Peter Annin is the author of "The Great Lakes Water Wars" and director of the Mary Griggs Burke Center for Freshwater Innovation at Northland College in Ashland, Wis.

CRAIN'S: Why does Chicago have such an advantage when it comes to Great Lakes water?

PETER ANNIN: Because of the Great Lakes Compact, all other Great Lakes states are restricted and cannot send water outside the watershed for diversions other than to a community that is on or near the watershed line. But Illinois has this Supreme Court case from 1967 that allows the state to send its water anywhere in the state that is practical. The vast majority of the people in Chicago and certainly in the state of Illinois don't realize what a special privilege they have.

Why does it matter?

Right now there are more than 200 collar communities and water utilities in the Chicago metropolitan area that are operating on or have been given permission to tap into Lake Michigan water. Under the compact, the vast majority of them wouldn't even have the right to request that water, or if they did have the right, they would have to get the approval of all eight Great Lakes governors. Joliet wouldn't even be able to request a Great Lakes water diversion under the compact. And that's a larger community which will presumably be requesting a much larger amount of water than has ever been considered so far under the 10-year-old Great Lakes Compact. That's what drives people nuts in St. Paul and Lansing (Mich.) and Albany and even Ottawa.

In those places, they have to apply for a diversion under the compact?

And not only that, but once they divert the water, they have to build a pipeline to send it back. They have to return the water, which makes the diversion twice as expensive. Joliet can just divert the water and discharge it into the Mississippi River watershed, like Chicago does.

What's the impact on the Great Lakes?

The Chicago diversion, or the 2.1 billion gallons a day that goes to the Gulf of Mexico through urban Chicago today, lowered water levels on Lakes Michigan and Huron by 2½ inches. That may not sound like much, but in 2013, just six short years ago, we broke the all-time-low water level. In low water periods, inches really, really matter. And they matter not just for the environment, but they matter for commerce. You take the 1,000-foot ore freighters that transport iron ore and taconite from the iron mines of northern Minnesota and the Upper Peninsula of Michigan to the steel mills in Gary, Ind., and northern Ohio. During those low water periods, those freighters have to shave a corresponding amount of cargo from their holds so that they can get through the shallow connecting channels in the Great Lakes system.

That is why the Chicago diversion is what we don't want to have happen anymore in the Great Lakes region. Because if it were replicated a half a dozen times, then we wouldn't be talking about inches—we'd be talking about feet.

These lakes are very fragile, and we need to keep that in mind with all of our water-quantity and water-quality decisions. Yes, there's a lot of water in the Great Lakes Basin—6 quadrillion gallons is what I'm told. But only 1 percent of that water is renewed annually through rainfall, snowfall and groundwater recharge. So think of the lakes as a gift from the glaciers 10,000 years ago, a water bank account deposited in the heart of the North American continent.

Does all of the Great Lakes region appreciate how lucky it is?

In the corridor between Milwaukee and Chicago, there is a history of depleted and naturally contaminated groundwater supply, and the gap is very narrow between the shoreline of the Great Lakes and the basin line. But it's a huge area for development, as you know. Amazon is in there, Uline is in there. Of course, Foxconn is in that corridor as well. It's anticipated that there's going to be an increasing amount of development in that area.

That's the area where water tension in the Great Lakes region is highest, and that's really the one spot in the region where there's a growing appreciation for water. I don't think it's going to stop development there, but I think the development is going to have to be smarter—the investments are going to have to be smarter and more forward-looking. And the communities are already thinking in that way, more and more.

What's the status of the compact at this point?

I think the compact is holding up well. There are always going to be people who aren't happy with these compact decisions about diversions. But the point is that the process worked. They sent a signal that they're going to be tough. That's particularly true for communities that lie outside the Great Lakes watershed but also inside a county that straddles the Great Lakes basin line.

Waukesha—a Milwaukee suburb in a county that straddles the basin line—requested Lake Michigan water and was really run through the ringer in many ways. Water bills in Waukesha are expected to triple or more because of the costs of this new water diversion. On the other side, they feel like they've really got a secure water supply for decades to come, which is huge for economic development and society at large.

If I'm in Iowa and my groundwater runs out, could I get Great Lakes water?

If you're in Iowa, you can't even request Great Lakes water. The best chance you've got is diverting from the Mississippi River.

What about arid states like New Mexico. Any possibility?

Not under the Great Lakes Compact. That's all off-limits. The key ideas behind the Great Lakes Compact are: 1) bring the jobs to the water rather than send the water to the jobs, 2) allow people inside the Great Lakes watershed to use as much water as they want, sustainably, and 3) the vast majority of the resource is set aside for the environment.