Panama Canal Expansion Will Have Big Effect on Energy, Water, and Grain in U.S. and China


Keith Schneider (Circle of Blue) explains how, now that deeper channels and immense new locks are due to open in the Panama Canal in 2016, the expansion project will change Panama drastically and have a big effect on other countries. The article explores many aspects including the effect on trade, water reserves, shipments of food and energy, and how canal construction is shaping Panama. Here are excerpts; see link below for full article:

[. . .] Thousands of men and hundreds of trucks and excavators, like a colony of motorized ants, swarmed through the construction site to bend steel and pour concrete. The scale of the project to excavate new channels, widen existing shipping corridors, and complete three new lock chambers on the Pacific side and three more close to the Caribbean make the canal expansion a 21st-century parallel to building the Egyptian pyramids.

With its much larger locks lifting and lowering much bigger ships for the day-long crossing, the expanded canal is projected to alter global patterns of food and energy production and trade. Analysts anticipate that the additional transport capacity will shift water use and supply, particularly in the United States and China, the primary producers and consumers of goods that are shipped through the canal.

The expansion project’s effects on Panama’s economy and management also are extraordinary. Both the Pacific and Caribbean entrances are swollen with new construction. Proposals for big power-generating, fuel-storage, logistics, and transport projects in the canal corridor are under review by national authorities.

The canal’s ability to drive economic growth is evident in Panama City, the capital, where an impressive skyline of seaside white towers bloomed in the last decade. The Pacific coast city of 1.5 million people has quickly become a modern maritime hub where jobs are plentiful and employees are needed for almost 100 banks holding more than $US 100 billion in assets, as well as for hundreds of shipping firms and busy container terminals.

Along the Caribbean coast, the canal expansion also is attracting developers of mega-projects who are testing Panama’s regulatory agencies with proposals that could have substantial effects on the nation’s water resources and tropical landscape. The projects include a $US 6.4 billion open-pit copper mine powered by a 300-megawatt coal-fired power plant, a $US 8.7 billion container terminal east of Colon, and a $US 4 billion residential resort.

“The expansion project is pushing the country in new directions,” said Onesimo V. Sánchez, manager of the Panama Canal Authority’s economic research unit. “It’s been a long road to discovery of yourself. It’s changing Panama.” [. . .]

For full article, see

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