Midwest officials float 'not-for-sale' sign on Great Lakes

Water-short Western states have been fighting it out among themselves for available water supplies within that region.

But as those supplies become scarcer, Midwestern officials are increasingly concerned that the Great Lakes could end up the coveted object of water raids or water sales. These lakes are currently the source of 95 percent of the nation's freshwater supply. And until lately, this region largely has taken the lakes for granted.

Fueling this concern was the fact that South Dakota recently arranged to sell a portion of its Missouri River flow to a Western energy developer. The worry among Midwestern leaders is that more such deals could be struck and that Congress might one day order water transfers from one region to another.

''It's clear that Congress has the authority for interstate water allocation, '' notes Prof. J. David Aiken, a water law specialist at the University of Nebraska. ''And when push comes to shove, Congress will ultimately do whatever is in the national interest.''

''Water will become for the Midwest what oil is for OPEC,'' insists Michigan Gov. William Milliken, who called his Midwestern colleagues to a water resources summit conference earlier this summer on Michigan's Mackinac Island to discuss the point.

At last year's annual meeting of the Midwestern Governors' Conference in Milwaukee, some state leaders talked of selling Great Lakes water and even of putting a severance tax on it. No more. At Mackinac the group tried to put a protective arm around what some now describe as America's Persian Gulf.

Hoping to seal off the region from any possible water raids, the governors passed a resolution opposing any proposal to divert the region's water to other parts of the country. Noting that to export water was to export economic opportunity, they asked Congress to allow the states to control their own water resources.

While such concern over future water supplies may sound far-fetched in 1982, water experts insist there is a solid basis for the concern.

Americans use about 235 billion gallons of fresh water a day -- largely for irrigation. Only about half that amount is returned to the nation's water system. Man-made diversion from the Great Lakes have reduced the mean level of Lakes Huron and Michigan by about one foot over the last 80 years, according to Benjamin DeCook, chief of the Great Lakes Hydrology Division of the US Army Corps of Engineers office in Detroit.

Of most immediate concern to those in water-rich states now is South Dakota's recently arranged water sale. It is the first such out-of-state commercial water transaction between a state and a commercial firm.

The water will be siphoned from the Lake Oahe Reservoir near Pierre and carried 260 miles West by pipeline to Wyoming's Powder River Basin. There it will be mixed with crushed coal and pumped through a second pipeline to power plants in Arkansas, Oklahoma, and Louisiana. Under the 50 year agreement, Energy Transportation Systems Inc. (ETSI) would draw 16.3 billion gallons of Missouri River water a year and pay South Dakota a total of $1.4 billion for the privilege.

South Dakota, which has long viewed federal help for its water projects as inadequate, will use the funds for irrigation and other rural water development projects. And South Dakotans were told that if they didn't agree to the sale, ETSI would try to get water drilling permits from Wyoming to bring up groundwater from South Dakota's western Madison Formation. ETSI agreed to install 10 taps along the pipeline so that communities in arid western South Dakota could take some water along the way.

''I had tremendous misgivings about approving the project but we felt we had a gun to our heads,'' explains Tim Johnson, a lawyer from Vermillion and state representative who voted with the South Dakota Legislature last fall to approve the project. ''It may in the long run turn out to be a bad deal.''

The action has been legally challenged by a mix of Sioux Indian, environmental, and rancher groups who may yet be joined by other states downstream from South Dakota on the Missouri River. In Missouri, for instance, where 60 percent of the population lives along the river, a suit is ''still under active consideration,'' according to Bob Lindholm of the Missouri attorney general's office. But overall the legal challenges are expected to delay rather than scuttle the project.

Meanwhile, ETSI is busy acquiring rights of way to build the pipeline and clearing other legal hurdles. Already in South Dakota it has Washington's permission to build a structure to withdraw the water and a permit to take the water out.

''From the standpoint of the feds, the whole thing is clear,'' says Harry Dolphin, a spokesman for Missouri River division of the US Army Corps of Engineers.

What most concerns other states that share water resources is the fact that one state could enter such an agreement on its own, becoming in effect a water broker.

''Almost everyone concerned now agrees that the amount of the diversion won't have a major impact -- it's the precedent that's really stirring up all the controversy,'' says Carroll Hamon, executive director of the Missouri Basin States Association in Omaha.

Indeed, Exxon Corporation officials have had their eyes on the Missouri River Basin as a water transfer source for oil shale development in Colorado and Utah. And a recent federal study also looked at the basin as a possible alternate water sources to compensate High Plains states for depleted groundwater supplies in the Ogallala Aquifer.

Even if state leaders decide they want no part of such interstate water transfers, a recent US Supreme Court ruling suggests their legal right to bar such diversions may be limited. The court ruled that Nebraska could not bar a farmer, whose property crossed a state boundary, from pumping Nebraska water to irrigate his Colorado property on grounds that Colorado did not have a particular kind of reciprocal law. Such a ban, the court said, amounts to an unconstitutional limit on interstate commerce.

The decision at the very least is expected to force a number of state legislatures, which now flatly ban such water transfers, to amend their laws.

Midwestern political leaders are obviously hoping that by taking a collective position and making their views clear at this early stage, they can amass enough clout on Capitol Hill to keep Washington from ordering any water diversions from the Great Lakes.