Consideration of a controversial pipeline to pump massive amounts of water from Lafayette to a state-created advanced manufacturing park in Lebanon is revealing major gaps in Indiana’s water-rights laws, some stakeholders say.
Large water withdrawals don’t need prior approval or review by a state regulatory agency, officials acknowledge. It’s only if water-supply problems arise after the withdrawal that a neighboring property owner can file a complaint and ask for a review by the Indiana Department of Natural Resources.
That regulatory structure is causing unease for some Lafayette-area residents who depend on the Wabash River aquifers that are being considered as a water source for the LEAP Innovation and Research District 35 miles away near Lebanon. They question how state leaders who are aggressively promoting the advanced manufacturing park can objectively determine the impact of such a pipeline in advance without a codified review process.
Experts in watershed management also see the need for regulatory review.
“When you first hear about this, you think, ‘There must be some sort of framework for assessing whether the Wabash can handle this large of a withdrawal,’” said Jane Frankenberger, a professor of agricultural and biological engineering at Purdue University who leads a Purdue Extension program on watershed management. “We very quickly realized, ‘No, in fact, we don’t [have one]. There’s no framework.’”
For now, the looming question is how Indiana policymakers should balance the interests of Lafayette-area residents concerned about their water supply against the desire of state economic development leaders to find a water source for future development at the 10,000-acre LEAP Innovation and Research District in Boone County that is envisioned as an economic boon for the state.
It’s a matter the Legislature will be asked to consider when it convenes in January. But the debate is expected to occur against the larger backdrop of calls to prepare for the state’s overall growing water needs to sustain drinking water and economic growth in the short term.
After Lafayette residents raised their concerns, Gov. Eric Holcomb earlier this month transferred responsibility for the water impact study being conducted in the Lafayette area from the Indiana Economic Development Corp., a quasi-governmental agency that is developing the LEAP district, to the Indiana Finance Authority.
The purpose of that study is to determine if as much as 100 million gallons of water a day can be withdrawn from an aquifer connected to the Wabash River without harming resources needed by communities along the waterway.
Holcomb chose the finance authority to oversee the study because it has experience in water-related issues. In addition to overseeing state-related debt issuances, the agency manages the Wastewater and Drinking Water State Revolving Fund Loan programs and the Indiana Brownfields Program, which assists in the redevelopment of former industrial or commercial sites.
Holcomb also has instructed the agency to accelerate the start of a planned comprehensive regional water study for north-central Indiana that will examine watersheds covering Tippecanoe County and at least 12 other counties. The study, which will be the fourth such regional water study the IFA has conducted since 2017, is expected to be completed next fall.
Still, residents near the area where test wells have been drilled said they already have been shaken by the results they’ve seen.
Danny Kouns and his wife said they noticed a strange smell coming from their water shortly after the drilling began in early summer. Since moving into their West Lafayette home 20 years ago, the couple had never had issues with their well, they said. But when they turned on the shower one evening after the drilling began, they couldn’t bear the sulfuric stench emanating from their bathroom.
Their home is about 800 feet from the test wells where 2 million to 3 million gallons of water a day were being pumped from the Wabash Alluvial Aquifer to assess the impact.
Residents as far as 2 miles from the drilling site said they also experienced problems with their water supply after the IEDC began drilling.
Tom Antczak didn’t smell any foul odors coming from his water, but sometime in July, he started losing water pressure in his house. He checked his water filter to find it was full of gravel and sand, something that hadn’t happened before. He said his water heater was permanently damaged and will have to be replaced.
“What’s irritating is, they’re telling all of our representatives that the studies have shown no ill effects, but they never asked any of us before testing if they could monitor our wells,” Antczak said.
The IEDC has said initial testing results from Austin, Texas-based engineering firm Intera show that pumping and drilling will have “minimal impacts on homeowner wells,” given that most large wells near the Wabash River get much of their water from the river and not the aquifer.
In September, the state agency released the complete results of its first round of testing of a 70-acre area of the Wabash Alluvial Aquifer. The tests found the average flow rate of the Wabash River is 2 billion gallons per day and the aquifer itself “is deeper and wider” than previous studies indicated, according to the report. The state is paying environmental consultant Intera $2.9 million to conduct a full study.
Intera concluded that its two test wells could support a maximum pumping rate of 45 million gallons daily, well shy of the 100 million gallons per day the IEDC hopes to supply to the LEAP Innovation District in Lebanon. Further testing at a second site is needed to determine whether the 100-million-gallon target can be reached, according to the report.
Indiana Secretary of Commerce David Rosenberg has said the IEDC invested in the effort to “support the growth of Indiana as a whole.”
State officials have said numerous companies are considering major investments in the LEAP district. Indiana is one of two Midwestern states competing for a potential $50 billion semiconductor plant, and the state is also courting a $3.2 billion data center project, according to the IEDC.
Eli Lilly and Co. already is building a $3.7 billion manufacturing site in the LEAP district that will result in an estimated 700 jobs. The pharmaceutical giant will serve as the anchor tenant.
But since the potential water pipeline was disclosed publicly more than a year ago, four municipalities along the river—Attica, Shadeland, Lafayette and West Lafayette—have declared their opposition to the project, and grassroots groups have formed to try to stop the development.
Those community concerns have prompted state lawmakers from the Lafayette area to propose legislation that would require a stringent review and permitting process for such large water withdrawals.
Indiana’s water-rights laws
Indiana’s lack of such a framework isn’t unusual among Eastern states that haven’t experienced the water shortages encountered in the West.
Indiana, like many Eastern states, follows the “riparian doctrine,” which allows a landowner whose property is adjacent to a river or above an aquifer to use the water that flows through that land.
In 1985, the Indiana General Assembly enacted the state’s first water-rights law, which was designed to protect owners of small-capacity wells from the effects of large-scale water withdrawals.
The statute requires withdrawals of at least 100,000 gallons of water per day to be registered with the Department of Natural Resources within three months of the pumping taking place. The withdrawals don’t need preapproval, however.
Residents with small-capacity wells who have had their drinking water impacted by large-water withdrawals have a right to timely compensation under Indiana law. The well owner can submit a written complaint to the DNR, which will conduct an on-site investigation.
If the complaint is found to be credible, the DNR director can declare a groundwater emergency and ensure that “timely and reasonable compensation” is provided to residential well owners.
Lafayette-area lawmakers believe more protections are needed for landowners and that the state should apply standards now common in the West.
In states like Arizona, California and Colorado, water rights are governed according to the Prior Appropriation Doctrine, which means a body of water belongs to whoever first used the source. In many cases, ownership is held by farmers whose claims to the land pre-date the establishment of cities.
A person or entity that withdraws water in these states must also put it to “beneficial use.”
Lafayette-area lawmakers from both political parties have banded together to propose legislation that would require groundwater withdrawals of at least 10 million gallons of water per day—that is then transported to a destination beyond the aquifer surface area— to receive prior approval through a DNR-regulated permitting process.
Under the legislation, large withdrawals would also require public hearings and written feasibility studies that would have to be peer-reviewed by an expert in water resource hydrology, with the Natural Resources Commission becoming the permitting authority.
“It’s not that we’re against economic development and growth, but we want to make sure that we’re doing this in a very pragmatic way,” said Rep. Sharon Negele, an Attica Republican who is one of the co-authors of the bill that will be filed during the 2024 legislative session.
Whether water-related legislation is allowed to advance next year will depend on what exactly is proposed, said Senate President Pro Tem Rod Bray, R-Martinsville.
He said the LEAP district is a tranformational project for the state, but he emphasized at an Indiana Chamber of Commerce event this week that he doesn’t support moving forward with withdrawing the water until all the data is in and he is satisfied that there are ample resources to supply the local community.
On Monday, the Tippecanoe County Commissioners took the Lafayette-area concerns into their own hands, voting unanimously to institute a nine-month moratorium on high-capacity water withdrawals and transfers, a direct rebuke of the IEDC’s proposal.
In a statement sent to IBJ, IEDC spokesperson Erin Sweitzer said the commissioners’ ordinance is moot because there is no plan to start moving water in the next nine months.
“The only thing occurring in the area is testing to gather data around water capacity,” the statement read. “… This was a clear action to stoke further rhetoric and misinformation.”
The entire debate is expected to lead to a broader discussion in the Legislature about the need for a comprehensive water plan for the entire state, something the Indiana Chamber of Commerce has been calling for since 2014. That’s when it released a study that showed some water shortages could be on the horizon if needs over the next 50 years aren’t taken into account.
The chamber noted that the issue is particularly important in Indiana because it has a state economy that is among the most reliant on an adequate water supply, largely due to the huge presence of manufacturing, farming and pharmaceuticals.
While the chamber’s study didn’t predict anything like the water shortages experienced in California, it did find that counties south of Bloomington could face water-supply problems in the not-too-distant future without proper planning. The issue could become particularly problematic if economic growth along the southern spur of Interstate 69 takes off as some state leaders envision.
In central Indiana, demand for water could increase by 50 million gallons a day by 2050 if population growth continues, the study found. And experts say Indianapolis is more prone to water shortages than most large Midwestern cities because it is not along a major waterway.
Greg Ellis, the chamber’s vice president for energy and environmental policy, said he hasn’t seen the legislation being proposed by Lafayette lawmakers, so he can’t offer a complete assessment of it.
“Our concern is, if there’s another layer of a permitting process, we’re not sure that’s the best approach. We just want to see what the language has to say,” Ellis said. “Obviously, we support planning and protection of water resources because it’s important to everybody.”
Ellis said the chamber is in the process of updating its 2014 water study and should have its new findings ready by late spring or early summer.
Environmental and agricultural groups, which have cited water policy as a major priority for the 2024 legislative session, also are expected to weigh in.
While recent attention has been focused on water for the LEAP district, Indiana Farm Bureau said it has been hearing about water challenges in other parts of the state over the past couple of years.
“Without water, we can’t grow some of the crops that we need to grow here,” Andy Tauer, Farm Bureau’s executive director of public policy, recently told Inside INdiana Business. “And so, if we’re going to continue to have this balance between … advanced technologies and agriculture, we, too, need to be at the table and considered a priority when it comes to the water needs of the state of Indiana.”
David Van Gilder, senior policy and legal director for the Hoosier Environmental Council, also pointed to broader concerns. “The water is not the state’s,” he said. “The water is held in trust for everybody.”•