VKG: Two plants not operating due to oil shale distribution plan
According to Northeastern Estonia-based shale oil producer Viru Keemia Grupp (VKG), the company cannot operate two of its oil plants due to the oil shale distribution plan, reported daily Postimees.
"Two VKG oil plants are not operating because we do not have a high enough limit to mine oil shale due to the distribution plan," CEO Ahti Asmann told the newspaper. "If we had the oil shale, we could launch the oil plants and offer work for people. At the same time, nearly five million of 20 million tons of oil shale is not extracted because Eesti Energia is unable to utilize its capacity. If Eesti Energia claims that it has excess capacity, it should use it.
BNS reported on Tuesday that according to state-owned energy group Eesti Energia, the company does not have enough oil shale to achieve production goals if the state will not grant a new permit to the company after the Supreme Court decided on Tuesday to revoke its extraction permit.
"We have been preparing since 2011 to establish a mine in Uus-Kiviõli to guarantee the long-term availability of oil shale for the production of oil and electricity," Eesti Energia CEO Hando Sutter told BNS. "We will familiarize ourselves with the decision and will decide further steps after that. I hope that the Ministry of the Environment will solve the legal uncertainty regarding the mining permit as soon as possible.
"The maximum oil shale consumption capacity of Eesti Energia's existing power and oil plants is greater than our annual oil shale mining rate of 15.01 tons of geological oil shale," he continued. "In the past five years, we have used up on average 83 percent of the annual oil shale mining rate which is the biggest rate utilization among oil shale mining companies."
According to Sutter, the reality is that the company does not have enough oil shale in the long term to use the maximum potential of its oil shale supplies.
The Supreme Court on Tuesday annulled the extraction permit granted to Eesti Energia for the Uus-Kiviõli mining area in a court dispute which had been ongoing since March 2014.
The Administrative Law Chamber of the Supreme Court said on Tuesday that the Earth's Crust Act did not enable issuing a new mining permit in the capacity which exceeded the annual volume the permit holder was permitted to mine; it was at odds with the law as well as the goals of the oil shale development plan.
The Administrative Law Chamber said that if the ministry is to discuss Enefit's request again, they must take EU competition law into account.
Editor: Aili Vahtla