Sunday, Aug. 08, 2004
In the remote and barren highlands of eastern Iceland, the herds of reindeer and flocks of pink-footed geese suddenly have some company. Hundreds of workmen have moved into the unspoiled valleys northeast of the Vatnajökull icecap, where glacial rivers flow through magnificent canyons in a starkly beautiful volcanic landscape. The men are working on the Kárahnjúkar Hydroelectric Project: a vast network of dams, reservoirs, tunnels, power stations and high-tension lines to support a new aluminum-smelting plant for the U.S. multinational Alcoa on a fjord some 70 km to the east. At a total projected cost of $2.2 billion for the smelter and its hydropower system, it's the biggest construction project in Iceland's history — and it's taking shape in one of Europe's last remaining large wilderness areas. Little wonder that it has sparked a furious debate over whether economic growth can co-exist with environmental care in this place that few people ever visit.
"The highlands have a great value in themselves, especially because Europe is so densely populated," says Arni Finnsson, chairman of the Iceland Nature Conservation Association, a leading opponent of the Kárahnjúkar project. "This area is far too beautiful to destroy." Environmentalists like Finnsson, supported by the WWF Arctic Program, the International Rivers Network and others, argue that construction will ruin this beauty by redirecting rivers, wiping out waterfalls and wildlife habitats and encouraging soil erosion.
But Sigurdur Arnalds, spokesman for Landsvirkjun, the national power company, which is developing the Kárahnjúkar project, downplays the environmental impact, saying the scheme — which is supported by the national government, local authorities and a significant majority of the general public — will create about a thousand jobs in the sparsely populated east. The project finally got the go-ahead from Iceland's Supreme Court in January, after four years of legal wrangling over the environmental impact assessment submitted by Landsvirkjun.
Alcoa's Fjardaál smelting plant, for which ground was recently broken in Reydarfjördur, a port on the country's largest east-coast fjord, will be Landsvirkjun's principal electricity customer. Excess capacity generated by the Kárahnjúkar power plant will be passed on to the national grid. The whole enterprise, says Arnalds, is "not only to create jobs locally, but to create national wealth." Iceland has an abundance of hydroelectric power, so the government is encouraging energy-hungry industries to settle here.
But the country is also rich in natural wonders, and opponents of the massive development scheme think Kárahnjúkar will squander some of that wealth for insufficient economic benefit. "We have serious doubts about the old-fashioned industrialist thought" behind the project, says Steingrímur J. Sigfússon, a Left-Green Movement member of the Althingi, the Icelandic parliament, and one of a handful of legislators who opposed the Kárahnjúkar project. "We have to do something to reverse the trend of people moving away to seek work, but is this a good solution — one big factory with monotonous jobs?"
Arnalds thinks it is. Unemployment in Iceland — home to some 290,000 people, 60% of whom live in and around the capital, Reykjavík — is only around 3%. But in places like Reydarfjördur and Egilsstadir, the east's main town, many people have moved away in search of jobs as the traditional industries, fishing and farming, have declined. Will young people who have fled the east be drawn back to work in the smelting plant and other businesses that Alcoa's presence may generate when many of them can work, for example, in the tech and pharmaceutical sectors in Reykjavík? "The labor market [in Iceland] is very flexible," Arnalds says. "If the smelter does not attract people back from Reykjavík, it will attract people from the villages of eastern Iceland."
For building its plant, Alcoa gets access to Iceland's cheap and clean hydropower and a new harbor facility to be built nearby. The company says that when production begins in 2007, the plant will be one of the most efficient, safe and environmentally friendly in the world. Aluminum is smelted from an oxide called alumina, which is refined from bauxite ore — and Fjardaál will be capable of churning out 322,000 metric tons of aluminum each year. Alcoa says it will recycle materials and use the most eco-friendly production technology to control fumes and minimize waste discharge into the sea and groundwater. It is determined to "play a sustainable role in the community," says Hrönn Pétursdóttir, the company's community relations manager at Fjardaál. "We're going to be here for a long time."
To generate power for Alcoa's smelter, Landsvirkjun is building the Kárahnjúkar dam; at 190 m high and 730 m wide, it will be the tallest rock-and-gravel dam in Europe. Due for completion in 2009, Kárahnjúkar, together with two smaller dams, will create the Hálslón reservoir, submerging 57 sq km of glacial river valley in the process. The related Kárahnjúkar power plant will produce 4,560 gigawatt hours (GWh) of energy per year by harnessing the Jökulsá á Dal river as well as the Jökulsa í Fljótsdal waterway, some 25 km to the east.
As a sign of its environmental concern, Iceland's government plans to create a massive Vatnajökull National Park adjoining the Kárahnjúkar project in the glacial highlands, a move Alcoa and environmentalists support. The park could be as large as 5,275 sq km, 50% bigger than Europe's current No. 1, Norway's Hardangervidda.
Sigfússon, who's also a geologist, is convinced the dam project is environmentally unsound. Pointing to the planned relocation of a glacial waterfall and the damming of sediment-carrying glacial rivers, he warns that "a huge plateau of silt" will eventually form around the large dam that, together with dust from normal soil erosion, could be blown into storms by the heavy winds that sweep Iceland. These dust storms, in turn, could damage the vegetation that the reindeer depend on for survival. "We are concerned about early summer winds, erosion and dust storms" taking their toll on the land, Sigfússon says.
Arnalds responds that much of the region is already dusty and barren, but that soil erosion is being taken seriously in Iceland and research is under way to devise techniques to slow or reverse the process. He concedes that roughly 600 pink-footed goose nests will be lost, but says that the number represents just 1.5% of such nests in Iceland; the birds are not a threatened species. Arnalds also acknowledges that part of the herd of calving and spring-grazing reindeer may be affected — but the animals could well adapt to the change.
Apart from environmental damage, Sigfússon believes Iceland's image is suffering as a result of the Alcoa smelter and the Kárahnjúkar power projects. "We are putting ourselves in a developing-country situation," he says. "All the aluminum will be exported elsewhere. We're not going to build cars or airplanes with it, so all the added value will happen elsewhere."
The contracts have been signed and, as Finnsson says, "there is not much that can stop this short of earthquakes." But at a time when countries around the world are weighing the balance between environmental and economic interests, what happens in the eastern highlands could have repercussions far beyond Iceland's borders.