Since its genesis and subsequent boom, Paso Robles Wine Country and surrounding areas have been able to operate without permits from the San Luis Obispo County Air Pollution Control District — until now.

Now, the district is pointing its finger at the $1.8 billion wine industry, calling it a significant contributor to the county’s emissions despite testimony to the contrary from prominent local wine officials. On July 22, the district board voted 8-0 to support a new permit program for the wine industry that will require wineries that are permitted to produce 26,000 gallons, or 10,000 cases or more of wine in wooden barrels a year to pay a new fee.

The proposal, since it was originally laid down months ago, was met with criticism by the Paso Robles Wine Country Alliance and some major winemakers in the Paso Robles Wine Country, including Gary Eberle of Eberle Wines.

At last week’s board meeting, Eberle spoke as an industry representative from Paso Robles as did PRWCA executive director Stacie Jacob.

Eberle, who studied microbiology at the University of California, Davis for more than a decade, questioned the science behind the permit requirements — something that he said has been received with little of it taken seriously. Eberle said that despite APCD representative Larry Allen’s comments pointing to the contrary, the reason the room was not full of other winemakers is he was designated the “sacrificial lamb.”

Earlier on preceding public comment, Allen had noted that the majority of comments received on the proposal from the industry were positive.

Eberle cited a number of concerns, among them the alleged flawed scientific research backing the proposal, overburdening taxation of the wine industry and how the industry might benefit from the new fee schedule.

“We have been told that we have to pay our fair share, that we don’t pay enough, and we’re the highest regulated industry in this country,” he said. “I am the most taxed industry in this country. I am still paying taxes to offset World War I. I am still paying taxes to offset the 1928 Johnstown Flood. If I sell wine in Arizona, I pay a fee to Arizona in addition to California and the federal government. If I sell wine in Kansas, not only do I have to pay the tax in Kansas, if there is a chance that I am going to sell wine in Kansas, I have to pay taxes every month even though I don’t sell wine in the meantime. I would love to take over the tax position of the local bakeries or the local gas stations. I will trade my tax position any time.”

The industry also had some issues about the calculations, Jacob said. The industry would have liked to see the calculations based on actual production instead of a three-year average.

“We still felt that there was some general misunderstanding on the winemaking process,” she said.

Jacob said many winemakers have two vintages in the barrel room at any given time, which would appear to result in double billing. For red wine, it takes an average of 18 months before release.

“You’re almost double taxed,” she said. “At least that’s how it appears.”

Allen said there are two major issues with actual production calculations. First, the three-year average allows the APCD to better predict what the level of fees are going to be for its revenue every year so that it can understand what its budget is going to be. He also pointed to the difficulty in the revenue process and extra burden on staff.

“For us from a budgeting standpoint, that’s really the only way we can do it,” he said.

Eberle said he believes the industry has a net positive effect on the greenhouse gas emissions, in part through the conversion of carbon dioxide to oxygen through the grapevines.

“We are not polluters, we are net sink,” he said. “We ship carbon dioxide out of the state, we ship carbon dioxide out of the country, we ship carbon dioxide out of the county. We are a net sink for greenhouse gases–we get no credit for that.”

The APCD pointed to neighboring air districts in Monterey, San Joaquin Valley and Santa Barbara counties, which require permits for wineries. Wine officials pointed to Sonoma and Napa counties, which don’t.

The bottom line, according to the APCD, is that the industry went unregulated for many years. Since its subsequent boom, the amount of emissions has increased, thus triggering the regulation. Funds derived from the permit program would benefit air quality across the county, district officials said.

“The wineries are a large emissions source in our county, and we’re just trying to get a fair share of our air program costs covered due to those emissions,” said Gary Willey, APCD engineering manager.

Although it varies year to year based on production, it is estimated that the industry’s non-attainment pollutants for stationary sources are in the 7 to 11 percent range, Willey said. Fermentation, among other things, is one of several processes that occur during winemaking that produce greenhouse gas emissions, he said.

“It’s still going to be a conservative amount of emissions that we’re attributing to the wine industry,” he said.

“The fact of the matter is that they’ve been getting a break for 10 years by us not getting out and requiring permits of them, but now that they are the size that they are we have to look at them,” Allen said. “We’re required under state law to be consistent with all other air districts in our basin with their regulations. Once Santa Barbara went forward, that shined the light on us, and we are a significant wine producing region.”

The proposed changes reflect higher costs to operate the APCD’s district permit program and board direction to achieve better recovery of those costs, according to an APCD staff report. The permit system is intended to be self-funded.

There are 40 to 50 wineries countywide that will be subject to the permit fees at the current time, Willey said.

APCD board member and Fifth District Supervisor Jim Patterson urged the district to consider including smaller wineries in the permit program.

“They’re contributing and they ought to be responsible for that,” he said, encouraging conversation and suggesting looking at a possible phased or flexible plan to bring them into the program.

Jacob pointed to the industry’s stewardship and economic impact.

“In any case, I think our primary [request] is to remember that we are a major economic force in your county as the wine industry,” she said. “We do practice good, sustainable practices, and I think overall contribute to the environmental health of our county.”

The fees go into effect immediately. Notification is being sent out to those affected, Willey said.