By Lord Toussaint

Time’s up. There is a strategic necessity for the United States to identify potential alternatives to the Panama Canal. For decades, the issue of the canal’s size constraints—and thus its viability as a shipping lane—has loomed large to observers of global trade. As of late, though, the primary cause for concern has been its dwindling capacity. In December of 2023, a historic low of 22 ships per day were able to cross the canal, down from the usual 36-38 ships per day. But why? It so happens that the canal and Panama’s people are competing for fresh water. Each time a vessel crosses the isthmus, 51 million gallons of fresh water are released from the Lake Gatún reservoir. Millions of gallons that could be going to the people of Panama, for over half of Panama’s drinking water comes from this one reservoir. Last year, unprecedented drought conditions afflicted the country as a result of the El Niño phenomenon—a warming of the Pacific’s waters that dramatically reduces rainfall—resulting in the reservoir reaching its lowest levels since “at least 1965,” (E.I.A.). As a consequence of the shortage, a tradeoff had to be made and, at one point, “more than 160 ships were stuck at anchor at both ends,” of the canal (N.Y.T.). Climate change is expected to make these dry spells more pronounced as the waters of the Pacific warm with increasing intensity and regularity.

The Panama Canal Authority knows this.

According to Panamanian engineers, the solution is to create a second reservoir to feed the canal by building a new dam at the Río Indio. A recent ruling by Panama’s supreme court will enable the construction of this reservoir which will lie beyond the canal’s traditional watershed. Authorities are moving ahead with the project, “which is expected to take six years and cost $1.6 billion,” (N.Y.T.). Still, as the issues outlined compound, efforts to find other “paths between the seas” are being taken seriously for the first time in decades. In December of 2023 Mexico inaugurated a railway connecting the ports of Salina Cruz and Coatzacoalcos (W.S.J). This is part of what the Mexican government under A.M.L.O. has dubbed the Interoceanic Corridor of the Isthmus of Tehuantepec, which it estimates will move 1.4 million twenty foot equivalent units per year—half of Panama’s capacity—by 2033 (FreightWaves). If time constraints in Panama persist, this alternative may prove competitive. On the continent below, Colombia is revitalizing its Pacific and Caribbean rail corridors which it may seek to link (A.N.I.). Further afield, the countries of the Southern Cone are developing their own highway based corridor that will link port Santos in Brazil with ports Antofagasta and Iquique in Chile via an unprecedented road network that will run through Paraguay and Argentina (B.B.C.). The route will deny Panama revenues from the emerging lithium trade.

Prior to this ongoing renaissance, Chinese investors moved toward a more radical goal altogether by reviving an age-old proposition: The construction of an interoceanic canal through Nicaragua, this time, to rival Panama’s. In 2012, the Hong Kong Nicaragua Canal Investment Corporation (H.K.N.D.) was founded by Chinese billionaire Wang Jing to enact the vision outlined. In 2013, H.K.N.D. secured a concession from the Ortega government, but, for a bevy of reasons, including mass protests, dire ecological concerns associated with the project, and China’s 2015 stock market crash, construction never broke ground and H.K.N.D. shuttered in 2018. This Chinese soiree—however laughable it may seem—still begs the question of whether building a second canal to address the sustainability concerns associated with Panama is desirable or even possible.

The question has been asked before. Only 35 years after the Panama Canal’s completion, the United States came to the conclusion that it could be done. American engineers were contemplating the construction of such a canal in the Colombian department of Chocó, using the Atrato and Truandó rivers. In 1945, the 79th Congress commissioned an investigation of “the capacity and security of the Panama Canal.” A subsequent 1949 report “describes the investigation and study made by the Governor of the Panama Canal to meet the future needs of interoceanic commerce and national defense, including an evaluation of the possibilities of a canal at other locations.” Policymakers a mere generation removed from the construction of what was then the greatest operating feat of human engineering on the planet—wittingly or unwittingly—contrived solutions to challenges that would not begin to manifest themselves until the following century. The report’s conclusion was that, “the construction of a sea-level canal on the Atrato-Truandó Route is practicable.” In 1984, Colombia’s Congress ordered its construction.

No one broke ground.

Perhaps a second look is in order.

This piece is a reproduction from its original issue in Hemispheres Volume 48 Issue 1. Read more here.