Tennessee whiskey distillers focus on pollution controls as industry grows

As the whiskey industry continues to grow, Tennessee’s two largest distilleries struggled to comply with water quality regulations last year. 

Jack Daniels and George Dickel exceeded their limits for chlorine and other pollutants that can harm aquatic wildlife. After investigating the violations, the distilleries traced the problems to broken or inadequate machinery and faulty testing. State officials say the companies have fixed the problems and are now back in compliance.

Meanwhile, Jack Daniels is applying for a new water pollution permit to cover its growing distillery. The historic operation in Lynchburg, owned by Louisville-based Brown-Forman, is undergoing a $140 million expansion as consumer demand surges. Executives expect to increase the amount of wastewater in the next two to three years.

“Water is a very important resource to us, and we do beyond what’s required of us with our permits,” said Jack Daniel’s general manager Larry Combs. “These are relatively minor issues.”

The rapidly growing industry for U.S. bourbon and Tennessee whiskey has generated more work for state and local regulators. From 2010 to 2016 U.S. sales grew by 40 percent, according to the Distilled Spirits Council. The number of distilleries in the state proliferated from three to 41 around the same timeframe.

Whiskey — the word is derived from the Gaelic for “water of life” — is better known for its environmental impact on air quality. Distilleries create so-called “whiskey fungus” from airborne ethanol emissions. Appearing like black mold, the fungus blankets buildings and trees downwind of distilleries. It’s mainly a cosmetic concern, and led neighbors to sue some major Kentucky distilleries in 2012.

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Wastewater is less visible, but has the potential to kill fish in water bodies downstream from distilleries. Distillers discharge a range of water pollutants, depending on their operations: ethanol, cleaning agents, leftover organic matter from the fermented grains and corn, and solids such as charcoal from filtering operations. The organic material and ethanol, when consumed by microorganisms, can deprive lakes and streams of oxygen. Also, warm water from cooling operations can upend fragile ecosystems.

“It’s not like discharging cadmium or lead into the water, which is of much greater concern from a public health point of view,” said James Scott, a professor of occupational and environmental health at the University of Toronto. “But it’s an example of an undeniable environmental impact.”

Regulators from the Tennessee Department of Environment and Conservation cited Jack Daniels in October for exceeding its limits of solids, for falling below oxygen levels, and for high levels of chlorine. The chlorine originated from disinfecting stream and lake water, company officials said. Limits were exceeded between July and September 2017, state regulators found.

Companies monitor their own pollutants by sampling water around their sites and sending electronic reports to the state. If test results show levels elevated above standards, officials can begin enforcement actions. 

Combs said this was the first water quality violation since the company received its permit under the Clean Water Act, about 40 years ago. Regulators at TDEC confirmed it was the first violation under the company’s current permit, which was issued in 2011, but were unable to immediately provide the compliance history.

Jack Daniels is permitted to discharge wastewater and stormwater runoff into the East Fork Mulberry Creek, which is on the state’s list of impaired waterways because of pollution from farming operations. After the October notice of violations, company officials tested for toxicity in two species of minnows near the site, and found no killed animals.

One of the biggest fears in the industry is a whiskey spill — both for its economic and ecological impact. A fire in 2000 at the Wild Turkey distillery in Lawrenceburg, KY sent flaming bourbon into a nearby river, depriving fish of oxygen and creating a large kill zone. News reports at the time described a 28-mile-long dead zone, with fish leaping from the water to escape it.

Jack Daniels repairs water filtration system

After receiving the October violation Jack Daniels investigated its water systems and found a few points had broken down. They found a tear in a filter used to remove charcoal and diatomaceous earth. Also, a tank with chlorinated water was overflowing. The company installed a new valve and repaired the filter. 

“Unless the violations continue, there doesn’t seem to be any need or desire for further enforcement or civil actions,” said Vojin Janjic, manager of the water-based systems at TDEC.

At the George Dickel Distillery in Tullahoma, the company’s chlorine levels were off the chart for most of 2017. It was more than six times the allowable level in April. State officials issued violations, and the company, which is owned by multinational beverage giant Diageo, struggled to explain why. Dickel environmental consultants scoured their operations but couldn’t find any source of chlorine. Then, in a late-August letter to TDEC, company officials said the elevated levels may be from false positive test results. 

Consultants found manganese, which can lead to high chlorine readings, in water the company was drawing from a nearby creek. They changed their testing method to control for manganese, and since August 2017 the results have been under allowable chlorine levels. 

“All these violations they were getting were really false-positives,” said Janjic.

Dickel in 2016 also exceeded its allowable level of solids. Company officials told TDEC they searched their facility and couldn’t find a link between their operations and the days with high volumes. In a November 2017 letter a TDEC regulator notes that Dickel hasn’t exceeded its solids limits since June 2016, and the company was in compliance.

New distilleries learn water pollution control from the big players

Both Jack Daniel’s and George Dickel were founded in the 19th century, but a new crop of Tennessee distilleries are learning about water pollution for the first time. Before 2009, only three distilleries operated in the state, according to Kris Tatum, president of the Tennessee Distillers Guild. Today, there are 41.

“We work hand-in-hand with George and Jack on these things because they’ve been around so long,” Tatum said. “These questions have been asked for decades.”

State officials recommend that upstart distilleries locate where they can connect to a municipal sewer system. That way, they don’t need to treat their own wastewater or stormwater runoff, Janic from TDEC said. 

Large distilleries have environmental compliance teams and can monitor pollution and comply with regulations, said Combs, the Jack Daniels manager. But the newer ones aren’t equipped. 

“They are not all going to have labs, or the technical capability,” he said. “The risk is more of what they don’t know. If one of us makes a mistake or messes up, it’s a reflection on all of us.”

Reach Mike Reicher at mreicher@tennessean.com or 615-259-8228 and on Twitter @mreicher.