Oct. 26 (Bloomberg) -- The air is redolent of ripe apples, milled corn and mown rye. Ralph Erenzo, co-founder of Tuthilltown Spirits in Gardiner, New York, interrupts work in the fields to give me a tour.

“We think one of the problems with American whiskey is that nothing tastes like what it’s made from,” Erenzo says. “Our corn whiskey actually does taste like corn.”

I get to sip some of the output, and the rye really evokes rye.

Another thing I like about this place, the first distillery in New York since Prohibition and about a 90-minute drive north of the Manhattan, is that the founders are good environmental citizens. They use local ingredients as much as possible, although Erenzo concedes that has more to do with economics than green sensibilities.

“It’s not even a philosophical question for us, it’s a practical problem. If we have to cart corn from Iowa, I’m paying more to get it here than I am for the corn.”

Erenzo, 58, speaks with some brashness for a guy who knew nothing about making whiskey just a few years ago. He ran a rock-climbing school in Manhattan.

When he moved here in 2001, he had hoped to start a “climber’s ranch.” Persnickety neighbors held up his enterprise in court for two years, bleeding his dream dry of enthusiasm -- and cash. They were concerned that he would turn the area into “another Woodstock,” he says.

Mastering the Science

Erenzo sold off bits of the property -- including a 1788 grist mill, a National Historic Site -- to stay afloat, and then cooked up the distillery plan. He joined with technical engineer Brian Lee, 58, who quickly mastered the science of turning grains into booze.

“There are guys with no teeth and a kindergarten education in the woods somewhere making this stuff. If they can figure it out, we can figure it out,” Erenzo says.

They attended a seminar at the University of Michigan, scoured the scant literature on the subject (not all of it in English), and toured small distillers of cognac, grappa and absinthe in France, Italy and Switzerland “to learn what the little guys were doing.”

They brought some of that Old World charm back to their farm. A copper still from Germany coaxes alcohol from the grains. The furnace is an EBay purchase from a Cincinnati church. Rows of white-oak barrels lend the liquids color and flavor, until the liquors are bottled and labeled by hand, one at a time. All of this takes place in a barn.

The distillers put out their first product in 2006, and expect to produce 4,000 gallons this year. Their licensing allows 70,000 gallons a year, yet Erenzo prefers the human element of this small-scale operation. “We will never get to that capacity and we have no interest in getting there.”

Sales and Energy

Their whiskeys are sold all over New York and in 12 other states, as well as Europe, Australia and coming soon to Asia. At Crush Wine Co. on East 57th Street in New York, Tuthilltown’s Hudson Baby Bourbon and Hudson Manhattan Rye sell for $41.99, both half-bottles, or 375 milliliters.

The distillers are about to embark on a serious effort to save energy and reduce waste. They will soon install an ethanol micro-refinery system, a device unveiled earlier this year by E- Fuel Corp., with which the distillers can convert organic waste into fuel. The New York Department of Environmental Conservation classifies their slurry byproduct as hazardous industrial waste, making it difficult (and expensive) to dispose of properly.

Erenzo says the E-Fuel set-up will be a prototype, something small brewers and farmers in the Northeast can try. Not-so-small brewery Sierra Nevada Brewing Co. has one in Chico, California. Ultimately Erenzo and Lee hope to be totally self- contained by converting all their waste into fuel, and using it in their cars, tractors and electrical generators. Lee is looking into hydro and solar power to supplement the arrangement.

‘Off the Grid’

“Our goal is to get off the grid entirely,” Erenzo says. “You know what? Even if society completely breaks down, people are still going to want whiskey. It’ll always be a commodity we’ll be able to trade.”

If anyone is well-positioned for the apocalypse, it would be these guys. For now, business is booming, not least because fall foliage is bringing thirsty leaf peekers to the area.

Next year there will be a bed and breakfast on the adjacent property; today you can stay at the homey Blueberry Inn -- an 18th-century farmhouse -- or the majestic Mohonk Mountain House in New Paltz.

(Mike Di Paola writes about preservation and the environment for Bloomberg News. The opinions expressed are his own.)

To contact the writer of this column: Mike Di Paola at mdipaola@nyc.rr.com.

Last Updated: October 26, 2009 00:01 EDT