This segment was previously recorded on November 3, 2023.
The El Niño weather event caused the driest October on record for the Panama Canal since its origins in 1950. The event has caused the Panama Canal Authority to cut daily ship passages from 25 to 18 by February 2024. Questions now arise around global climate change and the impacts it has on global shipping. U.S. Energy Information Administration Industry Economist Josh Eiermann joins Yahoo Finance to discuss these impacts and what they mean in both the near and long term for global shipping.
On the immediate impact, Eiermann states: “What we are seeing that is more ships now are being taken off the market and this is causing rates to be higher.”
He continues, describing the tug-of-war on prices of commodities, such as oil, that pass through the canal: “For very large gas carriers… these are rising quite a lot, however, the market did cool off a bit so what we see is with the freight market we can see prices going up. And then at a certain point, prices reach a level where characters and market participants will start to back off of the market. So those prices will start to decrease a bit, however, with the new restrictions that were put in place, we’ve seen those prices now again start to pick back up.”
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Interesting story
Maybe I don’t know anything, but the canal connects the Pacific with the Gulf. Shouldn’t these very large bodies of water fill in the canal?
Edit: so i get there are locks to help raise/lower the elevation of the passing ships. Couldn’t they seal off that reservoir for non-canal use and use seawater to be pumped into/out of the locks?
Yes, it should be a “closed loop” system that uses “reclaimed ” water but the popular narrative is “climate change “. More like, shitty , inefficient design.
No pump in the world could pump such quantities of water, only mother nature can.
Connects the Atlantic with the Pacific Ocean. Canal was built around 1910. They use fresh water Gatun Lake as the water reservoir to feed the locks. It is all gravity flow, no pumps. Big tidal differences between the Pacific and Atlantic side, hence the locks.
To all of you who do not realize: the pumps and associated piping are rigged for freshwater only, taken from a nearby lake. If salt water is suddenly used then there’s the issue of corrosion of the pumps and piping to deal with. It will take a lot of money to redesign the entire system for saltwater.
Anything that is crossed by immigrants by foot can’t be used by ships. Full ⛔
Most of our imported oil and gas comes from Canada, so bad example.
Yesterday I was at the visitor center of the Panama Canal to see the vessels in the locks. They told us on average they lock 34 ships a day and now they have reduced to 30-31 vessels. They save water by lowering or raising the ships in the locks a little more slowly.
Not sure how the flow rate helps them save water. It is the amount of water they use on each vessel that counts. Any method to use less water on each vessel would be beneficial. But as far as I know, it is all gravity fed water, from high to low. They have valves but no pumps. They are kinda stuck with their 1910 technology, hard to make improvements to the existing system. Gatun Lake has always been the holy grail for the Panama Canal, not sure if the expansion that was completed some years ago is contributing to this problem.