Despite Citizen Uproar, IDEM Grants Air Permit For Sunman Barrel House

The permit gives MGPI of Indiana LLC permission to begin aging up to 320,000 whiskey barrels at a warehouse in Sunman.

(Sunman, Ind.) – Now, it seems nothing stands in the way of MGPI of Indiana, LLC storing hundreds of thousands of barrels full of whiskey in a warehouse in Sunman.

Whether the boundless fungus associated with barrel houses has an adverse effect on neighbors in and near town remains to be seen.

On April 10, the Indiana Department of Environmental Management Office of Air Quality granted MGPI of Indiana the new source construction and minor source operating permit it needed for the barrel house operation.

The permit is effective immediately. It does not expire until April 10, 2024.

A copy of the permit is available on IDEM's Virtual File Cabinet website here (PDF, 2.2 MB).

According to the company’s plans, up to 320,000 wooden barrels of spirits produced at MGPI’s distillery in Lawrenceburg and Greendale will be aged for years at the former Deufol factory the company purchased last year. Town officials have said the barrel house operation will employ fewer than a dozen people.

The 415,000-square-foot former stationary factory, located on Meridian Street-State Road 101 on the south side of town, is likely to be among the largest barrel houses in the world.

As whiskey ages inside the oak barrels, ethanol inside the barrels evaporates through the saturated wood. Known as the angel’s share of the whiskey, the evaporation is key to giving the liquor its desired taste.

Here’s where the controversy resides. The heightened amount of ethanol in the air feeds the growth of a fungus called Baudoinia compniacensis. It shows up as a hard-to-clean, black coating on almost anything near to the evaporated ethanol source.

Such fungal growth has been apparent for decades on homes, trees and vehicles near the distillery in Greendale and Lawrenceburg. It’s been the same story at barrel houses in bourbon distillery towns in Kentucky, brandy distilleries in France, and scotch distilleries in Scotland.

The air permit being issued seemed almost certain based on what IDEM officials told citizens at a February 28 public hearing at Milan High School. Doug Wagner, technical environmental specialist with IDEM's Office of Air Quality, said the agency cannot regulate airborne ethanol because it is classified as a fugitive emission.

Also, ethanol is not among the contaminants the agency is required to regulate, he said.

“Ethanol is not classified as a hazardous air pollutant. The EPA by statute or federal rule has set out 187 hazardous air pollutants by name and ethanol is not among them,” Wagner explained.

Citizens were invited to continue submitting their comments on the air permit through March 4.

More than 130 public comments were received. Each are included in the air permit just issued to MGPI.

A vast majority of the spoken comments and written letters specifically mentioned worries about the fungus, including impacts on citizens’ health, property values and crops.

“We are very concerned about what this will do to our home, cars, plant life, animals, water and mostly, our HEALTH! I see the results that this black fungus causes to the areas of Greendale and Lawrenceburg from this toxic fungus. How can you allow this to happen to another town???” one Sunman resident wrote to the agency.

Some citizens wrote about fears of the fire risks posed by millions of gallons of alcohol stored in one location. Others pleaded for IDEM to require MGPI to install equipment which would collect the evaporated ethanol before it leaves the warehouse.

As was promised by agency officials at the February 28 public hearing, IDEM wrote a response to each comment. It pointed toward various policies or answers to other commenters’ similar questions.

Citizens do have one Hail Mary pass available to stop the angel’s share and the unsightly fungus it causes. They can file a petition of review of IDEM’s decision to an administrative law judge within 18 calendar days of the mailing of the permit notice.

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