The Great Lakes Compact

Why this matters: The CompactcompactA binding agreement between states that Congress approves. Once approved it becomes federal law and overrides conflicting state rules. The Great Lakes Compact is one. is the reason “they’ll pipe Great Lakes water to Phoenix” is not a serious near-term worry. It is also narrower than most people think: it governs where water crosses a watershed line, and says almost nothing about who uses how much of it inside the basin.

Facts current as of July 2026.

1. What it is

The Great Lakes-St. Lawrence River Basin Water Resources Compact is an interstate compactcompactA binding agreement between states that Congress approves. Once approved it becomes federal law and overrides conflicting state rules. The Great Lakes Compact is one. among Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania, and Wisconsin. Congress consented to it in Public Law 110-342, and it took effect December 8, 2008. Congressional consent makes an interstate compact federal law, so the Compact binds the 8 states as a matter of federal law, not just state law.

Running alongside it is the Great Lakes-St. Lawrence River Basin Sustainable Water Resources Agreement (2005), a good-faith international agreement that adds Ontario and Quebec. The provinces cannot be bound by a US interstate compact, so the Agreement is the parallel instrument that brings them into the review process.

Two bodies administer it:

Wisconsin passed implementing legislation in 2008, now at Wis. Stat. 281.343 to 281.348. Each state files a water management program review with the Council every 5 years. Wisconsin’s most recent was submitted in 2024. (Wisconsin DNR Compact page)

2. The basic rule

New or increased diversionsdiversionMoving water out of the Great Lakes basin. The Compact bans new ones except in a few narrow cases. of water out of the Great Lakes basin are banned. A diversiondiversionMoving water out of the Great Lakes basin. The Compact bans new ones except in a few narrow cases. means moving water across the surface watershed divide into another basin, most often the Mississippi basin.

The ban has 3 narrow exceptions, and each has its own approval path.

Three cross-cutting rules apply to the exceptions:

1. Public water supply purposes only. Diverted water must serve a public water supply system. A private company cannot get a diversion to run a factory outside the basin.
2. A withdrawal of 100,000 gpd or greater averaged over any 90-day period must also meet the Exception Standard.
3. A new or increased consumptive useconsumptive useWater that is taken and never comes back: evaporated, transpired by plants, or built into a product. This is the number that actually matters. of 5 million gpd or greater averaged over any 90-day period must also undergo regional review.

(Compact text, sections 4.9 and 4.12)

3. Return flow, the teeth

Every diversion exception carries a return flowreturn flowWater you withdrew that finds its way back to the river or aquifer. Downstream users depend on it, which is why you usually cannot sell that portion. obligation: all water withdrawn from the basin must be returned to the source watershed, either naturally or after use, less an allowance for consumptive useconsumptive useWater that is taken and never comes back: evaporated, transpired by plants, or built into a product. This is the number that actually matters..

In practice, communities describe this as 100 percent return flowreturn flowWater you withdrew that finds its way back to the river or aquifer. Downstream users depend on it, which is why you usually cannot sell that portion., because the consumptive allowance for a municipal system is small and the returned volume is capped at the diverted volume.

The conditions on returned water are strict:

• It must be treated to meet applicable water quality discharge standards.
• It must be treated to prevent the introduction of invasive species into the basin.
• It must maximize the portion returned as basin water and minimize non-basin water in the return stream.

Return flow is what turns a diversion into a loan. It is also the single most expensive part of any diversion project, since it means building a second pipeline running the opposite direction plus wastewater treatment upgrades. That cost is why very few communities pursue this.

4. Waukesha, the only one

Waukesha is the only community in a straddling countycommunity in a straddling countyA town entirely outside the Great Lakes basin but inside a county the basin line crosses. It needs all 8 Great Lakes governors to agree. Waukesha is the only one that has ever succeeded. ever approved for a diversion under the Compact, anywhere in the basin, as of July 2026.

The Compact Council’s conditions cut the request substantially:

• Volume reduced from 10.1 mgd to 8.2 mgd.
• Service area reduced to only the area then served by the Waukesha water utility, dropping the surrounding towns from the original request.
• Root River monitoring for wastewater impacts.
• Annual reporting to all 8 states and both provinces.

Why Waukesha needed it: the city’s deep aquiferaquiferUnderground rock or sand with water in the spaces between the grains. It is not an underground lake. Water seeps through it slowly, often only feet per year. wells were contaminated with radiumradiumA naturally radioactive element in southeastern Wisconsin's deep sandstone aquifer. It is what pushed Waukesha off its wells and onto Lake Michigan water. above the federal and state drinking water standards, and the city was under an amended court order to comply by September 2023.

How it works mechanically: Waukesha buys treated water from the City of Milwaukee, which draws from Lake Michigan. Waukesha’s treated wastewater goes back to the Root River, a Lake Michigan tributary, up to the volume of the annual average diversion. Wastewater beyond that volume goes to the Fox River, which is in the Mississippi basin. That excess comes from inflow and infiltration into the sewer system.

Sources: Compact Council Final Decision, June 21, 2016; WDNR Waukesha diversion page; Alliance for the Great Lakes, Oct. 9, 2023.

5. Wisconsin’s approved diversions

Every one of these except Waukesha and 3 straddling communitiesstraddling communityA town sitting partly inside and partly outside the Great Lakes basin. It can apply to divert water with its own state's approval. predates the Compact. “Pre-existing” means an interbasin transfer approved under Wis. Stat. 281.344(3m) and (4) that existed before ratification on December 8, 2008.

Source: Wisconsin DNR, Great Lakes Compact and Diversions, values as published July 2026.

Note the shape of this list. Pleasant Prairie at 10.69 mgd and Portage at 9.58 mgd are both larger than Waukesha, and neither needed a governors’ vote because both predate the Compact. Racine’s 7 mgd straddling communitystraddling communityA town sitting partly inside and partly outside the Great Lakes basin. It can apply to divert water with its own state's approval. approval, issued by WDNR in 2018 for the Foxconn project, also required no Council vote.

6. The withdrawal side, inside the basin

Withdrawals that stay inside the basin are managed by each state under its own law. The Compact adds reporting, conservation programs, and one regional trigger.

Two things about the 5 mgd trigger. It measures consumptive use, meaning water that does not return to the basin, not gross withdrawal. And regional review of an in-basin withdrawal produces comments, not a veto. The originating state still decides.

Wisconsin’s own in-basin permitting sits underneath: a general water use permit at 100,000 gpd averaged over 30 days, and an individual permit at 1,000,000 gpd for 30 consecutive days. See Wisconsin water law, section 10.

7. The weak spots, argued honestly

The Compact is a good instrument aimed at one specific failure mode. Several other failure modes sit outside its scope.

7a. A straddling community can serve an unlimited industrial user inside the basin

The Compact’s diversion machinery triggers on water crossing the basin linebasin lineThe ridge that decides whether rain drains toward the Great Lakes or away from them. In southeast Wisconsin it runs straight through populated suburbs, which makes it a political line as well as a geographic one.. If a community is a straddling community, it can get a diversion approved by its own state with no Council vote, and it can then serve enormous industrial customers on the in-basin side of the line with no Council review at all.

Southeast Wisconsin is the live example. In 2018 WDNR approved Racine’s request to draw up to 7 mgd of Lake Michigan water for the Foxconn project, on the ground that Mount Pleasant is a straddling community. Foxconn never materialized at anything like the promised scale and employs around 1,100 people.

Microsoft bought roughly 1,900 acres of the land originally assembled for Foxconn and is investing about $20 billion in data centers at Mount Pleasant. Racine supplies the water, inside Racine’s existing 7 mgd approval.

Microsoft’s projected water use is modest by data center standards because of closed-loop cooling: peak of 234,000 gpd and 2.8 million gallons for 2026 in phase 1, rising to a peak of 702,000 gpd and 8.4 million gallons per year at full buildout. WDNR’s water use section manager reported Microsoft’s Mount Pleasant average as roughly 15,000 gpd, with 468,000 gpd on the hottest days.

Microsoft has said publicly it does not expect its Great Lakes basin projects to trigger Compact review, because the 5 mgd consumptive use threshold is far above what closed-loop campuses consume. That is almost certainly correct on the numbers. The structural point stands regardless: the Compact would not have reviewed it even if the number were much larger, because the water never leaves the basin.

Sources: WPR, Microsoft and the Compact; WPR, 8.4M gallons; Wisconsin Watch, March 2026.

7b. Municipal purchase hides the meter

The Alliance for the Great Lakes found that 97 percent of data center operators buy water from municipal supplies, and that buyers of municipal water face no water use reporting requirement of their own. Fewer than a third of data centers track their water use at all. Nondisclosure agreements between developers and municipalities routinely obscure projected demand during the siting decision.

A single hyperscale data center can use more than 365 million gallons per year, roughly what 12,000 Americans use. The Alliance projects hyperscale facilities could withdraw as much as 150.4 billion gallons nationally over 5 years. (A Finite Resource, Aug. 20, 2025)

The International Joint Commission reached a similar conclusion in its decadal review. The IJC’s Protection of the Waters of the Great Lakes: 2025 Report on Water Diversions and Uses, released December 2025, contains 15 recommendations. Recommendation 14 asks the states and provinces to develop best practices for large-scale data center water use, including a consistent accounting and public reporting methodology, and to prepare a report modeling future cumulative impact scenarios on the lakes, tributaries, and groundwater. Recommendation 1 advises no near-term changes to the Compact itself, with continued vigilance. (IJC 2025 PWGL Report)

7c. Chicago is outside the Compact entirely

Compact section 4.14 says that withdrawals, consumptive uses, and diversions by the State of Illinois are governed by the US Supreme Court decreedecreeThe court order at the end of an adjudication, spelling out exactly who gets how much water and in what order. in Wisconsin et al. v. Illinois et al. and are not subject to the Compact.

That decreedecreeThe court order at the end of an adjudication, spelling out exactly who gets how much water and in what order. caps Illinois’s total diversion from Lake Michigan at an average of 3,200 cubic feet per secondcubic feet per secondA flow rate rather than a volume. 1 cubic foot per second running all day is about 2 acre-feet., measured as a 40-year running arrangement with a 5-year averaging period and a 110 percent annual cap. The accounting covers domestic pumpage, storm runoff diverted from the lake watershed by the reversal of the Chicago River, and direct diversion at the Wilmette Pumping Station, the Chicago Controlling Works, and the O’Brien Lock and Dam. The Army Corps supervises the measurement.

3,200 cfscubic feet per secondA flow rate rather than a volume. 1 cubic foot per second running all day is about 2 acre-feet. is roughly 2.1 billion gallons per day. It dwarfs every Compact-approved diversion combined, and it is not reviewable by the Compact Council. Illinois must use best efforts to facilitate Ontario and Quebec participation if it seeks to modify the decree.

7d. Bottled water and the 5.7 gallon line

Compact section 4.12(10): a proposal to withdraw water and remove it from the basin in any container greater than 5.7 gallons is treated the same as a diversion. For containers of 5.7 gallons or less, each state decides for itself.

So a truckload of half-liter bottles is not a diversion under the Compact. Whether it is one under state law depends on the state. Michigan requires bottlers proposing 200,000 gpd to demonstrate no adverse impact. Other states do less. The cumulative effect of bottled water withdrawals is essentially unmanaged at the regional level.

7e. What the Compact does not do at all

• Water quality. The Compact is a quantity instrument. Nutrients, PFASPFASThe "forever chemicals" from firefighting foam and industrial processes. They do not break down, treatment is expensive and permanent, and standards keep tightening. Never in a standard water test unless you ask for it by name., harmful algal blooms, and nitratenitrateFertilizer and manure that has leached into groundwater. Above 10 milligrams per liter it is a health risk, especially for infants, and you cannot fix your neighbor's fields. are outside it entirely.
• In-basin groundwater depletion. Between 20 and 40 percent of the Great Lakes water budget originates as groundwater. A well that draws down a tributary aquiferaquiferUnderground rock or sand with water in the spaces between the grains. It is not an underground lake. Water seeps through it slowly, often only feet per year. without crossing the basin linebasin lineThe ridge that decides whether rain drains toward the Great Lakes or away from them. In southeast Wisconsin it runs straight through populated suburbs, which makes it a political line as well as a geographic one. is a state matter.
• Land use and siting. Nothing in the Compact reaches a municipality’s decision to annex land and extend water service.

8. Why the pipeline-to-Arizona scenario is very unlikely

Three independent barriers, any one of which is probably sufficient.

Legal

A diversion serving Arizona would have to be a straddling community or a community in a straddling countycommunity in a straddling countyA town entirely outside the Great Lakes basin but inside a county the basin line crosses. It needs all 8 Great Lakes governors to agree. Waukesha is the only one that has ever succeeded.. Arizona is neither, and no amount of money changes the geography. Amending the Compact would require action by all 8 state legislatures plus Congress. Even a straddling county diversion, the closest analog, requires unanimous consent of all 8 governors. Waukesha, a city 15 miles from the lake with a documented radiumradiumA naturally radioactive element in southeastern Wisconsin's deep sandstone aquifer. It is what pushed Waukesha off its wells and onto Lake Michigan water. problem and a court deadline, spent 6 years getting to a vote.

Physical

Water is heavy and does not compress. Moving it uphill costs energy in direct proportion to the lift, forever, with no way to engineer around it.

Lake Michigan sits at roughly 579 feet above sea level. Phoenix sits at roughly 1,100 feet, and the route crosses the Continental Divide, which exceeds 7,000 feet at most crossings. The lift is the cost.

A University of Michigan team led by Jonathan Bulkley studied moving Lake Superior water to the upper Missouri River near Yankton, South Dakota in the early 1980s, a distance of about 500 miles with far less elevation gain than a route to Arizona. Their findings:

• About $26 billion in early-1980s dollars for the pipelines and pumps alone, roughly $60 billion or more at 2026 prices.
• 7 dedicated 1,000 MW power plants just to lift the water.
• Conclusion: “the total cost would far exceed the value of the water.”

(Michigan Public, April 23, 2015)

Economic

For a coastal or near-coastal Southwest user, desalination is cheaper per acre-footacre-footEnough water to cover 1 acre a foot deep: 325,851 gallons. Roughly what 2 or 3 suburban households use in a year. than continental-scale conveyance, and Arizona has been in discussions with Mexico about Sea of Cortez desalination for years. Arizona set aside funds in 2018 to study Missouri or Mississippi River imports, appropriated $160 million in 2021 toward considering imports, and passed a $1.2 billion water augmentationaugmentation planA Colorado requirement where a newer well owner has to replace the water their pumping takes from the river, in the same place and at the same time. package in 2022. No feasibility study of an actual long-haul import has been completed as of July 2026, and water managers consistently describe it as politically and economically unpalatable rather than technically impossible.

The honest version of the risk: the threat to a Wisconsin landowner is not a pipeline west. It is demand growth inside the basin, in the county next door, with no Council vote required. See Live threats watchlist.

Related

• Wisconsin water law
• Live threats watchlist
• Key agencies and data sources
• Module index