Panama Canal facing operational uncertainty due to severe drought

Panama’s authorities have limited shipping traffic in the Panama Canal due to a severe drought that depletes the water reserves of two artificial lakes — Alajuela and Gatun — supplying the vital waterway.

The two lakes have seen significantly reduced water levels, with Alajuela dropping by 7 m (22.9 feet) between March 21 and April 21.

The Panamanian Canal Authority (ACP) has restricted the passage of the largest ships for the fifth time during this drought season, impacting the canal’s revenue and raising concerns over its long-term operations.

As a crucial part of global maritime shipping, the canal sees approximately six percent of global shipping traffic, primarily from the United States, China, and Japan. The 200 million liters of fresh water required to move each ship through the canal’s locks up to 26 m (85.3 feet) above sea level come from these two lakes. In the 2022 fiscal year, over 14 000 ships carrying 518 million tons of cargo traversed the canal, contributing $2.5 billion to the Panamanian treasury.

The ongoing water crisis has already set off alarm bells, as the freshwater supplies dwindled to just 3 billion cubic meters in 2019, far below the 5.25 billion needed for the canal’s operations. This operational uncertainty may prompt shipping companies to seek alternative routes, emphasizing the need to find long-term solutions to guarantee the canal’s functioning.

Experts warn of potential water conflicts between the canal and local populations due to the disorderly urban expansion around Panama City. The Panama Canal basin supplies water to over half of the country’s 4.3 million population, and water shortages have caused supply issues in various parts of the country, sparking numerous protests.

Luz de Calzadilla, general manager at Panama’s meteorology and hydrology institute, warned that the El Nino climate phenomenon is likely to further reduce rainfall in the second half of the year.

References:

¹ Drought threatens Panama Canal shipping traffic – AFP – April 26, 2023

Featured image credit: Copernicus EU/Sentinel-2, EO Browser, The Watchers. Acquired on April 14, 2023