Technology and Science08 September, 20263 min read
Panama Canal Authority Weighs Further Transit Cuts as El Niño Drought Lowers Lock Power
This article is an automated aggregation of coverage from news outlets. Our editorials offer in-depth analysis curated by the NewsCord team.
Transit slots reduced from 32 to 29 as water levels fall under El Niño. Panama Canal may impose additional transit restrictions if rainfall remains insufficient.
El Niño tightens canal
Panama’s Panama Canal Authority is weighing further limits on ship transits because drought tied to El Niño is lowering reservoir levels that power the locks, with the new administrator Ilya Espino de Marotta telling AFP on Monday that additional measures may be implemented if the drought does not subside. Espino de Marotta said the canal could lower the limit “probably not to 24 slots per day, but it could be reduced to 29 or something similar,” as Panama has declared a nationwide emergency over El Nino. The canal already cut the maximum number of ships allowed through daily from 36 last month to 32 by mid-September, and it relies on rainwater stored in two reservoirs whose levels have dropped due to the onset of El Nino.
Hindustan Times also reported that the canal operates using rainwater collected in two reservoirs and that without water the locks that lift and lower ships cannot function, while the restrictions come as shippers seek an alternative to the Strait of Hormuz, which Iran has blocked in retaliation for the war launched by the United States and Israel. The same Hindustan Times account said the interoceanic Panama Canal handles five percent of global maritime trade and that it operates through an interoceanic route between the Atlantic and Pacific oceans.
Shipping costs and slots
As El Niño-driven drought reduces vessel traffic, SK Gas paid a record $5.7 million for a Panama Canal transit slot to move U.S. liquefied petroleum gas supplies to Korea, according to a report carried by Korea JoongAng Daily.
An SK Gas spokesperson said, “We purchased an expedited transit slot to ensure a stable supply of LPG imported from the United States to Korea as part of our efforts to strengthen energy security,” linking the purchase to drought and surging cargo traffic.
Korea JoongAng Daily reported that the Panama Canal Authority plans to cut the daily number of vessels passing through by more than 10 percent starting Thursday, and it said rainfall from May to August is down 34 percent from its historical average.
The report also described how competition for limited transit slots intensified, with auction prices averaging $55,000 from October through February and then tripling.
In the same account, the World Meteorological Organization said sea surface temperatures across the Pacific region monitored for El Niño were 2.6 degrees Celsius above normal from Aug. 23 to 29, with the WMO expecting El Niño to reach “very strong” levels before the end of this year and persist until at least February next year.
Rio Indio and future limits
Baird Maritime reported that Ilya Espino de Marotta said once the Rio Indio infrastructure project is complete, the Panama Canal will not need to impose restrictions on transit even during droughts, but in the meantime the authority may need to impose more restrictions if there is not enough rain over the coming three months to lift reservoir levels. Espino de Marotta told Reuters that “Depending on how rainfall comes in September, October and November — those are the three most critical months — they will tell me if I need to lower any quotas further in January, February or March,” framing the next decision points around rainfall. Baird Maritime added that the Rio Indio reservoir is expected to take five to six years to complete and is meant to secure water for the next 50 years for over half the nation’s population as well as operation of the Panama Canal.
Latina Noticias said the reduction in reserves has already forced a decrease in daily transits from 36 to 32 and that the administrator considers it unlikely that the most severe restrictions from three years ago will be repeated, while acknowledging daily quotas could be reduced to around 29 during February or March depending on weather. Latina Noticias also said the project would allow storing a larger amount of the resource and facing future El Niño episodes without having to substantially reduce vessel traffic or compromise supply for the population, with the project envisioning a construction period of about four years.