Musings, politics and environmental issues

Archive for May, 2016

Iceland’s political situation is a farce

The situation in Iceland has in many ways been farcical since the Mossack Fonseca scandal broke. First, the then-PM, Sigmundur David Gunnlaugsson, caused utter confusion when he tried to dissolve the government but wasn’t allowed to, but later that day resigned anyway – though maybe not completely. New elections were called for but not heeded: instead, another Minister was appointed PM, Sigurdur Ingi Johannsson (SIJ), and SDG became a rank-and-file MP who took a long break from work soon afterwards. He returned a week ago, and caused confusion once again (see below).

Take two: There is a presidential election coming up in a month’s time. Iceland’s current president, Olafur Ragnar Grimsson (ORG), has been in office for 20 years and said in his presidential address at the start of the year that he wouldn’t run for president again. So around 20 people decided that they would run for presidency.

Fine, except that ORG decided soon after SDG took a holiday from politics that given the situation, Iceland needed a president who was experienced and capable – and none of the candidates were, in his mind. So he changed his mind and decided to run again. Subsequently about 5 of the presidential hopefuls decided to quit because they didn’t want to run against a sitting president. Then a few others were pressured (or so the story goes) to run for presidency and ORG decided that the new candidates DID have the required experience – and he changed his mind again and withdrew his candidacy.

One of the more recent candidates is a historian called Gudni Th. Johannesson, who ironically was almost constantly on the TV screens as a political commentator after the Mossack Fonseca scandal broke. He is also putting the final touches to a book on, yes, Icelandic presidents.

The other interesting new candidate is David Oddsson, who was a former PM of Iceland but was one of the CEOs of the Central Bank of Iceland at the time that the banks crashed (note that he’s trained as a lawyer, not an economist). He subsequently left the bank to become an editor of the newspaper Morgunbladid  – which led to a huge drop in readership of that paper as he was said to promote the interests of the big fishing companies, not to mention the right-wing Independent Party. The Special Investigation Committee decided that he was guilty of neglect in the time leading up to the bank crash.

Back to SDG – after SIJ took over and as a consequence of pressure from the public and opposition MPs, the ruling coalition acceded to an early election “in autumn, as long as we can get through our main policies without problems from the opposition”.  No date, though. But as soon as SDG arrived back, he started to question the early election, saying “we never promised that”. Since then, other Progressive Party MPs have also questioned the need for an early election (both SFG and SIJ are PP members). So what will happen now is anyone’s guess.


To round it all off: The Icelandic Althingi recently passed legislation that allows prisoners to leave prison earlier than before. Five of the 13 prisoners released early are the Kaupthing bankers, who are now at the halfway house Vernd. They have to be back at Vernd by 11 p.m. on weekdays and 9 p.m. on weekends. Which is fine – except one of them, Olafur Olafsson, got in the news last weekend as he had taken a helicopter with 3 customers and an Icelandic pilot on a sightseeing trip and crashed in the Hengill mountains, about 35 km from Reykjavik. He’s obviously getting himself accustomed to “everyday life” again!  IMG_1653












Aluminium smelters, energy and the Eden project

Last week, Iceland’s national power company, Landsvirkjun, announced that they had successfully negotiated a new electricity price for 161 MW of electricity for the expansion at the Nordural (Century Aluminium) smelter at Grundartangi. The price will be valid from 2019 for four years and, for the first time ever, will be linked to the market price for electricity in the Nord Pool electricity market instead of being linked to the world price of aluminium, which is extremely low at the moment. This is a breakthrough, as up till now the aluminium companies have negotiated very low prices for contracts lasting much longer than four years – Landsvirkjun sells 37.5% of its energy to the Alcoa Fjardaal smelter in East Iceland, which came on line 10 years ago, and that contract doesn’t run out until 2048.

The Rio Tinto Alcan plant at Straumsvik, which reported a loss for the last financial year, also has a contract for cheap energy for a long time.

Meanwhile, out at Helguvik on the southwest tip of Iceland, what is supposed to be Nordural’s second aluminium plant remains half-built.


The Rio Tinto Alcan plant at Straumsvik

How about a competition: What can be done with a half-built aluminium smelter? I think that something along the lines of the Eden Project in Cornwall would be brilliant. It’s logo sums up the situation: Transformation: it’s in our nature.