by our own volition," said Sims. "The Hawai'i expansion had fallen into quasi-judicial territory, and so we said, 'Let's make sure we can do what we do well.' "

While disappointing, Sims said the decision was fortunate, given a jump in oil prices has made the air freight of raw fish prohibitively expensive.

Despite cultural and environmental concerns about the open ocean fish pens, Sims said there is no evidence the activity is harming the sea around the farm.

Sims said the company conducts monthly monitoring of the ocean around the cages and quarterly inspections of the sea floor.

The company has eight submersible cages spanning 80 feet by 50 feet off the Kona Coast. They rest a half-mile offshore 30 feet below the surface in waters between 200 and 220 feet deep.