What does oil shale industry give us?

Naturally, the oil shale industry provides us with electricity. That is a simple answer but it is not very precise. Firstly because Estonia has been part of the regional electricity market for two years now, where wind energy, nuclear energy and hydro energy are also available, so you can never be sure where the electricity in your sockets comes from today. Secondly it is not precise because the oil shale industry also provides heat, oil, raw materials for the chemical industry, thousands of jobs, and hundreds of millions of euros for the Estonian economy.

The year 1870 can be taken as the beginning of oil shale mining in Estonia, as this was the year when Baron Robert von Toll of Kukruse began heating his distillery by burning rocks. Widespread industrial mining began only in 1918 and the first large-scale industrial consumer to use oil shale heating was the Kunda cement plant, followed by the Tallinn power plant near the current Linnahall.

The Soviet occupation had a dual effect on the oil shale industry, for the triumph of oil shale energy began then, but the reputation of the industry suffered as oil shale was developed with no regard for the environment. Naturally the oil shale industry still impacts the environment today but the ecological footprint is becoming smaller as years go by, because otherwise oil shale companies would no longer be competitive. The truth of the matter is that oil shale energy in Estonia has never been as clean as it is today.

Energy independence hand-in-hand with jobs A recent survey from TNS EMOR ordered by Eesti Energia showed that Estonians consider energy independence to be the most significant value given by the oil shale industry. It is beside the point that under normal circumstances we are happy to consume electricity from neighbouring countries when it is cheaper. Circumstances may change and in those cases it is good to know that we can survive on our own. And Estonia can survive on its own because according to Eurostat we almost top the charts for energy independence with only the Danes ahead of us.

The second important value of the oil shale industry is usually considered to be employment. Oil shale provides jobs for more than 14,000 people in Ida-Viru county alone, 7,000 of them directly through oil shale mining or processing companies. The other jobs come from the other businesses built up around the industry. Of course there are thousands of jobs connected with oil shale in other counties as well, but as the majority of the oil shale industry, just like the oil shale, is to be found in Ida-Viru county, then the nature and scope of employment in other areas are not obvious to most Estonians.

/-/doc/8457332/news/graafik-p6levkivitoostus-eng.gifSurvey of people's attitude towards the oil shale industry, EMOR 2014

A big money-making machine for a well-oiled economy The effect of the oil shale industry on the Estonian economy is the icing on the cake. Even now, Eesti Energia as the leader of the local oil shale industry pays about 200 million euros of tax income into the Estonian state budget every year. This is a lot of money and is enough to raise the monthly net salaries of all the teachers in Estonian secondary schools by 500 euros a month for the whole year. It should be noted that this money does not come from electricity bills. These are resource fees paid by Eesti Energia for mining oil shale, environmental fees, labour taxes and dividends. And on top of this come the contributions of other oil shale companies.

It is the income earned from the oil shale industry that enables Eesti Energia to pay dividends to Estonia year after year. Electricity sales to residential customers make up only 5% of the company’s turnover and we have been unable to make a profit from this business thus far, while we gained more than 11 euros from every tonne of oil shale we mined in the past year. This money mainly comes from electricity produced from oil shale, which is sold to the Nordic wholesale market, and also from crude oil shale, oil produced from oil shale, heat sales and taxes paid to the state.


Companies in the Estonian oil shale industry have paid Estonia more than 500 million euros in environmental fees over the past nine years, and this money has largely been used for funding environmental projects. However, some of it has been used in other areas, and last year 43% of the environmental fees collected from the oil shale industry went to the state budget without being earmarked for any specific purpose.

Given all of this, a legitimate question comes to mind – perhaps projects funded by the oil shale industry in Estonia should be labelled the way projects and construction work funded by the European Union are? This would help raise awareness and speak more clearly about how the industry contributes to our well-being.