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Drought leaves Panama Canal in dire straits

Panama Canal officials are struggling with a water shortage so severe they recently took the unusual step of limiting the loads of some ships passing through.

Now the big question: Is this a glimpse of the canal's future under Panamanian ownership?

The El Nino weather phenomenon, caused by a warming of waters in the tropical Pacific, has touched off the worst drought in the canal's 84-year history, lowering the freshwater lakes that feed the canal's locks. About 52-million gallons of fresh water are needed to lift or lower a ship through the canal's locks, which happens 35 times a day on average.

Uncontrolled development

But environmental experts are worried about another, more insidious problem that could make the water shortages chronic in years to come: uncontrolled development of the canal's watershed. The population in this 806,000-acre jungle area has ballooned to about 200,000 during the past 20 years, bringing with it massive deforestation and greater water contamination from sewage and industrial waste.

Scientists say this could eventually hurt the operation of the canal by increasing soil erosion, which results in greater buildup of sediment in the rivers and lakes that provide fresh water. As sediment levels rise, the storage capacity of these bodies of water falls, thus making it ever more difficult for the canal to continue normal operations during a serious drought.

With greater soil erosion, a larger amount of nutrients, including fertilizers from farming operations, finds its way into lakes. The higher nutrient levels are already starting to spur greater growth of vegetation, which can suck up valuable water supplies even further while also reducing storage capacity.

"We have very worrisome signs of water-quality loss," warns Stanley Heckadon, a scientist who has studied the canal watershed at the Smithsonian Tropical Research Institute in Panama City. "Industry and real-estate developers are the two frontiers of struggle," he adds.

With the handover of the canal from the U.S. to Panama set for Dec. 31, 1999, the care and management of the watershed has become a critical concern for the U.S. government. The Panama Canal Authority, the Panamanian entity that will replace the U.S.-controlled Panama Canal Commission, has been given charge over the entire watershed as well as the canal. The commission hasn't any direct control over management of the watershed.

Such is the threat that watershed conservation is "one of our top priorities at this mission," says U.S. Ambassador to Panama William Hughes.

Panama Canal Commission officials agree that uncontrolled development poses a major threat to the future operations of the canal. The country recently designated a third of the watershed zone as national park land, thus legally off-limits to all types of development, says the environment ministry.

"The major threat to the watershed is the lack of coordination among institutions" in Panama, says Mirei Endara, head of Panama's environment ministry. "The ministry of housing is promoting residences in the watershed when we should be promoting residences outside of the watershed," she says, adding: "As populations grow, the pressures on water needs, electricity and waste disposal will become a major issue."

Less than an hour's drive from Panama City, the effects of the drought are impossible to miss. The lowest rainfall levels in the history of the Panama Canal _ 35 percent below normal in 1997 _ are literally causing the drying up of Lake Alajuela, a key part of the watershed.

The lake is lined with a steep bank of dried mud that reaches over 100 yards in some places. The dense jungle on the northeastern side of the lake is a veritable tinderbox because of the lack of rain. The levels on Madden Lake, a major reservoir for the canal, dropped more than 23 feet in February, alone.

Already the PCC has been forced to make several reductions in ships' maximum permitted draft, a measure of the distance between the waterline and the bottom of the ship's hull. The reductions, the first in 16 years, have cut 2{ feet off the normal draft limit of 39{ feet.

Sharply higher charges possible

Fresh water is used to fill the canal's locks because of gravity, more than anything else. Gravity carries fresh water down into the canal's reservoirs from the watershed and then into the locks. Saltwater would have to be pumped into the locks, which are used to lift up or lower ships as they pass through the canal. There is no system set up to pump from the sea the 52-million gallons of water needed for the transit of each ship.

When the French made a disastrous first attempt to build the canal, their original plans were to construct a salt-water canal. But after they did the necessary surveying, they discovered that the terrain of Panama and the difference in water levels between the Caribbean and Pacific sides, made this impossible.

It's probable that things will get much worse. Panama's dry season, which usually ends in May, could now extend into June or July, PCC officials warn. As a result, the commission has plans to reduce the draft to as little as 34 feet. At those levels, as many as one in six ships passing through the canal would have to reduce their loads, canal officials say.

The result could be significantly higher transport charges, which could boost the cost of wheat, among other things.

Deforestation is blamed

If reductions reach 34 feet, a typical Panamax vessel, the largest type of ship that can pass through the canal, "would be forced to carry about 10,800 metric tons less bulk wheat," says Doug Marshall of the International Navigation Corp., a shipping company. "Ship owners will consequently be forced to seek a higher per-ton rate on the cargo," he says.

Massive deforestation of the watershed by cattle ranchers in the 1970s and early 1980s, many of them financed with funds from Panamanian banks and multilateral lenders, already has claimed a huge chunk of the jungle that once covered about one-third of the watershed. Less forest cover means greater erosion and less water retention. The result is that a smaller portion of rainfall is trapped by the lakes of the watershed during the rainy season for use during the dry season.

Since 1950, jungle cover in the watershed has shrunk about one-third to around 118,500 acres. During the past few years, however, the Panamanian government has managed to slow the deforestation rate. But much damage has been done.

The U.S. Agency for International Development has mounted a project with the PCC, the government, the Smithsonian Tropical Research Institute and a leading environmental group to gauge the effects of the deforestation and more imminent risks to the watershed, such as overdevelopment, and come up with ways to deal with them.

The population in the watershed area had increased to more than 110,000 in 1990, when the most recent census was taken, from just 40,000 in 1950. Since then, growth has exploded with the population figure reaching as many as 200,000, according to estimates by U.S. officials here.

Signs advertising new tract developments dot the road leading to Lake Alajuela. At one spot just before the turn-off to the lake, a dozen bulldozers plow into a hillside to remove gravel for construction projects.

Runaway development

"They need to get permission to do this but they don't," says Jorge Tovar, a biologist with the National Association for Nature Conservation, or Ancon, Panama's leading private environmental group.

Failure to control the development is nothing new, Tovar says. In the 1970s, as the environmental ministry was attempting to move some communities out of the area around Lake Alajuela, the ministry of education set up a new school and sent professors to the same area.

Tovar is headed for Lake Alajuela to survey the damage and show a community of farmers and fisherman how to grow coffee organically. The idea, he says, is to reduce the use of fertilizer, which runs off into the lake. Another goal, he explains, is to replant acres of land that were slashed and burned during the past 20 years.

New zoning laws were passed last year, says Mirei Endara of the environment ministry. They are supposed to reduce new developments and control existing ones.

But on the road to Lake Alajuela, construction continues apace. Tovar observes a row of recently completed tract homes on his drive back. There's a sign posted on the roadside offering easy financing terms.

Reprinted with permission from the Wall Street Journal

(c) 1998, Dow Jones & Company, Inc. All rights reserved.

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