Icelandic Energy
Jeremy Wegner
Energy and Society
Spring 2008
Iceland’s Hot Economy
As most of us are painfully aware, we are poised on the brink of an economic precipice. This year demand for oil reached 80 million barrels per day, almost matching the world’s production capacity. Wars in oil-producing regions only complicate matters, and competition from industrializing countries like China and India is increasing at an alarming rate.
The world must make hard decisions in a short period of time. We must wean ourselves from the poisonous teat of foreign oil and start thinking about our long-term prosperity. No longer is environmentalism a luxury reserved for idealists and utopian dreamers; it is in fact a necessity, and fundamentally essential to modern economics.
Petroleum is much too valuable as a feedstock resource to be burning it! What would we do without all the products petroleum allows us to manufacture? Medical technology would be a joke, clothing would be quite different, houses would be less efficient, and forget about buying Rubbermaid or Tupperware! We are simply burning the most valuable, cheapest plastics feedstock that we possess.
Our future depends on finding alternative, renewable energy. However, such a transition would be risky and expensive for the corporations that, for the most part, run the western world. Fortunately, there are a few countries blessed with resources enough to make such experiments not only economically viable, but preferable. One such country is Iceland.
While the rest of the world struggles to adapt economically to increasing energy scarcity, Iceland seems to be thriving. Various causes may be associated with this effect, but perhaps the most startling is that some sources estimate that up to 99% of Iceland’s residential energy infrastructure is geothermally or hydroelectrically derived.
What this means is that, in a time when fossil fuels are failing us as an economically viable energy source, Iceland has a head start on a new paradigm. While the rest of us tighten our belts and design our homes to pinch every Joule, the people of Iceland luxuriate in heated outdoor baths.
In fact, this turn of events has made Iceland an attractive prospect for foreign investment. For example, Alcoa, a major worldwide producer of aluminum goods, was enticed to build a factory near the town of Reydarfjordur when Landsvirkjun, the national utility, offered to build a 690 Megawatt hydroelectric power plant 30 miles away.
As manufacturing requires incredibly large volumes of power, more and more companies seem to be interested in relocating production lines to Iceland. Fossil-fuel power is almost prohibitively expensive now, but Iceland possesses almost limitless supplies of renewable energy.
However, this report does not seek to incite envy, but rather to acknowledge Iceland as an example. Admittedly, Iceland has been blessed with a landscape rich in renewable resources, but the lesson remains: work with what you’re working with.
Photo from skywatch-media.com. Creator unknown.
