The water crisis in the West is more than a headline for Arizona farmer Nancy Caywood. As a holder of junior water rights in the Pinal Valley, Caywood and her neighbors for three years in a row had lost access to Colorado River water for their crops of alfalfa, cotton and corn, jeopardizing their family income, their land and the economic future of the community around them. In the late summer of 2025, it was about to happen again.

“They’re going to shut off our canals any day now,” Caywood, 72, said from her home in Casa Grande. “And we’re not going to have any water. The whole farm is fallow. We have almost 250 acres just sitting out there.”

Farmers beyond the Pinal Valley, in other states such as California, may soon find themselves in Caywood’s shoes, along with residents who enjoy keeping their lawns green and taking luxurious baths.

The Colorado River provides water for cities from Denver to Los Angeles, 30 Native American tribes and farming communities from the Rocky Mountains to northern Mexico. A two-decades-long megadrought in the West means a so-called zero day is fast approaching: when the two largest reservoirs in the country, Lake Mead and Lake Powell, become dead pools behind hydroelectric dams, and there’s nothing left but a bathtub ring: The reservoirs are less than one-third full. Overused and once-plentiful groundwater supplies are in no better shape, with water wells coming up empty and the ground sinking as much as a foot a year in California because of overpumping.

The Midwestern United States has a reputation as a climate haven, where temperatures are moderate, natural catastrophes are rare and water is plentiful—21% of the world’s fresh water sits in the Great Lakes. Yet water problems and controversies hit there too. Residents of a growing suburb of Chicago have had to contemplate what it would be like to turn on the tap and have nothing come out. The deep aquifer serving Joliet, Illinois, and neighboring communities south of Chicago is projected to run dry by 2030. 

In the last few years, residents in some of the most populated places in the country, covering at least 80 million people, have had to take notice of something that almost every American has taken for granted during their lifetime: turning on the tap. In the process, they are becoming acquainted with the strange and complex legal framework that governs and underpins access to fresh water for Americans—not to mention some Mexicans and Canadians.

“It’s a checkerboard of different water regimes across the U.S.,” says Michigan environmental attorney Jim Olson, who founded a nonprofit to protect the Great Lakes. “The nitty-gritty is: Who is going to own and control water in the 21st century?”

Politicians have become fond of saying “water is the new oil.” Maybe it is, at least in its propensity to become increasingly dear, cost more and provoke disputes. Whether Americans are able to alleviate the catastrophic depletion of life-sustaining surface water and groundwater—exacerbated by what scientists have concluded is a global warming-driven drought—will depend on the outcomes of negotiations, litigation, legislation and other forms of conflict resolution that vary greatly by jurisdiction.

As a result, lawyers who specialize in water law are busier than ever.

In 2021, a strenuous but productive farm life under the perpetual Arizona sun began to unravel at the fifth-generation Caywood Farms. Nancy’s father died; several months later, her mother died. In the midst of her mourning, the U.S. Bureau of Reclamation lowered the boom: no irrigation water for the farm. The Colorado River no longer had enough for everyone, starting with junior rights holders. The local reservoir also had gone dry.

“It was the worst year of my life,” Caywood says. “It was just a major loss. We’re 96 years in the business at that farm—it’s just crushing. The first time I drove by an empty canal, it was devastating.”

Caywood and her neighbors are contemplating whether to continue farming at all. These existential questions have emerged from the way that water rights were claimed in the frontier West. In the East, water rights evolved differently.

The contrasting geographies, climate and patterns of settlement shaped the two primary water law doctrines and set the stage for the contentious provision of water from plentiful freshwater sources such as the Colorado River and the Great Lakes.

Water law in the West was built on top of English and Spanish legal concepts and was intended to stabilize access and control of this scarce resource when the Gold Rush and the resulting economic boom began in this arid region in 1848. To separate dense gold deposits from lighter soil, water was needed, and it needed to be brought in from somewhere else.

Court rulings, like the landmark California Supreme Court case of Irwin v. Phillips in 1855, allowed miner Matthew Irwin to divert all the water in a stream because he was there first. The ruling established the “prior appropriation” doctrine. The first parties to have diverted water and put it to beneficial use are granted senior rights, and they have legal claim ahead of junior rights holders.

If there’s not enough to go around, senior rights holders can “call” the river ahead of junior rights holders, which is why Caywood Farms has lost access to Colorado River water for four years in a row. Pinal Valley farmers lost over half of their Colorado River allocation after the first ever shortage was declared in 2021, and the rest was cut off in the years that followed.

Western states follow this “prior appropriation” legal doctrine. In the East, where the Rocky Mountains give way to the Great Plains, water rights are tied to owning land directly adjacent to a lake or stream. These are called “riparian” rights, which derive from English common law and the public trust doctrine in Roman civil law. Riparian landowners do not own any actual water but have the right to reasonable use that does not interfere with other riparians’ use of the water. State-based permitting today helps to head off reckless use and disputes.

Given the potential for fights over a life-giving substance, policymakers in both the East and the West have demonstrated impressive multistate cooperation at certain moments over the last century.

The major sources of water in each region, the Colorado River and the Great Lakes, are governed primarily by interstate compacts formed under the Constitution’s compact clause. Treaties, federal and state laws, court decisions and decrees, contracts and federal actions complete and often complicate the tapestry that comprises the “Law of the River” in the West, and riparian water law in the East.

The Colorado River Compact of 1922 is the elder of the two interstate agreements. It divvied up 15 million acre-feet of water evenly between four upper basin states, Colorado, New Mexico, Utah and Wyoming; and three lower basin states, Arizona, California and Nevada. (An acre-foot of water is enough to cover one acre in water 1 foot deep, which amounts to approximately 326,000 gallons.)

To get everyone on board, the agreement promised way more water than was typically available, and today it can’t meet those numbers in the lower basin. In 2023 and 2024, Arizona, California and Nevada got less than the 7.5 million acre-feet allocated to them: 5.8 million and 6.1 million, respectively. Even with those reductions, so much water is now withdrawn from the mighty Colorado River—which in its full force eroded and created the Grand Canyon—that it peters out a few miles short of its former outlet into the Gulf of California. 

“The Colorado River is burdened by the appropriation doctrine,” Olson says. “Those are all [valid] claims until there’s no more water.”

These cutbacks have serious consequences not only for residents in these states but throughout the country.

For example, the river’s single-largest water user is the Imperial Valley along California’s southern border with Mexico, which produces 65 different crops—such as lettuce, broccoli, cauliflower and cabbage—and is where 90% of the nation’s winter leafy greens are grown. As part of an agreement with California—the biggest river water-consuming state—to reduce its water usage, some valley farmers are leaving fields barren in exchange for cash payments. Fewer crops means less to eat and higher prices.

As the water has dried up, the spirit of cooperation that produced the compact has been in short supply. The lower basin states contend that compact language requires delivery of 7.5 million acre-feet (averaged over 10 years), and that Colorado and other upper basin states have to join in the cutbacks. In reply, those states argue that they are not obligated to deliver a specific amount and aren’t even using all of their own allocation. The states are now back at the negotiating table in various undisclosed locations with a looming federal deadline hanging over their heads, trying to figure out who will take the additional cuts of the type that have already hit Caywood Farms. In a reflection of the stalled state of negotiations, at an annual conference in December 2024, the delegates did not bother to meet even though they were all staying in the same hotel, a break from past years.

As a popular phrase out West goes, “Whiskey is for drinking, water is for fighting.” If the states cannot agree, the decision will be booted to federal appointees under President Donald Trump.

“I’ll just go out on a limb,” says Dan Tarlock, a professor at Chicago-Kent College of Law. “The whole compact needs to be renegotiated. It’s a hundred years old, it was based on faulty hydrology.”

He adds: “There will be a new compact when pigs fly; it’s time for pigs to fly.”

In contrast, its sister compact in the East, a relative teenager, has performed much better, according to Tarlock, Olson and others. The Great Lakes-St. Lawrence River Basin Water Resources Compact has preserved the six quadrillion gallons of water in the lakes for the surrounding states and rebuffed outside usurpers. After several proposals in the 1980s and ’90s by various outsiders to avail themselves of the Great Lakes’ natural bounty—including one dubious scheme to ship drinking water overseas—the states and two Canadian provinces were motivated to put in place a strong legal regime to protect their water. The compact was finalized in 2008.

“It demonstrates that parties can get together to address water needs,” Olson says. 

The goal of the Great Lakes Compact is that not one drop of water will leave the 94,000-square-mile basin that holds 84% of the fresh surface water in North America. Some water might evaporate, some might be consumed, but everything else, including the toilet flush, has to go back into one of the five lakes—Erie, Huron, Michigan, Ontario and Superior—with few exceptions. There is only one gaping loophole in the compact, and it is held by the state of Illinois. It enjoys a special privilege, won by impunity, that has rankled its neighbors for more than a century.

Illinois secured that loophole through one of the boldest and most audacious public works projects in the country’s history, one designed to stop making its residents sick. Chicago was one of the fastest-growing cities in the world in the late 1800s, reaching half a million people by 1880, and there was no such thing as wastewater treatment in the United States. Moreover, the human waste and industrial discharges of slaughterhouses, glue factories and tanneries went out the slow-moving Chicago river, and into Lake Michigan, the city’s drinking water source. Rolling epidemics of cholera, typhoid fever and dysentery were the result. A cholera outbreak in 1854 killed 6% of the city’s population, according to Donald L. Miller’s City of the Century, creating panic and fear.

In response to a series of epidemics that made Chicago one of the most dangerous places to live in America, the city and state took a number of steps to clean up their acts, eventually resulting in the creation of one of the first regional authorities in the country, the Sanitary District of Chicago. The district decided to build a massive and deep canal to draw more water from the lake, reverse the polluted river, and send it down the Mississippi. Chicago’s downstream neighbors were less than pleased.

The new canal was scheduled to open on Jan. 20, 1900. But with St. Louis threatening legal action, sanitary board members gathered unannounced in the cold early-morning hours of Jan. 2 to shovel, blast, burn and finally dredge away an earthen and wooden dam to let the lake water flow into the new Chicago Sanitary and Ship Canal. They beat St. Louis to the punch.

With the new channel only beginning to fill up with water, on Jan. 17, Missouri sought an injunction from the U.S.
Supreme Court alleging that Chicago’s effluent poisoned its water supply and threatened the health of its residents with elevated typhoid fever deaths. In a decision that created the first jurisdictional standard for the high court to hear an interstate environmental dispute, it agreed in Missouri v. Illinois & Sanitary District of Chicago that the state had standing to sue under the constitution’s Article III.

Five more years of sewage traveled the 350 miles to St. Louis before the substantive matters of the case were finally heard by the court. In the Missouri II decision in 1906, Justice Oliver Wendell Holmes found that Missouri could not prove Chicago was making its residents sick.

It was a victory for the greatest earth-moving and quarrying project in the history of cities at that time.

The completed Sanitary and Ship Canal was named one of the Seven Wonders of American Engineering by the American Society of Civil Engineers in 1955. One less-impressed author, writing in 1898, said the river reversal “stands as a stupendous piece of blasphemy against nature.” Other Great Lakes states were inclined to agree. 

Led by Wisconsin, states sued Illinois to stop it from diverting an estimated 8,500 cubic feet of water per second from the Great Lakes basin, saying it had lowered the lakes by 6 inches and wreaked havoc in their harbors.

The U.S. Supreme Court in a 1929 decision ultimately allowed the diversion to continue but capped its size, finally in a 1967 decree settling on 3,200 cubic feet of water per second, or 2.1 billion gallons per day.

Today, Chicago distributes 700 million gallons of water per day to 120 municipal customers, enough water to fill an Olympic swimming pool every 82 seconds. The decision ultimately forced Chicago to rely less on dilution and begin improving its sewage treatment. The diversion itself was codified in the Great Lakes Compact, but the court retains jurisdiction over the details.

The French-Canadian fur trapper and explorer, Louis Jolliet, is at least partly to blame for the millions of gallons of water that flow out of Lake Michigan and the Great Lakes basin each day.

Traveling in a birchbark canoe with Father Jacques
Marquette in 1673, the two paddled from the Arkansas River back to Lake Michigan and used a shortcut suggested by Native Americans to go straight into the lake via the “Chicago Portage.”

It led Jolliet to suggest that building a canal at this spot would be rather advantageous to traders, connecting the St. Lawrence River—a gateway to Canada and Europe—and the Gulf of Mexico through the interior of the United States. With Chicago at the center of that connection on the southern shore of Lake Michigan, the city turned Jolliet’s musings into reality with the construction of the Illinois and Michigan canal and then the sanitary canal. Chicago subsequently became the hub of a transportation and trade network that evolved into the metropolis and commercial center that it is today.

Jolliet’s canal dream also led directly to the Illinois diversion loophole that his namesake city (spelled Joliet) would one day seek to take advantage of.

For Joliet, this loophole is a lifeline. The state has ordered its fourth-largest city, which has become the country’s largest inland port in an era of online shopping and shipping, to stop drawing from a disappearing aquifer—contaminated with radium the city has to remove—by 2030. But Joliet is outside the Great Lakes basin, the boundary where rain falls, drains into and replenishes the five lakes. In any other Great Lakes state, sending millions of gallons of water each day outside the basin would be prohibited. But by using the Illinois diversion loophole, Joliet formed a public water utility with five neighboring communities to construct pipelines and pay Chicago to obtain fresh water from the lake.   

“The pressure to divert is going to increase,” says Dave Strifling, a professor at Marquette University Law School’s Water Law and Policy Initiative, citing Joliet and the needs of the high-tech industry. “It’s one more straw in the lake.”

In the late 1800s, Joliet politicians had complained about the smell from Chicago’s sewage discharges floating past its riverfront. But elected officials from both cities were all smiles and bouquets in June as members of the Grand Prairie Water Commission shared a toast of Lake Michigan water with Chicago Mayor Brandon Johnson to kick off construction of the 62-mile pipeline. The commission will fork over $30 million a year to the Chicago water department once the $1.45 billion construction project is completed. The new utility will draw more than 50 million gallons a day, the largest post-compact diversion of water ever outside the Great Lakes basin, a fact that has drawn concern from environmental groups and activists who want to see more money and effort put into the types of innovative conservation and water reuse that is being implemented elsewhere.

“It does raise some eyebrows around the basin,” says the Chicago Department of Water Management’s David Kohn, who manages the relationships with the city’s municipal customers. “We as a state have a very unique and privileged position.”

To act in “good faith” and dissuade other Great Lakes states from suing Illinois again over its diversion of Lake Michigan water, Kohn says that Chicago takes conservation seriously. The city has made “dramatic improvements” in reducing water usage over the last 20 years, and that trend is expected to continue. New customers like Joliet have to reduce water loss—currently at over 30%—to 10% before it can tap the spigot.

The good news is that Chicago is not the only big city that has successfully reduced water use. Motivated by severe water shortages, other big cities such as Los Angeles and Phoenix as well as the state of Nevada have achieved some surprising reductions while continuing to add residents. Consumers have installed low-flush toilets. Cities have replaced leaking water pipes, implemented watering restrictions and increased metered water fees to incentivize reductions. Per-person use in Southern California is down 45% since 1990.

Farming uses an estimated 80% of Colorado River water, and the rest supplies 40 million residents. For their part, some farmers have helped to conserve water by lining canals and using drip irrigation.

For Caywood Farms in Arizona, which relies on unlined canals, it may all be too little too late. There’s just not enough water in the Colorado River to go around, even if the federal government and seven compact states can somehow agree on how to divvy up what’s left, or if reuse and conservation slowly frees up more water over time.

This year, Nancy Caywood and her family have only been able to plant 40 acres of alfalfa and a small plot of cotton for farm tours, a side project that brings in a few dollars from tourists. 

Some farmers have thrown in the towel and sold their land to housing developers or solar farms. But Caywood, her son and grandchildren aren’t ready to let go. 

“This is deeply embedded in our blood,” she says.

Zack Nauth is a freelance journalist who reports on natural resources and business for the ABA Journal and Chicago Public Media (WBEZ and the Chicago Sun-Times). He is an avid outdoorsman and amateur naturalist, and he lives with his wife in Oak Park, Illinois.