Under normal circumstances, the Panama Canal handles about 3% of global maritime trade volumes and 46% of containers moving from Northeast Asia to the US East Coast. The channel is Panama’s biggest source of revenue, bringing in $4.3 billion in 2022.
To allow for 24 vessels a day through the dry season, the canal will release water from Lake Alajuela, a secondary reservoir. If the rains begin to pick up in May, the canal might be able to start increasing traffic, according to Córdoba.
But those are short-term fixes. In the long term, the primary solution to chronic water shortages will be to dam up the Indio River and then drill a tunnel through a mountain to pipe fresh water 8 kilometers (5 miles) into Lake Gatún, the canal’s main reservoir.
The project, along with additional conservation measures, will cost about $2 billion, Córdoba estimates. He says it will take at least six years to dam up and fill the site. The US Army Corps of Engineers is conducting a feasibility study.
The Indio River reservoir would increase vessel traffic by 11 to 15 a day, enough to keep Panama’s top moneymaker working at capacity while guaranteeing fresh water for Panama City, where developers have erected a mini-Miami of gleaming skyscrapers over the past two decades. The country will need to dam even more rivers to guarantee water through the end of the century.
Moving the proposal forward won’t be easy. It will need congressional approval, and the thousands of farmers and ranchers whose lands would be flooded for the reservoir are already organizing to oppose it.
It’s not the first time Panamanians are banding together to push back against a major infrastructure initiative. Last year, protesters regularly blocked roads after the government rushed to keep First Quantum Minerals Ltd.’s $10 billion copper mine operating. Authorities have since said that they will shut the mine, a project many view as an ecological disaster.
Elizabeth Delgado, 38, lives in the last house along the road to the Indio River. It’s one of the first that will get flooded if the reservoir is built. During major storms, the Indio rises enough to get within a few meters of her unpainted wooden home, where her family lives off of the rice, plantains and cassava she grows. She has no intention of moving.
“How are we supposed to survive someplace else where we won’t know what to do?” Delgado said. “They’ve told us that we’re going to have to leave, but we’re going to stick with our land.”
Another potential fix is decidedly more experimental. In November, a small plane operated by North Dakota- based Weather Modification Inc. arrived in Panama to test cloud seeding, the process of implanting large salt particles into clouds to boost the condensation that creates rain. But cloud seeding has mostly been deployed successfully in dry climates, not in tropical countries like Panama.
Some shippers have expressed frustration that the canal authority isn’t moving faster to address low water levels.
“No significant infrastructure projects have gone ahead in Panama to increase the fresh water supply,” Jeremy Nixon, chief executive officer of Japanese container transportation company Ocean Network Express Holdings Ltd., or ONE, wrote in a letter to Panamanian President Laurentino Cortizo Cohen that was seen by Bloomberg. “We sincerely hope that as ONE, and on behalf of our customers, that some urgent action can now be taken.”
Panama’s presidential palace didn’t respond to a request for comment on
the letter.
A combination of climate change and infrastructure expansion are to blame for the canal’s woes. The canal authority completed a new set of locks in 2016 to increase traffic and keep pace with the growing size of cargo ships. What it didn’t do was build a new reservoir to pump in enough fresh water.
Then the drought hit. As of November, last year was the driest year on record at Barro Colorado Island in Lake Gatún, according to Steve Paton, the director of the physical monitoring program at the Smithsonian Tropical Research Institute. Global warming is intensifying the weather phenomenon known as El Niño, which has brought dry conditions to Panama and is expected to last at least through March in the Northern Hemisphere. Lake Gatún drains faster during severe dry seasons, and rising temperatures accelerate evaporation.
Last year was “totally different from the others,” said Gabriel Alemán, the head of the Panama Canal Pilots’ Association. He’s steered ships through the canal for more than 30 years. “We haven’t reached the peak of the impact.”
THE REPORT | MAR 2024 | ISSUE 107 | 93
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