Third Rail Proposal: Selling Great Lakes water proposed to lower lake levels

Todd Henderson, University of Chicago law professor, Photo by University of Chicago

“My purpose was to spark a conversation,” said University of Chicago law professor Todd Henderson as he touched the third rail of Great Lakes issues—selling water to arid states outside the region.

With record high lake levels “wreaking havoc” around the region, Henderson noticed the proposed solutions by elected officials and the Army Corps of Engineers were focused on expensive deterrents like hard barriers.

He felt more creative solutions were needed and proposed in a Chicago Tribune column selling the excess water to regions in need.

“We have too much water here, but plenty of communities have too little water,” he wrote. “About half of Texas is experiencing moderate to severe drought.”

He also mentioned “vast swaths” of western states in the midst of drought.

“Moving water from Lake Michigan to farmers and communities in these places would make everyone better off,” Henderson said.

The revenue from the sale of water could be used to shore up state budgets and provide relief for lakefront communities impacted by the lake levels, Henderson proposed.

He cited Illinois as an example of where selling water could benefit the state.

“States such as Illinois have financial problems that are imperiling long-term economic growth and the well-being of their citizens,” Henderson said. Illinois had an unfunded pension liability of $137 billion in December 2019, according to a Reuters report.

He did not mention Michigan, but its governor and legislature have been squabbling over how to pay for billions of dollars in overdue road repairs. Unable to reach a road-funding agreement with the legislature, Michigan Gov. Gretchen Whitmer recently announced she would use her authority to borrow $3 billion for road repairs.

Challenges in the West

In a lengthy phone interview, Henderson told Great Lakes Now that he claims no expertise in water resource management, though early in his professional career he was a geological engineer. He worked on water issues in Southern California where he became aware of the challenges western states are facing.

Over the years drought conditions have hurt areas like Playa Lakes in Anson, Texas, Photo by USDA NRCS Texas via wikimedia.org

He said drought-stricken areas are interested in market solutions to water shortages and he believes the marketplace can provide them.

“Water is absolutely a commodity that should be bought and sold,” he said, and “a futures market for water would help to get water where it is needed.”

Henderson’s legal specialty is in securities and banking regulation and economics.

Aware of the barriers to his proposal to sell the excess water, Henderson said he is not in favor of water privatization and if a plan to sell water is enacted, government regulation would be necessary.

He also understands that there is a state and federal process to modifying the Great Lakes Compact, the eight-state agreement designed to prevent diversions of the kind Henderson is proposing.

Not the first time it’s been suggested

Henderson’s proposal didn’t resonate with the regional Great Lakes governors group responsible for the compact.

“Schemes like this reinforce the importance of the Great Lakes Compact and what it is designed for—putting an end to the specter of large-scale, long-distance water diversions and ensuring that our waters are responsibly managed,” said Dave Naftzger, executive director of the Great Lakes and St. Lawrence Governors and Premiers.

Canadian provinces of Ontario and Quebec, Image by E Pluribus Anthony via wikimedia.org Public Domain

Canadian provinces Ontario and Quebec have a separate agreement that matches the compact. They cannot vote on U.S. diversion requests but must be consulted.

Henderson’s water-trading idea is not the first. In 1998, the Canadian Nova Group requested a permit to ship Great Lakes water to Asia and it was granted without fanfare.

But when activists and government officials became aware, they were outraged, and approval of the permit was withdrawn. The event put a spotlight on the vulnerability of laws barring diversions. It eventually launched the process that led to the Great Lakes Compact in 2008, which prevents large-scale diversions of the kind Henderson is proposing.

The exception is Chicago which is allowed to take over 2 billion gallons daily based on a 1967 Supreme Court ruling. Chicago does not have to return water to Lake Michigan as is required for other diversions.

Wisconsin author Peter Annin has the long view on diverting water from the Great Lakes and has authored two books on the topic.

“These kinds of proposals come up during high-water periods. From an engineering perspective and a geopolitical perspective, they are quite naive. But then water levels always fall and the proposals fade away,” Annin told Great Lakes Now.

He doesn’t see the eight states revisiting the compact based on the current high water levels and thinks it would be “foolish” for the region to encourage outsiders to tap the Great Lakes.

Cameron Davis, who led the efforts of environmental groups to enact the compact, did not respond to a request for comment.

Annin directs the Burke Center for Freshwater Innovation at Northland College and Davis is a commissioner at Chicago’s Metropolitan Water Reclamation District.

Profit-minded outsiders

Lynn Broaddus, President of Broadview Collaborative, Inc. , Photo by broadviewcollaborative.com

Henderson’s proposal follows a recent foray into tapping Great Lakes state water reserves.

A Minnesota company floated the idea of shipping water from a Minnesota aquifer to Colorado via rail tanker for an undefined purpose.

Minnesota quickly responded that there was not a scenario for the request to be approved but it demonstrated that water-needy states are looking at ways to tap Great Lakes-region water.

At the time, veteran Great Lakes water activist Lynn Broaddus said this won’t be the last of the “profit-minded outsiders” who want to tap the region’s water. She urged Great Lakes governors to focus on updating the compact.

Henderson told Great Lakes Now that a convening of water managers, environmental groups and other interested parties would be a logical next step to look for creative ways to deal with rising lake levels.

“Pricing is the best way to get people to think about the value of water,” he said.

Featured Image: The Sun sets on Lake Michigan, courtesy of Russell Sekeet via flickr.com cc 2.0

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