Iceland's Visionary Energy Policy

Reykjanesbaer, Iceland -- On this dramatic black lava-lain and volcano-dotted peninsula, the sub-arctic Atlantic mist can chill the air even on a sunny spring day. So I strip off my clothes, don my favorite bathing trunks and jump into the steaming wastewater of the local electric power plant.

No, I don't risk harming my health in any way. The effluent pool -- known as the Blue Lagoon and frequented by locals and transcontinental travelers alike -- is pollution free. So is the adjacent Sudurnes power plant.

As I bask up to my neck in the turquoise, silica-rich water, I curse the fact that no one in America will be swimming in utility effluent any time soon. That is, if the Bush administration has its way.

Compared to the what Icelanders have been doing for the past several decades, the Bush administration's national energy plan seems nothing more than a vintage example of bad linear thinking. Build, drill and burn is the mantra of the plan, which was unveiled in May and is now working its way through Congress. There's an energy crisis, the administration argues, and what we're doing today isn't working, so we ought to do even more of it. Caribou be damned, we need petroleum from the Arctic National Wildlife Refuge. Global climate change be damned, voters in key swing states have coal to sell. The American lifestyle is sopping up unprecedented quantities of electrons, so we must build 1,300 new power plants! Build, drill and burn.

But the Blue Lagoon and the Sudurnes power plant that feeds it are proof that there is vast potential for creativity in the energy sector if we're willing to look beyond fossil fuels.

The plant produces cheap, reliable and sustainable electricity by tapping geothermal steam from thousands of feet below the Earth's surface to drive its turbines. Unlike conventional utilities, it doesn't burn anything. You could live next door, breathe the air, and bathe in its effluent for decades without worrying about the lung disease or nerve damage that you might get from one of the dirty coal-fired power plants that generate most of America's energy.

In addition to generating electricity, the Sudurnes plant makes hot water for local communities. It does this through "cogeneration," a simple technology which heats fresh water using the waste steam. In the U.S. most utilities discard this steam, and as a result they are only about half as efficient as Sudurnes. In other words, an American power plant burns about twice as much fuel per unit of energy produced.

Sudurnes is not unique in Iceland. Reykjavik Energy, which powers the capital, also exploits geothermal energy and makes hot water. Not only do residents pay low energy rates for their clean energy, but the company has enough water left over to supply an extensive network of heated public pools -- complete with Jacuzzi-like "hot pots" where, legend has it, most of the country's important decisions are made.

Iceland has spent the last half century doing precisely what the Bush administration's plan treats as a far-fetched dream of eco-quacks: reducing pollution; weaning itself from fossil fuels and building a sustainable, locally self-sufficient energy infrastructure. In recent years, every electron that has coursed through Iceland's grid has been produced without fossil fuels. The country is prospering, not in spite of, but because of these efforts, which have been good for the environment, but also for national security and the economy. This resource-poor country no longer spends billions importing stuff to burn.

Skeptics might point out that, thanks to its location on the crest of the volcanically active Mid-Atlantic Ridge, Iceland has extensive geothermal capacity. But Icelandic engineers argue that any project in their country is complicated: imagine what it's like on a sparsely populated island on the Arctic Circle and in the middle of the Atlantic that has almost no natural resources. There's hardly even a tree to be found.