A Great Lakes Water War: Nestlé, the Great Lakes Compact, and the Future of Freshwater

Posted on September 18, 2017 by

Each day, 4.8 million bottles of water leave Nestlé’s packaging plant in Stanwood, Michigan and  end up neatly stacked one-by-one in gas station coolers across the Midwest. If you’ve sipped from an Ice Mountain-branded bottle in the last decade, you’ve sampled a tiny fraction of the 3.4 billion gallons that’s been pumped from nine wells in Mecosta and Osceola Counties.

Since 2001, bottled water consumption in the United States has exploded, surpassing even carbonated soft drinks to become the nation’s largest beverage category by volume as of this year. Riding the bottled-water boon, corporations like Nestlé have set up shop in water-endowed states such as Michigan. Their handful of wells in mid-Michigan alone each pump over 200 gallons per minute, amounting to hundreds of millions of gallons per year.

Nestlé has never been a controversy-free corporate neighbor. Critics charge that Nestlé is unjustly exploiting a public resource, but Michigan law permits any private property owner to withdraw from the aquifer directly below for free, given they pay a nominal $200 paperwork fee each year. In the context of Detroit’s ongoing water shutoffs to poor residents and Flint’s continued billing for lead-poisoned water, Nestlé’s bargain deal has predictably sparked outrage across the state.

But Nestlé isn’t alone. Industries, utilities, and farms all withdraw hundreds of billions of gallons each year from Michigan groundwater sources. Pfizer’s pharmaceutical manufacturing operation near Kalamazoo alone draws around 6.9 billion gallons annually. The difference? Pfizer returns over 97% of that water, unpolluted, to the ground. Nestlé ships most of its 1.7 billion bottles out of state and many of them outside the Great Lakes basin.


The Great Lakes Compact


At the heart of this controversy is a little-known piece of legislation called the Great Lakes Compact. Ratified by all 8 Great Lakes States, approved by both houses of Congress, and signed by President Bush on October 3, 2008, the legally-binding interstate compact created a standardized set of tools and protocols for the management of Great Lakes water. Most notably, the agreement effectively banned all water withdrawals by municipalities located outside the Great Lakes basin, and it restricted withdrawals that have a measurable negative impact on a surrounding watershed—the latter being the component that has Nestlé and the Michigan Department Environmental Quality butting heads. The burden is upon Nestlé to prove their recent application to increase withdrawals to over 400 gallons per minute at a handful of wells won’t degrade the watershed.

Work began on the compact in 1999 after a series of proposals floated by private corporations and government agencies caused a stir: a Canadian company proposed shipping Lake Ontario water to Asia, and others floated piping Great Lakes water to Arizona or western Canada to replace depleting aquifers and quell ongoing droughts. Governors and legislators in the region, alarmed by the schemes, realized there were no legal barriers to such proposals and no legal authority they could exert to stop them. At the time, lake levels were nearing historic lows, and industries relying on the Great Lakes were suffering: commercial fishing, hydropower electricity generation, tourism, shipping, etc. The politics of water withdrawals were perilous.

What made the Compact such a radical departure from the natural resource law of the time is that it treated groundwater, surface water, and Great Lakes tributaries as a single ecosystem. The law is clear: no diversions of Great Lakes basin water, period—not by pipe to Arizona, not by ship to China, not even to Madison, Wisconsin or Columbus, Ohio.


The Waukesha Test


Where the law has been profoundly unclear is in the case of municipalities that straddle the Basin. What happens when half of a town is inside the Basin, and half is outside? Or even more drastic, what if a town finds itself just barely on the wrong side of the water slope? The answer is complicated, in part because it’s still being debated.

The city limit of the Milwaukee suburb Waukesha lies several miles outside the Lake Michigan drainage basin and approximately seventeen miles from Lake Michigan itself. When water quality tests revealed a growing contamination problem in the city aquifer, state and federal regulators demanded the city take immediate action. Since the city is located in a county straddling the subcontinental divide between the Great Lakes and Mississippi River drainage basins, it was eligible to apply for a diversion. Because the city itself lies entirely outside of the Basin, their request to pipe water from Lake Michigan as a replacement required approval of state regulators and all of the Great Lakes states governors.

The Waukesha proposal took five years and $5 million before earning a unanimous vote by the Great Lakes governors in June 2016. Before the city can officially close the seven deep wells drawing radium-contaminated water from its sandstone aquifer, $200 million in infrastructure is needed to pipe and treat over 8 million gallons per day. To comply with the Compact, Waukesha must return an equal volume of water back to Lake Michigan, which requires wastewater treatment improvements and a new pipeline to return treated water back to a tributary river. The city expects to complete the transition by 2023.

The case of Waukesha was inherently controversial because the entirety of the city was well outside the drainage basin boundary. Legal and administrative challenges charged that the agreement violated the Compact because the city had other reasonable alternatives and that the proposed service area included communities with dubious claims to ‘straddling community’ status. While these challenges have been dropped, they led the states of Michigan and Minnesota to offer amendments to the agreement that clarified the definition of ‘straddling community,’ thus reducing the original proposed service area and requested diversion volume. Rather than going to federal court to block the diversion, the Great Lakes and St. Lawrence Cities Initiative announced their intention to meet with state representatives over the coming year to negotiate potential changes to procedures for reviewing future diversion requests.

While some folks aren’t happy with the outcome, the agreement held up and operated as intended.


The Loophole


Despite overwhelming legislative support, not everyone enthusiastically lined up behind the Compact. Bart Stupak—ten-term ex-congressman whose northern Michigan district included more than 1,500 miles of shoreline on Lakes Superior, Huron, and Michigan—voted against the agreement when it came in front of the House of Representatives. “Ratifying the compact could allow Great Lakes water to no longer be held within the public trust and instead be defined as a product for commercial use,” he argued.

In retrospect, Stupak’s warning seems prescient. A clause in the compact exempts water shipped in containers under 5.7 gallons—without regard to the total volume and number of containers. It’s a bizarre omission amongst the otherwise strict limitations on diversions and exports. Compare the rigorous review process of the Waukesha proposal to the paltry $200/year fee and minimal paperwork of Nestlé’s operations.

It’s this loophole that allows the company to continue its water withdrawals of hundreds of thousands of gallons per day and sell it on the marketplace for up to 240 times its production cost. Nestlé can profit upwards of $1.5 million each day, as long as they ship the water in containers smaller than 5.7 gallons.


The Future of Freshwater


Still, it’s important to keep this in perspective; this is 6 quadrillion gallons we’re talking about. The five great lakes cover an area the size of Oregon. Their combined waters could cover the contiguous United States to a depth of nine feet. Lake Superior alone could flood all of North and South America to a depth of one foot. In the grand scheme of things, a few million gallons from an inland waterway seem trivial.

And indeed it is trivial. Bottled water represents less than 1% of Michigan’s groundwater consumption, dwarfed by agriculture (39%) and public waterworks (26%). Groundwater withdrawals in Michigan add up to 700 million gallons per day. Nestlé? A little over 200 million gallons per year.

Cases like Nestlé may seem like an blip on the map in this context, but they reflect a deeper cultural anxiety about a potential future in which water is the new gold and the Great Lakes the world’s largest gold mine—and potentially the site of the world’s largest gold rush.

The United Nations and the World Bank predict widespread water shortages worldwide by 2030, when 3 billion won’t have consistent access to clean, affordable water. Today, 44 countries depend upon other countries for more than 50% of their water, and 45 countries do not have the sufficient 1000 cubic meters/person/yr of water needed to sustain modern life and ensure agricultural production.

But this demonstrates why the gold metaphor is incomplete. Unlike gold, water is essential to life; water cannot be substituted; water is not a good we can easily adjust our consumption of as prices rise and fall. This water war in mid-Michigan is a harbinger of the violent 21st-century wars that many predict will be fought over water resources.

At the center of the Nestlé conflict is a fundamental disagreement about what water means in our society and in our culture. Michiganders, and Great Lakes citizens broadly, still largely understand water as a public good—something we don’t pay a premium for, something everyone has a right to access and enjoy, and something that sits at the foundational center of our social and economic lives. The Great Lakes and its tributaries were a one-time gift from the glaciers. Approximately 1% of the water evaporates or leaves the Great Lakes Basin each year, and approximately 1% is returned through precipitation. It’s a delicate balance that humanity must take care not to disrupt. Great Lakes residents understand this.

Thus, in the end it doesn’t matter that Nestlé is a drop in the freshwater ocean. The fundamental questions the case poses need to be answered. Are the Great Lakes up for sale? Should private corporations profit at the expense of local communities? Do we each have a right to clean, affordable, and accessible water for drinking, fishing, and sport? Do we have an obligation to share Great Lakes water with the world? Do watersheds and ecosystems have inherent value outside human use and consumption? The Great Lakes compact has given us a foundation on which to begin answering these questions, but how we choose to adapt, interpret, and implement it in the case of Nestlé and beyond will have tremendous consequences in the years to come.


© 2021 Freshwater Future. All Rights Reserved.

Images courtesy of Steven Huyser-Honig,
West Grand Boulevard Collaborative, & Yellow Dog Watershed Preserve.