Water levels in the Panama Canal have been sitting low since May
2023, which has caused shipping delays and record-setting transit
fees. But is this protracted dry spell just bad luck or a sign of
things to come?
More than 500 hundred million tons of cargo.1 Over
14,000 transits. Roughly 4.7% of all goods transported by sea
worldwide.2 For more than a century, the Panama Canal
has served as an essential conduit in global transportation routes.
And following the completion of the Third Set of Locks Project in
2016, the canal is now able to accommodate larger ships with double
the cargo capacity of its original maximum.3 Despite
that expansion, for most of 2023 vessels seeking to enter the canal
have been confronted by lengthy queues, extended wait times and
extra fees imposed by the Panama Canal Authority. In August, when
the traffic jam was at its worst, 154 commercial vessels were
waiting for weeks to cross the isthmus.4
The root cause of these difficulties is too little water. The
Suez Canal in Egypt is built at sea level, and ocean water flows
through it freely, but in Panama, the canal is elevated and sealed
by locks at both the Pacific and Atlantic entries. Its operations
depend on freshwater from the Chagres River in central Panama,
which is dammed twice to produce the Gatún and Alajuela
reservoirs. Every time a ship crosses the canal, more than 50
million gallons of water are diverted into the locks and then,
after the vessel has been lifted, flushed into the ocean. In most
years, there is enough runoff to operate the canal and provide
water for hydroelectric power and human consumption. But in 2023,
Lake Gatún did not recover from its usual early year
drawdown5 and instead has remained low for the past
several months (Figure 1).
Figure 1. Water level in Panama’s Lake Gatún for 2023
compared with previous years.
Data source: Panama Canal Authority. Last updated: October 29,
2023
In response to the freshwater shortage, the Panama Canal
Authority has reduced the number of daily crossings by 10%, knocked
back the number of advance reservations and required ships to carry
less cargo.6
Shipping companies have also proved willing to pay record
amounts to skip the line. Avance Gas Holding Ltd. paid US $2.4
million (on top of the standard transit fee of US $400,000) to
secure faster transit for a liquefied petroleum gas
carrier.7 But why has Panama — wet, tropical
Panama — been so dry for so long in 2023? Is this recent
episode simply due to a string of bad luck or is it a harbinger of
future water problems spawned by climate change?
Not the intensity but rather the duration
Panama is a water-rich country because, for most of the year, it
sits under the Intertropical Convergence Zone (ITCZ), where the
trade winds collide and create an unbroken girdle of rainstorms
that circles the equator.8 When the ITCZ migrates
southward, Panama does experience a brief three-month dry season.
The rest of the time, rainfall is consistently high and often
intense. The two provinces that border the canal (Panama and Panama
Oueste) usually get more than 2 meters of rain each
year.9
Coming into 2023, the canal enjoyed quite a good position for
its overall water storage. As recently as July and August 2022,
Lake Gatún had actually never been higher for that time of
year. But once the calendar flipped, the lake fell lower and lower
through the first half 2023 and finally bottomed out in early June.
The lake has been even lower in the recent past; at no point did it
come close to threatening the record minimum of 78.3 feet, which
happened on May 19, 2016. But what makes this current drawdown
stand out is its duration. As of November 2, 2023, Lake
Gatún has remained low for nearly five months (Figure 1).
That’s never happened before in the history of the canal.
Unseasonably dry weather in Panama is often blamed on El
Niño. But the 2023 Panamanian drought started several months
before the current El Niño began. And although El
Niño events are usually associated with drier conditions on
the western coast of Central America, the tropical Pacific is not
the only factor that influences the region’s
climate.10 So we should be careful not to attribute
events like the current drought to a single, clear-cut cause.
Rainfall trends are hazy, but a hotter future is certain
Over the past few decades, Panama, like most of Central America,
has gotten warmer. This trend is mainly due to increasing nighttime
temperatures. Compared with the early 1970s, the region now
experiences fewer cool nights.10 For rainfall, the
geographic pattern of change is less consistent. Nicaragua,
Honduras and (southern) Costa Rica have gotten drier while
Guatemala has become wetter. But in Panama, rainfall does not show
a clear increasing or decreasing trend; however, we also should not
place too much faith in that conclusion. The most up-to-date
regional assessment of climate trends across Central America draws
upon very few weather stations from Panama. And none of those
stations are located inside the canal’s watershed.
For the immediate future, the situation in the canal may get
worse before it gets better. If the developing El Niño does
have its usual effect, Panama would be confronted by an extended
dry season and hotter-than-average temperatures into 2024.
According to the Smithsonian Tropical Research Institute, that
combination could lead to record or near-record low water levels at
Lake Gatún by March or April 2024.
If we look farther ahead, there’s more cause for concern.
Dr. Hugo Hidalgo at the University of Costa Rica is one of the top
climate scientists in Central America. He has argued that, although
climate models struggle to reproduce regional precipitation
patterns correctly, those tools all show that the region faces a
hotter future.10 A warmer atmosphere would mean greater
evaporation and more water lost from the Gatún and Alajuela
reservoirs. Because global warming may also push the ITCZ
southward, away from Panama,11 in the years to come it
may be even more difficult for the canal to secure an adequate and
reliable water supply.
The canal is and will remain ‘climate dependent’
In his 1963 speech inaugurating the Greers Ferry Dam in
Arkansas, U.S. President John F. Kennedy said, “A rising tide
lifts all boats,” arguing that economic development in one
state benefited the entire country.12 Because the canal
is a critical bottleneck in the global network of maritime trade,
when rainfall is abundant, carriers, producers, consumers and
Panama itself reap the benefits. Instead, the current drought has
presented the canal with its most significant challenge since its
opening in 1914.
In October 2023, administrator Ricaurte Vásquez Morales
commented that, when the new locks for the expanded canal opened in
2016, it would have been unthinkable to even consider working at
the water levels experienced in 2023.13 Only seven years
later, the Panama Canal Authority now is making plans to build more
dams to supplement Lake Gatún with extra water from
neighboring watersheds. But even if those plans bear fruit, it
seems certain the canal will always be vulnerable to drought risk
— and be the canary in the climate coal mine for Central
America.
Footnotes
1 Panama Canal Authority. Panama Canal traffic by fiscal
years. (2022).
2 United Nations Conference on Trade and Development.
Review of maritime transport. (2022).
3 The Waterways Journal Weekly. Panama Canal Authority
celebrates fifth anniversary of Neopanamax Locks, July 11, 2021.
(2021).
4 CNBC. ‘This is going to get worse before it gets
better’: Panama Canal pileup due to drought reaches 154
vessels, August 9, 2023. (2023).
5 Reuters. Focus: Historic drought, hot seas slow Panama
Canal shipping, August 21, 2023. (2023).
6 Panama Canal Authority. Panama Canal prepares for the
impact of climate events, June 6, 2023. (2023)
7 Bloomberg. One ship in Panama Canal paid $2.4 million
to skip the line, August 31, 2023. (2023).
8 Lindsey, R. & Kennedy, R. Annual migration of
tropical rain belt. Climate.gov, 2011. (2011).
9 World Bank. Panama. Climate Change Knowledge Portal.
(2023)
10 Hidalgo, H. Climate variability and change in Central
America: What does it mean for water managers? Frontiers in Water
2, Article 632739. (2021).
11 Mamalakis, A. et al. Zonally contrasting shifts of the
tropical rain belt in response to climate change. Nature Climate
Change 11, 143-151. (2021).
12 Kennedy, J.F. Remarks in Heber Springs, Arkansas, at
the Dedication of Greers Ferry Dam. The American Presidency
Project. (1963).
13 Seatrade Maritime News. The Panama Canal is
‘climate dependent’. (2023).
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.