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Granholm Administration Eyes New Strategy to Move Water Legacy Act

Legislative stall prompts new look at a bedrock law

February 15, 2005 | By Andy Guy
Great Lakes Bulletin News Service

Pat Owen

Governor Granholm’s Water Legacy Act has been at a standstill for a year because business and agricultural leaders resist establishing an entirely new permitting process, higher fees for access to water, and another layer of governmental oversight.

LANSING — In the face of a calculated effort by the Republican-led Legislature to stall Governor Jennifer M. Granholm’s proposal to improve safeguards for Michigan’s vast water supply, the state’s environmental agency has quietly launched an alternative strategy. Senior officials of the Michigan Department of Environmental Quality say they are thoroughly reviewing the state Inland Lakes and Streams Act to determine whether it can be used for the same purpose.

“The department has designated a formal workgroup to study this issue,” said Jim Cleland, assistant chief of the Michigan Department of Environmental Quality’s Water Division.

Governor Granholm, a Democrat, introduced her Water Legacy Act in March 2004 amid a blaze of respectful media coverage and supportive statements from state Republican leaders. Ms. Granholm said her proposal would  permanently ensure a high-quality, robust water supply by improving how Michigan managed water withdrawals from the Great Lakes ecosystem. Though Ms. Granholm actively campaigned for the proposal, and it attracted broad public support, the Legislature has yet to hold a single committee hearing.

The Inland Lakes and Streams Act (ILSA), originally passed in 1972 and one of Michigan’s bedrock environmental statutes, regulates construction and other activities that threaten the natural condition of surface water resources.

The plain language in the Inland Lakes and Streams Act, say legal authorities and the DEQ, may provide Ms. Granholm another route to accomplish much of what is contained in her Water Legacy Act.

The Inland Lakes and Streams Act requires a person to obtain the state’s permission before undertaking a project that diminishes the quality of lakes or streams. But legal experts, advocates for the environment, and even some business leaders contend that the definition of the term “diminish” that MDEQ used in the past is too narrow, in effect applying only to projects that dredge and fill lake and river bottoms. They argue that the definition should be expanded to apply to projects that withdraw fresh water as well, or at least to those projects that could harm interconnected natural resources, riparian property rights, and the broader public interest in maintaining healthy water resources.  

Governor’s Plan Hits Slack Water
The governor’s original legislative proposal has been at a standstill for more than a year largely because business and agricultural leaders resist the idea of establishing an entirely new permitting process, higher fees for access to water, and another layer of oversight. Rewriting the administrative rules of the Inland Lakes and Streams Act could  minimize many of those issues, according to water resource experts on all sides of the issue. The approach takes advantage of a 32-year old regulatory structure, a successful public involvement process, and a series of rigid environmental standards that are familiar to water users. The strategy already appears to be gaining traction with key business leaders.

“The solution could have broad applicability and certainly warrants a deeper level of discussion,” said Jon Allan, the director of environmental services for Consumers Energy and immediate past chair of the Michigan Chamber of Commerce’s Environmental Quality committee.

Michigan currently lacks a comprehensive system of rules to evaluate withdrawal projects, which has led to conflicts between hundreds of competing users, falling groundwater levels, and legal troubles for some businesses. Legal experts also contend the lack of standards also leaves the Great Lakes vulnerable to large water diversions. Michigan farms withdraw more than 100 million gallons of groundwater per day for irrigation, according to United States Geological Survey, while industry withdraws daily some 180 million gallons; both do so from onsite wells.

More than 1.25 million private household wells also tap into aquifers across the state. Homeowners drilled more than 31,000 new wells in Michigan in 1998 alone, according to DEQ data. The effects of these withdrawals on lakes, rivers, wetlands, and other water dependent resources is poorly monitored and not well understood, according to water resource experts.

The state environmental agency’s move to consider modifying the lakes and streams law reflects a sharp change in its attitude toward managing the growing number of water withdrawals across the state. Just three and a-half years ago, when Republican John Engler was governor, the department responded to widespread public concern over a proposal to construct a major spring water bottling plant in central Michigan by confidently stating that existing state law does not apply to large water withdrawal projects. 

The Inland Lakes and Streams Act “does not regulate potential changes in water level or water volume of an inland lake or stream unless caused by dredging, filling, or manipulation of structures on bottomlands,” the DEQ said on August 8, 2001. The statement was made in a formal Response to Public Comments on the Perrier company’s plan to capture, bottle, and sell spring water from an aquifer that otherwise naturally feeds the Muskegon River and eventually replenishes Lake Michigan. The document added: “Therefore, no activities at the proposed Perrier production site are regulated by the provisions of [ILSA].”

Circuit Court Surprise
But Mecosta County Circuit Court Judge Lawrence Root disagreed on November 25, 2003, after a 19-day trial that pitted Perrier, a multinational corporation, against the Michigan Citizens for Water Conservation, an environmental group formed to stop the bottling operation.

“With all due respect, [the DEQ’s] conclusion is simply wrong,” Judge Root wrote in his formal opinion of the case. “I don’t know if the department’s decision to so narrowly interpret its statutory duty arises from a misreading of it, or arises from uncertainty regarding the physics of the process of groundwater withdrawals affecting surface water bodies, or is simply a product of limited financial resources to conduct the kind of studies necessary to evaluate projects.”

Judge Root ordered the bottling operation halted, ruling that the company’s pumping threatened the natural integrity of a nearby stream, interconnected wetlands, and the property rights of neighboring property owners.

“I believe ILSA presents an excellent standard for environmental protection,” the judge counseled.

The circuit court decision compelled the DEQ to revisit the Inland Lakes and Streams Act as a tool to manage water withdrawals, particularly from underground aquifers, according to the agency’s Jim Cleland. Modified rules could provide guidance for state regulators to judge new and increased withdrawals and avoid harmful projects, he said. Individuals or companies seeking to withdraw water likely would be required to obtain a permit, demonstrate that their project will have only a minimal affect on state water resources, and comply with existing riparian and public trust law.  

A Big Job
One major challenge Mr. Cleland noted, however, is figuring out where to draw the line on regulatory responsibilities for a state agency operating with a limited budget and staff.  “We’ve discussed the ILSA concept for months,” Mr. Cleland said in an interview with the Great Lakes Bulletin News Service. “And it raises the question of ‘What is practical?’ All of our streams and many lakes have a significant base flow of groundwater. The trick is figuring out which wells and what size withdrawals most directly impact those resources.”

Currently, the agency staffs two different initiatives to answer these and other questions. The Groundwater Conservation Advisory Council was established in August 2003 by state statute to study the sustainability of Michigan’s groundwater use. The group must report its findings to the Legislature by January 2006. The DEQ also established the less formal Water Policy Work Group to forge agreement about the need for withdrawal laws among business, farm, environmental, and other interests.

At a two-day retreat in January 2005, the group reached a consensus that Michigan needs improved decision-making standards to protect high quality water resources, such as trout streams, from ill-advised withdrawals.

Environmentalists agree the state must identify an appropriate pumping threshold to guide the review of a realistic number of water use applications. They also say that revised ILSA rules must require detailed information about an applicant’s pumping plan, scientific studies of the surrounding hydrology, and a summary of water conservation practices.

But others say that, since ILSA is geared to protect lakes and streams from degradation it is not suited to wrestle with the kind of larger, unanswered questions about water privatization, diversion, and sale that projects such as Perrier’s raise. That issue, it seems, will still eventually require legislative attention. Without it, some experts say, uncertainty will reign, making it more, not less, difficult for Michigan businesses of all sorts.

“By providing guidance on the administration of water withdrawal permits under the ILSA [we can] minimize the potential for litigation and inconsistent judicial decisions,” said Wil Cwikiel, program director for the Tip of the Mitt Watershed Council. He added that the approach also “recognizes natural water cycles and the interconnection between surface and ground water and the need to review each withdrawal on a case-by-case basis.”

Andy Guy, who writes extensively about sustaining the Great Lakes in the global economy, directs the Michigan Land Use Institute’s Great Lakes Project and reports on Smart Growth from the Institute’s Grand Rapids office. Reach him at aguy@mlui.org.

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