The Obed River watershed drains a 520-square-mile area of the Cumberland Plateau physiographic region in the Tennessee River basin. The watershed is underlain by conglomerate, sandstone, and shale of Pennsylvanian age, which overlie Mississippian-age limestone. The larger creeks and rivers of the Obed River system have eroded gorges through the conglomerate and sandstone into the deeper shale. The largest gorges are up to 400 feet deep and are protected by the Wild and Scenic Rivers Act as part of the Obed Wild and Scenic River, which is managed by the National Park Service.
The growing communities of Crossville and Crab Orchard, Tennessee, are located upstream of the gorge areas of the Obed River watershed. The cities used about 5.8 million gallons of water per day for drinking water in 2010 from Lake Holiday and Stone Lake in the Obed River watershed and Meadow Park Lake in the Caney Fork River watershed. The city of Crossville operates a wastewater treatment plant that releases an annual average of about 2.2 million gallons per day of treated effluent to the Obed River, representing as much as 10 to 40 percent of the monthly average streamflow of the Obed River near Lancing about 35 miles downstream, during summer and fall. During the past 50 years (1960–2010), several dozen tributary impoundments and more than 2,000 small farm ponds have been constructed in the Obed River watershed. Synoptic streamflow measurements indicate a tendency towards dampened high flows and slightly increased low flows as the percentage of basin area controlled by impoundments increases.
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