This story is part of a series called Shockwave: Rising energy demand and the future of the Great Lakes. The Great Lakes region is in the midst of a seismic energy shakeup, from skyrocketing data centre demand and a nuclear energy boom, to expanding renewables and electrification. In 2026, the Great Lakes News Collaborative will explore how shifting supply and demand affect the region and its waters.

Summary

• Reusing waste heat could help the Great Lakes reduce climate change emissions from heating and cooling buildings.
• The region has a huge opportunity for energy innovation that could reduce costs to consumers and limit damage to land and water.
• The biggest barriers are political and organizational.

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The energy system in the Great Lakes region, as in most parts of North America, is wasteful. Stupendously wasteful.

Consider these data points. Two-thirds of the energy generated by the 2,100-megawatt Pickering Nuclear Generating Station, east of Toronto, comes in the form of heat, not electricity. The excess heat is transferred to cooling water that is dumped into Lake Ontario.

For data centres, a booming, voracious energy user, nearly all the electricity that enters a facility to power servers turns into heat. Ejecting that heat so that the servers continue to support Zoom calls and ChatGPT queries can consume gobs of energy and water.

Even underground business and household waste holds wasted energy. Sewage flows in pipes at an average temperature of roughly 15 C, a thermal energy source waiting for an enterprising soul to tap into and extract the heat.

A movement is underway to do just that — mine the region’s power plants, data centres and sewers for heat and use it to develop cleaner, cheaper energy that helps reduce or remove carbon emissions from heating and cooling. The same practices cut the expense of adding new electric generating capacity.

Such a transformation is certainly possible and has been embraced in northern Europe. But it will not be easy here. Though the physics and equipment for waste-heat recovery are tested and proven, other barriers — financial, organizational and political — are more formidable hurdles for a region and a country in which energy efficiency is less valued than energy expansion.

“It’s not a technology issue,” said Luke Gaalswyk, president and chief executive officer of Ever-Green Energy, a district energy company based in St. Paul, Minnesota, that is eyeing wastewater as a heat source. “The engineering of this is well understood. It’s an awareness issue, it’s a funding issue, it’s a priority issue. We, the United States, don’t have the same policy frameworks or funding mechanisms that Europeans do as it relates to these sorts of projects and incentivizing waste-heat recovery.”

Gaalswyk and others see tantalizing opportunities for waste heat in aiding the region’s electric transition. The benefits include cheaper energy, less exposure to fossil fuel price fluctuations, fewer carbon emissions, less land disruption to build new generating and transmission capacity, and less thermal pollution into waterways. But getting there, they say, requires foundational shifts in understanding, attitudes and public policy. 

A new energy scenario

Electricity demand in the Great Lakes is growing, in some states for the first time in decades. If the projected buildout occurs, data centres will gobble electricity while the climate-friendly push to electrify everything boosts demand for electrons. 

Thermal networks, such as district heating systems that circulate hot water or steam to multiple buildings, garner less attention. Comparable to a home radiator at scale, they have been part of the urban energy landscape for more than a century, predating the invention of the gas-powered automobile. College campuses have them, as do hospital complexes. Cities like St. Paul, Chicago, Rochester and Lansing use district heating or cooling in their downtown cores. Toronto has a district cooling system that uses water drawn from deep in Lake Ontario to cool 80 buildings.

Waste heat — or, heat that is currently regarded as waste — could be a new reservoir of energy for district heating systems.

To find one source, building owners need only look beneath their basements. Promoting sewer thermal energy is a passion project for Paul Kohl, the board chair of the Sewer Thermal Energy Network, a trade association founded in 2023 to advocate for an unsung energy source. “We thought, let’s get people talking about it,” he said.

Kohl’s primary pitch is that sewer thermal energy goes hand-in-hand with reducing greenhouse gas emissions from buildings. Say an office complex wants to stop burning fuel oil for heat and instead wants to install a heat pump. An air-source heat pump, which extracts heat from ambient air, is a common option. But it can be problematic in an era of constrained electricity supply.

“What we’re finding is there are certain entities that are really excited about electrifying their building stock but they’re running into electrical demand problems,” Kohl said. “They can’t get enough electricity from the supplier.”

Enter sewer thermal. The building owner could instead tap into the sewer line running beneath the property and circulate the wastewater through a water-based heat pump that extracts the heat. The sewage is always contained and is not a health risk for those in the building. The water-based heat pump still uses electricity, but because of water’s superior capacity to transfer heat, its electricity demand is about half that of an air-based unit. In short, the well-understood thermal dynamics of water translate into substantial energy savings.

The sewer is a heat resource that constantly renews itself — people take showers, do laundry and wash dishes every day, using hot water in the process. The heat that went into the water could be used again. So why aren’t there more such systems? Kohl cited two major obstacles. One is knee-jerk revulsion, typically from the general public. “The ‘ick’ factor,” he said. 

The second is an unwillingness from utilities to allow other organizations to access their pipe infrastructure when it is not the utility’s mandate to do so. The utilities, he said, are more concerned with regulatory compliance and ensuring the integrity of their pipes.

Asked if his organization operates like a matchmaker, uniting parties that otherwise might not have met, Kohl turned the analogy around. A matchmaker works only if there are willing participants, he said. “A lot of water and wastewater utilities are the consummate bachelors. So they’re like, ‘If I never have to do this, great.’”

What brings utilities into the market? Progressive leadership, Kohl said.

Leaders heating the way

That leadership is on display in pockets around the Great Lakes region, from both the public and private sectors. 

In St. Paul, Ever-Green Energy has drawn up plans to tap the heat in the roughly 650,000,000 litres of wastewater that flows daily out of the Metropolitan Council’s treatment plant and into the Mississippi River. The US $150 million project would use the wastewater heat to replace the natural gas that currently fuels half of the district energy system, which is the largest hot water system in the United States.

Project proponents, including the City of St. Paul and Ever-Green, applied for the U.S. Environmental Protection Agency’s climate pollution reduction grant in 2024 but they were not selected. (Ever-Green’s wastewater heat project in Duluth also was not selected for the grant.) Though Clean Heat St. Paul, as the project is known, is currently unfunded, leaders continue to advocate for it.

“It presents an enormous opportunity for our community, for our state, to build a project that would generate global recognition around what’s possible with linking up wastewater and district heating,” Gaalswyk said.

Across the border, Toronto Western Hospital, part of the city’s leading hospital system, partnered with Noventa, an energy company, to install the world’s largest raw sewage thermal system. Completed in 2025, the project provides about 90 per cent of the hospital’s heating and cooling. 

Also in Toronto, Enwave, a district energy company, operates the Deep Lake Water Cooling system that uses cold water drawn from Lake Ontario to cool 115 buildings before the water is sent to taps as drinking water. Enwave, which operates systems across eastern Canada, is now adapting that system to utilize waste heat from the cooling operations so that heating and cooling work in tandem. At the same time, the company is considering sewer heat recovery from a wastewater treatment plant in Mississauga, Ont.

“The idea is you’re trying to capture waste heat in whatever form you can find it in,” said Carson Gemmill, vice president for solutions and innovations at Enwave.

More trade associations are embracing that logic. The Boltzmann Institute, a group of engineers focused on obstacles to electrification, persuaded the Ontario Society of Professional Engineers to start a campaign in September 2025 to advocate for thermal energy systems. Since the province is considering new nuclear power plants and building small modular reactors, including four 300-megawatt units at Darlington Nuclear Generating Station, the institute would like to see their designs incorporate waste heat reuse.

“In Ontario, the heat rejected from nuclear power plants is quite a bit greater than the heat required for heating with natural gas in the whole province,” said Michael Wiggin, a Boltzmann Institute director who is also leading the Ontario Society of Professional Engineers’ thermal energy advocacy. “So there’s an enormous possibility to use the heat from these power plants to heat cities.”

Waste heat can flip conventional narratives on their head. Data centres today are maligned for their energy needs. Yet what if their waste heat was put to beneficial use? 

That’s the objective in Lansing, Michigan, where Deep Green, a London-based company, has proposed a 24-megawatt, US $120-million data centre project that would transfer its waste heat into a district heating system run by the Lansing Board of Water and Light, a water and power provider. The Lansing City Council is set to vote on the project on April 6.

“Previously, we didn’t consider heat as an asset because we didn’t need to,” Mark Lee, CEO of Deep Green, wrote in a January 2026 blog post. “There was an abundance of power, cheap energy and less awareness of environmental impact. That’s changing: electricity prices are high, grids are congested and there’s pressure to meet net-zero and [environmental, social and governance] targets.”

Barriers to entry

Even with these first steps, energy experts agree that North America, as a whole, is playing catch-up. Scandinavian countries have been reusing waste heat for decades. Stockholm has a 3,000-kilometre district energy pipe network that serves 800,000 residents and more than 90 per cent of the city’s buildings. More than 30 data centres feed waste heat into the system. In Oslo, sewer thermal provided nearly 7 per cent of the energy for the city’s district heating system in 2025. As a whole, the system provides 30 per cent of Oslo’s heating and hot water demand. China, a more recent entrant in the market, has developed world-champion projects in Qingdao and elsewhere.

Committed cities and governments can reach scale quickly. “The Chinese had nothing hardly in the early ’90s, now they’ve got perhaps the most district heating installed capacity in the world,” Wiggin said.

Rapid growth in waste-heat recovery will not happen in the Great Lakes region on its own. Without policy signals, electric companies, data centre operators and water utilities don’t have the incentives to innovate and co-operate, Kohl said. And for waste heat, collaboration is the key to success.

What are those policy signals? Gaalswyk focused on carrots: tax breaks for companies that install heat recovery systems and a quicker permitting process for those that incorporate efficiency measures.

Wiggin, by contrast, outlined the sticks. A tax on waste heat. State or provincial efficiency standards.

Kohl mentioned both measures. Massachusetts, he noted, set aside state funds for waste-heat recovery feasibility studies. New York, meanwhile, passed a law in 2022 to develop a regulatory framework for thermal energy networks. The law requires the largest investor-owned utilities to submit pilot projects for development.

Those in the district energy industry see waste heat as a massive opportunity, one that begins in the early stages of project development, whether it’s a data centre or a nuclear power station. Incorporating waste-heat recovery into a project’s initial design is easier than retrofitting the facility in the future.

“Our thesis is data centre projects that are bringing additional layers of community benefit to communities will find more success in building trust and gaining the necessary social licence to operate,” Gaalswyk said. “A really important aspect of that is heat recovery, free heat. Again, it’s not a technology issue. We have the heat pumps, we have the industry that can design heat offtake. It’s a matter of figuring out how to get a diverse stakeholder group to work together to realize these benefits in tandem.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

This story is part of a series called Shockwave: Rising energy demand and the future of the Great Lakes. The Great Lakes region is in the midst of a seismic energy shakeup, from skyrocketing data centre demand and a nuclear energy boom, to expanding renewables and electrification. In 2026, the Great Lakes News Collaborative will explore how shifting supply and demand affect the region and its waters.

A six-decade history in the Great Lakes region of ecosystem and water protection is being put to the test as a dynamic era of energy investment, rising electricity demand, aging assets and political intervention dawns across the basin.

The energy story emerging today is one of tumultuous change in energy supply and demand coupled with conflicting state and federal objectives that are colliding with a buzzy economic narrative centred around artificial intelligence (AI) and data centres. Electricity consumption in the basin’s eight states and two provinces is climbing for the first time in at least a decade. 

Forecasts show electricity demand in the region growing two to three per cent annually over the next 10 years. The Trump administration, meanwhile, is injecting carbon-promoting policies into energy markets, requiring coal power plants in Michigan and Indiana to continue operating beyond their announced closure dates while also slowing solar and wind projects, two energy sources that emit no climate-altering carbon and use little to no water. 

Along with coal, another water-intensive energy source is being revived or reimagined to satisfy projected electricity demands. With nearly US$3 billion in federal and state financing, the 55-year-old Palisades Nuclear Generating Station is preparing to restart after a four-year shutdown. When it does, the old reactor will draw 370,000 litres a minute, 530 million litres a day, from Lake Michigan.  

In addition to these legacy energy sources, new gas-fired power plants, battery storage, transmission lines and a planned new nuclear plant north of Benton Harbor, in Michigan, are being added to keep pace with demand. Agriculture, the region’s biggest water consumer and water polluter, is playing a larger role in energy production — by converting corn into biofuel and producing methane from manure in industrial-scale biodigesters.

Liquid fuels also remain in the spotlight due to the lingering question of Line 5, an oil pipeline that crosses the Straits of Mackinac. The future of the 73-year-old pipeline is the subject of several lawsuits, with key legal and permitting decisions expected in 2026.

This is the first article in our Shockwave project, a series of reports that will investigate the rapid evolution of the energy landscape in the Great Lakes region and the consequences the new era will have for one of the world’s largest reserves of fresh water. Produced by the five partners of the Great Lakes News Collaborative — Bridge Michigan, Circle of Blue, Great Lakes Now, Michigan Public and The Narwhal — Shockwave will document the depth and breadth of the region’s energy transformation and its influence on water use and pollution.

“As electricity demand is soaring, in part due to data centres, we’re seeing changes in water use, we’re seeing changes in electricity consumption,” said Mike Shriberg, director of the University of Michigan Water Center. “And how our region responds to that over the long term will have a massive impact for the Great Lakes and for our energy future.”

Altogether, these changes amount to an inflection point in the region’s energy policy, one with as many questions as answers. Will data centre demand and the White House’s lifeline to fossil fuel units jeopardize state clean energy targets? Will the numerous binational, regional and state-level consultative bodies enable collaboration that reduces harm to waterways? Can local officials, researchers and lawmakers assemble the data to inform their responses? Will a decade-long decline in the energy sector’s water use continue or stall? Will the projected data centre demand for electricity materialize or will the energy buildout result in stranded assets?

What is certain is that the energy playing field today is set up for a different game than just a few years ago. These are still early days, but the region, its US$9.3-trillion economy, its border-crossing energy infrastructure and its world-class environmental riches stand at the threshold of a profound shift in some of its basic economic inputs and assumptions.

Top-down orders

The changes begin at the top. 

For political, ideological and grid reliability reasons, the Trump administration is adamant on propping up fossil fuels and shepherding a nuclear power revival. It is doing so through executive orders and agency action. 

The Department of Energy issued a series of emergency orders to prevent the coal-fired J.H. Campbell Power Plant, in West Olive, Michigan, on the shore of Lake Michigan, from shutting down last year. It issued a separate order in December to prevent the closures of the R.M. Schahfer Generating Station and F.B. Culley Generating Station in Indiana. 

In addition, the administration extended the deadline for closing coal waste dumps in Illinois, Indiana and Ohio, though none is directly within the basin. Though the administration asserts it is “clean,” coal is the dirtiest and among the thirstiest sources of electricity. 

The Department of Energy excluded small modular reactors, or SMRs, and other “advanced” nuclear generation technologies from National Environmental Policy Act review. SMR developers promote the new reactors as more mobile and less risky than the older generation of big reactors. SMRs are under development or have been proposed in Ontario, Illinois, Ohio, Michigan and Wisconsin.

Canada, too, has announced national energy strategies that appear certain to affect Great Lakes waters. Rebuffed and taunted by tariffs imposed by President Trump, Prime Minister Mark Carney told an audience at the World Economic Forum in Davos last month, “We are an energy superpower.” Carney outlined his plan for $1 trillion in fast-tracked Canadian investments in energy, AI and critical minerals. He also promoted a national infrastructure campaign for oil pipelines, electricity transmission lines and mines.

Big political announcements are reinforced by facts on the ground. The numbers tell a story of rapid growth in electricity demand that has analysts reaching back decades for a historical equivalent. Some compare it to the push for rural electrification in the United States after the Second World War. Already rising, electricity demand in the Great Lakes region could soar ever higher if high-tech corporate interest in data centres manifests as real-world construction. This comes as the North American Electric Reliability Corporation, a regulatory agency, warns that the Great Lakes region faces high risk of electricity shortfalls in the next five years due to rising demand and power plant retirements.

This represents a head-spinning, era-defining reversal in electrical demand. In Wisconsin, electricity sales had been on a downward slope since the 2007 recession began. By one estimate, data centre electricity demand in the state will increase seven-fold by 2030, amounting to more than four per cent of its electricity consumption. Data centre load in northern Illinois has climbed 27 per cent annually between 2022 and 2025, according to ComEd, the region’s electric utility. 

DTE Energy, the largest Michigan electric utility, announced a deal last fall to provide power to the 1,383-megawatt Green Chile Ventures data centre in Washtenaw County. The Michigan Public Service Commission conditionally approved the state’s first “hyperscale” development in December. 

Consumers, the second largest electric provider in Michigan, has 9,000 megawatts of projects in its development pipeline, mostly for data centre and manufacturing.

Meta, the parent company of Facebook, announced a 20-year deal with Vistra last month to buy 2,100 megawatts from three nuclear plants while also expanding the generating capacity at those facilities. The agreement covers Perry and Davis-Besse, both located along Lake Erie in Ohio, as well as Beaver Valley, in Pennsylvania along the Ohio River. Meta also signed an agreement with California-based Oklo Inc. to build a 1,200-megawatt SMR plant in Ohio.

The rise in electricity demand could pose a challenge to state renewable energy goals. Illinois has a target of 100 per cent clean energy by 2050. For Michigan’s electric utilities, the deadline is sooner: 100 per cent clean energy by 2040.

That shift to renewables and the closure of water-intensive coal plants has been a net benefit for Great Lakes water so far. Water is drawn from lakes and rivers to cool the equipment at thermoelectric power stations, a category that includes fossil fuels and nuclear. Water withdrawals in the basin for thermoelectric power are down 24 per cent compared to a decade ago, according to a University of Michigan report prepared for the Conference of Great Lakes St. Lawrence Governors and Premiers. That decline is true for power plants that use once-through cooling as well as for those that have recirculating systems that reduce withdrawals but increase consumption.

There are “substantial water savings as the region transitions away from traditional fossil fuels,” the report found. Besides water demand, the shift away from thermoelectric plants means fewer fish sucked into cooling-water pipes or trapped against their screens. It means less thermal pollution of nearshore waters and rivers. It means less mercury deposited into waterways from coal plant air emissions.

The downward trend could shift upwards this year when the Palisades nuclear plant is scheduled to open, and may tilt higher as another shuttered nuclear plant in Wisconsin could reopen and new SMR plants come online. For data centres, the largest piece of their water use is not in direct operations. It is through the electricity they consume.

Years ago, the Great Lakes Commission, which represents the eight basin states and two Canadian provinces, was thinking about the same questions of water supply. In 2011, the commission published the findings from a multi-year project to identify water quality and quantity vulnerabilities in the U.S. portion of the Great Lakes basin due to thermoelectric power generation. 

The analysis, led by Sandia National Laboratories, considered multiple power generation projections and assessed three energy-related risk factors for the region’s water resources: water quality, thermal pollution of waterways and low stream flows. It was the first model to consider water resources in future electricity scenarios for the region. A fifth of the basin’s 102 subwatersheds scored a high risk in at least two categories.

The commission published the analysis, but largely moved on. No follow-up review was completed to determine the project’s effectiveness in shaping policy, said Erika Jensen, the commission’s executive director.

Today with data centres commanding so much attention, the water-energy connection resurfaced. That focus is partly due to growing public pushback against data centre growth. Lawmakers in Indiana, Michigan and Minnesota have introduced legislation to mandate more transparency from data centre operators on their water and energy use.

At its meeting last October, the Great Lakes Commission signaled its reengagement when the commissioners — largely high-ranking state officials and lawmakers — signed two new resolutions related to energy and water. One resolution encourages water reuse for industry, where appropriate. The other, on the water-energy nexus, asserts the “importance of coordinating and integrating water, energy and sustainable resource management” in the face of data centre development and related industries that are poised to increase energy demand and water use.

The resolutions reaffirmed that energy and water are back on the table at the highest levels, Jensen said. “We’re just getting restarted right now.”

Looking back, looking forward

Electricity is only part of the region’s evolving energy story. Aging legacy assets are also a part of the mix. 

The most noteworthy of these older assets is Line 5, the 1,000-kilometre oil pipeline that runs from Superior, Wisconsin, to Sarnia, Ont. Enbridge, the Canadian company that owns the pipeline, wants to drill a tunnel to house the structure so that it does not sit exposed on the lakebed. Michigan officials are seeking to shut down the line. Lawsuits are proceeding in both state and federal courts, with a U.S. Supreme Court hearing later this month to determine the appropriate venue. 

The outcome will be a bellwether for energy policy, Shriberg said. “It’s really symbolic and may be determinant of which direction this region and this country is headed on energy and water issues.”

Reliable water and cheap energy are foundational economic pieces. Historically, these resource inputs were the great engines of the Great Lakes economy. Water-intensive industries — tanneries, breweries, pulp mills, manufacturers and the like — were drawn to a region where they could extract water and pump out profits. Nuclear and coal-fired power plants were installed on the shores of Michigan, Ontario, Huron, Superior and Erie, the source of water to cool their electricity-generating equipment.

Today a different set of businesses has entered the market. The entire sweep of large water users catalyzed by the new energy economy — semiconductors, battery manufacturers — need to be part of the water-use equation, said Alaina Harkness, CEO of Current, a Chicago-based organization focused on water innovation.

“If we had better policy and planning frameworks, this could be a great place to do that relative to some of the water-scarce regions in the rest of the country,” Harkness said. “But again, we’ve got to shift our frameworks, got to look much more at water reuse and these water-energy connections.”

There is indeed opportunity in the new energy landscape, said Liesl Clark, director of climate action engagement at the University of Michigan and the former head of the state environment agency. Not just for a foothold in the 21st century economy, but also for continuing on a low-carbon path and strengthening the policies that ensure the region’s water is not abused in the process.

“How do we make sure we’re doing it in the most protective way possible in the state?” Clark asked.

As the new energy era takes shape, that is a prevailing question not just for Michigan but for the region as a whole.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

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This story is part of a Great Lakes News Collaborative series called Cash Flows: Industry, Ecology and the Future of the Great Lakes Blue Economy. The series examines the wealth derived from the waters of the Great Lakes and the ways in which that economy is threatened. This story was originally published by Circle of Blue

Livelihoods and economies in the Great Lakes region always centred on water. From the manoomin, or wild rice, grown and revered by the Ojibwe people to the whitefish catch in Lake Michigan, to the water-dependent ports, steel mills and manufacturers that dot thousands of miles of Fresh Coast lakeshore. The area’s liquid assets and the industries that developed around them form a “blue economy.”

The treasure trove of clean fresh water is seen as a competitive edge in a region hungry for growth and whose leaders boast about exporting the scientific breakthroughs and infrastructure hardware to solve the world’s water challenges. 

The moment is ripe for a new approach to appraising a regional asset as the warming climate desiccates the U.S. Southwest and deep fries the Deep South. Great Lakes officials are promoting their ecologically stable and water-rich region as a sensible place to do business in the 21st century and beyond. 

This is the first in a series of articles and broadcasts that investigate the blue economy in the Great Lakes region. Produced by the five partners of the Great Lakes News Collaborative — Bridge Michigan, Circle of Blue, Great Lakes Now, Michigan Public and The Narwhal — the articles pose a question central to the region’s future: how can states, provinces and Indigenous nations steward their water to provide jobs and attract businesses without inflicting the severe ecological damage that was a ruinous hallmark of earlier periods of development?

“The supply of fresh water is essential to our quality of life and creates a competitive advantage for our region,” said Howard Learner, executive director of the Chicago-based Environmental Law and Policy Center. “Midwesterners understand the importance of the Great Lakes. It’s where we live, where we work and where we play. The key is cleaning it up.”

Following decades of environmental degradation that produced burning rivers, fish kills and a large concentration of highly contaminated Superfund sites, the U.S. and Canadian governments passed legislation and signed landmark pacts in the latter half of the 20th century to protect the lakes against pollution and exploitation from interests outside the basin that were eyeing one of the world’s largest sources of surface fresh water. The transformation promised by those agreements is not complete — agricultural runoff remains a pervasive pollutant and non-native species jeopardize local fisheries — but handsome shoreline real estate developments even in the rustiest of cities like Muskegon, Mich., (four active Superfund sites) show the investments in ecological remediation are paying dividends.

The goal for the Great Lakes today, amid a suddenly frosty relationship between Washington and Ottawa, is to maintain stringent environmental safeguards while using that water within the basin, luring innovative companies and new residents with the vow that reliable, clean water will fuel not only a multitrillion-dollar regional economy but also enable recreation, tourism and public enjoyment.  

Promoted in regional councils and city halls, the blue economy is many things to many people. Our project found noteworthy successes and gathering headwinds: 

• Government funding to clean up polluted lakeshore sites — in Thunder Bay, Ont., and elsewhere — has rejuvenated formerly industrialized waterfronts and generated tourism dollars to boost local economies.
• Research collectives that unite industry and academia and provide startups with a path to market are positioning the region as a Silicon Valley for water technology and know-how.
• Agriculture, the largest water consumer, is confronting changes in herbicide use that would deliver public health benefits but increase the cost of operations. 
• An economic lynch-pin for the Great Lakes is the completion of a US$3-billion lock expansion, allowing ships to carry iron from Lake Superior to steel mills throughout the region.
• Taxpayer-funded cleanups have made formerly polluted industrial waterfronts ripe for redevelopment with condos and private marinas. But the influx of wealthy newcomers has raised concerns that blue collar residents could be priced out.
• A proposed US$3-billion data centre in Benton Harbor, Michigan, reflects growing investment in the Great Lakes basin, raising both economic hopes and environmental concerns.

The project tracks today’s geopolitical pulse. For the U.S. government, economic arguments are ascendant when it comes to environmental matters. In the Trump administration, the Environmental Protection Agency, which was founded five decades ago to clean up and prevent pollution, has placed its idea of economic growth on equal or higher standing than ecosystem renewal. Lee Zeldin, soon after his confirmation as the agency’s administrator, announced his Powering the Great American Comeback initiative, a move to support energy developers, AI companies and the U.S. auto industry, all of which have a foothold in the Great Lakes region or expect to.

Across the border, Canadian leaders are starting to view water as a strategic economic asset. The Liberal Party, which took the most seats in Parliament in the April 28 federal election, pledged $100 million for a water security technology fund to invest in water research and development.

“This is a real watershed moment for Canadian water innovation,” said Soula Chronopoulos, president of AquaAction, an organization that assists water tech startups and lobbied for the fund. AquaAction was founded in Montreal and is opening an office in Detroit. “In a new era of geopolitical tension, we need to put water security first,” Chronopoulos added. “The U.S. has already done this. Canada must follow suit.”

Defining the Blue Economy

In some ways, it is silly to speak of a blue economy. Water creates economies, noted Dean Amhaus, founding president and chief executive of The Water Council, a Milwaukee-based water tech hub. Without water, there is no economic activity. No jobs. No life. Even arid Phoenix could be considered to have a blue economy, he said.

But when Great Lakes leaders use the phrase, they generally have two meanings in mind. The first is broader: water as an economic input. Manufacturers need it. Real estate developers crave a view of it. Farmers can’t grow corn or soybeans or blueberries without it. Toronto, located on Lake Ontario, uses it to cool more than 100 buildings in its downtown core.

The second meaning is more focused: water as an industrial cluster. The model here is Silicon Valley, where the assembly of technical expertise, research funding and equipment suppliers birthed a world-changing computing industry. A similar conglomeration of water innovation exists in the Great Lakes with century-old water infrastructure stalwarts Kohler, Badger Meter, A.O. Smith and Sloan, joined by younger entrants like RHST, a Canadian firm intent on conserving water in agriculture, and CLEANR, the Cleveland-based company that produces a microplastics filter for washing machines.

To facilitate those opportunities, the region boasts an abundance of councils and initiatives to marry environmental protection with economic possibility.

The Great Lakes Commission, in 2021, published an Action Plan for Growing the Great Lakes Blue Economy. The plan, developed in consultation with regional organizations and universities, listed eight priority areas — among them education, infrastructure, environmental protection, workforce development and investment — as foundations of the blue economy. The commission declined an interview request to discuss the plan’s implementation.

The Great Lakes and St. Lawrence Cities Initiative, a cross-border partnership of municipal officials, is thinking along the same lines. It is working with 80 other organizations, from industries to nonprofits, to release a plan this fall for a blue economic corridor. Part of that planning exercise means ensuring that supporting infrastructure — energy grids, ports, water supply lines — are in place and communities are prepared. “We want to bring new types of industry to our region that are going to protect our waters and bring prosperity,” said Jon Altenberg, the initiative’s president and CEO.

Current, a Chicago-based outfit, was awarded a National Science Foundation grant in 2024 worth up to US$160 million over 10 years. The organization is working with universities in six states, as well as with the private sector, venture capital and Argonne National Laboratory, to develop “waste-to-wealth” technologies that purify water while also extracting useful minerals and chemicals from industrial and municipal wastewater.

The list of players goes on: Cleveland Water Alliance, Freshwater Collaborative of Wisconsin, Council of the Great Lakes Region. This burst of activity has not gone unnoticed. “Because there’s a regional knitting together of all of these [initiatives] I think it really adds to the potential and the dynamism of the blue economy across the Great Lakes,” said Sam Rikkers, deputy secretary and chief operating officer at the Wisconsin Economic Development Corporation, a state body dedicated to promoting economic growth.

Wisconsin Economic Development Corporation collaborates with The Water Council on trade missions globally to attract international water-related businesses to the region. One notable catch, Rikkers said, is the German company Wilo. The water pump manufacturer located its North American headquarters in Cedarburg, Wis., and struck a partnership with the Milwaukee Bucks basketball team. The company’s logo adorns the team’s warmup jackets.

More than water

Businesses that need a reliable water supply might look at the blue expanse of Lake Michigan and Lake Huron and salivate. Businesses that produce water-supply hardware will be energized by the cluster of suppliers and expertise. But the blue economy, in its full flourishing, relies on much more than water. Research universities, political leadership, drivable roads that connect ports to markets and a reliable energy grid all contribute.

All of that is being challenged in numerous and novel ways, from local and state levels to the federal government. When looking at the region’s blue economic potential, these supporting functions also need to be considered.

When asked how his organization pitches water-using businesses to relocate to Wisconsin, water was not Rikkers’ first response. He mentioned instead the strength of the state’s university system. “That’s number one,” he said. “If businesses don’t have the tremendously talented people that we think we offer, then that’s tough.”

Yet the Trump administration and Republican allies are hacking away at the foundations of federally funded research by using research grants as political leverage. The administration froze US$790 million in research grants for Northwestern University earlier this year.

On top of the perils to the U.S. research system, the Trump administration has imposed or threatened daunting barriers to global trade. For a region that wants to export the hardware to solve the world’s water problems, Trump’s punishing tariffs are raising the blood pressure of company executives. Rikkers said uncertainty around tariffs — What will they be today? Tomorrow? A month from now? — is damaging for business. “It’s not helpful,” Rikkers said.

Laws and policies could also use a refresh. Some think the landmark Great Lakes Compact, signed in 2008 to prevent water from being siphoned out of the basin, requires strengthening to close loopholes. Same with the Great Lakes Water Quality Agreement, which ordered a 40 per cent cut in phosphorus flows into Lake Erie. That has not happened, and harmful algal blooms spoil the lake and smaller inland waterways every summer. “We need political will, and the courts to require action,” said Learner, of the Environmental Law and Policy Center.  

In the 19th and 20th centuries, the capitalist blue economy exacted a high cost on the region’s environment. Agricultural and urban expansion drained wetlands. Tanneries, chemical plants, breweries and mills set up shop along rivers and lakes, using the soil and water as dumping grounds. Tires bobbed in lakes, rivers caught fire. The Love Canal scandal revealed the brazen evasion of environmental responsibility. No wonder that Earth Day was born in the region, an outgrowth of Wisconsin’s political leadership and the protest movements that defined the 1960s, or that the appalling decay of the Cleveland waterfront helped birth the U.S. Environmental Protection Agency.

The challenges posed by a changing climate today are no less worrisome. Bigger rainstorms that dump several inches in a few hours have overwhelmed the region’s creaky flood-protection infrastructure. The lakes themselves have witnessed sharp swings from record highs five years ago to water levels today that are below the long-term average. Winter ice cover last year was also the lowest on record. The region may be more temperate than Arizona, but a blissful climate haven it is not.

Amid these political and environmental headwinds, policies to protect the resource will continue to be paramount, Altenberg said. Municipal codes, state mandates and binational restrictions on water exploitation are constraints from which innovation springs.

Water “is going to become so restricted and so expensive that the companies that are going to be able to be ready to win in the next 30 years are going to be the ones that are thinking that way anyways, right?” Altenberg said. “So we need to incentivize that now for them to prepare.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.