Archive for November, 2011

Nov 16 2011

Aluminium Smelter in Helguvík: Mere Myth of the Past?


Plans to operate a 250-360 thousand ton aluminium smelter in Helguvík, which has in fact been under construction since 2008, seem ever more likely to be nothing but an inoperable myth of the past, according to environmentalists as well as high ranking officials within the energy sector. Aluminium producer Norðurál (alias Century Aluminum, which already operates one smelter in Iceland), has not only been unable to guarantee the necessary minimum 435 MW of energy but is also stuck in an arbitration conflict with its planned energy supplier HS Orka (owned by Alterra Power, former Magma Energy), concerning energy price. Additionally, environmentalists’ warnings – that the geothermal energy planned to run the smelter can simply not be found – have gained strength and lead to the inevitable question if the damming of river Þjórsá has been planned for Helguvík.

During a recent meeting of chairmen from all the member unions of the Icelandic Confederation of Labour (ASÍ), Hörður Arnarson, the director of the national energy company, Landsvirkjun, said that due to the current situation on international markets it would be enormously difficult for Norðurál to finance the 250 billion ISK smelter project. According to Vilhjálmur Birgisson, who attended the meeting, chairman of the Labor Union of Akranes (near to Grundartangi, where Century’s currently operating smelter is located),  Hörður spoke of the Helguvík project’s likelihood as very negligible. Another representative at the meeting, Kristján Gunnarsson, chairman of the Labour and Fishermen Union of Keflavík, stated that when asked about the possibility of Landsvirkjun selling energy to Norðurál, Hörður answered saying that no energy is really available for the project.

While it certainly is true that Landsvirkjun has, especially in the nearest past, had problems with financing, due to the international financial crisis as well as the Icelandic economy’s instability, the latter point – that no energy is actually available for Helguvík – is of more importance here. Environmentalists have, from the beginning of the Helguvík project, stated that the plans to harness energy for the smelter in geothermal areas on the Reykjanes peninsula, are not sufficient, for two reasons. Firstly, as the alleged size of the energy extraction is not sustainable and is more than likely to drain these unique natural areas for good. Secondly, because even if fully exploited, the geothermal areas would not produce enough energy for the smelter. Another energy source will be essential in order for the smelter to operate and even though Reykjavík Energy (OR) has promised Century some energy from a planned enlargement of their power plant in Hellisheiði, the aluminium producer still faces a serious lack of electricity for Helguvík. Read More

Nov 14 2011
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It Ain’t Easy Being Green


Words by Paul Fontaine. Photo by Alísa Kalyanova. Originally published in The Reykjavík Grapevine.

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. Read More

Nov 09 2011
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From Siberia to Iceland: Century Aluminum, Glencore and the Incestuous World of Mining


A special report for Saving Iceland by Dónal O’Driscoll

Preface

Glencore are the majority shareholder of Century, the owner of one operational and one half-built smelter in Iceland, it’s key operations for aluminium smelting. But who are Glencore and what are the implications for Iceland? This comprehensive article profiles the world’s biggest commodity broker, who’s only comparable predecessor was Enron. The profile covers the reach and grip of Glencore’s domination of metal, grain, coal and bio-oils markets, allowing it to set prices which profit very few and are detrimental to many. It shows the tight web of connections between the major mining companies and Glencore through shared board history and shared ownership of assets, cataloguing key shareholders (and board members) who’s stakes make them larger shareholders than institutional investors in ownership of Glencore. These connections include Rusal’s co chair Nathaniel Rothschild, a financier with a $40m investment in Glencore, and a personal friend of Peter Mandelson (former EU trade commissioner and British politician) and George Osborne (UK Chancellor).

The article details the human rights and environmental abuses of Glencore at it’s many operations, including the 2009 killing of Mayan indigenous leader Adolfo Ich Chamán who spoke out about Century’s activities in Guatemala under CEO-ship of Peter Jones (still a Century board member). It claims that Glencore is higher than most in the running for most abusive and environmentally detrimental mining company, going where lesser devils fear to tread – trading with Congo, Central Asia and embargoed countries such as Saddam Hussein’s Iraq and apartheid South Africa. Glencore founder Marc Rich was involved in trading embargoed Iranian oil, and fled the United States in 1983 accused of insider dealing and tax dodging over Iranian deals, becoming one of the 10 fugitives most wanted by the FBI, until he was pardoned by Bill Clinton. Glencore is still run by two of his main men. Read More

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Nov 09 2011
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Aluminium Smelters Use Tremendous Amounts Of Electricity, Return Little


From The Reykjavík Grapevine

The smallest aluminium smelter in Iceland uses 50% more electricity than all of Iceland’s households and businesses combined, while contributing very little to the country’s GDP. Heavy industry has often been touted by Icelandic conservatives as a cash cow: foreign companies can provide the country with jobs, while utilising Iceland’s green energy to produce aluminium in a cleaner fashion.

While the myth of the “green smelter” has been definitively put to rest, aluminium is still billed by some as being good for the economy. However, Vilhjálmur Þorsteinsson – the chair of a study group assembled by the Ministry of Industry that studies Iceland’s energy use – has come to some damning conclusions about smelters in Iceland.

Iceland’s three aluminium smelters – Alcoa in Reyðarfjörður, Norðurál in Grundartangi, and Rio Tinto Alcan in Straumsvík – consume approximately 13 terawatt hours of electricity. The entire capacity of Iceland’s electrical output is 17 terawatt hours. Furthermore, Straumsvík – the smallest smelter in the country – uses 3.6 terawatt hours. The combined total energy consumption of every home and business in Iceland (apart from the smelters) equals only 2.3 terawatt hours.

At the same time, even the best estimates of what smelters contribute to the economy only put them in the neighbourhood of contributing to 5% of the GDP. Tourism accounts for about the same percentage of the GDP while using far less of the power grid. Meanwhile, Iceland’s service sector accounts for 69.9% of its GDP, and fishing accounts for 12%.

Nov 05 2011
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When Two Become One – On The Ever Impenetrable Handshake Between Public Relations and Media


By Snorri Páll Jónsson Úlfhildarson, originally published in The Reykjavík Grapevine.

Those who are yet to give up on Icelandic media cannot have avoided noticing one Kristján Már Unnarsson, a news director and journalist at TV station Stöð 2. Kristján, who in 2007 received the Icelandic Press Awards for his coverage of “everyday countryside life”, is a peculiar fan of manful and mighty constructions and loves to tell good news to and about all the “good heavy industry guys” that Iceland has to offer.

To be more precise, Kristján has, for at least a decade (and I say “at least” just because my memory and research doesn’t take me further back), gone on a rampage each and every time he gets the chance to tell his audience about the newest of news in Iceland’s heavy industry and energy affairs. He talks about gold-mills when referring to dams built to power aluminium production; and when preparing an evening news item on, say, plans regarding energy and aluminium production, he usually doesn’t see a reason for talking to more than one person – a person who, almost without exception, is in favour of whatever project is being discussed.

After witnessing Kristján’s latest contribution to the ongoing development of heavy industry and large-scale energy production, i.e. his coverage of Alcoa’s recently announced decision not to continue with its plan of building a new aluminium smelter in Húsavík, wherein he managed to blame just anything but Alcoa itself for the company’s decisions, I couldn’t resist asking (and, really, not for the first time): What can really explain this way too obvious one-sidedness, manifest not only in this one journalist’s work but seemingly the majority of news coverage concerning heavy industry? Read More