Proposed Water Legacy Act: A Bad Idea for Michigan

Source: Great Lakes Information Network

Michigan is blessed by an unparalleled abundance of rivers, lakes, and streams. With more than 3,288 miles of shoreline,[1] the state is bordered by lakes containing nearly 20 percent of the Earth’s surface freshwater supply. Spread evenly across the contiguous 48 states, the Great Lakes waters would measure 9.5 feet deep.[2]

(The following article by Mackinac Center Senior Environmental Policy Analyst Russ Harding originally appeared as the cover story in the July/August 2005 issue of Michigan Forward, a bimonthly magazine published by the Michigan Chamber of Commerce. The piece is reprinted here with the permission of the magazine.)

In proposing the Water Legacy Act, Gov. Jennifer Granholm is attempting to increase state regulation of groundwater use through a costly and intrusive permit regime. If enacted, this drastic change would upend longstanding water rights and further weaken Michigan’s economy.

According to the governor, Michigan currently lags other Great Lakes states in controlling groundwater withdrawals, as well as in preventing diversions of surface water and groundwater outside the basin. Her proposed Water Legacy Act, now pending in the Legislature, supposedly would fulfill the state’s obligation to preserve and protect a threatened natural resource and bring Michigan into partial compliance with the so-called Annex 2001, a voluntary regulatory code under consideration by the eight states and two Canadian provinces that cooperatively exercise jurisdiction over the Great Lakes.

"We are the only state that hasn’t lived up to its end of the bargain," the governor stated in unveiling her proposal to the Legislature. "If we do not take action to regulate withdrawals of water from the Great Lakes Basin, those who are already eyeing our treasured lakes as the solution to their water shortages will begin arriving with their pumps and hoses to take their bounty home."

The importance of water supplies to Michigan and its neighbors demands caution in its regulation. The lives of thousands of property owners, and the livelihoods of millions more, would be jeopardized by ill-conceived government actions. The Mackinac Center for Public Policy thus examined Gov. Granholm’s arguments for so radical a change in water law, as well as the likely consequences of the proposed regulatory crackdown. In April 2005, we published a Mackinac Center Report, "Groundwater Regulation: An Assessment." Our findings on these matters argue against enactment of the proposed Water Legacy Act.

Michigan is not a regulatory backwater, as the governor contends. Legal mechanisms already exist to protect groundwater supplies and limit large-scale diversions from the Great Lakes. Our review of statutes throughout the region found only a single instance of a regulatory scheme as stringent as that proposed by the Granholm administration. Moreover, the governor’s proposals to restrict water diversions far exceed the draft rules of Annex 2001.

At the federal level, water diversions are regulated under the Water Resources Development Act of 1986. The statute requires the approval of all Great Lakes governors for the export of water outside the basin. This statute has been used successfully by Michigan governors to veto proposed Great Lakes withdrawals. Whether this statute can withstand constitutional scrutiny remains a matter of debate.

The greatest threat to diverting water from the Great Lakes does not come from the states of California and Arizona but instead the other Great Lakes states. The regulatory barriers to permitting a pipeline from Michigan to the Southwest are formidable. Michigan is the only Great Lakes state that is entirely within the basin. Any agreement, such as Annex 2001, that makes it easier for the other Great Lakes states to divert Great Lakes water to areas in their states that are outside the basin is not in the best interest of Michigan.

Also inaccurate is the governor’s characterization of the Great Lakes as "more threatened today than perhaps they have ever been." The truth is, more water is diverted into the Great Lakes than is siphoned out, and groundwater supplies are regularly replenished and remain abundant.

Conclusions

Proponents of strict new groundwater regulation contend that Michigan lags other Great Lakes states in statutory protections of groundwater. Our review finds that only one state in the region — Minnesota — broadly regulates groundwater withdrawals. Minnesota is distinct from Michigan and other Great Lakes states both geographically and meteorologically. The climate in the western half of the state resembles the semi-arid western plains. It is not surprising, then, that Minnesota would enact a more restrictive water-allocation system.

A groundwater statute recently enacted in Wisconsin does require groundwater permits, but only in limited circumstances that affect a small number of wells. Still, the Wisconsin regulations are far more limited than those crafted by the Granholm administration in the proposed Water Legacy Act.

Fears of a water crisis are disturbingly overblown. There is an abundance of groundwater in nearly every area of Michigan, and no evidence of a looming scarcity. The greater threats are the economic impact of draconian regulations and the forfeiture of riparian rights.

The proposed Water Legacy Act would encumber thousands of Michigan businesses, including factories, farms and even recreational facilities, as well as public water systems. Merely complying with application requirements, such as evaluating alternative water supplies, modeling withdrawal impacts and devising new conservation measures, would require the services of hydrologists or other specialists and cost each applicant hundreds of thousands of dollars per permit. A recent analysis by the Michigan Chamber of Commerce calculated application costs ranging from $315,000 to $800,000, depending on the scope of the proposed withdrawal.

Agriculture, too, would be hard hit. With a good many farmers already struggling to remain economically viable, additional regulatory costs would increase the likelihood of farmland conversions.

Allowing the state a full six months to process each permit application, as called for in the proposed legislation, would only exacerbate the regulatory uncertainties. With the highest unemployment in the nation, Michigan cannot afford to further alienate job providers – especially in the absence of any environmental threat.

The proposed regulations also are needlessly arbitrary. Groundwater supplies vary across the state, as do recharge rates. Yet the proposed Water Legacy Act would treat all watersheds and aquifers as identical. That hardly constitutes sound stewardship.

Recommendations

1. Suspend any action on the proposed Water Legacy Act, or any other groundwater regulations, until the Groundwater Conservation Advisory Council completes its mapping of groundwater supplies and evaluation of existing controls.

2. Postpone consideration of any elements of the draft Annex 2001 until all provisions are finalized by the Council of Great Lakes Governors.

3. Ensure continued funding for the administration of Public Act 177, the Aquifer Protection and Dispute Resolution Act.

4. To the extent lawmakers believe it necessary to regulate groundwater withdrawals, controls should be limited to specific aquifers for which there is scientific evidence of significant, harmful and irreversible depletion.

5. In determining whether to limit groundwater withdrawals, the burden of proof should be borne by the state rather than citizens.

6. Absent proof of significant, harmful and irreversible depletion of an aquifer, any new limits imposed on groundwater withdrawals should be treated as a regulatory taking for which the state must compensate citizens for the loss of water rights.

7. In the event that new groundwater controls are enacted, lawmakers should utilize incentive-based methods, including privatization and water trading, to achieve the intended results.

8. Any new controls on groundwater withdrawals enacted by the Legislature should specify all regulatory standards to minimize the discretion of the Departments of Environmental Quality and Agriculture.

9. Any future codification by the Legislature of amendments to the Great Lakes Charter should guarantee state sovereignty over water use within Michigan.

10. Michigan should vigorously oppose through the appellate process any ruling that upholds the decision of Mecosta County Circuit Court Judge Lawrence Root in the case of Nestle Waters.

Russ Harding is senior environmental policy analyst for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part should be sought from Michigan Forward, a publication of the Michigan Chamber of Commerce.

[1] Michigan Department of Environmental Quality, "Shorelines of the Great Lakes," https://www.michigan.gov/deg/0.1607.135- 3313_3677-15959-.00.html.

[2] Great Lakes Information Network, www.great-lakes.net/lakes.