Articles Archive

Jun 04 2005

The Grapes of Vaði – Interview with Guðmundur Ármannsson Farmer at Vað and Host to Saving Iceland Protest Camp in 2005


Grapevine Issue 6, August 2004 with update Jan. 2006

In the 1930s, dust storms swept the southern plains of the United States. The “Black Blizzards,” as they were called, had come about because of overfarming, which had caused the topsoil to wear thin and become dust. Crops failed, and as the banks that held the mortgages realised they would not be getting returns on their interest, farmers were run off of their land. Their plight is immortalised in the songs of Woody Guthrie and John Steinbeck’s book “The Grapes of Wrath”, which went on to become a Hollywood film starring Henry Fonda as Steinbeck´s protagonist Tom Joad. Read More

May 15 2005
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‘Kárahnjúkar Hydropower Project – Estimate of Profitability’ by Thorsteinn Siglaugsson, MBA


Prepared for the Iceland Nature Conservation Association
Thorsteinn Siglaugsson MBA
Reykjavik 2002

Extract

Introduction

Landsvirkjun, the state-owned electric power company in Iceland has for some time been planning a large hydropower plant in the area north of Vatnajokull, Europe´s largest glacier in the east of Iceland. The facility would be built to produce electricity for a 390,000 ton aluminium smelter in Reydarfjördur on the east coast of Iceland.

Until recently a consortioum of Icelandic banks, pension funds and the Norwegian company Norsk Hydro planned to build and run the Reydarfjordur smelter, a prerequisite for initiating the Karahnjukar project. Early 2002 Norsk Hydro decided to postpone its final decision on the project. Subsequently the Icelandic government decided to seek other investors. In september Alcoa and the government signed an agreement to take up talks to build a 295,000 ton smelter in Reydarfjordur run on electric power from the Karahnjukar plant.

According to a previous study conducted for the Iceland Nature Conservation Association the Karahnjukar plant would not be financially viable when valued based on market rates of interest and return on equity expected for a comparable project. As a state owned company Landsvirkjun does however enjoy full financial backing from the state of Iceland and is able to borrow at sovereign rates. The Sumitomo Mitsui Banking Corporation prepared an assessment of Landsvirkjun´s plans in September 2001 confirming that the project could support the cost of capital demanded by Landsvirkjun based on Landsvirkjun´s estimate of future power prices.

There are considerable differences between the current and earlier plans. The size of the power plant is different as well as the expected investment. The buyer profile is different which no doubt has an effect on interest rates and the construction timeline for the Karahnjukar plant is considerably shorter according to the current plans.

This report aims to compare the financial characteristics of the earlier plans for the Karahnjukar plant with the current plans. This includes an analysis of buyer risk profile, estimate of probable power price based on current and forecasted aluminium prices and the constraints provided by the general cost structure in the aluminium industry.

Read the report here or on the original site

Apr 13 2005

Saving Iceland: The Buck Stops Here


CorporateWatch.org
Newsletter Issue 23 April/May 2005

falki

In March 2004, the government of Iceland held a conference in the capital Reykjavik. It was a private conference, attended by representatives of the top multinational corporations, Rio Tinto, Alcoa and Alcan among them, and the population were not told about it in advance. Iceland, a government spokesman informed its people afterwards, was now open for business. Read More

Mar 05 2005

Icelandic Wetlands Saved


Lowana Veal

The Thjorsarver wetlands in South Iceland have been saved from the ravages of a hydro-electric scheme, at least for the foreseeable future.

Thjorsarver is a wetlands area that became listed as a RAMSAR site in 1990, principally because it is home to the world’s largest breeding ground for pink-footed geese, 6-10,000 breeding pairs. But many other birds nest there too, such as the purple sandpiper, red-necked phalarope, dunlin, Arctic tern, Arctic skua, ptarmigan, golden and ringed plovers, snow bunting and long-tailed duck. Botanically, it is home to 167 species of vascular plants as well as mosses and lichens, some of them rare. The insect life is rich.

Paradoxically, the designation of RAMSAR and nature reserve status should mean that the area be left untouched – but those with vested interests appeared to disregard this point. Read More

Mar 04 2005
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Ice Burks! – Schnews


This article served as a follow-up to  the ‘Power Driven’ article published in the Guardian in November 2003.

Schnews, 4th March 2005, Issue 487

Super-cool Iceland, the eco-tourist’s wet dream, right? Maybe not for much longer if the Icelandic government has its way.

You see, they’ve got a cunning plan to turn the whole country into a heavy industry paradise for all sorts of multinational scum, damming and flooding and generally trashing nature to power up a bunch of giant aluminium smelters and other slight blots on the landscape.

This is not an early April fool – it’s already started. The construction of the giant Karahnjukar dam in the Icelandic Highlands – one of Europe’s last surviving wildernesses – is well under way. Landsvirkjun (the national power company, a government quango) has a raft of further projects that would see 25% of the entire country dam affected by 2020: some vision.

Karahnjukar and most of Landsvirkjun’s future schemes harness glacial rivers fed by Vatnajokull – the biggest non-arctic glacier in the world. This glacier is the heart of a fantastically intricate eco-system: barren red and black Martian landscapes; geo-thermal springs and pools hot enough to take a bath in; rivers banked by deep, springy emerald green moss woven with tiny red and yellow flowers where no-one’s ever walked; the glacier’s own fantastic ice caves; seal breeding grounds on the black sand deltas to the north. All this will be destabilized and damaged forever if these dam projects are allowed to happen.

An international protest camp this summer aims to halt this war on nature. It’s going to be one hell of a struggle since the Icelandic government seems determined to push these projects through, no matter what opposition it faces.

What’s going on at Karahnjukar demonstrates the way that government operates. When plans for the mega-project were first submitted to the National Planning Agency (NPA) in 2001 they were rejected because of the “substantial, irreversible, negative environmental impact” the dam would have. All the experts agreed with this verdict (see IRN’s report linked below). But the environment minister overturned the NPA’s ruling and declared that in her opinion the project was environmentally acceptable – of course she is suitably qualified to decide on environmental issues – she’s a physiotherapist! There were a few financial hiccups with banks getting all ethical but Barclays bravely stepped forward with the necessary dosh – even though they’d signed up to the Equator Principles which demand “sound environmental management practices as a financing prerequisite.”

Work started in July 2003, with Italian bully-boys Impregilo (construction arm of Fiat, currently charged with corruption in Lesotho and ‘financial irregularities’ at home) and a terrifying squadron of Caterpillar bulldozers began to claw up and dynamite the fragile sub-arctic tundra. Reindeer, arctic foxes, other small animals and thousands of bird species that lived there fled in fear.

FROZEN ASSETS

All electricity produced at Karahnjukar is contracted to a massive Alcoa aluminium smelter (being built by Bechtel, due to be operational in 2007) which itself will pollute and ruin Reydarfjordur, a pristine eastern fjord. A Reykjavik court recently ruled that Alcoa’s planning permission for this monstrosity isn’t valid, but that probably won’t stop them as they immediately appealed to the – allegedly – rigged High Court.

Karahnjukar won’t benefit Icelanders at all: none of the electricity is destined for the national grid and cos there’s little unemployment in the region no Icelander’s gonna want a nice healthy job at the smelter thanks.

Yet the cost to the nation is enormous: independent experts say the economy is at risk (see IRN report), it has cost $1 billion so far and is likely to cost more – the electricity for Alcoa is for a price linked to the changing prices of Aluminium on London Metal Market…in other words no guarantee it’ll ever make a profit.

The environment suffers more by the day. They’ve already blown part of Dimmugljufur – Iceland’s Grand Canyon – to smithereens, and if they fill up the reservoir (scheduled 2007), 65.5 square kilometres of pristine wilderness will be completely submerged. This land includes birthing grounds for the majority of Iceland’s reindeer and Ramsar ‘protected’ nesting sites for endangered species such as pink-footed geese, and Gyrfalcon. Sixty waterfalls will be lost as will a range of sediment ledges – judged completely unique in the world by scientists studying global warming – which record 10,000 years of geological and climate change. And this vast projected reservoir would extend right onto the glacier itself, which is breaking up because of global warming. Wouldn’t giant icebergs trucking up to the dam be a bit – er – dangerous? Yep. And it gets worse – the dam is being built over a seismic fault!

airial

Earthquake zone at Kárahnjúkar volcanoes
White lines = Ground rock cracks
Yellow lines = Erosion of sediments. Erosion is parallel
to cracks: Sediments are cracked, cracking is still active
.
In 2003, Landsvirkjun’s chief, Fridrik Sophusson, was asked what would happen if there was an earthquake under the dam. “It would burst,” he smiled calmly. “A catastrophic wall of water would annihilate everyone in Egilsstadir [the nearest town] and all the neighbouring farms would be swept away.” Icelandic Tsunami anyone? “It won’t happen,” he added smugly. Yet in August 2004 there were continuous earthquakes at Karahnjukar for several days.

Environmentalists also warned that silt residues left by changing water levels round the projected reservoir would dry to a fine dust which the wind would carry onto local farmland. This was dismissed, yet last summer silt left in the wake of unexpected surges in the newly diverted glacial river produced just such devastating dust storms.

But none of this makes any difference: while everyone else in the ‘developed world’ is busy dismantling dams, Iceland’s rulers just can’t get enough. There are plans to dam every major glacial river in the country. Rio Tinto Zinc are reportedly salivating over the chance to devastate the North of the country, while Alcan and Century (who’ve already got smelters near Reykjavik) are keen to expand their deathly shadow in the south.

Ironically, the government- via its tourist board – still invites visitors to enjoy the “unspoilt pure natural beauty” it’s hell-bent on destroying! So how do they get away with it? Well, Iceland has a tiny population (290,000) and power is concentrated in the hands of a few very wealthy families who control politics, industry and the media. Scientists, journalists, anyone who asks questions is swiftly discredited and then sacked.

But it’s not all bad news and you can even help. A really vigorous and up-for-it grass-roots environmental movement is emerging, determined to stop Icelandic nature being pimped to the highest bidder. It’s a David v. Goliath battle and the call is out for international support.

If you are up for peacefully showing your solidarity with some of the most fantastic nature on our planet, check out www.savingiceland.org and joining the protest camp summer 2005.

http://www.schnews.org.uk/archive/news487.htm

Also in pdf.

Feb 26 2005
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Environmental Impact of the Kárahnjúkar Dams


throng

 

The Kárahnjúkar Power Plant is the largest industrial development in Iceland’s history. Roughly 3% of the total area of Iceland, approx. 290,000 ha, will be impacted by the project, not including areas of secondary impacts, such as windblown dust, long-term erosion, downstream or coastal silt and soil deposits, alterations in groundwater characteristics in peripheral areas with resulting changes in vegetation and wildlife habitats. Read More

Feb 26 2005

Hydroelectric Power’s Dirty Secret Revealed – New Scientist


Hydroelectric dams produce significant amounts of CO2 and methane – some produce more greenhouse gases than fossil fuel power plants.

Duncan Graham-Rowe, New Scientist, 26-2-2005, issue 2488

Contrary to popular belief, hydroelectric power can seriously damage the climate. Proposed changes to the way countries’ climate budgets are calculated aim to take greenhouse gas emissions from hydropower reservoirs into account, but some experts worry that they will not go far enough.

The green image of hydro power as a benign alternative to fossil fuels is false, says Éric Duchemin, a consultant for the Intergovernmental Panel on Climate Change (IPCC). “Everyone thinks hydro is very clean, but this is not the case,” he says.

Hydroelectric dams produce significant amounts of carbon dioxide and methane, and in some cases produce more of these greenhouse gases than power plants running on fossil fuels. Carbon emissions vary from dam to dam, says Philip Fearnside from Brazil’s National Institute for Research in the Amazon in Manaus. “But we do know that there are enough emissions to worry about.”

“Reservoirs convert carbon dioxide in the atmosphere into methane, which has 21 times the warming effect” Read More

Jan 26 2005

Iceland Under Attack – Threatened Protestors Raise Stakes, Call for International Protest


Sauðárfossar – Amongst numerous waterfalls destroyed by the Kárahnjúkar dams

Corporate Watch

“Nobody can afford to allow the divine Icelandic dragon of flowers and ice to be devastated by corporate greed”

People in Iceland are calling for an international protest against the building of a series of giant dams, currently under construction in the eastern highlands of Iceland. The dams are designated solely to generate energy for a massive aluminium smelter, which will be run by the US aluminium corporation Alcoa and built by Bechtel.Not a single kilowatt of energy produced by the dams will go for domestic use. Alcoa is seizing the chance to relocate to Iceland after costs of producing aluminium in the US soared. Read More

Aug 04 2004

Kárahnjúkar – Some Facts About the Project


Robert Jackson

It is now two years since the government gave the approvals that made way for the creation of a huge hydroelectric scheme in the Central Highlands at Kárahnjúkar. This paved the way for a subsequent deal with Alcoa for the building of an aluminium smelter in the coastal town of Reyðarfjörður.

WHAT DOES THE SCHEME INVOLVE?

The Kárahnjúkar project will consist of nine dams, three reservoirs, seven channels and sixteen tunnels. It will divert two large rivers, the Jökulsá á brú and Jökulsá í Fljótsdal, and several smaller rivers to the north of the Vatnajökull glacier, the largest glacier in Europe. The main dam will be highest rockfill dam in Europe, 190 metres high, 800 metres long and 600 metres wide at its base. This main dam will create a huge reservoir, to be called Hálslón, which will flood a wilderness area of 57 sq. km. 70 km of tunnels will carry water to an underground powerhouse, which will have a 690 megawatts capacity. Read More

Jul 21 2004
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The Bad Neighbor – Alcoa’s Dirty Dealing in Central Texas by Esther Cervantes


0704cover“…some Alcoa Rockdale employees… were offered a choice between early retirement or transfer to Iceland.” So much for job creation for the people of Eastern Iceland!

Dollars and Sence
The Magazine for Economic Justice

Issue #254, July/August 2004

Earlier this year, the Aluminum Company of America (Alcoa) broke ground on the $83 million Three Oaks lignite mine outside Austin. The mine will provide coal to Alcoa’s massive facility near the town of Rockdale: an aluminum smelter plus the three power plants that fire it. In addition to the lignite, Alcoa intends to remove groundwater from the new mine (as well as from its existing mine at Sandow, near Rockdale) and ship it to the city of San Antonio, more than 100 miles away. In a company report celebrating the Rockdale smelter’s first 50 years, manager Geoff Cromer thanks the facility’s neighbors for “the strong support we have received from the community”—but that’s less than half the story. The “several hundred people” who “took time from their jobs” to attend numerous public hearings and “provide comment in support of Alcoa and this project” were far outnumbered by those who struggled against it for four years. Read More