Capacity of Panama lakes is exhausted - Canal administrator

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Capacity of Panama lakes is exhausted - Canal administrator

Posted 27/06/2023

SEVEN YEARS HAVE PASSED SINCE THE expansion of the Canal came into operation. Since then, the interoceanic highway has faced new and important challenges, one of which is maintaining the availability of water not only for the operations of the road, but also the need for consumption for the population and the productive activities of the country.

Today, they are again faced with a situation of lack of the resource, reflected by the impact of climate change, and the fundamental point is that the country, not only the interoceanic highway, depends on good water management despite being surrounded by it says  Ricaurte Vásquez the Canal administrator.

"The availability of water, in general, is approximately between 50 and 54 lockages per day, and it depends on the amount of rain we have," said   Vásquez.

However, these rains have been decreasing since the transfer of the canal in the last 20 years, together with other recurring phenomena that have impacted such as droughts.

In the case of water for the canal in the metropolitan area, there are two components, one of them, is the storage of water in general, either through reservoirs, or auxiliary dams, however, the conclusion of a study carried out by engineers of the United States Army, revealed that both Lake Alajuela and Gatun have already exceeded their capacity.

The country has approximately 52 basins, but, according to Vásquez, it is necessary to solve the water problem from the point of view of the water for the population; The fastest route has been the use of the lakes of the Panama Canal as a source of raw water to be able to make it drinkable.

The warning of this is that, between the traffic on the road, plus the population growth, the capacity of the lakes as it is known "is already exhausted".

In fact, Vásquez anticipated that with all the expansions of plants that draw water from the lake today that are equivalent to approximately 5 transits per day, and those that are being built and that were approved in 2015, the extraction of water from the lake will double.

This would mean that of the 50 to 54 equivalent transits, 10 to 11 equivalent transits will be dedicated to the supply of drinking water for the population, so solutions must be found and these solutions and "these solutions take time" from 3 to 10 years , as these are complicated projects that have an important presence in the community and can affect it.

The administrator maintained that it would be necessary to find sources of water that are not within the hydrographic basin, sources of water either for potabilization outside the basin, or bring more water to the Panama Canal and use Gatun Lake to regulate the water supply and purification, or make an intermediate combination between the two.

"The analysis received by the Corps of Engineers projects the demands for the next 50 years in order to have a solution of programs that will successively meet the country's water needs," he added.

https://www.newsroompanama.com/news/capacity-of-panama-lakes-is-exhausted-canal-administrator

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Drought forces Panama Canal to reduce transits

Posted 27/07/2023

The Panama Canal announced that as of July 30 and "until further notice" it will lower the daily transit capacity of vessels to 32 "to reduce the possibility of additional draft restrictions in the coming weeks" due to the drought that affects the basin.

The Canal, through which around 3% of world trade passes, maintains a daily transit average of between 35 and 36 ships, according to what the and the measure will result in a reduction of between 3 and 4 ships per day.

In a notice addressed to all shipping agents, owners, and operators, dated Tuesday the Panama Canal Authority (ACP) indicated that the reduced transits will be "normally distributed" as "10 ships in the Neopanamax locks), and 22 ships in the Panamax locks”, which have been operating since 1914 and are smaller.

The ACP clarified that this daily transit capacity "can be further adjusted as deemed necessary, depending on the level of Gatun Lake, weather forecasts, and combination of vessels."

The ACP warned last June that "as an extreme measure", "the decision would have to be made to limit the number of transits" of ships daily to a minimum of 28 vessels.

The ACP "strongly recommended to all customers that they make use" of the transit reservation system "to reduce the possibility of long delays" due to the reduction in daily transits.

It said that these measures are necessary "despite the arrival of the rainy season in the Isthmus and the continuous water saving measures that the ACP has implemented in recent months to mitigate the adverse effects of the prolonged dry season in the Canal Basin”.

"The ACP may implement additional measures and establish additional procedures, in accordance with the safe and efficient operation of the Canal," added the notice to shipping agents, owners, and operators.

In recent months, the Canal has implemented a staggered reduction in draft which, according to a notice issued on June 14, dropped from July 19 to 43 feet (13.11 meters), when the maximum offered by the channel is than 50 feet (15.24 meters).

https://www.newsroompanama.com/news/drought-forces-panama-canal-to-reduce-transits

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The drought triggered alarms in the Panama Canal

Lake Gatun

Posted 09/12/2023

 

The serious drought, a product of the El Niño phenomenon and the prolongation of the dry season has triggered alarms in the Panama Canal, forcing the interoceanic waterway to apply drastic measures to face this unprecedented situation in 2023.

Some of them are the reduction of daily transits until next year, the draft of the vessels, and the variable rate charged for the use of freshwater, which will have an economic impact in the fiscal year of 2024, between October 1 and September 30 of next year.

One of the direct effects has been the traffic jam to enter the canal, with up to 160 ships waiting, mainly ships without reservation, that is, without a scheduled crossing, which are mostly bulk carriers, gas carriers, and chemical tankers, among others.

Yesterday, Dec, 8,  there were 75 ships in the queues, 47 with reservations and 28 without it, according to data from the interoceanic waterway, his relevant global trade route under normal circumstances moves 500 to 510 million tons of cargo each year.

The economic consequences

The Panama Canal has gradually reduced the number of daily transits this 2023, reaching 31 ships in November, and 18 ships are expected to cross next February, according to forecasts.

"The forecast is that in January there should be 20 transits and in February 18. We are evaluating this (...) and monitoring every day because if there may be some rainfall like in November, the accumulated rain was 300 millimeters and that helped a little to improve the situation,” the canal's hydrologist supervisor, Nelson Guerra, told EFE.

The Panama Canal could lose around $200 million in revenue in 2024 due to the reduction in daily transits that it has been forced to implement due to the drought, its administrator, Ricaurte Vásquez, said last August.

 In September, it was announced that,  as compensation,  a reduction of nearly 50% in the rate it charges for using fresh water due to the limited rainfall this year in Panama, a country that only has two seasons, dry and rainy.

Despite this and given the reduction in daily transits and a traffic jam at the entrance to the canal, some shipping companies have chosen to explore alternative routes, even though, they may be longer and more expensive, as reported by the local.

In hot a year, the main lake level drops

Due to the El Niño phenomenon, the average accumulated rainfall in the canal's hydrographic basin - approximately 350,000 square kilometers in the heart of this highway - for 2023 is 25.6% less than the average of the last 73 years. , according to official information.                                                                                                                                                          “We come with a water deficit issue this year. Regarding rainfall, in the period from January 1 to December 5, and compared to the historical record from 1950 to date, (2023) it is, so far, the third year with less rain or drier in the last 74 years,” said Guerra.

The Canal has already warned on previous occasions that it has rained less in the country for two decades. Last October was the driest month on record as it rained 41% less than usual.

Therefore, the water level of Gatun Lake, the main source of the canal, has fallen to approximately 81 feet PLD (Precise Level Datum) compared to 88 feet PLD in a “normal year,” an atypical situation. in December at the beginning of the dry season in Panama, Guerra explained.

The Panama Canal explores the possibility of creating a new water reservoir, a decision that falls in the hands of the Executive.

https://www.newsroompanama.com/news/the-drought-triggered-alarms-in-the-panama-canal

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Drought will cut Panama Canal revenue by up to $700 million

Posted 18/01/2024

Revenue from tolls from the Panama Canal will decrease between 500 million and 700 million dollars in the fiscal year 2024 due to the restriction on the transit of ships that can use the route, currently limited by the drought which provided 30% less rain in 2023.

The administrator of the Panama Canal Authority (ACP), Ricaurte Vásquez, said that a reduction of $200 million had been estimated for the fiscal year of 2023, but due to the extension of transit restrictions of boats, due to the drought that has affected the level of lakes Gatún and Alajuela, a greater drop in income is now projected.

In addition, in 2024 a second phase of toll adjustments will be implemented that would give some respite in regards to the Canal's income but these are measures that cannot be depended on says Vásquez.

"I am not sure that the loss of that income - from tolls - can be corrected in another way because, to the extent that auction prices decrease and the number of ships in line is lower, the income is not recovered," he explained.

In 2023, the Canal closed with less load and fewer transits compared to the previous year, but an adjustment in the rate determined that the income from tolls was located at $3,348 million, that is, $320 million above 2022.

The administrator reiterated that the Channel is not transactional and maintains long-term relationships with customers. “So it doesn't seem reasonable to profit from a long-term business relationship,” he said

The lack of water has caused a reduction in the number of boats using the route. From an average of between 36 and 38 ships, the passage of 24 ships per day has now been scheduled until April. Hence, the administrator estimates that this will have a financial effect at the end of the fiscal year.

All of this is caused by the drought, exacerbated by the El Niño phenomenon, due to which the Panama Canal ended 2023 with 30% less rain and with no new reservoirs in sight.

 El Niño is characterized by decreased rainfall and increased temperatures, causing heat and evaporation. This phenomenon will be present, at least until April 2024, influencing the patterns that affect the increase in temperatures both on land and in the ocean.

The administrator did not rule out that the number of daily transits could be further reduced if the water situation worsens and it does not rain at the expected levels between April and May of this year.

https://www.newsroompanama.com/news/drought-will-cut-panama-canal-revenue-by-up-to-700-million