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MELISSA BLOCK, host:

Most of the world's nations are gathering this week in Bali, Indonesia, discussing how to tackle global warming after the Kyoto agreement expires in 2012.

One country that's ahead of the curve is Iceland. This island in the North Atlantic is the only industrial country in the world that burns practically no fossil fuels to generate electricity or to heat buildings. That's because it has abundant supplies of renewable energy. In fact, Iceland has so much cheap and clean electricity, it's encouraging heavy industry to ship raw materials halfway around the world for processing there.

NPR's Richard Harris went to Iceland for this story, part of our Climate Connection series with National Geographic.

RICHARD HARRIS: Iceland's many volcanoes make Yellowstone National Park look tame. The land is stark but beautiful in an otherworldly way, with barren valleys cradling bubbling mud pots and smelly steam vents. Jagged mountains, dusted with snow separate these valleys.

Iceland's volcanoes are still very much alive. Among other things, that means this island nation has an abundant energy supply. All you have to do is drill…

(Soundbite of drilling machine)

HARRIS: …and capture blistering-hot steam as it shoots up from underground.

Mr. BJARNI PALSSON (Engineer, National Power Company): (Unintelligible).

HARRIS: Bjarni Palsson works at the National Power Company, which is drilling new steam wells all the time. This one is about 20 miles from the shore of Lake Myvatn in northern Iceland. A huge drilling rig, set in a black and red volcanic valley, runs 24 hours a day.

Palsson takes us into the relative quiet of a lab trailer nearby.

Mr. PALSSON: This is the third time we drill from the same drilling platform.

HARRIS: Palsson says they eventually plan to drill about 20 holes, all within a few miles of each other. The steam that comes up the holes will flow into pipes that will snake across this rugged valley and end up at a single power station.

Mr. PALSSON: So it's very practical, not to spoil too much land, but still being able to explore a relatively large area.

HARRIS: So how much energy could ultimately be produced here?

Mr. PALSSON: Being careful, I would say 100 to 200 megawatts.

HARRIS: And how many households would that provide electricity for?

Mr. PALSSON: Probably 200,000 households.

HARRIS: But wait. There aren't even 200,000 households in all of Iceland.

Mr. PALSSON: Therefore, we need a big customer, like an aluminum smelter or some kind of heavy industry that requires so much energy.

HARRIS: In fact, these holes are being drilled to accommodate an Alcoa aluminum smelter that will be constructed on the coast about 15 miles away. Now, Iceland actually doesn't mine any aluminum ore. Instead, aluminum oxide powder will be shipped halfway around the world from Australia. And the metal that comes out of this smelter will be shipped out again, to be turned into airplanes or soda cans.

Mr. PALSSON: This is our way of exporting electricity.

HARRIS: It sounds pretty inefficient, except that it takes gobs of electricity to smelt aluminum. More than 2 percent of all electricity generated in the world is used to produce this one metal. And that puts a lot of carbon dioxide into the air. So Palsson says it makes economic sense and environmental sense for aluminum companies to seek out cheap and clean electricity.

Mr. PALSSON: It's very good for everyone here on this Earth that the aluminum is produced here in Iceland with clean energy rather than somewhere else with less clean energy.

HARRIS: More than a quarter of the global aluminum production relies on climate-unfriendly coal as a source of electricity, so you'd think the use of cleaner sources of energy would make environmentalists happy. Well, that's not so for Omar Ragnarsson.

Mr. OMAR RAGNARSSON (Founder, Iceland's Movement - Living Land): We are looking here at a cool(ph) place called (unintelligible).

HARRIS: Ragnarsson looks out over a rugged lava coastline on the outskirts of Reykjavik, the capital of Iceland. Across the water is Iceland's very first aluminum plant. Ragnarsson says he voted in favor of it 40 years ago. It came as part of a wave of economic development that helped pull Iceland out of Europe's poorhouse and made it one of the wealthiest populations on Earth. But, Ragnarsson says, enough is enough. He's started a political party in a bid to block new smelters.

Mr. RAGNARSSON: There are plans for seven huge smelters in Iceland. These smelters will require all the energy that this country can offer and destroy all our nature.

HARRIS: Existing smelters rely mainly on hydroelectric power — dams that have flooded river valleys across Iceland. The next wave would be powered by geothermal energy. But Ragnarsson says Iceland's volcanic landscape is a world treasure and should not be crisscrossed with steam pipes and transmission lines or pocked with power plants. Ragnarsson says it would be like asking Americans to exploit the hot springs in Yellowstone National Park.

Mr. RAGNARSSON: Because in Yellowstone, you see huge amounts of energy, but in America, it would be a civil war if somebody mentioned to harness one of ten-thousandth hot springs there.

HARRIS: Let me look at it slightly different way which is that global warming is getting worse and worse.

Mr. RAGNARSSON: Yes.

HARRIS: Global warming is threatening Iceland's glaciers and if these aluminum smelters weren't here…

Mr. RAGNARSSON: Yeah.

HARRIS: …maybe they would be some place burning coal and making global warming even worse.

Mr. RAGNARSSON: Burning coal you say?

HARRIS: Yeah.

Mr. RAGNARSSON: No, not burning coal.

HARRIS: Geothermal resources can be found all around the world. So Ragnarsson says Iceland should be helping develop geothermal energy plants overseas - in Africa, the United States even near the aluminum mines in Australia.

Mr. RAGNARSSON: And that is what we can contribute to the global warming - it's to bring this technology to other nations.

HARRIS: That is starting to happen. But for the time being, Iceland is a world leader in developing new sources of geothermal energy and the government is taking advantage of that head start as it invites power hungry industries to its shores.

Richard Harris, NPR News.

BLOCK: You can find out exactly how Iceland harnesses the power of volcanoes at npr.org/climateconnections. You'll also find videos of climate science in action from Public Television's "Wild Chronicles."

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