July 13, 2001 Dear Madam, Dear Sir, We have received a few identical letters regarding our
planned hydro project in two glacial rivers in the Northeast of Iceland. We would like to thank you for
letting us know of your concern in this matter. You can rest assured that we have been proceeding with the utmost care
with regard to the environment in the research, design and preparations for this project. Some of you sent
copies of your letter to the State Planning Agency which will take it into consideration in its deliberation
on the Environmental Impact Assessment (EIA) according to Icelandic law which is based on the current EU directive
on EIA. The Icelandic authorities will now evaluate the project and reach a conclusion on whether or not to allow
us to proceed. Since your letter does contain some inaccuracies with regard to matters of fact, we would
like to point out the following: · Our research on the effects of the project involved over 3% of the area
of Iceland or about 3000 km˛. This research has shown that the project has effects on only a very small part of that
area. · We did extensive research on the habitat of all forms of life in the area affected, including birdlife.
This research was conducted for us by the Icelandic Institute of Natural History. The conclusion of that research is
that your fear for birdlife and endangered species is groundless. Effects on bird habitats will be minimal and any decrease
in the bird population will be within the margin of error for estimates of the population size. · You
claim that we are breaching international agreements with regard to nature conservation. This is not correct. Furthermore,
we have pointed out to the authorities that the development of a large national park and conservation area in the
district can go hand in hand with the proposed hydro project. · You claim that increased electricity generation
for the proposed aluminium industry is irresponsible since it increases emission levels and contributes to global
warming and pollution. In answer to that we would like to point out that the Brundtland Report, "Our Common Future",
urges the nations of the world to utilize renewable energy sources, including unharnessed hydro, on a global scale.
This will allow a reduction in the greenhouse effect and should be a priority energy issue in the 21st century (See
chapter on energy, pp. 192-196). Iceland is world leader in production of electricity per capita. Almost all
our electricity is produced with renewable and emission free methods. This production has up to three hundred times less
greenhouse effect per person than the electricity production in most other Western countries. While the annual CO˛
emissions due to electricity production is about 20 kg per Icelander, the figure is 4500 kg per German, 6500 kg per American
and 3500 per Englishman. Increased electricity production in Iceland, not least for aluminium production which
is used to decrease emissions e.g. in automobiles, can in fact be one of the country's largest contributions
in the battle against global warming. We are well aware that a project of such magnitude
as the Kárahnjúkar project is bound to generate controversy and it is important that the developer does not
conduct his affairs in a vacuum. We therefore appreciate that you should let us know of your worries. We
assure you, however, that our work emphasizes concern for the environment and Icelandic law ensures that
decisions will be made in a responsible manner in accordance with the strictest European standards Sincerely,
Thorsteinn Hilmarsson Head of Corporate Communications July 13, 2001
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