The Panama Canal faces a creeping threat from climate change, including droughts so intense that ships sometimes reduce their cargo so as not to run aground, and giant storms that almost overwhelm its dams and locks, canal officials say.
The canal hasn’t had a major disruption like the one suffered by the Suez Canal in late March, when a container megaship ran aground for almost a week, tying up a chunk of global shipping at a time of rising bottlenecks in the world’s supply chains.
But the Panama waterway faces more serious long-term challenges that could also disrupt global shipping. The biggest problem is diminishing rainwater needed to operate the 50-mile waterway, through which 4% of global trade passes. Four of the past seven years have been among the driest since 1950, according to estimates from the state-run Panama Canal Authority.
“Our challenge is how to solve the water problem,” said Ricaurte Vásquez, chief of the Panama Canal Authority. There is too little water during the dry months, or too much all at once as warmer weather causes bigger storms to hit the area, including nearby hurricanes.
Canal authorities are working on a $2 billion plan to build infrastructure to manage and preserve freshwater reserves—an amount equal to the canal’s annual contributions to Panama’s government coffers. On Monday, officials said they would choose from among 30 proposed solutions and put those out for bids in about two years. The projects, with a completion target of 2028, are expected to be a combination of new dams and reservoirs, using treated sewage water, or finding alternative freshwater sources like diverting flows from other rivers. Authorities have also considered pumping desalinated seawater.
Several countries, such as the U.S., have developed large reservoirs and river transfers to offset growing water shortages. Cities such as New Orleans or Italy’s Venice have developed levees and barriers to contain flooding and sea-level rise. Miami Beach is planning to invest $1 billion to raise roads, lift sea walls and install pump stations to drain stormwater.
But a comprehensive project of the magnitude planned by the Panama Canal doesn’t exist anywhere else in the world, said Daniel Muschett, who heads the canal’s environment and water division.
The canal’s role in global shipping comes as skyrocketing demand for consumer goods has sparked congestion in the world’s busiest shipping routes.
“The pandemic meant less shopping and more shipping,” said Carlos Urriola, executive president of Manzanillo International Terminal, a Panama-based logistics and port operator. “The boom in maritime trade increases the strategic value of the canal at a time when you can’t find space on ships, or empty containers for that matter.”
The Panama Canal uses a system of gates and locks that lifts ships almost 90 feet above sea level onto a navigable waterway and then lowers them at the other end.
A decline in depth of Lake Gatún, the main reservoir for the canal, means ships can’t go through fully loaded. Canal authorities face the possibility of reducing the number of ships that cross the canal during the dry season.
A disruption in the canal’s operations can hurt exporters and consumers. Chilean wines and Ecuadorean bananas are shipped to the U.S. East Coast through the canal, as is copper from Chile to Europe and liquefied natural and petroleum gas from one U.S. coast to the other.
Europe is more vulnerable to disruptions in the Suez and Panama canals than the U.S., which has railway links between its two coasts, industry executives say. Alternative sea routes—like going around Africa or South America—mean longer trips and higher fuel consumption.
Unlike Suez, a flat seawater canal whose stream flow is defined by the tide, the Panama Canal is a much more complex infrastructure that relies on freshwater and uses a system of locks as aquatic elevators, lifting ships almost 90 feet above sea level onto a navigable waterway, and then lowering them down the other end.
The Panama waterway depends on rainwater to fill reservoirs and lakes that provide trillions of gallons of fresh water to fill the locks, which empty into the sea after every use. Its daily water consumption is triple that of New York City. Every time a ship traverses the waterway, the canal uses between 200 million and 350 million gallons of water—enough to fill as many as 500 Olympic-sized swimming pools.
Fortunately for the canal, Panama is the world’s fifth-rainiest country. But the supply of fresh water is no longer steady, with very strong storms at the end of the wet season or long spells of dryness. Canal officials say they have faced more challenges during the past 12 years than the rest of the canal’s existence since 1914.