Beyond the Shale

I think we'll continue the Eastern Europe tour this week (with a side trip to British Columbia tomorrow), timely considering 20 years have passed since the Berlin Wall fell.  So let's discuss another inspiring success story in the once-Iron Curtain, Estonia.  Overall, this easternmost of the Baltic States has gob-smacked the world with its economic transformation.  Depending on what survey you read, Estonia is the freest economy in the world, or ranks twelfth--impressive no matter how the survey data is tweaked.  Benefiting from its proximity to Finland (Estonia's largest trading partner); avoiding the vitriol towards Russia that has stunted economic and diplomatic progress for its neighbor, Latvia; and overall embrace of privatization, this tiny nation of 1.3 million has become a haven for telecommunications, IT, and engineering firms.  The recent financial crisis has put a dent in Estonia's economic growth, but all indicators suggest Estonia will dust off those troubles and continue to thrive.  When it comes to its energy infrastructure, Estonia is remarkably independent, but relies on a worrisome source:  oil shale.

 

Oil shale is a double misnomer:  it's not truly shale, and the fuel extracted from this rock, kerogen, has a different chemical composition from crude oil.  Oil shale also makes petroleum look spotlessly clean, as it belches high levels of emissions, and for every unit of oil shale processed, you need three to five times that amount to process it.  The resulting fuel squeezed out of oil shale is filthy, leaves the land from which its culled scarred--and then there's the issue of where to store the waste.

 

Oil shale, however, has allowed Estonia to remain almost entirely energy independent; and in fact, the two largest oil shale processing plants are in Narva, near the border with Russia.  The company managing the plants recently retrofitted them with improved technology (called circulated fluidized bed combustion, or CFBC) to reduce emissions, but Estonians still deal with air quality issues . . . and then there's that puzzle of where they must store all that ash:  almost half of oil shale heated and converted into energy remains and begs for disposal, so for now, the ash is transferred to lagoons, which are a pretty cyan color in the satellite photos (I want to positive here!).

 

So what do the Estonians do with the EU goal of 20% renewables in 2020 hanging over their heads?  Well, Narva's plants purchase green energy certificates to offset their carbon footprint, and its managing company, Eesti Energy, is investing in renewable sources to molify the EU.  As for alternative fuels, Estonia's sizable timber and paper industries provide plenty of waste product that is converted into biomass sources like pellets.  Wind power is also gaining traction--the number of megawatts produced by wind has increased significantly year to year this decade.  A recent agreement between the eight countries surrounding the Baltic Sea has the goal of creating more smart grid technologies that will link these nations' energy sources to each other.  Considering Estonia's vibrant technology sector, smart grid paired with renewables should have a bright future here; this may well become the Silicon Valley of The North!

 

Estonia's capital, Tallinn, charms like a fairy tale, with a whimsical atmosphere in its many cafes and trendy shops.  Renewable energy investors, however, won't be chasing a fairy tale here:  although Estonia is behind right now in its EU renewables target, I have a feeling reducing the nation's dependence on oil shale is not a total fantasy.