Forbes covers a climate-change story about global trade and supply chains (something the pandemic taught the world about), focused on that thin isthmus between the Atlantic and Pacific where a man with a plan built the Panama Canal. It’s the world’s most important shortcut for everything from diesel oil to Prius parts to Chinese-made toasters, and over the last few years, it’s gotten too low for the locks to float enough ships through:
They’re a visible reminder of how parched conditions have crippled a waterway that handles $270 billion a year in global trade. And there are no easy solutions. The Panama Canal Authority is weighing potential fixes that include an artificial lake to pump water into the canal and cloud seeding to boost rainfall, but both options would take years to implement, if they’re even feasible.
With water levels languishing at six feet (1.8 meters) below normal, the canal authority capped the number of vessels that can cross. The limits imposed late last year were the strictest since 1989, when the conduit was shut as the US invaded Panama to extract its de facto ruler, Manuel Noriega. Some shippers are paying millions of dollars to jump the growing queue, while others are taking longer, costlier routes around Africa or South America.
The constraints have since eased slightly due to a rainier-than-expected November, but at 24 ships a day, the maximum is still well below the pre-drought daily capacity of about 38. As the dry season takes hold, the bottleneck is poised to worsen again.
“As a canal, as a country, we need to take some measures because it isn’t acceptable,” Erick Córdoba, the manager of the water division at the canal authority, said in an interview. “We need to calibrate the system again.”
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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.
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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.
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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.”
In 2023 the trade winds never fully kicked in, which contributed to record water temperatures off the Pacific and Atlantic coasts of Panama. Weak winds also mean that rain clouds don’t make it all the way to Gatún. On many days, it pours in Panama City while the lake only gets a few drops.