More Whiskey Barrels Could Mean More Mold; Greendale Mayor Seeking Public Hearing By Regulators

With a record number of whiskey barrels being stored in Greendale, the mayor worries "whiskey mold" in the city may get worse.

Baudoinia compniacensis, or "whiskey mold," covers the siding of a Greendale home near the MGPI of Indiana Distillery. Photo by Mike Perleberg, Eagle Country 99.3.

(Lawrenceburg, Ind.) – The so-called angel’s share of whiskey being distilled in the massive warehouses at MGPI of Indiana’s distillery is what causes a mold to appear on homes and buildings nearby.

The dark mold, called baudoinia compniacensis, is a problem which has been occurring here for decades, perhaps even as far back as the distillery’s establishment more than 170 years ago.

A key part of crafting a good whiskey is allowing it to age appropriately in an oak barrel. As the liquid sits in the barrel for at least a couple years, ethanol evaporates through the wood and escapes into the air. The presence of ethanol in the air fuels the growth of the mold, which has been found at distilleries around the world.

Although it can be unsightly when growing on the homes and trees near the distillery by giving them a dirty appearance, the “whiskey mold” is not known to cause human health issues.

MGPI of Indiana’s complex is split between the Lawrenceburg city limits and Greendale. Most distilling operations are in Lawrenceburg. The warehouses, all in Greendale, are a mix of new buildings and old Schenley Place multi-story structures.  

Capacity at the storage houses is now up to 439,600 barrels each holding upwards of 50 gallons. Considering the additional volume of whiskey aging here, as much of the angel’s share may be swimming through the air today as at any time since the distillery was built in the mid-1800’s.

The distillery from Ridge Avenue in Greendale. Photo by Mike Perleberg, Eagle Country 99.3.

But only recently did whiskey mold in Greendale catch the attention of federal regulators. As new whiskey barrel storage warehouses were being set up in 2016, the United State Environmental Protection Agency’s Air and Radiation Division notified MPGI of Indiana that it was in violation of the Clean Air Act as well as a state implementation plan.

But controlling the problem is not as simple as filtering the air inside the warehouses. Devices installed to collect the escaped ethanol could all but ruin the company’s money-making whiskey.

According to an Indiana Department of Environmental Management filing, whiskey aging relies on natural ventilation, thus fans cannot be used to force air in and out of a warehouse. Essentially, outfitting the warehouses with devices to collect the VOC emissions would diminish the quality of the booze – perhaps even cause more ethanol to go airborne.

After discussions about the volatile organic compound – or VOC – concerns with MGPI, the EPA decided in February not to pursue the case after evaluating the facts and working with the company, says IDEM spokesman Barry Sneed. MGPI received no requirement from the EPA to install any emission controls.

The state environmental agency also declined to pursue the case because, under Indiana’s rules, the project would not have required permitting under the federal Nonattainment New Source Review and Emission Offset permit program, Sneed said.

“Once EPA decided not to pursue their case, IDEM proceeded with the permitting action… …which is intended to provide construction and operation approval under our state rules for the warehouses at this facility,” explained Sneed.

A recent public notice shows MGPI did not obtain that proper permit before storing whiskey barrels in the new warehouses. It was only this past May when MGPI submitted to IDEM an application for a “significant source modification” for its 2014-issued Part 70 air permit.

“This draft significant source modification contains provisions to bring unpermitted equipment into compliance with construction and operation permit rules,” according to the IDEM public notice, which can be viewed here (PDF file).

A new storage warehouse at the MGPI of Indiana Distillery in Greendale, one of the eight for which the company was late to seek an air permit from the Indiana Department of Environmental Management. Photo by Mike Perleberg, Eagle Country 99.3.

Unbeknownst to many citizens, a 30-day public comment period on the permit modification came and went on September 13.

A notice did run in back pages of the local newspaper, but IDEM failed to formally notify Greendale officials, even though all the new warehouses are located in the city.

Greendale Mayor Alan Weiss was only made aware of that notice on September 7 by the city attorney.

“MGPI has been an important local business in the City of Greendale and, like all our businesses, we would like to see them succeed. However, as mayor, my first concern will always be the health and safety of the citizens of Greendale,” Weiss said in a statement.

The mayor requested a public hearing on September 7, but was told by the agency about a week later that the MGPI permit contains all the federal and state requirements regarding air pollution. IDEM, Weiss says, told him a public hearing would not be held.

At this time, IDEM is still reviewing MGPI’s permit modification request.

Eagle Country 99.3 posed questions to MGP Ingredients, Inc. in an email sent Thursday. Although a company spokesperson did not directly answer the questions about reducing mold in the area, they did provide the following statement:

Thank you for your inquiry regarding our warehouse expansion project and the associated air quality permit modification required for the completion of the project. Alcohol that escapes from the wooden barrels when whiskey is maturing is referred to as the “angel’s share.” This evaporation is an inherent part of the production and aging of American whiskey.

We are proud to be a part of this community and of the role our distillery has played in Lawrenceburg’s proud history. We continue to invest in our distillery, including in new warehouses, to further build on Lawrenceburg’s Whiskey City legacy.

The issue of mold around distilleries has prompted lawsuits by neighbors both here and elsewhere.

In 2016, a class-action lawsuit in Dearborn County resulted in a $1.23 million dollar judgement against Pernod Ricard, a prior owner of the distillery. Awards ranged from $4,000 up to $500 for property owners in Lawrenceburg and Greendale.

Distillers in Louisville, the U.S. Virgin Islands, and Scotland have also faced litigation for the angle’s share.

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