EXECUTIVE SUMMARY :

 

The administration and operation of the Panama Canal has been carried out jointly by a complex US civilian and military apparatus.  To guarantee the security of the Canal, the United States received the concession of a strip of land 8 km long on each side of the Canal and of the small portion of the Chagres watershed delimiting Madden Lake. This strip of land became known as the Panama Canal Zone.

 

As time passed and Panama began to grow as a nation following its separation from Colombia in 1903, a new sense of nationalism developed.  The Panamanians felt the need to renegotiate the American presence in the Canal Zone and, in 1977, the Torrijos-Carter Treaty was signed. Under this treaty, the United States was committed to the return of complete control of the Canal to the government of the Republic of Panama on 31 December 1999.

 

At present, the Panama Canal is administered by the Panamanians, and it is incumbent on the Authority of the Panama Canal (in Spanish, Autoridad del Canal de Panamá, ACP) to effectively continue to comply with the tasks for which it was built.

 

The Canal watershed is defined as the geographic area, the surface, and the underground waters which flow toward the Canal and are spilled into it or its tributary lakes. The borders of the watershed are defined by an imaginary line that joins the highest points of the mountains surrounding the hydrologic system of the Canal. Until 1999, the watershed was said to cover 1,289 square miles. With the passage of Law 44 of 31 August 1999, the legal territory of the hydrographic watershed was extended to include three other river basins: Rio Indio, Caño Sucio, and Coclé del Norte. All three are located to the west of Gatun Lake in the Atlantic region.

 

Because the Canal is not at sea level (Lake Gatun is 85 feet above sea level), the ships are elevated by a system of three sets of locks. Going from the Atlantic Ocean to the Pacific, a ship passes through the locks of Gatun, Pedro Miguel, and Miraflores. The locks are fed by water displaced only by the effects of gravity; water is not pumped into the locks. The water elevates or lowers the ships in the locks. During each transit, approximately 52 million gallons of water are used. The total water storage capacity of the Canal is approximately 1,660 billion gallons. However, the net capacity is approximately 365 billion gallons. Gatun Lake provides 203 billion gallons, and Madden Lake 162 billion gallons.

 

According to Article 84 of the Law of 1 July 1998, “the administration, use, maintenance, and conservation of the water resources of the hydrographic watershed of the Panama Canal will be the responsibility of the Panama Canal Authority, in coordination with the National Authority for the Environment (ANAM), and having as a basis the strategies, policies, and programs related to the sustainable management of the natural resources in these river basins.”

 

The Panama Canal allows the passage of ships from one ocean to the other. However, the watershed that feeds this engineering marvel allowing ships to pass from one ocean to another does not escape from El Niño’s effects. Studies about the effects of the El Niño-Southern Oscillation (ENSO) cycle in Panama show that there is a clear tendency during El Niño (the warm extreme) toward a reduction in precipitation below the normal long-term average values, mainly in the Pacific region or the southern part of Panama. Panama’s climate has two distinct seasons: a rainy season (mid-April to mid-December) and a dry season (mid-December to mid-April).

 

Early studies[1] indicated that El Niño is associated with below-normal precipitation values. The annual mean deviation of the anomaly of precipitation during El Niño years is 8 percent below normal in the region of the Canal’s watershed. In 11 of the 12 El Niño years used in the study, the precipitation anomaly is negative. There is a reduction in the net river discharge that flows into Gatun Lake during El Niño years, which causes a decrease in the lake’s water level. Historical records document a considerable reduction in precipitation in the watershed during El Niño.

 

Consequently, there is a decrease in the levels of the lakes that feed the Canal system during El Niño. These events jeopardize the normal operation of the Canal. The Canal’s operating conditions have been especially critical during the last two strong ENSO warm events of 1982-83 and 1997-98.

 

During extreme water shortages, the authorities responsible for the management of the Canal have been forced to implement a set of navigational draft restrictions for transiting vessels. These constraints have had adverse economic effects on some customers and users of the Canal. In addition, the fact that some of them have opted for alternate routes to transport their cargo during El Niño years has translated into a decrease in the number of ships crossing the Canal, which in turn yielded less general income from transits.

 

The Panama Canal Authority uses the water of the Canal according to the following distribution: 58% is used for the operation of the locks; 36% for generation of hydroelectric power, and 6% for municipal consumption.

 

El Niño is responsible for causing major problems to the economy of the region and, consequently, to the economy of Panama. Several socio-economic sectors in the country are affected by El Niño (and La Niña). These sectors include, but are not limited to, the following:

 

·         Water resource and energy

·         Natural resources

·         Farming

·         Fisheries

·         Human health

 

According to data released by government agencies and private companies, Panama’s productive sectors experienced losses of over $50 million during the 1997-98 warm event.

 

The energy generated in Panama is mainly dependent on the availability of water resources. Thus, energy production depends on precipitation, which means it will be affected by El Niño. In years of extreme drought, the country has been subjected to electric power blackouts for periods of more than five hours a day for several weeks at a time. During the 1997-98 El Niño, various cities in Panama experienced daily blackouts ranging from two to four hours. In addition to the irregularities in the delivery of electric power, the population also suffered from shortages in water supply for human consumption, mainly in urban areas. And, as noted earlier, the transit of ships through the Panama Canal has been affected by El Niño events.

 

The most critical operating conditions that could be blamed on severe drought, observed since the Canal’s construction, were registered during the El Niño events of 1982-83 and 1997-98. In fact, during the 1997-98 El Niño, the lakes of the Canal’s watershed reached their lowest levels ever recorded in its history. The Panama Canal Commission, the organization in charge of Canal operations at the time, was forced to apply draft restrictions to ships in transit. During the 1997-98 event, several fires were reported in the Canal watershed. These were extinguished rapidly, mostly by the US military, and never progressed into major forest fires.

 

On 10 May 1998, under a photograph of a desert-like countryside landscape, El Panama America, a daily newspaper, wrote that “the El Niño phenomenon has harmed farmers and Indian communities that live off the products of the land, and they have not been able to harvest a thing since last year.” About 3,861 hectares insured under Instituto de Seguro Agropecuario (ISA) were affected by El Niño.

 

Droughts also reduce the quality and quantity of pasture available for cattle and, therefore, affect meat and milk production. In addition, a considerable number of cattle died due to illnesses generated by water shortages. The losses were in the tens of millions of dollars. The ISA itself paid US$1.47 million in compensation to 596 farmers and cattle raisers.

 

Not all crops suffered during the 1997-98 El Niño. For example, in the provinces of Chirique and Bocas del Toro, coffee growers reported an increase in production of 10,000 sacks in comparison to the previous year’s yield.

 

In aquaculture, a decrease in shrimp production was detected, because of low survival rates and poor growth. Shrimp farming is very sensitive to changes in precipitation and air temperature. The effects of El Niño on the fisheries sector are not yet well understood. However, some observations showed a tendency toward a decrease in the number of fish landings during warm events. The cause of this trend is attributed to the anomalous increase in sea surface temperatures.

 

The impacts of ENSO warm events on the country’s economy are most significantly experienced by the poorest sectors of the population, mainly farmers and indigenous groups. Drinking water in rural areas becomes scarce, which brings, as a consequence, an increase in the incidence of water-related and vector-borne diseases such as malaria and dengue. In many cases, the deterioration of the quality of subsurface waters, caused by infiltration from domestic and industrial sources, also aggravates health conditions. Studies carried out by researchers within the framework of the Trade Convergence Climate Complex (TC3) research initiative[2] also showed that during the 1997-98 El Niño, there were increases in the number of people affected by respiratory and dermatological diseases, in addition to vector-transmitted and water-borne diseases.

 

The Department of Meteorology and Hydrography of the Panama Canal Authority is mainly responsible for the management of water resources in the Canal watershed. This institution has an operational mandate and has not carried out specifically scientific investigations on El Niño. Nevertheless, making use of the records of physical data recorded since 1903, it has produced time series that, after being processed and analyzed, can be used to infer the effects of El Niño in the Panama Canal watershed.

 

The Department of Hydrometeorology of the Institute of Hydraulic Resources and Electrification (IRHE) (recently privatized under the name Electric Transmission Company, or ETESA) was responsible for monitoring the behavior of meteorological parameters in time and space. Until the early 1990s, this was the only government institution to carry out occasional studies of El Niño. These studies centered primarily on the variations of precipitation in Panama during El Niño. Beginning in 1995, studies were carried out to establish the effects of El Niño in Panama and its impact on electricity generation.

 

The interest in Panama about the El Niño phenomenon began to gradually increase after the warm event of 1982-83, with the few works of investigation already noted. It was not until the middle of the 1990s when the global scientific interest in this phenomenon spread throughout the continent that Panama began to involve itself extensively in ENSO-oriented research. An important role was played by the TC3 Network in the promotion of research on El Niño in Panama. This group of researchers from the physical and social sciences began to organize different activities aimed at evaluating the impacts of El Niño on key socio-economic sectors. These activities continue to bring together scientists and decision makers.

 

In the mid-1990s, Panama began to take important steps to combine the efforts of different national institutions and regional organizations to exchange experience and knowledge and, thus, to increase its understanding of El Niño and its effects and consequences in Panama. One of the first initiatives was the organization of the TC3 Network under the coordination of the Water Center for the Humid Tropics of Latin American and the Caribbean (in Spanish, CATHALAC), of the first National Forum on “The El Niño Phenomenon and Its Impacts on Panama.” This took place in November 1995.

 

The 1982-83 El Niño

 

Dependent on a system of locks and a navigable lake, water is a vital element for the Canal’s operations. The El Niño event of 1982-83 caused the first important impact of an El Niño on the waterway.

 

The first indication of El Niño’s influence appeared in November 1982, when Gatun Lake did not increase to the level of 26.75 meters (87.75 feet) as normally occurs during that month. It was only at the beginning of February 1982, when this critical level was finally reached, and the implementation of the first restriction was put in place. It is important to remember that this El Niño was not forecast, and even as the event was developing it was not recognized as the onset of El Niño.

 

With the experience acquired during the 1982-83 event, the Canal Commission decided to deepen by 3 feet the navigable channel of the Canal waterway. They thought that by doing so, if another El Niño event of this magnitude were to occur again, it would not be necessary to set navigational draft restrictions, or at least they would not be as significant as those applied in 1983. Recall that the 1982-83 El Niño, at that time and until the 1997-98 event occurred, was labeled “The El Niño of the Century.” Of course, Canal operators (as well as El Niño researchers everywhere) did not expect an event of the intensity of the 1997-98 El Niño. This event has replaced the 1982-83 event as “The El Niño of the Century.” The 1997-98 El Niño restrictions were estimated to have cost US$12 million to the Panama Canal coffers.

 

Unlike the 1982-83 El Niño, the 1997-98 event was forecast some months ahead of its impacts on Panama. This allowed the Panama Canal Commission to take some preventive measures aimed at mitigating any adverse effects that this event could cause to the waterway. The initial prognosis indicated that this El Niño would be of considerable intensity.

 

The information about the possible onset of an El Niño was received by the personnel of the Office of Meteorology and Hydrology of the Panama Canal Commission (PCC) in April 1997 through the Internet. Around the middle of that year, PCC officials consulted Web sites and obtained information indicating that it would be a strong event. The main source for these consultations was the NOAA Web site postings. The information was presented in numerical, graphical, and tabular form and as text and images. The Division of Public Affairs of the PCC also received information on the development of this event through different media (e.g., TV reports, email messages).

 

The first news disclosed by the print media on the matter of a warm event occurred on 1 June 1997 through an international news posting from Tegucigalpa, Honduras, entitled “El Niño Returns With Its Pranks,” published in the newspaper La Prensa. The first news on the possible effects of the event in Panama was published in the newspaper El Panama America on 10 June 1997, with the headline, “El Niño Phenomenon Will Cause Losses.” Nine days later, a group of experts in the region, participants of the TC3 Network, met in Panama City. They included in their agenda an analysis of the state of the event’s development. The conclusions they formulated with respect to El Niño were disseminated by way of the local mass media.

           

The first news that suggested possible effects of the 1997-98 El Niño event on the Canal watershed was published 17 August 1997 in La Prensa under the title, “El Niño Could Affect the Canal.”

 

PCC employees from several departments organized a Working Group that met regularly to coordinate efforts before the imminent impact of El Niño. Participants in these meetings included representatives of the Division of Engineering of the Meteorology and Hydrology branch, the Department of Marine Operations, the Department of Engineering Services, and the Division of Public Relations of the PCC. A series of recommendations from these meetings were provided about the actions to be implemented by the different departments of the PCC. The outcomes of these meetings were reported to the corresponding authorities, who then approved the execution of the recommended actions.

 

The Department of Marine Operations continuously sent warnings to the ships (users and customers of the Canal) to inform them of the situation with regard to Canal operations. Special emphasis was given to inform them clearly about the status of draft restrictions. Twenty-two warnings of navigational restrictions in relation to the ENSO event were sent out during 1998. As a result of the imposed draft restrictions, the number of ships passing through the Canal decreased by 4% during the second trimester of 1998 in relation to the previous year.

 

From May to December 1997, which happen to be the months of expected intense rains in the watershed, recorded precipitation was significantly below average. That year, the Canal watershed experienced its worst recorded drought in Panama Canal history. The existing climatic conditions caused a reduction of 25% in the runoff toward the tributary lakes of the Canal. In spite of a decrease of 58% of the water flow toward Gatun Lake, by the end of September and into the month of October, the authorities of the Canal officially announced that the operations in the Canal would NOT be affected for the remainder of 1997.

 

The forecasts by PCC experts in the first months of 1998 were not very encouraging. Based on the experience of the 1983 event, draft restrictions were forecast to begin in February 1998, in light of the possibility that the lake levels would be unable to recover because of the fact that the dry season was already approaching.

 

Measures were taken to mitigate the effects of this event, and to avoid the negative impacts that would affect the customers and users of the Canal, as well as the public in general. The measures taken were as follows:

 

·         Saving water by stopping the generation of hydroelectric power at the Gatun plant, and replacing the lost electric power by the more expensive thermoelectric generation. (The Gatun plant is used only when there is an excess of water in the lake, because it would otherwise spill its water directly into the sea.)

·         Saving water by using smaller chambers of suitable size.

·         Saving water by means of ship transit in tandem through the locks (more than one ship per lock).

·         Saving water by means of crossed water transference between adjacent chambers.

·         Maintenance of a safe depth in the navigable channel of the Canal through the implementation of nearly continuous dredging.

 

The implementation of these measures cost US$10 million to the Canal authorities, but at the same time they brought about a water savings of about 10 to 15 percent. Another adopted action was to make a complete sounding of the bottom of the Canal section known as Corte Culebra, which would serve to guide the dredging of this section. This helped to eliminate all accumulated sediment and reduced the degree of draft restrictions.

 

The various measures that were adopted, together with the continuous monitoring of important hydrometeorological parameters for the Canal watershed, allowed for a delay in the setting of draft restrictions. Originally, it was believed that draft restrictions would need to be set by the end of February 1998. But it was not until 12 March 1998 that the Canal authorities issued the first of their 22 warnings announcing El Niño-related draft restrictions. These warnings were issued to the users with an average of three weeks in advance of their implementation.

 

On 12 March 1998, months after the implementation of the measures for water conservation, the first draft restriction was applied. This fact was beneficial to the customers who traversed the Canal from the end of February to 11 March, enabling them to transport more cargo than would be the case after 12 March. The maximum allowed draft in the Panama Canal was decreased to 39 feet, half a foot less than the maximum allowed draft under normal conditions. Obviously, some customers were affected by these restrictions. A reduction in draft of half a foot, depending on the type of ship, could represent a loss of lift capacity of up to several hundred tons of cargo.

 

The maximum allowed draft was reduced by a half-foot every time a restriction was set, until it reached a minimum value of 35.5 feet on 19 April 1998. This draft restriction stayed in place until 28 April, when the maximum allowed draft was increased with the coming of the rains that began to fall primarily in the Atlantic sector of the watershed. Progressively, as rain accumulated over the Canal watershed, the draft was increased until it returned to its normal value of 39.5 feet on 29 July 1998.

 

Fortunately, some of the earlier forecasts related to draft restrictions were not correct, such as the one that predicted that the maximum allowed draft would be reduced to 33.5 feet in May 1998. If this had occurred, it would have further affected the customers and users of the Canal. On 25 August 1998, the PCC reported the Canal lake levels had returned to normal.

 

During the period of draft restriction, some customers of the Panama Canal had the chance to decide on alternative routes like the North American coast-to-coast railroad or the Suez Canal. Some Canal economists were afraid that the programmed increase in tolls by the PCC for January 1998 would have a negative impact on the international marine community and would affect the volume of traffic through the Panama Canal. This increase was programmed before awareness of the appearance of the El Niño for the purpose of gathering funds to finance extension works in Corte Culebra.

 

The interruption of the generation of hydroelectric energy at the Gatun hydroelectric plant in order to save water had an adverse effect on the Panama Canal. The PCC was deprived of between US$5 million and US$8 million, which would have been generated by the sale of this energy.

 

In spite of the negative effects of the 1997-98 El Niño, such as the drought in the Panama Canal watershed caused by a reduction in precipitation of almost 35%, and the investment of about US$12 million that the PCC had to make to mitigate these effects, the income obtained by the  PCC not only fulfilled the projected expectations for that fiscal year (October 1997 to September 1998), but surpassed them. The income (US$743 million) was an increase of 10.6% over the previous year’s income (US$663.9 million). This success, according to declarations of the PCC authorities, was possibly due to several factors. One of these, and possibly the most important, was the capacity of the personnel to plan and implement actions to counteract the critical climatic conditions in the region that were created by the 1997-98 El Niño. Other factors included the adoption of new tariffs for tolls in 1997 and 1998, the increase in traffic of ships of greater width in the Canal, and other services that the Canal offered.

 

Although the Panama Canal could, through successful management, face one of the hardest contingencies ever experienced, the 1997-98 El Niño is still considered the most intense event of the last 150 years. Various customers and users were affected during the four-and-a-half months of draft restrictions. The ships that were affected were mainly those carrying bulky loads, tankers, and other container carriers. Between 12 March and 20 May 1998, 2,612 transits occurred, and of these, 289 ships (11%) had to reduce their drafts to be able to go across the Canal. This was a low percentage, according to the Canal authorities. Some of those ships, having to reduce their draft, experienced a loss of lifting capacity of up to a thousand metric tons for each half-foot of draft restricted. These restrictions obviously affected their economic gain. For example, from 12 March to 16 April, 1,375 ships passed through the Canal, and of these 138 were affected by the draft restrictions and were forced to reduce their cargo by approximately 500,000 metric tons. This caused the Canal authorities to consider deepening the waterway by a few feet more, as had been done in 1984.

 

With the approval of the new Law 44 of 31 August 1999, the legal area of the hydrographic watershed was extended to include three other river basins, namely Rio Indio, Caño Sucio, and Coclé del Norte, all three of which are located to the west of Gatun Lake in the Atlantic region. The annexation of these three river basins to the Canal system, together with the proposed structural modifications of the waterway, will provide new elements to be considered when modeling the potential impacts of future ENSO warm and cold events on the Panama Canal. Research on the impacts of climate variability still needs to be carried out in parallel with the future development of the Panama Canal system.

 

 

Conclusion

 

The Canal authorities do not have the resources to forecast El Niño events and, therefore, it depends on the information that it acquires from international institutions that forecast and monitor the ENSO cycle. The different experiences gained during the El Niño events of 1982-83 and 1997-98 highlight the importance of obtaining early warning of these events to guarantee better management of the watershed’s resources. It is not difficult to imagine what might have happened to the operations of the Panama Canal during the 1997-98 event if in 1984 the Canal authorities had not decided to further deepen the navigable channel of the Canal or if the forecast of the 1997-98 event had been delayed.

 

Newspaper, radio, television, and other forms of media are important channels through which to disseminate information about climatic events. They are also important forces that can either contribute to the mitigation of the impacts of such events by alerting the  opinions of the general public, or can cause unnecessary unrest (even hysteria) when the intensity of the event is exaggerated. In the case of the 1997-98 El Niño, the media did not influence the decisions or actions undertaken by the PCC with regard to the waterway. The PCC conducted its business based on its experiences during the 1982-83 El Niño, and its interpretation of information coming from sources such as NOAA. As a matter of fact, the local media generally based its coverage of the situation as it related to the Panama Canal on press releases issued by the PCC’s Office of Public Affairs. This was not the case in relation to other sectors, such as agriculture, where speculation from some media agencies sometimes ran wild.

 

In general, the treatment of the 1997-98 El Niño by the local media was relatively professional. The reason for such moderate reporting on the effects of the 1997-98 El Niño in Panama could be that enough catastrophic footage of impacts was coming in from Peru and Ecuador, and later from Honduras (after the passage of Hurricane Mitch), that there was no need to exaggerate the situation. Thus, the media could have “attractive” headlines.

 

In summary, as stated by the PCC Administrator, Alberto Aleman Zubieta, the rapid response of the Canal’s authorities to the 1997-98 El Niño demonstrated their capacity to handle major problems. The action plan implemented in response to this extreme climatic event was based on the interpretation of information coming from adequate sources such as NOAA, enhanced by input provided by local experts, and the expertise gained by the PCC during the 1982-83 event. However, the continuous and accelerated changes in land use that are taking place in the Canal watershed calls for a permanent monitoring of the basin and a constant verification of the models that simulate the response of the Canal system to climate variability.

 

 

Lessons Learned

 

·         In preparation for a future major El Niño event, the Panama Canal Authority needs to guarantee good storage and provision of water for the watershed. The best solution seems to be the expansion of the Canal watershed system to include other basins along with the possible construction of new dams.

 

·         During extreme water shortages, such as those generated during the 1997-98 El Niño event, a contingency plan needs to be put in place that should include a good efficient management of water resources that take into account the different water usages.  (This is being put together now.)

 

·         To promptly and adequately take the necessary measures to minimize impacts in ship transits and to inform the shipping industry with sufficient advance notice on these measures, the Panama Canal Authority needs to identify a mechanism in order to have available as early as possible forecasts of the onset of a warm event. (This is being undertaken at present.)

 

·         The available studies on the impacts of El Niño on the watershed were good benchmarks for the Canal Authority to put together a strategic plan during the 1997-98 El Niño, but not sufficient, taking into consideration the continuous and accelerated changes in land use that are taking place in the Canal’s watershed.  This calls for a permanent monitoring of the basin and a constant verification of the models that simulate the response of the Canal system to climate variability.  In other words, we need to do more research.