People can let off steam, get angry, shudder at the thought of it… ‘Who do these politicians think they are?’ ‘Scumbag generals!’ […] And they get more and more angry, and then, burp! A little liberatory burp to relieve their social indigestion.

These words came to mind last month when Iceland’s media reported upon the current situation of river Lagarfljót in the east of Iceland. “Lagarfljót is dead,” some of them even stated, citing the words of author and environmentalist Andri Snær Magnason regarding a revelation of the fact that the river’s ecosystem has literally been killed by the the gigantic Kárahnjúkar Dams. The dams were built in Iceland’s eastern highlands in the years between 2002 and 2006, solely to provide electricity for aluminium giant and arms producer Alcoa’s smelter in the eastern municipality of Reyðarfjörður.

The revelation of Lagarfljót’s current situation originates in a report made by Landsvirkjun, Iceland’s state owned energy company and owner of the 690 MW Kárahnjúkar power plant, the main conclusions of which were made public last month. Although covered as breaking news and somewhat of a scandal, this particular revelation can hardly be considered as surprising news.

Quite the contrary, environmentalists and scientists have repeatedly pointed out the mega-project’s devastating irreversible environmental impacts — in addition to the social and economical ones of course — and have, in fact, done so ever since the plan was brought onto the drawing tables to begin with. Such warnings, however, were systematically silenced by Iceland’s authorities and dismissed as “political rather than scientific”, propaganda against progress and opposition to “green energy” — only to be proven right time and time again during the last half a decade.

AQUATIC ECOSYSTEMS SHOULD RECEIVE MORE ATTENTION

One of the Kárahnjúkar plant’s functions depends on diverting glacial river Jökulsá á Dal into another glacial river Jökulsá í Fljótsdal, the latter of which feeds Lagarfljót. This means that huge amounts of glacial turbidity are funnelled into the river, quantitatively heretofore unknown in Lagarfljót. This has, in return, led to the disintegration of Lagarfljót’s ecosystem, gargantuan land erosion on the banks of the river, serious decrease in fish population and parallel negative impacts on the area’s bird life.

As reported by Saving Iceland in late 2011, when the dams impacts on Lagarfljót had become a subject matter of Iceland’s media, the glacial turbidity has severely altered Lagarfljót’s colour. Therefore, sunlight doesn’t reach deep enough into the water, bringing about a decrease of photosynthesis — the fundamental basis for organic production — and thereby a systematic reduction of nourishment for the fish population. Recent research conducted by Iceland’s Institute of Freshwater Fisheries show that in the area around Egilsstaðir, a municipality located on the banks of Lagarfljót, the river’s visibility is currently less than 20cm deep compared to 60cm before the dams were constructed. As a result of this, not only is there less fish in the river — the size of the fish has also seen a serious decrease.

Following last month’s revelation, ichthyologist Guðni Guðbergsson at the Institute of Freshwater Fisheries, highlighted in an interview with RÚV (Iceland’s National Broadcasting Service) that the destruction of Lagarfljót’s ecosystem had certainly been foreseen and repeatedly pointed out. He also maintained that aquatic environment tends to be kept out of the discourse on hydro dams. “People see what is aboveground, they see vegetation, soil erosion and drift,” he stated, “but when it comes to aquatic ecosystems, people don’t seem to see it very clearly. This biosphere should receive more attention.”

BENDING ALL THE RULES

All of the above-mentioned had been warned of before the dams construction took place, most importantly in a 2001 ruling by Skipulagsstofnun (Iceland’s National Planning Agency) which, after reviewing the Kárahnjúkar plant’s Environmental Impact Assessment, concluded that “the development would result in great hydrological changes, which would have an effect, for example, on the groundwater level in low-lying areas adjacent to Jökulsá í Fljótsdal and Lagarfljót, which in turn would have an impact on vegetation, bird-life and agriculture.” The impacts on Lagarfljót being only one of the dams numerous all-too-obvious negative impacts, Skipulagsstofnun opposed the project as a whole “on grounds of its considerable impact on the environment and the unsatisfactory information presented regarding individual parts of the project and its consequences for the environment.”

However, Iceland’s then Minister of the Environment, Siv Friðleifsdóttir, notoriously overturned the agency’s ruling and permitted the construction. Although her act of overturning her own agency’s ruling is certainly a unique one, it was nevertheless fully harmonious with the mega-project’s overall modus operandi: For instance, during Alcoa and the Icelandic government’s signature ceremony in 2003, Friðrik Sophusson, then director of Landsvirkjun, and Valgerður Sverrisdóttir, then Minister of Industry, boasted of “bending all the rules, just for this project” while speaking to the US ambassador in Iceland.

A BIOLOGICAL WONDER TURNED INTO DESERT

As already mentioned, the destruction of Lagarfljót is only one of the dams irreversible impacts on the whole North-East part of Iceland, the most densely vegetated area north of Vatnajökull — the world’s largest non-arctic glacier — and one of the few regions in Iceland where soil and vegetation were more or less intact. Altogether, the project affects 3,000 square km of land, no less than 3% of Iceland’s total landmass, extending from the edge of Vatnajökull to the estuary of the Héraðsflói glacial river.

Sixty major waterfalls were destroyed and innumerable unique geological formations drowned, not to forget Kringilsárrani — the calving ground of a third of Iceland’s reindeer population — which was partly drowned and devastated in full by the project. In 1975, Kringilsárrani had been officially declared as protected but in order to enable the Kárahnjúkar dams and the 57 km2 Hálslón reservoir, Siv Fiðleifsdóttir decided to reduce the reserve by one fourth in 2003. When criticized for this infamous act, Siv stated that “although some place is declared protected, it doesn’t mean that it will be protected forever.”

The dams have also blocked silt emissions of the two aforementioned glacial rivers, Jökulsá á Dal and Jökulsá í Fljótsdal, resulting in the receding of the combined delta of the two rivers — destroying a unique nature habitat in the delta. In their 2003 article, published in World Birdwatch, ornithologists Einar Þorleifsson and Jóhann Óli Hilmarsson outlined another problem of great importance:

All glacier rivers are heavy with sediments, and the two rivers are muddy brown in summer and carry huge amounts of sediment, both glacial mud and sand. The Jökulsá á Dal river is exceptional in the way that it carries on average 13 times more sediment than any other Icelandic river, 10 million metric tons per year and during glacial surges the amount is many times more. When the river has been dammed this sediment will mostly settle in the reservoir.

In contravention of the claim that Kárahnjúkar’s hydro electricity is a “green and renewable energy source,” it is estimated that the reservoir will silt up in between forty and eighty years, turning this once most biologically diverse regions of the Icelandic highlands into a desert. While this destruction is slowly but systematically taking place, the dry dusty silt banks caused by the reservoir’s fluctuating water levels are already causing dust storms affecting the vegetation of over 3000 sq km, as explained in Einar and Jóhann’s article:

The reservoir will be filled with water in autumn but in spring 2/3 of the lake bottom are dry and the prevailing warm mountain wind will blow from the south-west, taking the light dry glacial sediment mud in the air and causing considerable problems for the vegetation in the highlands and for the people in the farmlands located in the valleys. To add to the problem the 120 km of mostly dry riverbed of Jökulsá á Dal will only have water in the autumn, leaving the mud to be blown by the wind in spring.

This development is already so severe that residents of the Eastfjords municipality Stöðvafjörður, with whom Saving Iceland recently spoke, stated that the wind-blown dust has been of such a great deal during the summers that they have often been unable to see the sky clearly.

All of the above-mentioned is only a part of the Kárahnjúkar dams over-all impacts, about which one can read thoroughly here. Among other factors that should not be forgotten in terms of hydro power would be the dams’ often underestimated contribution to global warming — for instance via reservoirs’ production of CO2 and methane (see here and here) — as well as glacial rivers’ important role in reducing pollution on earth by binding gases that cause global warming, and how mega-dams inhibit this function by hindering the rivers’ carrying of sediments out to sea.

TEXTBOOK EXAMPLE OF CORRUPTION AND ABUSE OF POWER

“Lagarfljót wasn’t destroyed by accident,” Andri Snær Magnason also said after the recent revelation, but rather “consciously destroyed by corrupt politicians who didn’t respect society’s rules, disregarded professional processes, and couldn’t tolerate informed discussion.” The same can, of course, be said about the Kárahnjúkar ecological, social and economical disaster as a whole, the process of which was one huge textbook example of corruption and abuse of power.

Responding to same news, Svandís Svavarsdóttir, Iceland’s current Minister of the Environment, cited a recent report by the European Environment Agency, titled “Late Lessons from Early Warnings,” in which the results of a major research project into mega-project’s environmental impacts and public discussion are published. One of the damning results, the report states, is that in 84 out of 88 instances included in the research, early warnings of negative impacts on the environment and public health proved to be correct.

This was certainly the case in Iceland where environmentalists and scientists who warned of all those foreseeable impacts, both before and during the construction, found themselves silenced and dismissed by the authorities who systematically attempted to suppress any opposition and keep their plans unaltered.

One of the most notorious examples of this took place after the publication of Susan DeMuth’s highly informative article, “Power Driven,” printed in The Guardian in 2003, in which she highlighted all the up-front disastrous impacts of the project. The reaction in Iceland was mixed: While the article served as a great gift to Icelandic environmentalists’ struggle — tour guide Lára Hanna Einarsdóttir suggesting “that an Icelandic journalist would have lost their job if he or she had been so outspoken” — the reaction of the project’s prime movers was one of fury and hysteria. Mike Baltzell, president of Alcoa Primary Development and one of the company’s main negotiators in Iceland, wrote to The Guardian accusing DeMuth of “creating a number of misconceptions” regarding the company’s forthcoming smelter. Iceland’s Ambassador in the UK and Landsvirkjun’s Sophusson took a step further, contacting the British newspaper in a complaint about the article’s content and offering the editor to send another journalist to Iceland in order to get “the real story” — an offer to which the paper never even bothered to reply.

Another example is that of Grímur Björnsson, geophysicist working at Reykjavík Energy at that time, who was forbidden from revealing his findings, which were suppressed and kept from parliament because they showed the Kárahnjúkar dams to be unsafe. His 2002 report, highly critical of the dams, was stamped as confidential by his superior at the time. Valgerður Sverrisdóttir, then Minister of Industry, subsequently failed to reveal the details of the report to parliament before parliamentarians voted on the dams, as she was legally obliged to do. Adding insult to injury, Grímur was finally deprived of his freedom of expression when his superior at Reykjavík Energy — taking sides with Landsvirkjun — prohibited him to speak officially about the Kárahnjúkar dams without permission from the latter company’s director at that time, Friðrik Sophusson.

THE SHADOW OF POLLUTED MINDS

Similar methods applied to the East-fjords and other communities close to the dams and the smelter, where the project’s opponents were systematically ridiculed, terrorized and threatened. One of them is Þórhallur Þorsteinsson who, in a thorough interview with newspaper DV last spring, described how he and other environmentalists from the East were persecuted for their opposition to the dams. In an attempt to get him fired from his job, politicians from the region even called his supervisor at the State Electric Power Works, for which he worked at the time, complaining about his active and vocal opposition. Another environmentalist, elementary school teacher Karen Egilsdóttir, had to put up with parents calling her school’s headmaster, demanding that their kids would be exempt from attending her classes.

Farmer Guðmundur Beck — described by DeMuth as “the lone voice of resistance in Reyðarfjörður” — was also harassed because of his outspoken opposition towards the dams and the smelter. After spending his first 57 years on his family’s farm where he raised chicken and sheep, he was forced to close down the farm after he was banned from grazing his sheep and 18 electricity pylons were built across his land. Moreover, he was literally ostracised from Reyðarfjörður where Alcoa’s presence had altered society in a way thus described by Guðundur at Saving Iceland’s 2007 international conference:

In the East-fjords, we used to have self-sustaining communities that have now been destroyed and converted into places attracting gold diggers. Around the smelter, there will now be a community where nobody can live, work or feed themselves without bowing down for “Alcoa Director” Mr. Tómas.* — We live in the shadow of polluted minds.

(*Mr. Tómas” is Tómas Már Sigurðsson, Managing Director of Alcoa Fjarðaál at that time but currently president of Alcoa’s European Region and Global Primary Products Europe. Read Guðmundur’s whole speech in the second issue of Saving Iceland’s Voices of the Wilderness magazine.)

A LESSON TO LEARN?

All of this leads us to the fact that Icelandic energy companies are now planning to go ahead and construct a number of large-scale power plants — most of them located in highly sensitive geothermal areas — despite a seemingly non-stop tsunami of revelations regarding the negative environmental and public health impacts of already operating geothermal plants of such size. This would, as thoroughly outlined by Saving Iceland, lead to the literal ecocide of highly unique geothermal fields in the Reykjanes peninsula as well as in North Iceland.

Two of the latter areas are Þeistareykir and Bjarnarflag, not far from river Laxá and lake Mývatn, where Landsvirkjun wants to build power plants to provide energy to heavy industry projects in the north. Large-scale geothermal exploitation at Hellisheiði, south-west Iceland, has already proven to be disastrous for the environment, creating thousands of earthquakes and a number of polluted effluent water lagoons. The Hellisheiði plant has also spread enormous amounts of sulphide pollution over the nearby town of Hveragerði and the capital area of Reykjavík, leading to an increase in the purchasing of asthma medicine. Another geothermal plant, Nesjavallavirkjun, has had just as grave impacts, leading for instance to the partial biological death of lake Þingvallavatn, into which affluent water from the plant has been pumped.

Responding to criticism, Landsvirkjun has claimed that the Bjarnarflag plant’s effluent water will be pumped down below lake Mývatn’s ground water streams. However, the company has resisted answering critical questions regarding how they plan to avoid all the possible problems — similar to those at Hellisheiði and Nesjavellir — which might occur because of the pumping and thus impact the ecosystem of Mývatn and its neighbouring environment. In view of this, some have suggested that Iceland’s next man made ecological disaster will be manifested in a headline similar to last month’s one — this time stating that “Mývatn is dead!”

Concluding the current Lagarfljót scandal — only one manifestation of the foreseen and systematically warned of Kárahnjúkar scandal — the remaining question must be: Will Icelanders learn a lesson from this textbook example of political corruption and abuse of power?

Recent polls regarding the coming parliament elections on April 27, suggests that the answer is negative as the heavy-industry-friendly Framsóknarflokkur (The Progressive Party), for which both Siv Friðleifsdóttir and Valgerður Sverrisdóttir sat in parliament, seems to be about to get into power again after being all but voted out of parliament in the 2007 elections. Following the Progressives, the right-wing conservative Sjálfstæðisflokkur (The Independence Party) is currently the second biggest party, meaning that a right-wing government, supportive of — and in fact highly interrelated to — the aluminium and energy industries, is likely to come into office in only a few days from now.

In such a case, Iceland will be landed with the very same government that was responsible for the Kárahnjúkar disaster as well as so many other political maleficences, including the financial hazardousness that lead to the 2008 economic collapse and Iceland’s support of the invasion in Iraq — only with new heads standing out of the same old suits. Sadly but truly, this would fit perfectly with the words of Dario Fo’s Maniac when he states on behalf of the establishment:

Let the scandal come, because on the basis of that scandal a more durable power of the state will be founded!

Geothermal energy is commonly praised as a “green” alternative to environmentally unfriendly power sources such as fossil fuels, coals and nuclear energy. As a result of “the development of what were once thought to be non-viable resources”, a glossy brochure from engineering firm Mannvit states, “more and more public and private entities are looking into geothermal power as part of their strategy to mitigate global warming while still meeting growing energy demands.” In a promotional text for the Geothermal Energy Exhibition at Hellisheiði, the plant is said to be a “striking example of how geothermal energy is harnessed in a sustainable manner in Iceland and a showcase for the rest of the world.” Additionally, Reykjavík Energy has not hesitated maintaining that “general public opinion of exploiting the geothermal resources in the Hengill region is positive.”

So many men, so many minds. Only about ten kilometres away from the plant stands the small town of Hveragerði, wherein one gets to hear a completely different story. “We cannot accept that OR will be permitted to continue polluting the atmosphere,” Hallgrímur Þ. Magnússon, clinical doctor in Hveragerði said to newspaper DV last June. A few days earlier he had voiced his worries to local newspaper Sunnlenska, encouraging the town’s residents to start taking magnesium and iodide supplements to counteract the health impacts of the power plant’s sulphur (hydrogen sulphide) pollution. “I maintain that the pollution is of such quantity that the human body needs those two materials in order to resist the effects,” Hallgrímur said to Sunnlenska.

Recent inspection makes it clear that the sulphur pollution, which does not only reach to Hveragerði but also to Reykjavík, often goes far above Icelandic and international standards. In the case of Hveragerði, the quantity of polluting materials in the atmosphere is such that the town should be considered within the plant’s dilution area (the area in which residential homes are not permitted).

EFFLUENT LAGOONS AND MANMADE EARTHQUAKES

Unfortunately for the burgeoning and PR heavy Icelandic energy sector, the green image of geothermal power has been repeatedly challenged lately. In particular regarding the country’s and, in fact, the world’s biggest geothermal plant at Hellisheiði. Two new unplanned effluent lagoons were recently discovered close to the plant, where waste water from geothermal pumping had leaked out onto the surface. Environmentalist and journalist Ómar Ragnarsson, who originally discovered the lagoons, followed the story by publishing his own photographs of similar lakes created by other geothermal plants, such as those by the plants at Reykjanes, Svartsengi, Nesjavellir and Bjarnarflag¹. These lakes can be very dangerous to local freshwater systems, as Saving Iceland’s Jaap Krater and Miriam Rose explain in a book chapter on the development of geothermal harnessing in Iceland:

Geothermal fluids contain high concentrations of heavy metals and other toxic elements, including radon, arsenic, mercury, ammonia and boron, which are damaging to the freshwater systems into which they are released as waste water. Arsenic concentrations of 0.5 to 4.6 ppm are found in waste water released from geothermal power plants; the WHO recommends a maximum 0.01 ppm in drinking water.²

Yet another backlash for the geothermal industry is a recent study, carried out by Hanne Krage Carlsen, whose results were published in the international Environmental Research journal earlier this year³. The study shows a direct link between the plant’s sulphur pollution and increased purchase of asthma medicine among the residents of the greater Reykjavík area. New examination of vegetation in the Hellisheiði area also shows that the sulphur pollution has damaged large quantities of moss, which according to Magnea Magnúsdóttir who carried out the examination, will take decades to recover⁴. OR claims that the results of the plant’s Environmental Impact Assessment “indicate that construction of the plant will not have a lasting influence on the area’s vegetation” — something which, according to this recent information, needs to be questioned.

POLLUTION ABOVE GUIDELINE LIMITS

During OR’s Annual General Meeting (AGM) last June, it was revealed that Hveragerði is inside an area wherein sulphur (hydrogen sulphide) pollution is above the current guideline limits. New rules are supposed to go through in 2014, according to which the guideline limits will be strict 50 micrograms per square-meter per 24 hours. The authorities will also be obliged to alarm the public each time the pollution goes above that limit.

Though they admit the plant’s high concentration of polluting emissions, OR has said that the company will not able to adapt to the new rules until 2019 at the earliest. Therefore, the company will ask for an exception, to which the people of Hveragerði are heavily opposed. In an interview with Iceland’s National Broadcasting Service (RÚV), the town’s Mayor Aldís Hafsteinsdóttir protested against the company’s request, stating that OR had obviously rushed way too fast when preparing and building the plant and thus underestimated its environmental impacts. In a separate interview with Saving Iceland’s Miriam Rose this June, Aldís emphasized this point:

We feel very much like victims of all of this. This town has been here for 70 years and the power plant has only been here for 10 or 15. They should have considered the effects on the neighbourhood they were putting it in. It is absolutely obvious that the plant is situated too close to our town, as there are so many impacts that affect daily life here in Hveragerði.

Adding fuel to such criticism, Minister of the Environment Svandís Svavarsdóttir followed in the footsteps of many environmentalists and told RÚV, in an interview last June, that OR had been nothing but the puppet of heavy industry for the last years. That explains not only the company’s poor financial situation but also the environmental catastrophe at Hellisheiði, Svandís said. Mayor Aldís agrees: “They [OR] have sold their energy to the aluminium smelters way too cheap and now they can’t afford to reduce their pollution. That is, in my opinion, the reason why they are trying to stop the new regulations.”

DILUTION AREA: BIGGER THAN OF ALUMINIUM SMELTERS

The Hellisheiði plant started operating in 2006 and has since then seen two expansions, in 2008 and 2011, leading to increased sulphur pollution. Most of the energy goes to the aluminium smelter in Grundartangi, owned and operated by the North-American Century Aluminium, which then again is owned by mining and commodities giant Glencore.

Demonstrating Iceland’s haphazard approach to the development of geothermal energy, the Hellisheiði power plants’ dilution area has yet to be defined after six years of operation. However, it is clear from recent evidence that the dilution areas for geothermal plants should be much larger than for other polluting industries in Iceland — much bigger, for instance, than Rio Tinto Alcan’s aluminium smelter in Straumsvík and Century’s in Grundartangi, as reported by newspaper Morgunblaðið in June⁵. During OR’s recent AGM, their environmental director Hólmfríður Sigurðardóttir, admitted that she could not guarantee that the health of people living inside the area where pollution is above guideline limits (i.e. people living inside the dilution area) is not negatively affected by the pollution. Permanent residence is, in fact, prohibited inside such areas by law and land use is restricted to several limitations.

Interestingly, the Environmental Impact Assessment (EIA) for the Hellisheiði power station, carried out by engineering firm VGK on behalf of OR, overlooked the potential impacts on Hveragerði altogether, though it did take into consideration the negligible impacts on Þorlákshöfn and other towns much further away from the plant.

In September 2011 more than 1500 earthquakes were felt in Hveragerði in a single day, with other quakes going on for several weeks, some up to 4 on the Richter scale⁶. At first OR denied any culpability in the incident, though the residents immediately recognised the quakes as being unusual as many were focused on a single spot. However, after a few days they admitted that they had been pumping geothermal effluent water back into the ground, which is necessary to prevent surface pollution, but is well known by geologists to be a cause of man-made earthquakes. OR responded to the resident’s outrage over the quakes by holding a public meeting in which they claimed they were simply speeding up the release of earthquakes that would have happened anyway in the future. To this local resident Einar Bergmundur stood up and stated: “That is a very good argument. I am also sure I am going to die one day, but that doesn’t give you the right to kill me today to speed the process up?”

THE GUINEA PIGS OF HVERAGERÐI

In January this year some residents of Hveragerði started experiencing breathlessness, coughing and nausea as well as a strong sulphurous smell. They called Aldís to ask what was going on. Thanks to a monitoring site the residents had requested OR to install on their kindergarten, Aldís was able to see that hydrogen sulphide levels had persistently been in the hundreds of micrograms for more than a week. One day they had reached 337µg, more than double the current regulations, and almost seven times higher than the new regulations would allow. With the man-made earthquakes still on their minds, the residents were furious. Aldís told us that despite this breach of regulations no action seems to have been taken by OR:

I just can’t believe that this is how it is supposed to be — that the locals are supposed to monitor these levels themselves. There must be some institution that is supposed to take care of the people and make sure that we are not breathing this. But it did not happen. We live here, we have kids, the elderly are fragile and some have bad lungs. They [OR] are experimenting with these technologies as they build the plants. If they wanted to use us, the inhabitants of Hveragerði as guinea pigs they should have asked us first and not let everything that has happened here come as a surprise. They must have known better before they started this project and that is a fact the makes us angry. Our experience of the Hellisheiði power plant teaches us that not a single plant should be built here in the vicinity before they have a complete control of those matters that have gone wrong in Hellisheiði.

In response to such criticism, OR published a press releases claiming that there are no health risks at that level of exposure and that much of the science which says so is contended. They invite people to visit the plant and breathe the fumes, and even suggest that up to 14,000µg of Hydrogen Sulphide is acceptable to breathe for up to 8 hours⁷.

The World Health Organisation (WHO) does not agree. They state that concentrations above 280µg can cause breathing problems, followed by eye irritation at 500µg, loss of energy and increased lactic acid in the blood at 700µg, and finally headaches, irritability, dizziness, memory loss and fatigue at 2800µg. By 14,000µg people tend to suffer “olfactory paralysis” — a shut down of sense of smell which prevents them from noticing the odour and accompanying dangers. The WHO recommends a maximum guideline of 150 µg/m3 for a 24 hour period to ensure “the absence of appreciable risks that can cause adverse health effects” whereas the Californian regulation limits Hydrogen Sulphide emissions to 43 µg/m3 for more than an hour to prevent strong smell⁸. Iceland’s current regulations are weak by international standards and even these weak standards are not being enforced.

In the same press release OR presented a diagram of emissions from Hellisheiði showing that 99.49% of the steam released from the power plant is made up of water, while only 0.42% is CO2 and 0.08% Hydrogen Sulphide. This is a clear attempt at greenwashing the reality, as it is self evident that steam is largely made up of water and that this is not how sulphur concentrations in the environment are measured. These widely broadcast figures try to downplay well established science in what Aldís called “an insult to the intelligence of the people of Hveragerði.”

REYKJAVÍK’S CITY COUNCIL OPERATING AGAINST ITS OWN POLICY

Yet another 90 MW expansion is now planned in the area of Hverahlíð, south of the Hellisheiði plant and even closer to Hveragerði. The Hverahlíð plant is supposed to generate energy for another Century smelter, which currently stands half built and collecting dust in Helguvík, close to the Keflavík International Airport. The Helguvík project has been criticised from the beginning of its construction in 2008, not only for environmental reasons but also for the major energy uncertainty the project has long faced. During the smelter’s ceremonial first shovelling — interrupted by Saving Iceland activists who rightly named it “Century’s Lack Of Permission Party” as the company did not have any permissions but to construct the building itself — Century’s director in Iceland, Ragnar Guðmundsson, said that he hoped the energy issues would be sorted in late 2010, when the smelter’s first phase would be complete.

Today the unfinished building stands like a skeleton at the construction site while the energy issue remains unsolved. Century has signed contracts with two energy companies, OR and HS Orka — the latter owned mostly by Canadian firm Alterra Power and partly by Icelandic pension funds — but neither company has been able to guarantee any energy. HS Orka hopes to be allowed to drill in the geothermal areas of the Reykjanes peninsula — a large-scale construction that would not only permanently alter the peninsula’s unique nature, but also, as many scientists have claimed, not produce enough energy for the Helguvík smelter.

OR, on the other hand, bets on Hverahlíð as an electricity supplier for Helguvík. But the company is heavily indebted after its recent aluminium adventures, which is one of the reasons the contract with Century should be breached, says Sóley Tómasdóttir from the Left Green party (“Vinstri græn”) and board member of OR. In an interview with RÚV in April this year, she maintained that the company should focus on the environmental impacts at Hellisheiði before even thinking about building new plants. She also criticised the current majority of Reykjavík’s city council (composed of the social democratic “Samfylkingin” and the centrist “Besti flokkurinn,” a new party that won the city elections in 2010), for not standing by its promises to stop selling new power from the publicly owned energy company to heavy industry projects.

In the same interview, Haraldur Flosi Ólafsson, chairman of the board, responded to this criticism by maintaining that despite the current majority’s official opposition to developing any further energy for aluminium production, the company would have to abide to already existing contracts. The Century contract is originally from 2006 but was renewed in late December 2008, less than three months after Iceland’s infamous economic collapse. At the aforementioned AGM, Haraldur’s words were echoed by the company’s director Bjarni Bjarnason, who said that in his opinion all future plans for building new power plants should be abandoned, as building new plants for private entities goes against the company’s current policy. However, Bjarni stated, already existing contracts needs to be abided.

Sóley disagrees, pointing out a clause in the contract, which should allow for the company’s withdrawal if it does not have the financial capacity to fund the project. But instead of doing so, OR is now planning to finance the Hverahlíð plant with the assistance of Icelandic pension funds. Such a step is generally seen as very controversial (such as in the heavily criticised case of HS Orka) and as the first step on the way to the privatisation of Iceland’s nature.

NEITHER SUSTAINABLE NOR RENEWABLE

The impacts of sulphur pollution, man made earthquakes and effluent lagoons appearing at Hellisheiði are of great importance in Iceland in view of the large scale geothermal plans which are increasingly being promoted in Mývatn and Reykjanes peninsula. According to the recently published parliamentary resolution for the so-called Master Plan for Hydro and Geothermal Energy Resources in Iceland, these geothermal power plans are definitely “on”, while several planned hydro dams are now “off”.

Effluent lagoons have already been discovered at test drilling sites at Þeistareykir and Bjarnarflag in the North⁹. If all of the planned geothermal power plants are built around Mývatn, the town of Reykahlíð will become exposed to 32,000 tons of hydrogen sulphide per year potentially raising serious health issues for residents¹⁰. In Reykjanes the two existing geothermal power plants at Svartsengi and Rekjanesvirkjun already produce huge amounts of hydrogen sulphide, and the proposed expansions and new projects would radically increase this figure. Scientists have warned that geothermal fields at Svartsengi are already overexploited and may not be able to produce power much longer¹¹. In addition many of the new proposed drilling sites are connected to the same geothermal aquifer and could very quickly become dried or cooled by excessive exploitation for large scale energy. For further information read Saving Iceland’s detailed account of the planned geothermal power projects on Reykjanes peninsula.)

The fact is that geothermal energy technology is still very new and little is known about the long term, or even short term effects of exploiting the heat of volcanic aquifers on such a large scale. In addition, geothermal areas are globally incredibly rare and each one is different, making the impacts of drilling and power generation hard to predict. Cambridge University professor David McKay’s comprehensive 2009 book on sustainable energy points out that geothermal power is neither sustainable nor renewable when used on a commercial scale as the wells can quickly dry up or cool down, taking more than a hundred years to recover afterwards¹², yet drastically altering the local environment. Experimenting with such an undeveloped technology in Iceland’s endemic geothermal hot spring areas, which the country is so famous for, could result in total destruction of these beautiful and unique places. All that for only a few years of energy production, which in turn would be sold at a cut rate price to heavy industry, reaping little reward for Icelandic people.

See Saving Iceland’s photos of the effects of drilling at Hellisheiði here. The photos are from 2008 when Saving Iceland’s then annual action camp against heavy industry was located at Hellisheiði.

________________________________________________

References

1. Ómar Ragnarsson: Affallsvatn háhitasvæða — auðleyst vandamál? Framtíðarlandið, 17.05.2012.

2. Krater and Miriam Rose on behalf of Saving Iceland: “Development of Iceland’s Geothermal Energy Potential for Aluminum Production — A Critical Analysis”. In: Abrahamsky, K. (ed.) Sparking a World-wide Energy Revolution: Social Struggles in the Transition to a Post-Petrol World. 2010, AK Press, Edinburgh. p. 319-333 (download PDF here).

3. Hanne Crage Carlsen: Results published in Environmental Research (link currently not available), 2012.

4. Mosinn lengi að jafna sig, Náttúran.is. 24.06.2012.

5. Meiri mengun en talið var, Mbl.is. 14.06.2012.

6. Jóhanna M. Thorlacius: Jarðskjálftar á Íslandi 2011 — Ársyfirlit, Veðurstofa Íslands, 04.04.2012.

7. Brennisteinsvetni — Spurt og svarað, Orkuveita Reykjavíkur, 15.06.2012.

8. Luis A. Franco Nolasco: United Nations University, Geothermal Training Programme at Orkustofnun, Reykjavík, “Hydrogen Sulphide Abatement During Discharge of Geothermal Steam From Well Pads: A Case Study of Well Pad TR-18, El Salvador”, 2012.

9. Energy Companies Destroying Þeistareykir, Saving Iceland, 10.07.2008.

10. Benediktsson, O.: “Open letter to the minister for the environment regarding operating licenses for an anode factory at Katanes in Hvalfjordur”, University of Iceland, Reykjavík, 2004.

11. Sigmundur Einarsson: Hinar miklu orkulindir Íslands, Smugan, 01.10.2009.

12. David McKay: Sustainable Energy – without the hot air, Cambridge UIT, 2009 (download PDF here).

This is the content of Saving Iceland’s first round of brief monthly news from the struggle over Iceland’s wilderness and connected struggles around the world.

Hellisheiði: Asthma, Sulphur Pollution and Effluent Water Lagoon

Those who promote large-scale geothermal energy production as green and environmentally friendly, are once again forced to face another backlash as a recent research suggests a direct link between sulphur pollution from the Hellisheiði geothermal plant and asthma among the inhabitants of Reykjavík. The results of this particular research, which was done by Hanne Krage Carlsen, doctorate student of Public Health at the University of Iceland, were published in the Environmental Research journal earlier this year, showing that the purchasing of asthma medicine increases between 5 and 10 percent in accordance with higher sulphur pollution numbers in the capital area of Reykjavík.

Adding to the continuous unmasking of the geothermal green myth, environmentalist Ómar Ragnarsson recently discovered and documented new lagoons, created by run-off water from Reykjavík Energy’s geothermal power plant in Hellisheiði. At first Reykjavík Energy denied that the lagoons’ water comes from the company’s power plant, but were forced to withdraw those words only a few days later. Ómar had then brought a journalist from RÚV, the National Broadcasting Service, to the lagoons and traced the water to the plant. Despite the company’s withdrawal, they nevertheless rejected worries voiced by environmentalists, regarding the very possible pollution of ground water in the area, and insisted that this is allowed for in the plant’s license.

According to the plant’s license the run-off water should actually be pumped back, down into earth, in order to prevent polluting impacts and the creation of lagoons containing a huge amount of polluting materials. Ómar’s discovery shows that this is certainly not the case all the time, and additionally, the pumping that has taken place so far has proved to be problematic, creating a series of man-made earthquakes in the area, causing serious disturbances in the neighbouring town of Hveragerði.

In an article following his discovery Ómar points out that for the last years, the general public has not had much knowledge about geothermal power plants’ run-off water, and much less considered it as a potential problem. Ómar blames this partly on the Icelandic media, which have been far from enthusiastic about reporting the inconvenient truth regarding geothermal power production. One of these facts is that the effluent water, which people tend to view positively due to the tourist attraction that has been made of it at the Blue Lagoon, is a token of a serious energy waste, as the current plants use only 13% of the energy while 87% goes into the air or into underutilized run off-water. These enlarging lagoons — not only evident in Hellisheiði but also by the geothermal power plants in Reykjanes, Svartsengi, Nesjavellir and Bjarnarflag — suggest that the energy companies’ promises regarding the pumping of run-off water, are far from easily kept.

The Fight Over Iceland’s Energy Master Plan Continues

During the last few weeks, the Icelandic Parliament’s Industries Committee received 333 remarks in connection with the committee’s work on a parliamentary resolution for Iceland’s Energy Master Plan. The resolution, which was presented by the Ministers of Industry and of Environment in April this year, gives a green light for a monstrous plan to turn the Reykjanes peninsula’s geothermal areas into a continuous industrial zone.

The remarks can generally be split into two groups based on senders and views: Firstly, individuals and environmentalist associations who, above all, protest the afore-mentioned Reykjanes plans. Secondly, companies and institutions with vested interests in the further heavy industrialization of Iceland who demand that the Master Plan’s second phase goes unaltered through parliament — that is, as it was before the parliamentary resolution was presented, in which the much-debated Þjórsá dams and other hydro power plants were still included in the exploitation category. Saving Iceland has published one of the remarks, written by Helga Katrín Tryggvadóttir, which differs from these two groups as it evaluates energy production and nature conservation in a larger, long-term context.

During the process, the head of the Industries Committee, Kristján Möller — MP for the social-democratic People’s Alliance, known for his stand in favour of heavy industry — ordered and paid for a remark sent by management company GAMMA. The company first entered discussion about one year ago after publishing a report, which promised that the national energy company Landsvirkjun could become the equivalent of the Norwegian Oil Fund, if the company would only be permitted to build dams like there is no tomorrow.

In a similarly gold-filled rhetoric, GAMMA’s remark regarding the Energy Master Plan states that the changes made by the two ministers — which in fact are the results of another public reviewing process last year — will cost Iceland’s society about 270 billion ISK and 5 thousand jobs. According to the company’s report, these amount are the would-be benefits of forcefully continuing the heavy industrialization of Iceland, a plan that has proved to be not only ecologically but also economically disastrous. Seen from that perspective, it does not come as a surprise realizing that the management company is largely staffed with economists who before the economic collapse of 2008 lead the disastrous adventures of Kaupþing, one of the three biggest Icelandic bubble banks.

Alterra Power: Decreases Revenue, Enlargement Plans in Iceland

Canadian energy company Alterra Power, the majority stakeholder of Icelandic energy company HS Orka, recently published the financial and operating results for the first quarter of this year. “Consolidated revenue for the current quarter was $16.4 million compared to $18.9 million in the comparative quarter,” the report states, “due to lower revenue from our Icelandic operations as a result of lower aluminium prices, which declined 13.9% versus the comparative quarter.”

At the same time, the company’s Executive Chairman Ross Beaty stated that Alterra is preparing for an enlargement of the Reykjanesvirkjun geothermal power plant, located at the south-west tip of the Reykjanes peninsula, which should increase the plant’s production capacity from the current 100 MW to 180 MW. The construction is supposed to start at the end of this year and to be financed with the 38 million USD purchase of new shares in HS Orka by Jarðvarmi, a company owned by fourteen Icelandic pension funds.

According to Alterra, permission for all construction-related activities is in place. However, as Saving Iceland has reported, Iceland’s National Energy Authority has officially stated their fears that increased energy production will lead to an over-exploitation of the plant’s geothermal reservoir. Furthermore, Ásgeir Margeirsson, Chairman of HS Orka, responded to Alterra’s claims stating that due to a conflict between the energy company and aluminium producer Norðurál, the construction might not start this year. According to existing contracts, the energy from the enlargement is supposed to power Norðurál’s planned aluminium smelter in Helguvík. That project, however, has been on hold for years due to financial and energy crisis, and seems to be nothing but a fantasy never to be realised.

Greenland: Cheap Chinese Labour and Toxic Dumping

The home rule government of Greenland is split in their stand on Alcoa’s plans to import 2 thousand Chinese workers for the construction of the company’s planned smelter in Maniitsoq. The biggest governing party, Inuit Ataqatigiit, is against the plan as the workers will not be paid the same amount as Greenlandic labour. On the other hand, the Democratic Party, which has two of the government’s nine ministerial seats, is in favour of the plans on the grounds that the workers’ working condition and payments will be better than in China.

In Iceland, during the construction of the Kárahnjúkar dams and Alcoa’s aluminium smelter in Reyðarfjörður, Chinese and Portuguese migrant workers were imported on a mass scale. More than 1700 work-related injuries were reported during the building of the dams, ten workers ended up with irrecoverable injuries and five workers died. In 2010, the Occupational Safety and Health Authority stated that the Kárahnjúkar project was in a different league to any other project in Iceland, with regard to work-related accidents.

At the same time as Greenland’s government argued over Alcoa, Danish newspaper Politiken reported that the Scottish oil company Cairn Energy — a company that, along with Indian mining giant Vedanta, shares the ownership of oil and gas company Cairn India — is responsible for dumping 160 tons of toxic materials into the ocean in the years of 2010 and 2011. The dumping is linked to the company’s search for oil off Greenland’s shore and is five times higher than the amount of comparable materials dumped in 2009 by every single oil platform of Denmark and Norway combined.

One of Iceland’s proudest assets is its energy grid. Geothermal energy, by 2010 figures, accounts for just over 26% of the country’s electricity, as well as 86% of its heating and hot water. Iceland’s geothermal energy technology has been shared with countries around the world, and has attracted the interests of foreign investors.

However, as comparatively cleaner for the environment geothermal power is not without its problems. One of these is the main elephant in the room: geothermal energy is not a renewable energy source. Boreholes that tap into the massive steam vents below the surface do not last forever. When Ross Beaty, CEO of Magma Energy (now a part of Alterra Power Corp.) made the specious claim that geothermal energy lasts for centuries, scientists such as Stefán Arnórsson and Sigmundur Einarsson were quick to point out that geothermal power in the Reykjanes area — where Magma sought to drill — only had enough power to last about 60 years at best. Although this point was seldom, if ever, brought up in any previous discussion about geothermal power in Iceland, more recent events have shown that geothermal energy is not just non-renewable; it can even pollute.

DON’T DRINK THE WATER

First of all, the steam that geothermal energy taps does release a number of harmful emissions. The International Geothermal Association released a report in 2002 showing that these emissions can include carbon dioxide, hydrogen sulfide, methane and ammonia. These emissions are linked to global warming, and can do extensive environmental damage. Even the water itself can be poisonous — the scientific journal Environmental Contamination Toxicology published a study in 1997 which showed that waste water can contain chemicals such as mercury, arsenic and boron.

In order to reduce the amount of pollutants that geothermal power produces, it is necessary to take a number of precautions, such as recycling the steam through a series of compressors and pumps. The waste water needs to be channelled deep back into the ground, to prevent it from poisoning drinking water tables. Both of these precautions were outlined in the 2007 scholarly article ‘Strategic GHG reduction through the use of ground source heat pump technology’. This last point has been the centrepiece of the controversy surrounding one such plant in Iceland, Hellisheiðarvirkjun.

The largest power plant in Iceland — and slated to be the largest in the world once it reaches its full capacity — it is located in the geologically active Hengill area of southwest Iceland, comprised primarily of a chain of three volcanoes. The up-side of this is that a tremendous amount of power can be generated here: the plant estimates 400 megawatts will be reached once the two additional turbines added earlier this month as in full swing. The down-side is: geological activity means earthquakes.

The sheer amount of geological activity in the area cannot be underemphasised. Hundreds of tremors were reported in the Hengill area on a single day last September, and concerns were immediately raised that these tremors — some of them measuring 3 or higher on the Richter scale — could do damage to the pipeline that pumps waste water back into the ground, below drinking water tables. Steinunn Jakobsdóttir of the National Weather Service told Stöð 2 news at the time that larger quakes could not be ruled out.

The plant itself had already been targeted by environmentalists as damaging to the environment, from a developmental standpoint, with Saving Iceland trying to bring attention to the plant’s overall effects on the landscape. The notion that poisonous waste water could be broken free from pipes, and spilled into drinking water, turned the dial up on the anxiety.

NOTHING CAN POSSIBLY GO WRONG!

These concerns were immediately addressed by Bjarni Bjarnason, director of Orkuveita Reykjavíkur (Reykjavík Energy), the power company that oversees the plant. He told RÚV earlier this month that he did not believe waste water pipes were in any danger of being damaged by earthquakes, and added: “We see no danger [of waste water poisoning ground water] so long as we pump it at least 800 metres into the earth.”

But research done on the drilling does not necessarily support Bjarni’s claim. An environmental assessment conducted on the plant in 2006 by the South Iceland Health Supervisory Authority arrived at the conclusion that they “put a great deal of emphasis on closing the construction of the waste water disposal system and the area used to dispose of the water,” meaning that the area itself for pumping waste water back into the ground was far from ideal. Research conducted by the nearby municipality of Ölfus in March of this year concluded that there were not enough controls in place to even be able to handle the regular amount of waste water being produced under normal circumstances.

Despite these warnings, construction steamed ahead, and any criticism of waste water polluting drinking water was dismissed as alarmist. That is, until it was discovered that that’s exactly what happened.

STRANGE BREW

Only weeks ago, it was discovered that Hellisheiðarvirkjun had been pumping waste water containing hydrogen sulphide into drinking water tables, on and off, for two years. The reason? Before a new waste water borehole was completed last September, another one at the Gráuhnjúkar area had been used instead. This borehole did not have the capacity to deal with the amount of waste water it had to contend with, and so it released it, through a valve intended only for emergencies, into the drinking water tables.

Residents of nearby Hveragerði were less than pleased with this news, and called a town meeting demanding an explanation. They have been assured by Orkuveita Reykjavíkur that with the new waste water borehole in place, this practice will not continue. They also emphasised that their scientists do not believe the pumping of waste water into the ground will increase the risk of earthquakes. No mentions were made, however, on how well these pipes could hold up in the event of a strong enough quake — and strong earthquakes are not exactly uncommon to the area.

WHERE DOES THIS LEAVE US?

If geothermal power — Iceland’s crown jewel of green energy — is neither sustainable nor non-polluting, does this mean we need to turn exclusively to hydropower, which comprises the remainder of the country’s power source? What about oil, which is believed to lie beneath the seabed in Drekasvæði, the northern corner of Icelandic fishing waters?

There might not actually be a dichotomy at all — other green resources may exist. While Iceland is far from ideal when it comes to solar energy, and wave power is still proving to be both expensive to build and maintain, anyone who has ever visited the country can attest that if there is one thing Iceland has plenty of, it’s wind.

A research group assembled by Landsvirkjun in 2010, working in conjunction with Icewind — a pan-Scandinavian team looking to develop wind power in the Nordic countries — has concluded that wind power is a very realistic option for Iceland. They believe that building wind turbines in the southwest would be the best option.

Úlfar Linnet, an energy expert at Landsvirkjun, told Fréttablaðið that the matter should be explored seriously. “The goal is to have Iceland in step with the other Nordic countries,” he said in part. “We’re starting at zero, as a windmill has never been raised in Iceland. But we’re making progress.”

In fact, just last July Icelander Haraldur Magnússon successfully raised a 30 KW windmill on top of Hafnarfjall mountain, which immediately went into operation. MP Mörður Árnason — who is also the chairperson of the National Energy Authority Research Fund — believes that while figures do not seem to indicate that wind power is a competitive option at the moment, that it would be hasty to dismiss the option altogether. Indeed, there are many vast, uninhabited and perpetually windy areas in Iceland, particularly in the Highlands, which would make ideal grounds for a wind farm.

Whether the Icelandic government devotes more time and energy into exploring wind power remains to be seen. In the meantime, Hellisheiðarvirkjun is inadvertently repeating the point that geothermal power is not as green as it seems, and that it may be time for Iceland to put its pride and joy to rest.
_________________________________________________________

For further information and analysis see:

Saving Iceland’s Increased Sulphur Pollution in Reykjavík Due to Geothermal Expansion in Hellisheiði.

Miriam Rose’s and Jaap Krater’s Development of Iceland’s Geothermal Energy for Aluminium Production – Download as PDF.

Anna Andersen’s Reykjavík Energy in Deep Water: The Untold Story of Geothermal Energy in Iceland.

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?

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.”

_______________________________________________________________________________

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.”

—

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.

—

‘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.

Since October 2006 Orkuveita Reykjavíkur (Reykjavík Energy) has produced geothermal energy on Hellisheiði, predominantly for the Norðurál/Century aluminium smelter in Grundartangi, Hvalfjörður. Since then increased sulphur pollution in the power plant’s surrounding area, as well as in the area around Reykjavík, has regularly become a topic of discussion and Sigurðardóttir says that the pollution’s impacts are systematically underestimated. Instead of using recent researches into the issue, Mannvit bases the EIA on prediction-models, but new studies by the University of Reykjavík indicate that the increased use of medicine for asthma and heart disease angina pectoris is directly linked to increased sulphur pollution.

Sigurðardóttir pointed out that according to an assessment made by the Public Health Authority (PHA) the construction at Gráuhnjúkar could increase the amount of sulphur in air by 40 percent. Since the energy production at Hellisheiði started in 2006, increase by 140 percent has already been measured at Hvaleyrarholt, close to Hafnarfjörður. The PHA’s concerns are the exact same as those from the PHA of Hafnarfjörður and Kópavogur. In the preliminary EIA there is no mention of climate and the fact that due to easterly winds the pollution from the power plant travels regularly to Reykjavík.

The impacts of hydrogen sulphide are well known but there is lack of knowledge about the long term impacts of low sulphur valency on people’s health. Sigurðardóttir said that nothing is known about the results of Reykjavík Energy’s experiments with refinery equipment. “Suitable equipment already exists but it is expensive and there is a question how much will there is to put it up” she said.

Mannvit, the engineering firm that made the preliminary EIA, is directly connected with the construction of Hellisheiði power plant and the planned expansion at Gráuhnjúkar. The company, which according to its website states to be “dedicated to the development of green energy”, is the result of the merger of Iceland’s three major engineering firms: Hönnun hf., VGK hf. and Rafhönnun hf. Due to the 2008 merger, Mannvit is linked to all major energy and heavy industry projects in Iceland, as the three merged companies “have played significant roles in Iceland’s development into a modern, industrialized nation,” like it says on their website. The list of Mannvit’s projects includes the three aluminium smelters in Reyðafjörður, Grundartangi and Straumsvík, as well as the Kárahnjúkar dam.

See also this analysis from Saving Iceland on the harmful effects of geothermal energy on an industrial scale: Development of Iceland’s Geothermal Energy Potential for Aluminium Production – A Critical Analysis PDF

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

The Struggle So Far
The campaign to defend Europe’s greatest remaining wilderness continues. For the past five years summer direct action camps in Iceland have targeted aluminium smelters, mega-dams and geothermal power plants.

After the terrible destruction as a result of building Europe’s largest dam at Kárahnjúkar and massive geothermal plants at Hengill, there is still time to crush the ‘master plan’ that would have each major glacial river dammed, every substantial geothermal field exploited and the construction of aluminium smelters, an oil refinery, data farms and silicon factories. This would not only destroy unique landscapes and ecosystems but also lead to a massive increase in Iceland’s greenhouse gas emissions.

Political Landscape
Saving Iceland has reintroduced civil disobedience and anarchist ideas into Icelandic grassroots and demonstrated numerous methods of direct action, many of which were utilized in a highly successful manner in the ‘Kitchen Utensils Uprising´ of last year, where experienced Saving Iceland activists constantly stood in the forefront pushing boundaries. Saving Iceland and our work throughout the years was a major catalyst in toppling the corrupt pro-heavy industry ‘Alcoa government’.

However, last year´s general elections were a major blow for the environmental movement in Iceland, with the ‘Left Greens’ booting their own minister of the environment out for being genuinely concerned about environmental values. The leader of the party denounced their own environmental policies for being too ‘puritanical’ to be applicable in such times of financial crisis. With this and the continuing of the People’s Alliance in government we are still looking at a heavily fortified pro-heavy industry government, doing away with any pretence of being green or even remotely progressive. On top of this, corrupt labour unions are firmly in the grip of the aluminium lobby calling for job growth regardless of the environmental costs.

The Situation Now
The deep financial and ethical crisis that hit Iceland in the autumn of 2008 caused the energy companies temporary difficulties in obtaining foreign loans for their projects, but the aluminium lobbyists are more bloody minded than ever. Now their argument is that with the economic collapse, Iceland can simply not afford to take note of environmental concerns. This actually exposes the underlying truth that the aluminium lobby have always been aware of the validity of the environmentalists point of view. The aluminium lobby want to further their horrors, on grounds of a crisis which they are largely responsible for having created.

The banking side of the crash tends to be overemphasized while other major drivers of the crash are often ignored. The report of the Special Investigation Commission (SIC), which looked into the events leading up to and causing the financial crash, has however focused on the effects of heavy industry in a key chapter of their report. The expansion of Iceland’s financial system beyond the country’s sustainable limits, is unequivocally traced back to the enormous projects of the heavy industry build-up. This chapter has been ignored by the media, and so has another chapter that stated the media’s own culpability as unquestioning servants of the bank and industrial establishments.

A fundamental problem with the SIC report and the general atmosphere of denial that greeted it is that the report comes from within the very heart of the rotten State of Iceland. As such its real function is to keep all the options for dealing with the huge amount of corruption and democracy deficit safely within the sphere of the courts and parliamentary politics: Firmly under the control of the very establishment that created all this power abuse in the first place.

In case of the financial frauds this will mean years of long, drawn-out court cases which will gradually loose all meaning to the public, which have been left to pay the massive debts generated by the frauds.

In case of the deep rooted culture of corruption and the climate of fear which the aluminium corporations and power companies so thrive in, the promises of transparency and democracy are nothing but a smokescreen for an even greater corporate plunder of the countries’ energy resources. This plunder, supported by restructuring obligations in loan agreements with the IMF, is a continuation of a deeply corrupt policy of privatisation and ruthless industrialisation, the very same policies that created the crisis.

Current action targets
The Century aluminium smelter in Helguvík, targeted by Saving Iceland last two summers, is still slowly being built. Where the electricity for the plant is to come from is still uncertain, but it will require up to eight new power plants, at least seven of which will be geothermal on the Reykjanes Peninsula (HS/MAGMA) and Hellisheiði (OR – Reykjavik Energy). One of the geothermal plants powering Century’s smelter could be in Bitra, close to Hengill, and the eighth power plant will probably be a large dam on the beautiful Þjórsá River that Landsvirkjun (National Power Company) is eager to build as soon as they can. Norðurþing is in negotiations with Alcoa about an aluminium smelter in Bakki/Húsavík with energy coming from fragile wilderness areas in the north. Platina Resources want to do gold and other mining research in the Eastfjords.

Take action!
This year, instead of organizing a summer protest camp, we call for resistance throughout the seasons. We especially call for Icelanders to take action all year round but also environmentalists worldwide to come to Iceland, where we will warmly welcome any kind of individual actions against the aluminium corporations and the energy companies active in destroying the environment.

Symbolic actions have turned out not to be enough to stop the forces of destruction. The aim of actions should be to prevent any further rape of the land. Saving Iceland gives its wholehearted solidarity to any actions that hit the aluminium industry and the power companies where its most effective.

Even if you can not come to Iceland to do direct actions your help to our struggle with solidarity actions, donations, translations and by spreading the word will be invaluable.

For information on targets read:

The Nature Killers

The Saving Iceland European Target Brochure

S.I. European Target Brochure Update

By Miriam Rose

The economic issues currently causing mass demonstrations in Iceland have a less publicised ecological cousin, and one which the IMF has recently identified as part of the economic collapse. In 1995 the Ministry of Industry and Landsvirkjun, the national power company, began to advertise Iceland’s huge hydropower and geothermal energy potential. In a brochure titled “Lowest energy prices!!” they offered the cheapest, most hard working and healthiest labour force in the world, the cleanest air and purest water – as well as the cheapest energy and “a minimum of environmental red tape” to some of the world’s most well known polluting industries and corporations (such as Rio Tinto and Alcoa). This campaigning has led to the development of an ‘Energy Master Plan’ aimed at damming almost all of the major glacial rivers in Iceland, and exploiting all of the geothermal energy, for the power intensive aluminium industry. The loans taken by the Icelandic state to build large scale energy projects, and the minimal payback they have received from the industry, has been a considerable contributing factor to the economic crisis, while at the same time creating a European ecological crisis that is little heard of.

The Largest Wilderness in Europe
I first visited Iceland in 2006 and spent a week with activists from the environmental campaign Saving Iceland, a network of individuals from around Europe and Iceland who decry the fragmentation of Europe’s largest wilderness in favour of heavy industry. From these informed and passionate folk I learned of the 690 MW Kárahnjúkar dam complex being built in the untouched Eastern Central Highlands to power one Alcoa aluminium smelter in a small fishing village called Reydarfjörður. The dams formed the largest hydro-power complex in Europe, and were set to drown 57 km² of beautiful and virtually unstudied wilderness, the most fertile area in the surrounding highlands. Ultimately it would affect 3% of Iceland’s landmass with soil erosion and river silt deprivation. They also explained how materials in the glacial silt transported to the oceans bonds with atmospheric CO₂, sinking carbon. The damming of Iceland’s glacial rivers not only decreases food supply for fish stocks in the North Atlantic, but also negatively impacts oceanic carbon absorption, a significant climatic effect. After taking part in demonstrations at the construction site of the Alcoa smelter (being built by famous Iraq war profiteers Bechtel), I went to see the area for myself.

Travelling alone on foot in this vast and threatening landscape was one of the most incredible and spiritual experiences of my life. I walked along the deep canyon of the crashing glacial river set to be dammed, as ravens soared above me and a sound like falling rocks echoed from distant mountains. I slept in grassy valleys and bathed in a warm waterfall which ran from a nearby hot spring as reindeer galloped in the distance. The midnight sun showed me the way to Snæfell mountain, from the top of which I could see from the Vatnajokull ice cap all the way to the dam construction site; across wetlands, black sand deserts and shadowy mountains. By the next year the dam’s reservoir would stretch across this whole area. I felt small and vulnerable and had a sense of the immense power of nature, and the even greater power of mankind to choose whether to preserve or to irreversibly destroy it.

Since then critiques of the completed Kárahnjúkar project have made it increasingly unpopular with the Icelandic public, who have become sceptical about the secretive nature of energy deals and the damage to nature. As a result, Landsvírkjun and the heavy industry lobby are now focussing on geothermal power which has a more benign reputation. Ultimately, it is proposed that all of the economically feasible hot spring areas in Iceland will be exploited for industrial use, including a number of sites located in Iceland’s central highlands, the beautiful heart of Iceland’s undisturbed wilderness. Landsvirkjun, without any irony, has termed Iceland ‘the Kuwait of the North’.

The following section challenges some of the myths about ‘green’ geothermal energy.

Renewable
Geothermal energy is created when boreholes are drilled into hot subsurface rock areas or aquifers, and turbines are powered by the emitted steam. They only have a sustainable production level if the surface discharge of heat is balanced by heat and fluid recharge within the reservoir (as occurs at undisturbed hot springs), but this is generally not sufficient for exploiting economically. The Geyser hot springs at Calistoga, USA experienced a 150% decrease in production over ten years, due to rapid exploitation to meet economic requirements, and there have been many similar cases. Geothermal boreholes in Iceland are usually modelled for only 30 years of productionⁱ.

Carbon-neutral
The concentration of carbon dioxide present in geothermal steam is a reflection of the chemical make up of the underground reservoir and is distinct to each area. The 400 MW of boreholes planned for another Alcoa smelter in the north of Iceland will release 1300 tonnes CO₂ per MWⁱⁱ. An average gas powered plant would produce only slightly more, 1595 tonne per MWⁱⁱⁱ. The total of 520,000 tonnes CO₂ for these fields alone is almost as much as what is produced by all of road transport in Iceland^iv.

Minimal environmental impact
Geothermal power accounts for 79% of Iceland’s H₂S and SO₂ emissions^v. In 2008, sulphur pollution from the Hellisheiði power station, 30 km away, was reported to be turning lamposts and jewelry in Reykjavík black, as a record number of objections was filed to two more large geothermal plants in the same area, which would have produced more sulphur and carbon emissions than the planned smelter they were supposed to power, and plans were put on hold.
Geothermal areas such as Hellisheiði are globally rare, very beautiful and scientifically interesting. Icelandic geothermal areas are characterised by colourful striking landscapes, hot springs, lavas and glaciers, and are biologically and geologically endemic to the country. Irreversible disturbance to these wild areas for power plants includes roads, powerlines, heavy lorries and loud drilling equipment.

Wishful green thinking?
In the desperate search for plausible alternatives to our fossil fuel economy, a number of well known British greens have been advocating a ‘European Grid’ energy future, in which Icelandic large scale hydro and geothermal power, and Saharan solar, are transferred by underwater cable to Britain and Europe^vi. It is quite understandable that such schemes look appealing, but it is also essential to have a realistic analysis of the impacts caused by these so-called sustainable technologies before we accept them as a panacea to our fossil fuel sickness.

The technological or pragmatic environmentalism in favour of super grids comes down to a proposal to sacrifice unique ecological areas for the greater good of living a resource-intensive life style ‘sustainably’. In contrast, for anyone who identifies with a natural area, it is easy to understand why it has a value of its own. This value can be seen as far greater than that of any of our possessions; it is in a sense, invaluable.

What can perhaps be concluded from this Icelandic green energy case study is that application of a technology that has been thought of as renewable, climate-friendly and low-impact, on the large scale that is associated with fossil fuels, makes it a lot like the technology it was supposed to replace. It has certainly been argued that technological systems tend to reproduce themselves independent of the specific technologies^{vii viii}. Simply applying a different technology to address issues that are not entirely technological, is not addressing the problem of our consumptive lifestyles. But it can irrevocably end the existence of a place that is not like any other.

References:

i E.g. VGK (2005), Environmental Impact Assesment for Helisheidarvirkjun [online]. URL http://www.vgk.is/hs/Skjol/UES/SH_matsskyrsla.pdf [Accessed August 15, 2007].
ii Sigurðardóttir, R. Unpublished. Energy good and green. In: Bæ bæ Ísland (bye bye Iceland), to be published by the University of Akureyri and Akureyri Art Museum.
The data in this study is arrived at by calculation of the figures in site surveys for the Krafla, Bjarnarflag and Þeistareykir geothermal plants.
Sigurðardóttir has experienced threats and harassment by Landsvirkjun, the national power company, since 2000. In that year, she concluded the formal environmental impact assessment for a proposed large dam, Þjórsárver, a Ramsar treaty area, by stating there were significant, irreversible environmental impacts. The national power company did not pay her and refused to publish the report. Since then Sigurðardóttir has been refused all Icelandic government commissions. Since then, practically all EIAs for geothermal and hydro plants and smelters have been commissioned to the companies HRV and VGK, construction engineers rather than ecological consultancies and “the leading project management and consulting engineering companies within the primary aluminum production sector” (HRV. 2008. Primary aluminium production [online]. URL http://www.hrv.is/hrv/Info/PrimaryAluminumProduction/ [Accessed 13-12-2008]).
iii US Govt. Energy Information Administration. 2008. Voluntary reporting of greenhouse gases program. [online]. URL http://www.eia.doe.gov/oiaf/1605/coefficients.html [Accessed 13-12-2008].
iv Ministry of the Environment, Iceland (2006). Iceland’s Fourth National Communication on Climate Change. http://unfccc.int/resource/docs/natc/islnc4.pdf [Accessed August 15, 2007].
v Statistics Iceland. 2007. Emission of sulphur dioxides (SO2) by source 1990-2006 [online]. URL http://www.statice.is/Statistics/Geography-and-environment/Gas-emission [Accessed 12/12/2008]
vi E.g. Monbiot, G. (2008). Build a Europe-wide ‘super grid’ [online]. URL http://e-day.org.uk/solutions/charities/14536/george-monbiot–build-a-europewide-super-grid.thtml [Accessed 13-12-2008].
vii E.g. Mander, J. 1992. In the absence of the sacred. Sierra Club, San Francisco, CA.
viii Krater, J. 2007. Duurzame technologie, een contradictie? Buiten de Orde, zomer 2007.

Þjórsárver are a unique ecosystem characterized by tundra meadows intersected with numerous glacial and spring-fed streams, a large number of pools, ponds, lakes and marshes, and rare permafrost mounds. Iceland’s national energy company, Landsvirkjun wanted to build a 30 meters high dam in the area, creating a 65 km2 big reservoir. The energy was supposed to run the enlargement of Rio Tinto Alcan’s aluminium smelter in Hafnarfjörður, a plan that the majority of the town’s population voted against in a local referendum in 2007. Later Landsvirkjun proposed to lower the planned dam down to 24 meters. Halldórsdóttir’s decision about the protection of Þjórsárver is very important and a big victory for the Icelandic environmental movement.

Iceland’s new minority government, formed by Samfylkingin (the Social Democratic Alliance) and Vinstri Grænir (VG – The Left Greens), has released it’s policy statement for the upcoming 80 days until parliamentary elections will take place in the end of April. The statement states e.g. that “no new plans for aluminium smelters are on the government’s list.” Still Össur Skarphéðinsson, a Samfylkingin MP and the minister of industry since 2007, has said that both Norðurál’s planned 360 thousand ton smelter in Helguvík and Alcoa’s planned smelter in Bakki, Húsavík, do not fall under this statement.

“This particular sentence means that no foreign aluminium company can come and knock on the door of the minister of industry. There will be no new plans about aluminium smelters,” said Skarphéðinsson in an interview with Iceland’s TV station, Channel 2.

Helguvík smelter get’s the government’s “special treatment”
Shortly before the collapse of the former government, Skarphéðinsson signed a investment contract between the government and Norðurál about the Helguvík smelter. Construction of the smelter started this fall but after the collapse of Iceland’s economy in October, Norðurál has had problems with financing the continued construction in Helguvík. The contract is supposed to make it easier for Norðurál to keep on the construction and includes e.g. that Norðurál will never pay higher taxes than at the time the contract was singed; and that the company does not have to pay several official fees that other companies have to pay. A similar contract was made between the government and Alcoa couple of years ago, because of Alcoa’s smelter in Reyðarfjörður.

Kolbrún Halldórsdóttir, minister of enviroment agrees with Skarphéðinsson’s words. “A contract has been signed about Helguvík, which though is still waiting an approval in the parliament. Our evaluation is that this contract is the former government’s work and will therefor most likely not be changed,” she said to Morgunblaðið.

Asked about Alcoa’s planned smelter in Húsavík, Kolbrún says that the memorandum of understanding between the former government and Alcoa will expire in the upcoming fall and that it is not on the new government’s list to renew it. Alcoa has also said that the company is lowering it’s production and new constructions.

Contracts made without proper knowledge about possible energy
Today, the City Council of Reykjavík approved a contract between Norðurál and Orkuveita Reykjavíkur (OR – Reykjavík Energy), about the purchase of energy for the Helguvík smelter. OR is engaged to supply 250 MW to the smelter and plans to produce most of the energy by geothermal power plants in the Hengill area. Most likely it will not be enough, so OR has talked about building a power plant on Bitra, an old plan that was stopped by heavy campaign one and a half year ago, by Hveragerði township, which would be much affected by the construction and loose a treasured hiking area. The energy price is linked with the constantly falling world price of aluminium.

If built, the Helguvík smelter will need at least 625 MW of energy. According to the contract mentioned here above, 375 MW will have to come from Hitaveita Suðurnesja’s (HS) planned geothermal power plants on the Reykjavík peninsula. But HS has already said that the company will not be able to produce all that amount of energy. Ómar Ragnarsson, an active environmentalist, has said that if HS will construct all the needed power plants to produce enough energy for Helguvík, the whole Reykanes geothermal area will dry up in few years. Eight power plants are needed to supply all the needed energy (see more on that issue here).

Svandís Svavarsdóttir, a member of the Left Greens, heavily criticized the contract making today. She highlighted the stupidity of signing the contract when it is still not sure that the necessary energy can be supplied.

Once again completely corrupt contracts are signed concerning the development of the aluminium industry here in Iceland. And now, when in government, the Left Greens seem to be ready to make compromises about their environmental policy. Surely there will be a lot to do for Icelandic environmentalists in the upcoming months.

Alcoa pays 6-8 milliards for energy. ALL THIS MONEY GOES OUT OF THE COUNTRY TO PAY LANDSVIRKJUN’S DEBTS for the next 40 years and will therefore never run into the economic system to facilitate student loans, consumption, or the health care system. Here we find the distinct and enormous difference on how the outcome is, for Alcoa on one hand, and Landsvirkjun on the other, of investments similar in scale. This means that with the meagre 5% tax that Alcoa negotiated especially – the actual impact of Alcoa Fjarðaál is around 3-4 milliards and not the 70 milliards the company claims when it boasts about its export earnings.

The remainder – more than 65 milliards, ENTIRELY bypasses the country. These milliards do not have any more to do with us than the airplanes that fly in and out of our airspace. It is immoral to try to dupe a nation into believing that it lives on, or can live on, a company that has so little importance in the big picture. An entire nation will never live on the salaries of 400 workers in Reyðarfjörður, the income is within the margin of error. The exposition of monumental export earnings has resulted in people taking risks based on false information, taking on debt in fits of optimism, and sacrificing more than they would have for a profit that is not to be had. Economists confirm these figures, but you don’t have to be an economist to figure this out. Anyone who can do simple domestic bookkeeping can make these calculations. The difference is twenty to thirty times fold but the aluminium companies and the energy companies choose to circulate the higher number. Unfortunately the difference is so great that these statistics can only properly be described as lies and deception. I repeat: 70 milliards in export earnings is a false figure, and not acceptable in public discussion as it has nothing to do with us. Any reporter that uses crude figures on export earnings has been played too easily by PR representatives.

In comparison, the actual income of the fishing industry is well over one hundred milliard ISK, and aside from oil costs nearly all of it stays in the country. According to Statistics Iceland air passenger transport counted for 50 milliards ISK of the total consumption of tourists in Iceland in 2006.  Purchasing of accommodation services and food and beverage services was around 26 milliards ISK, or 19.3% of the tourism industry gross value, and is split almost half-and-half between these two service sectors. This means that cafés and restaurants rendered 4 times the income of Alcoa – and so the cafés should, in the same way, be hailed in editorial articles as the nation’s greatest foreign currency earners after the fishing industry. The Kárahnjúkar and Hellisheiði power plants return next to NO foreign currency income because all earnings go straight out of the country to foreign creditors. The media has to stay alert when interested parties seek to use the fear and the chaos to set in motion activities that can lead us into even more troubled water. All talk of abolishing laws and regulations is nothing but corruption and the reception is based on false information people have been fed. The situation is serious, no doubt about that, but to put public energy companies up for collateral for hundreds of milliards can not be the answer to our problems, and factories that are to open in 2012 -2015 have no validity in the current debate. If we manage to create twenty companies with staff of 50, similar to Össur, Marel, CCP, and Actavis in the next 7 years, we will have created considerable more value, a stronger economy, in addition to having established less debt without sacrifice. The large scale industry’s offer to make Iceland one of the largest aluminium plants in the world, is of the same cloth as when the banks became 10 times bigger than Iceland. It is the desire for a strong leader, the protection of a superpower, a noble mogul or giant corporation that people can point to because they don’t dare to stand on their own two feet. We should be able to get ourselves out of this mess, accept our independence and renounce all those that want to weigh us down with even more debt. The proposed remedies are good for nothing but delivering the final blow.

We have heard from workers what kind of cirumstances they are in (2):

• The pipe wielders work 72 hour weeks in up to 17 hour long shifts, even in the winter.
• They work there for 3-6 months on end and then have a three-week holiday before they return to this project or a similar project in Iceland or elsewhere.
• They are not paid to Icelandic standards but to Romanian standards, with a monthly salary approximating 2300 Euros at current exchange rates (for a 72 hour work week).
• They are however paid in Icelandic Krona, rather than Euros. Due to devaluation of the Krona they have seen a quarter of their income disappear without compensation.
• They are forced to stay in the camp, with one night out in Reykjavik per month.
• The camp is worse than a prison – there are no recreational facilities and no gymnastic / sports facilities. Even their televisions do not work because the location hampers reception.
• Requests for simple facilities such as a football pitch or even a table tennis table are turned down.
• Those who complain too much are threatened with loss of their jobs.
• Workers have been told the expansion of the power plant is meant to provide energy for the city of Reykjavik. However, the plant is being expanded to provide energy to Century Aluminum’s smelter at Grundartangi, north of the city.

“It is not surprising that deadly accidents happen to workers who have to work 17 hour pipe wielding shifts. It is ironic that a public owned company such as Reykjavik Energy, who credits itself with being clean and green, constructs its facilities by exploiting foreign workers in this fashion. No Icelander would work in these circumstances. The only people willing to do this work are those that have very little opportunities and have no choice but to do this, to support their families back home” says Jaap Krater, a spokesperson of Saving Iceland.

“We have brought this issue up at previous actions that we have done at Hellisheidi (3, 4), but Reykjavik Energy has taken no action to improve the worker’s lot. Now that a number of workers have suffered a horrible and tragic death by suffocating in the pipes they were wielding, action has to be taken now to stop this scandalous behaviour by a company that is owned by the city of Reykjavik,” says Krater.

About Saving Iceland

Saving Iceland was started by Icelandic environmentalists asking for help to protect the Icelandic wilderness, the largest remaining in Europe, from heavy industry. Aluminium corporations Alcoa, Century Aluminum and Rio Tinto-Alcan want to construct a number of new smelters in Iceland. This would require exploitation of all the geothermal areas in the country, as well as damming most major glacial rivers (see http://www.savingiceland.org/sos).

References

• 1. Iceland Review (2008). Two Immigrant Workers Die in Work Related Accident. http://www.savingiceland.org/?p=2425&amp… and 

  ” title=”http://www.politube.org/show/817

” target=”_blank”>http://www.politube.org/show/817

Worker’s accomodation

They might have thought Karahnjukar was a shame, or even a necessary sacrifice, but that it would be limited to just that.

Two years after the flooding in the east, what is happening now? The Century smelter at Hvalfjordur has just been expanded, without anyone really noticing. A huge part of the Hengill area is being blown up right now with explosives to make the ground level enough for the geothermal boreholes and pipes constructed by low-paid Eastern Europeans working 72 hours a week, living in something that makes the newly opened Akureyri Prison look like Hotel Nordica.

Work has been started to build a smelter in Helguvik for which the same will happen to all the geothermal areas in Reykjanes. Never mind the environmental impact (which hasn’t even been assessed yet).

At Krafla, Alcoa and Landsvirkjun are drilling boreholes right into one of the top 10 tourist attractions of Iceland, the Viti volcano crater. At Theistareykir the deep drilling testing has accidentally created a new arsenic-sulphur lake. Oops.

Apparently most Reykjavik journalists are too bored with the issue to go and take a few pictures up north, no one has written anything about it.

In the mean time, everyone who can calculate that one plus one is two can figure out that there won’t be enough geothermal energy in the north to power a second Alcoa smelter. If the smelter plans aren’t stopped now it is inevitable that Skjalfandafljot and the Skagafjördur rivers or Jökulsá á Fjöllum will be dammed. But apparently most journalists have forgotten their basic maths and choose to ignore the obvious.

Last year, before the Saving Iceland protest camp began, we had a two-day conference where we browsed through every little detail of the aluminium industry. We had people over from Africa, Trinidad and Brazil telling their stories. The whole conference was completely ignored by Icelandic media.

They are mostly not interested in that kind of thing. It’s boring.

When we chain ourselves to something, they always phone up asking for injuries, arrests, whether things are damaged or stolen and if anyone ever uses drugs or has ever flown in an aluminium plane.

The papers don’t show photos of pollution lakes or blown up mountains but what they do print is a giant close-up of our camp toilet. We just hope people have a look at our website or find some other way to inform themselves and then decide to take whatever kind of action they feel is appropriate.

I find it quite amusing to have the weirdest questions being asked, such as “do you use cutlery to eat?” but it also makes me incredibly sad. James, you are right, but tell me, what should we do? Maybe I will start working on my giant pink footed goose costume!

Apparently four years of climbing cranes has not motivated many people to actually do something about making sure there will not be any new dams. Everyone is just bored and apathetic about it.

Write something, make a complaint, get angry at politicians for breaking election promises, phone people up, whatever it is you can do, if you oppose these projects, no one will stop them if no one does anything. Please!

Jaap Krater

Saving Iceland’s Attention

James Weston, Iceland Review – The television is on in the corner of the room showing the evening news bulletin. A young protester is chained to a fence with a few police officers trying to pull her away. A crowd of onlookers is standing with their mouth’s agape, a few still waving their own protest banners.

Now this may seem like exciting television, but for some, it’s quite the opposite. During the piece I found my own attention wandering from the television towards the conversation that has just started between two friends. It doesn’t appear they’re listening either.

This is a piece regarding the latest protest by Saving Iceland, “who do not intend to stand by passively and watch the Icelandic government in league with foreign corporations slowly kill the natural beauty of Iceland.”

Everyone seems to have an opinion on the aluminum smelting issue facing Iceland. I’ve previously presented my outlook on the situation. That’s not to say that all of my friends and new Icelandic family agrees with me. On the contrary, there are quite a few that strongly disagree! The issue is a debate starter, but for both sides, the debate is entered with a sigh. A “here we go again…”

I keep some of my fears hidden just to grease the wheels of friendly, social conversation. Some situations do not welcome the discussion, of course. It’s tantamount to announcing that you were a card-holding communist at dinner with Joe McCarthy! I will say at this point, I am not and never have been a member of Saving Iceland. In fact I don’t know anyone that is.

With the frequent media coverage, “Saving Iceland” seems to have become a by-word for someone who posses a little environmental awareness. The mention of those two words seems to conjure up images of hand holding, banner waving lunatics .The woman from Saving Iceland interviewed after the news piece does much to uphold the viewpoint. A well-spoken Brit, earthen clothing, complete with big red dreadlocks. You really don’t get more new-age hippy than this!

There are many of my friends who are fiercely against the smelting program. When I ask them about Saving Iceland, the responses are all very similar. The overriding issue being that they are simply bored of it all. They have been seeing this for ages and find themselves switching off when any news item is raised about the group. “It’s always in the news and I kind of switch off” is a common reaction. They’re aware of the issue, but seeing it almost every day pushes it into the background for them.

It’s an age-old problem for any issue worldwide. Prolonged attention in the public eye will lead to a stagnation of reaction. Saving Iceland have done a fantastic job in keeping their cause in the public psyche. It’s a grand project and the commitment admirable. As always though, people will be looking for something new. Being told the same thing again and again does become, well, boring.

Maybe the fact that people are bored of the issue is signs of a job truly well done for Saving Iceland. They’ve almost become ubiquitous, part of the news briefings almost as much as Sports & Weather. Not everyone is going to grow dreadlocks and get out the padlocks and chains; but they are constantly aware of the situation whether it bores them or not.

JW

• Krafla gallery
• Þeistareykir gallery / report
• Hengill gallery

HELLISHEIDI (ICELAND) – This morning the direct action campaign Saving Iceland has occupied one of the main geothermal drill sites in Hengill where the Hellisheidi power plant is being expanded by Reykjavik Energy. 20 activists have chained themselves to machinery and have climbed the drill to hang up a banner saying “Reykjavik Energy out of Hellisheidi and Yemen”. They have also occupied the power control room of the drill site. The power to the drill was shut off and drilling was stopped for the rest of the day. Seven people got arrested. The protest was aimed at Reykjavik Energy supplying electricity to aluminium smelters in Iceland, destruction and pollution of the Hengill area and RE’s sponsoring of severe human rights abuse in Yemen.

In the last week, Saving Iceland took action at the Glencore and ALCOA headquarters in Switzerland as well as all Swiss Icelandic consulates, the Icelandic embassy in Rome, Icelandic consulate in Milan and also the headquarters of Impregilo. In Iceland Century Aluminum and Landsvirkjun both saw two actions against them and now Reykjavik Energy was targeted.

Click Images to Enlarge

“We have been camping at Hellisheidi for two weeks now and we are witnessing the scale of destruction, most of which is not very visible to the public. People should really come and have a look what is happening here. What used to be a beautiful natural area is now full of tarmac and pollution. It used to be full of tourists. Now the hiker huts are abandoned while mountains are being blown up to power the Century smelters,” says Saving Iceland’s Jaap Krater.

Most of the work is being done by Eastern Europeans who are living in a work camp, in similar conditions to the Karahnjukar construction.

Reykjavik Energy Invest in Yemen
Saving Iceland also criticises Reykjavik Energy for it’s investments in Yemen (1,2), a country with a Shari’a regime, where there is no free press and security services are routinely involved in torture and even extrajudicial executions (3,4).

“RE say that geothermal investments will benefit the poor in the country. The reality is that the energy will not go to the poor. The regime is very corrupt and Yemen is even advertising for aluminium smelters to come there. If someone would have said ten years ago: I’m making a deal with Sadam Hussein to help the poor, would you believe them?”
“RE should not make deals with anyone involved in serious human rights violations, whether it’s a fundamentalist state or heavy industry corporations,” says Krater.

A factsheet on the REI deal with the Yemen regime is attached as a pdf file.

Impact of Hellisheidi extension
The environmental impact asessment for Hellisheidarvrikjun says explicitly that the only purpose is to supply energy for the Century expansion at Grundartangi and possible new ALCAN and Century plants at Straumsvik and Helguvik (5). At the same time, farmers pay twice as much for electricity as these corporations (6).
Saving Iceland has published reports documenting a long list of human rights violations of these companies (7, 8).

Saving Iceland spokespeople Miriam Rose and Jaap Krater have documented the effects of the geothermal power in Hengill in the journal the Ecologist (9):

“Laced with various and sometimes toxic compounds from deep within the bedrock, the [geothermal borehole] water is either pumped back into the borehole – which can lead to geological instability – or is pumped untreated into streams and lakes. This particular technique has already created a huge dead zone in lake Thingvallavatn.”

Pictures of the physical impact of the drilling can be seen on the Saving Iceland website (10 / see below) and in the attached pdf file.

Download MBL.is – Report

About Saving Iceland
In the last two weeks, Saving Iceland stopped work at the construction site of Century Aluminum’s planned new smelter in Helguvík, they blockaded the existing Century smelter on Hvalfjordur, and took a number of actions against Landsvirkjun, Iceland’s national power company. This is part of their fourth summer of direct action against heavy industry in Iceland.
Saving Iceland was started by Icelandic environmentalists asking for help to protest the Icelandic wilderness, the largest remaining in Europe, from heavy industry. Aluminium corporations Alcoa, Century Aluminum and Rio Tinto-Alcan want to construct new smelters. This would require exploitation of all the geothermal areas in the country, as well as damming all major glacial rivers (see http://www.savingiceland.org/sos).
This year, the fourth action camp to protect Icelandic nature has been set up near the Hellisheidi geothermal plant.

More information
 http://www.savingiceland.org
 savingiceland at riseup.net

References

1. Yemen News Agency (2008). Yemen, Icelandic REI sign document to invest in generating electricity by geothermal. http://www.sabanews.net/en/news151190.ht… [Accessed July 27th, 2008]
I2. ceNews (208). Electricity agreement signed between Yemen and Iceland. http://www.icenews.is/index.php/2008/04/… [Accessed July 27th, 2008]
3. BBC News (2008). Country Profile: Yemen. http://news.bbc.co.uk/1/hi/world/middle_… [Accessed July 17th, 2008]
4. Embassy of Yemen in the US (2008). http://www.yemenembassy.org/economic/ind…. [Accessed July 17th, 2008]
5. VGK (2006). Environmental Impact Assesment fot Helisheidarvirkjun. VGK, Reykjavik.
6. Iceland Review (2007). Century Smelter to Pay Less for Energy than Farmers. June 7th 2007. Also available at http://www.savingiceland.org/?p=821. [Accessed July 27th, 2008]
7. Saving Iceland (2007). Alcan’s Links to the Arms Industry. http://www.savingiceland.org/?p=882 [Accessed July 27th, 2008]
8. Saving Iceland Press Release (2007). Saving Iceland Blockades Century and ELKEM. http://www.savingiceland.org/?p=841 [Accessed July 27th, 2008]
9. Krater, J., Rose, M., Anslow, M. (2007). Aluminium Tyrants. The Ecologist 2007 (10). Also available at http://www.savingiceland.org/?p=1021 [Accessed July 27th, 2008]
10. Saving Iceland (2008). Destruction of Hengill. http://www.savingiceland.org/?page_id=23… [Accessed July 27th, 2008]

Images of destruction at Hengill

“We applaud that OR has started listening to criticism, and that this has lead to the cancellation of plans to buid the Bitruvirkjun plant in Hengill. However, Hellisheidi is still being expanded for aluminium and this is not something we support at all. OR is a company that is still directly involved in heavy industry expansion, so we can not accept any donations from them,” says Saving Iceland’s Jaap Krater.

“OR is also still involved in dubious enterprises through Reykajvik Energy Invest. They have just signed a drilling contract in Jemen (1), a country with a nasty Shari’a regime, where there is no free press and security services are routinely involved in torture and even extrajudicial executions (2,3). This is not something we condone. RE should not make deals with anyone involved in serious human rights violations, whether it’s a fundamentalist state or heavy industry corporations.” states Krater.

• Download REI / Yemen Factsheet as PDF

Hellisheidarvirkjun

The environmental impact asessment for Hellisheidarvrikjun says explicitly that the only purpose is to supply energy for the Century expansion at Grundartangi and possible new ALCAN and Century plants at Straumsvik and Helguvik (4, 5). At the same time, farmers pay twice as much for electricity as these corporations (6).

Last summer, Saving Iceland published reports documenting the long lists of human rights violations of these companies and blockaded of the Century and Alcan smelters in Iceland actions (7, 8).

Saving Iceland spokespeople Miriam Rose and Jaap Krater have also documented the effects of the geothermal power in Hengill in the Ecologist journal (9):

“The boiling water which comes out of geothermal boreholes is extremely useful while it spins turbines and heats buildings. After that, however, it becomes a waste product. Laced with various and sometimes toxic compounds from deep within the bedrock, the water is either pumped back into the borehole – which can lead to geological instability – or is pumped untreated into streams and lakes (10, 11). This particular technique has already created a huge dead zone in lake Thingvallavatn, leading to a decline in numbers of falcons, greylag geese, harlequin ducks and ravens (5,12).”

Clean aluminium?

Saving Iceland will this year specifically focus on human impact of aluminium and bauxite mining.
On Wednesday July 23, 19.30 h. Saving Iceland will hold a conference with the Indian writer, scientist and aluminium expert Samarendra Das and ‘Dreamland’ author Andri Snær Magnusson, on the influence of the aluminium industry in the third world. Also, the concept of aluminium as a ‘green’ product will be examined. The evening is organised jointly with Futureland. It will take place at the Reykjavikurakademian house on Hringbraut 121. (Click here for more information).
Last year, Das unfortunately had to cancel for the Saving Iceland conference ‘Consequences of heavy industry’ in Olfus, where Magnusson spoke as well as guests from Trinidad, South Africa, Brazil and various other countries. Saving Iceland is happy to finally have the opportunity to welcome Samarendra to Iceland.

Contacts

• Jaap Krater (867 1493)
• Snorri Páll Jónsson Úlfhildarson (857 3521)
• Miriam Rose (869 3782, 6150713)

References

• 1. SABA News, April 6th, 2008
• 2. Derechos (2008). Human Rights in Yemen.
• 3. Human Rights Watch (2002). World Report – Yemen.
• 4. European Investment Bank (2007), http://www.eib.org/projects/pipeline/200…
• 5. VGK (2006). Environmental Impact Assesment fot Helisheidarvirkjun, p. 2 and other.
• 6. Iceland Review, June 7th 2007.
• 7. Saving Iceland Press Release (2007). Alcan’s Links to the Arms Industry.
• 8. Saving Iceland Press Release (2007). Saving Iceland Blockades Century and ELKEM.
• 9. Krater, J., Rose, M., Anslow, M. (2007). Aluminium Tyrants. The Ecologist 2007 (10). Also available on http://www.savingiceland.org/?p=1021.
• 10. Kristmannsdóttir, H, & Armannsson. H (2003). Environmental aspects of geothermal energy utilization. Geothermics 32, 451-461.
• 11. Rybach, L. (2003). Geothermal energy: sustainability and the environment. Geothermics. 32, 463-470.
• 12. Landvernd (2007). Letter to national planning agency, 28th June 2007, http://www.landvernd.is/myndir/Umsogn_He… [Accessed August 2007].

A week of international Saving Iceland solidarity actions will take place from July 21st to 27th in different European countries. Moreover a specialised conference with respected Indian writer and aluminium expert Samarendra Das and Andri Snær will examine the idea of “green aluminium” and the effects of the Aluminium industry in the Third World, (July 23 at Reykjavikur Akademia).

Please contact us with queries or for more details,

Miriam Rose, Saving Iceland.

Contact: Miriam Rose
Jaap Krater
Snorri Páll Jónsson Úlfhildarson

Numbers have been removed as they have gone out of date. Please contact us by email.

(1) See www.savingiceland.org for details of the camp location, and to reach our new, revamped website (just click the link).
The new site is currently working through a secure connection, similar to what you might have for accessing secure site like your email or bank account. For the moment, while we are making the move, you might get a security warning from your browser. Please click ‘Accept Certificate’, ‘Trust this certificate’ or ‘Continue Anyway’ if there is a popup.

(2) See attached background info on page two of this posting and ’Double death’ by Samarendra Das and Felix Padel.

Download
When the Visir news crew visited, the weather was a whole lot worse!

A summer of International dissent and action against Heavy Industry – swarming around Iceland from the 12th of July 2008!

The camp this year will commence in the Hengill geothermal area, about one mile from the Hellisheidi power plant that is currently being expanded to power Rio Tinto – Alcan and Century smelters.

Location:

Hellisheidi, Hengill. Click here for directions.

Date:
The camp program starts July 12th with a program of skill and information sharing workshops, so be there by Friday the 11th, from which date camping and food will be available.
If you are a foreigner and planning to come to Iceland, we suggest you arrive on the Smyril Line ferry on the 3rd or 10th of July. If you need accomation before the 10th, this will be arranged – please get in touch.

Practicalities

Food:

Vegan meals will be provided throughout the camp by the new Icelandic mobile field kitchen that was setup last year. Food will be free/donation for those coming from other countries and served on a donation basis to others.
If you are an Icelander, we very much welcome food donations, preferably rice, pasta, potatoes, vegetables, fruit and bread.
If you are interested in joining the cooking crew and becoming a fully trained to cook for large groups of people, please email us: resources [at] savingiceland.org or knock on the kitchen tent’s door.

Money:

Iceland is a famously expensive place to visit but at the camp you will not need to spend any money. Also, if you hitch-hike, use a tent and shop well at stores like Bónus you can live cheaply. When entering Iceland you legally must be able to prove that you have enough money to fund your stay, otherwise the border cops might not let you enter the country. For this you can either point to some cash on you or just show a credit/debit card. This shouldn’t be a problem, dont worry.

Travelling to Iceland:

Boat:

Smyril Line sails from Denmark (Hanstholm), Norway (Bergen) and Scotland (Scrabster) to Iceland (Seyðisfjörður, in the East of Iceland). Prices tend to be cheapest if you book with their Danish office (they speak English). Paying in Danish Krona is supposedly cheapest.
If you remind Smyril Line that you are a “student” then you will get a good discount. You can usually easily change your ticket without any extra cost.
If you are able to bring a car, this is well worth it and does not usually cost much more then four foot passenger returns).
You are encouraged to arrive the 3rd or the 10th of July.
Whilst sailing look out for whales and dolphins…
Smyril-line – Ferry from Scotland, Denmark and Norway to Seydisfjordur.

Plane:

International flights usually land in Iceland’s main airport, Keflavik. An airport transfer bus service (called the FlyBus) runs between the airport and Reykjavik bus terminal via various hotels (1100 Kr [1200Kr from 01 Jan 07], 45 minutes). A return is 300 Kr cheaper than 2 singles.

Iceland Express – Flights from Denmark, Sweden, Norway, France, Spain, Netherlands, Germany and UK – This is usually the cheapest airline to Iceland.

IcelandAir

British Airways – Flights from the UK – even cheaper than Iceland Express currently

SAS Scandinavian Airlines – Flights from Oslo

Travelling inside Iceland:

We will of course aim to coordinate any necessary camp related transport but there may be times when this is logistically impossible. Also, you may want to travel apart from the camp within Iceland. Like other Nordic countries you can legally pitch your tent on any patch of land that is not fenced off and is not in sight of someones house, for one night, apart from around Myvatn. Many villages have campsites you can pay to pitch at, and you can also stay at mountain huts and emergency shelters which are spread across the country (for info on these check a map). Check the weather report here or in the tourist information centre before you leave on a big journey

Commercial Transport:

Iceland’s long distance bus system is slow and extremely expensive, so you might want to consider other means of travelling.
Bus Seydisfjordur – Egilsstadir: http://www.nat.is/travelguideeng/bus_sto…
More busroutes and other practical info:
 [Air Iceland – Internal flights]

Renting a car is also very expensive for extended periods of time.

Hitch-hiking:

It is generally safe to hitch-hike and this kind of travel has lead to lots of exciting road-trips. Iceland has only one highway, Route 1, and it circles the island. Whether you should head along the North or South Route 1 is a matter of raging opinion which will never be settled. Hitching from Egilstadir to Reykjavik will usually take anything between one and four days. Make sure you stock up on supplies before you set off on a long journey, as you will not pass many shops. Try to travel in pairs if possible and be prepared to be unlucky and not get a ride for possibly a day or two. Make sure you have a tent if you hitch-hike.

By Bike:

Many people cycle around Iceland. It is 800km from Seydisfjordur to Reykjavik along the south route of Route 1, and it is mostly flat with a few insane hills. You should judge for yourself how long this will take you but we estimate that it will take you about 10 days to cross the country. The north Route of Route 1 is longer and crosses through the mountaneous interior highlands of Iceland. There are not many opportunities to buy food along the way so make sure you are well stocked and equiped.

Icebike.net – Very Useful general information of cycling in Iceland

By Car:

Cars of all kinds are extreemly useful: 4x4s, mini buses and vans especially, though small cars that don’t use much fuel are too. The cheapest way to travel on the Smyril-Line Norona ship is to fill your car up with people. If you email us in advance, we may be able to organise people to share your seats and cost. 

You can circle the country in the summer in a usual road car without a problem. But, entering the central-highlands in something other than a 4×4 can be highly problematic. Most of the Central-Highlands roads are just mud tracks, meaning that they are extremely potholed and can have rivers running through them. We say this as a caution, but many people do take these sorts of vehicles through 4×4 tracks… The higher your vehicle is off the ground the better. Most mountain roads and roads in the interior of Iceland have a surface of loose gravel. The same applies to large sections of the national highway, but which also has long stretches of asphalt. The surface on the gravel roads is often loose, especially along the sides of the roads, so one should drive carefully and slow down whenever approaching an oncoming car. Always observe speed limits, they are there for very valid reasons. The mountain roads are also often very narrow, and are not made for speeding. The same goes for bridges, most are only wide enough for one car at a time. In addition to not having an asphalt surface, the mountain roads are often very windy. Journeys therefore often take longer than might be expected.
For information on road conditions, Tel.: +354-1777, daily 8:00-16:00. or click here

According to the law everyone must drive with their headlights on, even in daytime. The general speed limit is 50 km/h in urban areas, 80 km/h on gravel roads in rural areas, and 90 km/h on asphalt roads. Always slow greatly down before approaching a bridge. Even relatively smooth roads have nasty potholes on either side of bridges. Asphalt roads tend to change suddenly and even without warning into gravel roads. That can be very dangerous if you are not driving at a sensible speed and has often caused terrible accidents. Traffic sign posting in Iceland is to put it mildly, sloppy. Don’t trust maps just because they show drivable tracks. Mountain tracks can suddenly vanish or become unusable. Be extreemly cautious when crossing rivers. Small streams tend to swell into forcefull rivers in the afternoons, so are best crossed early in the morning. Always make sure another vehicle is present when crossing a river. Expect roaming herds of sheep and cows on roads when driving anywhere in the countryside, and if you knock a sheep over then you legally have to contact the relevant farmer immediately. Petrol stations are few and far between around Iceland and are non-existent in the highlands, so make sure you always fill up when possible,and have spare cans. STICK ONLY TO THE ROADS AS OFF-ROAD DRIVING in the summer IS VERY DESTRUCTIVE TO THE FRAGILE SUB-ARCTIC ICELANDIC VEGETATION, and is also illegal.

What to Bring:

Absolute essentials:

* Waterproof clothing (Coat and trousers), it can rain horrendously.
* Good hiking shoes (trainers can be very dangerous in the highlands.)
* Thermal underwear (it can get very cold!)
* Other warm clothing (eg wool jumpers, gloves, etc.)
* Summertime clothing – it’s not always cold!
* Double skinned tent (or find someone to share with.)
* At least a two season sleeping bag, three season highly recommended but not essential.

Highly recommended:

* Camera / video-camera. Especially digital equipment (these are invaluable at the camp). Lots of DV tapes are also very useful.
* Your own cutlery (knife/fork/spoon),
* Plate or bowl and a cup
* Camping cooking equipment (especially if you go travelling on your own)
* Torch
* Maps
* Compass
* GPS
* Medical equipment
* If you are sensitive to light when trying to sleep then you should bring an eye mask because the sun will be in the sky all night.
* Cars of all kinds, 4x4s, mini buses and vans especially, though small cars that don’t use much fuel are also useful. These are incredibly useful for the camp functioning.
* Mobile phones, especially NMT phones that are more useful the highlands.
* An Icelandic sim card. These are free with Siminn if you buy credit. A good place to get them is the Siminn shop in Egilsstadir near the Bonus or in Keflavik airport. Highly recommended.
* Suncream.

For actions:

(The police might try to confiscate these when you enter, think of a reason why you might need them that’s not connected to the camp)
* Climbing harness
* Climbing clips
* Bicycle locks
* Paints and brushes.
* Banners

For the camp:

* Your driving licence, so you can drive a camp car.
* Food for the camp kitchen. In particular please bring special vegan products. This is a country whose biggest supermarket puts milk into its humus!! You can bring in 3kg of food per person. Half/whole Kilo bags of spices (turmeric, pepper, curry etc) are useful.
* Is there an environmental/social struggle in your area? Why not bring some fliers or a film?
* Do not bring ANY drugs to the camp!

Other

* Iceland’s growing grassroots radical library, Andspyrna, would highly appreciate donations of books, films, posters and information about social/ecological change movements from your local area. If you have anything that might be of interest then bring it along or contact them in advance if you are unsure: punknursester[at gmail.com. The radical library is held at Kaffí Hljómalind, 23 Laugavegur, Reykjavik 101 and shall have a selection of books at this years Saving Iceland camp.

* You can legally bring in 2 liters of alcohol. Alcohol is very expensive in Iceland.

Other links

Icelandic Diplomatic Missions

Icelandic Directorate of Immigration – VISAS etc.

Underestimating Mother Nature May Cost Your Life – Article in Grapevine about the dangers of traveling in the Icelandic highlands without the necessary precautions.

Icetourist

LonelyPlanet

The National Land Survey of Iceland

The Icelandic Meteorological office