From Iceland — Is the Magma Energy Purchase of HS Orka Final?

Is the Magma Energy Purchase of HS Orka Final?

Published October 8, 2010

At an open seminar held yesterday evening to discuss the Magma Energy Committee findings, committee member and lawyer Aagot Óskarsdóttir said their report had been misrepresented in the media and that it is still legally possible to stop Magma Energy Sweden AB from owning 98.5% of HS Orka.

The committee, which was commissioned by Prime Minister Jóhanna Sigurðardóttir to evaluate the legality of the Magma Energy purchase, released their findings last month. In three out of four interpretations of the law, the committee concluded that the purchase was legal. However, this is only part of their 93-page report.

In another (not adequately portrayed in the media) part of the report, the committee detailed several actions the government can take to essentially nullify the sale. Aagot said the most feasible of these is to exercise the right of eminent domain. In non-legalese, this means the government can justifiably take Magma Energy’s purchase from them if it is in the interest of the nation.

This right can be found in article 72 of the constitution: “The right of private ownership shall be inviolate. No one may be obliged to surrender his property unless required by public interests. Such a measure shall be provided for by law, and full compensation shall be paid. The right of foreign parties to own real property interests or shares in business enterprises in Iceland may be limited by law.”

In regards to public interest, Björk Guðmundsdóttir cited survey results in which 80% of Icelanders say they do not want Iceland’s energy resources privatized. She also pointed out that nearly 20.000 people have signed a petition asking the government to stop the sale and call for a referendum. Björk asks, “Do the nation’s representatives really want to allow the sale of the country’s third largest energy company to go through, against the will of the people?”

Also of note, geologist Stefán Arnórsson pointed out that the geothermal energy in question is not renewable – meaning it is used up faster than it renews. He said the size of the energy resource available has been estimated at 3600 – 4200 MW and if, for example, this is converted to electric power, the resource will be depleted in 50 years, adding that it could take thousands of years to renew. This he said is important to realize given that the current agreement gives Magma Energy 65 years of unrestricted access to the geothermal energy.

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