A prolonged drought has affected Gatun Lake, jeopardizing the Panama Canal’s operations and threatening tourism, agriculture and drinking water supplies for millions of Panamanians.
GATÚN, Panama — In his inaugural address in January, President Donald Trump made the first of many official statements about his desire to retake U.S. control of the Panama Canal to guard against encroachment from China. But for years, the waterway has been under threat of a different kind – severe and prolonged drought.
That threat is clearly evident at Panama’s Gatun Lake, which is part of the canal. The lake provides water necessary to operate the canal’s locks, as well as drinking water for more than 2 million people – half of the nation’s population.
Due to climate change and the global weather cycle known as El Niño, 2023 marked one of the driest periods in Panama since the 1950s, resulting in lower water levels in Gatun Lake. This led to large backlogs of cargo ships waiting to traverse the canal, a dwindling supply of drinking water, and threats to livelihoods tied to tourism and agriculture.
With water scarcity now a growing concern, the country faces a delicate balancing act: protecting the needs of its citizens while ensuring the continued flow of global commerce through one of the world’s busiest trade routes.
Supporting livelihoods
Gatun Lake’s tourism industry has been a vital part of Ariel Yayo’s family livelihood for generations. Following in his father’s footsteps, Yayo has spent 27 years as a tour boat captain on the lake. His two brothers are also captains. He emphasizes the importance of tourism not only for providing jobs and boosting the local economy but also for attracting visitors from around the world.
The lake, located 40 miles north of Panama City, was created in 1912, when the canal was being constructed. Workers built a dam across the powerful Chagres River, both to control flooding and to create the waterway that makes up the northern half of the canal. The result was one of the largest artificial lakes in the world. It covers 166 square miles and is habitat for an abundance of tropical plants and animals, including capuchin monkeys, sloths, caimans, crocodiles and many bird species. The Smithsonian Institution turned the lake’s Barro Colorado Island into a research center, and the island has become “the most intensively studied tropical forest in the world.”
The lake also plays a vital role in supporting several rural communities, including La Represa, where Yayo and his brothers grew up.
“I became motivated because I spent a lot of time in the area and saw my friends doing it. That’s when I learned how to drive a boat and became a captain,” Yayo said. “I love my job.” Yayo takes tourists on boat rides through the lake to see the wildlife. He said he takes care not to damage or disturb the lake’s plants and animals.
“That’s something we have to focus on when tourists come – showing them the best we can, whether it’s iguanas or any species, so that they can see it,” Yayo said. “But we can’t allow people to destroy nature, and we have to protect it.”
The Panama Canal and the lake are among the top destinations for tourists. In 2023, Panama welcomed 2.5 million international visitors, who spent an average of eight days in the country and around $2,000 during their stay, contributing $5.4 billion to the economy.
Yayo’s father taught him from a young age to respect and protect nature, which is why the two-year water shortage is especially concerning to him. Beyond tourism, Yayo said the lake supports life for the nearby rural communities in various ways.
“There are some who are dedicated to fishing, others dedicated to this [tourism],” Yayo said. “There are many kinds of things that can be done with the lake to earn a living.”
The wide impact of water shortages
The lake provides economic benefits but, as stipulated by the Panamanian constitution, its primary purpose is to provide drinking water. So, what happens to agriculture and the operation of the canal’s locks if there isn’t enough water to meet all demands?
Ilya Espino de Marotta, deputy administrator of the Panama Canal Authority and its first-ever chief sustainability officer, is working to bridge gaps in addressing that question. The already strained resource has faced even more pressure since 2023, which marked the second driest year in the history of the canal.
Freshwater is essential for operating the Panama Canal’s locks. They function like elevators for ships. The freshwater fills or empties the locks to raise or lower the vessels, allowing them to pass through the canal, since the Atlantic and Pacific oceans are at different levels. Saltwater from the oceans can’t be used because it would disrupt the biodiversity in the lake and both oceans, which all have different ecosystems. Saltwater can also damage and corrode the locks’ moving parts.
Marotta said that during the drought, the increasing demand for drinking water and the overall shortage led to a reduction in the number of daily transits through the canal’s larger Neopanamax and Panamax locks, which dropped from 38 ships per day to a low of 22 ships per day at the height of the drought.
“We’re looking at different options and projects for the future to secure enough water for all operations, which is the canal and drinking water,” Marotta said.
Raisa Banfield, an avid environmentalist and past vice-mayor of Panama City, thinks too much attention is centered around the canal. Banfield said if sustainable water management practices are not implemented, Panama will continue to face water shortages.
“Panama depends on water for many things: agriculture, tourism, energy production and, of course, the canal,” Banfield said. But not the canal only.
“We need to think about alternative solutions,” she said. “The problem is that Panama keeps focusing on the canal, but we need to address how to protect and manage the water for the entire country, not just for one sector. There needs to be a broader, more inclusive approach.”
Banfield also said the impacts of canal expansion and increased ship traffic have contributed to increased salt levels in the freshwater supply, which affects both potability and the lake’s ecosystems. As ships pass through, they bring some saltwater into the freshwater system of the locks, which changes the salinity levels in the lake and its tributaries. Banfield said this requires additional water treatment, making it more expensive and complicated to provide drinking water.
Banfield said these changes impact the taste and quality of drinking water, something residents have noticed.
“Sometimes people feel that the water doesn’t taste good or is saltier. Sometimes they feel that it has color because [historically] the water in Panama has always been very good,” Banfield said. “When it rains less, the taste of the water changes because less freshwater enters the lakes, so that is felt, but since the Panama Canal Authority manages and administers potable water plants and the government distributes it, we have no way of knowing.”
In addition to providing drinking water, the lake sustains much of Panama’s agriculture.
For farm owners such as Liduvina Rivera, lake water is essential for irrigation. Her coffee farm in the area of Cirí Grande and Trinidad provides income for her family. Her rural community, located in the rolling hills of the southern part of the Panama Canal Watershed, is surrounded by dense tropical jungle and fertile soil, making it ideal for agriculture. The watershed includes all bodies of water that are connected to the Panama Canal, and is managed by the Panama Canal Authority.
Rivera’s nephews, Orlando Rivera and Osmeyi Yobani, both work on the farm. Orlando Rivera said they enjoy the work of maintenance, cleaning, weeding and harvesting. Yobani said the community has received support from Panama Canal Authority programs.
In 2009, the authority launched the Environmental Economic Incentives Program, which uses the acronym PIEA in Spanish. The program focuses on developing various projects, including sustainable family farming and initiatives for the conservation and protection of forests.
The program supports small producers by helping them market their products locally. It also includes other social and environmental management efforts within the watershed, especially aimed at protecting mountain water sources. The program emphasizes environmental education, working with primary school students and teachers, as well as with local communities.
“It’s a comprehensive effort that requires the involvement of many people, and it also creates opportunities for economic income, making it an attractive initiative for participants,” said Luis Alvarado, an agronomist with the Panama Canal Authority. Participation is voluntary, but Alvarado said they offer significant benefits to the producers, including extensive training.
“The social and economic work we do with the communities helps them become empowered and learn the value of their land; we can work together to preserve this space,” said Alfredo Mitre, a spokesperson for the Panama Canal Authority.
The PIEA program helped Liduvina Rivera start her coffee plantation. In addition to providing jobs for her nephews, Rivera has built a successful business that generates a sustainable income. The farm also supports her older aunts, Adriana and Estrudes. While Adriana assists with chores like feeding the chickens, the aunts often rest inside during the hottest hours of the day.
After Rivera’s harvest, she sends her beans to another local business, where they are processed by Dionísio Delgado, a master roaster. The process creates a cycle of work that supports the entire community.
None of the economic activity connected to the lake is possible without adequate water levels. Panama is the fifth rainiest country in the world, but the drought hit it hard. Experts say the country has to do a better job with rain catchment and storage.
“[T]he two lakes [Gatun and Alajuela] obviously have a limited capacity,” Marotta said. “So even if it rained, we have no place to put it, and that’s what we’re looking at right now.” Panama’s experts see ominous signs all over the globe. The 2023 drought was considered a wakeup call.
“Uruguay ran out of drinking water from their lake. Manaus [a city in Brazil] couldn’t get goods in and out of their town with shipping, and the Mississippi River had to decrease the load on their barges because of low water levels,” Banfield said. “Water is critical for life. It’s not just about the canal … we cannot live without water.”
The challenge of managing water resources is compounded by Panama’s population increase.
“We can’t guarantee good water quality if we only depend on one source for a growing population,” Banfield said. “Panama cannot depend solely on the Panama Canal Authority. There should be a more comprehensive approach. We need to diversify our water sources. It rains for 10 months a year.”
Banfield has called for the establishment of a water governing body separate from the Canal Authority.
“In Panama, water is treated as a resource for business and commerce, including the canal. But water should also be seen as a common good that benefits society as a whole,” she said. “The government needs to oversee the equitable distribution of water for different uses like agriculture, tourism, and consumption. Right now, the issue is that all these activities are competing for the same resource.”
Banfield’s vision extends beyond merely managing bodies of water to more comprehensive conservation efforts that would include land resources, and a plan that would look beyond short-term economics.
“We cannot just keep exploiting natural resources for short-term gains,” Banfield said. “I believe that there is a lot to work on in terms of awareness not only for citizens but also our authorities. What’s the limit of the planet? We have limits on rainwater. We can’t grow forever.”
Harley Mitchell is an expert in environmental and administrative law. From his office in Panama City, Mitchell can see ships waiting to cross the canal, a constant reminder of the role it plays in global trade. In spite of calls for a new governing system for Panama’s water, Mitchell said the Canal Authority still holds a dominant position.
Mitchell argues that the Canal Authority’s vast influence means that other organizations in Panama struggle to compete. He said he believes the Canal Authority should work more closely with the Maritime Authority and the Ministry of Environment. A more coordinated approach could not only improve transit in the Panama Canal but also enhance the management of the country’s broader waterways.
“We can appreciate the know-how of the Canal Authority in the rest of the country,” Mitchell said. “The Canal Authority could share their knowledge about water management, water use and environmental management in a watershed with the Ministry of Environment, the Maritime Authority, and other institutions. Panama is full of watersheds, but they don’t have the level of management that the Panama Canal watershed has.”
According to the Panamanian Constitution, “The Panama Canal Authority, in coordination with other government agencies as established by the Law, shall be responsible for the administration, maintenance, use and conservation of the water resources of the Panama Canal watershed, which include the waters of the lakes and their tributary streams.”
One of the solutions the Canal Authority has come up with is creating controversy: the Rio Indio Project involves building a dam to capture more water. The project will come with a human cost. Some people will be displaced from their generational homes along the river. A resettlement program is aimed at providing new homes and higher living standards, but many locals say it does not compensate for the loss of deeply-rooted connections to the land.
Looking ahead, Mitchell said he believes the need for long-term planning is essential.
“Sooner or later we must address the reality that the Panama Canal as a business must grow, but we must address the issue that the environment doesn’t grow,” he said. “[W]e can expect that new technologies and new forms to manage water will be needed in the decades to come to keep the canal open without more problems and safe for everyone and so that no more people will have to sacrifice themselves for the sake of the canal.”
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