An intense drought related to this year’s El Nino phenomenon has precipitously lowered the level of Panama’s Gatun Lake, forcing the country’s Canal Authority to impose draft limits this week on ships moving through the waterway’s recently expanded locks.

The restrictions on how deep the vessels can reach below the surface means large ships, primarily from the United States and China, must pass through with less cargo, which translates into lower revenue for the voyages.

The driest period in memory for the canal basin is also hitting small indigenous villages that depend on tourism along the tributaries of the inter-oceanic passage.

The economic hit to canal operators stands to be minor, an estimated 15 million US dollars this year, compared with the 2.5 billion dollars in revenue generated in 2018.

Panama Canal Drought
Madden Dam, that holds back the waters of Lake Alajuela and supplies water and electricity to the Panama Canal (Arnulfo Franco/AP)

But the drought and the resulting restrictions highlight the difficulties Panama faces in satisfying increased demand for fresh water to feed the canal while irrigating fields and keeping the taps flowing in the capital as climate change threatens more extreme weather events.

“This year I do not think there will be problems with drinking water … due to the resources we have,” Steve Paton, who heads the long-term climate monitoring programme at the Smithsonian Tropical Research Institute, said, referring to an accumulation of rainfall from the last rainy season.

“As for the future, it is difficult to forecast,” Mr Paton continued.

“But we are observing in the canal area that climatic events are becoming increasingly extreme. … The biggest droughts and the eight or nine largest storms have occurred in the last 20 years, in the same way that 2014 to 2016 were the driest years in the canal’s history.”

El Nino is a recurring phenomenon in which warm ocean temperatures in the Pacific lead to drier than usual conditions in some areas and wetter in others.

Carlos Vargas, vice president of environment and water for the Canal Authority, said recently that Gatun, one of the largest artificial lakes in the world, with an area of 168 square miles — was 4.6 feet (1.4 metres) below normal levels for this time of year.

It has dropped more than a half foot since early April.

A smaller lake that also supplies the waterway, Alajuela, was 7.2 feet (2.2 metres) below usual.

“These low levels in the Panama Canal are the product of four or five months of almost zero precipitation,” Mr Vargas said.

Panama Canal Drought
A measuring gauge on Madden Dam shows the water level of lake Alajuela, in Chilibre, Panama (Arnulfo Franco/AP)

“It really has been the driest dry season we’ve had in the history of the canal.

“The flow of rivers to the lake is down 60%.”

That forced the Canal Authority to notify customers in early April that the maximum freshwater draft of 44 feet (13.41 metres) for Neopanamax vessels would be a foot less beginning at the end of the month.

It marks the fourth reduction in drafts imposed during the current dry season, which runs from January through April.

When water levels are optimal, maximum draft for those ships is about 50 feet (15.2 metres).

Panama Canal Drought
A cargo ship transits the Panama Canal (Arnulfo Franco/AP)

The limits affect only the Cocoli and Agua Clara Locks, a multibillion-dollar project inaugurated in 2016 to accommodate the larger Neopanamax ships.

On average, 7 1/2 vessels move through those locks daily day, though there have been days with as many as 12 crossings.

The canal charges shipping companies based on a vessel’s capacity and also a percentage of the cargo it carries, so lighter ships mean less profit for everyone.

The Canal Authority has had to deal with extreme weather patterns in the past.

A severe dry season also associated with El Nino in 2015-2016 affected the crossing of cargo in the old locks and cost 40 million US dollars in revenue.

The canal and most Panamanians rely on rains over a watershed of nearly 1,300 square miles, covered with forests, rivers and lakes, that generates 95% of the water consumed by Panama City and Colon, whose metro areas combined are home to nearly half the country’s population of just over four million.

Panama Canal Drought
Residents paddle their boat on the basin of the Panama Canal waterway near Gamboa, Panama (Arnulfo Franco/AP)

Panama has one of the highest levels of annual rainfall among tropical countries.

Last year marked one of the highest amounts of rainfall on record for the basin, which experts say has helped cushion the ravages of the current drought.

“Gatun and Alajuela lakes have been below optimum levels, but on the other hand it could have been much worse,” Mr Paton said.

The canal is promoting short-term drought measures such as suspending generation of hydroelectric power at Gatun as well as water recycling via tubs in the new locks that cut water use by 60%.

“This has helped us alleviate the effect for the moment,” Mr Vargas said.