Executive Summary

Liquid Gold Rush

Citizens call for legislative action

Citizens across the Great Lakes basin were caught by surprise in 1998 when news broke of an alarming business venture to scoop 156 million gallons of water out of Lake Superior every year and ship it in tankers to Asia. The plan, by the aptly named Nova Group, was like a brilliant star. It illuminated vividly the growing global demand for clean, fresh water and exposed how vulnerable the Great Lakes basin is to world water markets.

But public pressure prevailed in 1998. Across Michigan and other basin states, the reaction was an emphatic: “No!”The Ontario Ministry of Environment rescinded a permit it had issued the Nova Group. Later, in 2000, Congress amended the 1986 Water Resources Development Act, which governs transfers of water from the basin, to prohibit such commercial diversions and exports of Great Lakes water without permission from each of the eight Great Lakes governors.

As any astronomer knows, however, novas eventually fade and give way to an even stronger, more penetrating light. Enter the Perrier Group of America in 2001, the bull of the bottled water market and a subsidiary of Nestle, the world’s largest food company.

In August 2001, the Michigan Department of Environmental Quality granted the Perrier Group permission to pump 105 million gallons of water per year from central Michigan and approved pipelines for more than 210 million gallons. That’s 54 million gallons more water per year than the Nova Group would have taken ó a virtual supernova in comparison.

Rather than take a conservative approach to the Perrier Group’s unusual proposal, Michigan has encouraged the company to take the state’s water. The Michigan Economic Development Corporation, a state agency, has offered the Perrier Group a subsidy package of infrastructure improvements, worker training, and property and education tax abatements worth $9.6 million.

Urgent Policy Action

The Perrier Group’s water venture into Michigan and the state’s near-automatic permitting and encouragement of it have sparked a new discussion about the state’s ability to protect the water resources that sustain Michigan’s environment, economy, and way of life. Without adequate water supply protections and clear rules for withdrawals and exports, the state leaves itself open not only to water marketing schemes from across the globe but also to shortages and environmental damage at home.

Global consumption of water is doubling every 20 years, more than twice the rate of human population growth. According to the United Nations, more than one billion people already lack an adequate supply of fresh drinking water. An estimated three billion people will be living in water-stressed countries in 2035, according to research by the World Bank.

Entrepreneurs are eager to serve this demand in the absence of comprehensive and committed efforts on the part of world governments to protect water supplies by preventing pollution and promoting efficient water use. Instead of safeguarding public water, international trade efforts are actually embracing privatization of water and setting the stage for global water markets.