Iran's Ahmadinejad dismisses Western oil sanctions as 'ridiculous'

TEHRAN, Iran - President Mahmoud Ahmadinejad on Tuesday slammed Western sanctions on Iran'soil sector as a "ridiculous" move that seeks to deprive the world of energy resources at a time when demand is swelling.

"It's very funny. They (the West) use oil as a political weapon against a country that is an oil producer itself," Ahmadinejad said at the inauguration of a new fuel-making unit at a Tehran oil refinery. "This is among the most ridiculous behaviours."

Iran's leaders have repeatedly insisted the country can withstand the international sanctions imposed in efforts to curb Tehran's nuclear program. But the rash of defensive comments by Ahmadinejad and others — including warnings against local media reports on the sanctions fallout — suggest deepening worries about a sustained drop in vital oil revenue.

The European Union — which once accounted for around 18 per cent of Iran's oil exports — stopped all contracts with Tehran on July 1. Meanwhile, the U.S. is pressuring Iran's key Asian oil customers such as India and South Korea to look to the Gulf and other suppliers.

"The ones that need oil use what they need as a tool to pressure (others)," Ahmadinejad said, calling it "political warfare."

Iran relies on oil for some 80 per cent of its foreign revenue.

"It takes a lot of insolence to be like that," he added in the speech broadcast on state TV. Ahmadinejad also urged for foreign investment in Iran's oil and petrochemical industries, but many companies remain wary of running afoul with Washington over sanctions.

Ahmadinejad's remarks came after Congress pressed ahead late Monday with a new package of sanctions on Iran, expanding financial penalties and targeting Tehran's energy and shipping sectors in the hope that economic pressure will undercuts the country's suspected nuclear weapons program. Iran denies it seeks atomic weapons

Also Monday, U.S. Defence Secretary Leon Panetta acknowledged that increasingly stiffinternational sanctions have yet to compel Iran to give up its nuclear ambitions. But he argued that more pressure eventually would lead Iran to "do what's right."

In Tehran, Iran's oil minister said there is no need for an additional OPEC meeting to discuss oil prices. A report by the semiofficial Mehr news agency quoted Rostam Ghasemi as saying the current price does not merit an extraordinary meeting of the oil-exporting cartel.

Spain says up to $200 billion left country by May

MADRID (AP) — Spain's central bank says €163 billion ($200 billion) has been pulled out of Spain in the first five months of the year, reflecting plunging confidence in the government's ability to manage its financial problems.

Figures released Tuesday showed €41.3 billion was withdrawn in May, compared to €9.5 billion in the same month last year. May saw Bankia, one of Spain' largest banks, announcing it would need a whopping €19 billion in rescue funds.

Bankia's announcement spurred the government to seek a rescue loan of up to €100 billion from its eurozone partners.

A glance at Europe's unemployment figures

LONDON (AP) — The number of people unemployed across the 17 countries that use the euro hit a record high in June, official figures showed Tuesday, in a stark reminder that Europe's debt crisis has ramifications beyond the financial markets.

Eurostat, the EU's statistics office, said 17.801 million people were out of work in the eurozone in June. That was 123,000 more than May, and is the highest level since the euro was formed in 1999. The increase was the 14th in a row and means that around 2.25 million people have lost their jobs since April 2011.

Despite the increase, the seasonally adjusted unemployment rate in June was unchanged at a record 11.2 percent. Without Germany's relatively-low unemployment rate of 5.4 percent, the wider figures would be much worse.

Even then, the eurozone unemployment is nearly three percentage points higher than the U.S.'s equivalent 8.2 percent. Europe's unemployment rate for May had originally been estimated at 11.1 percent.

"Another horrible set of labor market data for the eurozone, which bodes ill for consumer spending and growth prospects," said Howard Archer, chief European economist at IHS Global Insight.

• by Cathryn Wellner
• July 30, 2012

Last weekend we were sitting on our balcony, enjoying appetizers with friends, when the sky darkened and a wind fiercer than any we have experienced in the interior of British Columbia sent us inside. We dashed back out to rescue the flying chairs and table before they could crash through the glass doors.

The Insurance Bureau of Canada’s (IBC) new study warns Canadians “the frequency and severity of severe weather is on the rise,” and we had better prepare for it. “Telling the Weather Story” confirms the recent landslides, fires and drought are becoming the new norm.

Another study, this one published by Nature Geoscience, confirms the prediction. A team of Canadian and American scientists studied the drought of 2000 to 2004 and found it was the worst since the one that lasted from 1146 to 1151. They warn a “megadrought” could parch the planet through the entire 21st century.

Insurers have been hit hard by the impacts of catastrophic events. IBC reports insured losses internationally reached $10 billion to $50 billion a year over the past decade and exceeding $100 billion in 2011. In Canada alone insurers were on the hook for roughly $1.6 billion in 2011 and close to $1 billion annually in the previous two years. Aging infrastructure contributed to the losses, as older sewer systems are unable to handle the increased precipitation.

Next: Adaptation Strategies Are Urgent Need

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Power grids in India fail in massive, cascading blackout affecting more than 600 million

By Ravi Nessman, The Associated Press | Associated Press – 3 hrs ago

NEW DELHI - Electric crematoria were snuffed out with bodies inside, New Delhi's Metro shut down and hundreds of coal miners were trapped underground after three Indian electric grids collapsed in a cascade Tuesday, cutting power to 620 million people in the world's biggest blackout.

While Indians were furious and embarrassed, many took the crisis in stride, inured by the constant — though far less widespread — outages triggered by the huge electricity deficit stymieing the development of this would-be Asian power.

Hospitals, factories and the airports switched automatically to their diesel generators during the hours-long cut across half of India. Many homes relied on backup systems powered by truck batteries. And hundreds of millions of India's poorest had no electricity to lose.

"The blackout might have been huge, but it wasn't unbearably long," said Satish, the owner of a coffee and juice shop in central Delhi who uses only one name. "It was just as bad as any other five-hour power cut. We just used a generator while the light was out, and it was work as usual."

The crisis was the second record-breaking outage in two days. India's northern grid failed Monday, leaving 370 million people powerless for much of the day, in a collapse blamed on states that drew more than their allotment of power.

At 1:05 p.m. Tuesday, the northern grid collapsed again, energy officials said. This time, it took the eastern grid and the northeastern grid with it. In all, 20 of India's 28 states — with double the population of the United States — were hit in a region stretching from the border with Myanmar in the northeast to the Pakistani border about 3,000 kilometres (1,870 miles) away.

Hundreds of trains stalled across the country and traffic lights went out, causing widespread jams in New Delhi. West Bengal Chief Minister Mamata Banerjee asked office workers to go home and rushed generators to coal mines to rescue trapped miners.

Sahiba Narang, 17, was taking the Metro home because school bus drivers were on strike, "but this power failure's messed up everything."

S.K. Jain said he was on his way to file his income tax return when the Metro closed. The 54-year-old held his head, distraught that he would almost certainly miss the deadline. Hours later, the government announced it was giving taxpayers an extra month to file because of the chaos.

By evening, power had been restored to New Delhi and the remote northeast, and much of the northern and eastern grids were back on line. Electricity officials said the system would not be back to 100 per cent until Wednesday.

Power Minister Sushil Kumar Shinde said the new crisis had the same root as Monday's collapse.

"Everyone overdraws from the grid. Just this morning I held a meeting with power officials from the states and I gave directions that states that overdraw should be punished. We have given instructions that their power supply could be cut," he said.

But others were skeptical of Shinde's explanation, saying that if overdrawing power from the grid caused this kind of collapse, it would happen all the time.

"I just can't believe that there is no system in place to check whether the states are drawing more than their limit or not," said Samiran Chakraborty, head of research at Standard Chartered, a financial services company. "There has to be a much more technical answer to that question."

At a contentious news conference, R.N. Nayak, chairman of Power Grid Corp., which runs the nation's power system, said his staff was searching for the cause of the problem and pleaded for patience.

"We have been running this grid for decades. ... Please trust us," he said.

The blackouts came amid consumer anger with the recent increase in power fees, including a 26 per cent hike in Delhi, that government officials said were needed to pay for the steep rise in fuel costs.

The Confederation of Indian Industry said the two outages cost business hundreds of millions of dollars, though they did not affect the financial centre of Mumbai and the global outsourcing powerhouses of Bangalore and Hyderabad in the south. Like many, the group demanded a widespread reform of India's power sector, which has been unable to keep up with the soaring demand for electricity as the economy expanded and Indians grew more affluent and energy hungry.

"India has outgrown its own infrastructure," said Jagannadham Thunuguntla, a strategist at SMC Global Securities.

India's Central Electricity Authority reported power deficits of more than 8 per cent in recent months, and many economists said the power deficit is dragging down India's economy.

"Without power we cannot run an economy at 8 per cent, 9 per cent growth or whatever your ambition is," Chakraborty said.

Part of the problem is that India relies on coal for more than half its power generation and the coal supply is controlled by a near state monopoly that is widely considered a shambles.

A recent survey showed nearly all the coal-fueled plants had less than seven days of coal stock, a critical level, said Chakraborty, and many of the country's power plants were running below capacity. Government bureaucracy has made it difficult to bring more plants online.

In addition, vast amounts of power bleeds out of India's antiquated distribution system or is pirated through unauthorized wiring. Farmers, with a guarantee of free electricity that is driving many state electric boards to bankruptcy, have no incentive to conserve energy.

The power deficit was worsened this year by a weak monsoon that lowered hydroelectric generation, spurred farmers to use pumps to irrigate their fields long after the rains would normally have come and kept temperatures higher, keeping air conditioners and fans running longer.

The opposition said officials should have located the first fault and fixed it before getting the whole system back on line Monday.

"The power minister owes an answer to the prime minister, owes an answer to the nation why this is happening," Bharatiya Janata Party spokesman Prakash Javadekar said.

Instead, as part of a planned Cabinet shuffle, Shinde was promoted in the middle of the day to the powerful job of home minister, putting him in charge of the nation's internal security even as the power crisis dragged on.

By contrast, the power chief in the state of Uttar Pradesh was summarily fired by his chief minister Monday for his handling of the first power crisis.

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Associated Press writer Nasr ul Hadi contributed to this report from New Delhi and Prasanta Pal contributed from Kolkata.

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