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:

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. ?

Powerpoint Slides

Current State of the Water Industry Supply and Identification of Financial Market Risks 

Innovative Approaches, Solutions and Opportunities to Address Uncertainty and Risks

Legal Issues and Challenges Facing the Water Industry


For further information, please contact Jeffrey M. Karp from our Water Practice: