Saving Iceland

John Perkins, the author of The Confessions of an Economic Hitman, is currently in Iceland. Perkins is here to be at the premier screening of The Dreamland, a documentary based on Andri Snær Magnason’s book, also titled The Dreamland. Last Sunday, Perkins was interviewed in a political TV show on RÚV (the state television station) where he spoke about the threat of Icelandic resources being sold to foreign corporations and advised Icelandic authorities not to collaborate with the International Monetary Fund (IMF).

Perkins used to work for the U.S. National Security Agency and his job included “to convince poor countries to accept enormous development loans – and to make sure that such projects were contracted to U.S. companies,” as says on the back cover of his book. Perkins states that Iceland is the first ‘developed’ country in the world to be hit by the ‘Economic Hitmen’, referring to the invasion of the aluminium industry in Iceland. Read More

From New Renaissance Magazine

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. Read More

Jaap Krater, Morgunblaðið, 26-10-2008

In times of economic crisis, it is tempting to embrace new megaprojects such as new power plants and aluminium smelters. But will this realistically improve Iceland’s economic prospects?

Prime minister Geir Haarde recently explained on Stöd 2’s chat show Mannamál that one of the main reasons for the fall of the Krona, was due to the execution of heavy industry projects: the construction of Kárahnjúkar and Alcoa’s smelter in Reyðarfjörður. If more large projects are executed, what will the cost be for the Icelandic taxpayer?

Haarde’s comments were not surprising. Before construction of Kárahnjúkar many economists predicted the negative impact on inflation, foreign debt and the exchange rate of the ISK.

Of course there is some economic benefit from new smelters, but “it is probably outweighed by the developments’ indirect impact on demand, inflation, interest rates and the ISK exchange rate,” stated a report by Glitnir in 2006 on the impact of aluminium expansion in Iceland. The report expected an increase in inflation and a depreciation of the ISK.

“Kárahnjúkar will never make a profit, and the Icelandic taxpayer may well end up subsidising Alcoa,” said the eminent economist Thorsteinn Siglaugsson after publishing another report on the profitability of the Alcoa dam in East Iceland before construction commenced. Read More

INDIA – Farmers in Hirakud, Orissa are protesting against the Hindalco aluminium smelter plant for emitting poisonous gas, which has damaged their paddy crops spread across 113 acres of land. They have also demanded immediate compensation from the factory management. In an early morning in September farmers in Nuagujatal and Gundurupada village near Hindalco aluminium smelter plant in Hirakud NAC of Sambalpur district, found that their paddy crops had turned from green to yellow. They were surprised to see the change happening so quickly, overnight, and when they looked around similar symptoms were noticed in the trees.
The yellowing had been a regular phenomenon in the area, which occurs every year. This time the factory had released noxious emission, mostly fluoride wastes, when there was a heavy downpour. With the rain water the fumes became toxic rain and damaged the crop, allege agricultural scientists. Read More

For the last two weeks Iceland has been facing economic crisis, the worst since 1914. The Icelandic Króna (ISK) has fallen lower than ever and the whole economy seems to be close to a total collapse. How did this start and how does it look now?

The collapse of Iceland’s bank system

The morning of September 29th was the beginning of the crisis for the Icelandic public, when it was announced that the State and Glitnir, one of the tree big banks of Iceland, had come to an agreement that the State would buy 75% share in the bank. Signs of economic crisis have been visible for quite a long time in Iceland; economics and leftists have been warning the Government, but until September 29th, the Government and the Banks have repeatedly ignored these warnings and stated that everything is fine. According to Iceland Review “the state is not planning to be a majority owner in Glitnir long-term; the purpose with these actions is to secure economic stability.” At this time Glitnir had lost c.a. 85% of its share value when the stock market closed Friday September 26th.

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Tom Henry, Toledo Blade – ILULISSAT, GREENLAND — Beyond the howl of sled dogs echoing across this hilly coastal village is the thunderclap of ancient icebergs splitting apart, a deafening rumble you feel in your bones. There’s no mistaking its big, loud, and powerful boom, a sound that can work up to a crescendo like rolling thunder. Or be as sudden as a shotgun blast. Lifelong Greenland resident Karen Jessen Tannajik said people who live in Ilulissat — an Inuit word for icebergs — notice more about what’s been calved by the village’s nearby Sermeq Kujalleq glacier than sights and sounds. Read More

Alcoa has laid off 300 workers in it’s Rockdale smelting facilities in Texas after idling some of the facility. Another 100 contract workers will be affected. The aluminium giant says this is necessary due to unreliable power supply from the energy supplier that is contracted for the smelter, Luminant. That company claims Alcoa is using them as an excuse to fire workers to drive up profitability. Read More

Wake Up, Freak Out – then Get a Grip from Leo Murray.

Jaap Krater, Morgunbladid – Thórunn Sveinbjarnardóttir’s has said the environmental impact of Alcoa’s planned Bakki smelter and the associated energy production needs to be considered jointly (1). This poses the question whether or not new dams will be needed for heavy industry in the north. Looking at what can be realistically realised from geothermal plants, it becomes clear that a number of hydro projects will inevitably be necessary to power the Bakki smelter, and they should be taken into the assessment. In this article Jaap Krater analyses the energy calculations for the smelter and potential power plants. Read More

Jaap Krater, Iceland Review – As someone who has been active with Saving Iceland for a number of years, I read James Weston’s column about media coverage on our campaign with much amusement. Many of his comments are not only funny but also have a ring of truth.
For me, they also illustrate something that is quite sad. People watch TV and see others chaining themselves to machines, according to polls most might even agree with them that they do not want more dams or smelters, and they get bored. Read More