'Corruption' Tag Archive

Nov 24 2018
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The Hidden Price of Iceland’s Green Energy


Henner Busch

In times of runaway climate change, phasing out fossil fuels and increasing the share of renewables is imperative. But this transition is not without pitfalls as shown by a recent study of two large renewable projects in Iceland.

The recent IPCC report has made it clear that we need to change our energy supply from fossils to renewable energy if we want to avoid catastrophic climate change. This transition has to happen now and it has to happen fast.

The good news is: renewable energy is a wonderful thing. As countless studies have shown, it can be cheap, low-carbon, good for regional development, and bring about great benefits for local people.

But, our new research cautions that these benefits are not inherent to renewable energy development and that each project needs to be carefully assessed on its merits.

Through a case study in Iceland, we show how the “green” image of renewable energy sometimes makes the public overlook the negative impacts of these technologies.

As a result, some of Iceland’s renewable energy resources have been misused to generate private profits for companies outside of the country. While, the benefits for the local population are, at best, questionable and large areas of unique nature have been lost forever.

 

A developmental model based on heavy industry

In the study, which was recently published in the journal Environment and Planning E: Nature and Space, we investigated the impacts of two large-scale power projects built recently in Iceland: the Kárahnjúkar hydropower project in east Iceland, and the Hellisheiði geothermal plant in the southwest. They are the biggest power plants of their kind in the country.

For our investigation, we analysed scientific literature, and we looked at homepages, reports and statistics. Finally, we interviewed 18 actors from the Icelandic energy sector (5), politicians (5), and experts from NGOs (3) and academia (5). 

We found that the two projects were the outcome of an aggressive industrialisation strategy driven by successive Icelandic governments over a number of decades, which have essentially used the country’s renewable energy sources to prop up other environmentally damaging industries.

This strategy entailed minimum environmental regulations, guaranteed low-energy prices, and an industry-friendly tax regime, designed to attract heavy industry, in particular power-intense aluminium smelters to Iceland.

As an incentive, the Icelandic government, together with the country’s publicly owned power company Landsvirkjun, promised to provide the required energy from renewable sources, namely hydro and geothermal, to companies that agreed to set up factories in the country.

This “clean” energy option was offered at very competitive rates and with a guarantee of supply for several years.

In the study, we investigated the impacts of two large-scale power projects in Iceland: the Kárahnjúkar hydropower project in east Iceland, and the Hellisheiði geothermal plant in the southwest. They are the biggest power plants of their kind in the country. (Image: Forskerzonen / ScienceNordic. With graphics from Vecteezy.com)

Let’s look at each project in turn to see what went wrong and what lessons can be learnt.

 
1: A mammoth hydropower project in a small country

In the early 2000s, large amounts of public money went into the energy sector to live up to the promises made to private sector investors.

One of the following projects is the Kárahnjúkar hydropower project. It consists of several reservoirs, tunnels, and the Fljótsdalur power station. It generates approximately 5,000 GWh per year, accounting for more than one fourth of all electricity produced in Iceland in 2016. All of this energy is used to power a big aluminium smelter built by the global company, Alcoa, on the east coast of the country.  

The project serves as an illustrative case for two phenomena: First, it shows how the green label of renewable energy can be misused to justify a costly and arguably quite destructive industrialisation. Second, it shows what can go wrong if a small country makes deals with a big transnational company whose decisions are predominantly driven by the hunt for economic profits.

 
Destruction in the name of progress

The power plant and the power-intense aluminium smelter must be seen as interlinked projects, because Alcoa’s commitment to build the smelter was the precondition for the power project going ahead, and vice-versa.

The Icelandic government at that time hoped that the development would boost the regional economy in the East of the country. To support this goal, the minister of the environment overrode the environmental impact assessment that vetoed the hydro energy project because of its destructive impact on the local environment.

With the Kárahnjúkar project, unique geological formations and landscapes in and along the Hafrahvammagljúfur canyon were irredeemably lost and downstream ecosystems suffered negative impacts that are yet to be fully understood. For example, the local fish population in Lake Lagarfljót collapsed and Iceland’s wild reindeer population lost part of its grazing and breeding grounds.

 
Who benefited from the projects?

The contract between Landsvirkjun and Alcoa turned out to be unfavourable for the state-run energy company. The energy prices paid by Alcoa are extremely low and tied to the volatile global market prices for aluminium. This makes revenue for Landsvirkjun very low and unpredictable.

In addition, Alcoa practiced a model of transfer pricing in Iceland to avoid paying the dues taxes in Iceland. This means that the local operation owes a great deal of money to its parent company based in Luxembourg. And so far, the local smelter has not generated any taxable profits, as all revenues are used to pay off the immense debt.

As a result, Iceland has not yet benefited from tax revenue from the smelter. This is particularly scandalous, as Alcoa has described the smelter in its 2012 annual report as a “profit leader” due to the low local energy prices.  Read More

Jul 30 2015
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Time to Occupy the Smelters?


Helga Katrín Tryggvadóttir

Icelanders are notoriously bad investors. Once someone has a business idea, everyone jumps on the wagon and invests in exactly the same thing. The infamous growth of the banking sector is one example, before the 2008 banking crash the Icelandic banking sector was 12 times the size of the GDP and Iceland was supposed to become an international financial centre. I have no idea how anyone got the idea that an island with three hundred thousand inhabitants could become an international financial centre, but many people in Iceland considered this a perfectly normal ambition.

And then there are the politicians, they have had the same investment idea for more than hundred years. Either it is building an artificial fertiliser factory, or it is building an aluminium smelter. Last year one MP proposed building an artificial fertiliser factory, in order to “lure home” young Icelanders who have moved abroad. A majority of those have moved abroad to educate themselves, but sure, who doesn’t want to use their PhD on the factory floor?

Now there is an Icelandic investor in the North of Iceland, Ingvar Skúlason, who is planning on building an aluminium smelter, at a time when aluminium prices have been dropping due to overproduction. He has already managed to sign a deal with a Chinese company, NFC, which is willing, he says, to pay for the whole construction, yet the smelter would be owned by Icelandic companies. All of this sounds kind of dubious in my ears. And everyone can see that this is not a good idea, even the banks, with a new report released by Arion Bank advising against more investment in the aluminium industry. The bank bases its analysis on the fact that aluminium price is too low at the moment to bring any profit into the country (since the price for the electricity is connected with the price of aluminium, the price the aluminium smelters pay to the National power company (LV) is low when aluminium prices are low).

But that does not stop the politicians from supporting the idea. The prime minister Sigmundur Davíð Gunnlaugsson, was present when Skúlason signed a deal with the Chinese company, praising the initiative. Skúlason also claims to have support from the Minister of Industry, which is not surprising since her only campaign promise was building an aluminium smelter and get the “wheels of the economy rolling”. Recently, Alcoa World Alumina, owned by Alcoa Inc., admitted to having bribed officials in Barein. In Iceland, however, they have never had to pay any bribes. Icelandic officials have been more than willing to do their service for free, “bending all the rules” as Friðrik Sophusson, former head of LV, was caught on tape saying.

There are currently three aluminium smelters in Iceland. Together, they use 80% of the energy produced in the country and their profit account for 60 billion ISK a year (USD 500 million). Yet, a majority of the profit is registered as debt to their parent companies abroad, leaving the Icelandic subsidiaries operated in debt but creating profits to the parent companies. The only profit that is left in the country is the wages they pay to their employees, and that only accounts to less than 1% of the national revenue. The jobs they create (which is usually the main argument for their construction), also account for less than 1% of all jobs in Iceland. The price they pay for the energy is also below the normal market price. Lets think about this for a second: 80% of the electricity produced in the country goes to international corporations that only produce 1% of the national revenue and creates 1% of the jobs, exports the majority of the profits and pays below-market price for the energy. So, 99% of the people do not get any share in the majority of its electricity production. Sounds familiar.

Maybe it is time to occupy the smelters?

Aug 22 2014
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Large Dams Just Aren’t Worth the Cost


By Jacques Leslie

Sunday Review

New York Times

Thayer Scudder, the world’s leading authority on the impact of dams on poor people, has changed his mind about dams.

A frequent consultant on large dam projects, Mr. Scudder held out hope through most of his 58-year career that the poverty relief delivered by a properly constructed and managed dam would outweigh the social and environmental damage it caused. Now, at age 84, he has concluded that large dams not only aren’t worth their cost, but that many currently under construction “will have disastrous environmental and socio-economic consequences,” as he wrote in a recent email.

Mr. Scudder, an emeritus anthropology professor at the California Institute of Technology, describes his disillusionment with dams as gradual. He was a dam proponent when he began his first research project in 1956, documenting the impact of forced resettlement on 57,000 Tonga people in the Gwembe Valley of present-day Zambia and Zimbabwe. Construction of the Kariba Dam, which relied on what was then the largest loan in the World Bank’s history, required the Tonga to move from their ancestral homes along the Zambezi River to infertile land downstream. Mr. Scudder has been tracking their disintegration ever since.

Once cohesive and self-sufficient, the Tonga are troubled by intermittent hunger, rampant alcoholism and astronomical unemployment. Desperate for income, some have resorted to illegal drug cultivation and smuggling, elephant poaching, pimping and prostitution. Villagers still lack electricity.

Mr. Scudder’s most recent stint as a consultant, on the Nam Theun 2 Dam in Laos, delivered his final disappointment. He and two fellow advisers supported the project because it required the dam’s funders to carry out programs that would leave people displaced by the dam in better shape than before the project started. But the dam was finished in 2010, and the programs’ goals remain unmet. Meanwhile, the dam’s three owners are considering turning over all responsibilities to the Laotian government — “too soon,” Mr. Scudder said in an interview. “The government wants to build 60 dams over the next 20 or 30 years, and at the moment it doesn’t have the capacity to deal with environmental and social impacts for any single one of them.

“Nam Theun 2 confirmed my longstanding suspicion that the task of building a large dam is just too complex and too damaging to priceless natural resources,” he said. He now thinks his most significant accomplishment was not improving a dam, but stopping one: He led a 1992 study that helped prevent construction of a dam that would have harmed Botswana’s Okavango Delta, one of the world’s last great wetlands.

Part of what moved Mr. Scudder to go public with his revised assessment was the corroboration he found in a stunning Oxford University study published in March in Energy Policy. The study, by Atif Ansar, Bent Flyvbjerg, Alexander Budzier and Daniel Lunn, draws upon cost statistics for 245 large dams built between 1934 and 2007. Without even taking into account social and environmental impacts, which are almost invariably negative and frequently vast, the study finds that “the actual construction costs of large dams are too high to yield a positive return.” Read More

Mar 15 2014

Tom Albanese – Blood on Your Hands


On 6th March Tom Albanese, the former Rio Tinto CEO, was appointed CEO of Vedanta Resources, replacing M S Mehta. The newspapers are billing his appointment as an attempt to ‘polish the rough edges off [Anil] Agarwal’s Vedanta’ and to save the company from its current crisis of share price slumps, regulatory delays and widespread community resistance to their operations. This article looks at Albanese’s checkered history and the blood remaining on his hands as CEO of Rio Tinto – one of the most infamously abusive mining companies.

The Financial Times notes the importance of his ‘fixer’ role, noting that:

The quietly spoken and affable geologist is seen as someone willing to throw himself into engaging with governments and communities in some of the “difficult” countries where miners increasingly operate. That is something that Vedanta is seen as desperately needing – not least in India itself. Mr Albanese may lack experience in the country but one analyst says that can give him the opportunity to present himself as a clean pair of hands who will run mines to global standards…“There’s a big hill to climb there” Mr Albanese said.(1) Read More

Feb 16 2014

The Wheels of Greed Are Spinning in Iceland


Iceland once was set as an example of unspoiled nature, clean energy and extraordinary financial recovery. Unfortunately, lately the strong Atlantic winds of change start to blow in the wrong direction.

By Julia Vol

In the wake of the devastating financial crisis that brought Iceland to its knees, the people took charge, went out on the streets and demanded the right-wing government to quit what later will be named the “pots and pans revolution”. The right-wing government, led by the Independence Party, was deeply involved in corruption and notoriously known for its crony capitalistic approach in reaching for the country’s leadership, which eventually led to the economical collapse.

The new social-democratic alliance led by Johanna Sigurðardóttir came to power in May 2009, and in the aftermath of the financial collapse had a lot of mess to clean and painful decisions to make. However, under Sigurðardóttir’s leadership the economic situation stabilized and recovery came about quicker than expected. In the years to follow, Iceland was often quoted as an example for economic recovery to fellow crisis countries such as Greece and Ireland. In addition to essential financial reforms and regulations, the social-democratic government set the foundation for long-term social and environmental sustainability. Natural preservation laws and committees were put forward to minimize the exploitation of Icelandic natural resources for monetary profit, green economy plans were outlined by the Parliament, and sustainability considerations started to receive growing attention in decision-making processes.

Many Icelanders even claim that the crisis turned out to be somewhat a positive thing, breaking the “gold rush” craze grasping the nation over the years prior to the crisis, and helping people get back to basic values and out of their arrogance and greed.

Still, apparently not enough Icelanders shared this optimistic view, as in April 2013 the right-wing coalition led by the infamous Independent and Progressive Parties were voted back into the government, by a majority of 51% of the votes. Only four years after being disgracefully thrown out of Parliament, the two parties were back on the top again. With less than a year in power, things seem to take a backward turn to the worse quite quickly, especially in regards to issues of natural preservation, social justice and governance on the little island.

A More Utilitarian Use of Nature

The results of the administration switch were soon translated into action. Among the first steps of the new government was to cancel out the Ministry of Environment and merge it with the Ministry of Fishing and Agriculture. No conflict of interests there. The new minister of all the above declared upon entering the office, that his administration would be making more utilitarian usage of the Icelandic nature and refused to sign a bill initiated by the previous government to increase nature protection in Iceland. This promising start embodies the governments’ general line of argument: that whenever environmental considerations are part of the equation they will always count the least.

It’s All About Energy

The previous government had appointed a special professional committee to conduct the “Energy Framework”, a document aimed at providing guidelines on which areas of Iceland could be harnessed for power, and which shall be protected, aiming to regulate and limit the exploitation of natural resources for monetary profit. Shortly after coming to power, the new government called to cancel the Energy Framework guidelines and build a new shiny power plant in areas previously categorized as preserved. The government also dismissed over 400 letters from citizens who raised concerns over the new changes – in a manner that was widely described as arrogant and ignorant. Government officials claimed that experts’ opinions were more important than public opinion, while forgetting to mention that the two experts appointed to deal with the issues were politically appointed with no expertise in energy nor in preservation.

Over the course of the last half a year new plans have been laid out, setting the stage for more energy projects that violate the Energy Framework and the Icelandic conservation law. Experts from all fields are voicing their concerns and dissatisfaction over the very short-sighted environmental assessments made in the preparations for the new plants, warning constantly about the irreversible damage that will be done to Icelandic wilderness and disturbed ecosystems.

Worldly renowned natural areas such as the Mývatn lake, the Þórsjá river and the Icelandic highlands are put in danger of destruction, all for the cause of producing more energy for aluminum smelters. Lately, the Minister of Environment (and agriculture, and fishing), announced that he aimed to change the existing conservation law to allow further development in preserved areas around the Þórsjá river, including damming the river flow. This area (Þjórsárver, S.I. Ed.) has been protected by both the Environment Agency of Iceland and the Ramsar Convention since 1981. As expected, the Icelandic Nature Conservation Association strongly objected the plan, claiming that this will cause irreversible damage to the entire area and the surrounding waterfalls. The minister’s answer to these allegations was that it is okay to sacrifice several waterfalls for the purpose of economic profit which will come out of developing the area.

Infrastructure for Private Interests

The violation of the natural conservation law continued when last October the government presented a brand new program to construct a highway which will pass through an 8,000 year old protected lava field. This expensive plan has been approved by the government right after a long line of a very painful budget cuts in education, welfare, health, culture, research, arts and science (yet not in subsidies to heavy industry). Why such a rush to build a highway in a sparsely populated area in times of financial cuts? The answer followed soon: The family of the Minister of Finances is expected to greatly benefit from the development of this project.

Environmentalist groups appealed against the project to the supreme court, however, the government decided that waiting for the court decision would be a waste of time and gave green light to start the construction. This sparked a protest of concerned citizens, and many of them arrived to express their dissatisfaction with the construction. They were arrested for speaking their mind despite their completely peaceful protest. Among the arrested protesters were some very well-known journalists, professors and public figures, not exactly a group of hooligans. Today, some of these people are facing prosecution

for demanding the government to obey the law. This chain of events vividly demonstrates the government’s insistence on proceeding with its plans at all costs, using every possible tool to silence the opposition.

“Enjoy the Icelandic Wilderness (Before it’s Too Late)!”

The disruption and destruction of the Icelandic nature reserves is not preventing the new government from attracting as many tourists as possible, and maximizing profits from marketing Icelandic wilderness before it’s all gone. Tourism is a very fast-growing industry in post-financial crisis Iceland. The number of tourists has tripled over the past 12 years passing the threshold of 1 million tourists in 2013 (keep in mind that the entire population of Iceland is 380,000 people!). Understandably, this raises concerns over the fragile Icelandic nature, which was never exposed to so many people at once. While the previous government was putting forward regulations and preservation plans, the new government announced that 1 million is not enough and aims to bring over 3 million tourists per year within the next few years. Already today the effects of this fast growing industry are evident all around the island: Massive tourism is damaging fragile ecosystems, and Icelandic cities are turning into tourist attractions with decreased space for the local population. Needless to say that such a steep increase in tourism will put strain on the ecological system, especially since there is still no regulation or infrastructure in place to prevent the long-term effects of massive tourism. No wonder then, that even the New York Times strongly recommended its readers to go to Iceland ASAP, before it’s too late.

To Whale or Not to Whale

The paradox of destroying nature while communicating and marketing the image of Iceland as a pure and unspoiled nature destination is very present in the whaling controversy. Last summer the whaling of Fin whales was renewed, and the new administration has also revoked the decision to limit whaling grounds around the capital in favor of whale watching areas. Note that whale watching is the most profitable tourism attraction in the capital area, however, there is an increasing amount of incidents where tourists pay to witness the magic of wild animals but end up watching a very bloody hunting process.

The paradox is that the demand for whale meat worldwide decreases, and that it would be much more profitable to preserve these magnificent creatures for whale watching only. But this does not fall in line with the internal interests of the Icelandic elite, where the family owning the whaling company is well connected. The whaling ships continue their work, and the saddest part of this paradox is that due to low demand many of the endangered animals end their life as dog food in Japan or as some marketing nonsense such as “whale beer”.

The Wheels of Greed are Spinning

Iceland is an amazing country and is home to some of the most creative, innovative, talented and entrepreneurial people. It has the potential to become a role model for a sustainable community in the middle of the Atlantic Ocean. For a brief moment there it looked that it might even come true. However, it seems that the strong Atlantic winds bring darker times along. Best put into words by the former Prime Minister Jóhanna Sigurðardóttir: “The current government’s priorities could not be more different from the ones honored by the last one. Inequality is once again rearing its ugly head, and the sharp knife of austerity has been turned towards the welfare system—all to benefit society’s wealthiest and best-off. Once more, the wheels of greed are spinning”. Read More

Feb 05 2014

Copper Colonialism – Vedanta KCM and the Copper Loot of Zambia


Saving Iceland associates Samarendra Das and Miriam Rose of Foil Vedanta have recently authored a report exposing Vedanta’s dirty dealings in Zambia. The report has already caused a stir and the Mineworkers Union of Zambia have launched an investigation into the report’s findings.

Daily Nation, a leading independent Zambian daily newspaper, reports: Copper gate scandal deepens

The report by Das and Rose can be downloaded here: Copper Colonialism – Vedanta KCM and the copper loot of Zambia report or you can read the full report (35 page) online below.

21st January 2014. 

In December Foil Vedanta activists made a trip to Zambia to investigate the operations of Vedanta subsidiary Konkola Copper Mines (KCM), Zambia’s biggest copper miner, and to make links with grassroots movements, academics, journalists and those in the political system who may be questioning the unjust terms of copper mining in their country.

We were shocked to discover the environmental and social devastation wrought by Vedanta’s operations, and the lack of information held by policy makers and regulators in Zambia on this multinational as well as on wider issues with copper market manipulations, material flows and the real interests controlling their country. This report is a comprehensive account of the origins of, and interests behind the rapid loot of Zambia’s copper resources which is currently taking place. Read More

Jan 30 2014
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Skouries – A Story of Political Emancipation


How a mining conflict led to the political emancipation of a community in Northern Greece.

By Evi Papada

Occupied London – From the Greek Streets

Mining conflicts are increasingly surfacing globally due to complains over mines and pollution of water, soil and land occupied as well as over transport and waste disposal. The Skouries forest in Halkidiki has been at the center of a hot dispute between the mining company, Hellas Gold, a subsidiary of the Canadian mining giant Eldorado Gold and local communities. The company claims that an ambitious plan for mining of gold and copper in the area- including deforestation and open pit mining with excavation and everyday use of explosives- will benefit the region through the creation of some 5,000 direct and indirect jobs, while local residents argue that the planned investment will cause considerable damage to the environment  and livelihoods, resulting to many more jobs losses in the existing sectors of the local economy (farming, pasture land, fisheries, beekeeping, food processing and tourism).  The residents’ claims are supported by research conducted by various independent scientific institutions including the Aristotle University of Thessaloniki and the Technical Chamber of Macedonia. In addition to legitimacy questions underpinning the transfer of mining rights from the Greek state to the aforementioned company[1],  the Environmental Impact Assessment produced by El Dorado has been found to contain gross methodological discrepancies and whilst the public consultation process could be at best described as cosmetic[2]. Read More

Oct 28 2013

Come and Meet the Members of the Brand


By Haukur Már Helgason

After being hailed as the world’s radical wunderkind for a few years, Iceland left observers perplexed when the parties evidently responsible for its failed neoliberal experiment were voted back in 2013. Who or what runs this shop, really?

You “want to move outside the herd and be independent” because you are “different from the ‘ordinary’ tourist.” You “have above average education” and you “have above average income,” says the Icelandic Tourist Industry Association’s report from last year, defining their target group, ‘the enlightened tourist.’ And boy, are you targeted. Read More

Oct 21 2013
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Passion for Lava – The Struggle to Save Gálgahraun Lavafield


By Dr. Rannveig Magnusdottir

People have different passions. Some people are enthusiastic about coffee, others adore shiny things, yet others are passionate about nature and wildlife. Passion for nature makes people chain themselves to trees, parade naked to protest the fur trade, sail in rough seas to stop whale killing, climb oil rigs to protest drilling etc.

Now in Iceland, a group of environmentalists (lead by the NGO “Friends of the lava” are passionate about protecting a lava field, close to Reykjavík called Gálgahraun (Gallow-lava), from being dug up and buried under major roadworks. Some people might think this very odd. Why protect a small piece of lava since Iceland has so much of it? There is lava pretty much everywhere! There are a number of reasons why this particular lava field is unique and should be kept unspoiled. This lava was formed in the eruption of Búrfell, 8000 years ago and is protected by law.

This beautiful lava field is mostly intact, and contains amazing geological features and old historical paths used by our ancestors. It also has a strong resonance for cultural reasons, as our best known painter, Jóhannes Kjarval, used scenes from the Gálgahraun lava field as inspiration for some of his famous paintings. Furthermore, it is one of the last unspoiled lava fields within the greater Reykjavík area. What upsets people about the situation is that the planned (and possibly illegal) road construction is completely unnecessary. It will only serve a low number of people (Álftanes has a population of 2.484) and the road construction will cost a fortune (approx 6 million Euros). The argument put forward for the new road layout is that the old road has caused accidents because of icing but out of 44 roads within the greater Reykjavík area, 21 roads were considered more dangerous than the Álftanes road, and of 1427 roads in the whole country, 301 roads have more accidents than Álftanes road. The road could be improved and made much safer for a fraction of what the new road would cost. I don’t know exactly what drives the municipality of Garðabær and The Icelandic Road and Coastal Administration to pursue this insane road construction but something about the whole thing stinks very badly.

Four nature NGO’s have sued the municipality to halt the road construction, but have not been able to change the planned work and the lawsuit is still being processed in court.

In the last weeks hundreds of people have been protecting the lava field and they set up a rota to make sure there was always someone in the lava field protecting it from the bulldozers. These brave people are making a human shield to protect something they love. Today, the police started dragging them away and are carrying them handcuffed like they were the criminals. On days like these it doesn’t feel like Iceland is a country of law and order anymore.

If you want to help in any way, you can either show up in Gálgahraun and protest or transfer a donation to their bank account number: 140 05 71017, kennitala. 480207 – 1490. All help is greatly appreciated.

Addition at 13:30 on 21st of October: I just came from Gálgahraun and the bulldozers are already ruining this amazing lava field. Dozens of people have been arrested, there is police everywhere and we all (even the police) stood there horrified watching the screaming bulldozer tear down delicate lava features. The people responsible will stop at nothing, their greed has no limits.

Update in February 2014: Gálgahraun lavafield has been destroyed and the court cases against its defenders have commenced. All are charged for “disobeying police orders”. (S.I .Ed.)

 

Apr 25 2013
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The Biological Death of River Lagarfljót — Yet Another Revelation of the Kárahnjúkar Disaster


In his much celebrated play, Accidental Death of an Anarchist, Italian absurdist Dario Fo brings forth a tragicomic picture of the scandal and its most typical aftermaths in democratic societies, thus described by the main protagonist, the Maniac:

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!

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