Is North Carolina at risk of ‘water bankruptcy’?

North Carolina’s drought is pushing water levels lower and putting a sharper focus on whether the state’s water supply can keep pace with growth and a changing climate.

At Falls Lake, Raleigh’s primary source, levels are hovering just 2% above the threshold that could trigger restrictions. 

“It is incredibly unusual for Falls Lake to be two and a half feet down in the middle of April,” Raleigh Water Assistant Director Ed Buchan said.

Reservoirs typically refill through the winter and spring. This year’s dry stretch has disrupted that pattern, leaving systems with less cushion heading into warmer months.

But drought is just one piece of a larger strain on the state’s water supplies.

A system under pressure

A recent United Nations report warns that many water systems worldwide are moving beyond short-term shortages and into a more persistent imbalance. Researchers describe it as “water bankruptcy,” when long-term use and damage outpace what natural systems can replenish.

In those cases, recovery to past conditions is no longer realistic.

The report points to a combination of factors, including population growth, overuse, pollution and climate change. Drought plays a role, but increasingly as part of a broader pattern driven by human activity.

Some of the same global pressures are beginning to surface in North Carolina.

Growth, transfers and demand

Across the state, communities are growing and looking for new water sources.

In Fuquay-Varina, officials are seeking to withdraw millions of gallons per day from the Cape Fear River Basin to support future demand, while returning treated water to a different basin. The proposal has drawn opposition from downstream communities concerned about long-term impacts.

Moving water between river basins can reduce the supply where it is taken from, especially during dry periods.

“The more we transfer water out of river basins, the greater that’s going to impact rural communities,” Western Piedmont Council of Governments Executive Director Anthony Starr said.

Those decisions are becoming more common as utilities try to keep pace with growth, but they also raise questions about how much water can be moved — and from where — before systems begin to feel the strain.

Local decisions, limited visibility

At the local level, officials say they are often weighing those questions without a complete picture of long-term impacts.

In Chatham County, commissioners recently approved a moratorium on data centers, driven in part by concerns about water use.

“I think that is probably the single greatest concern, and that is that probably what was weighed by the minds of our commissioners in deciding to pass the moratorium more than anything else,” Chatham Commissioner Karen Howard said. “We know that our climate future is at risk. We are in the process of creating a climate plan and the use of water is a significant concern for us.” 

Howard said the pace of development can outstrip the ability to fully study its effects.

That uncertainty extends to smaller systems across the state.

“These rural systems don’t have the resources to do engineering studies so they don’t fully understand the impact before approving these projects,” said Heather Somers, director of the North Carolina Rural Water Association.

“If we don’t get some reins in place to reel that in and have some oversight on what these industrial users are going to pull from our resources, we’re going to be in trouble for sure,” Somers said.

Climate and compounding drought

Climate change is expected to make those challenges more complex.

Higher temperatures increase evaporation, while rainfall is becoming less predictable. That can mean longer dry periods followed by more intense storms, which do not always replenish water supplies in the same way.

Even when conditions improve, recovery may be incomplete.

“It takes a long time to get into a drought, and a long time to get out,” Buchan said.

Some water managers are increasingly looking at drought not as a single event, but as part of a longer cycle. Systems may not fully recover between dry periods, leaving less margin for the next one.

A changing balance

North Carolina’s water system has long depended on balance. Much of the water withdrawn by utilities is treated and returned to rivers, where it becomes part of the supply again.

But that balance can shift as demand changes.

Some large industrial users, including certain types of data centers, rely on cooling systems that remove water from the local system through evaporation.

“That’s water not going back to the Neuse River,” Buchan said. “It’s just gone.”

At the same time, long-term planning is built on projections that can be difficult to predict.

Regional utilities are working together through the Triangle Water Supply Partnership to map out demand decades into the future, but new types of growth and changing climate conditions add uncertainty to those forecasts.

“You’re really making a lot of assumptions,” Buchan said.

For now, utilities say North Carolina has the capacity to manage through the current drought.

But the combination of growth, shifting demand, climate variability and decisions about how water is shared across regions is raising a broader question.

Not just how to respond to this drought — but whether the system, as it exists today, can sustain what is coming next.