1. Annex 2001 Water Diversions, Withdrawals, and Uses Jon W. Allan Presented to the Groundwater Conservation Advisory Council 26, February 2004

2. Where Did We Start? Great Lakes Charter of 1985 Great Lakes Charter of 1985 An informal agreement between Governors, Premiers An informal agreement between Governors, Premiers What does it accomplish? What does it accomplish? conserve the levels and flows of the Great Lakes and their tributary and connecting waters; conserve the levels and flows of the Great Lakes and their tributary and connecting waters; to protect and conserve the environmental balance of the Great Lakes Basin ecosystem; to protect and conserve the environmental balance of the Great Lakes Basin ecosystem; to provide for cooperative programs and management of the water resources of the Basin; to provide for cooperative programs and management of the water resources of the Basin; to make secure and protect present developments; and to provide a secure foundation for future investment and development within the region. to make secure and protect present developments; and to provide a secure foundation for future investment and development within the region. How does it do this? How does it do this? Voluntary prior notice and consultation (state and provincial) if new or increased diversion or consumptive use is > 5 mgd Voluntary prior notice and consultation (state and provincial) if new or increased diversion or consumptive use is > 5 mgd

3. Where Did We Start? Federal Water Resource Development Act of 1986/2000 Federal Water Resource Development Act of 1986/2000 Prohibits any diversions without approval by all Governors Prohibits any diversions without approval by all Governors Any one governor can veto any project within the basin for any reason Any one governor can veto any project within the basin for any reason No threshold withdrawal or diversion amount No threshold withdrawal or diversion amount Encourages the Great Lakes States, (and Provinces), to implement a mechanism that provides a common conservation standard embodying the principles of water conservation and resource improvement for making decisions concerning the withdrawal and use of water from the Great Lakes Basin Encourages the Great Lakes States, (and Provinces), to implement a mechanism that provides a common conservation standard embodying the principles of water conservation and resource improvement for making decisions concerning the withdrawal and use of water from the Great Lakes Basin Current Michigan State Law also prohibits out-of-basin diversions Current Michigan State Law also prohibits out-of-basin diversions

4. Why Was This Not Enough? The Great Lakes Charter is non-binding. The Great Lakes Charter is non-binding. Never ratified by U.S. or Canadians Never ratified by U.S. or Canadians Initial Legal Analysis Indicated: Initial Legal Analysis Indicated: WRDA may violate trade law (e.g. GATT, WTO) and U.S. Constitution (e.g. commerce clause, due process clause, others) WRDA may violate trade law (e.g. GATT, WTO) and U.S. Constitution (e.g. commerce clause, due process clause, others) WRDA does not have a conservation-based decision standard WRDA does not have a conservation-based decision standard WRDA is not law in Canada WRDA is not law in Canada State law is very uneven across the basin State law is very uneven across the basin Shift in Congress from Midwest to Southwest Shift in Congress from Midwest to Southwest Moment of Opportunity – Low Lake Levels Moment of Opportunity – Low Lake Levels

5. General Scope of Annex 2001 The Annex covers: The Annex covers: All new or increased water diversions All new or increased water diversions All new or increased water withdrawals in or out of basin All new or increased water withdrawals in or out of basin All new or increased consumptive uses in or out of the basin All new or increased consumptive uses in or out of the basin Lowers Threshold from 5 mgd to 0 mgd Lowers Threshold from 5 mgd to 0 mgd Includes Great Lakes, Tributary and Groundwater Includes Great Lakes, Tributary and Groundwater Existing Uses are Grandfathered Existing Uses are Grandfathered

6. Original Principles The philosophy of the Annex is to treat water uses and users similarly within and out of the basin And To Protect the waters of the Great lakes against bulk diversions. The philosophy of the Annex is to treat water uses and users similarly within and out of the basin And To Protect the waters of the Great lakes against bulk diversions.

7. The Annex Will Affect Water Users Manufacturers (water users and water in products) Manufacturers (water users and water in products) Agriculture / Irrigation (from all surface water sources and groundwater) Agriculture / Irrigation (from all surface water sources and groundwater) Power Generation (once-through cooling, cooling towers) Power Generation (once-through cooling, cooling towers) Bottlers and other product exporters Bottlers and other product exporters Municipalities Municipalities People People Others Others Essentially, all new or increased withdrawals in Michigan

8. Annex 2001- Introduction The Whereas Article States (in part) : The Whereas Article States (in part) : Governors and Premiers commit to protecting, conserving, restoring and improving the waters … Governors and Premiers commit to protecting, conserving, restoring and improving the waters … May extend formal consultation to Premiers May extend formal consultation to Premiers States that the Great Lakes remain at risk States that the Great Lakes remain at risk Current regulatory limitations exist under trade law Current regulatory limitations exist under trade law That uncertainty of environmental impacts of withdrawals can exist That uncertainty of environmental impacts of withdrawals can exist Notes a need for new data and consolidation of existing information still exists Notes a need for new data and consolidation of existing information still exists

9. Annex 2001 – The Directives Directive I Directive I Resolves to move the Great Lakes Charter to a binding agreement within three years of Annex 2001 Approval (from June 2001) Resolves to move the Great Lakes Charter to a binding agreement within three years of Annex 2001 Approval (from June 2001) Directive II Directive II Develop a broadly based Develop a broadly based public participation program

10. Annex 2001 – Directives Directive III Directive III Establish a new set of Decision Standards for permitting water use and withdrawals within the basin Establish a new set of Decision Standards for permitting water use and withdrawals within the basin No new or increased withdrawal will be permitted unless: No new or increased withdrawal will be permitted unless: Conservation measures are implemented, and Conservation measures are implemented, and Action does not individually or cumulatively cause “significant adverse impact to quality or quantity to water or water-dependant resource”, and Action does not individually or cumulatively cause “significant adverse impact to quality or quantity to water or water-dependant resource”, and Proposal complies with all applicable laws, and Proposal complies with all applicable laws, and Proposal results in an “improvement to water or water-dependant resource” Proposal results in an “improvement to water or water-dependant resource”

11. The Other Directives Directive IV – Project Reviews Will Continue Under WRDA Directive IV – Project Reviews Will Continue Under WRDA Exercise WRDA authority under decision standard in Article II Exercise WRDA authority under decision standard in Article II Includes Prior Notice with Premiers (but not bound by opinion) Includes Prior Notice with Premiers (but not bound by opinion) Directive V – Develop A Decision Support System Directive V – Develop A Decision Support System Gather information on use, and assessment of impact Gather information on use, and assessment of impact Improve scientific understanding of the system Improve scientific understanding of the system Directive VI – Promotes Further Commitments Directive VI – Promotes Further Commitments To coordinate implementation and monitoring To coordinate implementation and monitoring Develop guidelines for consistent implementation Develop guidelines for consistent implementation Establish mechanisms for dispute resolution Establish mechanisms for dispute resolution Assess cumulative effects of withdrawals within basin Assess cumulative effects of withdrawals within basin

12. Where Are We Now On Annex? Closing in on three years since signing of non- binding agreement Closing in on three years since signing of non- binding agreement 8 of 10 of the original signatories have changed 8 of 10 of the original signatories have changed Still believe regional control is better than Federal and States and Provinces will have a major role versus solely regional approach. Still believe regional control is better than Federal and States and Provinces will have a major role versus solely regional approach. Great Lakes Protection Fund Grants Great Lakes Protection Fund Grants Very likely see draft language by June Very likely see draft language by June

13. Some Major Uncertainties 1. What does ‘resource improvement’ mean and how much is necessary to offset an impact? When is this triggered. 2. What constitutes a significant individual or cumulative impact? At what thresholds or endpoints? Who decides? What level of evidence is required here? 3. How is this program to be coordinated with existing regulatory and permitting programs across all jurisdictions. 4. How is the program to be funded? Will states draft legislation evenly? 5. How much authority will a regional body of 8 states and 2 provinces have versus state and provincial authority administered and implemented to a consistent set of standards?

14. Some More Major Uncertainties 6. Who will make judgments and grant permit approvals? Who reviews, can veto, trumps, bring legal action in what court, etc… 7. How will Annex be made binding across the border? 8. Is the State of the Science rich enough for some of what Annex envisions? (e.g. regional cumulative effects) 9. How can a omnibus regulatory framework proceed data gathering understanding and science-based decision making? 10. What does a Governor do in a State that needs water at the margins of the GL Surface water divide?

15. Great Lakes Protection Fund Grants Case Study: How small communities at the edge of the basin can meet water needs. Case Study: How small communities at the edge of the basin can meet water needs. Case Study: How a medium sized city can move to a new source of water. Case Study: How a medium sized city can move to a new source of water. Case Study: How new or expanded in-basin uses of water can meet the requirements of the system contemplated by Annex 2001. Case Study: How new or expanded in-basin uses of water can meet the requirements of the system contemplated by Annex 2001. The Great Lakes Commission prepared a water conservation toolkit to assist public water supplies and agencies in meeting water conservation requirements. The Great Lakes Commission prepared a water conservation toolkit to assist public water supplies and agencies in meeting water conservation requirements. The Nature Conservancy lead a workshop on identifying ecological flow requirements for streams and implementing strategies to achieve them. The Nature Conservancy lead a workshop on identifying ecological flow requirements for streams and implementing strategies to achieve them. Enterprising Environmental Solutions lead a team to develop metrics and models to quantify the resource impacts of various types of water withdrawals. Enterprising Environmental Solutions lead a team to develop metrics and models to quantify the resource impacts of various types of water withdrawals. Limno-Tech tried to build a modeling framework to predict the ecological consequences of new or increased water withdrawals. Limno-Tech tried to build a modeling framework to predict the ecological consequences of new or increased water withdrawals. Several Organizations worked in four detailed case studies looking at the resource improvement mechanism. Several Organizations worked in four detailed case studies looking at the resource improvement mechanism. Specialists to develop a three dimensional visualization of the Lake Michigan basin which illustrates how groundwater relates to the surface water system. Specialists to develop a three dimensional visualization of the Lake Michigan basin which illustrates how groundwater relates to the surface water system.

16. Key Concepts New or Increased Nexus New or Increased Nexus Diversion definition Diversion definition Return flow requirements Return flow requirements Significance, Improvement and Cumulative Significance, Improvement and Cumulative Timing of implementation schedule Timing of implementation schedule Simple, Durable and Efficient Test Simple, Durable and Efficient Test Political Reality of needing State Legislation and Congressional Approval for a Compact. Political Reality of needing State Legislation and Congressional Approval for a Compact.