Michigan’s new water battle: How much of it should Nestle bottle?

Three years after state-appointed officials began piping contaminated water to households in Flint, eventually triggering a national outcry, another drawn-out fight over water management is roiling the Great Lakes state.

This time the battle is over the bottling of Michigan groundwater by Nestle, the Swiss multinational food company. Nestle is seeking permission to extract more water from an existing well about 100 miles from Flint, for sale in the Midwest. As long as it passes review, the expansion would only incur a nominal permit fee, to the dismay of critics who argue that Michigan is handing over its natural resources to a corporation for a song.

There is no direct link between Flint’s municipal water crisis and Nestle’s pumping permit. But the emotions stirred by the mismanagement in Flint, and concern over how regulators failed to stop it, have combined to make Nestle a lightning rod for environmentalists and a potential test case for how that most basic of natural resources – groundwater – should be managed.

“Flint has changed the conversation,” says Liz Kirkwood, director of FLOW, an advocacy group in Traverse City, Mich., that has contested Nestle’s application.  

In fact, officials in Osceola Township near the Nestle plant voted in April to deny the company a zoning permit to build a booster station so that it could handle additional flow from its wells. Nestle, which hopes to nearly double its permitted flow to 400 gallons per minute from its White Pines well, is appealing that decision.

Although bottlers like Nestle don’t use nearly as much water as farms or factories, the dispute is calling attention to how water is regulated in the US. State laws typically offer wide latitude for property owners to pump groundwater for personal or business use.

Nestle has argued that its increase wouldn’t put the environment at risk. Still, the company seems to concur with critics on one point – that the Flint crisis has altered the zeitgeist here.  

“What happened in Flint is a tragedy … we feel frustration about this,” says Nelson Switzer, chief sustainability officer for Nestle Waters North America. He points out that Nestle and other companies have donated bottled water to the city, which he visited in February.

“Water is a passionate issue,” he adds. “People make decisions based on their data and their knowledge, and they make decisions based on passion and their emotional responses.”

Like many well-watered states, Michigan allows a reasonable use of water by landowners and imposes no royalties for its resale. The Department of Environmental Quality (DEQ) must sign off on large withdrawals to make sure stream flows and fish populations aren’t adversely affected. The cost to Nestle? A $5,000 application fee, plus an annual $200 water-use reporting fee.

“That’s the real head-scratcher for folks,” says Nick Schroeck, who directs the Great Lakes Environmental Law Center at Wayne State University in Detroit.

He points to the Flint crisis and tensions over municipal fees in Detroit – nearly 18,000 customers faced shutoffs last month for years of nonpayment – as the backdrop to the outcry over Nestle’s right to pump more at minimal cost. “In a region where we are water rich and you have incredible water resources, it seems that the law protects certain users and not other users,” he says.

Debating the impacts – and the fees  

Nestle’s critics also say that, even in water-rich Michigan, environmental risks are greater than Nestle has allowed.

“Based on direct observation of the lowering of the water table ... we believe that these [nearby] wetland areas will likely be significantly impacted by the observed and predicted lowering of the water table at this location,” Christopher Grobbel, an environmental consultant to the Great Lakes Environmental Law Center, wrote in a February comment to the DEQ.

In Michigan and across the US, the typical residential water bill is more about treatment and delivery than the water itself. When it comes to commercial use, some states charge a sliding fee to bottlers for water extraction. In Maine, Nestle pays towns for water rights and markets the product as Poland Spring, a best-selling brand. Elsewhere, the company has also faced pushback. Last year voters in Oregon's Hood River County passed a ballot initiative to block a proposed Nestle bottling plant amid intense business lobbying.

Environmentalists are divided on the question of whether it makes sense to charge for groundwater, as states impose royalties on oil or minerals. Some are wary of putting a price on such a vital resource. The idea also raises complex questions about what water use should and shouldn’t be taxed in the public interest.

Bottled water represents a fraction of Michigan’s groundwater consumption – less than 1 percent in 2015, compared with 39 percent for agriculture and 26 percent for public waterworks, as in Flint. But its visibility makes its marketers a target in a way that doesn’t apply to cherry farmers.

“We are the largest food and beverage company in the world so attaching our name to something does bring greater scrutiny and attention,” says Mr. Switzer.

An added wrinkle in Michigan is that it belongs to the Great Lakes compact of eight states along with the Canadian provinces of Ontario and Quebec. This commits members to binding rules on managing their common resources, including not diverting water from the Great Lakes basin, which holds roughly 6,000 trillion gallons of water, the world’s largest such resource. But the 2008 compact inserted a loophole for bottlers that allows for its diversion in small containers.

‘There was outrage’

Since Nestle filed its application last July, the DEQ has twice had to extend the period for public comment and to collect more data from Nestle. It has received more than 50,000 comments, including remarks made last month at a hearing in a town near the White Pine Spring where the wellhead is located. At least 450 people showed up for the hearing, which ran past midnight to allow everyone a turn at the microphone.

“There was outrage,” says Ms. Kirkwood, who attended the forum and whose group has collected signatures opposing a well increase. “You have a multibillion-dollar company like Nestle coming to Michigan, basically taking our water for free, and selling it back to us in bottles for millions of dollars in profit. The public is sophisticated and they understand that is not just.”

A spokeswoman for the DEQ says there’s no set time frame for the approval process for Nestle, which is the first under a state law amended in 2008.

Even if state approval comes through, another hurdle for Nestle is the local resistance to its planned booster station for the water flow. Workarounds such as trucking the water are possible, but costly.

“If we are successful with the permitted capacity increase, what you need is a boost along that pipeline,” says Arlene Anderson-Vincent, natural resources manager at Nestle’s plant in Stanwood, Mich.