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Kárahnjúkar: Iceland's Most Divisive Buzzword

Among Iceland's natural resources, renewable energy -- generated from geothermal heat and flowing water -- is second only to fish. Aluminum smelting, which requires abundant energy and ready access to ports, seems the perfect fit.

Enter Kárahnjúkar -- a $3-billion hydroelectric network of dams, reservoirs, water tunnels, generators, and 52km (32 miles) of monstrous power lines in the eastern interior highlands -- all built to power a new aluminum plant at Reyðarfjörður in the Eastfjords. This mile-long behemoth is run by the American company Alcoa, the world's largest producer of aluminum products. Processed alumina powder is shipped in from as far away as Australia, and aluminum is produced in enormous vats cooked to 900°C (1,652°F).

Kárahnjúkar mobilized a worldwide protest campaign. In 2002 about one in six Icelanders petitioned against the project, but the parliament approved it by a large majority. Many foreign activists staged protest actions near the construction sites -- a tactic which probably backfired. In 2006, stoppers were stuck in the drains, and huge swaths of tundra disappeared underwater.

Support for Kárahnjúkar runs high in the east, where sagging local economies have already been revitalized. Local fishermen were often idle after being outbid for fishing quotas. Iceland relies on dwindling fish stocks for most of its export income, and needs to diversify its economy. Kárahnjúkar's backers also stress that hydroelectric power is a "green" energy source: If aluminum plants were built elsewhere and powered by fossil fuels, they would produce 10 times the carbon emissions. Alcoa even has a relatively good environmental track record.

Kárahnjúkar's opponents, however, see no reason to sacrifice Iceland's pristine wilderness just to feed the world's energy gluttony and lower the cost of beer cans. On a per capita basis, Iceland is already one of the world's 10 richest countries. The overall unemployment rate is low, and most of Kárahnjúkar's new jobs have been filled by foreign workers. Kárahnjúkar has soaked up capital that could have been invested in more forward-looking sectors, such as universities, scientific research institutions, or software companies.

The dams have drastically altered the most intact and extensive glacier-to-sea ecosystem in Iceland. Some feeding grounds of reindeer and nesting grounds of pink-footed geese and other birds have already disappeared. Sand and clay have washed down from construction sites and devastated local fishing grounds. In the longer term, soil erosion could send storms of dust and sand onto farmland. The dams could prove vulnerable to volcanoes and earthquakes. Vatnajökull glacier, the source of the dammed rivers, is melting rapidly and reservoirs could eventually dry up.

Support for Kárahnjúkar among Icelanders has slipped, but remains high at around 64%. Support for similar, planned projects is waning, however, and in April, 2007, residents of Hafnarfjörður voted to reject a $1.2-billion smelter expansion by the Alcan corporation. When the next Kárahnjúkar comes along, the government will be more cautious.

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