Plans to build a new road in Iceland ran into trouble recently when campaigners warned that it would disturb elves living in its path. Construction work had to be stopped while a solution was found.
Work on the highway to link the Alftanes peninsula to the Reykjavik suburb of Gardabaer was halted when campaigners warned it would disturb elf habitat and a protected area of untouched lava.
Surveys suggest that more than half of Icelanders believe in, or at least entertain the possibility of the existence of, the Huldufolk - the hidden people. Just to be clear, Icelandic elves are not the small, green, pointy-eared variety that help Santa pack the toys at Christmas - they're the same size as you and I, they're just invisible to most of us.
Mainly they're a peaceable breed but if you treat them with disrespect, for example by blasting dynamite through their rock houses and churches, they're not reticent about showing their displeasure. During our car journey, Petur tells me several stories about how elves are suspected to be behind bulldozer breakdowns and a series of workmen's accidents.
"Please don't portray Icelanders as uneducated peasants who believe in fairies, but look around you and you'll understand why the power of folklore here is so strong," she says. It is of course also strong in the tourism trade.
There's even an elf school in the capital at which I dutifully enrolled.
Magnus Skarphedinsson, the headmaster, a rotund, ebullient chap had regrettably never seen an elf himself although he did own an old cooking pot that apparently had once made stews in an elf kitchen before the bottom rusted away.
His eyes twinkled so wickedly throughout the class that at the end I asked if he wasn't some kind of malevolent fairy himself.
Petur eyes me suspiciously.
"I could tell you about our family elf," he begins tentatively. I encourage him to tell his tale and learn that Petur's family had a protective elf in the wild north of the country who'd brought them good fortune.
When he'd gone on a camping trip to the isolated area, his father asked him to go and pay his respects to the elf and to thank her.
"But I don't believe in elves so I sort of forgot," he says. The next day, despite the overcast sky and drizzle, he woke up so badly blistered by what appeared to be sunburn that he could barely stand.