Panama Canal: Economics trump environment

7 November 2010 [MediaGlobal]: When the French began digging the Panama Canal in 1878, tropical diseases and technical issues inhibited their success. The United States took over and completed the engineering masterpiece in 1914. As plans to widen the canal are underway, the original dredges that were abandoned by the French over a century ago are being revisited.

The contemporary project will benefit the economies of countries whose large cargo-carrying freights will now be able to pass through the Canal with greater ease, however, the possible environmental consequences of this mega-project is not without controversy.

The project, approved in a 2006 national referendum by 76.8 percent of the vote, intends to double the capacity of the Canal by 2014. Engineers will re-dredge the original French site, less than a mile north of the current canal locks, providing a third set of locks for the new canal. It will be the greatest construction the canal has seen since the SS Ancon steamship made the first transit on August 15, 1914.

The main concern is the effect the project will have on Gatun Lake, which supplies drinking water for 50 percent of Panamanians. Without proper caution, Gatun Lake could be infiltrated with ocean salt.

According to a report released by the Delft Hydraulics, a Dutch consultant company that specializes in water management issues, the Miraflores Lake currently acts as a saltwater buffer between the current locks and Gatun Lake, thereby dampening the salt concentration variations. But the changes created by additional locks may prevent this effect from occurring efficiently in the future.

Teresa Arosemena, communications officer of the Panama Canal Authority, argued, “The expansion project has no impact on the quantity of water available for human consumption, and any potential impacts on water quality will be monitored and actions taken to avoid it during the construction stage.”

Arosemena added, “Prior to embarking on the Expansion Program we commissioned 100-plus studies that looked into various aspects: economic, financial, social, environmental, and of course, engineering. After a rigorous process of analysis and garnering input from the industry, we came to a collective decision to expand the current Canal. Based on studies and projections, the new lane of traffic will double Canal capacity to more than 600 million Panama Canal tons.”

Although Arosemena may be right, it is difficult for local Panamanians to forget the last time governmental studies and simulations predicted such a low impact. In 1914, when the Canal was first constructed, governments that promised limited impact managed to displace 50,000 people and submerged 150 square miles of jungle under what is now Gatun Lake.

But are water concerns enough to overshadow the inevitable positive economic implications of the canal’s expansion?

Using the original canal as a basis of success, there is little doubt over the economic progress that such an essential and historic trade route has brought to this country. Experts project the new expansion to be so successful that Panamanians see an overall poverty decrease of 30 percent.

As it stands, the principal countries using this canal include the United States, China, Japan, Chile, South Korea, Peru, Canada, Ecuador, Colombia, and Mexico – all of whom pay a toll to Panama based on cargo weight each time they pass through the 110-foot space. By doubling that capacity, Panama is expected to gain a 12.3 percent total revenue increase.

“Alternatives were considered to the expansion project and it all boiled down to two options,” asserts Arosemena. “Leave the Canal – which is almost at capacity and unable to capture vital traffic of larger and wider ships – unchanged, or expand the Canal, bringing in new technology and forward thinking for the future of Panama. We chose expansion.”