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Iceland financial woes, continued.
July 14, 2010 3:11 PM   Subscribe

Magma Energy Corp. sets to acquire HS Orka (shareholders) for about 40 canadian millions. HS Okra owns the rights to most of Iceland's natural ressources for the next 65 years. Renewable. Some MP's consider suing the Icelandic government. Björk asks some questions(PDF).
posted by CitoyenK (57 comments total) 6 users marked this as a favorite

 
$40,000,000 CDN
posted by blue_beetle at 3:15 PM on July 14, 2010


Do her questions include "yes what is your name?" and "what do you want with me?" Or are they more along the lines of "will my eyes be closed or open?"
posted by turgid dahlia at 3:21 PM on July 14, 2010


Wait, what? Is this theft on anything like the scale it seems to be?
posted by From Bklyn at 3:22 PM on July 14, 2010


I wonder if blue_beetle wants to correct me (just tought writing it this way would make the ridiculousness of the amount stand out), or if he is, like me, astounded by the fact that it's about the yearly salary of two good baseball hitters combined...
posted by CitoyenK at 3:22 PM on July 14, 2010 [3 favorites]


Unbelievable theft and should have never been for sale in the first place.
posted by letitrain at 3:24 PM on July 14, 2010 [2 favorites]


turgid: the closest one is '' What will our grandchildren think of the deals weʼre making now? ''

the most legitimate: '' Are
we thus going to use our nature in this way to pay off the Icesave-debts of
those few Icelandic venture capitalists?''
posted by CitoyenK at 3:25 PM on July 14, 2010


I spam my own thread, but I forgot to add Bjork24's comment from years ago in the [previously] and a new linky because the timeonline's one is dead.
posted by CitoyenK at 3:30 PM on July 14, 2010 [1 favorite]


I had some trouble understanding what's going on here, so I did a little Googling and found a post on this Icelandic blog that seems to explain things:

"...Brief recap for anyone who doesn’t know about this case. Last year, a decision was made to sell [privatize] a share in utilities company HS Orka, which provides heating for the entire Suðurnes region of Iceland [the peninsula on which Keflavík international airport is located] to a Canadian company called Magma Energy. All dealings around the HS Orka privatization stank of corruption and the decision spurred massive protests. One of the most obvious deviations in the matter concerned the fact that Magma Energy had set up a “subsidiary” in Sweden in order to be able to purchase the share. This was done to get around Icelandic law, which stipulates that only Icelandic firms or firms from the EEA area can own shares in Icelandic energy companies. The law, obviously, is designed to protect Iceland’s resources, which should be used to benefit the people who own them, not some overseas corporation that will exploit the profits for its own gain..."

And now the "share" that Magma aspires to own has become all of the shares. It sounds like a stealth privatization, with the Icelandic government trying to achieve an unpopular action by doing in degrees so no one will notice. Except it seems people did notice.
posted by Kevin Street at 3:36 PM on July 14, 2010 [10 favorites]


The only thing less trustworthy than Icelandic banks are Canadian energy companies.
posted by KokuRyu at 3:38 PM on July 14, 2010 [4 favorites]


Bjork? The author of that pdf is James Merry. Always look at the document info, people.
posted by oonh at 3:42 PM on July 14, 2010


Fine, sell HS Orka, but also grow a pair and pass a law that all HS Orka stock holder decisions must also pass a referendum in Iceland. Public-private partnership full seam ahead. :)
posted by jeffburdges at 3:45 PM on July 14, 2010 [1 favorite]


Or just change the existing law so that only Icelandic citizens may hold shares in Icelandic energy companies for the next 50 years.
posted by jeffburdges at 3:47 PM on July 14, 2010 [1 favorite]


FTFY : The only thing less trustworthy than Icelandic banks are Canadian energy companies.
posted by jeffburdges at 3:48 PM on July 14, 2010


My bad if so, oonh, my source is pretty fuzzy and my icelandic hoorrible.

On Tuesday 13th July a Formal Proposal was submitted to the Public Representative of the Icelandic Parliament, signed by Björk Guðmundsdóttir, Jon Thorisson (the Icelandic assistant to Eva Joly) and the writer Oddny Eir.
posted by CitoyenK at 3:49 PM on July 14, 2010


The time has come to pay the piper, Iceland.

I love the way Björk tries to suggest only "a few venture capitalists" benefited from the Iceland bubble. Everybody is innocent, except for a few fat cats. Nobody speculated. Nobody got greedy. Nobody bought mortgages they couldn't pay, and if they did, they didn't know what they were doing! Nobody bought luxury cars and condos and went clubbing on weekends in London in private jets.
posted by falameufilho at 3:49 PM on July 14, 2010


Or just change the existing law so that only Icelandic citizens may hold shares in Icelandic energy companies for the next 50 years.

And get sued for trillion$ by the IMF/World bank/younameit?
posted by CitoyenK at 3:51 PM on July 14, 2010


I'd like to see the members of the Parliament of Iceland submit a list of questions to Björk about her career.

The dead swan dress. What was going through your mind when you decided to wear that in an event televised to 2 billion people worldwide?

What will your grandchildren think of Medúlla?

posted by falameufilho at 3:56 PM on July 14, 2010 [1 favorite]


Or just change the existing law so that only Icelandic citizens may hold shares in Icelandic energy companies for the next 50 years.

Iceland: the Venezuela of the North.
posted by falameufilho at 3:57 PM on July 14, 2010


Bjork? The author of that pdf is James Merry. Always look at the document info, people.

That's the information entered into either the PDF-making program or the original Microsoft Word program where the list of questions were written, and CitoyenK already cited the authors of the questions, and that linked site has a 9 page formal suggestion in Icelandic, with a lot more background (if you want to take time and auto-translate it, or find a friend who speaks Icelandic).

For the US audiences, SNL does a disservice to Björk. They're hilarious, as I imagine her serious Icelandic nationalist side would be less of a wacky counterpoint to Charles Barkley and Sean Connery and more of an "oh shit, she knows her stuff, there's nothing to laugh about in this situation."
posted by filthy light thief at 4:00 PM on July 14, 2010 [1 favorite]


Those fat cats had great days indeed, abusing Iceland's government guaranteed deposit banking law, devised for a population of 300 000 souls, to open a sham ponzi bank on the internet. A lot of europeans (mainly british citizen) were attracted by those suspiciously high interest rates, they were indeed robbed and then the Uk bailouted Iceland...
And please, save those mortgages they couldn't pay talking points, they are for the US housing crisis.
posted by CitoyenK at 4:04 PM on July 14, 2010 [1 favorite]


That's the information entered into either the PDF-making program or the original Microsoft Word program where the list of questions were written

Ok, lemme get this straight: whomever employs a secretary/assistant never wrote anything?
Note to self: Have the wife type my sedicious comments, she'll be happy to get involved THEN arrested. Win-Win!
posted by CitoyenK at 4:09 PM on July 14, 2010


/ALL AMOUNTS IN CANADIAN DOLLARS. NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES//
posted by Blazecock Pileon at 4:09 PM on July 14, 2010 [1 favorite]


Not sure about the PDF, but she did write a letter to The Reykjavik Grapevine.

They had more about the deal in that issue. That kind of deception raises serious red flags.
posted by Nothing at 4:10 PM on July 14, 2010 [1 favorite]


The dead swan dress. What was going through your mind when you decided to wear that in an event televised to 2 billion people worldwide?

What will your grandchildren think of Medúlla?


Answers from a fan:

1. That she's showing less skin and not all that crazy in context.

2. That their grandmother is fucking awesome.

Being an unconventional artist and a political figure don't necessarily mesh, but they're not opposites. See: Ilona Staller, a Hungarian-born Italian porn-star, sometimes politician, and singer. She continued to make hard core pornographic films while in office. Oh, or California's very own Governator, that "Cowboy from Brooklyn," Ronald Regan. And the second hit for politician artist in Wikipedia: Yūtokutaishi Akiyama, a Japanese engraver artist, photographer, and occasional politician. (This is fun, and educational!)
posted by filthy light thief at 4:12 PM on July 14, 2010 [1 favorite]


A quote:

"On September 16, 2009, we asked Ross Beaty if Magma had its eye on a majority stake in HS Orka, to which he replied “no, we do not plan on getting a majority. I have no interest in fighting Icelanders, particularly the government, over what is proper energy policy in the country."

And my favorite quote, just because it is such a ridiculous lie:

"On May 19, 2010, the Grapevine called up Ross Beaty to ask him a couple of questions about the recent goings on and he rushed off the phone saying “I’m just going through a tunnel and I’m just about to jump onto an airplane.” Are there tunnels on route to Keflavík now?"
posted by Nothing at 4:13 PM on July 14, 2010 [1 favorite]


The dead swan dress. What was going through your mind when you decided to wear that in an event televised to 2 billion people worldwide?

"Can you believe that people are taking this thing seriously?" is my guess.

I hate it when people call Bjork crazy, or just don't get how self-aware she is.
posted by jokeefe at 4:14 PM on July 14, 2010 [2 favorites]


Oh no! Somebody's nonviolently stealing energy resources from white people!
posted by mobunited at 4:38 PM on July 14, 2010 [5 favorites]


I love the way Björk tries to suggest only "a few venture capitalists" benefited from the Iceland bubble.

Yeah, apparently all those Land Rover Discos just grew out of the earth. Wonders of volcanism!
posted by atrazine at 4:41 PM on July 14, 2010


"40 Canadian millions" has got to be the least clear and most bizarre way I've ever seen a number present on metafilter. Or, possibly, anywhere.
posted by Hildegarde at 4:50 PM on July 14, 2010 [2 favorites]


HS Okra owns the rights to most of Iceland's natural ressources for the next 65 years


Much as I sympathize with the Icelanders who object, this seems like a pretty wild claim. The links in the post aren't particularly clear on this. And again, while Kevin's link helps provide some much needed context, I'm still not sure what's happening here. Kattullus? Marisa? Bueller?
posted by Dumsnill at 4:54 PM on July 14, 2010


*who object to the sale of HS Okra
posted by Dumsnill at 4:55 PM on July 14, 2010


Hildegarde: Thank you very much!
I'm French-Canadian and preempt all these 'weird syntax' comments in my profile!
First FPP btw.

Dumsnill: It's not clear because im pretty cluless about much in my post and didn't found much coverage about it, yet. That's why I posted, hoping Mefites would have much to add to the story.
posted by CitoyenK at 5:06 PM on July 14, 2010


"40 Canadian millions" has got to be the least clear and most bizarre way I've ever seen a number present on metafilter. Or, possibly, anywhere.

Well, given the whole thing with the British not knowing how many a billion is, making it clear that you're talking about a "Canadian million" should clarify exactly how many zeroes we're talking about.

Trust me, I'm a Brazilian. I know all about having my nationality being used as a large quantity.
posted by qvantamon at 5:15 PM on July 14, 2010 [3 favorites]


This deal is never going through. There aren't even 40 million Canadians.
posted by electroboy at 5:41 PM on July 14, 2010 [1 favorite]


Someone care to explain why the press release isn't supposed to be sent to US wire services?
posted by Civil_Disobedient at 5:52 PM on July 14, 2010


This deal is never going through. There aren't even 40 million Canadians.

How many Canadians is it in Metric?
posted by Blazecock Pileon at 6:06 PM on July 14, 2010


After the great financial quake comes the tsunami.

The tsunami of predatory capital which has been waiting right offshore for this opportunity, that is.

Quantitative Easing (essentially, printing a bunch of extra money), which was billed as a method to prevent the financial collapse from deepening into a full-scale depression, has caused much, if not all of the wealth which evaporated from 401Ks, home equities, college endowments, museum and other non-profit endowments, pension funds, stock holdings, private equity accounts, trust funds, etc., and etc. not to simply vanish into thin air as it would have done ordinarily, but, instead, to recondense into the hands of Mysterious Strangers.

In others words, Quantitative Easing transmogrified the vast loss of wealth typical of a collapse into a vast looting of that wealth without the disagreeable necessity of getting your hands dirty that looting has previously entailed.

And now, the Mysterious Strangers who ended up with all our wealth are stepping out of the shadows to buy everything we've got left with the money they stole from us, and at fire-sale prices, under an expectation of being able to rent it all back to us for much more than we now spend on it.

Enjoy your futures, my friends.

Such as they are.
posted by jamjam at 6:09 PM on July 14, 2010 [2 favorites]


Someone care to explain why the press release isn't supposed to be sent to US wire services?

@Civil Disobedient: a disclaimer like this is generally used to avoid the appearance that the company may be trying to sell shares in the US. See this link.
posted by phyrewerx at 6:25 PM on July 14, 2010


There is some confusion here.

Magma is buying 52.3% of HS Orka for about C$120m. They previously held 46.2%, now they hold 98.5%. The latest transaction values the company at about C$235m.

The OP's confusion is probably from a release today from Magma that they were raising C$40m in a bought deal to help finance the acquisition.

The reason these releases are not for distribution to US wires is for compliance and regulatory reasons - most Canadian equity issuances have specific rules about US investor solicitation. Nothing suspicious or interesting there.

Nothing really interested about the transaction in general. The company was for sale, a Canadian geothermal company bought it. Anyone else could have, apparently noone else thought it was worth $230m. Geothermal energy is a beast to commercialize and monetize (Magma is a story of false starts itself). I know nothing about this Icelandic company, but the whole thing is probably being blown out of proportion. Just like how Canadians flip out every time a US company buys some two-bit nickel mine in Northern Ontario.
posted by loquax at 6:34 PM on July 14, 2010 [6 favorites]


Also, Orka generates 300 MW of electricity (being generous) from two plants, a decent percentage of Iceland's geothermal electricity production, but a very small %age of total production. Certainly nothing close to "most" of Iceland's renewable power resources (especially considering the majority comes from hydro power, not geothermal). Most of Orka's electricity is used in aluminum smelting, which has fallen on hard times lately, resulting in a cash crunch for the company, and poor prospects at raising the considerable amount of money required to expand the business. Hence the logic (for Icelanders as well as shareholders) behind selling to someone with deeper pockets who can develop the business.

The big bad Canadians will find it very difficult to move geothermal energy off the island, and they will likely have an equal interest in profit as the current Icelandic owners, so I highly doubt things will change much for anyone buying their power from Orka. The selling shareholders will surely spend their $230m in cold hard Canadian cash on something other than magic beans.
posted by loquax at 6:56 PM on July 14, 2010 [4 favorites]


More facts - at a glance, the transaction is being done at a fair valuation for geothermal assets - about 10x EBITDA, 20x adjusted earnings. Similar to valuations of projects in Nevada, elsewhere in North America (and very expensive relative to other industries due to the realatively high rate of failure in drilling and large capital requirements, not to mention permitting and power transmission)

Orka was out of cash and growing its debt levels to finance project expansions. Magma has already committed ~$100m for a 50 MW expansion, which implies about another $200-300m for further capacity expansions through 2016. Money that according to Orka's management would have been difficult if not impossible to come by at anything close to reasonable terms.
posted by loquax at 7:07 PM on July 14, 2010 [5 favorites]


I wonder if being the country with the top voted banks helped put Magma in the position to do this coup?

If it makes you feel better I'll write to my member of parliament that as matter of national pride I think it would be worth politely encouraging this company to be as gentle as they can with the poor little country.
posted by Phalene at 7:43 PM on July 14, 2010


How many Canadians is it in Metric?

About 20 hogsheads.
posted by electroboy at 8:16 PM on July 14, 2010


We have to make fun of that crazy lady Bjork of course. Because if we do that, we can discount her political statements and anyone in Iceland who agrees with them. Laugh at that crazy Bjork! Laugh at those crazy Icelanders! Silly crazy people, what are they thinking of, trying to keep their mineral and energy rights!

Say, while we're at it, are there any silly American Indians or other native peoples we can laugh at as well? You never know when we might want their stuff.
posted by happyroach at 8:47 PM on July 14, 2010 [5 favorites]


You never know when we might want their stuff.

I've always known I wanted Björk's stuff.
posted by Blazecock Pileon at 10:37 PM on July 14, 2010 [2 favorites]


First of all, as to whether Icelanders as a whole are to blame for the various fuckups, yes and no. Yes, in that Icelandic voters kept the right-wing Independence Party in power for 17 years and it's crony-libertarian ideology. No, because that would be like blaming all Americans for the invasion of Iraq or blaming all Canadians for Stephen Harper being a dick. Furthermore, the Icelandic media did a spectacularly poor job of keeping Icelanders informed of the various bad things that were happening in the Icelandic financial sector pre-crash, so there's that too.

Björk, incidentally, has been a campaigner for environmental causes in Iceland for a very long time, and also operates a company that provides start-up capital to small businesses in Iceland. She is a very smart businesswoman. Ignore what she says at your peril.

Alright, here's a brief summary what it's all about (with the caveat that this is such a convoluted business that I barely understand what's going on, so I'm bound to get a few things wrong).

HS Orka was a public utility company, supplying energy, heating and water to residents of the southwestern peninsula of Iceland (an area loaded with geothermal hotspots, even by Icelandic standards) The HS Orka drama has been going on for years now, at least since 2007. The Geniuses of Capitalism that were in control of the Icelandic business sector in the pre-crash era decided that they should own Icelandic utility companies. The Independence Party, which was the largest party in government, decided to sell the state's shares in HS Orka to a company called Geysir Green Energy, which was owned by cronies of the Independence Party. The mayors of Reykjavík and Reykjanesbær, Hanna Birna Kristjánsdóttir and Árni Sigfússon,* also of the Independence Party, later sold their municipalities' shares. To avoid getting lost in the details, let me just say that eventually Geysir Green Energy and Magma Energy ended up owning 55% and 43% of HS Orka respectively. There were protests about Geysir Green Energy gaining control of a public utility, incidentally, so this isn't merely a matter of Icelanders not liking the idea of foreigners owning the rights to natural resources in Iceland, but that the private ownership of public utilities is widely disliked.

That said, when it became clear that Magma Energy, a foreign company, was going to buy Geysir Green Energy's shares and thereby own HS Orka outright, the shit hit the fan. Let me explain why that is. Iceland was a colony of Denmark (and before that Norway) for centuries. The exploitation of Icelandic resources by foreigners is a very acute historical reality. Now, I personally don't care if I'm being exploited by Icelandic or non-Icelandic businessfolk, but foreign exploitation is a very touchy issue in Iceland, much like any other post-colonial country. Of course, CEO of Magma Energy Ross Beaty didn't exactly make friends when he said, when asked whether he was taking advantage of Iceland's economic troubles: "Icelanders don't know what we're all about and they don't understand the world that we live in." Nothing wins you friends like patronizing contempt. Add some blatant lying, shady business practices and fairly naked profiteering and it's no wonder that Magma isn't terribly popular among Icelanders. Some of the same kinds of financial shenanigans Beaty is pulling are all too familiar to us from the pre-crash years (e.g. buying shares in HS Orka using a loan provided to you by a company who Magma is buying out of HS Orka using those same shares as collateral).

Magma Energy is a company out to make a profit. In Iceland, power companies have always been owned by the state or municipalities. The conflict arises from a conflict of those two world views. Personally I think that Magma Energy will try to squeeze every last króna out of its investment and then sell it off. Private ownership of utilities has rarely been a boon for the public and I don't see any reason to think that this case will be any different. Unfortunately, it seems that this particular bird has flown the coop. I hope something can be done, but I don't know what options are still available.

For more, I recommend the excellent Grapevine (disclaimer: I know a lot of the folk who run it and I have written for their web-edition).


* Incidentally, Árni Sigfússon, who steered Reykjanesbær into bankruptcy while enriching himself and his cronies, was reelected Mayor of Reykjanesbær this past May... go figure.
posted by Kattullus at 12:36 AM on July 15, 2010 [9 favorites]


Oh, and especially read the Grapevine feature Blame Canada. Even though it's a few months old now, it's the best summary of the story out there, in English or Icelandic.
posted by Kattullus at 12:41 AM on July 15, 2010 [2 favorites]


A lot of people already covered all the points of this case well enough. I'd add that parliament is now in the process of reviewing just what to do about this. The politics behind this might sound familiar to a lot of Americans: conservatives pushed for privatizing utilities, opening the door for something like this to happen. Now the leftist government has to reverse a lot of legislation if they want to prevent something like this from happening in the future. Also:

whether Icelanders as a whole are to blame for the various fuckups, yes and no. Yes, in that Icelandic voters kept the right-wing Independence Party in power for 17 years and it's crony-libertarian ideology. No, because that would be like blaming all Americans for the invasion of Iraq or blaming all Canadians for Stephen Harper being a dick. Furthermore, the Icelandic media did a spectacularly poor job of keeping Icelanders informed of the various bad things that were happening in the Icelandic financial sector pre-crash, so there's that too.

This, a million times. While many Icelanders voted for conservatives (and actually, given the multi-party system of Iceland, they were in the minority; they just had the largest percentage), the banks AND the supervisory apparatus both colluded to lie to us about what they were doing and what their financial status was. The president and the media were also all too happy to cheerlead and whitewash. Granted, anyone who did any reading of English language financial reports from Standard & Poors, Moodys and Fitch would see that something was up, but English language financial reports aren't exactly widely read, least of all by people just dealing with their neighborhood banks and not wheelin' and dealin' in the stock market.
posted by Marisa Stole the Precious Thing at 4:05 AM on July 15, 2010 [3 favorites]


At the risk of just repeating what others have said:

The dead swan dress. What was going through your mind when you decided to wear that in an event televised to 2 billion people worldwide?


That this was the most awesome piece of awesomeness ever seen at the Academy Awards? That the sheer dumbfoundedness of the reporters was a delight and a pleasure to see? That the wearing of this dress would have absolved Bjork of many many sins, should she have had many many sins to be absolved of or that absolution of sins were possible?

Bow before the genius!
posted by GenjiandProust at 6:11 AM on July 15, 2010 [2 favorites]


P.S. All upper management of all non-Public Energy companies should probably be executed yearly as a prophylactic. They always come squirming out from under the rocks.
posted by GenjiandProust at 6:13 AM on July 15, 2010


Granted, anyone who did any reading of English language financial reports from Standard & Poors, Moodys and Fitch would see that something was up, but English language financial reports aren't exactly widely read, least of all by people just dealing with their neighborhood banks and not wheelin' and dealin' in the stock market.

This is the "your honor, she looked eighteen" excuse. It might make some sense before the fact, during the "irrational exuberance period" - people are being sold on a dream, and the party poopers don't get their deserved attention because, well, what they're saying is really unpopular. The problem is, the financial reports were not being read then as they are not being read now. Loquax's two great posts above should have terminated the debate: Björk, like all people who suddenly turn nationalists and wrap themselves on a flag when the word "privatization" pops up in the debate, doesn't know what she's talking about. Half her questions are loaded on the "have you stopped beating your wife?" tradition. The other half are all answered already: in balance sheets, in contracts, in long boring documents that she doesn't have the time or the inclination to go through them. So she prefers not to read them and just throws her "questions" in the air. So then, as now, nobody goes after the information that matters because they don't want to. Too much work and it interferes with the agenda.

What irritates me the most about this is that I have seen this movie before in Latin America, in somewhat similar circumstances. Even though the process (though imperfect because these things are never perfect) ended up being beneficial to countries and societies, these ridiculous conspiracy theories live on for decades, even though they are easily dismissed by anyone who had the patience to actually go to the primary sources.

What also irritates me about it is the weight celebrities get when they get involved in these debates, even when they are clearly in over their heads. Yeah guys, Björk is really prepared to discuss the management of Iceland's energy resources. I am ignoring her to my own peril. Pffff. Really?
posted by falameufilho at 7:52 AM on July 15, 2010


Metafilter: 20 hogsheads in Metric Canadians.
posted by vibrotronica at 7:55 AM on July 15, 2010


This is the "your honor, she looked eighteen" excuse. It might make some sense before the fact, during the "irrational exuberance period" - people are being sold on a dream, and the party poopers don't get their deserved attention because, well, what they're saying is really unpopular.

You seem to misunderstand me. I'm not talking about brokers or people trading online or whatever. I'm talking about people putting their money in the bank and believing it was in a sound place, because the financial supervisory apparatus in the country was telling them it was stable, and to expect that your bank isn't going to collapse is, to my mind, a pretty reasonable expectation.

Secondly, I'll again remind you that only a fraction of the population was voting the conservatives back in - it was due to the multiparty system, and the conservatives winning the largest fraction thereof, that they managed to stay in power, so this sweeping generalization that we were all dancing on tables and willfully ignoring the real situation is, frankly, bullshit.
posted by Marisa Stole the Precious Thing at 9:33 AM on July 15, 2010 [1 favorite]


Had I not been on a plane all day yesterday, I would've been all over this post!

*sigh*

*bookmarked*

*gulp*

*nap*
posted by bjork24 at 12:49 PM on July 15, 2010


Thanks to Katullus and Loquax for shining light on this discussion.

So, a minor but somewhat notable player in the Icelandic energy business is privatized, then bought out by a small, and barely notable player in the North American alternative energy business. That does not seem too remarkable by itself, though the shenanigans to get over foreign ownership laws are ugly on the face of things. Stepping back a bit, it seems like the crux of the matter is this claim by Katullus:

Private ownership of utilities has rarely been a boon for the public and I don't see any reason to think that this case will be any different.

This assertion is one that tends to divide people into two separate camps. If you believe the claim, then the issue isn't that some junior Canadian company bought up a minor Icelandic asset, its that the utility was privatized in the first place (though I can see that given Iceland's history with foreign powers exploiting their resources, specifically the fishery there is bound to be additional sensitivity). On the other hand, if you hold that private ownership and operation of energy utilities is actually a good thing, there is really nothing to the story. Please note that I think that both positions are sound and defensible depending on the cirumstances, but I have generally observed a tendency for people to take up an absolutist (i.e. ideological) position on this.
posted by bumpkin at 12:05 PM on July 21, 2010


On the other hand, if you hold that private ownership and operation of energy utilities is actually a good thing, there is really nothing to the story.

Name one, bumpkin.

One that has been around long enough for a real track record, or that isn't just tiny.

On the other side of the ledger, all I need to do is breathe the syllables En-Ron, and I have named about 50 that were not simply not "actually a good thing", but were in fact corrupt and fraudulent on a vast scale, costing California ratepayers alone upwards of $20B, and complete with tape recordings of Enron energy traders laughing and boasting about how they screwed aunt Millie out of her pension.

Or would you prefer First Energy, which brought us a catastrophic blackout, one of the largest in history, costing the economy God knows how much quite apart from their ratepayers, and all because they chose, in the face of dire warnings, to neglect infrastructure maintenance in the favor of bloated executive salaries and dividends to support their stock prices (largely just another way of paying their executives, of course)?

The verdict is in, and all possible appeals have been exhausted: privatization of energy utilities is a disastrous failure.

To pretend that any doubt about this remains is disingenuous and disgusting-- and an indication of a lack of intellectual integrity, frankly.
posted by jamjam at 7:38 PM on July 21, 2010


Big ol' interview with Björk in The Grapevine about the Magma Energy thing (and other things as well). Excerpt:
I face a bit different situation than your average Stjáni or Gunna who might also feel strongly on issues like nature conservation. I know I have a greater chance than the average person of getting people to attend a press conference, of getting them to listen and pay attention—to try and prevent what I believe to be a catastrophic event. Not using that opportunity would mean disregarding deeply held beliefs of mine. My choice is thus: either I commit a crime, or I take this all the way. And I’ve made my decision.

[...]


How am I supposed to live with myself if I stand back and potentially allow the worst possible scenario to arise, without attempting to fight it? Iceland has given me so much, I feel as if Iceland’s nature was bestowed upon me and all the rest of us as a gift, and I feel a great need to defend it. I simply cannot ignore that.

Just imagine, how can I face myself at age eighty if some nightmare situation has unfolded where we have eight more aluminium plants lining the countryside and our hitherto unspoilt nature reserves are all gone to ruin, knowing I could have done something but didn’t even try.
The whole interview is very interesting.
posted by Kattullus at 9:11 AM on July 31, 2010


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