An extreme drought in Panama is forcing authorities to substantially scale back shipping through the Panama Canal, one of the world’s key shipping channels. This comes at a time when traffic through the Suez Canal has been significantly disrupted. Ilya Espino de Marotta, the Panama Canal Authority’s deputy administrator, joins Stephanie Sy to discuss.

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    AMNA NAWAZ: An extreme drought in Panama is  forcing authorities to substantially scale   back shipping through the Panama Canal,  one of the world’s key shipping channels. And it comes at a time when traffic has  also been disrupted through the Suez Canal,   where commercial shipping has been limited  by the widening Middle East conflict.

    Stephanie Sy looks into the problems  for the critical Panama Canal. STEPHANIE SY: The canal is one  of the most important waterways   in the Western Hemisphere and  typically carries 5 percent of   the world’s maritime trade and 40  percent of U.S. container traffic.

    But with water levels below normal, authorities  are only allowing 24 ships to cross a day,   down from 38. That means more  delays and higher shipping costs. The Panama Canal Authority’s deputy administrator,   Ilya Espino de Marotta,  joins me now for the Panama. Ms. Marotta, thank you so much  for joining the “NewsHour.”

    So describe the severity of the situation at the   Panama Canal right now. You’re  operating at a reduced capacity,   24 ships a day. Do you expect that volume  to go even lower in coming days and months? ILYA ESPINO DE MAROTTA, Panama Canal  Deputy Administrator: Hi. Good afternoon.   Happy to be here.

    No, actually, we are forecasting that we  will stay up 24 until the end of April,   beginning of May, when, hopefully, rainy  season starts again. So we have to reduce   the amount of traffic because we are just  entering the dry season in Panama. So we  

    Will have no rain whatsoever. And we had a  very dry season in ’23 because El Nino effect. Now, you saw that all over the world, not only  Panama. So we were forced to reduce the number   of transits and maintain a 44-foot draft for  our clients not to be impacted too much. So  

    We have less loss where we’re trying to give  a draft that is still very competitive for the   industry. And hopefully we will stay at 24 until  rainy season comes back in late April, early May. STEPHANIE SY: What if the rains  don’t come back? You mentioned  

    The periodic weather pattern  El Nino, but I have also seen   quoted meteorologists that say climate  change has exacerbated a drought there. Do you really see relief coming with the next   rainy season? And what if  that relief doesn’t come? ILYA ESPINO DE MAROTTA: Yes, no, we’re looking  at NOAA predictions. And predictions do say  

    That El Nino is weakening and we’re  going into the April/May/June quarter. We’re looking that — is, we’re going to neutral  and maybe, at the end of the year, in other words,   October, November, December, El Nina effect  will come in, which means a lot of rain. So,  

    According to the meteorologist forecast  of NOAA, that’s the perspective. So we don’t think that we will have a  problem coming rainy season next year. ILYA ESPINO DE MAROTTA: If for any reason,  the rain — some delay, then we might have   to adjust either draft or reduce one or two  more transits per day to maintain the lake   until rainy season comes in, if it comes a  little bit later in the — in that quarter.

    STEPHANIE SY: I want to ask  you about long-term planning. Gatun Lake, which I understand feeds  the Panama Canal, there are also thirsty   cities that draw water from that lake. And  there is this ongoing drought. Are you in a   place now where you are having to plan for  perhaps an alternative reservoir to make  

    Sure that the canal can stay functional  in years to come, not just this year? ILYA ESPINO DE MAROTTA: Yes, definitely. We are looking at a very holistic project that  is not only an additional reservoir. And we do   have two reservoirs. We have Alajuela Lake, which  also provides potable water for the population,  

    And it’s a regulatory lake for the Gatun  Lake. So we have two lakes currently. And we were able to fill Alajuela Lake to  the maximum. So let’s say potable water   is assured for the population, and that’s  how we reduce transit. But we are looking  

    At two additional projects to have increased  water-saving measures, and then we’re looking   at a new reservoir that will be built on the  western side of the Panama Canal watershed. We have analyzed the project. It will provide  water for either 11 to 16 lockages per day,  

    And that’s a project that we hopefully will  be embarking sometime in late ’24, early ’25. STEPHANIE SY: Ms. Marotta, tell me what  your level of concern is. You make it seem   like it’s a temporary problem for this  year with the El Nino weather pattern,  

    And yet there’s long-term climate  change concerns and drought concerns. How do you make sure that the Panama  Canal continues to be sustainable? ILYA ESPINO DE MAROTTA: Well, we have  experienced dry years before. 2016 was  

    A dry year. 2019 was a dry year. 2023 has been  dry. So we can see that there’s a pattern change. This has impacted the entire world, not just  Panama, the Rhine River, the Mississippi River,   the Amazon River, Argentina. So, definitely,  2023 has been of a big impact. We follow NOAA.  

    We are definitely — we have — have been  appointed a chief sustainability officer for   the canal to impact not only the canal, but also  worldwide policy to go into carbon neutrality,   to be net zero carbon by 2050, but  not just us, also the industry. So we are definitely putting in place policies to  

    Help towards a better environment  and reduce the carbon footprint. STEPHANIE SY: Ilya Espino de Marotta with the  Panama Canal Authority, appreciate you joining us. ILYA ESPINO DE MAROTTA: My pleasure.

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