Water Supplies for the Future: Challenges and Opportunities
An increasingly scarce resource, fresh water has become recognized as a factor of production necessary for economic growth, including energy production, commercial and industrial output, and municipal residential water supply services and wastewater treatment. Provision of water is estimated to involve $120 billion in economic activity annually in the U.S. Water supply threats pose increasing financial risks to project developers and industrial users. At the same time, the imperative for expanding water supplies and increasing efficient use of available water is creating new opportunities for advanced technologies, services and modernized infrastructure.
The U.S. Environmental Protection Agency and the Senate Finance Committee have estimated that the investment required to maintain and provide minimally necessary water infrastructure over the next two decades will be approximately $500 billion. Given the current budgetary pressures, however, Congressional appropriations for State Revolving Fund grants cannot be expected to meet this demand. Innovative policy solutions providing incentives for greater investment of private capital and development resources are urgently needed to address these challenges.
In recent years, acute drought in regions around the United States has resulted in water shortages, disputes, and increased attention to the legal framework governing the availability of water supplies. Surface water withdrawals have raised conflicts under Interstate Water Compacts dating back to the early 20th Century, many of which are based on Western water rights frameworks that are ineffective in times of scarcity and the need for effective allocation. Ground water aquifers -- which provide as much as 20% of overall U.S. fresh water supplies, and over 90% in some regions -- are also increasingly subject to such competing demands, but often lack any effective legal framework for allocation.
Water supply has traditionally been viewed as a matter of state law. But with greater scarcity and competing demands, Federal law requirements are becoming critical determinants of water uses. Several important cases have recently been brought to the U.S. Supreme Court, while Federal agencies such as the U.S. Army Corps of Engineers, the Department of the Interior and the Environmental Protection Agency have grappled with increased water demands and related legal requirements. Such demands and constraints arise under several Federal laws and programs, including:
- Resource development statutes, such as the Federal Power Act and Corps of Engineers projects
- Laws aimed at protecting threatened species and habitat, such as the Endangered Species Act and the Migratory Bird Treaty Act
- Environmental protection laws, such as the Clean Water Act and the Safe Drinking Water Act
- Congressionally approved Interstate Compacts and Apportionment Decrees
Federal policies are in need of modernization and harmonization to provide a more effective legal framework for ensuring continued supply of fresh water for economic development, recreational uses and ecosystem support. The coming years will unquestionably see a resurgence of Federal involvement in these areas.
The links below provide key materials relating to water supply issues and legal frameworks.
In addition, our Water Resources Development Group has among the foremost and comprehensive hard-copy collection and archives in the country of documents chronicling the progression of water law through litigation, legislation and agency policy over the last half century. These documents are available for inspection upon appointment at the Water Resources Historical Compendium. ?
- Uncertainty and Risk in Securing Adequate Water Supplies: Challenges and Opportunities, March 2012 (PDF - slides only)
- Uncertainty and Risk in Securing Adequate Water Supplies: Challenges and Opportunities, March 2012 (.wmv - slides and audio)
Current State of the Water Industry Supply and Identification of Financial Market Risks
- The Ripple Effect: Water Risk in the Municipal Bond Market (2010), Sharlene Leurig, CERES (PDF)
- Historical Water Price Trends (2010), Steve Maxwell, American Water Works Assn. (PDF)
- The Water Industry: A Closer Look at the Numbers (2011), Steve Maxwell, American Water Works Assn. (PDF)
- The Concept of Virtual Water: Understanding Our Real Water Use (2010), Steve Maxwell, American Water Works Assn. (PDF)
- Assessing Water Risk (2011), World Wildlife Federation (WWF) (PDF)
Innovative Approaches, Solutions and Opportunities to Address Uncertainty and Risks
- 2012 Water Market Review: A Concise Review of Challenges and Opportunities in the World Water Market (2012), Steve Maxwell, TSG (PDF)
- The Business of Water: It Is Time to Embrace a New Model for Water Services (2011), G. Tracy Mehan III, BNA Daily Environment Report (PDF)
- Water Reuse: Expanding the Nation’s Water Supply Through Reuse of Municipal Wastewater (2011), National Research Council (PDF)
- Science & Technology to Support Fresh Water Availability in US (2004), National Science And Technology Council
Committee On Environment And Natural Resources (PDF)
- FreshWater Supply – States’ Views of How Fed. Agencies Could Help Meet Challenges of Expected Shortages (2003), GAO Report to Congress (PDF)
- Water Stewardship, Pepsico (PDF)
Legal Issues and Challenges Facing the Water Industry
- Western Water in the 21st Century (2009), A. Schempp, Dir. Western Water Program, ELI (PDF)
- UTTON Transboundary Resources Center Model Interstate Water Compact (2006), Muys, O’Leary (PDF)
- CA Drought: Hydrological and Regulatory Water Supply Issues (2009), CRS Rpt for Congress (PDF)
- Secure Water Act: Sec. 9503(c) – Reclamation (2011), United States Dept. of Interior (PDF)
- Tarrant Reg. Water Dist v Herrmann, et al (2012), United States Supreme Court (PDF)?
For further information, please contact Jeffrey M. Karp from our Water Practice: