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The Panama Canal was among the defining engineering achievements of the 20th century. Since its completion in 1914, it has served as one of the world鈥檚 most important shipping routes, providing the fastest way to sail between the Pacific and Atlantic oceans. But its visionary planners couldn鈥檛 foresee the drastic fluctuations in water supply that would come with climate change a century later.

鈥淭he fresh water supply seemed infinite,鈥� says Matthew Larsen at the Smithsonian Tropical Research Institute in Panama. 鈥淣o one at the time it was being built considered that they might someday have a limitation on fresh water.鈥�

That day has now come. For the third time in less than a decade, a shift to El Ni帽o conditions has led to a severe drought. This, plus a recent surge in demand for passage through the canal, has created a water crisis. There is now limited water available to fill the massive locks that raise ships 26 metres above sea level so they can cross the continental divide, then lower them down on the other side. This has forced the Panama Canal Authority to restrict traffic.

In June 2023, the authority set limits for how low ships could sit聽in the water to avoid running aground in the canal鈥檚 central Gatun Lake, which has been at record low levels since July. Some ships had to offload cargo to pass through. Restrictions have since tightened further, with traffic cut to just 22 ships a day in December, the lowest since the US invaded Panama in 1989 and the canal was closed. A rainier-than-expected November bulked up the lake, allowing a few more ships to pass through by February, but transits remain a third below normal.

鈥淭his is about the worst it鈥檚 been,鈥� says Larsen. The resulting traffic jam 鈥� with some ships having to wait for more than a month to cross 鈥� has already had serious financial consequences for Panama and the world (see Drain on the economy).

Things are set to get even worse over the next few months of the dry season, says at Everstream Analytics in the US. Restrictions may ease as El Ni帽o conditions are expected to recede for the wet season starting in May. But in the years ahead, severe drought made worse by climate change will continue to threaten the reliability of the canal unless major changes are implemented.

鈥淣o one at the time it was built considered that they might someday have a limitation on fresh water鈥�

At the heart of the canal鈥檚 problems are its locks. They are filled using water from Gatun Lake, which eventually flows off into the ocean. This uses up a huge amount of fresh water. On the canal鈥檚 older system of locks, a single ship passage uses about 197 million litres. On a newer set of locks completed in 2016 鈥� which include several adjacent basins to reuse water 鈥� each passage uses about 170 million litres. Those are significant savings, given the new locks were built to accommodate larger ships, but this has also raised the number of ships that can pass through the canal, increasing overall water use, says Joseph Schofer at Northwestern University in Illinois.

Gatun Lake also supplies drinking water to more than 2聽million people, and is tapped for agriculture and mining. Panama is聽one of the wettest countries on Earth, and when enough rain falls聽there is more than enough; sometimes there is flooding. But聽trouble comes when the rainy season doesn鈥檛 deliver as much as expected. 鈥淢other Nature has a really big role in the game, and it鈥檚 hard to anticipate what she鈥檚 going to do,鈥� says Schofer.

Droughts in the region are generally associated with the shift to El Ni帽o conditions in the Pacific Ocean, says Steve Paton at the Smithsonian Tropical Research Institute. The three El Ni帽os of the past decade 鈥� in 2015, 2019 and 2023 to now 鈥� all saw restrictions on the canal.

But the current drought stands out. Paton says 2023 was among the top three driest years in more than a century, and it had the driest October on record. Gatun Lake also set several record monthly lows, despite starting 2023 flush. 鈥淭hey started with more water than they had ever had before and ended up with less than they鈥檝e ever had before,鈥� he says.

Paton says warmer temperatures due to climate change exacerbate the drought by聽increasing evaporation. However, it remains uncertain what influence climate change has聽on the cycles of sea surface temperature behind El Ni帽o itself, which is the main driver of the droughts. Nonetheless, he says the聽canal must prepare for change.聽鈥淎ny economic system that depends on stability in the environment needs to be really, really worried.鈥�

Just add water

The Panama Canal Authority has taken steps over the years to use water more efficiently. For instance, when possible, two ships move through the same lock together. New gates allow locks to be shortened for shorter ships. Water used to fill locks for descending ships is reused to fill locks for ascending ships. And the hydroelectric turbines on Gatun Lake鈥檚 dam that power some canal operations were even shut off.

But the authority recognises that solving the canal鈥檚 longer-term problems will require far more substantial changes across Panama鈥檚 water system. 鈥淭echnical solutions within the Panama Canal鈥檚 jurisdiction are not sufficient to meet the growing demand for water,鈥� says a spokesperson, adding that it is working on measures 鈥渢o secure a聽steady water supply for at least the next 50 to 75 years鈥�.

It is likely that will mean constructing at least one additional reservoir to capture more water during the rainy season. To that end, the authority has contracted the US Army Corps of Engineers, which played a central role in building the canal, to develop a feasibility plan for what this would involve. A longstanding idea is to dam the Indio river to the west of the canal, then tunnel through the mountains to pipe water from the resulting reservoir to Gatun Lake. This could help, but it would cost billions of dollars and the prospect of flooding more land in the tiny, biodiverse country has sparked controversy. Thousands of residents whose land would be flooded by such a聽reservoir have resolved to fight the project, which would require permission from the government to move forward.

With the canal spanning oceans, some have suggested pumping sea聽water into the locks. But that would take an enormous amount of energy and would taint the fresh water, damaging the water source for ecosystems and people. If the canal鈥檚 lakes get too salty, there is even concern it would enable fish from the Pacific to invade the Atlantic and vice versa, which could be a disaster for those marine ecosystems. But there are聽other possibilities: Larsen says some water could be saved by fixing the leaky system of pipes that delivers drinking water to much of the country. Gatun Lake could also be dredged so ships have more space. The authority has even tested cloud seeding to stimulate more rain.

This is all enough to raise the alarm about the future of the Panama Canal. But Larsen thinks that, with so much at stake, it is 鈥渋nevitable鈥� that Panama and its ally, the US 鈥� which sees nearly half聽of its container traffic pass through the canal 鈥� will do whatever it takes to keep this all-important artery open.