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 drawdown[5] and instead has remained low for the past several months (Figure 1).
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?
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.
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.
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.
