business & economy

Also in this section:
Northwest Passage navigable
Labor rights and their infringement in Panama

American developer trying to carve out part of indigenous comarca

WTO reviews Panama's economy, warns of canal expansion risks
PRD pushes water privatization, runs into opposition

El Valle's market changes with tourism boom

Free trade campaign gaffe forces Tico VP to resign
Business & Economy Briefs

 

Composite satellite photo with illustrative lines by the European Space Agency

 

Much sooner than the gloomiest predictions

The Panama Canal's new competition is opening up

by Eric Jackson

 

On September 14 the European Space Agency (ESA) released the graphic above, a composite of photos of the Arctic Ocean taken in early September by its Envisat ASAR observation satellite. The yellow line is the Northwest Passage running between the Bering Strait, around the top of Alaska and Canada, then down through the Davis Strait between Canada's Baffin Island and Greenland (the latter a Danish possession) and the Labrador Sea toward the major ports of North America's Atlantic seaboard. The blue line is the Northeast Passage that runs from the Bering Strait across the top of Russia and Norway, then down toward Atlantic ports of Europe. The green area is the polar icecap.

 

The unbroken yellow line means that the Northwest Passage was completely navigable when the photos were taken. It will probably be frozen back up sometime in October, but for some weeks could be kept open by icebreaker ships.

 

The blue line of the Northeast passage is partially blocked by ice in the broken section north of Russia's Tamyr Peninsula, but there, too, the way could be cleared by icebreakers.

 

Scientists have been keeping systematic records of the seasonal growth and expansion of the polar icecap for about 30 years, and through the analysis of core samples drilled from the middle of the ice cap can reasoably estimate its annual growth and shrinkage over more than 10,000 years. This year the polar icecap shrank to about 1.2 million square miles, about 386,000 less than its smallest expansions in the summers of 2005 and 2006. For the past decade the icecap has been shrinking on an average of around 38,600 square miles per year, and this ten-fold acceleration is something that had never before been seen.

 

Despite White House and corporate patronage of those who claim that there is no process of global warming underway, the consensus of scientific opinion is that it's a very real phenomenon and most who seriously study the subject believe that no matter the extent of human activity's contributions to its causes, whatever people do the planet will continue to warm for at least another couple of centuries. (Climate change, as any competent historian or archaeologist will verify, is a phenomenon long known to mankind, even if its cycles and contributing causes may be at least partly mysterious.)

 

The basic physics in play here is that ice reflects sunlight back into space, while seawater and rock absorb the sun's energy. This means that the polar icecap's melting is phenomenon that feeds itself, because this year's record melting means more heat absorption and less reflection than before, warming the temperature of the Arctic Ocean and promoting further icecap melting.

 

The Northwest Passage, which has previously been navigated with the help of icebreakers, will remain naturally navigable for only a few weeks this year. Prior to this year many scientists had predicted that by 2015 the sea lane would become commercially viable and by 2050 there would be an annual 100-day shipping season along the route.

 

That's important to many shippers because to sail from Tokyo to London via the Northwest Passage saves about 4,350 miles and the steadily increasing tolls in comparison with the Panama Canal route. (The Suez Canal makes the Tokyo to London passage shorter than by using the Panama Canal, but still 3,050 miles longer than by way of the Northwest Passage.) The Northeast Passage would cut these sailing distances even more.

 

Another perspective, from the China Economic Review, points out that by way of the Northwest Passage Europe is some 5,000 miles closer to the US West Coast than via the Panama Canal and China's main ports are 10 days closer to New York than through Panama.

 

In last year's canal expansion referendum, people on the "no" side criticized the Torrijos - Alemán Zubieta Plan because its canal usage projections allegedly did not take competing routes into account. One of these factors, raised by the likes of former deputy canal administrator Fernando Manfredo and former National Environmental Authority director Gonzalo Menéndez, was that the thawing of the Northwest Passage would create strong competition for the business of certain global shippers.

 

Neither Torrijos nor Alemán Zubieta Zubieta would debate their proposal with critics, but they did spend public funds to produce a position paper that predicted that in 2050 the Northwest Passage would be open for part of the year but even then would not present serious competition for the Panama Canal.

 

The Canadian government, on the other hand, is making other plans. It is establishing military bases along the Northwest Passage, and has warned US military ships that the navigable parts of the passage are generally within Canada's territorial waters and may not be used by American ship's without Canadian permission. A small bit of disputed rock in the waters between Danish Greenland and Canadian Baffin Island gained international prominence when a group of scientists from Denmark left a Danish flag there, which was removed by a small Canadian military force and politely but pointedly delivered to the Danish Embassy in Ottawa.

 

The defrosting of the Arctic Ocean will also open vast undersea gas and oil reserves to potential exploitation, and that has the governments of Canada, Denmark, Norway, Russia and the United States maneuvering to call dibs.

 

The opening of the Northwest Passage has had no direct commercial consequences this year, at least not in terms of its use by merchant shipping. However, just a few days after the ESA released its photo montage, the World Trade Organization released a report that among other things warned of the risks in the Panama Canal expansion project. A few days after that, President Torrijos called off a scheduled meeting with a group of international bankers with whom he had intended to discuss canal expansion financing during his visit to New York for the UN General Assembly summit.

 

During last year's referendum campaign, ACP spokespeople --- who have for the most part since been forced out of their jobs by a reorganization --- made light of environmental arguments against the Torrijos - Alemán Zubieta Plan. Those environmental objections, however, were never predictions of unmitigable ecological catastrophe. They were about the costs involved in limiting potential harms caused by the intrusion of saltwater into Gatun Lake and the speciously exaggerated optimism of ruling out global warming as a factor taking business away from the canal --- environmental issues that at their bottom line are economic.

 

Now one of those environmental / economic factors has come into play much sooner than anyone expected, and the ACP has had no comment about it.

 

 

Also in this section:
Northwest Passage navigable
Labor rights and their infringement in Panama

American developer trying to carve out part of indigenous comarca

WTO reviews Panama's economy, warns of canal expansion risks
PRD pushes water privatization, runs into opposition

El Valle's market changes with tourism boom

Free trade campaign gaffe forces Tico VP to resign
Business & Economy Briefs

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