Economy News Technology United States

How U.S. Water Infrastructure Works

The sprawling U.S. water system is central to the nation’s economy, but chronic underinvestment, increasing demand, and the consequences of climate change have revealed the system’s weaknesses.  


  • U.S. drinking water is among the safest and most reliable in the world, but high-profile infrastructure failures have revealed that many Americans still lack access to clean and affordable water.
  • Aging infrastructure, growing demand, and severe droughts threaten to destabilize industries that rely on water, including agriculture and power generation.
  • The Joe Biden administration has made the largest federal investment in U.S. water infrastructure in decades, but critics contend that more money is needed to fix the beleaguered system.


The U.S. water system is a sprawling, complex series of networks with the mission of providing safe, reliable, and cheap drinking water to hundreds of millions of people. The nation’s water system is also tasked with managing wastewater and contributing to hydropower, agricultural irrigation, flood control, and industries such as oil, gas, and mining.

This network is under stress from growing populations, aging infrastructure, extreme weather patterns, and regulatory failures. While authorities struggle with public-health hazards, water utilities face budget squeezes, rising consumer costs, and unmet investment needs. Western states wrangle over water rights as drought and overuse deplete their rivers, reservoirs, and aquifers. Meanwhile, debate continues over the proper role of the federal government in regulating, as well as funding, the nation’s water infrastructure—with access to water for drinking, as well as growing food and myriad other forms of commerce, at stake.

What Role Does Water Play in the U.S. Economy?

Water access is central to every aspect of the U.S. economy. Power generation requires massive amounts of water for cooling purposes, as do the technology and manufacturing sectors; however, much of this water is returned to its source. Agriculture, especially crops and livestock, rely on large quantities of water, as do extractive industries such as mining, refining, and fracking. A 2020 study by water utilities, engineers, and advocacy groups estimated [PDF] that making all the needed investments in U.S. water infrastructure would add $4.5 trillion and eight hundred thousand jobs to the U.S. economy by 2039.

U.S. per capita water consumption is among the highest in the world, amounting to more than twice that of other industrialized nations such as Germany, Japan, and the United Kingdom.

According to U.S. Geological Survey calculations [PDF] for 2015, the most recent year for which it compiled data, power generation was the biggest drain on U.S. water bodies, accounting for 41 percent of withdrawals, although nearly all that water was recycled and thus not “consumed.” The next largest use, irrigation, made up around 37 percent of withdrawals, but it consumed—through evaporation or other loss—nearly seventeen times as much water as power generation. Public consumption made up 12 percent, while mining and industry composed another 6 percent.

States whose economies are particularly tied to agriculture depend even more heavily on reliable water supplies. California, the country’s largest food producer, uses about three-quarters of its freshwater for agricultural purposes. Severe drought cost the state [PDF] nearly twenty thousand jobs and over $3 billion in economic losses between 2020 and 2022, the driest three-year period in California history.

How Does the U.S. Water System Work?

In the United States, water provision depends on an extensive but decentralized collection of independent systems. There are more than 148,000 of these across the country, with roughly 50,000 considered “community water systems,” defined as permanent structures that operate year-round. Just 9 percent of these community water systems provide water to nearly 80 percent of the country, with the remainder servicing communities of under 10,000 people. 

Treatment of wastewater, whether used water from homes and businesses or runoff from streets and farms, could significantly increase the U.S. water supply and aid in efforts to protect the environment There are approximately sixteen thousand such treatment plants around the United States, but experts say more investment in wastewater infrastructure is needed.

Taken together, the United States depends on more than two million miles of pipes to move the thirty-nine billion gallons of water used for public consumption every day. Surface waters provide roughly 60 percent of the public water supply, with the remaining 40 percent coming from groundwater aquifers.

What Condition is it in?

U.S. drinking water is among the safest and most reliable in the world, providing clean and inexpensive water on demand to hundreds of millions of people. Yet, many experts say that challenges to both safety and affordability have been increasing as the nation’s infrastructure ages.

Government agencies and independent experts agree that most of the United States’ water infrastructure, built more than fifty years ago, is reaching the end of its lifespan and requires massive new investment. The Environmental Protection Agency (EPA) estimates [PDF] that the country will need to spend more than $744 billion over the next decade on water infrastructure, including pipes, treatment plants, and wastewater management facilities. However, private industry groups including the American Water Works Association say the costs could top $1 trillion [PDF]. The American Society of Civil Engineers (ASCE) gives U.S. dams, which are the centerpieces of water management in many western states, a “D” grade; In 2022, the Association of State Dam Safety Officials (ASDSO) estimated that rehabilitating [PDF] non-federal dams alone would cost upwards of $75 billion. ASDSO has identified over fifteen thousand dams that pose a “high hazard” of failure.

The 2015 lead contamination crisis in Flint, Michigan, raised alarm over the nearly ten million lead pipes estimated to remain in service around the country. Nearly a decade later, thousands of children across the Midwest still suffer from lead poisoning each year. Lead exposure, which is particularly dangerous for children, can lead to brain damage and developmental problems. Other chemicals, such as arsenic, raise the risk of cancer, while bacteria can transmit disease. Recent toxic spills, including a train derailment in East Palestine, Ohio, in February 2023, have put added pressure on regulators to prevent chemicals and other toxins from entering the water system.

How is Supply Regulated?

Water legislation in the United States divides regulatory responsibility between the federal government and the states. The 1972 Clean Water Act (CWA) and the 1974 Safe Drinking Water Act (SDWA) are the two major federal laws governing the nation’s water quality. Under both laws, the federal government, through the EPA, sets pollution limits and regulations for all discharges into drinking water supplies, including surface waters and wastewater treatment output, while states are responsible for day-to-day implementation and enforcement. 

In recent years, these laws have been criticized for being out of date. Legislation such as the CWA and SDWA “were made considering 1960s technologies and 1960s considerations,” says Upmanu Lall, director of the Columbia Water Center.

In addition to the EPA, the involvement of a handful of other federal agencies illustrates the overlapping jurisdictions of the system. The Interior Department’s Bureau of Reclamation built and currently operates numerous large-scale water projects across western states, including the Hoover and Glen Canyon Dams on the Colorado River. The U.S. Army Corps of Engineers, which falls under the purview of the Defense Department, also carries out large-scale engineering projects, but with a focus on navigation and flood control. Experts say this fragmentation of responsibility has made it harder to determine the country’s water needs.

Efforts to expand the EPA’s regulatory reach have proven controversial, dividing those who oppose greater federal powers and those who accuse the EPA of lax enforcement. In 1991, the EPA issued the Lead and Copper Rule, which requires utilities to test water samples from “high risk” buildings and take measures to reduce lead exposure. (Authorities in Flint ignored many of these requirements, leading some, including the state’s former governor, to face criminal charges.)

Many environmental groups and consumer activists say that regulators are stretched too thin to carry out proper oversight, and that testing procedures for lead and other contaminants are not sufficient. Many schools in New Jersey, New York, and elsewhere, for instance, had passed lead inspection tests for years, but more stringent testing carried out post-Flint revealed dangerously high lead levels.

Some experts point out that toxic chemicals are still prevalent throughout U.S. water infrastructure. A report by the nonprofit Environmental Working Group found that more than one hundred million Americans could be drinking tap water contaminated with dangerous chemicals. Meanwhile, the EPA has punished a small percentage of lead and copper rule violators, and its drinking water enforcement office has lost 10 percent of its budget and 17 percent of its staff since 2011. While nationwide lead poisoning has fallen since lead was removed from gasoline starting in the 1970s, a 2021 study by health-care company Quest Diagnostics found that over half of U.S. children had detectable levels of lead in their bloodstreams.

What is the Clean Water Rule and Why is it Controversial?

In December 2022, the Joe Biden administration reestablished a Barack Obama–era EPA regulation known as the Waters of the United States (WOTUS) Rule, or the Clean Water Rule. President Donald Trump, backed by Congressional conservatives, farmers, and other industry groups opposed to greater federal oversight of the nation’s waters, had sought to rescind the rule during his time in office; those efforts were overturned by a federal judge in 2021.

The rule clarifies which bodies of water come under the regulatory jurisdiction of the Clean Water Act (CWA). That law gives the federal government authority over the “navigable waters” of the United States, a term that was not clearly defined and led to uncertainty over whether wetlands, streams, ponds, and other small bodies were included. In 2001 and 2006, the Supreme Court rejected EPA attempts to define the CWA in a manner that would have brought almost every surface water source and wetland in the country under its jurisdiction. In 2015, the Obama administration finalized a new rule that effectively expanded EPA authority and imposed permitting restrictions on construction, farming, and other commercial activities that were previously exempt.

The Biden administration restored many of the 2015 rule’s provisions. The updated regulation has drawn scrutiny from the Republican-controlled House of Representatives, which voted to overturn the rule in March 2023. Biden has said he will veto the reversal if it passes the Senate. Meanwhile, the Supreme Court is considering a case that could overhaul the rule entirely.

What Else has Biden Done?

In November 2021, Biden signed the bipartisan Infrastructure Investment and Jobs Act (IIJA), a $1 trillion infrastructure spending bill that earmarked over $60 billion for water infrastructure (including $40 billion in drinking water appropriations and $20 billion in wastewater appropriations). Most of those appropriations will go toward protecting environmental resources and upgrading and repairing aging systems; at least $15 billion will be used to replace lead pipes in existing water infrastructure. The legislation marks the largest-ever direct investment in U.S. water. In March 2023, the Biden administration introduced new restrictions on the amount of toxic chemicals in U.S. drinking water, with IIJA funding helping utilities cover the cost of implementation.

Yet, critics argue that the funding authorized by the IIJA still falls short of what is necessary to fix U.S. water infrastructure. Among other shortcomings, they argue, the legislation does not include significant investments in new technologies that could improve water quality or encourage a shift toward more efficient forms of water storage. “It’s quite a lot of spending on bandaids is what it comes down to,” says Lall.

The ASCE found that spending to repair water infrastructure fell $81 billion short in 2019, and that the need could grow to $136 billion by 2039. And according to a study by nonprofit DigDeep [PDF], disparities in access to clean water cost the U.S. economy $8.58 billion per year in lost output.

Critics also say the Biden administration should do more to reverse a Trump-era revision to the Lead and Copper Rule that decreased the number of lead service pipes that must be replaced annually. “The EPA simply cannot allow the last administration’s Lead and Copper Rule to go into effect and must overhaul that rule immediately,” writes Erik Olson, director of health programs at the Natural Resources Defense Council (NRDC). 

Some analysts blame deteriorating water infrastructure on declining tax revenue caused by decreasing populations in some cities. That trend has forced some municipalities to raise prices, leading to a crisis of water affordability for tens of thousands of low-income residents in Baltimore, Detroit, Philadelphia, and elsewhere. Recent analyses have found that the average U.S. water bill increased by over 43 percent from 2012 to 2021, outpacing inflation over that time and rising faster than the cost of other utilities such as electricity or gas.

What are the Main Water Scarcity Flash Points?

Many U.S. states, particularly in the hot, dry Southwest and plains regions, regularly grapple with water scarcity and often prolonged drought conditions.

Colorado River Basin. The Colorado River has become a major source of concern. Seven states—Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming—share its water, which is collected in a series of reservoirs by massive dams and then distributed according to an agreement that is nearly a century old. More than two-thirds of people in southwestern states—nearly forty million people—rely on the river for drinking water. Over 80 percent of the river’s water goes to agriculture, supplying 15 percent of the irrigation for U.S. farmland.

A map of the Colorado River Basin, which covers seven states and supplies water to large metro areas including Denver and Los Angeles

Climate change and drought. Authorities say that climate change and population growth are making the Southwest’s water consumption rates unsustainable. In February 2023, Lake Powell, the Colorado River’s second-largest reservoir by volume, fell to its lowest level since its 1963 creation. The drop led some experts to call for draining Lake Powell into nearby Lake Mead, the Colorado River’s largest reservoir. Severe droughts, including a 2000–2021 dry period that some specialists estimate to be the most severe in over one thousand years, have upped the pressure. Some cities, such as Los Angeles, have cut per capita water consumption through conservation, wastewater recycling, fines for overuse, and cash incentives for reducing usage. Meanwhile, states including California, Nevada, and Texas are increasingly desalinating groundwater for use in farming.

Waste and inefficiency. Critics contend that Americans in desert areas use far more water than people in places with similar climates, such as Israel or Australia, and that billions of gallons of U.S. water are wasted due to poor infrastructure and federal incentives for farmers to grow water-intensive crops such as rice and cotton in desert climates.

Groundwater depletion.The Ogallala Aquifer is a 174,000-square-mile underground freshwater source that spans eight states in the Great Plains region, providing water for one-fifth of all cattle, corn, cotton, and wheat in the country. Scientists estimate that 30 percent of the aquifer had been drained by 2010 and that its most agriculturally productive regions could be depleted within 80 years. These experts warn that without conservation efforts, more efficient technologies, and better crop rotation, the region could face economic disaster.

Analysts warn that these issues echo a growing global problem of water scarcity that could fuel conflict and trigger increased migration. In June 2022, Biden announced his intention to incorporate water security into foreign policy decision making.

What is the Role of Congress?

In addition to passing the legislation that gives the EPA its authority to regulate the nation’s waters, Congress controls the purse strings for a swath of water-related projects. A primary role is to authorize financing for water projects through what are known as the State Revolving Funds. Since its creation in 1987, the Clean Water State Revolving Fund has provided states with over $163 billion in low-interest loans. A separate fund focused specifically on drinking water systems, established in 1996, has received over $20 billion from Congress, with an additional $11 billion expected over the next five years as part of the IIJA. However, experts say these funds are less accessible to rural and lower-income communities that cannot afford to apply for the funds and are located farther from water utilities.

Some in Congress have proposed various mechanisms for increasing federal contributions to the water system. The Water Infrastructure Finance and Innovation Act (WIFIA) [PDF], passed in 2014, established a new federal loan program for drinking water treatment, and wastewater, water recycling, and drought mitigation projects. In 2021, a bipartisan group of senators proposed a $35 billion water infrastructure bill; many of its provisions, including increased funding to federal water-funding programs, were incorporated into the IIJA. Other proposals include creating a national infrastructure bank, which has garnered a small amount of bipartisan support.

Source : Council on Foreign Relation