It's a lunar landscape on the peninsula where the Blue Lagoon and Keflavik airport are located. Volcanic eruptions have left behind a thick blacket of black lava, making this part of Iceland oddly similar to the Kona Coast of the Big Island of Hawaii.
The architects of the Blue Lagoon have done an excellent job of blending the spa building into the landscape. You can hardly tell where the land ends and the buildings begin! The Blue Lagoon has recently embarked on a major expansion, the location of which you can discern from the towering crane. But I'm sure that the new wing of the spa will be just as environmentally sound as the old.
The bluish white waters are the same as those that at the spa. It looks slightly radioactive, doesn't it?
Visit the Blue Lagoon. It's a unique geothermal swimming pool with wonderfully warm water. You can just swim there for hours. The water is rich with minerals that give the lagoon it's soft, milky color.
The Blue Lagoon is heated by the hot water from the nearby geothermal power plant. There's a couple of rocks in the middle of the pool and the hot water enters the pool from there. See the steam clowd in the picture?
Try taking an ice cold shower and then enter the pool again. The feeling was just unbeliavable.