The Panama Canal runs out of water

The Panama Canal has seen a significant decrease in the number of ships passing through this vital route due to weather events that have reduced the water level for canal operations. The economic implications of these cuts are significant for a country whose GDP depends in part on this market.

For more than a century, the Panama Canal, one of Latin America's greatest engineering feats of the 20th century, was the shortest route between the world's two largest oceans.

Almost 6% of world trade passes through it: more than 12.000 ships pass through it every year, transporting goods or passengers on more than 140 routes to more than 160 countries.

The economic consequences of the reductions in the number of ships currently transiting the Panama Canal are significant for the country. The canal is an important source of income for Panama, representing around 10% of GDP. In addition, the canal generates direct and indirect jobs for thousands of people.

Few water reserves for the Panama Canal

The Panama Canal struggles to find water to avoid being devastated by reduced rainfall due to climate change and El Niño, which threatens to dry up the route through which almost 6% of world maritime trade passes.

Reductions in canal traffic are due to declining water reserves in the canal's watershed. This decline is due to a combination of factors, including climate change, deforestation and drought.

Of the average 40 ships passing through each day (2022), 32 are currently in transit to save water, the energy source that powers ships in the lock. Each ship throws 200 million liters into the sea.

Reductions in canal traffic have had a negative impact on the Panamanian economy. The country has lost revenue, which has affected public finances. Additionally, reductions in traffic have led to worker layoffs and reduced economic activity in the country.

In this regard, the channel's administrator, Ricaurte Vásquez, said, "The biggest disadvantage of the Panama Canal as a sea route is that we use fresh water, while other sea routes [such as the Suez Canal] use sea water.".
Vázquez pointed out that due to the lack of rainfall, the canal has limited the number of ships operating, which will reduce the canal's income by about 200 million dollars by 2024. Meanwhile, the forecast for this year is estimated at 4.900 billion Dollars.

“TWe have to find solutions to continue being a relevant route for serving international trade. If we don't adapt, then we will die", indicated the administrator and added that"The lack of water, only measured in terms of tolls, already gives a price of 200 million balboas” (dollars) less in revenue in 2024.

El Niño phenomenon impacts the Panama Canal

The lack of precipitation also increases the salinity of interoceanic waterways, causing other problems.

The canal's hydrological basin, formed by lakes Gatún and Aljajuela and several rivers, also supplies water to three cities, including the capital, where half of the country's population lives.

"Every time we open the gate that faces the sea, seawater mixes with fresh water; the larger the gate [...], the greater the volume of salt water that enters the system”Vásquez indicated.

"We have to keep this level of salt water within a certain range, because the water treatment plants do not have desalination capacity."He added.

Measures to take

Despite the lack of fresh water, the possibility of using a seawater channel was ruled out, as it would require extensive excavation. “Suez is much flatter and sandier. In our case it was a rock and a small mountain range, but there was a mountain range that created the problem”Vásquez explained.

Panamanian authorities are taking steps to mitigate the effects of reductions in canal traffic. These measures include the implementation of a water saving program, the construction of new infrastructure to store water and the search for new water sources.

However, these measures will take time to have a significant impact. In the short term, reductions in canal traffic will continue to have a negative impact on the Panamanian economy.

With information of: