Iceland’s recent general election shows that the country’s neoliberal consensus is over. What happens next?

When the Icelandic parliament assembled in fall of 2010, tens of thousands gathered to throw eggs and rotten tomatoes at the politicians. The MPs were participating in a traditional march between the cathedral and the parliament building that marks the beginning of each legislative setting. Protesters repeated their performance exactly a year later, now with an even larger crowd.

These events marked the midpoint of Iceland’s anti-neoliberal rebellion, which had started in the fall of 2008 at the time of the financial collapse. The mass actions represented a definitive break with the neoliberal consensus the country had sustained since 1984.

Any government will now have to understand — and then accept — this popular revolt if it wants to credibly hold power. Old alliances and structures have collapsed, and new ones must be built.

This October’s elections reflected the changed political atmosphere. On the one hand, the results were inconclusive, failing to produce a clear majority that could form a government. On the other hand, they decisively showed the fate of the sitting government, made up of the centrist Progressive Party (FSF) and the right-wing Independence Party (XD). In 2013, they had received a clear majority of votes — each winning nineteen parliamentary seats out of a total of sixty-three — despite their direct responsibility for a number of bank collapses in 2008.

Between 1991 and 2008, XD enacted a unrelenting series of ultra-neoliberal and right-wing policies that led to the financial crisis. The basis for this neoliberal turn, however, was laid in the eighties, when an earlier Progressive-Independence coalition government held power.

How these parties returned to power in 2013 can only be explained by the events between the financial crisis and that election. Their fate in this October’s election gives us a sense of what might come next.

A Disgraced Left

When the Icelandic banks collapsed on October 6, 2008, a powerful mass movement appeared out of nowhere. By late November, it had become a grave threat to the government.

The movement was organized on several levels and had several centers of operations, which were mostly uncoordinated. All of them coalesced, however, in weekly meetings in the center of Reykjavík. On December 1, protesters convened a meeting at Arnarhóll, after which the more radical wing attacked and occupied the Central Bank of Iceland. A full-scale uprising — which many expected — did not materialize.

The movement, however, successfully removed the sitting government and forced a new general election in April 2009. The Social Democratic Alliance (XS, which had also been in the government at the time of the collapse) and the socialist Left-Greens (VG) formed a government.

They inherited de facto IMF rule, which had been imposed right after the collapse. But the government did not need the IMF’s help in becoming extremely unpopular, extremely quickly.

It embarked on a very dubious mission to enter the European Union against the population’s wishes. To do so, it would have to agree to pay all the debts incurred during the Landsbankinn’s Icesave operation.

Before the crash, the bank had launched online operations in the Netherlands and the United Kingdom to allow foreign investors to take advantage of Iceland’s higher interest rates. Money poured into the Icesave accounts, but the collapse wiped it all out. The British and Dutch governments demanded that Iceland reimburse these customers before it could enter the European Union, and the government agreed to the deal.

Icelanders rightly understood that their government had chosen to take on odious debts. A strong movement against this agreement gathered steam, and it was supported by a sector of the Left-Greens in parliament. They were joined by the Movement (the Hreyfingin), a party formed out of the 2008 protests that had received some 7 percent of the vote and won four parliamentary seats.

The two parties successfully demanded a referendum on the plan, which was overwhelmingly rejected in 2010. A second proposal was rejected with a smaller majority in 2011.

The Icesave maneuver cost the government all its credibility. It floundered through the last two years of its term without trying to restore legitimacy.

In spring 2013, the final nail was put in the coffin: an international court ruled the Icesave agreement illegal and declared the Icelandic government under no obligation to repay the British and Dutch citizens who lost money.

This decision not only electorally decimated the left parties, but took the Independence Party with it. The Progressive Party — which had opposed the Icesave agreement — could portray itself as the redeemer of the protesting masses. It received one of the highest vote counts in its history.

Neither of the discredited parties had any chance of entering government. XD meekly accepted FSF leadership and appeared to take the backseat in a government supposedly in tune with the people’s rebellious spirit.

However, it took very little time for this government to become just as unpopular as the last one. Its scheming, wheeling, and dealing to benefit the Icelandic elite was far too transparent.

The Panama Papers finally blew it out of power. The revelation that the prime minister held off-shore, tax-free accounts contradicted his persona as the representative of the protesting masses. On April 4, thirty thousand people rallied to demand his resignation and new general elections. Both demands were met.

Both post-crisis governments fell apart because they could not create a new social consensus to replace the neoliberal contract shattered by the bank collapses.

Representing Rebellion

The neoliberal consensus began in 1984, as certain discourses — like class conflict, solidarity, or the notion the state was responsible for the well-being of its citizens — were suppressed. By 1990, the Contract of National Reconciliation — an agreement signed by government and labor to ensure economic stability — completed this task.

In Iceland, as elsewhere, parties that were built on the idea of opposing capital with working-class interests also supported the pact. By 2007, the the Social Democrats had entered an extremely right-wing government and watched the crisis unfold.

The neoliberal consensus was sustained by widespread prosperity. But when the economy fell apart in 2008, it left the social peace in tatters. The ban on discussions of class and exploitation evaporated.

Thus, the real issue in the recent elections became who could carry the torch of popular rebellion. In 2013, the Progressive Party was temporarily able to present itself as the party of the social movement. When it failed, the Pirate Party stepped in.

After the Progressive-Independence government fell out of favor in early 2015 — primarily by refusing to fulfill its promised referendum on European Union membership — the Pirate Party benefited. It approached 30 percent support between February 2015 and April 2016. The Greens whittled away some of the Pirate Party’s base, but it stayed around 20 percent in the polls. In the end, the Pirates received only about 15 percent, and the Greens around 16 percent.

The Pirates’ rise in the polls can be attributed, to a large degree, to protest votes; the traditional left and right had lost all credibility, and this upstart party seemed like the only option.

But eight years of protests were also a decisive factor. The size of this movement cannot be overstated: Between 2008 and 2011, the police counted over 1,300 protest meetings of various sizes and shapes — close to one every day. The Pirates appeared as a direct, organized, and electoral representation of these protests, presaging a renewed social contract based on the enormous political activity after the collapse.

An attempt to realize this new consensus materialized two weeks before the election. The Pirates invited three other parties — the Social Democrats, the Greens, and another new party called Bright Future — to create an electoral bloc. Voters would know that if they voted for any of these parties, they would form a government.

The media, controlled by moneyed interests, immediately branded this as an attempt to create another government like the disastrous leftist coalition elected in 2009. Many, especially the corporate-controlled media, viewed the Pirates’ suggestion as a desperate, misguided move on the political chessboard.

A Far Too Successful Party

By October 2016, the establishment was out of tricks. The bloc proposed by the Pirates received 43 percent of the vote, not quite a majority. Its loss is, to some extent, beside the point. In fact, we might even see it as a preferable result; had it received a mandate, the media would have immediately labelled it the new left government and started predicting the economic ruin it would bring. The resulting impasse is far more revealing, uncovering the old system’s complete impotence.

The Independence Party, which earned 29 percent of the vote, now stands alone, naked in its class arrogance. With such a large vote share, it cannot hide behind another party as it wages a class war on behalf of the 1 percent.

The party built on the idea of class struggle — the Social Democrat Alliance —forgot everything about its foundations during the neoliberal consensus. It received around 30 percent of the vote in 2006. Ten years later, it got only 5.7 percent. Throughout Europe, social-democratic parties served as essential props to capital’s power. The Social Democrats’ collapse in Iceland shows the power of the country’s anti-neoliberal revolt.

Meanwhile, a proliferation of new parties are attempting to capture the street movement’s momentum with little success. The Pirate Party hasn’t been able to present a solid social or economic analysis. Instead, it relies on a visceral opposition to the elite, which, on its own, does not equip it to govern. The party’s main plank — a basic income guarantee — reveals a neoliberal influence, as Milton Friedman originally proposed the idea in opposition to generalized social security.

From this perspective, the street rebellion has only created a vaguely anti-establishment party with an equally vague reformist agenda, shot through with half-baked neoliberal ideas.

Two other such parties in parliament — Resurrection and Bright Future — are hollow replicas of the people’s voice, without much conviction or moral power. They are are even more consciously neoliberal than the Pirates, calling for a sanitized neoliberalism that is of course impossible.

That said, their dealings with XD since the election show how far the anti-neoliberal movement has gone. In coalition discussions, these upstart parties tried to force the Independence Party to agree to a major reorganization of the fishery quota system, still a central element in the Icelandic economy. XD’s refusal exposed it as a party for the elite. They also tried (and also failed) to call a vote on European Union membership. These demands — and the parties’ willingness to leave the coalition as a result — highlights how differently political lines are drawn today.

Already it is clear that the Independence Party is unlikely to remain in government. Its only hope is that the Left-Greens — the second largest party in parliament — will turn to it after failing to to establish a center-left government. XD has repeatedly, but so far unsuccessfully, tried to woo the Greens into some kind of all-national government. That the right-wing party’s best partner is now the most left-wing party epitomizes how strange Icelandic politics have become.

The proposed left-wing alliance between the Left-Greens, Bright Future, Resurrection, the Pirate Party, and what’s left of the Social Democratic Alliance doesn’t seem plausible either. But how can three social-democratic parties, one newborn neoliberal party, and one indescribable mess of a party come together to govern?

But they have reached consensus on some major policy changes: strengthening the health and education system and redistributing profits from the fisheries. The question remains whether internal squabbling will prevent this consensus being realized.

Although the previous neoliberal consensus has been decisively shattered, a new one — already present as a mass movement — is struggling to articulate itself as a coherent political project.

Iceland’s circumstances are different enough that this may still come together. Unlike Greece at the time of Syriza’s rise to power, Iceland is not and does not want to join Europe and the eurozone. Further, the broad participation in the anti-neoliberal protests of the past eight years means that nativist or right-wing populist movements have no chance of gaining ground.

These developments have created an atmosphere where five parties on the left and in the middle of the political spectrum could conceivably create an anti-neoliberal alliance despite themselves. At the very least, the neoliberal consensus that existed between 1984 and 2008 has been irrevocably disrupted. A new, reformist hegemony seems likely to take its place in the near future, but it will have to deal with all the pitfalls and dangers of broad coalitions and the burden of governance.

Árni Daníel Júlíusson is a historian in Reykjavík and a member of the board of Attac Iceland.

This article was first published by the Jacobin.

See also Inspired By Iceland… No, really! by Árni Daníel Júlíusson.

Helga Katrín Tryggvadóttir

Icelanders are notoriously bad investors. Once someone has a business idea, everyone jumps on the wagon and invests in exactly the same thing. The infamous growth of the banking sector is one example, before the 2008 banking crash the Icelandic banking sector was 12 times the size of the GDP and Iceland was supposed to become an international financial centre. I have no idea how anyone got the idea that an island with three hundred thousand inhabitants could become an international financial centre, but many people in Iceland considered this a perfectly normal ambition.

And then there are the politicians, they have had the same investment idea for more than hundred years. Either it is building an artificial fertiliser factory, or it is building an aluminium smelter. Last year one MP proposed building an artificial fertiliser factory, in order to “lure home” young Icelanders who have moved abroad. A majority of those have moved abroad to educate themselves, but sure, who doesn’t want to use their PhD on the factory floor?

Now there is an Icelandic investor in the North of Iceland, Ingvar Skúlason, who is planning on building an aluminium smelter, at a time when aluminium prices have been dropping due to overproduction. He has already managed to sign a deal with a Chinese company, NFC, which is willing, he says, to pay for the whole construction, yet the smelter would be owned by Icelandic companies. All of this sounds kind of dubious in my ears. And everyone can see that this is not a good idea, even the banks, with a new report released by Arion Bank advising against more investment in the aluminium industry. The bank bases its analysis on the fact that aluminium price is too low at the moment to bring any profit into the country (since the price for the electricity is connected with the price of aluminium, the price the aluminium smelters pay to the National power company (LV) is low when aluminium prices are low).

But that does not stop the politicians from supporting the idea. The prime minister Sigmundur Davíð Gunnlaugsson, was present when Skúlason signed a deal with the Chinese company, praising the initiative. Skúlason also claims to have support from the Minister of Industry, which is not surprising since her only campaign promise was building an aluminium smelter and get the “wheels of the economy rolling”. Recently, Alcoa World Alumina, owned by Alcoa Inc., admitted to having bribed officials in Barein. In Iceland, however, they have never had to pay any bribes. Icelandic officials have been more than willing to do their service for free, “bending all the rules” as Friðrik Sophusson, former head of LV, was caught on tape saying.

There are currently three aluminium smelters in Iceland. Together, they use 80% of the energy produced in the country and their profit account for 60 billion ISK a year (USD 500 million). Yet, a majority of the profit is registered as debt to their parent companies abroad, leaving the Icelandic subsidiaries operated in debt but creating profits to the parent companies. The only profit that is left in the country is the wages they pay to their employees, and that only accounts to less than 1% of the national revenue. The jobs they create (which is usually the main argument for their construction), also account for less than 1% of all jobs in Iceland. The price they pay for the energy is also below the normal market price. Lets think about this for a second: 80% of the electricity produced in the country goes to international corporations that only produce 1% of the national revenue and creates 1% of the jobs, exports the majority of the profits and pays below-market price for the energy. So, 99% of the people do not get any share in the majority of its electricity production. Sounds familiar.

Maybe it is time to occupy the smelters?

By Julia Vol

Links:
http://grapevine.is/Home/ReadArticle/Minister-Of-Environment-Wont-Sign-O…
http://heartoficeland.org/
http://grapevine.is/Home/ReadArticle/Environmental-Minister-To-Change-Pr…
http://grapevine.is/Home/ReadArticle/Minister-Of-Environment-Would-Suppo…
http://thepalebluedot.me/2013/10/21/passion-for-lava/
http://grapevine.is/Home/ReadArticle/Ministers-Dad-And-Uncles-Profit-Fro…
http://visir.is/myndband-af-handtoku-omars-ragnarssonar/article/20131310…
http://grapevine.is/News/ReadArticle/Charges-Filed-Against-Galgahraun-Pr…
http://grapevine.is/Author/ReadArticle/27-Increase-In-Tourism-This-Year
http://grapevine.is/Author/ReadArticle/Travellers-Take-Their-Toll-On-Tou…
http://grapevine.is/Home/ReadArticle/Hotels-Motels-Holiday-Inns
http://www.nytimes.com/interactive/2014/01/10/travel/2014-places-to-go.html
http://www.theguardian.com/environment/2013/jun/19/iceland-fin-whale-hun…
http://grapevine.is/Home/ReadArticle/City-Hall-Wants-Answers-On-Whale-Wa…
http://www.theguardian.com/environment/2014/jan/08/icelandic-whale-beer-…
http://grapevine.is/Features/ReadArticle/A-Look-In-The–Rearview-Mirror-

After being hailed as the world’s radical wunderkind for a few years, Iceland left observers perplexed when the parties evidently responsible for its failed neoliberal experiment were voted back in 2013. Who or what runs this shop, really?

You “want to move outside the herd and be independent” because you are “different from the ‘ordinary’ tourist.” You “have above average education” and you “have above average income,” says the Icelandic Tourist Industry Association’s report from last year, defining their target group, ‘the enlightened tourist.’ And boy, are you targeted.

Since 2010, the local population has been thoroughly informed about the importance of proper social media utilisation. In its 2012 annual report, the national branding bureau known as Promote Iceland states that the general public is being ‘harvested’ for this purpose. That year, Promote Iceland also ‘assisted’ some 600 foreign journalists in organising their visits to the country. Journalists and bloggers coming specifically for events sponsored by Promote Iceland wrote 1,400 articles, including pieces in The New York Times, Huffington Post, The Guardian and so on. Sponsored events included music festivals, food festivals, dance, theatre and design festivals. And a marathon.

Meanwhile, a few Hollywood film productions were funded directly through Iceland’s state budget, using Tom Cruise, Ben Stiller and Ridley Scott and their fine productions for the promotion of Icelandic landscapes. If no such subtle methods of nation-branding get to you, of course some good old advertising is also involved.

Bad breath, meet white teeth

In late 2007, in response to what was locally perceived as an image-crisis, mainly that some foreigners were sceptical about the growth of Icelandic banks, the Prime Ministry formed a committee on the Image of Iceland. A few months later, in April 2008, the committee published its findings in a report. The report’s main proposal was that various institutes dealing with exports, culture and diplomacy, should be put under the control of one bureau to unify broadcast messages. One correspondent quoted in the report explained that we must “walk in unison and speak with one voice.” The report suggested that institute be called Promote Iceland. Then came October, the boom went bust, and mass protests were followed by a change of government—making the need for image-management plain for all to see. As stated in the report, “future orientation must be long-term, and must not change along with changes in government every few years and the nation must agree on it.”

In 2010, the marketers faced a unique challenge, an unforeseen national branding emergency, as Eyjafjallajökull erupted, disrupting the flight schedules of millions. As if stories of crooked bankers, political incompetence and violent riots were not enough, travellers all over now cursed Iceland for its geo-historically bad breath. Thank god work on Promote Iceland was already well under way. The necessary legislation was hastened and before the eruption was over, Parliament passed the Promote Iceland Law (38-2010). This sputnik institute whipped up the social media-based campaign ‘Inspired by Iceland’ and before anyone knew how to pronounce Eyjafjallajökull, Icelanders appeared on YouTube, dancing to Emiliana Torrini’s “Jungle Drum” in the seemingly eternal sunshine of spotless fun. Post the video, spread the message, officials urged their compatriots: show people everything is alright, invite friends over. And tourism went up. Solid nation-branding, Promote Iceland’s unified message was obviously a winner.

After being hailed as the world’s radical wunderkind for a few years, Iceland left observers perplexed when the parties evidently responsible for its failed neoliberal experiment were voted back in 2013. The right-wing coalition government just published its first annual budget proposals, for 2014. Schools, hospitals, welfare, culture, arts and sciences face the world’s most terrifying euphemism: austerity. One single item in the whole budget, however, is explicitly declared ‘exempt from budget cuts’: Promote Iceland. The law passed through Alþingi without debate in 2010 established an institute funded by taxes, but run by a board majority appointed by the Confederation of Icelandic Employers (CIE). Yes, there is such a thing. And yes, it is what it proclaims to be: the national capitalists’ union. One lobby to rule them all. The confederation negotiates salaries nation-wide. It directly funds research in Bifröst University’s business department. It does all sorts of clever things to secure its members’ interests. And now they have this new central bureau. Obviously, Promote Iceland is not a propaganda ministry. Ministers are elected officials; their policies are debated in public and subject to change. Promote Iceland is something much handier.

The value of our values

Apparently some U.S. schools teach, as fact, that ‘the Vikings’ gave Iceland its name to keep strangers away from the place, using the even more dishonest name ‘Greenland’ as bait to misdirect them towards a glacier. This remains speculative. What is true is that local attitudes towards foreigners have long been selective. In 1936, Iceland chose not to join the League of Nations because the members’ countries condemned Mussolini’s Italy for using chemical weapons against the population of Abyssinia. At the time, Italy imported fish from Iceland. After Iceland’s polite gesture, Mussolini showed his appreciation by signing an import agreement with Iceland in his own hand. Another example of Iceland’s selective foreign policy is the country’s request that the US armed forces would not send any black soldiers to its Keflavík military base. The US agreed until the 1970s when the policy became a scandal in American newspapers. In an early display of intuition for nation-branding, Icelandic officials responded kindly: Send a few so you can call it mixed. The soldiers were then kept under curfew, only allowed to Reykjavík on Wednesdays, during which, idiosyncratically, the selling and consumption of alcohol was forbidden.

Nowadays, the most striking display of Iceland’s implicitly selective foreigners policy is its preference not to grant refugees asylum. The 2009–2010 record of thirteen individual refugees receiving full asylum in two years was set by a left-wing government under heavy scrutiny from activist groups. Otherwise the number is mostly zero. The presence of Roma communities is not debated in Iceland. If any arrive at all, the media declare them a threat before the police swiftly throw them out. And so on. Those excluded are obviously not just any foreigners. They are vulnerable, poor people. You are probably somewhat better off and you are very welcome. As Prime Minister Sigmundur Davíð phrased it last September, addressing financiers in London: “We want you and your money in Iceland!”

The original 2008 report on the Image of Iceland showed awareness that socially oriented projects can make useful marketing ploys. The report acknowledged the value of artists: “Positive success stories are considered one of the most successful marketing tools today. […] One option is constructing stories of the success of Icelandic companies and individuals in all fields of enterprise, culture, arts and business. It is necessary to use poets, writers, photographers and sound engineers to deliver these stories convincingly.” It also recognised the value of communal ties, suggesting that “key people from certain market zones should be invited to visit Iceland once a year.” It showed appreciation of the value of education and cultural heritage, proposing special projects like, “The Saga-nation exterminates illiteracy, a global effort to teach reading. Each year the nation provides financial and educational support to teach as many people to read as the number of the nation’s members. […] Thus the heritage of the sagas can be intertwined with the global problem of illiteracy, emphasizing the nation’s high levels of education and enlightenment.” It valued peace: “Iceland – the World Peace Camp: Iceland will be leading in connecting children and youth from all over the world – especially from conflict zones – who will come to Iceland for a week to participate in a peace camp, subsequently becoming peace ambassadors of Iceland.” Oh, and: “Iceland will be the world’s first country to offer all its subjects [!] to invest in businesses in Africa.” And, sadly, cynically, ruthlessly, so on.

This broadcast will not be revolutionised

The long-term challenge faced by Promote Iceland was not Eyjafjallajökull’s eruption but the financial crisis and its aftermath—the ‘kitchenware revolution.’ In 2009, Icelanders voted left. It made good spin material. The recently elected President Obama signified change in people’s mind. Through a sustained effort, Iceland broadcast a clear message about radical change. And so you heard about Iceland’s new crowd-sourced constitution, the prosecution of evil bankers and the president who refused to let the people pay the crazy bankers’ bills. These fine stories are not true, as in what actually happened, because that’s not what they are for. These are convincing success-stories, vital elements of any ambitious nation-branding project.

The truth is that after a grand democratic theatre performance, involving the country’s whole population, the new constitution was, with somewhat less fanfare, simply cancelled. The president made his operatic gestures, swiping away Iceland’s burden of reimbursing German and Dutch savings accounts, while securing his own re-election. Most of the banks’ staggering debts were nonetheless absorbed through the devaluation of Iceland’s currency, leaving wages, pensions and savings worth only half of what they were before. They remain so. Export industries are booming, while wages stay far below the EU average. Every working person who stays in Iceland pays the infamous bankers’ debts. And most stay. Most of them owe their homes to a bank. Most would sell at a loss. Those who could turn a profit cannot bring that profit out of Iceland, due to currency restrictions. Yes, this is somewhat Berlin Wall-ish. Luckily, however, being an island, Iceland needs no such eyesore. Cheap labour makes Iceland an increasingly popular tourist destination, they stay and pay their dues serving foreign visitors—enlightened tourists like you.

“Iceland got back on its feet and is now thriving” because that is what you wanted to hear. If there is anything you like more than a winner, it is a sympathetic, quirky, leftist kind of winner. Promote Iceland’s original 2010 campaign got Icelanders dancing in front of cameras all around the country, to soothe you, show that we’re all right and you will be safe here. The 2011 ‘invite a tourist home’ campaign showed a cosy little place where the minister of finance will give you a foot massage. The most recent effort is the ‘Share Your Iceland Secret’ campaign, encouraging locals to reveal their ‘secret places’ to you, hidden gems of city life or nature, to be crowd-sourced into an accessible app. Meanwhile, one by one, Reykjavík concert venues, parks and such disappear to make way for hotels. The whole post-lapsic process, however, does not feel like Naomi Klein’s shock doctrine tactics. Partly due to IMF’s plan to ease the country in. Partly due to four years of some actual socialist policies. Partly because so far, foreign investors are neither eager to buy the country’s natural resources nor infrastructure. And to a large extent because of Promote Iceland’s unified message, our success-story. Currently, exploitation remains focused on harvesting human resources, utilising people’s spare-time and private lives for the greater good, formerly known as GDP. Polls reveal the locals to be happier now than before 2008. Consuming less alcohol, less sugar and less tobacco, they tend more to what really matters. You.

Live happily ever after!

Summarising this article’s hypothesis runs the risk of caricature but let’s do it anyway: In Iceland, the logic of marketing and branding has been permanently institutionalised to minimalise the damage done by democratic processes, against which it currently has the upper hand. Meaning: Promote Iceland runs this shop. Iceland is a billboard. Some still hope that this is a case of double-bluff: that underneath the presently exposed layer of all-encompassing business logic runs another current, the cunning logic of history, a wisdom revealed through the ballot box.

Such a hypothesis would claim that the current coalition was tricked into power, maneuvered into overbidding the all-too compromising left-wing parties in a blackjack game of socialist promises: we will annul your private debts, PM Sigmundur Davíð promised, because they are unfair. We will fight the evil venture-capitalists and justice will prevail. If the coalition runs out of revolutionary steam or fails to deliver on its socialism, this hypothetical hypothesis would hold; they will be ousted once more. The third option is that the world, including Iceland, is an obscure and chaotic place and there is no underlying logic. And then there is the Prime Minister’s hypothesis. In the opening speech of the current parliamentary session, Sigmundur stated that, so long as the general public works in confident unison towards a shared vision of the future, so long as we do not let ourselves be influenced by ‘extremist ideologues,’ aiming at ‘disintegration and subversion,’ this country can be an exemplar, where “a cohesive and happy people live in safety to the end of their days.” For the sake of brevity, however, this article will make do with one speculative hypothesis at a time.

First published in Grapevine. Based on a 2010 article entitled “Í landi hinna klikkuðu karlmanna.” (“In the Land of the Mad Men”). Translated in part by Haukur S. Magnússon.

After the election, we see the old parties of economic mass destruction are coming back to power. Giving enormous promises of easy money to be wrestled from evil vulture funds, debt relief and tax reduction, The Progressive Party doubled in size after a few years of hardship. There is a jolly good feeling between the two young new leaders of a brave new Iceland, and when a radio host called them up and offered to play them a request, they asked for Duran Duran’s ‘Wild Boys.’ I Googled the lyrics, not quite remembering the lines, and got a nice chill down my back:

Wild boys fallen far from glory
Reckless and so hungered
On the razors edge you trail
Because there’s murder by the roadside
In a sore afraid new world

They tried to break us,
Looks like they’ll try again

Sounds quite grim. This, coupled with the new government’s announcement that it would be effectively dismantling the Ministry for the Environment and Natural Resources and that there will be no Minister for the Environment, gave me a strange flashback feeling. I decided to revisit the state of mind that we used to call normal in 2006. When the economic policy, the energy policy, the expansion of our towns, the mortgages on our homes—almost all aspects of our daily life had become totally mad. This is not my own diagnosis; if you search the homepage of the IMF for the phrase “Collective Madness,” you’ll find this:

“’Iceland, in the decade and a half leading up to the crisis, was an example of collective madness,’ said Willem Buiter, chief economist at Citigroup, a remark that elicited spontaneous applause from the more than 300 participants, many of them Icelandic policymakers, academics, and members of the public.”

In our daily lives, we usually sense what is normal and what is over the top. Sometimes the discourse will blind us; PR and propaganda can create a kind of newspeak. It can be a good exercise to try to talk about things in a foreign language, to view them in a new light. As an Icelander, you could for instance try to tell someone from another country that Iceland’s government sold one state bank and received payment in the form of a loan from another state bank—and vice versa. That the state banks were thereby handed to men that were closely connected to the then-reigning political parties. The manager of one of the parties became head of one of the banks’ board of directors, while the other party’s former Minister of Trade belonged to the group that was given the other bank. That man had access to every bit of inside information about the bank’s standing.

In the meantime, this former Minister of Trade became Central Bank Manager. He went to the US and made Alcoa an offer that the company could not refuse. He had thus set in motion the largest-scale construction project in Icelandic history, greatly increasing economic activity in Iceland—a grand boon for the bank he just finished selling to himself.

If you tell this story in a foreign language, people shake their heads. They gape in disbelief. They use words like “corruption” and “mafia.” They exclaim, full of disbelief and even disappointment, “no, not in Scandinavia!”

THE ACCEPTED INSANITY

It is insane to expand a banking system by tenfold in eight years. We know that now. It isn’t technically possible to grow all the knowledge and experience needed to build up and manage such a contraption in such a short time. Not even by shoving an entire generation through business school. It is impossible.

But the megalomania was not just confined to the banking sector. Energy production in Iceland was doubled from 2002–2007, when the huge Kárahnjúkar dam was built in the eastern part of the highlands—to serve one single Alcoa smelting plant. The energy it produces, about 650MW annually, is enough to power a city of one million people. Doubling the energy production in a developed country over a five-year period is not only unheard of, but it would also be considered ridiculous in all of our neighbouring nations. Most industrialised states increase their energy production by around 2–3% annually. Doubling it would be unthinkable. It has been proven again and again that gargantuan investments generally destroy more than they create.

In Iceland, however, the goal was to double the nation’s energy production AGAIN by building aluminium smelters in Helguvík, Húsavík and enlarging the Straumsvík smelter by more than threefold. The period of insanity was to be succeeded by a total and complete madness. This was to be funded by 4–5 billion dollar 100% loans to Icelandic energy companies from foreign banks. Nearly 20,000 dollars for every single Icelander—every loan directly connected to aluminium prices and secret energy prices. The media reported this as your everyday act of government job-creation. It was regarded extremist to ask critical questions. Many regarded it unthinkable for the survival of the nation NOT to do this.

Now we know that we did not only sacrifice our nature for the economy, we sacrificed nature and the economy. Again, we do not have to seek out the websites of activists or environmental groups for this information. We just go to the IMF reports:

“Executive Directors observed that the Icelandic economy is at a difficult turning point. The long economic expansion, initiated by aluminium sector investments, sustained by a boom in private consumption, and fuelled by ready access to external financing, contributed to a build-up of macroeconomic imbalances and financial vulnerabilities.”

COCAINE IN THE HOT WATER?

The madness made itself clear in the business of geothermal energy, making itself known in the form of financial troubles and enormous debt of the energy companies. The geothermal field had enjoyed an even and stable development since it got started in the early twentieth century. During the great depression, the City of Reykjavík created the world’s largest geothermal heating system by pumping hot ground water into the homes in the city. Later they started producing a small amount of electricity by harnessing steam through turbines. But one day it seemed as if someone drilled into a cocaine vein. Out of the twenty high temperature geothermal areas in Iceland, plans suddenly emerged to harness sixteen right away, all for the sake of the aluminium industry. The energy companies applied for permits to do research drilling in most of the remaining ones. In an instant, the field went from a very slow, conservative development to becoming a geothermal wild west.

In the south, a major development of all the geothermal areas from the Reykjanes Peninsula to Þingvellir was planned—a chain of power plants in pristine and delicate areas—to serve a Century Aluminium smelter in Helguvík. But the geothermal plants would not have sufficed—the remaining power would be squeezed from hydro electricity in the Þjórsá river—potentially threatening the greatest stock of North Atlantic Salmon in Iceland—and up in the highlands—threatening the Pink-footed Geese of Þjórsárver.

So what was referred to as “moderate development” when the parties of The Wild Boys were last in charge of our energy sector? Their plans went like this: A new Alcoa smelter in the east, a new Alcoa smelter in Húsavík, a new Rio Tinto Straumsvík smelter beside the old one, an expansion of the Century smelter in Hvalfjörður and a new Century smelter in Helguvík. Amounting to a total of 1.4 million tons of aluminium. Each one of them needing energy that could serve one million people in their daily lives. Each one of them demanding sacrifice of great natural wonders, wild rivers and pristine geothermal areas.

How did they fare? The Alcoa Smelter in the East has been built, with the destruction of two glacial rivers, Lagarfljót and 50 km2 of highland beauty. The expansion of the Rio Tinto smelter was stopped and the Húsavík smelter did not go through, however, a skeleton of the Helguvík smelter is currently rising—with no power in sight.

The Alcoa smelter in the north would have required all the harnessable power in the northern part of Iceland, only excluding Jökulsá á Fjöllum. Close to Mývatn, we have the Krafla geothermal area. After a long and often struggling forty-year development period, the available power from the area reached about 60 MW. Now, the goal was suddenly to quadruple the area’s energy production—expanding it by 150 MW in just a few years, and harnessing the beautiful Þeistareykir area to its utmost capacity—up to 200 MW. They also had their eyes set on Bjarnarflag and Gjástykki, delicate areas that should be regarded as national heritage sites. All this was to serve a new Alcoa factory they wanted to build close to Húsavík, the famous whale watching and fishing village in North Iceland. Having done all that, however, the energy production would still not reach the 600 MW that Alcoa really needed—the harnessing of two more glacial rivers would have been necessary: Skjálfandafljót with the waterfall Aldeyjarfoss and the glacial rivers running from Hofsjökull.

The interesting thing is not how crazy this seems in hindsight, how extreme, how mad this reality was — but that outsiders did not see this plan as collective madness. The scheme was praised in international media as being a progressive plan for “clean” energy, and we still have members of parliament that regret that this did not happen. And the fact that our labour unions and politicians have referred to this when they say that “nothing is happening” in terms of business and job creation in Iceland. Or that they refer to this when they say “we have still only harnessed X% of our energy.” They are talking about this as a normal feasible future state of Iceland.

Why are people so crazy? Is it or was it a good idea to indebt the nation by a total of 5 billion dollars to place two Alcoa smelting plants in the same constituency? To surround the Faxaflói bay, where 70% of Iceland’s population resides, with three smelters? The answer is simple: The mad men still think so. One of the new Independence Party MPs, Brynjar Níelsson, has no regrets for the death of the river Lagarfljót in service of Alcoa. He said it was apparent that protectionists loved a few fish more than they did people.

But you can still ask like a fool: Did Iceland really have enough accumulated knowledge and manpower to multiply all our energy companies in the space of ten years? Was there never a doubt in the geologist’s mind when he found himself in a magical place such as the Torfajökull area above Landmannalaugar, Kerlingarfjöll or the steam areas around Reykjavík? Did they really want to do drill, pipe and harness EVERYTHING, right away? And do it all for the sake of a single industry—the aluminium industry. Did it have to be the role of a marginalised group of a few activists to use their spare time to criticise this?

OF “REYKJAVÍK” KNOWLEDGE

I was once at a meeting in Húsavík, where I screened my film, ‘Dreamland.’ At that meeting, the local geothermal plant manager claimed he could easily harness 1,000 MW out of geothermal areas north of Mývatn. I asked if it wasn’t correct that scientists are concerned about overexploitation of the country’s geothermal areas. The scientists’ criticisms were quickly blown off the table as “Reykjavík knowledge,” and in that instant every alarm bell went off.

Now we understand that power is not as plenty as the hype promised, and now most Icelanders understand that energy production on the banks of Lake Mývatn in Bjarnarflag might just jeopardise the ecosystem in that wonderful lake. But you wonder if the people developing our most delicate areas possess good enough judgement to work close to natural wonders. It seems like they are ready to take the risk, to see what happens.

I found an interview with the aforementioned plant manager from 2002. At that time, he had drilled a big hole for 170 million ISK because a Russian company potentially wanted to build an aluminium oxide factory and a giant aluminium plant in Húsavík.

If one sets aside minor ethical facts, such as the Russian aluminium industry being run by the mafia at that time, one is still left to ponder the fact that almost no industry in the world produces as much and as toxic waste as aluminium oxide production (or alumina, as it is called). Those that followed the horrible events when a red slush toxic lake in Hungary broke should know what comes with an alumina refinery. But this local hard-working man had spent more than one and a half million dollars looking into the feasibility of such a plant in Húsavík. Things have been so good here that people think they are untouchable.

Even though the companies engage in malevolent practices in other countries, they would never do that here. Sure.

THE HOLY LOCAL

It seems that for some reason the most unbelievable hogwash gets promulgated without any critical thought. We enter a boom after boom and never learn from mistakes. We can look further back in history to see how madness is mixed up with ambition, how extreme and unrealistic views of the future are presented and taken seriously.

In an edition of Morgunblaðið from March 1987, one can read a prediction of the impending evolution of local fur farming until 1996. At that time, thirty fur farms were operated in Iceland. Morgunblaðið cites a report that predicts Iceland will foster 600 mink farms by 1996. They assume a twenty-fold growth in ten years, as if nothing were more natural. A month later, this optimistic story ran: “The mink stock will double this year.” Only three years later, in April of 1990, we find this dramatic headline in a copy of Morgunblaðið: “Fur farming: The industry is on its last legs. Many farmers on the edge of despair.”

In this country everything is considered normal if a “local” wants it. Nothing in Iceland is as crazy as the holy local is when he wants a smelter or an oil refinery, no matter how large or out of proportion. He has the sacred right to that, especially if he uses “job creation” as an argument. Numbers that would be considered sizeable in large nation’s economic statistics, energy resources and infrastructure that are earmarked by the world’s superpowers as being “strategically important” are subject to “the will of the locals.” The nation’s energy resources and nature are in the hands of a smattering of district councils that have no staff and no expertise while the majority of Icelanders that reside in the capital area seem by default “local” to nowhere.

So, the locals of the east destroyed their highlands, the locals of the south want to dam the wonders of the Skaftá area, the lower part of the Þjórsá river and the locals of the southwest are ready to harness almost every single geothermal area. And this seems to be a global problem—rural communities losing their youth and talents to the cities of the world are willing to sell off their forests, their mountains, their rivers and valleys for some hope of development and a future.

It is strange to see that one of the major driving forces behind this development resides within our labour leaders, who have been demanding extreme leverage and risk on behalf of public energy companies. If there should be a hesitation in the risk taking, the responsible parties are “dragging their feet.” The labour unions’ “stability agreement” with the former government entails that “every obstacle be removed” that somehow hinders the proposed Helguvík aluminium plant. It is exactly this kind of thinking that lead to almost 200 foreign workers being left disabled and unemployable as a result of working on building the Kárahnjúkar dam. Conditions of workers were severely compromised to make the dam construction process cheap enough. Every obstacle was removed to provide Alcoa with energy prices that save them 200 million USD annually. That amounts to the combined yearly wages of more than 10,000 teachers.

The noble cause of creating jobs becomes quite grim if it involves harming the work capacity of so many. The PR people talk about a ‘multiplication effect’ of every job in a smelter—but wouldn’t it be polite to subtract the disabled workers? People will go so far to satisfy their prince charming that they behave like the ugly stepsister in the fairy tale, cutting their toes off to fit the glass shoe.

HOUSE OF CARDS

The Helguvík aluminium smelter close to Keflavík Airport is a symbol of how poorly run Iceland can be; the Helguvík aluminium smelter is already being built, even though nobody knows where we can scramble together its required 600 MW of energy. The Helguvík smelter is a symbol of how weak the nation’s administration can be, of how shattered professionalism and long-term thinking can become, and how the media all but encourages unlawful activities in their headlines, if job creation is at stake. They started to build the smelter without access to power sources, and without the necessary power lines planned or agreed upon by landowners.

Why start building, then? Because in 2006, the Wild Boys were in power, showing their ambition and “competence” by signing long term sales agreements for cheap energy before the energy sites had been researched, planned or developed. Now Reykjavík Energy and HS Orka are bound by agreements that neither company wants to fulfil due to foreseeable losses from selling the energy below its production costs.

The sharks were very aware that they were taking advantage of a country with mad politicians in a rare period in our history. When they were willing to sell almost everything, anything, anywhere to anyone. In a remarkable investor report called: “Harnessing unlimited power and profit from the world’s most progressive energy program,” an analyst made this great comment:

“It works out great for Iceland, too. It is very cheap for Iceland to deliver power to Century. The Icelandic power companies will make extraordinary profits on that power if aluminium prices stay strong. And if aluminium prices weaken, Iceland is not biting the hand that feeds it.”

This is how politicians build an elaborate house of cards that combine risk, debt and commitment that collapses if only one of the cards falls. Thus, the hands of future city governments have been tied and an insane construction binge in important areas has been commenced, all to benefit one company that’s lacking most of the needed permits.

Could anyone recount the details of the Century Aluminium Helguvík Smelter project at an international conference without being booed off the stage as a fraud? At an aluminium conference, however, such a man would actually bring more lust than an exotic dancer.

Despite being in the hands of extreme capitalists, the labour movement has not called for professionalism or long-term thinking in energy affairs. It simply demands that “every obstacle be removed.” Get the trucks rolling immediately.

In 2006 we were in the middle of a revolution, but the Wild Boys did not call themselves “The Aluminium Revolutionary Front”—they defined themselves as the norm, even though their scale was insane. If they were criticised, they started thinking of themselves as persecuted. Warlords are always persecuted moderates when they’re merely conquering neighbouring nations in the name of peace.

THE CORE OF THE PROBLEM

Throughout the years, polls have shown that a large part of Icelandic males aged 40–70 have been in favour of the collective insanity seen in the energy policy of 2006. The biggest problem seems to be with male voters of The Independence Party, where a vast majority has even considered the most extreme energy policy as the sole basis for the continued survival of Icelanders. That explains the great emotional attachment they have to dams and smelters. To secure their survival, the majority of them wants to cut back on our environmental regulations, and they have no standards whatsoever on the ethical background of the corporations coming to Iceland.

Therein lies Iceland’s most serious political ill. If everything were normal, our males would be conservative, moderate, aversive to risk, frugal, orderly and even a bit boring. This is an important group of people in every society. It contains a lot of average household fathers; it contains pillars of society, company directors, influentials, MPs and even journalists and editors. These are men that have the power to define what is normal and what is abnormal and/or excessive.

OF RESPONSIBLE PUNKS AND SURREALISTS

It is harmful for communities when a critical mass of their important males starts adhering to revolutionary and completely reckless ideas, adopting a blind belief in them. This group is not fit for governing anything while the situation lasts, and it is therefore no coincidence that the city of Reykjavík is now governed by the punkers and surrealists of the Best Party. A moderate mixture of surrealism and punk rock is a down to Earth, conservative and responsible policy when compared to the delusions and anarchy of the crazed men. They have proved very moderate and responsible, and have now moved the policy of Reykjavík Energy, Reykjavík’s energy company, into a more sustainable and modest direction. And the Left Green Social Democrat government did the same with Landsvirkjun, the national energy company.

Those that are worst off in this group of mad men share a mutual admiration for Einar Benediktsson (1863-1945). The Icelandic National Myth is perhaps best embodied in the figure Einar Ben, our poet of progress. His most recent biography gives a good picture of the kind of man he was and the impulses that motivated his actions:

What drives Einar Benediktsson on to undertake this long journey […] is his unshakeable belief in his own abilities to be of use to his impoverished fatherland in countries abroad. His dream is to furnish the money that will transform Iceland into a modern country, with towns, factories, railways, roads, harbours and large-scale farms. He carries nothing with him except his belief in himself…

Einar Benediktsson had great dreams for the future of Iceland, replete with hydroelectric dams, factories and railways. While his generation on both sides of the Atlantic saw their dreams become a reality, and sometimes a nightmare, Einar was to be disappointed in all his great hopes and ambitions. Henry Ford was born a year before Einar Benediktsson, and Sam Eyde, the founder of Norway’s Norsk Hydro was born three years after him. But Iceland failed to industrialize in the way Einar envisaged. Whether Iceland was fortunate or unfortunate to have missed out on the Industrial Revolution is something we can argue over. But the failure of Einar’s dreams left an unfilled space in the Icelandic soul. Iceland’s wealth came from fishing, but Einar’s ideas still hovered in the air, leaving a sense of a task left unfulfilled—the unfinished Icelandic dream. The Americans could move on from Ford to Gates. The Icelanders were still lacking a Ford.

One of the first bubbles in Iceland happened when businesspeople travelled the country buying rights to harness waterfalls in the beginning of the 20th century. Einar Ben had the Norwegian engineer Sætersemoen draw up a row of power plants spanning the entirety of Þjórsá. The drawings of the proposed power plants look magnificent and enticing and would without doubt be considered among Iceland’s most beautiful buildings had they been constructed. But how realistic were the plans? They had planned for harnessing Þjórsá to produce 600–800 MW—in 1918, nota bene. This does not include the rest of the water rights these men had secured for themselves, including Dettifoss and Gullfoss. In comparison one could note that today, one hundred years later, the City of Reykjavík uses 200 MW—on Christmas Eve, with every electric appliance running at full steam.

What did Einar plan on doing with all this energy in 1918? Aluminium production was barely on the horizon as a feasible industry, and televisions and freezers were but distant dreams. What were they planning to do with all the power? Produce fertiliser? The Gufunes fertiliser plant used around 20 MW when it was running at its peak. Who was to use all the energy and pay for the series of power plants? The answer is likely simple: No one. No one in the world could have found use for this energy.

Of course Einar could easily have harnessed a small stream to light up a small village, maybe even a cowshed or two. But there is no glory in that. The act would not appease the deranged men’s need for conquest and magnitude. There’s much more spunk, gusto and vigour in lining all of Þjórsá with power plants, even if the energy produced is way beyond what the nation can use one hundred years later. To this day, a lot of people think that Iceland’s government at that time was backwards, afraid of foreigners and somehow prevented the founding of a great and profitable company and “foreign investment.” But it’s enough to look at the numbers to see that the whole thing was a sham.

It’s so weird to think that, ever since, a certain group of Icelandic males have harboured a strange sort of national grief. It’s as if Einar’s unrealistic ideas have been haunting later generations of Icelanders. Not as fantasy, but as real, attainable goals or lost opportunities: “The dreams of our turn of the century poets have finally come true.” Remarked former PM Geir Haarde as he signed a deal with Alcoa in 2002. Yes, finally, the nation was dragged into a century old illusion.

THE MAD MEN VS. THE WISE GIRLS

The mob seems tolerate nothing worse than young, educated women who that use words like “professional” or “process.” Even if aluminium production in Iceland has been tripled over the last ten years, a lot of the crazy guys think that Iceland’s economic problems stem first and foremost from a lack of aluminium smelters.

Supporters of a new Century Aluminium smelter in Helguvík spent millions in advertisements campaigning against departing Minister for the Environment Svandís Svavarsdóttir, who delayed the building process with demands of a sober overview of the energy demand and environmental impact. The blogosphere went wild when Left-Green MP Kolbrún Halldórsdóttir spoke up against deep-sea oil drilling in Icelandic waters. One sensed a lynch mob in the making as former-Minister for the Environment Þórunn Sveinbjarnardóttir met with locals in Húsavík advocating for a full environmental impact assessment for a new Alcoa smelter—the audience was only lacking the pitchforks. The decline of The Independence Party is very evident in the fact that Katrín Fjeldsted lost her seat in parliament. She is a well-educated, intelligent and logical doctor and the only party MP who questioned the insanity. Every obstacle shall be pushed out of the way.

Icelanders harvest 1% of the world’s fish. We receive more tourists per capita than most nations. Iceland has harnessed five times the amount of energy that the nation needs to function, and we currently operate three aluminium smelters. But we have ALREADY harnessed five times more energy than our neighbouring countries. We are already an energy superpower—if everything were normal, such an investment should yield a fair bit of profit to the nation, if we don’t blow the proceeds and resources in another round of debt. But the discourse is so crazy. People act as if “NOTHING IS PERMITTED” when the energy production is already five times more than the nation can consume. Of the energy we produce, 90% already goes to smelters.

We already have everything a modern society needs. We just need to tend to what we have already built, to reap some profit from the power plants we have already constructed and take better care of what we’re currently fishing. People get insecure when interest groups moan: “Who will support us in the future?!?” as if Iceland is a country without foundations. The fear that is purposely spread is resulting in Iceland acting like a man that demands radiotherapy, chemotherapy and surgery to fix his headache. The truth is that the treatment will never cure him—but it might kill him. He will in the best-case scenario grow addicted to the drugs.

THEY TRIED TO BREAK US…

We are a small community and we need peace and room to work. That Björk should need to take time off work to fight the insanity is just a small example of the disturbance that thousands of Icelanders suffer every day because of this crazy nonsense. Living here will become unbearable if something like the reckless policy from 2006 goes full speed again. It is maddening that we cannot seem to leave our most beautiful areas alone. We are a small community where co-dependency is the norm and people are polite.

The new leaders are young and nice guys; Sigmundur Davíð loves old buildings and has good ideas for city planning. But behind them is a crowd of mad men, “fallen far from glory, reckless and so hungered.” Were four years from power enough to sober up the mentality in terms of the energy policy? What will come out of the “rethinking” of the Energy Master Plan? Will we be strapped up into another rollercoaster, just to take another ride of boom and bust? “They tried to break us. Will they try again?”

At the heart of the exhibition, which consists of audio, video and sculptural pieces, is a 20 minute long film in Icelandic and English, bearing the same title as the exhibition. Around 30 people were willingly buried alive during the making of the film, which was shot this year in Greece and Iceland. Soundscapes were created by Örn Karlsson in collaboration with Angeli Novi.

Corporate green-wash and the Kárahnjukar dams play a key role in You Can’t Stand in the Way of Progress. In one of the film’s scenes, the 700 m long and 200 m high central Kárahnjúkar Dam is digitally blown up by the very same explosion that blew up the Dimmugljúfur canyon in March 2003. The first destruction of the 200m deep canyon, which was carved out by the 150 km long river Jökulsá á Dal, played a strategical key role in the conflict about the power plant’s construction, and was meant to signify the government’s determined intention to steamroller Iceland’s eastern highlands in order to produce electricity for the US aluminium corporation ALCOA. As environmentalists warned from the beginning, the construction has turned out to have devastating environmental, social and economical impacts, and contributed also heavily to Iceland’s infamous 2008 economic collapse.

Asked about the cinematic blast, artists Gunnlaugsdóttir and Sigurðsson said: “It was particularly pleasurable to blow up the image of the dam that has now become the main symbol of corporate power abuse and ecocide in Iceland.” Sigurðsson  added that it was “Very appropriate to use for our purpose the same film footage that was used by the Icelandic government in 2003 to dash people’s hopes of saving the Kárahnjúkar area from deeply corrupt forces of corporate greed and governmental stupidity. These same forces have learnt nothing from their past crimes and mistakes and are now lining up for taking power next year in order to continue their destructive rampage through Icelandic nature.”

A press release  from The Living Art Museum states the following:

Angeli Novi create a kind of a kaleidoscopic time machine, examining the plight of generations which, one after the other, become tools and puppets of economic and historical structures. Through symbolism and imagery, Angeli Novi examine the ideological backdrops of these structures, the variously substance-drained core values of occidental culture, as well as as the reoccurring themes of doctrines and clichés in the societal rhetoric, necessary for society to maintain itself.

You Can’t Stand in the Way of Progress opened on 29 September and will run until 2 December. The Living Art Museum is located on Skúlagata 28, 101 Reykjavík.

On May 21, however, DV published an interview with Þórhallur Þorsteinsson, one of the people from Eastern Iceland who had the courage to oppose the construction. In the interview, which turns Janne’s claims upside down, it emerges how heavy the oppression was in the East during the preamble and the building of the dams and smelter was — people where “oppressed into obedience” as Þórhallur phrases it. He talks about his experience, loss of friends, murder threats, the attempts of influential people to dispel him from his work, and the way the Icelandic police — and the national church — dealt with the protest camps organized by Saving Iceland, which lead him to wonder if he actually lived in a police state.

Þórhallur Þorsteinsson is one of the people from Eastern Iceland who protested against the construction of the Kárahnjúkar dams. For that sake, he was bandied about as an “environmentalist traitor”, accused of standing in the way of the progress of society. Influential people attempted to dispel him from his job, he had to answer for his opinions in front of his employers, and his friends turned against him. The preparations for the construction started in 1999, but the construction itself started in 2002. The power plant started operating in 2007 but the wounds have not healed though a few years have passed since the conflict reached its climax.

“There are certain homes here in Egilsstaðir that I do not enter due to the conflict. Before, I used to visit these homes once or twice a week. I am not sure if I would be welcome there today. Maybe. But in these homes I was, without grounds, hurt so badly that I have no reason to go there again. Now I greet these people but I have no reason to enter their homes. I was virtually persecuted,” Þórhallur says, sitting in an armchair in his home in Egilsstaðir.

His home bears strong signs for his love of nature, his bookshelves are filled with books about the Icelandic highlands, nature and animals. For decades, Þórhallur has travelled in the highlands and did thus know this area [the land destroyed by the Kárahnjúkar dams] better than most people. “I had been travelling in this area for decades. I had gone there hiking and driving and I have also flown over it. I went there in winters just as in the summers. I went there as a guide and I knew the area very well. So I am not one of those who just speak about this area but have never got to know it.”

Not only did he know the land but also cared for it. He was hurt to see it drowned by the reservoir and has never managed to accept its destruction. “I am immensely unhappy with everything regarding this project. The dams, the [Alcoa] aluminium smelter, the environmental impacts, and additionally, it has not brought us what was expected. Thus I find hardly anything positive about this,” Þórhallur says.

“The sacrifice of this part of the highlands, the environmental impacts of these constructions, just can not be justified. Waterfalls by the dozen, many of them extremely beautiful, are rapidly disappearing and are just about waterless. A highly remarkable land went under water, under the reservoir, for instance Hálsinn which was the main breeding ground for reindeer. Additionally, this was the only place in Iceland with continuous vegetation from the sea, all the way up to the glacier. This has now be interrupted by Hálslón [the reservoir].”

The Resistance in the East

During the journalist’s trip around Eastern Iceland, many of the locals spoke a lot about how artists from 101 Reykjavík [the center of the city] protested against the construction. Þórhallur, however, points out that the original resistance against the project was formed in the local region. “People tend to forget this fact all the time, as they only speak about 101 Reykjavík. Before the conflict started, an association for the protection of Eastern Iceland’s highlands was founded here. It was founded with the purpose of opposing the construction — Kárahnjúkar had not even entered public discussion at that point although we, of course, knew about it.”

About thirty people joined the inaugural meeting and agreed upon the importance of such an association. Soon, a few people left the organization. “Those who had an opposite opinion compared to what people generally thought about the project were oppressed. The picture was painted in a way suggesting that the residents of Eastern Iceland should stand together. The rest of us, who were against the project, were not considered true members of this society. And we were not good citizens at all. In people’s minds, we were traitors. We were the people who wanted to send people back to the turf huts, as they used to say. We were said to be against development, against creating a good future for our children. All this was thrown at us, that the children would not come back home after studying, that they would not get any jobs. By opposing the construction, I was, in these people’s minds, taking away their children’s future livelihood, preventing the creation of jobs, and lowering real estate prices here in the east. I got to hear all of this. This is how it was.”

The First Protests

At a certain point, the verbal abuse was taken further than can be considered normal. “My life was threatened. A man that I used to work with met me in the street and said that I ought to be shot. Of course, it was painful to live through this, it hurt because they were trying to oppress me. They personified the issue so they could portray me as if I was taking something away from people, as if I was preventing the people here from living an ordinary life. This was the attitude.

I have lived here since I was a little kid and from early age I have been contributing to this community. I have partaken in building it up, socially and as an individual. I have been here all my life. Despite my opposition to this construction, I did not consider myself being any less of a member of this community. Nothing of what I have done justifies the accusations of me wanting to ruin this community. I was simply against this construction. But just like others, I was to be suppressed into obedience.”

Despite all this, Þórhallur refused to throw away his ideals and stay silent. Determined not to be silenced, he continued his fight with both words and actions. “I am probably the only resident in Eastern Iceland who ever has been fined for opposing the Kárahnjúkar dams [in fact Gudmundur Mar Beck, farmer at Kollaleyra in Reydarfjordur (site of the ALCOA smelter) was also fined a hefty sum for protesting against the project. Ed. SI.org]. Along with others, I blockaded a bridge over river Besstastaðaá and was fined,” he says and adds that he did happily pay the fine. “This action was symbolic for the situation at that time, as a token of the fact that the case had become insolvable. We didn’t intend to completely prevent these people from continuing their way,” Þórhallur says. These people were the board of Landsvirkjun [Iceland’s national energy company] as well as Ingibjörg Sólrún Gísladóttir, then mayor of Reykjavík [later Minister for Foreign Affairs in the government that was toppled by protesters during the winter of 2008-9], and the area that was at stake at that time was Eyjabakkar wetlands. “We read two statements out loud, from the Association for the Protection of Eastern Iceland’s Highlands, and after that the protest was over.”

He does not regret this, even though he had to face the consequences his actions. “I was there in my spare time but at this time I worked for the The State Electric Power Works. Following the protest, we witnessed one of the worst witch-hunting periods in the history of Eastern Iceland. The severity is very memorable to me.”

Harsh Attacks

This protest had been organized by Þórhallur as well as Karen Egilsdóttir, who was an elementary school teacher, and Hrafnkell A. Jónsson, who has now passed away. “Parents phoned the school’s headmaster and demanded that their kids would not have to go to her classes. Politicians in the East systematically tried to get me fired from my job. They phoned both the State’s and the Region’s electric utility directors, demanding that I would be fired because of a thing I did in my spare time. These same men constantly interrupted the Chairman of RARIK [Iceland State Electricity] and I had to stand up for my opinions. I had to show up in front of the Region’s electric utility director and proof that I had been at the protest during my spare time. And as my words were not enough, I had to get my supervisor to come and proof it. Everything was tried. It was harsh.

And when I was informed that very influential people in the East, respected members of their society, were trying to get back at me and get me dispelled from work because of my opinions, I got a very strange feeling regarding what kind of a society I live in.

I also witnessed the behaviour of the police who chased protesters around the highlands, which made me wonder if I lived in a police state. The police tried to prevent protesters from resting by putting wailing sirens on during the middle of the nights, they constantly drove past them and around their cars, took photographs during darkness using flash, and blocked roads so that people could not bring them food. I saw all of this taking place.”

Always Knew of More Opponents

For two years in a row, the protesters set up camps in the highlands. During the first summer [2005], the protest camp was pitched on a land owned by the Bishop’s Office. “The church’s tolerance was not greater than so that the Bishop’s Office asked for the protesters to be removed. The second year I brought them food by taking an alternate route to their camp when the police had closed the main road. I supported these people because they were doing a job that many of us here, the locals, could not do. They were protesting against something that very few people from the East felt up to, due to the way those who dared to protest were treated. We were monitored and the word, about what kind of a people we were, was spread around. That is the reason why many people contacted me, people who otherwise did not dare to voice their opinion, did not dare to join the struggle. I always knew that I spoke on behalf of more people than just myself.”

Thus, when Saving Iceland contacted Þórhallur, he was more than willing to help. He was a spokesperson of the Icelandic Touring Association and explained to Saving Iceland that it would be just about impossible to expel them from the camping area at Snæfell, which had been open to the public for many decades. Eventually, a ten days long camp was to be set up there. “Then the word started to spread and I received a phone call from the Bishop’s Office, asking me if we could stop the camp from taking place. I told them that this camping area had been open to the public ever since the hut was built, but I invited them to come to the East and try to expel them themselves. A few days later, Landsvirkjun’s public relation manager called me and brought up the same thing. He asked about the possibility of putting a limit on the amount of people allowed to stay at the camp, if the health and safety authorities would agree upon this amount of people, etc. etc. I told him the same: “This is an open camping area and we do not choose who gets to stay and who not.” You get the picture of how the situation was at this time.”

Not everybody was happy within the Touring Association. “Some of the board members were against it and conflicts took place within the association. I asked them what they intended to do, if the Association would then, in the future, pick out people allowed onto the camping areas. I said to them: These people just enter the camping area, follow the current rules and pay their fee. While so, we can not do anything. Then, some of the people realized how far they had stepped over limits.

So the protesters came to Snæfell and stayed for ten days. That worked out pretty well but then they went to other places [within the intended reservoir. Ed. SI] and came up against all sorts of misfortunes.”

A Protection Cancelled

He also points out how politicians behaved in the Kárahnjúkar issue. “It is interesting to look at the current discussion about the Energy Master Plan. Some people now say that politicians are interfering with specialists’ work. In that case, it is worth remembering the fact that the Kárahnjúkar dams were removed from the Master Plan and were only briefly considered in that context. Those who decided this were politicians. The project underwent an Environmental Impact Assessment and Iceland’s Planning Agency rejected it due to the drastic and irreversible environmental impacts. But then the case was simply taken into a political process and soon it was decided to go ahead and build the dams, despite the Planning Agency’s view that the environmental impacts were unacceptable.

The way this case was handled should actually be an ample reason for an investigation. This area’s official protection was cancelled so the land could be drowned. Never before had this happened in Iceland, but it was nevertheless done by Siv Fiðleifsdóttir, then Minister of the Environment. That is her monument: being the one Minister of the Environment, responsible for the most severe environmental destruction,” Þórhallur says plain-spoken.

The Old People Got Away

He believes that only the further damming of Þjórsárver wetlands would have been a even bigger environmental sacrifice. “Thereafter came Kárahnjúkar. But this is all about politics, Icelanders have no time for politics. The Danes have done fine without heavy industry. This is always just a question of a political policy, and for decades, the inhabitants of Reyðarfjörður [where the Alcoa smelter is located] have been promised that someone will come and do something for them. In such a position, people tend to forget their survival instinct.

The exchange rate was way too high and all the local fishing industry left. Fishing company Skinney Þinganes moved all their business to Höfn in Hornafjörður, while Samherji [another seafood company incidentally owned by the family of Halldor Asgrimsson, one of two main perpetrators of the Karahnjukar dams] bought fishing quota from Stöðvarfjörður and Eskifjörður and took it away from there. But because an aluminium smelter was on its way, people believed that this was no problem. It is always possible to starve people into obedience. It is easy to change the mentality in such a way that it simply receives. All of a sudden the smelter appeared as some sort of a life buoy. The positive side of it is that now there are much younger people living in Fjarðabyggð [combined municipality of a few towns, including Reyðafjörður] than before. The old people got away. But behind this is the sacrifice. The sacrifice was too big and it was the whole region’s sacrifice. We sacrificed this for the benefits of a North American corporation. We sacrificed everything for too little. While all this took place, people were supposed to stand together and they spoke about the region as a totality. But immediately as the construction was over, all such solidarity disappeared.”

Direct and Indirect Payments

He is, nevertheless, able to understand why the region’s people were in favour of the construction and focused on getting a smelter. “I understand them very well, as they got something out of it. But it is clear that we got too little. 200 people from here work in the smelter, I think. 200 jobs — that is not enough for such a sacrifice. 500 jobs would also not have been enough when compared with the land that was destroyed. But people can be bought up if they are handed money. And I understand farmers who had never seen any real money but were all of sudden promised amounts which they would, in any other case, not have been able to even dream of. But is that the way we want it to be? That people can be mislead by money?

If they would have stood their ground and rejected all of , if the Fljótsdalshérað region would have rejected this, and the local politicians and the public — then this would never have become true. Now, some people state that we never had anything to say about it, but these are people who have a bad conscience because they did not fight against the construction.

Everywhere in the world, except Iceland, these “counterbalance steps” as they are called, would have been considered bribery. Basically, local politicians were bought up. Farmers and influential people were hired on good salaries and farmers got fertilizer to use on uncultivated land. All such indirect payments to influential people certainly have an impact on what decisions are made and on what premises they are made. Some farmers received compensation due to the destruction, but to pay compensation to only one generation is not acceptable. It would have made much more sense to link the compensation with the power plant’s electricity production and pay them to those living in the area on an annual basis.”

Gullfoss Falls Could be Forgotten

Asked about the actual value of the land now lost, Þórhallur answers: “This land used to be an attraction. The waterfalls that have now dried up, the vegetated land that went under water, the wilderness which is becoming increasingly precious. Being able to live with such quality is like nothing else. If well organized, hundreds of thousands of travellers could have been been shown this land without the land being harmed. Seen from a long-term perspective, that could have created more money than the dams.”

Think about the fact that the Gullfoss waterfalls and the hot spring Geysir did not use to be popular tourist places. It was not easy to get to them, say fifty or hundred years ago. We can not sacrifice something just because only a few people know about it. Using that same argument, we could as well dry up Gullfoss, as in a few decades we would forget about it and the next generations would not know what a beautiful waterfall used to flow there. We can not think in that way. One generation can not treat Iceland’s nature, this national treasure, in such a way.

I first drove to Hafrahvammar canyon in 1972 and, in fact, roads and paths have been there for many decades, but they were quite difficult to pass. That could easily have been changed and thus, the access to the area could have been increased.”

“The Same Horrific Situation Far and Wide”

In the end he says that the aluminium smelter has not lived up to society’s expectations. “It still has not been possible to staff the smelter with Icelanders. Only Icelandic-speaking people are hired there but despite all the unemployment and all the advertising, sub-contractors partly staff their companies with foreigners, as Icelanders are not willing to take on these jobs. The labour turnover has been about 25 percent. Despite the fiasco the nation has went through [the 2008 economic collapse], this is not considered a decent option for a working place.

Was the hole purpose of drowning this land, destroying this nature, drying up these waterfalls, to be able to import migratory workers from abroad? Do some of the unemployed people on Suðurnes not want to come to the East, move into all the empty apartments and work in the smelter in Reyðarfjörður? Isn’t there something wrong? Why do people not apply for jobs here?” Þórhallur asks and adds that the pot-rooms and the cast-house are not really desirable workplaces, though some other jobs in the smelter might lure some. “One has to work 12 hours shifts and I know no-one who works in the smelter and looks at it as their future job. I also know people who used to work there but quit because of the long shifts. They did not want to sacrifice their family life for the job. People will work there until they find a better job. If the economy recovers in a few years time, how will this end? Will we end up having to staff the smelter solely with foreign labour on season?

This was supposed to save everything but the same horrific situation is evident far and wide. The smelter had, for instance, no positive impacts in nearby places like Stöðvarfjörður and Breiðdalsvík.

The planned population increase in Eastern Iceland never took place, and as the senselessness was absolute, everything collapsed. No-one lives in the houses that were built — streets were laid but no houses built on them. The municipality is bankrupted, as it is expensive to go into such a construction and to sit up with this half-finished street-system. This situation might recover in a few decades, but it still was not worth it.”

These news echo the many warnings made by the opponents of the cluster of five dams at Kárahnjúkar and nearby Eyjabakkar, who repeatedly stated that the project’s alleged profitability was nothing but an illusion, but were systematically silenced by Iceland’s authorities.

Now, as these facts finally become established in the media—this time straight from the horse’s mouth—similarly bad news has arrived regarding another big Icelandic energy company. Reykjavík Energy has failed to make a profit from their 2007 and 2008 investments, effectively making them lose money. At the same time, new research shows that the environmental impacts of the Kárahnjúkar dams are exactly as vast and serious as environmentalists and scientists feared.

And yet, more dams, geothermal power-plants and aluminium smelters are on the drawing table—presented as the only viable way out of the current economic crisis.

Dividend: Close to Zero

During the last half century, Landsvirkjun has paid its owner—the Icelandic nation—only 7,8 billion Icelandic Krónur (66 million USD at present value) as dividend, which according to Hörður Arnarson is way too low and in fact almost equivalent to zero. While it would be fair to expect around eleven percent dividend from the company’s own equity, it has been at an average of two percent since Landsvirkjun was founded. The income from the Kárahnjúkar plant has been about 6 percent of its book value, which again is too low, as according to normal standards the income should be 9 percent of the book value.

At present, Landvirkjun’s total earnings have been 73 million US dollars at most, whereas it should be closer to 180 million USD, considering the owner’s 1,6 billion USD equity. It was made clear by Arnarson that the price of energy purchased by large-scale energy consumers plays a major role herein—a price that obviously has been far below any rational logic and standards.

Same Old, Same Old

In 2003, British newspaper The Guardian published “Power Driven”, Susan De Muth’s exclusive report about the Kárahnjúkar power plant, which at that point was already under construction. Among many critiques made in the article, De Muth questioned Kárahnjúkar’s allegeded profitability. She wrote:

Thorsteinn Siglaugsson, a risk specialist, prepared a recent independent economic report on Karahnjukar for the Icelandic Nature Conservation Association. “Landsvirkjun’s figures do not comprise adequate cost and risk analysis,” he says, “nor realistic contingencies for overruns.” Had the state not guaranteed the loans for the project, Siglaugsson adds, it would never have attracted private finance. “Karahnjukar will never make a profit, and the Icelandic taxpayer may well end up subsidising Alcoa.”

Siglaugsson is just one of many who critically analysed the economics of the Kárahnjúkar project, concluding that its contribution to Iceland’s economy would be about none—or in fact negative. But just as many geologists who cautioned against the risks of locating the dams in a highly geologically seismic area were dismissed by Valgerður Sverrisdóttir, then Minister of Industry, as “politically motivated and not to be listened to”, so were the skeptical economists.

De Muth’s article caused a real stir in Iceland, manifest for instance in the fact that Landsvirkjun and Iceland’s Embassy in London contacted The Guardian in a complaint about “so much space […] used for promoting factual errors and misconceptions of the project and Icelandic society as a whole.” Friðrik Sophusson, Landsvirkjun’s director at that time—who in the article is quoted calling all of Kárahnjúkar’s opponents “romantics”—actually offered The Guardian to send another journalist over to Iceland in order to do “a proper report on issues in Iceland”, this time with his “assistance.” ALCOA also sent a barrage of objections to the Guardian. All the facts presented in the article were double checked by the Guardian’s legal team and confirmed to be accurate.

This volatile response from the authorities and corporates only strengthened the article’s points on the Icelandic tradition of suppressing criticism. This was confirmed in a letter to The Guardian by Icelandic environmentalist and commentator Lára Hanna Einarsdóttir, who suggested that “an Icelandic journalist would have lost [his or her] job if he or she had been so outspoken.”

The Coming Recession

And no wonder, as the article pinpointed serious flaws in the whole rhetoric surrounding the plans to heavily industrialize Iceland, plans that would be nothing without the construction of a series of mega hydro dams and geothermal power plants. Whereas these plans were presented as a path to an increased economical prosperity, De Muth quoted aforementioned economist Siglaugsson, who voiced his fear “that a boom during the construction period, with attendant high interest rates, will be followed by a recession.”

And as time told, this was indeed what happened. In an article published in the early days of Iceland’s current financial crisis, Jaap Krater, ecological economist and spokesperson of Saving Iceland, gave it a thorough explanation:

These mega-projects in a small economy have been compared to a ‘heroin addiction’. Short-term ‘shots’ lead to a long-term collapse. The choice is between a short-term infuse or long-term sustainable economic development. The ‘shot’ of Fjardaal [Alcoa’s aluminium smelter in Iceland, powered by the Kárahnjúkar power plant] overheated the Icelandic economy.

Recognizing the dangers of overheating the economy—a point also made clear in Charles Ferguson’s recent documentary, Inside Job—leaves us with two options. As Krater pointed out:

There has been a lot of critique on the proposed plans to develop Iceland’s unique energy resources. Those in favour of it have generally argued that it is good for the economy. Anyone who gives it a moment of thought can conclude that that is a myth. Supposed economic benefits from new power plants and industrial plants need to be assessed and discussed critically and realistically. Iceland is coming down from a high. Will it have another shot, or go cold turkey?

Another Shot, Please

This spring, Landsvirkjun stated that if the company was to start its operations from scratch the aluminium industry would be its prime costumer. This particular paradox—as the aluminium industry is already its biggest energy purchaser—was just one of Landsvirkjun’s many. Another one is their suggestion that Icelanders should “settle upon” plans to build 14 new power plants in the next 15 years. And the third one is the company’s plans to sell more energy to aluminium companies—costumers who, in Landsvirkjun’s own words, do not pay a fair amount for what they get.

But Arnarson has said that the future looks better, referring for instance to the fact that the price for Kárahnjúkar’s energy is directly connected to world-wide aluminium prices, which Arnarson says are getting higher. Herein is the fourth paradox, as linking energy prices with aluminium prices has so far been disastrous for Iceland’s economy—most recently acknowledged in an official report regarding the profitability of selling energy to heavy industry. According to the report, commissioned by the Ministry of Finance and published last Friday, December 2nd, the total profitability has been an average 5% from 1990 until today, which is far below the profitability of other industries in Iceland, and much lower than the profitability of similar industries in Iceland’s neighbouring countries. The year 1990 is crucial here, as since then, Landsvirkjun’s energy prices to heavy industry have been directly linked to global aluminium prices.

It is worth quoting Jaap Krater again here, where he explains the dangers of interlinking these two prices, and describes how increased aluminium supply will lower the price of aluminium and decrease revenue for Iceland:

One might think that a few hundred thousand tons of aluminium more or less will not impact the global market. The reality is that it is not the sum of production that determines the price but rather the friction between supply and demand. A small amount of difference can have a significant effect in terms of pricing.

High Costs, Low Production

On top of this, recent calculations revealed in newspaper Fréttablaðið, show that Kárahnjúkar is Landsvirkjun’s proportionally most expensive construction. When the production of each of the company’s power plants is compared with the production of Landsvirkjun’s property as a whole, as a proportion of their construction costs, it becomes clear that Kárahnjúkar—with its 2.3 billion USD initial cost—is the most economically unviable plant.

Another Energy Company in Crisis

At the same time that Icelanders face Landsvirkjun’s confession to it’s virtually zero profitability, a damning report on another big energy company, Reykjavík Energy (OR), has been made public. It was originally published at the beginning of this year but wasn’t supposed to enter the public sphere, which it indeed didn’t until in late November. Reykjavík Energy’s biggest shareholder is the city of Reykjavík, meaning the inhabitants of Reykjavík.

As already documented thoroughly, the company—which operates several geothermal power plants, including Hellisheiðarvirkjun, largely built to fuel Century Aluminum’s production—is in pretty deep water. But the newly leaked report proves that it has sunk even deeper than generally considered. The report is a literal condemnation of the company, its board and its highest ranking managers, who get a grade F for their job. A good part of Reykjavík Energy’s investments from 2007 and 2008 are now considered as lost money.

The report also reveals that when energy contracts between OR and Norðurál (Century Aluminum) were made, for the latter’s planned fantasy-of-a-smelter in Helguvík, Reykjavík Energy’s directors completely ignored the very visible economic collapse confronting them.

Recently it has been reported that Reykjavík Energy owes 200 billion Icelandic ISK in foreign currency, which is two thirds of all foreign debts owed by Icelandic companies, whose income is not in foreign currency.

What we see here are two of Iceland’s largest energy companies, both of them public property, both having spent hugely excessive amounts of money—or more precisely, collected gigantic debts—struggling to continue to build power plants in order to feed the highly energy intensive aluminium industry with dirt cheap and allegedly “green” energy. As a result, they have ended up without profit and in a deep pool of debt.

And who is to pay for their gambling risks? As Thorsteinn Siglaugsson stated in 2003: the Icelandic taxpayer.

“No Impacts” Become Huge Impacts

To make bad news even worse, the irreversibly destructive ecological impacts of the Kárahnjúkar dams have, in the last months, become more and more visible. To quote “Power Driven” once again (as simply one of a good number of warnings on the dams’ environmental impacts):

The hydro-project will also divert Jokulsa a Dal at the main dam, hurtling the river through tunnels into the slow-moving Jokulsa i Fljotsdal, which feeds Iceland’s longest lake, Lagarfljot. The calm, silver surface of this tourist attraction will become muddy, turbulent and unnavigable.

This was written in 2003. Today, this is what is happening: because of the river’s glacial turbidity Lagarfljót has changed colour, which according to Guðni Guðbergsson, ichthyologist at the Institute of Freshwater Fisheries (IFF), means that light doesn’t reach as deep into the water as before (see photos aside and below). Photosynthesis, which is the fundamental basis for organic production, decreases due to limited light, its domino effects being the constant reduction of food for the fish. IFF’s researches show that near Egilsstaðir, where visibility in Lagarfljót was 60 cm before the dams were built, it is now only 17 cm. They also show that there are not only less fish in the river, but that the fish are much smaller than before.

In addition to this, residents by Lagarfljót have faced serious land erosion due to the river’s increased water content and strength.

This effect was warned of in an Environmental Impact Assessment (EIA) for the project by the Iceland National Planning Agency (INPA), purposely ignored and overruled by Siv Friðleifsdóttir, then Minister of Environment. Landsvirkjun had complained to the Ministry of the Environment, and the EIA ended up on Friðleifsdóttir’s table, who nevertheless issued a permit for the construction, stating that the dams would have no significant impact on Lagarfljót.

In response of the news on Lagarfljót’s current condition, Svandís Svavarsdóttir, Minister of the Environment, said during parliamentary discussion last September, that her Ministry’s over-all administration regarding the Kárahnjúkar decision-process will be examined in detail. She should demand a similar investigation into the decision making of the Ministry of Industry, whose Minister, Valgerður Sverissdóttir has, along with Landsvirkjun’s Friðrik Sophusson, openly admitted while joking on film with the US ambassador in Iceland, how they enjoyed “bending all the rules, just for Alcoa.”

All the Old Dogs

Despite all of this, Iceland’s energy companies, hand in hand with the aluminium industry, some of the biggest labour unions and industry-related associations—not to mention a majority of parliamentarians, including those of government-member social-democratic Samfylkingin—are still in heavy industry mode, campaigning for the construction of more dams, geothermal power plants and aluminium smelters. Ironically, but still deadly serious, smelter projects such as Century Alumium’s Helguvík, which is at a standstill, unable to guarantee both necessary energy and financing, continue to be presented as profitable solutions to the current crisis.

Met with little resistance in parliament, most of these plans are still considered to be on the drawing table, though most of them seem to be on hold when looked at closely. The latter is mostly thanks to grassroots activists, bloggers and commentators who have systematically reminded the public of the reality, while the bulk of journalists seem to be unable to stick to facts—being extraordinarily co-dependent with those in favour of further heavy-industrialization.

Under the banner of “solving the crisis”, “creating jobs”, and most recently “getting the wheels of work to spin again”, the heavy industry-favoured parties seem to simply refuse to listen to hard facts, even their very own. This attitude is probably best summed up in the recent words of Valgerður Sverrisdóttir, responsible as Minister of Industry, for the building of the dams at Kárahnjúkar, who in response to the news about the power plant’s close-to-zero profitability, said that she wouldn’t want to imagine how the current financial situation would be, if the dams hadn’t been built.

It is said that an old dog will not learn new tricks. And to be honest, ‘old dogs’ pretty accurately describes those making decisions on Iceland’s energy and industry affairs. In order to learn from mistakes and prevent even bigger catastrophes, it wouldn’t be unfair to ask for a new generation—would it?
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More photos of Lagarfljót’s turbid condition

These photos are from 2008, which suggests that the current condition is even worse.

It is funny how things can turn around. For decades, Iceland languished in neoliberal hell, with signs of opposition few and far between. Meanwhile the opposition to the neoliberal order of things grew all over the world—with massive protests in Seattle, Genoa and elsewhere—and the beginnings of a world-wide anti-globalisation movement represented by the World Social Forum, first held in Porto Alegre, Brazil, in 2001. Almost nobody in Iceland did or said anything to support these powerful movements against the neoliberal order, with the exception of the brave Saving Iceland organisation. Even the considerable activism surrounding the anti-imperialist campaigns against American military presence in Iceland seemed to die completely down in around 1990. Neoliberalism reigned, Iceland supported the Iraq invasion in 2003 and nobody said or did anything.

Everything changes

In 2008, everything suddenly changed. The Icelandic banks collapsed, and out of nothing there grew an immensely powerful protest movement, leading to the collapse of the ideological hegemony of neoliberal order in Iceland. It was symbolised by the January events of 2009, when saucepans and pots were taken into use by protesters, who drummed the right wing neoliberal government out of office in the last week of January.

Suddenly everyone and her brother was involved in organising some sort of protest, with many thousands turning up at rallies in the centre of town on a regular basis, and hundreds or thousands of people involved in organising alternatives to the prevailing neoliberal order.

Even the president of the country, who had been one of the cheerleaders of neoliberalism, suddenly turned into an invaluable ally of the protest movement against the financial system, enabling two national referendums on the Icesave issue. Under the leadership of Eva Joly a criminal investigation into the whole neoliberal financial scam of the nineties and noughties was organised, and a very thorough investigation on the causes of the collapse was initiated by the Icelandic parliament. There was even a Constitutional Assembly, which was meant to write a new constitution for the country.

Right wing, left wing: both neoliberals

To be sure, instead of the rightwing neoliberal government a leftwing neoliberal government ascended to power after parliamentary elections in April 2009. That was surely not the intention of the saucepan revolutionary movement, and the situation in Iceland has been tense since. An important part of the original protest movement has been paralysed, as it has seen it as its duty to defend the “left” government against what it sees as attacks organised by the right. So the most radical part of the original saucepan protesters, those who are of the opinion that the “left” government is just another neoliberal government, has found tactical allies among the right wing parties, and this alliance has had some victories, like the rejection of the Icesave treaties.

But the Icelandic protest movement against neoliberalism has been powerful enough to inspire people outside Iceland. Yes, indeed, people abroad have really been inspired by Iceland! This was first evident around the Icesave referendum on March 6, 2010. The international anti-globalisation movement followed it closely, for example the Jubilee movement, the international Attac movement and the Tax Justice Network.

Congratulations rained on Icelandic activists after the Icesave treaty was rejected, the so-called Icesave II treaty, wherein Icelandic taxpayers were supposed to pay large sums of money to the citizens of the Netherlands and the UK because of the collapse of the Icelandic bank Landsbankinn. Icelandic taxpayers refused to take responsibility for the wheelings and dealings of the international financial oligarchs, and this was widely admired by anti-neoliberal activists everywhere.

Rumours

But there was more to come. In 2010, rumours started to circulate on the Internet among activists, especially in those former provinces of the Roman Empire comprising the present day lands of Spain, Portugal and France, that there had been some sort of a quiet revolution in Iceland. This revolution was supposed to have been almost systematically shut out of the world media, in order not to present a possible model for revolution in other countries. These rumours appeared on French and Spanish websites, and at last they acquired some sort of critical mass. In December 2010 and January 2011, Attac Iceland started to receive a lot of questions about the quiet revolution in Iceland from members of Attac France and Attac Spain. Activists even started to visit Iceland to find out about the quiet revolution.

When Attac Iceland was slow to respond—and when it did it would not be ready to agree that there had been any sort of revolution in Iceland—it was pointed out by the international activists that the Icelandic banks had been nationalised, that the government had been forced from power, that the governors of the Central Bank of Iceland had been replaced, that Iceland had shown true grit by the rejection of the Icesave treaty. All of which was true, but Attac Iceland has not interpreted this as a revolution, even if it certainly can be viewed as a very powerful and successful protest movement, one of the most powerful popular responses to the collapse of the neoliberal order, and up until 2011 certainly the most powerful. And quiet it was not, as those activists who have come from Spain, Portugal and France to Iceland to investigate have found out.

Iceland as a model of revolt

Then in December 2010, Tunisia erupted in revolt. Egypt followed, and the world watched in amazement as country after country in the Arab world arose in revolution against the established order of American imperialist rule and the rule of US supported despots. There were certainly some references to the Icelandic revolt in these movements. And in May 2011 Spain erupted, with the M-15 movement and the Indignados movement forming as a powerful protest wave against the neoliberal order. Here the references to the Icelandic movement were numerous and quite visible, with public squares in Palma, Mallorca, renamed after Iceland in honour of the quiet revolution, the Icelandic flag being waved on numerous occasions and Facebook groups organised in honour of the Icelandic movement.

This was certainly a rather dramatic turnaround in the position of Iceland in relation to the neoliberal world order. Suddenly Iceland had turned from a model of the quiet, obedient neoliberal outpost, to become a model of protest movements around the world against this same neoliberalism.

The revolution that nobody wants to talk about

Then in the summer of 2011 the indignados started coming to Iceland themselves, organising TV-crews in order to document the Icelandic revolution. And, indeed, they did not find a quiet revolution: In the words of Portuguese document film maker Miguel Marques, who was here in August and extensively documented the activities of the Icelandic movement, the Icelandic revolution was anything but quiet. Another crew came from Spain and interviewed the Icelandic activists, and in October there will be a Venezuelan crew documenting Icelandic activism for the big South American TV network teleSUR.

So, for the Icelandic activists and anti-neoliberalist, the situation is a bit awkward. When finally Iceland produces something worthy of admiration of the international activist community, the activist groups in Iceland have been reluctant to admit to it being what the foreigners perceive it to be. Why is this? Why is the powerful protest movement in Iceland not lauded or presented in a positive light by the Icelandic activists? This is mostly because of the political situation in Iceland.

On one hand, the media, mostly right wing, the academics, mostly right wing or centre left neoliberals, and others of the talking and writing classes have very limited interest in promoting the Icelandic saucepan revolution. On the other hand many in the protest movement now support a neoliberal “left” government in the vain hope that it will eventually, in the distant future, maybe deliver on something of value, and this supports hinders any positive evaluation of the protest movement after the ascend of the “left” government. The radical parts of the protest movement do not have a positive evaluation of the results of the movement, exactly because the results of the parliamentary elections in April 2009 were that the neoliberal dominance in politics continued. So nobody seems interested in taking credit for the very real and positive results of the Icelandic protest movement 2008–2011.

Originally published in the Reykjavík Grapevine.

The Energy Master Plan is a framework programme, meant to result in a long term agreement upon the exploitation and protection of Iceland’s glacial rivers and geothermal areas. Its making, which since 1999 has been in the hands of special steering committiees, established by the two above-mentioned ministries, reached a critical status in July this year when its second phase was finished and presented to the ministers who in mid August presented their proposition for a parliamentary resolution. Before it will be discussed in parliament the proposition will be open to comments and criticism from the public, as well as interested parties, energy and aluminium companies on the one hand, environmentalists on the other.

Twenty-Seven Energy Options Put on Hold

The proposition lists natural areas into three categories; protection, exploitation and hold. The last-mentioned includes areas that, according to the steering groups and ministers, have not undergone enough research for a decision to be made upon weather to protect or exploit them. Included in this category are, among other, the glacial rivers in fjord Skagafjörður as well as other rivers such as Skjálfandafljót, Hvítá, Hólmsá and Farið by lake Hagavatn in the south-west highlands. Also geothermal areas such as Trölladyngja and Austurengjar in Krýsuvík and certain areas around mount Hengill where the heavily indebted Reykjavík Energy (OR) already operates Hellisheiðarvirkjun, a sulphur polluting geothermal power plant. The 27 areas of the waiting category will be revised in five years, given that satisfactory studies have been made at that time.

Þjórsárver Wetlands to be Saved

Delightfully, the protection category features the uppermost part of river Þjórsá where Landsvirkjun wants to construct Norðlingaölduveita, a dam that would destroy the Ramsar listed Þjórsárver wetlands. River Jökulsá á Fjöllum, which has been seen as an energy potential for a new Alcoa aluminium smelter in Bakki, is also listed protected. The same applies for certain parts of river Tungná, in which Landsvirkjun is already building the Búðarháls dam that will provide energy for increased production in Rio Tinto Alcan’s aluminium smelter in Straumsvík.

The protection category also features geothermal areas such as the ones around Brennisteinsfjöll mountains on the Reykjanes peninsula, as well as Gjástykki, close to volcano Krafla and lake Mývatn. The same goes for the Grændalur valley and Bitra, which are located close to the small town of Hveragerði and have been particularily desirable in the eyes of energy companies. Bitra was saved by a local campaign in 2008 whereas Grændalur was recently threatened when Iceland’s National Energy Authority allowed a company called RARIK to operate test drilling in the valley, in complete contravention of previous rulings by the Ministries of Industry and of Environment.

Krýsuvík, Þeistareykir and Þjórsá to be Destroyed

The exploitation list features geothermal areas Þeystareykir, Bjarnarflag and Krafla in the north of Iceland, as well as Hágöngur in the mid-highlands west to glacier Vatnajökull. Also certain parts of the area around mount Hengill and finally geothermal spots in Reykjanes, Krýsuvík and Svartsengi, all three on the Reykjanes peninsula. Rivers Hvalá, Blanda and Köldukvísl are then all categorised as exploitable. And most critically the Energy Master Plan proposition allows for Landsvirkjun’s construction of three dams in the lower part of river Þjórsá.

Environmentalists Threefold Response

The most common response from environmentalist so far has been threefold. Firstly there generally satisfied by the protection of areas such as the Gjástykki, Jökulsá á Fjöllum and Grændalur, let alone the Þjórsárver wetlands. Shortly after the publication’s release, Iceland Nature Conservation Association (INCA) stated that, if approved by parliament, the Master Plan will mark the end of environmentalists’ forty years long struggle to save Þjórsárver from destruction. Though listed by the international Ramsar Convention on Wetlands due to its unique ecosystem, the wetlands have been on Landsvirkjun’s drawing table as a potential for construct a large reservoir, meant to produce energy for a planned expansion of Rio Tinto Alcan’s aluminium smelter in Hafnarfjörður, which was later thrown off in a local referendum. The plan has always been met with fierce opposition, no matter of Landsvirkjun’s repeated attempts to get it through by proposing a smaller dam and reservoir.

Secondly environmentalists are critical of the fact how many invaluable areas, such river Skjálfandafljót, are kept on hold instead of simply been categorised protected. Thirdly there is a clear opposition to the planned exploitation of certain wonders of nature, one example being the geothermal areas on the Reykjanes peninsula. Ellert Grétarsson, a photographer who has documented these areas extensively (his photos are here aside), fears that the drilling in Krýsuvík – covering between five and eight thousand square meters of land – will simply kill the area. And as a matter, says Ellert, the whole Reykjanes peninsula will be riddled with energy construction. Hjörleifur Guttormsson, former Left Green MP and a genuine environmentalists, shares Ellert’s worries and has asked for an integral study of Reykjanes before any decisions are made.

Þjórsá, the Bone of Contention

As as mentioned before the biggest concern regards Þjórsá, which has for a long time been the bone of contention between the two clashing arrays fighting for or against nature conservation. The struggle over Þjórsá has been especially tough, actually to such an extent that the government can be reputed to stand or fall with that conflict in particular. Guðfríður Lilja Grétarsdóttir, MP for the Left Greens, demonstrated, during parliamentary debate last April, her full opposition to the construction of dams in Þjórsá. At that point, three Left Green MPs, who up until then had been increasingly critical of the government and its lack of left-leaning policies, had just recently departed from the party, leaving the government with only one person’s majority in parliament. And as most members of the social-democratic People’s Alliance (Samfylkingin), which makes up the government along with the Left Greens, have not shown a sign of objection to the damming of Þjórsá, it wouldn’t be surprising if the river will be up for a heavy debate in parliament.

In fact it is more than sure that Þjórsá will be among the main matters of argument in parliament. The right wing Independence Party, which was in in power from and is largely responsible for the neo-liberalisation and heavy-industrialisation of Iceland, has always been one of the driving motors behind Landsvirkjun’s plans to dam Þjórsá. When the Master Plan’s proposition was presented in August, Ragnheiður Elín Árnadóttir, a MP of the party, called for the immediate starting of construction in Þjórsá. She also said she grieved the long period of which the project has been stuck within bureaucracy, referring to the attempts of Svandís Svavarsdóttir, current Minister of Environment, to halt the construction of one of the three proposed dams by refusing to include the dam, Urriðafossvirkjun, in a land-use plans for the parishes of Flóahreppur and Skeiða- and Gnúpverjahreppur (rural districts along Þjórsá) made by them at the request of Landsvirkjun.

Three Dams: Threat to Society and Ecology

The conflict in parliament mirrors the actual conflict in the Þjórsá region where locals have for a long time fought over the river’s fate. There Landsvirkjun hasn’t only used bribes in its attempt to get its plans through local administration, but also threatened farmers whose lands are at stake will the dams be built, by stating that if the farmers do not negotiate with the Landsvirkjun, the company will attempt for a land expropriation. This conduct has created a complete split within the local community, clearly demonstrated in last March when young locals from the region published a statement, in which they demanded a permanent halt to all plans of damming Þjórsá – thereby an end to the social conflict associated.

As a matter of fact two members of the Master Plan’s steering committee recently stated, when interviewed on state radio station RÚV, that due to the serious lack of studies regarding the social impacts of the planned Þjórsá dams, those plans should without any doubt have been put on hold. This is exactly what Guðmundur Hörður Guðmundsson, chairman of environmentalist organization Landvernd, said in last July following the publication of the Energy Master Plan’s second phase report.

Þjórsá’s position in the Master Plan proposition, yet shouldn’t be of any surprise. In the second phase report the three planned dams are not considered to be a great threat to the ecology of Þjórsá and its surroundings – contrary to the opinion of environmentalists who have voiced their worries concerning the dams’ impacts, for instance on the river’s salmon stock. Orri Vigfússon, chairman of the North Atlantic Salmon Fund (NASF), recently stated that “never before in the history of Iceland has there occurred such an attack on a sensitive area of wild salmon.” As is considered that the salmon’s spawning and breeding grounds are mosty located above waterfall Urriðafoss, where one of the three dams is planned to be built, Orri believes that the stock of salmon and salmon trout are likely to vanish.

Energy Companies Unsatisfied as Expected

As one could have imagined, Icelandic energy companies and other adherents of large-scale power production for heavy industry, are everything else than happy about the Master Plan’s proposition. Following its release Eiríkur Hjálmarsson, Public Relation manager of Reykjavík Energy, opposed the protection of Bitra on the ground that the company has already harmed the area with three examination boreholes, roads and electricity lines – but most importantly, spent 785 million ISK on the project. As reported earlier this year by Anna Andersen, journalist at the Reykjavík Grapevine, the foolhardy business operations of Reykavík Energy during the last decade or so – including large-scale geothermal projects associated with heavy industry – have brought the publicly owned company a debt of 233 billion ISK (2 billion USD or 1.4 billion Euros). Despite this financial collapse the company still advocates for the continuation of the agenda that brought it down.

Other energy companies have responded similarly, mostly complaining about the amount of areas listed as protected or on hold. Landsvikjun’s director Hörður Árnason has said that compared to the second phase report, the parliament proposition suggest that way too many energy options are put on hold. Another company, Suðurorka, owned by Alterra Power (former Magma Energy) and Íslensk Orkuvirkjun, had planned to construct a dam, called Búlandsvirkjun, in river Skaftá – a plan that the proposition puts on hold. The company argues that few energy options have been studied as thoroughly and while the studies might have been done – and might be thorough – not everybody agrees with the company on the impacts. Farmers in the area have opposed the project as some of their most important grasslands will be drowned under the dam’s reservoir.

Energy company RARIK will, due to the Master Plan, loose its grip on geothermal areas in Grændalur valley, as well as rivers in Skagafjörður and Hólmsá river – projects that the company claims to have invested in with 300 million ISK. Using the same monetary argument, HS Orka, also owned by Alterra Power, has been vocal about its 700 million ISK investment into their proposed, but now delayed if not entirely halted, geothermal plants in Trölladyngja. Finally representatives from Reykjahlíð, a small town that holds the good part of Gjástykki’s property rights, have stated that if the area will be protected, billions of ISK will be demanded as compensation.

The Predominant Strategy

Those arguments do in fact manifest the predominant strategy of those involved in the heavy industrialization of Iceland. Instead of waiting for all necessary contracts to been signed, all needed permissions to be granted, and all required energy to be ensured, the energy and aluminium companies have simply started major construction immediately when only one or a few permissions have been granted. And when criticised, not to mention when forced to stop, they have stated that because these projects have been announced and vast amounts of money put into them, they should be allowed to continue. If needed, they have also pointed out that because the natural areas at stake have already been harmed (by themselves), there is “no point” in preserving them.

One example would be Helguvík, where a framework for a proposed Century Aluminum smelter has already been built but hardly any construction has taken place there for two year. With every day that passes it becomes clear that not only has the company failed to ensure the energy needed to operate the smelter, but also that the energy simply doesn’t exist.

Geologist Sigmundur Einarsson has, for the last years, pointed this out and stated that the amount of energy needed for the Helguvík smelter cannot be found and harnessed on Reykjanes, like stated by the parties involved. For instance he believes that no more than 120 MWe can be harnessed in Krýsuvík, contrary to the official numbers of 480 MWe, and has repeatedly demanded answers from the authorities about where from the rest of the energy is supposed to come. Just as Saving Iceland’s questions about the whereabouts of energy for Alcoa’s planned smelter in Bakki, Sigmundur’s questions have never been answered, but he claims the Energy Master Plan proofs his theory.

Yet Another Three Kárahnjúkar Dams!

Environmentalists have reacted to the energy companies’ complaints and asked how on earth the companies can still pretended to be unsatisfied. As pointed out by Landvernd, these company’s are about be granted permission to harness energy equivalent of three Kárahnjúkar dams. From 2004 to 2009, Iceland’s energy production duplicated, largely with the construction of Kárahnjúkar dam, and is currently 16,900 gigawatt-hours. If the Energy Master Plan will be accepted as proposed, the energy companies will be able to duplicate the production again in few years, says Guðmundur Hörður, chairman of Landvernd, and continues:

The increase of public electricity usage is about 50 gigawatt-hours per year. The expansion entailed in the proposition would thus sustain that particular public increase for the next 265 years! If this will be the conclusion, the energy companies can be very satisfied. Still they send their agents onto the media, in order to cry and complain. That doesn’t give a good hint for a settlement.

Other environmentalists, Ómar Ragnarsson for instance, have mentioned that the whole discourse surrounding the Energy Master Plan portrays a false image. While the plan regards Iceland’s each and every hydro and geothermal area, potential for exploitation, the areas that have already been harnessed are kept outside of the discourse. Ómar says that it is simply false to state that “only twenty-two areas” have been categorised exploitable, as twenty-eight large power plants have already been built in Iceland. That means that out of the ninety-seven considered in the Master Plan, fifty have already been or will be utilised. In addition to the twenty-seven areas put on hold, another thirty-two have yet not been categorised by the steering committees, which makes the current proportion of protected areas even lower.

Ómar has also pointed out mismatches within the proposition. One example regards geothermal area Gjástykki that is listed as protected, as it is “a part of Krafla’s volcanic system, which has a protection value on a worldwide scale,” like stated in the proposition. But according to Ómar this will depend entirely on definitions. As an energy option, Vítismór, which is a part of Krafla’s volcanic system and is an inseparable part of the Gjástykki-Leirhnjúkur area, is currently listed as an addition to the Krafla power plant and would thus, regardless of its position within the Master Plan, be available for exploitation.

Limnology (or freshwater science) professor Gísli Már Gíslason upholds Ómar’s argument and has stated that half of Iceland’s “profitable hydro power” has already been utilised. One of those rivers is Jökulsá á Dal, harmed by the infamous Kárahnjúkar dam, which in order to be built required disallowing the protection of Kringilsárrani, an extremely important grassland for reindeer. This is not a unique incident as, for instance, the three dams in river Láxá are also manifestations of hydro power plants built in protected areas.

The Coming Struggle

Notably by the above-listed contradictions, which though demonstrate only a small part of the debate about the Energy Master Plan so far, the coming struggle about the fate of Iceland’s nature is going to be harsh and heavy. Armed with the rhetoric of economic crisis, unemployment etc., those in favour of heavy industry – in other words a big part of parliament, the energy companies, the Associations of Industry and Employers, the country’s biggest trade unions, and most recently Samál, a joint association of aluminium producers in Iceland – use literally every opportunity to push for the further development of industry, especially aluminium. In order for that development to occur, the country’s glacial rivers and geothermal areas have to be exploited on a mass scale.

Environmentalists, on the other hand, need to sharpen their knives and both ask and answer a great amount of questions. What, if any, are the actual benefits of heavy industry and its parallel large-scale energy production? And what are its impacts on Iceland’s society and ecosystems? No less importantly, what are its global impacts such as on the atmosphere or bauxite communities in India, Guinea, Hungary and Jamaica? How has it affected the economy and what are its contributions to the current economic situation? What are the impacts of the building of big dams and geothermal power-plants, fuelled by extremely high loans, bringing a temporary pump into the economy that inevitably leads to the demand for another shot? And what is the value of nature per se?

Only by answering all of these and many more questions, one can honestly try to answer the one fundamental question regarding the Energy Master Plan: What actual need is there for yet another three Kárahnjúkar dams, or in fact just a single more power plant?

Ge9n trailer (EN) from SeND film tank on Vimeo.

If not familiar with The Reykjavík Nine – nine people who were charged and later acquitted of attacking Iceland’s parliament after wanting to enter the building’s public gallery on December 8th 2008, a few months after Iceland’s economic collapse – then you can read through the whole case on the nine’s official support website. Check out a short, sharp and informative video from the 2011 London Anarchist Bookfair or download a brochure that was published and distributed shortly before the case’s main procedure, which took place in January 2011.

Also take a look at Ge9n’s official website where you can find a very nice poster, a press kit and the film’s title song: Stóriðjuverkefnið mig, composed and performed by Linus Orri and Þórir Bogason. Finally, read a review of the film’s première (the one mentioning the “ticking timebomb”) and an exclusive interview with the film’s director, Haukur Már Helgason (p. 30-32).

It is written somewhere that all cats are grey in the dark, but here in Iceland, official reports are all black, no matter how bright it is outside. Alþingi’s Investigative Commission’s Report is black. The Central Bank’s Report on the status of household debt is black. And the government and International Monetary Fund’s Memorandum of Economic and Financial Policies is also black, dark as a coal mine, and sure enough, it was drafted in April, the cruellest month. It is a reminder of the misery that the IMF has presided over in countries all over the world, and directly refutes the notion that the IMF plans to apply different methods than those it has adhered to until now.

In Greece, the public has risen up against the Fund’s plans, but here the labour movement and employers get into bed with it and are almost more devout than the Pope in getting investors to come here with their baggage of offshore profits and dummy corporations. In one district, where neo-liberals have sold everything and there is nothing left to mortgage except the harbour, efforts are being made to set a precedent by selling natural resources through a shelf company just so politicians can save face after having handed over the entire district to their associates and relatives on a silver platter.

What should the poets write about? Will the IMF supply the country with a literary writing programme? No, I do not think it has any interest in literature. Thank goodness for that. They just have graphs and bar charts, economists, advisers, and—if the confessions of former employees of the Fund are taken seriously—so called ‘economic hit men,’ who see to keeping politicians quiet, paying them off, or even ousting them. I do not trust myself to make more of this matter,except to say that automatons from Washington have been sent here, men who know all about the state deficit and nothing about our history and culture. They go on about “economic growth” but do not want to know anything about the public’s welfare; they are indifferent to whether nations are literate or illiterate. They are only interested in whether it is possible to squeeze money and proceeds out of the state in the interest of investors and big industry. Here is one big lemon. We will squeeze a whole tub of lemon juice out of it. Here are natural resources. Money can be squeezed out of them to pay hedge funds that have bought the debts of banks and financial corporations at bargain rates. The economist Michael Hudson has described the IMF as a sort of henchman for international creditors, collecting property and industry revenues on their behalf. But what is more incredible, he remarks, is that nations around the world are sacrificing their economic and monetary independence without resistance.

The first mission chief the IMF sent here was Mark Flanagan. He was succeeded by a woman, Julie Kozak. They were both assisted by a man named Franek Rozwadowski; and all of them were assisted by a woman who headed Landsbanki’s research group and almost everything they once reported turned out to be false. In any case, the Icelandic public had to listen to the bubble economy wisdom of the research group when Landsbanki was supposedly in its prime.Those from other research groups were no better but I call her out in particular because she is an employee of the IMF, which is in command of this country. It may be leaving now, but it will only truly be felt after it departs, having tightly bound everything according to its plans. It is really quite remarkable that most of the Social Democrat cabinet ministers collect their assistants and advisers among the ruins of the banking system.The IMF mission chief gives more orders than the President and the government, regardless of the mission chief’s gender. The mission chief can tell the Minister of Finance to stand on his hands, and the Minister of Finance will stand on his hands. But whoever gives orders to the mission chief is another story.

I once met Mark Flanagan. It was at a meeting in The Central Bank requested by a group of people who opposed the IMF’s economic plans for different reasons and on various grounds. I had a copy of Naomi Klein’s book ‘The Shock Doctrine’ with me, a beautifully bound book with a yellow cover. I asked Mark Flanagan whether he had read this book and whether he wanted to discuss its contents. He looked down at me from above his table and replied that the author of this book was not an economist. Then he turned to his bar charts on trade deficit, which he supposed should level off in the very short-term. It was obvious from Mark Flanagan’s arguments that he was a disciple of Milton Friedman, the man at the centre of ‘The Shock Doctrine,’ the man who laid the groundwork for the period of neo-liberalism as an ideologist and prophet, and has left his fingerprints on historical events, from the military coup in Chile to the privatisation of Icelandic banks.

The most prominent disciple of Milton Friedman in Iceland was Hannes Hólmsteinn Gissurarson […]. Milton and Hannes were friends and were members of the same club, which shaped the most recent era of history. In the middle of the seventies, Hannes Hólmsteinn sat in the Student Council of the University of Iceland and I also sat there for a time, as a stand-in if I recall correctly. He was the only one among those on the right who took part in debates with those of us who were furthest to the left. Others on the right had little interest in global issues and generally knew little about politics and history. In light of history, Hannes Hólmsteinn Gissurarson is probably the most influential politician to have sat on the Student Council. But we did not take him seriously, and rather regarded him as an ultra right-wing individual who probably did not mean half of what he said. We thought he was joking. But we were wrong there. We were satisfied with dreaming, discussing and being in the right. But Hannes Hólmsteinn was the messenger of an ideology that was pushed into practice. I fancy that he gets the shivers when he thinks about the consequences of these theories. He talked about bringing dead capital back into circulation, that is to say, placing natural resources and public goods in the hands of private individuals. As such Hannes Hólmsteinn Gissurarson had no power but a lot of influence.

There were other famous right-wing personalities present, in addition to Ingibjörg Sólrún Gísladóttir and Össur Skarphéðinsson. Ingibjörg Sólrún was president of the Student Council and Össur Skarphéðinsson, the current Minister of Foreign Affairs, was vice-president. He had been president before her, exactly as it transpired later in The Social Democratic Alliance (Samfylkingin). It could be said that this Student Council was like a miniature picture of the nation’s failure. It was a little picture of the future, of the people who were to take charge and govern. Several Student Councils have since come and gone but it is always the same story. For many, the Student Council works as a springboard to the seat of power. When I sat there, it did not occur to me that I was surrounded by future heads of state, Members of Parliament, municipal mayors and some three cabinet ministers.

The left was in the majority and I supported the majority, but I was in a minority within the majority. Those of us who were to the extreme left and identified with revolutionary change and socialism did not adopt all the views of the majority and did not expect the majority to assume responsibility for our views. We had our own particular discourse on, for instance, overthrowing the social order, stopping wars and freeing political prisoners; views we thought should be heard but which did not explicitly fall within the jurisdiction of the Student Council. The Student Council was like any other special interest group, and it had student struggle on its agenda, just as recovering alcoholics join together to stay sober and stamp collectors to collect stamps. Or unions consolidate to protect the rights of their members. The struggle of the Student Council dealt with pressing interests such as student loans, student services and so forth. This is not to say that we did not regard the world revolution as a pressing interest but the majority on the left was not of the same opinion.

And so the winter went by. During this time, creative writing was taking hold of me and I was not always tuned into the political scene. Yet I wanted to participate in the discussion even though the discussion was not always objective. I was not particularly objective either. Sometimes I grew bored at these meetings, twisted things around and tried to be funny, causing trouble in a flippant sort of way. Sometimes I would let slip are mark that the opposition would put in the books and which would often amuse the Council. One time, for example, the right took up the issue of facilities for student associations, undoubtedly a necessary discussion. Among other things, it had to do with providing facilities for the respective associations affiliated with the left and right. While this discussion took place, I turned to the person sitting next to me and said to him:“Do those right-wingers need anything more than a wardrobe for their old Nazi uniforms?” We laughed at this sardonic joke. Meanwhile heated discussions were taking place over the issue itself, so that nobody heard what I said except one girl from the right-wing faction. This was of course merely crude humour, perhaps not particularly funny considering how sensitive Nazism is as a topic, especially for people on the right. But the girl insisted upon my words being recorded. I requested that she repeat my comment, and when she did, the room exploded with laughter as if she had been hearing voices. I still fail to understand what end was served in recording such a comment.

This girl was surely a fine individual but most of the others said little at these meetings and let the men present the arguments. Then they raised their hands and voted as they were supposed to.They contributed little to the discussions and did not keep up with world affairs. Nobody on the right kept up with world affairs except perhaps Hannes Hólmsteinn Gissurarson, the disciple of Milton Friedman. Today everyone agrees that this compliance and conformity, this subordinate way of thinking, is one ofthe causes of the collapse. I was myself turning away from political orthodoxy, which always toed the same line, and within a few years, I had completely turned my attention to story-telling and poetry. I found myself giving way to the facts and my view of society was expanding and becoming more variegated. Even so, the radical left continued to provide essential provisions for my journey in this world. It is also fair to point out that I would later meet many of those who sat with me on the Student Council as upright citizens who attended to their jobs with knowledge and solicitude, and it did not make a difference whether they had been on the right or left side of the spectrum.

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The photo of Einar Már is by Christopher Lund.

Like explained on the project’s official website the process was “split into two phases. The first phase, 1999–2003, evaluated and ranked 20 large-scale hydro-power options, mostly located in the highlands, and the same number of geothermal options in 8 high-temperature areas.” The second phase was supposed to “rank all the options to produce the final result,” including “an evaluation of whether some areas should be conserved completely, without any energy-harnessing activities.” Proposed power projects were said to be “evaluated and categorised on the basis of efficiency, economic profitability, and how they will benefit the economy as a whole,” while the “the impact on the environment, nature, and wildlife” was also supposed to be evaluated, “as well as the impact on the landscape, cultural heritage and ancient monuments, grazing and other traditional land use, outdoor activities fishing, and hunting.”

TORFAJÖKULL AND KERLINGAFJÖLL PROTECTED – HELLISHEIÐI, REYKJANES AND KRAFLA AMONG “EXPLOIT-FRIENDLY” AREAS

The second phase’s report, as said before, was published in the beginning of July 2011, two years later than expected when the process started. On top of the protection list are two geothermal areas, around Torfajökull glacier and Kerlingafjöll mountains, which both have been viewed as preferable exploitation areas by the energy industry and its representatives in committees concerning the Master Plan. Other areas scoring high on the protection list are geothermal area Vonarskarð and rivers Skaftá and Hólmsá, south-west of Vatnajökull glacier, the latest-mentioned being a part of Landsvirkjun’s recently announced plan to build 14 new power-plants in the next 15 years. These areas are, according to the report’s authors, the highest ranking natural treasures that were taken into account in the making of the report.

On the other hand the geothermal areas on Hellisheiði by mountain Hengill, the Reykjanes peninsula and volcano Krafla, as well as river Tungnaá, are listed on the top of exploitation areas. Geothermal energy production has been going on Hellisheiði since 2006 (where Saving Iceland’s 2008 action camp was located ), resulting in highly increased sulphur pollution in the Reykavík capital area. There is a vast local opposition against the plant and the planned enlargement of it, its most recent manifestation being when residents of Hveragerði, living close by one of Reykjavík Energy’s boreholes, called the police to complain about constant noise coming from the borehole. Further construction is currently taking place in Hellisheiði as well as in Tungaá river where Landsvirkjun is building its Búðarháls dam that will produce energy for increased aluminium production in Rio Tinto Alcan’s smelter in Straumsvík, Hafnarfjörður. Already existing plans to increase geothermal energy production on the Reykjanes peninsula, for a planned Norðurál/Century Aluminum smelter in Helguvík, have resulted in worries of overexploitation – not only by environmentalists but also, and most recently, by Iceland’s National Energy Authority.

ÞJÓRSÁ RIVER NOT CONSIDERED NATURALLY VALUABLE

What mostly grabs one’s attention is the fact that Þjórsá river is llisted quite high on the report’s exploitation list, meaning that according to the authors, Landsvirkjun’s three planned dams in the river would not have any serious impacts on the environment surrounding the river. Thus the planned dams by Holt and Hvammur are number 15 and 16 on the list, while the damming of Urriðafoss waterfall – the most critical of all three – is located number 28, which is still above the list’s middle. This conclution completely contradicts environmentalists nation-wide and many local residents around the river, opposing all three dams. In an article e.g. published on Saving Iceland’s website, natural scientist and author Guðmundur Páll Ólafsson, criticised the rhetoric of those in favour of the dams:

When a glacial river is harnessed to generate electricity, this important function, and the binding of the greenhouse gas CO2, is diminished. What they generate is not green energy as the advocates of hydro-power plants and heavy industry maintain, but black energy. Dams and reservoirs hinder the function of glacial sediment in the oceans, and hence hydro-electric power plants that harness glacial rivers are far more harmful than has hitherto been believed.

The planned Þjórsá dams have also been highly criticised from a social perspective, most recently by a group of young locals who challenged Iceland’s government “to state officially that no dams will be built in the lower Þjórsá river, against the peoples wishes.” This happened shortly after a Supreme Court ruling stating that the decision of Environmental Minister Svandís Svavarsdóttir, to reject the construction of a dam in Urriðafoss waterfall in Þjórsá river, was illegal. The ruling was only a one small factor in the long and complicated farce concerning the Þjórsá issue – a farce including Landsvirkjun’s attempts to bribe local residents and the company’s threats of using expropriation in order to gain access to lands owned by people opposed to the dams. Following the publication of the Master Plan’s second phase report, Guðmundur Hörður Guðmundsson, chairman of environmentalist organization Landvernd, expressed the organization’s disagreement with Þjórsá’s position on the exploitation list, stating that a much better and more detailed research has to be done on the planned dams’ social impacts.

Interviewed by newspaper Fréttablaðið, natural scientist Guðmundur Páll Ólafsson voiced a very negative view towards the report, saying that the whole process of it marks the energy company’s coming retrieval. “My criticism is mostly based on the premises that the exploitation options are always at the forefront, but not to protect the Icelandic nature and Icelandic natural treasures from the outburst of the present,” Guðmundur said and added that the latter is much more important than to exploit certain areas. He also criticised the Minstry of Industry and the National Energy Authority for allowing Landsvirkjun to walk all over the second phase’s protective section.

THE COMING RETRIEVAL

Only a few days prior to the report’s publication Landsvirkjun announced the company’s future policy formulation, parallel to the publication of another report that was made for Landsvirkjun by a consulting service named GAMMA. The reports states that according to the results of the Energy Master Plan’s first phase, Landsvirkjun can duplicate its energy production in the next 15 years, promising between 9.000 and 11.000 thousand related jobs. If things go like planned, at least 3.000 people would be employed by energy-intensive heavy industry companies in 2025, while the so-called – and often doubted – derivative jobs would be a little more than 4.000, meaning that c.a. 4% of the Icelandic nation would work directly or implicitly for heavy industry. To make a good story better the director of Landsvirkjun, Hörður Arnarson, compared Landsvirkjun with the Norwegian oil industry, saying that if the company is allowed to follow its published strategy, only its dividend payment and tax payment could become 14% of the state treasury. Hence Landsvirkjun would be able to live up to the cost of Iceland’s police, courts, culture, sports, colleges and universities.

Aforementioned Guðmundur Hörður Guðmundsson, chairman of Landvernd, called Landsvirkjun’s strategy “the mapping of the next economical bubble,” pointing out that the financial amounts mentioned in the report are much higher than the amounts of the Kárahnjúkar dam project, which contributed fiercely to Iceland’s economic collapse in 2008. “How will the situation be here when all this construction will be finished?” he asked when interviewed by a left-leaning news-website Smugan, adding that Landsvirkjun is not the only energy company planning large-scale constructions. The editor of that same website, Þóra Kristín Ásgeirsdóttir, called the report “Landsvirkjun’s political manifesto” and asked when a time would come where expensive professionals would be hired to write a report about the immeasurable value of unspoiled nature instead of yet another report on the greatness of large-scale exploitation. In an open letter to Katrín Júlíusdóttir, Minister of Industry, Guðmundur Páll Ólafsson said that “in fact nothing has changed in the Minstry of Industry since the collapse […] except that the scurrility is more than before.”

ENVIRONMENTAL MINISTER PROMISES EMPTY-LOOKING CHANGES

As reported by Saving Iceland before, environmentalists are highly critical of the making of the Master Plan, especially in relation to a committee, nominated to sort the areas in question into three different categories: protection, hold and utilization. The committee did not include a single representative from environmentalist organizations whereas representatives from the energy and tourism industries, as well as the Ministries of Environment and Industry, had seats IN it. Minister of Environment and a Left Green MP, Svandís Svavarsdóttir, has now backed up the criticism, stating that there is, and has always been, an enormous advantage difference between environmentalists on the one hand and those in favour of extreme exploitation on the other. Interviewed by State TV station RÚV, Svandís said that within both the Ministries of Environment and Industry there is a will to strengthen environmentalists’ position, though no plans have been made how to actually execute that will.

Once again promises given about changes concerning the protection of Iceland’s nature seem to lack all real meaning.

Overrun by Viking ambition, Reykjavík Energy built headquarters fit for Darth Vader, expanded ambitiously, dabbled in tiger prawn farming and flax seed production, went into the fibre optics business, invested in a new geothermal plant, speculated in places like Djibouti, and finally managed to run itself so completely into the ground that foreign investors will no longer offer the company loans.

In hopes of rescuing its multi-utility service company from the depths of abyss, the city of Reykjavík stepped in this March with a 12 billion ISK (105 million USD) loan, which is nearly its entire reserve fund set aside for the company, but still only a fraction of the company’s massive foreign debt of 200 billion ISK (1.7 billion USD).

With thousands of captive lifetime subscribers and a means of producing energy at very little cost, the company had all the makings of a cash cow. So what happened to Reykjavík Energy, an entity that less than a decade ago was a perfectly viable, municipally owned company providing the city with basic utilities: cold water, hot water and electricity?

From the top floor of Reykjavík Energy headquarters, an expansive view of Mount Hengill can be observed on the eastern horizon. The mountain range forms part of the Mid-Atlantic Ridge as it cuts through Iceland and divides the country between the North American and Eurasian continental plates. It is one of the most geologically active areas in the world.

Two thick white clouds of steam can be seen rising up from the mountain where Reykjavík Energy operates the Nesjavellir and Hellisheiði geothermal power plants. Together the plants provide hot water and electricity to more than half of Iceland’s population of 318.452.

Over the last half century, Iceland has successfully established a name for itself as a world-renowned leader in the field of geothermal energy, using it to heat 90% of the country’s buildings and nearly all 136 swimming pools in the country. As Iceland’s President Ólafur Ragnar Grímsson said at a geothermal conference last year, “We were very fortunate that while most of the world forgot about the geothermal sector, we had visionaries in Iceland. Not just scientists and technical experts, but also local councillors in towns and cities who saw the opportunities in this area.”

The President is well known today for having travelled the world during Iceland’s boom years giving laudatory speeches about the nation’s valiant bankers who led the country to economic prosperity, to the extent that some have called it cheerleading. However, since the crash he has abandoned the bankers, and now travels the world singing songs of praise for Iceland’s geothermal “visionaries,” who, instead of the bankers, helped “transform a country of farmers and fishermen into one of the most prosperous welfare economies in the world.”

The story goes, as he told it in Xiamen, China last year, “In my youth, over 80% of Iceland’s energy needs came from fossil fuel, imported coal and oil. We were a poor nation, primarily of farmers and fishermen, classified by the UNDP as a developing country right down to the 1970s. Now, despite the effects of the present financial crisis, we are among the most prosperous nations in the world, largely due to the transformation which made our electricity production and space heating based 100% on clean energy.”

He emphasises the last point that Iceland’s geothermal energy business has served to offset the effects of the economic crisis: “Yes, indeed,” he said in Abu Dhabi, Bali, and Shanghai last year, and again in New York this year, “geothermal energy has helped Iceland to survive the recent banking shock […].”

While the story that the President tells about Iceland’s transformation to geothermal energy is indeed marvellous, and it is true that the cost of heating and electricity is nowhere in Europe cheaper, one would have to be wearing rose-tinted glasses to see Reykjavík’s geothermal energy business as a saviour in the crisis. Upon closer inspection it appears that the country’s largest multi-utility geothermal energy company, which claims to operate “the largest and most sophisticated district heating system in the world,” has only driven the nation into deeper water.

A FINANCIAL BASKETCASE IS UNVEILED

When The Best Party came to power in Reykjavík after the May 2010 elections, the comedian-turned-Mayor Jón Gnarr said he was surprised to learn that Reykjavík Energy was in such a horrible financial state. “I had always had the impression that it was the wealth in the city,” he said of the company that is 94% owned by the city Reykjavík and exploits what is arguably Iceland’s greatest resource.

Yet despite the abundance of resources and a steady demand for its services, Reykjavík Energy managed to rack up a 233 billion ISK debt (2 billion USD or 1.4 billion Euros), which is nearly four times the city’s annual budget of 60 billion ISK. What’s more, 200 billion ISK (1.7 billion USD or 1.2 billion Euros) of this debt is in the form of foreign currency loans, which fluctuate at the whim of the króna.

“For months I found myself in daily meetings directly or indirectly related to Reykjavík Energy,” Jón Gnarr told me, admitting that it grew very tiresome. It was around that time, on September 25, 2010 at 11:43 pm, that he wrote the Facebook status update that would come back to haunt him in the form of political ammunition six months later [our translation]: “Reykjavík Energy is bankrupt. The city is in bad shape and its revenue has decreased. What should be done? Cut backs? Price increases? Streamlining? Where and how much? Meetings, meetings, meetings…”

Aiming to clean up the mess, Jón Gnarr’s team brought in Haraldur Flosi Tryggvason as Chairman of the Board and made him a full-time executive director with the gargantuan task of getting the company back on track. The initial ‘rescue operations’ included orchestrating a mass layoff of 65 employees in October 2010 and raising the price of heating and electricity by 27% between November 2010 and January of this year, to little fanfare from citizens and employees alike.

Though the decision to hire Haraldur Flosi was initially criticised because he had been the head attorney at Lýsing, a company that guaranteed the now-deemed illegal foreign currency loans to individuals, he is also one of the few Chairmen in the history of Reykjavík Energy to have a background in business. “We have made an effort to hire people based on professional training and experience rather than political affiliation,” Jón Gnarr told me.

In February, Haraldur Flosi had been noticeably cautious when he explained to me how the company managed to accumulate such colossal debt. “If the crash had not happened, it wouldn’t have been nearly as bad,” he said. “When the financial crisis hit, Reykjavík Energy was in a huge expansion period, so it was quite exposed to the crash, and because loans were mostly financed in foreign currency, the company’s debt about doubled overnight.”

The company chose foreign loans with a favourable interest rate of 1–2% over domestic loans with an interest rate of 10–15%. Had the company taken domestic loans at the higher interest rate, the debt would not have doubled in the crash, but it would nonetheless have been equally large today, Reykjavík Energy PR Manager Eiríkur Hjálmarsson would later tell me.

While this suggests the company’s massive debt cannot be wholly explained by the crash, Haraldur Flosi was not interested in pointing any fingers. He admitted that the company was perhaps over-optimistic in its investments, but yet his explanations were mostly framed by the economic crash.

“The biggest problem today is getting financing,” he said. “Foreigners have become sceptical of the situation here in Iceland. It’s more difficult to get access to money and it’s more expensive,” he told me, adding diplomatically, “but I think it’s the same everywhere. Many companies abroad are also struggling to adjust to this new reality. This is in a nutshell what happened.”

Less than one month later, this problem became more evident. Unable to secure loans from Deutsche Bank, Barclays, Citibank, Council of Europe Development Bank, European Investment Bank and Nordic Investment Bank, Reykjavík Energy announced on March 29 that it would be dipping 12 billion ISK deep into the city’s reserve fund, which had been set aside for a situation like this.

At the same time, the company announced that it would cease paying the city its annual 800 plus million ISK in dividends, it would continue raising the price of hot water and electricity, it would lay off another 90 employees, and it would begin selling off all assets unrelated to its core business. These assets include everything from a fibre optics business to The Pearl, a Reykjavík monument. Russian investors with ties to Ásgeir Þór Davíðsson from the sleazy Kópavogur strip club Goldfinger have already made an offer on Perlan, expressing an interest in turning the omnipresent monument into a flashy casino.

THE BEST PARTY TAKES THE RAP

Despite the fact the Reykjavík Energy had been heavily in debt for years, little had been said about it. “The state of the company should have been pretty clear for some time now,” Jón Gnarr told me, “but for some reason, while Icesave featured heavily in the public discourse, nobody talked about the state of Reykjavík Energy though the company debt is four to five times the Icesave debt.”

As soon as news of the emergency loan from the city broke, however, a blame game ensued. Fingers were pointed in all directions, but despite the fact that The Best Party is the only political party in Reykjavík that did not have a hand in running the company during the decade that it accumulated its monstrous debt, the fingers pointed were generally in the direction of Jón Gnarr and the new Reykjavík Energy directors.

It started on March 27 with an article on news website Vísir.is blaming Jón Gnarr and the new directors for making it difficult for the company to get its loans refinanced. As seems customary in the Icelandic media, Vísir based the entire story on an anonymous source: “According to our sources from the financial world, getting loans refinanced has not been going well, due to, among other reasons, comments that have been made by the directors and Jón Gnarr.”

Specifically, the article said, according to their sources, investors had received a translation of one of Jón Gnarr’s Facebook statuses: “Reykjavík Energy is bankrupt.” The status, which has since been deleted (and is quoted above in its entirety), was posted in September 2010, six months prior to the Vísir story.

This continued to be a point of contention for others, like Independence Party City Councillor and former Mayor of Reykjavík Hanna Birna Kristjánsdóttir, who publicly criticised Jón Gnarr for his comments about the company being bankrupt. She also disagreed with the idea of phrasing the city’s 12 billion ISK loan as a city bailout, which implied bankruptcy. This is despite Reykjavík Energy CEO Bjarni Bjarnarson claiming that the company would not have been able to continue paying employee salaries without the loan.

Then, on March 30, Haraldur Flosi’s predecessor as Chairman, Guðlaugur Gylfi Sverrisson, wrote a letter to the media both to make it known that when he was Chairman—between 2008 and 2010—the company had always been able to secure loans, and to accuse the new Board of fumbling a loan that was essentially a sure grab.

“In January 2010 the CFO of Reykjavík and the CFO of Reykjavík Energy met with the Nordic Investment Bank (NIB). They [NIB] expressed great desire to lend Reykjavík Energy 12–14 billion,” he wrote. “…In June 2010 when I left as Chairman, there were no doubts that NIB would loan the company the previously mentioned amount given that the company met stipulations [to raise prices].”

He concluded his letter with the implicating questions: “What changed after June 2010? Could it be that comments made by the directors and owner about the financial state of Reykjavík Energy have negatively influenced its ability to get financing?”

Sigurður Jóhannesson, a Senior Researcher at the University of Iceland Institute of Economic Studies, put it this way on a University of Iceland radio show: “I probably wouldn’t say that my company were bankrupt if I was trying to get loans, but I think that investors must look first and foremost at things like cash flow and annual financial statements. One can also read reports by rating agencies, and there is very little there mentioned about Jón Gnarr.”

If anybody knows best what the banks were thinking in 2010, however, it is probably Anna Skúladóttir who was Reykjavík Energy’s CFO from May 2006 until 2011. As Guðlaugur Sverrisson wrote, Anna met NIB in January 2010 and she confirms in conversation that “the bank expressed interest,” but told me that it was by no means a done deal. “In 2010, foreign loans weren’t just closed to Reykjavík Energy. Iceland as a whole was still on ice.”

Ultimately, the far bigger questions remain: What happened to Reykjavík Energy before Jón Gnarr and the Best Party enter the story in June 2010? And, could it be that something happened before 2010, which would explain the company’s financial state?

WHEN MONEY GREW ON TREES

Reykjavík Energy was founded through the merger of the institutions Reykjavík Electricity (Rafmagnsveita Reykjavíkur) and Reykjavík District Heating (Hitaveita Reykjavíkur) in 1999, and Reykjavík Water Works (Vatnsveita Reykjavíkur) in 2000. The company thus began on solid ground, with a long history of well-managed services to captive subscribers, respectively dating back to 1921, 1930 and 1909.

Historian (and active Left Green member) Stefán Pálsson, who worked as a curator of the Reykjavík Energy Museum for ten years before he was let go in the mass layoff last October, explained that the institutions were so lucrative that they had to find ways of spending money so that they wouldn’t show too much profit.

“They would, for example, hire hundreds of school children every summer to plant trees, make roads, and work on environmental projects,” Stefán said. “They would rationalise that we are harnessing geothermal energy from this area so we owe it to society to plant loads and loads of trees. And we give school children jobs, which makes their parents happy, which is good for society, and things like that.”

In fact, the institutions that preceded Reykjavík Energy were so lucrative that politicians could milk them to fund pet projects and other vanities. For instance, it was under Davíð Oddsson’s legacy as Mayor of Reykjavík that District Heating financed the construction of The Pearl, a well-known monument in Reykjavík, which opened to the public in 1991. “It was never supposed to turn a profit,” Stefán said. “The big tanks carry hot water, but then there is the building on top, the restaurant, and the sightseeing deck. And actually it was supposed to be even more extravagant with palm trees and tropical birds and plants.”

Nonetheless, the institutions were loaded with money and owed very little when these endeavours were carried out. It was not until after the institutions were turned into a private partnership company (sf.) in 2001 that the debt begins to amass.

A SLEEPING GIANT STIRS

If there is one person who has been most closely associated with Reykjavík Energy over the years, it is Progressive Party politician Alfreð Þorsteinsson. Alfreð’s involvement began in 1994 when he was appointed Chairman of a municipal body charged with overseeing the three institutions. It was under his leadership that the institutions were merged into Reykjavík Energy in 1999, and from then until 2006 he served as Chairman of the Board of the new company.

Alfreð, along with Guðmundur Þóroddsson, the former head of Water Works who was hired as CEO, were keen on stressing that Reykjavík Energy was now a company, Stefán explained. “We the staff were told that we were not to refer to it as an institution.”

This shift in mentality was also mirrored by a shift in the legal framework governing the company. A specific law, no. 2001/139, which was passed in 2001, gave Reykjavík Energy the right to take small loans and make payments for the purposes of running the company without the consent of its owners (the municipalities, Reykjavík, Akranes and Borgarbyggð). It also gave the company the right to operate subsidiaries and to invest in other companies. In essence, it enabled Reykjavík Energy to be run like a private company, while retaining a political management.

“The idea was that this new company was a sleeping giant that had been ineffective in the past. It had almost endless credit because it owed next to nothing, and around early 2000 that was not really something to brag about in Icelandic society; it was seen as an unused opportunity. You had this potential of taking loans to grow,” Stefán told me.

“The same argument was made to regular people who had paid off their mortgage; they were told that this made no sense, that it was downright silly. So people refinanced their homes, took a new loan to be paid over twenty years time instead of five, and this freed cash to play in the stock market, or to buy a summer house or a new jeep. I would say that Reykjavik Energy’s troubles stem from a large-scale version of the same thing.”

In the case of Reykjavík Energy, unleashing the power of capital meant buying tens of small district heating companies in the south and west of Iceland, expanding their service from five to over twenty municipalities. “You got the impression that somewhere in Reykjavík Energy there was someone with a map, putting down flags, you know with a Napoleonic dream of taking over,” Stefán jokingly remarked.

Additionally, Reykjavík Energy began investing in other companies, and by 2003, it had shares in over twenty companies, including Feyging ehf, a flax seed operation of which it was the largest shareholder. That project was abandoned in 2007 with a loss of 340 million ISK. An attempt to farm tiger prawns was also declared a failure in 2007, after seven years of work and 114 million ISK down the drain.

Alfreð, the former Chairman of the Board, is adamant that the investments were not too many or made too quickly. “When I left in 2006,” he told me, “the company’s debt was less than 70 billion ISK. The state of the company was very strong. The loans taken were all long term, to be paid off in 20–30 years.” In any case, that debt is still nearly seven times the debt that Reykjavík Energy inherited through the merger of the institutions in 1999.

BIG INDUSTRY FULL STEAM AHEAD

That being said, the bulk of Reykjavík Energy’s debt can be attributed to the construction of the Hellisheiði plant, which former Reykjavík Energy CFO Anna Skúladóttir said is “the largest investment in the company’s history.”

The decision to build the plant, she said, was made in the beginning of the 21st century when it became evident that the Reykjavík area would need more hot water as the Nesjavellir plant was expected to become fully utilised. At the same time, the decision was made to harness 300 megawatts of electricity to be sold to heavy industry, as it was considered more efficient to build and run a plant that produces both hot water and electricity.

In 2006, the company reached an agreement to sell electricity to aluminium smelting company Century Aluminum Norðurál, but when the crash hit in 2008, Reykjavík Energy had yet to secure financing for phase five of the plant build-up, including the 90 MW that were supposed to go to Norðurál in 2010.

By that time, however, it had already purchased five turbines at about 5 billion ISK a pop. “Turbines must be ordered at least three years in advance,” Anna explained. “It’s like ordering an airplane.”

Two of the five will come online this year, but an agreement was reached to postpone delivery of three of the turbines until a decision has been made to continue further plant production. Of the three outstanding turbines, Reykjavík Energy didn’t have a definite energy source lined up for the third one. What’s more, there were originally seven, not five, turbines ordered, but Independence Party politician Kjartan Magnússon said he was able to back out of two of them when he took over as Chairman of the Board in 2008.

When Moody’s reviewed the company for a possible downgrade in July 2008, it noted: “The company’s financial profile has continued to weaken during the course of the year, mainly due to the company’s exposure to unhedged foreign currency debt, the company’s primary source of funding. Conversely, 80% of its revenues today are in Icelandic krona derived from its operations as Reykjavik’s primary multi-utility.”

Despite the risks involved, however, it has essentially been government policy to attract heavy industry to the country. In the span of a decade, Iceland’s aluminium production went from 4% of the country’s GDP in 2000 to 14% in 2010—surpassing the country’s fish exports and making Iceland one of the largest aluminium producer in the world. “The ‘heavy industry agenda’ was a big part of the bubble in Iceland,” Minister for the Environment Svandís Svavarsdóttir said.

“The Left Greens always put a question mark next to heavy industry, but it was really the mainstream view. When we suggested that it was possible to do something else, people said, well ‘do you want to knit socks and pick mountain herbs?’ The Left Greens were considered a very foolish party for not wanting to proceed with heavy industry.”

Following the city’s bailout, though, it has been increasingly debated whether a municipally owned company should take the risks associated with making these kinds of heavy industry deals given that the city and its taxpayers are accountable. Not only is Reykjavík Energy financially incapable of continuing with phase six of the Hellisheiði plant for the time being, but they have also for the first time turned their back on the company’s heavy industry policy.

“We think that Reykjavík Energy should fulfil its role as a service company that provides people with electricity, hot and cold water, and sewage disposal,” Jón Gnarr explained. “We don’t think it should participate in heavy industry or other risky investments.”

BLOWING THE LID OFF 2007

Though it was undoubtedly unfortunate that Reykjavík Energy was in the middle of raising capital for the Hellisheiði plant when the crash hit, the company nonetheless made some very questionable decisions in 2007 at the peak of Iceland’s financial boom. For instance, the Board decided to buy shares in Hitaveita Suðurnesja for 13.4 billion ISK despite the fact that the company didn’t have any spare funds. The shares were paid for in entirety with a five year loan, which is due to come back to bite the company in 2013.

Perhaps, though, the spirit of the times is best captured in Reykjavík Energy’s decision to boost its geothermal operations overseas through a subsidiary company called Reykjavík Energy Invest (REI). At the same time as the banks had reached nearly ten times the nation’s GDP by expanding offshore, Reykjavík Energy also aspired to a world domination that made Ólafur Ragnar Grímsson proud. “I allege that if we continue like this,” he told a TV2 reporter in October 2007, “the Icelandic energy ‘outvasion’ can be an even bigger operation than the banks.”

The event that the President was praising is now commonly referred to as the REI scandal, in which Reykjavík Energy briefly merged its subsidiary company Reykjavík Energy Invest with Geysir Green Energy, a private company owned by, amongst others, FL Group and Glitnir bank, which were highly implicated in Iceland’s banking collapse.

According to an article that appeared in Fréttablaðið on October 4, 2007, REI’s project list included the building and buying of about 700 MW of energy in the United States, Philippines, Greece, Indonesia, Germany and Ethiopia. Their goal was to produce three to four thousand megawatts before year-end 2009, at which time they planned to go public. “These are very ambitious goals that will lead to the biggest geothermal energy company in the world,” FL Group Chairman Hannes Smárason told Fréttablaðið.

Though Reykjavík Energy Chairman of the Board at the time Haukur Leósson sincerely believed that the merger was in the best interest of the company, noting that they had negotiated 10 billion ISK for the use of Reykjavík Energy’s brand name alone, it is widely believed that there was foul play involved. When the former CEO of Glitnir and Chairman of REI Bjarni Ármannsson admitted in 2009 that the merger between REI and GGE had been a mistake, Independence Party politician Gísli Marteinn Baldursson wrote on his blog, “Hopefully he now realises that there were other things than our deliberation that have done more damage to Iceland and one would wish that more had shown care.”

Ultimately, the grand plans never materialised. After the company introduced the idea to the Board, news of the meeting went to the media and people were especially outraged to hear that key staff at Reykjavík Energy were being given special stock options. “There was so much anger,” Svandís Svavarsdóttir recalled. “I did a lot of interviews in the span of two to three days. I’ve never felt anything like it. It was like everything was burning in society. There was a lot of heat.”

The controversy led the Independence Party and Progressive Party majority municipal government to fall apart, and a new majority between the Social Democrats, Progressives, Left Greens and Liberal Party formed with Dagur B. Eggertsson becoming Mayor of Reykjavík.

While the so-called ‘100 day majority’ reigned, a steering committee headed by Svandís with representatives from every political party was set up to look into the events and to determine whether any lessons could be learned. The more they learned, the more it became clear to them that the merger should be stopped. They felt that Reykjavík Energy had developed too far from its owners and on its own initiative.

“In many ways, the REI story is a prototype of the financial crisis. Politicians decided to allow private individuals into public entities and let them behave as if they owned what belonged to the public,” Svandís told me.

“We saw that on a large and small scale in society. We saw it in the privatisation of the phone company, the banks, in the privatisation plan of the right-leaning government, which ruled for far too long, for eighteen years, but in Reykjavík this was basically the same thing that happened.”

At the same time as the REI deal was being discussed, an attempt was also made to privatise Reykjavík Energy. Part of such a proposal, which was put forth by CEO Guðmundur Þóroddsson and Vice President Hjörleifur B. Kvaran on August 28, 2007 rationalised that “[i]t is time to unleash the energy of free enterprise so that Iceland’s expertise and knowledge can be used to the fullest extent in the geothermal energy company outvasion.”

On September 3, 2007, the Board actually approved sending the proposal to the owners of the company for approval, e.g. the Mayor of Reykjavík, the City Manager of Akranes and of Borganes. However, the idea fell by the wayside when the frenzy erupted over Reykjavík Energy Invest. “Since then it hasn’t been brought up again, and I doubt it will be,” Svandís said. “Well I hope not.”

Reykjavík Energy Invest still exists today though its ambition is far from the grandiose dreams of its founders. Independence Party City Councillor Kjartan Magnússon, who became Chairman of Reykjavík Energy in January 2008, a few months after the REI scandal exploded, explained: “We decided after I became chairman to fulfil our commitments in projects abroad, in Djibouti for instance, but to stop the financing of such projects thereafter, and instead focus on selling knowledge and expertise.”

Said Anna Skúladóttir: “Unfortunately, looking back I think that everyone ran around crazy in 2007, it didn’t matter whether it was the municipality, State, companies, individuals—everyone was blinded. Hopefully we’ve learned something from this and can look forward.”

It might be noted that in 2009, Reykjavík Energy purchased a 7.1 million ISK Mercedez Benz ML 350 for Anna’s personal use. Anna went on to return the car in 2010 after Icelandic tabloid DV ran an indignant story about it.

A ROSY STORY INDEED

Though the crash alone is a convenient excuse as Reykjavík Energy’s debt doubled in 2008 due to fall of the króna and financing became more difficult, it could also be said that Reykjavík Energy was as much a victim of the financial crisis as Iceland’s banks were a victim of the United States mortgage crisis.

Truth be told, Reykjavík Energy managed in less than a decade to run a perfectly viable company into the ground, despite having the ingredients of a cash cow. As President Ólafur Ragnar Grímsson tells Icelanders, foreign leaders and journalists alike, geothermal know-how in Iceland is first class, and people come from all over the world to see it firsthand.

“We have great competitive advantages,” Ólafur said at a geothermal conference last year. “One is that Iceland is the only place in the world where you can, in a single day, witness all the aspects of geothermal utilisation. You can witness three geothermal power plants, a greenhouse town in a farming area, a world famous international spa, a medical clinic, as many swimming pools as you want to and visit fishing companies that use geothermal energy for drying their products.”

He continued: “…When we bring people here, they are inspired, they have a vision. They leave Iceland full of hope, inspired by the possibilities. That is very important, because political decision-making and even business decision-making need more than mere calculations. They also need a vision and inspiration—hope. That is what we can give.”

With all the geothermal know-how in the world, however, Iceland’s largest multi-utility geothermal energy company was inspired by a vision that took hold of Iceland during the financial bubble, which grew rapidly for a decade, peaked in 2007 and then burst in 2008.

When we called up the President to ask about his geothermal rhetoric, he explained, “The reason why I have emphasised the geothermal experience of Iceland as well as the technological know-how is that I believe this the most significant contribution we can make to the battle against climate change, which seriously is the most fundamental threat that the world faces.”

He added: “Even if one company in Iceland does badly it doesn’t mean that we should think to take this away from other countries, and quite frankly there is such a strong demand from the world to have access to Icelandic cooperation in this area that our problem is to meet the requests and they come from poor countries in the developing world to rich countries in Europe and the Western world.”

Despite the dark outlook presented by rating agencies for Reykjavík Energy, Jón Gnarr is optimistic. “The state of Reykjavík Energy is still difficult, and it’s very sensitive to exchange rates,” he told me, “but I believe that the plan that we have initiated is very good, and I am confident that the state of Reykjavík Energy will improve.”

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In addition:

HEADQUARTERS

Price tag: 4.271,7 BILLION ISK

As the company struggles to stay afloat, its headquarters, which were built in 2002 under the chairmanship of Alfreð Þorsteinsson, stand as a symbol of what many believe to have been the excessive and ill-founded investments of the municipally owned company.

“A service company for the people of Reykjavík has no business building a house like that,” Independence Party representative Kjartan Magnússon disapprovingly told me. “The people of Reykjavík felt it was part of a power game. When you come into this house, it’s a sign of power.”

Similarly, former employee and historian Stefán Pálsson called it a monstrosity. “You would expect it to be Darth Vader’s Headquarters. It is my advice to politicians connected with Reykjavík Energy never to allow themselves to be interviewed outside the building.”

On a visit to the infamous headquarters, Chief Press Officer Eiríkur Hjálmarsson, a company veteran since 2006 and the lone survivor in the PR department after the October layoffs, showed a photographer around the building. He took us to top floor to see the view over Mount Hengill, where the company operates the two power plants at Nesjavellir and Hellisheiði.

Since our visit, that floor has been put on the rental market. The advertisement is telling: “Fantastic 745m² office space on the sixth and top floor in Reykjavík Energy is available for rent immediately. The building is fully equipped with the best of the best and has access to a big rooftop balcony with a vast unhindered view over the city…”

It continues: “In the house is a staffed reception, World Class (luxurious fitness centre), with optional access to lecture rooms, a library, computer room, and more […]Special housing for those with demands. Blue prints and more information can be solicited from our sales men, trod.is.”

The ad doesn’t mention it, but the building also houses impressive art, including a 35 metre tall granite fountain by artist Svava Björnsdóttir, which travels through all five floors of the building, and a Foucault Pendulum, which takes 26 hours to knock down all the pins before they pop up again.

However, former Chairman of the Board Alfreð Þorsteinsson doesn’t think it’s overly extravagant. “The main fault of the house is that it is considered beautiful and chic,” he said. “If it had been built as a one or two story house nobody would have said anything. Should we have built an ugly house?” Furthermore, he said the top-class kitchen, which has been heavily criticised is “not unlike other kitchens in Reykjavík.”

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THE REI SCANDAL

The course of events

January 25, 2007

Former Reykjavík Energy CEO Guðmundur Þóroddsson proposed to the Board that Reykjavík Energy create a subsidiary company called Reykjavík Energy Invest (REI), which would oversee all of Reykjavík Energy’s stakes in ventures abroad, including Enex, Enex-Kína, Galantaterm and Iceland American Energy. The Board approved.

March 7

The Board additionally agreed that Reykjavík Energy would put two billion ISK into REI towards future projects. A report that was commissioned at the January 25 Board meeting and then delivered at the March 7 Board meeting noted: “There is great interest amongst Icelandic investors in environmentally friendly energy, for instance, Geysir Green Energy hf, Atorka hf and Enex hf. The first two named have already requested a partnership with Reykjavík Energy in the outvasion.”

June 11

Reykjavík Energy Invest was formally founded. Appointed to the Board were Björn Ársæll Pétursson, Haukur Leósson, and Björn Ingi Hrafnsson. Reykjavík Energy CEO Guðmundur Þórodsson would replace Björn Ársæll Pétursson as CEO in September.

September 11

Former CEO of Glitnir Bjarni Ármannsson was appointed Chairman of REI and bought stock worth 500 million ISK.

September 20

The Directors of REI met with banksters Hannes Smárason from GGE and Jón Ásgeir Jóhannesson from FL Group to discuss merging the companies.

September 22

Chairman of REI Bjarni Ármansson met with Chairman of GGE Hannes Smárason to flesh out the details of the merger.

September 23

Chairman of REI Bjarni Ármansson and Chairman of Reykjavík Energy Haukur Leósson met with Mayor of Reykjavík Vilhjálmur Þ. Vilhjálmsson at his home to brief him on the merger. Vilhjálmur did not inform his colleagues in the Independence Party about the merger until October 2, which greatly upset them, and led to a rift in the Independence Party.

October 3

Reykjavík Energy held a Board meeting and an owners meeting to introduce the merger. Invitations to the meeting were sent out the previous evening, which is extremely short notice. Nonetheless, the Board approved the merger, save for Svandís Svavarsdóttir from the Left Green party, who did not vote.

News of the meeting and specifically news that key staff were being given special stock options blew up in the media. The majority government between the Independence and Progressive parties collapsed. A new majority, dubbed ‘The 100 Day Majority’ took over. A steering committee headed by Svandís Svavarsdóttir began investigating the events that led up to the merger and proposed to City Council that the merger be thwarted.

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‘OUTVASION’

Yes, it’s a made up English word

The term ‘outvasion’ is a direct translation of the Icelandic word ‘útrás,’ which is often used to describe Icelander’s expansion overseas. The ‘útrásavíkingar’ or ‘outvasion Vikings’ refers to the businessmen who set out to conquer the world with a Viking-like ambition that ultimately brought about Iceland’s downfall in 2008.

The companies behind the co-operating forum include energy companies Landsvirkjun, Reykjavík Energy, HS Orka and its owning company Alterra Power Corporation (former Magma Energy), as well as aluminium companies ALCOA and Norðurál, owned by Century Aluminum. Banks Íslandsbanki, Landsbanki and Arion banki are also all involved, the last-mentioned being the forum’s main sponsor. Amongst other parties involved are the Universities of Reykjavík and the University of Iceland, the Federation of Icelandic Industries (SI) and the Confederation of Icelandic Employees (SA), the ministries of environment, of industry, of trade and of foreign affairs, and Mannvit, Iceland’s biggest engineering firm, responsible for both the design and the making of Environmental Impact Assessments for most of the country’s biggest heavy-industry and large-scale energy projects.

To recap, the newly formed co-operating forum manifests that all major parties with direct links and financial interests in the further heavy-industrialization of Iceland and its parallel destruction of the country’s wilderness, have joined forces. And the aim: To increase the competitiveness of Iceland’s geothermal energy industry and its making of capital goods, facilitate the capitalization of geothermal projects, contribute to technological advances and reinforce Iceland’s image.

A Follow-Up of the Plan to Heavy-Industrialize Iceland

During the forum’s establishing meeting, which took place in the headquarters of Arion bank, a new report, titled “The Icelandic Geothermal Cluster – Mapping and Mobilization”, was published, covering “the analysis and the collaboration-formation of the the Icelandic geothermal cluster.” The term business cluster was originally introduced and popularised by the aforementioned Michael Porter, and is, to quote Porter’s own words, a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field. According to the idea, the formation of a cluster creates a certain entity, which is supposed to be much stronger than many individual parties each operating separately.

The report – starting with the words of Henry Ford: “Coming together is a beginning, staying together is progress, working together is success” – lays out what it calls “three big growth opportunities”, as the results of the analysis of Iceland’s geothermal cluster. To nobody’s surprise these so-called opportunities consist of bringing energy-intensive industries to Iceland, exporting geothermal energy to Europe through a marine cable, and exporting Iceland’s geothermal expertise. These suggestions are of course no novelty in Iceland but rather a predictable follow-up of the plan to heavy-industrialize Iceland and fully exploit the country’s natural resources – a plan that was well documented in an infamous booklet, titled “Lowest Energy Prices!!”, which was made in 1995 by Landsvirkjun and the ministry of industry, and sent to international energy-intensive heavy industries, offering them cheap energy and “minimum environmental red tape”.

Carefully Chosen Rhetoric and a Private Speech on State Television

Michael Porter has carefully adapted his rhetoric to the current political atmosphere, obviously aware of many Icelanders’ increased doubt and decreased trust towards corporations due to the 2008 economic collapse and many of its following exposures of corruption, as well as the enhanced discussion about the importance of keeping the ownership of natural resources away from private parties. In his forewords to the aforementioned report, he and his co-author, Dr. Christian Ketels, also from Harvard Business School, state that though the “economy has [since the collapse] stabilized at a lower level, and the government has gotten its budget balance so much under control that it is expected to return to the global financial markets later this year […] stabilization is necessary and not sufficient.” And they continue:

Iceland needs to lay the foundations for a new, more sustainable economic growth path. In February 2009, we published an article in the Icelandic press that set out an action agenda for the country. One of its key elements was cluster mobilization as a critical step to build on Iceland’s unique assets and capabilities. We stressed that Iceland had to move beyond a backward looking debate about who was to blame for the crisis to a forward-looking collaboration to improve competitiveness. Clusters are a powerful vehicle to mobilize the private sector and guide the policy choices of government.

The Icelandic geothermal cluster program puts this vision into practice. It builds on Iceland’s unique assets and capabilities in geothermal energy with a clear focus on creating greater value for the Icelandic economy, rather than simply selling power. The geothermal program is grounded in the realization that progress towards this goal will only materialize through collaboration.

Interviewed in Kastljós, a daily news-report show on state-owned TV station RÚV, last night, Porter spoke in a similar way, reminiscent of a memorable Kastljós interview with Ross Beaty, the CEO of Magma Energy (now Alterra Power Corporation), in August 2009. When asked if he understood the public opposition towards privatization after the economic collapse, Beaty said, as reported by Saving Iceland, that he was aware of this but added that Icelanders would have to understand what kind of company he was leading. “We are not a scary company, we want to work with H.S. Orka in building up a stronger company, for the good of Icelanders, ourselves, and actually the whole world,” said Beaty to newspaper Fréttablaðið that same day.

During the TV interview last night, Michael Porter said that he finds Icelanders are “too cautious” when it comes to “using the opportunities that consist in geothermal energy,” and added that there is need for more innovating spirit, aggressiveness and risk-taking. Asked the same the question as Ross Beaty was, a little less than two years ago, Porter answered that the country’s natural resources could still be “owned by the nation” while the utilization rights could be lent to private companies. He also said that though he preferred a mixture of privately and state run businesses, the state-owned energy companies would still have to be run like private companies. This idealisation of privatizing energy companies perfectly resonates a recent encouragement from the Organisation for Economic Co-operation and Development (OECD), set fourth in the institution’s 2011 Economic Survey of Iceland. The interview would better be described as a speech-like monologue as the questioner mostly nodded and occasionally said things like “yes”, “absolutely” and “indeed”. After Porter had described his utopian corporate vision for large-scale geothermal energy production in Iceland, he ended the interview by saying: “Let’s do it!” – followed with an end-note from the presenter: “Let’s hope!”

Fearing Overexploitation of Geothermal Resources

Contrary to the statements about the need for large-scale exploitation of geothermal energy, as mentioned by Porter and the parties of the co-operating forum, environmentalists and Iceland’s National Energy Authority (INEA) fear overexploitation of the geothermal areas that are planned to be exploited to produce energy for aluminium smelter, which in fact constitute all major geothermal areas in Iceland. Recently INEA decided that HS Orka/Alterra Power would have to widen its planned drilling area for the planned enlargement of Reykjanes geothermal power plant and that they would have to supply proof that enough energy can be found on a larger area than already arranged for. The enlargement is meant to provide energy for a planned aluminium smelter in Helguvík, owned by Norðurál/Century Aluminum.

“It is possible to get all this energy on the current construction area, there is no doubt about that,” said energy director Guðni Jóhannesson to newspaper Morgunblaðið in March 2011. But he continued: “But we know it from geothermal areas abroad that if too much construction has taken place in too short time, the capacity of the area can decrease, resulting in the need for reducing the production again.”

Hence, we have it from the horse’s mouth that geothermal energy on a large-scale industrial level is not sustainable.

A little more than a year ago, several Icelandic bankers were arrested and kept in custody in relation to the Special Prosecutor’s investigation into the 2008 economic collapse, its antecedents and causes. Appearing in political TV talk show Silfur Egils shortly afterwards, French-Norwegian magistrate Eva Joly, who at that time served as the Prosecutor’s special assistant, talked about how society does not expect—and has problems to deal with—politically and economically powerful people being arrested, interrogated and possibly sentenced.

Eva Joly was right. And the reason? Habit. Whether a journalist, police officer, lawyer, judge or a powerless citizen, in a civilised society based on dualistic ideas of good and evil, one is most likely unable to recognise well-dressed and eloquent people—with possessions and power in their pockets—as anything other than good. During the interview, Eva compared those people with drug users and dealers that are brought to court, who generally are immediately seen by society as criminals deserving to face “justice”. Another rightful comparison would be political dissidents.

JURIDICAL MILESTONE OR POLITICAL WITCH-HUNT?

In September of last year, the majority of Alþingi (Icelandic parliament) decided to charge former Prime Minister Geir H. Haarde for negligence and mismanagement during the prelude to the 2008 economic collapse. After heavy parliamentary debate on the options to charge either four former ministers, a couple of them or none, the decision, based on the renowned Special Investigation Commission report, was to charge Haarde alone. Crying “political witch-hunt!”, was his and his comrades’ first reaction, particularly ironic as he himself was one of the main advocates for the investigation leading to this decision.

On June 6, the case was filed in front of Landsdómur, the national high court that now assembles for the first time in Iceland’s history. While some consider it a juridical milestone, Geir and his supporters stated that the filing marked the beginning of “Iceland’s first political trial”. Regardless of one’s opinion about the legitimacy of this particular case, it is impossible to overlook the concentrated attempt, embraced in such a statement, to openly deny not only the juridical system’s political nature but also the fact of how controversial state policies in Iceland—concerning economic, energy and refugee issues, to name a few—have evoked such fierce opposition that the state’s only answer has been to arrest and accuse, threatening people with up to a lifetime in prison.

MORE EQUAL THAN OTHERS

It is remarkably interesting to look at the rhetoric surrounding Geir Haarde’s case in comparison with other court cases. On one hand Geir is a “criminal”, on the other a victim of “political persecution”. The latter definition comes from a team of supporters who up until now have not seen a great deal of reasons to criticise the status quo’s greatest watchmen, the courts. But now, as their teammate has got caught in the unimaginable, they have shown a completely different side in their criticism towards the system.

Let’s be clear from the start: there is a slight difference as Geir’s case takes place in front of a particularly rare set of judges whereas all other defendants face their fortune in front of the standard courts. At the same time, Landsdómur is the only platform where the authorities can be brought in front of the court of law, counterbalancing the aforementioned difference. Additionally, the rhetoric around Geir’s case is not limited to it alone but was also predominant during the above-mentioned bankers’ arrests one year ago. At that point lawyers, judges, politicians and media editors raised their voices, highlighting what in theory is considered to be the maxim of the constitutional state: that everyone is innocent until proven guilty.

And now, when Haarde’s case has commenced, we get to hear the same clichés all over again. How his reputation has been damaged and his family and friends been affected by the publicity surrounding his trial. That Iceland’s parliament has been misused for a political assault. That the accusations are built on sand, which still does not allow us to underestimate the seriousness of being accused in the first place, regardless of the case’s final outcome. That the law articles concerning Landsdómur are outdated. How hard and expensive it is for a defendant to defend himself against the prosecution—an institution with a bunch of paid workers, and now even an entire website!

Yeah, yeah—this might all be true. But when compared with the discourse surrounding the majority of court cases, where the charges come from above and head hierarchically down the social staircase, the fuss around Geir’s case reveals itself as a simple tragicomedy. If one believes that some sort of a universal concept of justice exists, and that a particular institution of politically hired judges is able to reasonably execute this justice, the above-listed arguments must apply to all defendants.

But they don’t.

This we know e.g. from recent cases against political dissidents where charges have been in complete contravention of the cases’ evidence, investigations, the laws and Iceland’s constitution. During one of these cases, against the so-called ‘Reykjavík Nine’—who were accused and finally acquitted of “attacking parliament” in December of 2008—media editors, lawyers, police officers, former and current ministers and members of parliament amongst others, did their best to get the defendants sentenced before the actual court proceedings took place. Another case would be the one against anti-war campaigner Lárus Páll Birgisson, whose civil and constitutional rights have repeatedly been violated by the police by the demand of the U.S. embassy in Reykjavík. Lárus has already once been sentenced for refusing to obey the police who illegally ordered him to leave a public pavement in front of the embassy. Another case is going on right now, based on the exact same nonsense.

Neither of these cases nor most other court procedures in this country have been of any concern to the recently uprisen human rights guards of Geir H. Haarde. In the comparison crystallises George Orwell’s ominous saying that all animals are indeed equal, but some animals are more equal than others.

THE BITTER TASTE OF THEIR OWN MEDICINE

In his recent book, titled ‘Bankastræti Núll’, author Einar Már Guðmundsson, one of Iceland’s most critical present time authors, actually compares these two cases—the one against Geir and the one against the Reykjavík Nine—and accuses Geir’s supporters, which he calls the upper class elite, of lacking all unity. “Of course all the other ministers from the collapse-government and the bureaucrats around them should demand to undergo the same trial”, he says and refers to a petition in support of the Reykjavík Nine where hundreds of people said: “Charge all or none! We all attacked the parliament!”.

The argument in that case was that no one had literally attacked parliament, and if those who were charged for it actually attacked then everyone who took part in toppling a government during the winter of 2008-9, would be guilty of that same attack. Haarde and his supporters say the same, that he is not alone responsible for the economic collapse and crisis and should therefore not be on trial. And they are right. Geir H. Haarde is not alone responsible for the sufferings of people living under the über-power of the ruling capitalist civilization. It is the system itself—its structure, values and its definition of “justice”—that bears the responsibility.

But like all other systems, there are people behind this one and Haarde is one of them, not more or less responsible than any other authority figure. Sustaining and maintaining the system’s mechanism requires repressive methods, including political persecutions in the form of court procedures. Geir Haarde’s case demonstrates an incident that happens extremely rarely—but luckily once in a while—when those people are forced to sample the bitter taste of their own medicine. There is not much to say except: Bon appétit!

In a conversation with online newspaper Róstur, the director explained briefly his motivation for making the film:

I make the film… well, I guess because there one catches a glimpse of some potential, some possibility, a will for another kind of society, in the minds of a group of people who the state power has, by charging them, defined as a certain set. The charges basically call for an investigation about who these people, defined as enemies, are, and which thoughts someone somewhere can find so dangerous – because it was clear from the beginning that it was not the “action” in the parliament that was considered so dangerous.

On May 3rd 2011, Unesco Iceland held a panel on the right to protest, titled The Yellow Ribbon, where the Reykjavík Nine case and its result in court was the main focus point. There, an 8 min. preview from A9ainst was shown, a clip portraying ‘the tenth member’ of the group of nine: paramedic and anti-war campaigner Lárus Páll Birgisson.

A few days after the panel the same clip was screened in a political talk show on state TV station RÚV and published on the internet a few days later. The clip can be viewed here below but unfortunately there are no subtitles… yet. Like said before the film will be premiered at Patreksfjörður this weekend and will be screened in cinemas shortly afterwards.

Ge9n – Þáttur Lalla from Haukur Már Helgason on Vimeo.

Check out the film’s website here and its Facebook-page here.

Detailed information about the film:

Director: Haukur Már Helgason, Producer: Bogi Reynisson, Cinematography: Miriam Fassbender, Produced by: SeND film tank, Co-producer: Argout film, Post-production: Atmos, Music by: Linus Orri, Jón Örn Loðmfjörð, Áki Ásgeirsson, Giraffe and more.

Appearances: Andri Leó Lemarquis, Kolbeinn Aðalsteinsson, Jón Benedikt Hólm, Sólveig Anna Jónsdóttir, Þór Sigurðsson, Ragnheiður Esther Briem, Steinunn Gunnlaugsdóttir, Snorri Páll Jónsson, Teitur Ársælsson, Lárus Páll Birgisson, Vilborg Dagbjartsdóttir, Guðmundur Oddur.

Landsvirkjun’s new plan was presented at the company’s annual general meeting, which took place on April 15th. According to the company’s director, Hörður Árnason, the planned power plants are to be built in several rivers, including Þjórsá, Tungnaá and Hólmsá, as well as geothermal areas in the north of Iceland. The construction of Búðarháls Dam in Tungnaá has already started and Landsvirkjun plans to start energy production there in 2013, whereas all the other options are still being looked at in the making of a framework programme concerning the use and protection of Iceland natural resources.

These plans are presented as a way to increase Landsvirkjun’s profitability as the the company is heavily indebted after the Kárahnjúkar disaster, especially in comparison with other European energy companies. This means that even more loans are needed for the construction of the new power plants, which later will have to be paid up by the same method. In other words: A vicious circle.

Saving Iceland and other environmentalists have repeatedly warned against large-scale energy projects as a counterweight to the current economic crisis, e.g. in an article in Icelandic newspaper Morgunblaðið in October 2008 where Jaap Krater, ecological economist and one of Saving Iceland’s spokespersons said:

How did the [Alcoa] Fjardaal smelter contribute to Iceland’s economic crisis? The two billion dollars for the construction of the country’s largest dam [Kárahnjúkar] had to be borrowed by the state. That led to a more than significant increase in the current account deficit, which is now felt in increased inflation and depreciation of the currency. The economic cost now needs to be coughed up.

And he then continued:

Note that any schemes that demand new power plants associated with a significant amount of borrowed capital will have this effect, whether an expensive dam or power plant is meant for aluminium, a silicon refinery, data centre or some other purpose.

During a recent presentation of Landsvirkjun’s plans, held in the University of Iceland, the company’s representatives highlighted their interest in three possible energy purchasers; data centers, the European energy market (through a marine cable) and above all the aluminium industry. Like repeatedly reported by Saving Iceland all proposed aluminium projects in Iceland are on hold at the moment, because of either financial or energy-related uncertainties but due to massive mismatch in media coverage it is hard to get a clear picture of the situation.

At the same time as Landsvirkjun proudly presents its plans for a “new Kárahnjúkar dam”, the company, along with the minister of industry, states that the Icelandic nation has to settle up on a joint energy policy. There was never a joint reconciliation upon the Kárahnjúkar Dam, in fact it split the Icelandic nation in two conflicting arrays, which reveals Landsvirkjun’s democratic jargon as nothing but clear Orwellian Newspeak. It is known to both the company and Iceland’s authorities that Icelanders will never reach an agreement about such large-scale energy production, especially when it is aimed to be sold to aluminium companies.

Social Forum Journey / Malmö-Belem-Istanbul

Abstract: This article looks at how the national mass protests against neoliberal regimes in Iceland, Tunisia, Egypt and other African and Arabic countries and the Wisconsin in the US are linked with the climate justice movement. Both national protests and the climate justice movement are developing unevenly. National protests in some hot spots, the climate campaigning more even all over the world. By looking at how countries like Denmark and its organized civil society acts it can be possible to understand how the struggle both for defensive goals and constructive solutions can strengthen each other by what lacked in Denmark but exists on the global level. That is solidarity against repression and building resistance which enables solutions uniting anti-neoliberal struggles in general and specific areas.

This is important both at transnational level and in countries that are more advanced in this struggle as well as those lagging far behind their objective potential like Denmark or Sweden. The challenge is how to combine the strength of the workers movement lacking a global democratic organization representing the working class also in the South and peasants, environmental, women and indigenous people who have established such global democratic organizations. The argument is that the key lies in combining the workers movements strength in defending the common interests with the offensive constructive program promoted by popular movements that have established global democratic organizations and organize solidarity against repression of all popular movements.

The commodification of all human beings and all of nature is at the core of the present development model. The resistance against this model is now enabling alternatives to emerge at both national and on specific fields also the transnational level ultimately paving the way for abolishing the present unsustainable development model. By bringing the two ways of challenging the present development model together and critically examine while also celebrating them it might be possible to find new ways of struggling and winning against the rulers of the world. Both the national uprising against authoritarian neoliberal and austerity regimes and the climate justice movement are part of the same democratic momentum questioning the global world order in all kind of countries all over the world.

The mass climate movement must go beyond the neoliberal agenda

Solutions to the climate crisis is a field were those holding on to the present development model are especially aggressive. They push for a new global land and air grabbing regime with the aim of oppressing the poor to give their fair share of the global commons to the rich and wealthy and into the hands of transnational corporations.

The incapacity of those in power due to the present development model to address global warming have caused growing wide-spread concern. In 1991 people in 70 countries on 500 places participated in international climate action days, in 2009 there were actions on 5000 places and last year 7000 places in almost every country on earth. This incapacity also have caused the rising of the climate justice movement which not only asks for action but also resistance against the present development model and promote constructive solutions beyond the limitations set by those in power.

A primary force behind this climate justice movement has been the anti-debt movement emerging from the riots against International Monetary Fund policies imposed on countries who are oppressed and been given the role of delivering their economic resources to those who already are rich owners of capital, riots that erupted in Peru in 1976 and Egypt in 1977 and since then spread all over the world.

Another force has been the resistance against development projects imposed on local communities in the interest of transnational corporations and the capitalists that owns them. This resistance erupted also at the end of the 1970s when the indigenous Katinga and Bontoc people started armed resistance with arrows and bows against the Chico dam project in the Philippines which was supposed to be financed by the World Bank. Many died in the struggle but the Katinga and Bontocs never gave up in spite of the violence and attempts at bribing their leaders gaining both local, national and international support. The conflict ended with victory paving the way for indigenous and other movements protesting against the present development model in all parts of the world. A movement of oppressed indigenous and local communities that have grown stronger and stronger which was expressed at the international Cochabamba gathering in Bolivia last year with 33 000 people calling for climate justice.

These strands in a global popular movement against the present development model together with the peasant, women’s and environmental movements formed in 2007 the Climate Justice Now! Network. Thus a system critical movement had been established as an alternative to the global coalition of well funded environmental and like minded foundations and other organizations often lacking democratic accountability like Greenpeace. A coalition that in different forms address global warming and other environmental issues as mainly technical and individual moral issues claiming that what is necessary is media attention and pressuring politicians but not changing any social order.

This coalition has been dominated by Western organizations lacking global democratic accountability while the climate justice movement builds on the oppressed peoples and global democratic popular movements like Jubilee South, Via Campesina, Friends of the Earth and Women’s World March. They all have a leadership very much from the third world and build on ideas of equal distribution of power in the movement instead of top-down management.

What is lacking is the perhaps most important movement in resisting the present development model or at least in defending peoples interests, the workers movement. But the trade union is the only larger global popular movement that has refused to build on democratic accountability towards the global working class- ITUC, the International Trade Union Confederation has instead chosen to be dominated by the working class in the rich and wealthy countries and no strong alternative to ITUC have emerged which the other popular movements can cooperate with for building a joint resistance and constructing alternatives to the present world order. ITUC promotes social dialogue with business, IMF and G-20 instead of organizing the global working class.

This was criticized at the Open World Conference against War and Exploitation held in Alger 27-29 novemeber 2010 with 400 mainly trade union participants. Abdel Majid Sidi Zaid. General secretary of the Algerian TUC (UGTA), stated in his inauguration speech that employed and people in common had disappeared from the economic agenda. The only thing that seems to count is to give tax payers money to the capitalists. Sidi Zaid criticized how ITUC gradually slipped into becoming a social partner with business, G-20 and governments instead of representing a different interest than that of the employer.

But the voices of North African and other third world working class cannot be heard in the way ITUC excludes the large working classes to have their proportionate say as only number of individual members is counting making it possible for the rich countries with smaller working class but higher percentage of enlisted member to dominate the international organization. This weakens the trade unions everywhere and so also their ability to cooperate with other movements who are independent and not necessarily sees a solution to every problem social partnership with business and government. Thus is the trade unions a problematic ally as their lack of global democracy in their main international organization effectively excludes the third world working class from influence, the same working class that is so necessary to have as allied for popular movements struggling for climate justice.

Without a strong international cooperation partner among the trade unions it is necessary to find other ways to win the majority against false solutions to the climate crisis and for a just transition. The strength of the climate justice movement so far has been several. The commitment of activists in indigenous struggles against exploitation or climate camps and other forms of struggle has a key role. That strong organizations with a multi issue interest in both social and environmental concerns have been able to cooperate in CJN is another factor. So are the well articulated arguments against false solutions like carbon trading, nuclear power or monoculture biofuel. But what is lacking is a program for solutions, for just transition of housing, industry, transport, agriculture, forestry and many other sectors. It is not enough to know what we are against. We need alos something to long for.

Such a programme is indivisibly linked with going beyond the neoliberal limitations set by the social partnership agenda. Without a clear idea of how to socially mobilize for just transition domestically and internationally the struggle for change will become fragmenticized and easy to diverge into ideas of socially neutral technological plans or moral appeals without substantial economy and social forces to enable a just transition

Protests against the general neoliberal politics

While the climate justice movement is a growing wide spread protest in every corner of the world building momentum in small and large scale it has its limitations. What is also needed is challenging the system at the general political level. That is what is going on in some countries at the moment while in many others the situation is passive. While the climate justice movement and the general concern about global warming is spreading rather steadily all over the world the mass protests against the neoliberal general politics and the strongly connected wars and occupations to control the supply of natural resources are more volatile.

In general at least in Europe antineoliberal mass movements are on the defensive and especially trade unions are under pressure if they do not accept worsening working conditions. In elections right wing parties are the dominant force on the whole continent. When mass protests occur as in Greece two years ago the result can be worsening of the situation and even more neoliberal policies put in place to save the foreign banks and make the people pay.

The solutions accepted at the national level by some popular movements causes serious problems in other countries. The German trade unions accepted wage dumping in exchange for maintaining jobs. In other countries workers were able to maintain their salaries in par with the increase of productive instead as in Germany were the productivity increase worked in favor of the owners of the companies and growing export. If every trade union had chosen to follow suit the result would have been an even deeper crisis. But finally drastic contradictions in the European neoliberal politics reached Eastern, Southern and North Western European periphery as well as North Africa and many other places. The role of the periphery is clear, to feed the banks in the richest countries and owners of capital living on speculation while living with rising food prices and social cuts as a result often of demands by IMF. This has been a problem in many parts of the world for long but have now reached also Europe. The renewed axis between Germany and France to promote even more austerity politics with the help of EU will only deepen the contradictions and crisis.

But when the neoliberal authoritarian regimes following the demands by IMF and supported by EU and the US in North Africa started to fall down like in Tunisia and Egypt and now on the way in other countries this model meet severe resistance by movements that had started to protest against their politics already in the 1970s. These uprising are now often supported from the right to the left, with some similar claims and some different, all too limited from an environmental and climate justice movement perspective.

The common statement by the right and left is that this is a struggle for democracy in the Arab region against authoritarian regimes or dictatorships. This is misleading from an antineoliberal environmental point of view. From this point of view politics, ecology and economy are indivisible. Struggle for democracy is thus necessarily linked to the ecological and economical side of the protests. It is quite clear that the neoliberal model is directly in contradiction with the food sovereignty politics demanded by Via Campesina, Friends of the Earth groups and many others. With the total industrialization of agriculture which neoliberalism aims for with the exception of a small niche production of ecological food for those wealthy enough to afford it. The sky rocketing food prices which is the result of a volatile speculation economy combined with the destruction of domestic peasants by subsidized food from rich countries agriculture industry is a devastating combination together with the general assault against working people like the textile female workers in Egypt which with their strikes is a main factor behind the uprising.

Thus the linkage between an ever growing capitalistic speculation economy and a development model based on ever growing consumption of natural resources including destruction of ecological friendly ways of domestic production of food is at the core of the conflict behind the uprisings. A politics promoted by neoliberal regimes in rich countries unto the rest of the world in alliance with authoritarian segments in oppressed countries. In the case of the Arab world this is further emphasized by the role given to the region of the rich countries with their fossil fuel based economies as a region controlled by smaller privileged nations with less population that are supported by the rich countries to see to that the countries with larger populations are kept under control by their oppressive leaders and massive intervention from the West, at times with brutal force as the help to Iraq to make war with Iran and the later war against Iraq.

From an environmental point of view the struggle in the Arabic world is thus intimitely linked to the struggle against a development model devastating nature and built on aggressive control of fossil fuel sources which for certain is not a struggle which can be limited to the Arab world but is a common task. To the environmental movement in Sweden have since decades stated that the primary solidarity struggle is to change production and consumption patterns in Sweden so that it is not based on overuse of natural resources from other countries. As long as this development model claiming that people in rich countries are entitled to use more than their fair share of the natural resources on earth is in place it is causing the support by so called democratic countries as EU member states to oppressive regimes in the whole world.

The right and the left have some differing point of views on the uprisings in the Arabic and African world now spreading to the mass protests in Wisconsin in the US. The right delinks politics from economy which is helpful for avoiding the connection to the ecological and social justice problems which are a part of the economy promoted by the rich and proclaimed democratic nations. To the right winger whether liberal or conservative democracy is a question of form and have nothing to do with content. The geographic limitations is also self evident to them and thus there is no decisive connection between formally democratic countries in the West and the oppressive authoritarian regimes in countries with a central role in seeing to that rich and formally democratic nations is secured cheap natural resources. Under all circumstances there is no reason to reevaluate the own politics at home due to the uprisings in the Arab world.

To the left winger in rich European countries the dominant view seems to be that of revolutionary romanticism, general US criticism and delinking the struggle in the Arabic world from the struggle in their own countries. Appeals are made for mass protests in Palestine against the Israeli occupation in this leftist version of constant exotism appealing to revolutions sometimes in the future or in other countries rather than to reevaluate the struggle at home and also under other conditions than utter desperation like after 60 years of occupation supported by the rich countries.

US as a main enemy of the left is also a way to avoid focusing on politics were one can make a difference at home. In Sweden the left has mass produced articles about how bad the US is with their war and occupation of Iraq. There are hundreds of left wing articles in Sweden strongly criticizing the US for making false claims on the existence of weapons of mass destruction to start the war against Iraq causing the death of hundreds of thousand people. I have seen not one article about the responsibility of Sweden causing the death as many or more people in Iraq as we and others were supporting the economic sanctions against Iraq with devastating effects on the population built on exactly the same false accusations as those used by the US to start the war. The weapons of mass destruction did not disappear suddenly the day the US invaded, they had long gone before in a time when economic sanctions caused the death of hundreds of thousands. The left seems sometimes to have become part of an international literature market were it is more important to appoint big names as enemies than to do the home work in the municipality or country you live in instead of putting all your energy into criticizing other countries or calling for Palestinians to do one more dangerous intifada. From an environmental point of view EU and its member states is as much of a problem as the US and have supported ”stability” in the Arab region and Africa in similar and devastating ways.

The struggle to change production and consumption patterns and politics at local and national level including foreign policy is of course at times not as spectacular as large uprisings in other parts of the world or omnipotent ideas about shifting EU to become a progressive political force. But it is here we need to see what we can do and how the challenges in the world model for an economy based on cheap natural resources as fossil fuel by the uprisings in the Arab or other regions also means something for the daily struggle in every corner of the world also when it is not spectacular. By simultaneous struggles at all levels combining daily struggles and organizing solidarity across borders when necessary also in less spectacular cases is an internationalistic way forward. But this seems to be outside the view of many left wing commentators. They seem to draw the same conclusion of the uprisings in many aspects as the right – Under all circumstances there is no reason to reevaluate the own politics at home due to the uprisings in the Arab world.

The successful uprising in Western Europe

This becomes clear when seeing what both the left and right excludes from their analysis but the environmental movement have to include and all other opposing the present world order. That of successful uprising against neoliberal politics in a rich European democratic country were the government had no choice but to step down or call in the military from an EU member state to survive against the confrontative demands by the people. What is going on in Tunisia and Egypt have already been successfully accomplished in a Western European country. Thus the claim that what is going on is uprisings in the Arab world is wrong, the uprisings are also going on in other parts of the world with similar form and content including the best and richest of formally democratic nations. Why the right commentators excludes this fact from their analysis is after all understandable although makes their intellectual position utterly weak. After all it was 20 years of right-centre neoliberal government that was thrown out of power with a large scale popular uprising. Why the left also is excluding this Western European country in the same way is a fact at first thought puzzling, at second thought possible to understand as the example point at the necessity of change of the form and content of left wing politics in Western Europe.

The successful uprising started in the autumn of 2008 and reached a climax in January 2009 when people after demonstrations every week broke all restrictions of the police and forced their way through the police lines and smashed more or less all the windows of the parliament making it very clear that the government had no whatsoever control of the country any longer and had to go. The actions were disciplined and no harm was made to policeman but there was no way to not understand the message, you have to go as you have no power anymore. The police force was to small to control the growing protests. For the first time since 1949 the police used tear gas but it did not help. The only choice left was to call in the military from the EU member state Denmark who were staying on ships in the outer harbour of Reykjavik. But to call in the former colonial power that gave the freedom to Iceland as late as 1944 was not a popular option so the right-centre government resigned and new elections were held which brough a left-centre government to power.

Both the form, the content and the result of this successful uprising in Iceland brings in question the left in the rest of Western Europe. One is that the uprising was disciplined and all the different strands with the anarchists and environmentalists as those most radically questioning the present development model in Iceland both in content and in the way protests were organized as well as more moderate political forces all keeping to a strict code of not using violence against people. This in contrast to the unclear notion of diversity of tactics which is splitting the movements into factions in some countries. Thus when repression hit the Icelandic movement there is a lot stronger solidarity then in other Western countries were solidarity sometimes is lacking almost totally. This becomes clear before and during the trial against the Reykjavik 9, protesters standing trial in January 2011 for a peaceful action inside the parliament in 2008. In Iceland all the main stream press have declared them guilty of violence for months and stated that what they have done have no precedence in Iceland and thus many years in prison is reasonable. The foreign minister declared the opposite in the court room. In other countries like Sweden even the most self proclaimed revolutionary left wing party either joins the police opinion and declares the activists as more or less terrorist in need of policing or gets totally paralysed due to the media accusations of violence and starts to fight each other instead of the repression.

The political result of the uprising is also a fact showing that what more or less all the left with some parliamentary power is doing in Western Europe is wrong. The Icelandic people did not only make one uprising, they made two, both successful. With the new left-centre government in place Iceland started to negotiate to come out of the economic collapse that the former government had put the country into. They tried to make a deal with several foreign countries and institutions as IMF. The people did not accept the deal and started protesting again and thus the government found a clever way out. A referendum were a clear majority rejected the deal. Now the government could go into negotiations again making a better deal than before.

What Iceland did was directly contrary to the solutions forced onto countries like Greece and Ireland. Iceland placed its biggest lenders in receivership. It chose not to protect all creditors of the country’s banks. “Iceland did the right thing by making sure its payment systems continued to function while creditors, not the taxpayers, shouldered the losses of banks,” stated Joseph Stiglitz to Bloomberg.

The successful politics in Iceland after the uprisings are seen as good also by main stream economists. So why do we not hear about this solution o the crisis? The reason might be simple. The parliamentarian left is so occupied by being respected as responsible and accepts the core of the solutions in saving the banks instead of challenging the whole model by stating Iceland as an example and pointing at the economic catastroph in for Greece and Ireland when domestic debts possible to reduce by domestic decisions are turned into international debts making the EU the powerful collector for the foreign banks. What EU does is the opposite to Iceland, to force countries and thus their tax payers to make the creditors of the banks completely irresponsible and fully paid for their speculation without risk. To stand up against this way of saving the banks by letting people pay is not what many or any left wing parliamentary parties do by pointing at the Icelandic alternative. Instead general ideological rhetoric stating we do not pay for their crisis becomes a way for these parties to avoid using the parliament as a platform to build political opposition.

What they are doing instead, at least in Sweden, is playing political theatre. This became obvious in the last election when the left party formed an alliance with the Greens and social democrats. To very many in the left party it was obvious that the political platform of this Red Green alliance had no substantial difference from that of the right wing alliance which has now for the first time since 1932 been able to govern the country for a second term. One radical left winger in the party concluded that if the left party should have formulated a stronger political platform which he sees is needed and stayed outside of the alliance between the Greens and the Social democrats the party would have been totally ignored by media and would not have been able to come into the parliament. Thus was the support from the left party of the Red Green alliance necessary.

So at least some Left parties also with a long record of being system critical and still having substantial knowledge of what political opposition is necessary are not independent political actors anymore but extensions of the mass media playing a role in their political theater. To such political parties Iceland is a threat to their image as radical and it is better to exclude this example from people’s memory and continue using anticapitalist rhetoric while not opposing the core of today’s politics in parliament.

The non-parliamentary left have equal strong reasons for excluding Iceland from their understanding of the present situation. If they see parliamentary politics only as a problem and their own role as being non-parliamentarian is it not useful to claim that the Icelandic parliamentary politics and its solution to the crisis is of interest for the rest of Europe. If it furthermore includes member of the governments that defends anarchists the identity politics of much of the non-parliament falls into pieces. Such central politicians cannot have a progressive role when the main stream press is totally against the anarchists claiming that they are violent so Iceland cannot exist. It is too much a threat to identity politics of both the parliamentary and non-parliamentary left.

Iceland is not only a threat to the identity politics of the left at the tactical level but also on the strategic. The strongest supporter of the 9 accused Reykjavik activists comes from the environmental movement Saving Iceland. And if there is a left wing strand among the accused activists it seems to be anarchistic while traditional radical left wing organizations are not a visible actor anymore, at least not presented well abroad. Furthermore it is claimed in the support brochure for the Reykjavik 9 that : ”In interviews and other coverage of the court case, the Reykjavík Nine have shown that their participation in that winter’s uprising was rooted in their opposition towards the whole system – not only the economic collapse and “the crisis”.” With other words the activists are not belonging to a single issue movement or ad hoc group but a system critical movement with more long term goals than replacing one government with another to make some shifts in the costs for the bankruptcy of the banks for the Icelandic people. This threat is fully understood by the neoliberal press who have called for hard sentences against the Reykjavik 9 and claimed that they not only were violent, but also introduced a culture of violence into Icelandic protests. Thus they are also guilty of the escalating protests that continued during the winter and finally forced the government to resign.

In Many Western European countries the non-parliamentarian left is still to quite some extent influenced by parties claiming they are revolutionary and their press. To this left Iceland is a threat showing how a new radical system critical movement is emerging, so better keep silent about Iceland. One good exception is the German MP who have actively engaged in the case. He also makes a connection between the case of the Reykjavik 9 and the recently discovered British spy that was sent into the Saving Iceland movement as well as direct action movement in many other countries and asks if this is part of a European–wide policing of movements.

The case is similar for the environmental movement. In Iceland it is the system critical direct action movement that is strong and not so much environmental NGOs which is the opposite to most other countries in Western Europe. Neither the strong solidarity between the environmental movement and the protesters against the neo-liberal regime or civil disobedience as a form of action are not what many environmental NGOs sees as important.

In spite of that the Icelandic experience is relevant for a number of political reasons it is thus largely ignored both among the left and the environmentalists.

Connecting the hot political spots and the weak

The case of Iceland becomes also interesting when seeing if there is a possibility of connecting struggles in hot spots with successful uprisings and the more daily struggle and even defensive struggle when things gradually gets worse.

Here the climate justice connection can serve as helpful. The climate struggle is going on almost everywhere helped by the fact that any emission or deforestation anywhere on earth are contributing to global warming making our destiny as a human race ultimately connected.

Thus we here can see both an issue and a struggle different in the form in terms of a more steady increase forward and less volatile as the struggle against the economic crisis.

What are than the connections? One is the political content. In both cases is antineoliberal politics at the core of protests. In the case of the climate justice movement the stand against carbon trading, in the case of Iceland a general protests against neoliberal politics. There is furthermore some deeper connection. One is that the banks that brought Iceland to de facto bankruptcy earlier were state owned and then privatized, a privatization with some consequences. One other that the Icelandic crisis have a root in exactly the same idea which is underlying carbon trading schemes, that of establishing a market mechanism for selling nature. A speculation boom like the one promoted by the privatized Icelandic banks has to built on some cash flow and this was created by the decision to allow the selling of fish quota in Iceland.

This points at two complementary ways of challenging the neoliberal hegemony by general political uprising in some countries and a world wide challenge against the expansion of a neoliberal regime in one important sector, nature.

The other connection between the hot spot Iceland and more weak struggle in many other places is the form. Here Iceland has set an example that will tear up some of the hardest resistance against challenging the neoliberal world order, the resistance among many organizations claiming themselves to be anti-neoliberal or even revolutionary.

This resistance was clearly evident during the climate summit in Copenhagen when Denmark was a host to a meeting of global importance. Every revolutionary and other left wing parties in Denmark as well as every other environmental or social organization built on membership and representative democracy chosed to claim that non-violent civil disobedience towards an assembly of legislators which is a central character of a UN conference is an impossibility in Denmark. It would automatically result in violence to be blamed on those initiating the non-violent action and was thus unacceptable in a Nordic political culture like the Danish.

This is correct in the sense that a majority of the Danish people according to opinion polls claims that the violence used by the police against non-violent demonstrators is not actually violence committed by the police but violence caused by the non-violent activist. This is totally different from lets say an Egyptian policeman beating demonstrators with his stick in Cairo to protect the stability of the state who according to the same world view now is committing violence which everyone can see as easily as she or he can see how the policeman using his stick at the Climate Summit conference building is actually not using violence as the violence is caused by the demonstrator who does not understand the self evident need of the stability if the Danish state.

It is also correct in the sense that main stream media and the large majority of the parliamentary parties in Denmark have the same view. The media uses a model for shifting chronology or placing people in false places to make believe the story about police behaving properly and those under violent attack from the police as the cause of violence.

Thus if the only stone thrown at a policeman at the Climate Summit that actually harmed a policeman causing only light injury was thrown as an reaction in another part of the city after that the police mass arrested 918 innocent demonstrators this is by the media presented as preceeding the violence of the police against the demonstrators.

Similar is the way the mass arrested demonstrators are presented as causing their own mass arrest as some few demonstrators were smashing a dozen windows at the stock exchange and foreign ministry. But this was in another section of the demonstration where the police had guided activists into the demonstration that intended to go elsewhere but the police wanted them in the demonstration. It was also in another part of the city far away from the mass arrests. By claiming that there is a connection between the section that was mass arrested and the material damage at the stock exchange and the foreign ministry media presents a model for how the violence against the demonstrators is caused by themselves.

All parliamentary parties from the most radical left to the right with the exception of the social liberal party in the center followed the same pattern in their firsts comments on what had happened. Emberessment was not directed against the totally unacceptable mass arrest of 918 demonstrators who all later in court have been found the right to receive damages as innocent and victims of police abuse. The emberessment was instead directed against stones thrown at the police fueling furthermore the false chronology and misplacing of the mass arrested section in relation to the course of events.

With other words we have a people, mass media and parliamentary parties supporting the police view that the violence used by the police is not violence but actions by non-violent demonstrators and activists is the cause of the violence for everyone to see. Such a country is not at all a police state but a police nation, a situation probably similar to that in many other countries and of importance to deal with if a simultaneous protest movement against the present social and ecological crisis should be able to emerge in more than a few countries under extraordinary circumstances.

In such a police nation it is understandable that representative democratic organizations claim that non-violent action against a UN-conference will be perceived as guilty of the violence that automatically will take place according to this logic. But it is not acceptable. Every organization have their own responsibility towards their stated goal. If the rest of the nation have turned into a police nation this is no excuse for any organization to join the band wagon and even make a principle about it. To claim that only temporary activist networks should carry the whole burden against the violence of the police nation or even see to that when this violence occurs the victims should receive no solidarity is not standing up for the truth which is the basis of our society.

The claim by all formal Danish organizations rejecting to support a non-violent direct action was that the political culture in Denmark was such that by action, non-violent or not, against an assembly of legislators would be regarded as completley unacceptable by everyone except for an isolated small group. This was wrong as such a non-violent action took place at the EU-summit in the same conference center as COP15 was held but this fact was hidden to international cooperation partners or forgotten. More important is that Denmark cannot claim that their political culture is significantly different from that of Iceland sharing history for almost a thousand year and with stable democratic institutions.

As the Icelandic people have been able to make an uprising and storming the parliament successfully in a non-violent manner, this form of action cannot in principle be said to be impossible in Denmark. Furthermore can the Icelandic popular movement show results in combating neoliberal economic politics that most or all the left wing and environmental organisations in Denmark also would like to achieve.

The key point therefore is a question that concerns any European antineoliberal organization, is the kind of non-violent action against a parliament in principle always unacceptable this also means to say not to both the political antineoliberal success and form of the protests in Iceland. As Via Campesina and others in Copenhagen showed was it possible also at a Climate Summit to do the same thing as the Icelandic popular movement did, although it had less success due to that Danish left wing and environmental organizations opposed the non-violent action. It is well argued to claim that Iceland has similar political culture as Denmark. The conclusion of this is that the left-wing and environmental organizations in Denmark are not anti neoliberal or interested to protect the environmental but prefers to be part of a police nation and protect the state when given a choice.

It is necessary in every country were these kind of organizations dominate the political space for opposition to demand clear principles that shows respect for the Icelandic people. There are always specific conditions in each circumstances but there are also a general level were similarities exists. Iceland is a long term democratic nation and their experience should be reflected in any antineoliberal organization in a Western democracy. It gives possibilities of strengthening simultaneous struggles in different countries which also are of importance at Summits when global popular movements can combine their efforts with local mobilization to challenge the present world order.

Linking climate justice to anti neoliberal general political uprisings

Many left wing and environmental organizations are today not only part of the police nation but also accepting the limitations set by mass media. They see the unity with organizations having access to media as more important than to build on clear demands against false solutions on the climate issue. In spite of that key global democratic movements as Jubilee South, Via Campesina, Friends of the Earth International and the whole Climate Justice Now network is opposing carbon trading and offsetting most organisations prefer signing such statement and go home afterwards not taking them seriously.

If it is not media attention there are other tactical reasons for not taking international declarations seriously. One is the interest in cooperating with social partnership trade unions who refuse to take an antineoliberal stand in the climate justice issue. This is why the global day of action has such a out of date watered down platform.

But the antineoliberal climate justice movement is sufficiently large today to enable a stronger uniting initiative leaving the old claim for more action and a real climate deal behind. This was attempted at the Cochabamba gathering but with some problems. One was the exclusion of the Roundtable 18 (mesa 18) which also critically addressed social changes within countries including Bolivia. Another was the rather big ideas about a global referendum but no idea on the immediate term for uniting the climate justice movement.

But this is crucial for the ability to strengthen both the climate justice struggle and the general antineoliberal uprisings and struggles. By using the capacity of the climate justice movement to be present in almost every country a real important force would be added to the general antineoliberal uprising at national level. This would also work well in reverse. By politically showing more closeness to the political energy coming from the uprisings against authoritarian regimes whether in the West or other parts of the world the climate justice struggle would also be strengthened.

The climate justice movement could also learn from the Icelandic experience concerning solidarity. In spite of that all the press was in the hands of neoliberal perspectives and nine activists put to trials were presented as violent while making an action inside the parliament the movement kept together. 705 people claimed they had done the same crime which according to the attorney should result in minimum one year in prison. The trial ended with the verdict not guilty for most of the activist, a fine for two and suspended sentence for two others. The nine activists refuses to accept the verdict claiming that only full aquittal is acceptable.

After COP15 the trials are not yet over and two spokes persons for the non-violent action have been sentenced to four months in prison, verdicts that are up in court once more in the end of May. The massive solidarity in Iceland have lacked in Denamrk, especially during COP15 but also compared to Iceland afterwards. Without solidarity, the movement dies.

The anti-neoliberal uprisings can learn from the climate justice movement work for a constructive program for both agriculture forestry, industry, rural and urban planning to solve the climate crisis in ways which also solves other social and environmental crisis. Inspiration can come from the Klimaforum09, Assembly of Social Movements at European Social Forum in Istanbul and the Cochabamba roundtable 18 declarations that focus much on social justice and constructive solutions. A popular movement cannot only be against if it shall be able to win in the long term, it also needs something to long for, something that can attract more sympatizers and bring about change.

During a long period since 1980 all the results of the productivity increase have fallen into the hands of owners of capital. This has enabled those in power to penetrate every mind and every movement with the message that the market can solve everything while others cling to the defensive hope for the state or EU to challenge the market. The uprisings in Iceland, Africa and Western Asia challenges this model for controlling societies and limiting protest to defensive demands. The key way to try to limit the effect of the uprising in Africa and Western Asia is to claim that this is only a rebellion against dictatorships limited to the Arab world. Here Iceland is an example showing clearly that this is false. Together with the uprising in Wisconsin in the US inspired by the revolt in Egypt we here have examples showing that it is all authoritarian neoliberal and corrupt economic regimes that are challenged.

Together with a global action against neoliberal solutions to the climate crisis combined with a program for just transition the uprisings and the climate justice movement can make 2011 into a springtime of the people. A year of simultaneous struggle in many countries building a solidarity across borders that can bring us a decisive step towards making another world possible.

Tord Björk is active in Friends of the Earth Sweden.

Background on the COP15 lack of solidarity and trials:

The whole world on trial http://www.aktivism.info/socialforumjourney/?p=1109

Final count down for political theater at COP15 trials

http://www.aktivism.info/socialforumjourney/?p=1846

Danish law 1243: Truth! 2010: Power? http://www.aktivism.info/socialforumjourney/?p=1800

Historic COP15 victory against summit repression http://www.aktivism.info/socialforumjourney/?p=1892

Call for solidarity actions with the accused spokespersons for the Climate Justice movement and update information: http://www.climatecollective.org/en/start/

Strategy appeal made at World Social Forum tematico in Mexico May 2010:

Climate Justice and Class Struggles after Cochabamba http://www.aktivism.info/socialforumjourney/?p=1629

Reykjavik 9 and Iceland material:

Facebook cause Support the 9 Reykjavik and COP15 Activists! http://www.causes.com/causes/567523

Background material on the Icelandic situation: http://www.savingiceland.org/tag/rvk9

Solidarity web site for Reykjavik 9: http://www.rvk9.org/in-english/

Iceland’s Decision To Let Banks Fail Gaining Appeal by Paul Nikolov http://grapevine.is/Author/Paul-Nikolov

Report from Bloombergs with quotes from Stiglitz on Icelandic example: http://www.bloomberg.com/news/2011-02-01/iceland-proves-ireland-did-wrong-things-saving-banks-instead-of-taxpayer.html.

Sigmundur Einarsson, a geologist at the Icelandic Institute of Natural History, has written some articles on this matter (in Icelandic). He has tried, amongst a number of other environmental scientists,  to warn the Icelandic government about a new kind of collapse, an energy collapse due to following far too optimistic speculation of irresponsible people.

Einarsson’s first article was named: Iceland’s great energy sources. After the Icelandic economic collapse in 2008 politicians have constantly claimed that the future strength of the country lies in its wealth of power stored within rivers and geothermal areas. Einarsson has pointed out that all available geothermal power in Iceland would not be enough to power two big aluminium smelters proposed at Helguvík in SW Iceland and at Bakki in NE Iceland.

The only answer to Einarsson’s first article appeared in Century Aluminum´s homepage saying that about 1500 MW of energy is available from SW Iceland’s geothermal fields and rivers and that the Helguvík smelter needed only 625 MW. The company´s numbers on energy include all already harnessed geothermal fields along with highly optimistic numbers on areas not yet investigated.

Einarsson who has long experience working on geothermal activity in Iceland answered with more arguments titled Century Aluminum´s dreams of energy . The following table from his article includes every geothermal field in SW Iceland.

The following table shows the amount of technically exploitable power (TEP), already utilized power (AUP) and non-utilized power (NUP) in the geothermal fields of SW-Iceland. The numbers for TEP are Einarsson’s estimates and the numbers in brackets come from a paper by S. Björnsson, a geophysicist at the Icelandic Energy Authority.

Geothermal field             TEP (MW_e)            AUP (MW_e)            NUP (MW_e)

Reykjanes 100 (200)             100             0

Eldvörp/Svartsengi 100 (120)             75             25

Krýsuvík (Trölladyngja,             100 (480)             0            100

Sandfell, Seltún,

Austurengjar)

Brennisteinsfjöll (40)             –             –

Hengill (Hellisheiði,             600 (600)             333            267

Hverahlíð, Bitra, Nesjavellir)

Total            900 (1440)             508             392

Reykjanes geothermal field A 100 MW_e power station is already running in the area. The power company HS Orka has requested permission from the authorities (Icelandic Energy Authority) to the enlarge the station to 200 MW_e. The permission has not been granted since the power company has not been able to proof further exploitation to be sustainable (showing that Einarsson’s estimate for TEP might even be too high). In 2006 HS Orka signed a contract with Century Aluminum about 150 MW_e of energy for the Helguvík smelter, partly from this source. This delay is already under jurisdiction in Sweden, home country of  Magma Sweden, the owners of HS Orka.

Eldvörp/Svartsengi geothermal field Preparation for extended exploitation of the geothermal field has not started. The pressure within the reservoir has recently become steady after 28 years of constant draw down so increased exploitation is not likely to be allowed in the near future. Energy for the Helguvík smelter can not be expected from this source.

Krýsuvík geothermal fields This geothermal area which consists of 4 subfields has never bee harnessed. HS Orka has license for research in the total area but has only made agreement for future production with the landowners of the two smaller Trölladyngja and Sandfell subfields. Two deep drill holes in Trölladyngja subfield have proved negative and research has not started in the other three subfields. Scientific views on power potential of the total area are controversial, partly due to lack of data. Energy from these fields seems unlikely.

Brennisteinsfjöll geothermal field is quite small and lies in the mountains south of Reykjavík. This area is not likely to be harnessed in the future.

Hengill geothermal field with the subfields Hellisheiði, Hverahlíð, Bitra, Nesjavellir lies SE of Reykjavík. The area has been harnessed by the power company OR, owned by the Reykjavík municipality. This power company almost vent bankrupt after Icelands financial  collapse. The companies financial plans do not assume any new power stations in the next five years. So energy for the Helguvík smelter from this source can hardly be expected until at least 8 years from now. OR has secured energy for one 90 MW_e power station, but further plans have not been confirmed.

The above mentioned potential origins of power for the aluminium smelter are specified in the EIA report and nothing else.  Einarsson has in his articles repeatedly pointed out that it will never be possible to feed the smelter with energy from these geothermal areas. No answers have ever come from the authorities, neither local or governmental.

The third power company, Landsvirkjun, has prepared three water power stations in the river Thjórsá (Þjórsá) in South Iceland, producing about 230 MW. Landsvirkjun has repeatedly argued that the electricity from these power stations will not go to aluminium smelters. Other power potentials are not in sight in southern Iceland.

See also:

Threatened Areas

Development of Iceland’s geothermal energy potential for aluminium production – a critical analysis