Summary and Analysis:
The Great Lakes Water Resources Compact
and Great Lakes Basin Sustainable Resources Agreement


Prepared by The Cadmus Group
G. Tracy Mehan, Principal (703) 247-6106
Jeffrey E. Edstrom, Associate (312) 588-1670
August 2004


Background

The Great Lakes Water Resources Compact (Compact) is a draft document released for comment by the Great Lakes Governors and Premiers.  The Compact outlines a general consensus among the jurisdictions on a process governing the review of new or increased Great Lakes water withdrawals.  It delineates a standard of review, that among others, requires that out-of-basin diversions and some larger in-basin uses incorporate an improvement to the Great Lakes ecosystem.  A companion document, the Great Lakes Basin Sustainable Resources Agreement (Agreement), is a voluntary “good faith” agreement that provides greater detail on the intent of how the Governors and Premiers will implement the agreements before and after implementation of the Compact.  The agreements affect only new or increased Great Lakes water withdrawals.  Existing water uses would not be affected by the agreements.  The Governors and Premiers request comments on the two documents in general, but identify a series of specific issues where public input is needed to inform consensus. 

The proposed Compact is intended to build on two previous voluntary agreements, the Great Lakes Charter of 1985 (the Charter) and the Great Lakes Charter Annex of 2001 (Annex) and make many of The Charter and Annex provisions legally binding.  Further, the Compact also builds upon the requirements of the U.S. Water Resources Development Act of 1986 (WRDA) which requires that any new or increased diversion of Great Lakes water be approved by all eight Great Lakes Governors. 

Who Should Be Interested in What Happens?

Companies, entities and individuals who are located inside the Great Lakes basin and may have large new or increased water withdrawals where there is a high consumptive rate should understand that the Compact will affect them in the future.  While the agreements will not likely be fully operative for several years, it is likely that some states may enact some or all of their provisions in the interim.  Further, there is potential for the Standard’s application for water withdrawals that result in consumptive uses of less than five million gallons per day.  The Compact leaves that to the states. 

Communities near the Great Lakes basin with water quantity or quality problems should also monitor the agreements because they provide the criteria for what these communities will be required to undertake to obtain Great Lakes water.

Current System: A Patchwork of Agreements and Laws

The Charter provides a framework for the states and provinces for collective management of Great Lakes water resources.  It outlines a process for notice and consultation among the states and provinces for new or increased diversions of water outside the Great Lakes basin and new or increased in-basin withdrawals of Great Lakes water that result in the loss of over five million gallons per day to the Great Lakes system.  Diversions are withdrawals of water for use outside the Great Lakes drainage basin where the water would not naturally flow back to the Great Lakes and their tributaries.  Consumptive uses occur where water withdrawn from the Great Lakes system evaporates, incorporated into products or otherwise lost to the Great Lakes system.  A consumptive use is not the entire water withdrawal.  It is only that part that is not returned to the system or lost to the system.

The Charter outlined the creation of a regional water resources management plan around which to make decisions.  The Annex amends the Charter and outlines a new standard for reviewing withdrawals of water from the Great Lakes.  The most discussed component of the standard is one that would require improvements as part of proposals for new or increased withdrawals.  The Annex also identifies the issues and goals around which the Governors and Premiers wanted to build a new binding agreement. 

The Annex serves as a bridging document between the Charter and WRDA.  The original intent of the Charter was to provide a foundation for better managing water resources.  The WRDA, passed one year after the signing of the Charter, changed the focus of regional water management by focusing on a specific category of water withdrawals.  The Charter’s goal is to effectively manage all water uses on a regional basis through water resource management planning.   WRDA focuses on binding decisions only for proposed uses of Great Lakes water outside the drainage basin.   Put another way, the Charter is about how “we” in the basin manage Great Lakes water resources, while WRDA is about whether “they” outside the basin can access Great Lakes waters.  The Annex was an attempt to shift focus to broader watershed management planning goals by linking how “all improve water resources. 

Proposed System: A Binding Agreement and Managing Large Withdrawals

The Annex’s goals were far-ranging and ambitious.  The Governors and Premiers pledged that these goals would be further developed in a binding set of agreements within three years.  The Compact represents agreement among the Great Lakes states that would be binding once enacted into law following approval by Congress, signature by the President, and enacted into law by the eight states.  The Agreement is a good-faith agreement among the states and provinces that provides additional detail regarding their consultation process.  Despite being signatories to the Agreement, the Premiers of Ontario and Quebec will not have statutory authority in the approval or disapproval of U.S. withdrawals and vice versa because there can be no binding agreements between states and provinces.   

The draft Compact and Agreement will affect significantly fewer withdrawals than the Annex outlined.  The Annex based application of the new standard for all new withdrawals.  The Compact and the Agreement would require regional review for withdrawals for use inside the Great Lakes basin that result in a consumptive loss of over five million gallons per day and for diversions that result in a loss of over 1 million gallons of water per day. 

One criticism of the different trigger levels for diversions and in basin uses is that it builds a discriminatory system.  There is concern in some quarters that treating in-basin withdrawals so differently from diversions may be declared unconstitutional, or in violation of international trade agreements, if challenged.  Specifically, all diversions must include return flow and improvements, but withdrawals smaller than five million gallons per day will not have to include an improvement.  Further, diversions must be approved by all eight Great Lakes Governors, while consumptive uses requires only six affirmative votes. 

Diversions of less than 1 million gallons per day do not require approval from all eight Governors, but the regulating State must find that the proposal meets all of the standard criteria.  The lone exception is for diversions of less than 250,000 gallons per day.  These small diversions are exempted from the return flow requirement for public supply where there is no alternative potable water supply. 

The Compact would repeal any parts of acts that are inconsistent with the Compact.  As such, once the Compact is approved the WRDA would be repealed for diversions under 1 million gallons per day.  Until that time, all proposed new diversions will need approval of all eight Governors.  The average time for approval of such Compacts has been 10-15 years so it is unlikely that any of its provisions will be legally binding for some time. 

The Standard: Improving the Great Lakes Ecosystem

The Standard of review for new or increased water withdrawals originally outlined in the Annex has been viewed as groundbreaking in its requirement that these water uses result in an improvement to the water dependent natural resources of the Great Lakes.  The primary purpose for a standard is to fix the primary perceived weakness of WRDA in that it does not have standards or criteria for reviewing diversions.  The Compact and the Agreement build on that standard.  Under the draft agreements, water withdrawals subject to the Standard must incorporate the following criteria:

There is no reasonable water supply alternative;
Withdrawals are limited to reasonable quantities for the proposed purposes;
All Water Withdrawn from the Great Lakes Basin is returned to the Great Lakes Basin minus a reasonable consumptive rate;
The Withdrawal results in no significant individual or cumulative adverse impacts;
The proposal incorporates Environmentally Sound and Economically Feasible Water Conservation Measures
The proposal incorporates Improvement to the Waters and Water Dependent Natural Resources of the Great Lakes Basin; and
The proposal complies with applicable State and federal laws as well as regional interstate and international agreements.

Appendix 2 of the Agreement provides guidance regarding the application of improvements by reference to a report led by current Cadmus Group Associate, Jeffrey E. Edstrom when he worked at Tetra Tech EM Inc. and provides examples of improvement activities from that report.  These examples focus primarily on hydrologic improvements that improve water quantity and quality, watercourse timing, flow and groundwater infiltration, among many others. 

Future Application: Diversions and Large Scale Consumptive Loss

Since the Charter and the WRDA went into effect, there have been only three diversion proposals and two consumptive use proposals subject to regional review.  The draft agreements would not have added or subtracted any proposals for review, nor would the voting procedures have changed the outcome on any proposals.  It is unlikely that significant numbers of proposals will need to be reviewed under the Compact of the agreement in the coming years.  For in-basin users, unless they trigger the regional review, water users will not have to go through notice and consultation, and will only be subject to existing state permitting law.  A change in measuring consumptive use from “in any 30 day period” to “in any 120 period” allows water withdrawers whose use change seasonally or annually means to not be subject to regional review as often as they might under the current system.  The extended period allows withdrawal peaks to be averaged out more easily. 

The Standard will not be required for in-basin uses until passage of individual state or provincial laws.  Binding regional review of in-basin uses will not occur until the Compact is passed by Congress and all eight legislatures.  The Standard will apply for out-of-basin diversions once the Agreement is signed by the Governors and Premiers, if not sooner.  This is because the Governors have statutory authority to review all out-of basin diversions through WRDA.  There are currently two diversion proposals under development with and possibly several more in the next 5-7 years. 

Issues Where Input Is Requested

A release accompanying the draft Compact and Agreement ask for guidance from the public on a series of issues.  These are areas where there may not be consensus among the states and provinces or where the negotiators are seeking additional information to make the Compact and Agreement more effective.  Specifically, the Governors and Premiers request comment on:

Regional review and public participation processes; 
Thresholds for regional review of withdrawals and consumptive uses; 
The adequacy of the improvement component of the Standard;
The extension of the averaging from any 30 day period to any 120 period; 
The definition of “Existing Water Users”

Where to Send Comments

The agreements and associated documents are available online at the Council of Great Lakes Governors website at  http://www.cglg.org

 Comments on the Compact, Agreement and their Appendices can be mailed, e-mailed, or faxed to the following:

David Naftzger, Executive Director
Council of Great Lakes Governors
35 East Wacker Drive, Suite 1850
Chicago, IL 60601
Facsimile: (312) 407-0038
E-mail: comments@cglg.org

If you have additional questions about the Compact or Agreement, please contact either G. Tracy Mehan  at 703- 247-6106 (gmehan@cadmusgroup.com) or Jeffrey E. Edstrom at 312-588-1670 (jedstrom@cadmusgroup.com).