Boutique Washington Wineries, State Clash Over Water Pollution Plan

From Environment & Energy Report

June 21, 2018

By Paul Shukovsky

Boutique wineries, part of Washington state’s burgeoning wine industry, are threatening to sue over a new state water pollution permit they say could hurt the financial viability of small operators.

The new general permit, which goes into effect July 1, 2019, regulates wastewater from wine operations and establishes parameters based on how the discharges are managed, whether they are sent to storage tanks or to a lined lagoon where solids such as grape skins and seeds settle out. Some wineries use a portion of their wastewater to control dust on unpaved roads or to irrigate the vineyards or other crops.

Even wastewater sent to septic systems must meet permitting requirements to ensure that it doesn’t pollute groundwater with heavy metals that can leach out. The permit doesn’t cover wastewater sent to a pre-approved treatment plant.

With more than $2 billion in sales in 2016 and more than 940 wineries, Washington is the nation’s second largest wine producer after California.

While some larger wineries in Washington have been covered by individual discharge permits for years, they’ll likely now be covered by the new general permit—which also will bring in the smaller players for the first time.

Oregon is the only other state to have a general permit for wineries, though California covers two main winemaking regions with a general permit for each, permit writer Stacey Callaway of the Washington Department of Ecology told Bloomberg Environment.

Callaway estimated that fewer than 10 percent of the wineries in the state, which produce well over 90 percent of the wine, will be covered by the general permit.

Regulating Theoretical Harm

To maintain a balance between water resource protection and profitability, the rule sets production thresholds. Wineries that generate less than 53,505 gallons of wastewater or produce fewer than 7,500 cases per calendar year are exempt from the permit’s requirements, Callaway said.

Family Wineries of Washington State, which lists 63 members on its website, contends the rule stacks the deck against small players struggling to survive in an industry dominated by bigger companies, such as Ste. Michelle Wine Estates.

“They’re doing this all based on a theoretical threat to groundwater that doesn’t exist,” Family Wineries President Paul Beveridge told Bloomberg Environment June 18. “They could not find a single example of a Washington winery harming groundwater.”

Beveridge is an environmental attorney who retired in 2007 to plant an organic vineyard to grow grapes for the small 1,500-case winery, Wilridge Winery, he has operated on the side for two decades. Beveridge is recruiting wineries to pay for a lawsuit against the Department of Ecology.

“The 7,500-case threshold is arbitrary and capricious,” Beveridge said. “They just picked that number out of thin air. There is no basis for it whatsoever. They even admitted that they could show no harm at all to groundwater at that level.”

John Morgan, general manager and winemaker of Lost River Winery in Winthrop, said he’s concerned about his rural colleagues who produce more than 7,500 cases.

“It works for wineries of my size, because I don’t intend to go over the case threshold,” Morgan told Bloomberg Environment June 15. “But there is a sort of middle class of wineries who I could see viewing it quite a bit differently. These are the wineries that are over the 7,500 case-threshold, but are not really large enough to enjoy an economy of scale when it comes to wastewater treatment.”

Smallest Wineries Exempt

The Ecology Department acknowledged in a June 19 email that it was unable to find documented evidence of a Washington winery polluting groundwater. The only documentation available, the department said, comes from the few wineries covered under individual permits.

“There are examples of groundwater contamination from facilities with wastewater that have similar characteristics and that use similar discharge methods,” the department’s email says. “Because the wine production in Washington has increased greatly over the past decade, [the department] decided to develop a permit and establish good waste management practices for this rapidly expanding industry.”

The department said the first permit will only cover the winery discharges that have the greatest potential to harm the state’s waters. “Based on this, we established an applicability threshold so that the smallest wineries in Washington are not required to apply for coverage,” it said.

The lawsuit seeks to force the state to raise the case threshold, Beveridge said. But he also said he dislikes “the limitations they put on beneficial use like watering your vineyard, watering your neighbor’s farm, dust abatement, stuff we’ve been doing. Then there are all sorts of monitoring requirements. In the middle of harvest, they are going to be pretty difficult to deal with.”

Grape Skins and Seeds

Ste. Michelle Wine Estates, an affiliate of Altria Group, Inc. and the dominant player in the state, declined comment June 15, but a corporate responsibility statement on its website says the company seeks to reduce its water usage and looks for ways to reuse or treat wastewater.

The company referred Bloomberg Environment to the Washington Wine Institute, a trade organization.

Wine Institute Executive Director Josh McDonald told Bloomberg Environment in a June 15 telephone interview that the production threshold shields the industry’s smallest players,

“It protects over 80 percent of our industry who don’t create enough wastewater to meet the threshold and we think don’t reasonably fall under such a permit,” said McDonald, whose represents almost 200 companies, most of which are wineries.