“The waterway, which handles $270 billion in global trade annually, is crippled by drought,” Bloomberg reported. “And there are no easy solutions.
“The Panama Canal Authority is considering modifications such as artificial lakes to pump water into the canal and cloud seeding to increase rainfall, but neither option, even if feasible, could be implemented. It will take years.”
With water levels stagnant, 6 feet (1.8 meters) below normal, the canal authority has placed limits on the number of vessels allowed through. The restrictions imposed late last year were the toughest since 1989… Some shippers are paying millions of dollars to jump the growing queue, while others are shipping from Africa and South America. It takes a longer and more expensive route. Constraints have since eased slightly due to a wetter-than-expected November, but the maximum daily capacity of 24 ships is still well below the pre-drought capacity of around 38 ships per day. . As the dry season gets into full swing, bottlenecks are looming. Will it get worse again?
The canal's woes reflect how climate change is reshaping global trade flows. Last year, drought created choke points on the Mississippi River in the United States and the Rhine River in Europe. In the UK, rising sea levels are increasing the risk of flooding along the River Thames. Melting ice is creating new shipping routes in the North Pole. Under normal circumstances, the Panama Canal handles about 3% of the world's seaborne trade volume and 46% of containers moving from Northeast Asia to the US East Coast.
In the long term, the main solution to chronic water shortages is to dam the Indio River and drill a tunnel into the mountains to pipe fresh water 8 kilometers (5 miles) into the canal's main reservoir, Gatun Lake. It's going to happen. Eric Cordova, water division manager for the Canal Authority, estimates the project, along with additional conservation measures, will cost about $2 billion. He said it would take at least six years to dam the site and fill it. The U.S. Army Corps of Engineers is conducting a feasibility study. The Indio River Reservoir increases vessel traffic by 11 to 15 ships per day, enough to keep Panama City's biggest moneymaker running at full capacity while ensuring fresh water for Panama City…
More rivers will need to be dammed to ensure water availability until the end of the century.