Article has been published in Eesti Päevaleht. Twenty-six years ago these lines echoed from the lips of many Estonians in support of Viru County. Nevertheless, we are today in a situation in which Ida-Viru County has Estonia’s highest unemployment rate, the county’s average salary is among the lowest in Estonia, the population is ageing faster than the Estonian average, and a quarter of the young people are unemployed and leaving the area en masse. During the Phosphorite War, people desired to save the nature of Viru County from the predatory mining of a foreign power. Today, we can decide on our own possible mining volumes and the tolerance limit of the accompanying environmental impact. Therefore, we should act as responsible owners and find a compromise between profit gained from using resources and possible damages.
Socio-economic dependence on oil shale
The socio-economic impact of the oil shale industry is often overshadowed by environmental damages. Undoubtedly, this is the county’s biggest employer, important in a region suffering from a severe unemployment rate. The oil shale sector engages about 7000 people, whose earned income is about EUR 75 million per year. If you add to this goods and services related to the oil shale industry, such as transport, equipment maintenance, catering, and the staff of services companies, which is about the same number, then the employment associated with the oil shale sector is about one-fourth of total employment in Ida-Viru County. Proprietary income created during mining and processing oil shale is about EUR 100-120 million a year, the majority of which is earned by Eesti Energia AS, and the entire country benefits from this. The local governments of the area receive about EUR 10-11 million per year in income tax from oil shale sector workers.
The negative environmental impact of oil shale mining should not be underestimated; the region’s development could also be damaged by overestimating it. The oil shale industry is a field where the supervision is among the strictest found in the industrial sectors. As a result, the companies have invested a great deal in environmental measures: installed air filters and water treatment equipment, searched for solutions to recycle mine waste, and improved waste depositing technologies.
Besides the current environmental impact, we should pay more attention to alleviating the aftereffects of direct (for example, self-igniting mine waste hills, ground sinks, excess water drainage) and indirect consequences (empty former miner’s residential areas, higher building costs for buildings on underground mined areas, etc.) of intense mining during Soviet times. Although the Earth’s Crust Act states that damages from mining activities from more than ten years ago shall be compensated by the state from the mining rights income, in reality these expenses are covered by local governments or even the residents themselves. One example would be the condition of buildings located on areas that have been mined empty underground. Afterwards, it is hard to determine whether the cracks and rifts in the structure of a building are the result of construction works, poor material quality, or sinking ground.
Mining fees as the state’s source of income
At the same time, companies pay environmental charges related to oil shale mining and processing, for example, mining rights fee, pollution charge, and special water use right, in the order of magnitude of EUR 45-50 million per year — more than two thirds of the environmental charges paid in Estonia. From this, EUR 12 million per year is redirected to the budget of Ida-Viru rural municipalities with active mining activity and EUR 3.7 million is used to improve the environment through the Environment Investment Centre. Considering that most environmental damage is local and even the extent of impact of such factors as the air quality or groundwater situation is highest in regions with active mining and industry, this proportion seems to be strongly inclined: mining fees as the state’s source of income, not the source of alleviating environmental damages.
When regulating mining, we should weigh what impact the planned changes have on the socio-economic development of Ida-Viru County (recent quick increase in environmental charges, possible mining volume limitation). Income earned from mineral resources should be used to improve the living environment of Ida-Viru County and favourable development conditions should be created for the time when oil shale deposits are exhausted.
Dear governors, let us show that Ida-Viru County is not alone…
The article is based on the results of research recently completed by Praxis, “Evaluating the socio-economic impacts of mining and processing oil shaleâ€.