Saving Iceland

The Independent
21 March 2007
Richard Hollingham

Europe’s largest wilderness is paying the price of Iceland’s decision to market cheap, “green”, renewable electricity to the world, as a massive new smelter nears completion.

Across a pool of oily water deep inside a rocky cavern carved into a mountain, two steel pipes stretch up into a black void. They rise as high as the Empire State Building. Within weeks these pipes will be connected to enormous turbines and some 40km (25 miles) away, the waters of a 57 sq km reservoir will be released.

The power station in the mountain is only part of the construction project being built in eastern Iceland. It is designed to provide electricity for an aluminium smelter operated by the American multinational, Alcoa. And while the generators may be hidden from view – the source of the energy certainly is not.

An hour’s drive along the new asphalt road, which winds across a windswept plateau, you reach what was once one of the most isolated parts of an isolated country: Kárahnjúkar. The monochromatic scenery of black rock and white snow, under grey skies, was once dominated by a deep fissure in the earth – a canyon carved by the waters from Europe’s largest glacier. Now that flow has dried to a trickle and this incredible natural feature is blocked by the massive concrete wall of a new dam.

For those building the Kárahnjúkar dam this marks an exciting new stage in the country’s development. “The hydroelectric resources of Iceland are stranded here in the middle of the Atlantic Ocean,” says Sigurdur Arnalds, an engineer from the national power company, Landsvirkjun.

“We cannot sell the power to other countries because we are isolated here. The sole purpose of this is to sell electrical power to foreign industries, in this case it’s aluminium to Alcoa. If you look at it globally this is clean energy.”

Far better to build aluminium smelters in Iceland, goes the argument, than power them with fossil fuels elsewhere. It’s estimated that by using “green” energy, carbon emissions from aluminium production are reduced by some 90 per cent. For companies keen to stress their environmental credentials, you can see the attraction of setting up in Iceland. From the cold water pouring off the glaciers to the reservoirs of hot water under the ground that can be tapped for geothermal power, there’s more green energy here than Iceland’s 300,000 inhabitants could possibly need.

But if it’s all so green – why is opposition to the project so vociferous? Environmental campaigners are coming here from across the world, the Icelandic singer Bjork has written songs about Kárahnjúkar and politicians are highlighting the issue in forthcoming elections.

“This is the greatest environmental impact possible in Iceland,” says Ómar Ragnarsson, one of Iceland’s most respected journalists. After covering the story of the dam for the country’s national broadcaster, he became so incensed that he switched from journalism to campaigning. “We are taking this valley from future generations just for the benefit of some power utilisation company,” he complains angrily. “All this area will be hit with such destruction that the Icelanders will be shy of showing it for thousands of years.”

Some people already claim to be feeling the effects. Some 120km downstream of the dam, Örn Thorleifsson farms on the island of Húsey. The nearest village is almost two hours’ drive away. It really does feel like the end of the world. He calls it a beautiful paradise – a haven for birds, seals bask on the beach; apart from the wind rattling the windows, it’s almost totally silent.

“Everything has changed since they began to build the dam,” he says. “They destroyed everything.” He tells how sand and clay, washed down the mountain from the construction, have ruined local fishing grounds. The dam has also blocked the flow of glacial sediment to the coast. Without these sediments, Mr Thorleifsson claims, his island home could disappear.

But in this part of Iceland, Mr Ragnarsson and Mr Thorleifsson are in the minority. You’ll struggle in the villages to find anyone who has a bad word for heavy industry. Take the pretty community of Reydarfjordur for instance, near where the Alcoa smelter is soon to start production. The economic benefits of having a major employer here are tangible: there’s a new shopping mall, new roads are being built, tunnels are being drilled through the mountains to connect communities often cut off whenever there’s bad weather. Before the smelter, the area was in terminal economic decline, people were moving away and houses were being abandoned.

Around the headland from Reydarfjordur, the power lines from the mountains come to an end at Alcoa’s state-of-the-art smelter. The raw materials will arrive by sea – the processed alumina powder coming all the way from Australia. The metal is produced in 336 large vats or pots, as they’re called, working at 900C with each requiring a staggering 180 000 amps of electricity. It’s the reason the dam has to be so big. The first pot starts production next month and by the end of the year the plant will be producing some 346,000 tonnes of aluminium per year. More than a tonne for every Icelander.

The process of aluminium production also generates carbon dioxide. So while the energy may be green, aluminium can’t really be described as carbon neutral. And this isn’t the only aspect of Iceland’s energy policy that isn’t quite as green as it might first appear. Under the Kyoto protocol, thanks to the country’s clean energy reserves, Iceland negotiated an increase in greenhouse gas emissions. As a result heavy industries that locate here can produce carbon dioxide without penalty – therefore avoiding carbon taxes or the complications of offsetting or trading carbon emissions.

Nevertheless, Alcoa has a pretty good track record when it comes to environmental responsibilities, with targets to reduce pollution and greenhouse gas emissions. Its website talks of stewardship and sustainability. But Kolbrún Halldórsdóttir, a Green MP, believes Iceland is being taken advantage of. “We have this beautiful untouched nature, in itself a resource that can be used for the benefit of the nation through tourism, through science, through other kinds of things other than selling cheap electricity to foreign aluminium plants,” she says.

Although the dam and smelter projects were approved by an overwhelming majority in the parliament in 2002, Ms Halldórsdóttir says a lot has changed in the past five years and people are now coming round to her point of view.

And while it may be too late for Kárahnjúkar, it’s not too late to stop other areas being developed. The government is consulting on building two new industrial smelters and expanding a third. If they are given the go-ahead, at least four more dams will need to be built. “There’s no need to try to attract more and more to Iceland.” A surprising statement, perhaps, to hear from Iceland’s new Minister of Industry and Commerce, Jon Sigurdsson. “Aluminium is a good addition to our economy; it’s an important part of our development – but only a part.”

Richard Hollingham presents Crossing Continents tomorrow at 11am on BBC Radio 4

Here are some links to articles that provide vital facts that have been left out of the above article or correct some of its nonsense:

‘Conclusion of the Environmental Impact Assessment of the Kárahnjúkar Project’
The Icelandic National Planning Agency

‘Former Minister of Industry Under Fire for Corruption’
Iceland Review

Hydroelectric Power’s Dirty Secret Revealed
New Scientist

Glacial Rivers Reduce Pollution on Earth
Gudmundur Pall Olafsson

Hydropower Disaster for Global Warming
Jaap Krater

‘ALCOA’s Alarming Record on Pollution’