Ansip: Russian shale is a bad deal

  • 2005-08-31
  • Staff and wire reports
TALLINN - Prime Minister Andrus Ansip said this week that using Russian oil shale at Narva Elektrijaamad (Narva Power Plants) for generating electricity would not be economically viable.

Speaking on the ETV evening news program, Ansip explained that the use of Russian shale reduces the efficiency of Eesti Polevkivi (Estonian Oil Shale), the mining subsidiary of the national power company Eesti Energia (Estonian Energy), and will harm the country's chances to sell carbon dioxide emission quotas.

Ansip was speaking after having visited the northeastern region of the country, where Narva Power Plants and Estonian Oil Shale are located, over the weekend.

In his words, Estonia would essentially give away 400 million kroons (26 million euros) to Russia if it began buying its oil shale for electricity production. This is the approximate sum that Estonian Energy could ostensibly earn by selling its part of the greenhouse gas emission quota in accordance with the Kyoto Treaty.

Ansip said that if Estonia should decide in favor of using Russian oil shale, the price of the commodity would have to be as low as 48 kroons per ton.

Currently Estonian Oil Shale is selling to the Narva Power Plants at 131 kroons a ton.

Estonian and Russian authorities are trying to forge a deal so that Estonia can continue burning Russian-mined oil shale at its power plants on economically viable grounds.

Most recently, the Estonian side proposed that Estonian Energy lease the hydroelectric power plant situated on the Russian side of the border river Narva in exchange for buying Russian shale.

A spokesperson for the Ministry of Economy and Communications told the Baltic News Service that Russia had not yet responded to the proposal.

Narva Power Plants stopped using Russian oil shale this spring after the Russian side failed to meet its financial obligations. As a result, the Russian mining town Slantsy has been thrown into crisis, since the Estonian power generating company is the only consumer of the shale mined in the area.