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Tapping Shale Reserves, US Would Become World's Top Oil Producer By 2017 467

Posted by Unknown Lamer
from the where's-al-gore-now dept.
Hugh Pickens writes "The NY Times reports that according to a report by the International Energy Agency, the U.S. will overtake Saudi Arabia as the world's leading oil producer by about 2017, will become a net oil exporter by 2030, and will become 'all but self-sufficient' in meeting its energy needs in about two decades — a 'dramatic reversal of the trend' in most developed countries. 'The foundations of the global energy systems are shifting,' says Fatih Birol, chief economist at the Paris-based organization, which produces the annual World Energy Outlook. There are several components of the sudden shift in the world's energy supply, but the prime mover is a resurgence of oil and gas production in the United States, particularly the unlocking of new reserves of oil and gas found in shale rock. The widespread adoption of techniques like hydraulic fracturing and horizontal drilling has made those reserves much more accessible, and in the case of natural gas, resulted in a vast glut that has sent prices plunging. The agency's report was generally 'good news' for the United States says Michael A. Levi, senior fellow for energy and environment at the Council on Foreign Relations, because it highlights the nation's new sources of energy but Levi cautions that being self-sufficient does not mean that the country will be insulated from seesawing energy prices, since those oil prices are set by global markets. The message is more sobering for the planet, in terms of climate change. Although natural gas is frequently promoted for being relatively low in carbon emissions compared to oil or coal, the new global energy market could make it harder to prevent dangerous levels of warming (PDF). 'The report confirms that, given the current policies, we will blow past every safe target for emissions,' says Levi. 'This should put to rest the idea that the boom in natural gas will save us from that.'" The folks over at The Oil Drum aren't quite so optimistic: shale reserves may have an abysmal EROI. And, of course, Global Warming is a liberal myth.
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Tapping Shale Reserves, US Would Become World's Top Oil Producer By 2017

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  • by aurispector (530273) on Tuesday November 13, 2012 @09:07AM (#41966263)

    When the partisan political aspect of an issue is already included in the original post.

    Bettter to shut down discussions about AGW before they start! It's settled science!

    • Re: (Score:3, Interesting)

      What is most sad is because of the captured nature of congress the real discussions (of course happening in the back rooms) is about how this helps or hurts oil companies. Our system has real problems doing stuff for the greater good of all when the internal debate is basically controlled by a group of oil robber barons.

    • by h4rr4r (612664)

      Yeah! And why did they not bring up the theory that the earth is full of oil and it is regenerated by pixies?
      Why did they assume a round earth at all?

    • I think it is a sad sign of the times that basic science IS in fact a partisan political issue for some. Making a joke about that fact in a post, isn't the issue in my opinion.

  • "Peak Oil" (Score:5, Interesting)

    by argStyopa (232550) on Tuesday November 13, 2012 @09:09AM (#41966279) Journal

    We've heard it before, and we'll hear it again.

    "In 1975 MK Hubbert, a geoscientist working for Shell who had correctly predicted the decline in US oil production, suggested that global supplies could peak in 1995. In 1997 the petroleum geologist Colin Campbell estimated that it would happen before 2010. In 2003 the geophysicist Kenneth Deffeyes said he was "99% confident" that peak oil would occur in 2004. In 2004, the Texas tycoon T Boone Pickens predicted that "never again will we pump more than 82m barrels" per day of liquid fuels. (Average daily supply in May 2012 was 91m.) In 2005 the investment banker Matthew Simmons maintained that "Saudi Arabia ⦠cannot materially grow its oil production". (Since then its output has risen from 9m barrels a day to 10m, and it has another 1.5m in spare capacity.)" (and that's just since 1975).

    Personally, if the US has these sorts of reserves, we're idiots to tap them today. Use it as leverage to keep the Saudis pumping THEIR oil at moderate prices, and exhaust the supplies outside the US before touching our own.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      Personally, if the US has these sorts of reserves, we're idiots to tap them today. Use it as leverage to keep the Saudis pumping THEIR oil at moderate prices, and exhaust the supplies outside the US before touching our own.

      Unfortunately that's not how Capitalism works. This would be the definition of collusion or the United States government directing private industry not to make money. We're quite far from China in this respect and that's one area I'd like us to stay away from.

      Did you know we get more crude oil from Canada than Saudi Arabia?

      • Re:"Peak Oil" (Score:5, Interesting)

        by fuzzyfuzzyfungus (1223518) on Tuesday November 13, 2012 @09:40AM (#41966511) Journal

        Personally, if the US has these sorts of reserves, we're idiots to tap them today. Use it as leverage to keep the Saudis pumping THEIR oil at moderate prices, and exhaust the supplies outside the US before touching our own.

        Unfortunately that's not how Capitalism works. This would be the definition of collusion or the United States government directing private industry not to make money. We're quite far from China in this respect and that's one area I'd like us to stay away from.

        Did you know we get more crude oil from Canada than Saudi Arabia?

        You are missing one important point: not all 'oil reserves' are created equal. Some are nice, clean, sweet, crude conveniently buried in relatively uncomplicated rocks at moderate depth. Others are a zillion feet underwater, badly dispersed through some formation that makes geologists cry, or in the form of dubiously flammable shale or tar sands that can be coaxed into releasing just slightly more energy than required for the coaxing if you are willing to put up with ghastly byproducts.

        The exploitation of different classes of reserves creates externalities of differing severity. Because markets suck at dealing with externalities, we impose some level of regulation designed either to internalize the externalities or to simply forbid activities that cause excessive negative externalities.

        It is entirely possible that, if the US oil reserves are nastier, or if the Saudis need the oil money sufficiently badly to impose the externalities on themselves before we do, we would see a situation where less desirable US reserves remain in reserve until foreign reserves are tapped out.

        This would be a situation created by regulatory pressures(which I would argue is hardly a bad thing, if it keeps us from experiencing the... cost insensitivity... that accompanies oil development in places like the Niger delta...); but it would hardly require the establishment of the First People's Patriotic Petroleum Five Year Glorious Plan.

    • Re:"Peak Oil" (Score:5, Insightful)

      by VortexCortex (1117377) <.VortexCortex. . ... -retrograde.com.> on Tuesday November 13, 2012 @09:48AM (#41966593)

      I agree. Furthermore: Burning Oil is BAD -- No, hear me out. We should be using it to make plastics and other neat stuff, not wasting it as a fuel. I agree we need to use it now, but think of the future, when alternative energies are viable -- We'll curse ourselves for wasting all that valuable material used to make everything from medical supplies to computer screens. We won't stop pumping oil until every last drop is gone, even if we stop using it as a fuel.

      • Re:"Peak Oil" (Score:5, Interesting)

        by i kan reed (749298) on Tuesday November 13, 2012 @10:51AM (#41967265) Homepage Journal

        You know, I held the same opinion until I decided to do some research to back up my position, and found that only the heaviest oils in the refinement process are any good for plastics(at least the consumer/industrial grade plastics we're used to). Those heavy oils are also the worst ones for burning for energy, with the lightest ones being converted to jet fuel and gasoline.

        I'm also pretty impressed with what we're doing with plant-based plastics these days, which are essentially renewable. Not on par with the oil-based plastics, but getting there.

        Suffice it to say, I can't really hold that position anymore.

        • Re:"Peak Oil" (Score:4, Informative)

          by TubeSteak (669689) on Tuesday November 13, 2012 @01:27PM (#41969697) Journal

          You know, I held the same opinion until I decided to do some research to back up my position, and found that only the heaviest oils in the refinement process are any good for plastics(at least the consumer/industrial grade plastics we're used to). Those heavy oils are also the worst ones for burning for energy, with the lightest ones being converted to jet fuel and gasoline.

          https://en.wikipedia.org/wiki/Fuel_oil#Bunker_fuel [wikipedia.org]
          "... bunker oil is literally the bottom of the barrel; the only things more dense than bunker fuel are carbon black feedstock and bituminous residue which is used for paving roads (asphalt) and sealing roofs."

          Everything that gets shipped from China arrives on a boat burning bunker fuel aka "Those heavy oils [that] are also the worst ones for burning for energy".

          And I don't know where you got the idea that heavy oils are the worst for energy. In the same way that diesel has more energy content than gasoline, bunker fuel has more energy content than diesel. Bunker fuel just requires a lot more pre-treating before it can be used in an engine... which is why it gets sold so cheaply. Nothing smaller than a boat has room for all the extra machinery to heat and filter the fuel.

    • the petroleum geologist Colin Campbell estimated that it would happen before 2010

      And he was right, because global oil production peaked in 2008 and we are extracting less now than we did in that year.
      What, you meant something different? OK then, write something different instead of attaching whatever bullshit baggage you have to a technical term.

      • And he was right, because global oil production peaked in 2008 and we are extracting less now than we did in that year.

        Hmm, what else happened in 2008 that might explain why demand for oil dropped significantly around that time?

    • The First problem with predictions about "Peak Oil", or peak anything for that matter, is that it assumes the current known reservers are all that exist. The Second problem with these predictions are that they don't take into account the ability of price and new technology to change what known quantities of a natural resource even get counted in the reserves.

      The known reserves of Oil is higher today than it was during the oil shortages of the 1970's here in the US. This is becuase exploration continues
  • Limited time offer (Score:2, Informative)

    by Xacid (560407)

    "and will become 'all but self-sufficient' in meeting its energy needs in about two decades" for about two decades.

    • by alen (225700)

      i've read that at current consumption rates the US has enough oil to last us a few hundred years

      • by oodaloop (1229816)
        Enough coal perhaps. The life expectancy of oil is around 34 years right now. Proven global reserves of usable oil are around 1 trillion barrels (7 trillion to include all shale oil and other forms of oil not currently usable). At current rate of global consumption, we would use all 1 trillion barrels in 34 years. However, the life expectancy of oil has been increasing over the years due to discovery of oil growing faster then even our rampant usage (something peak oilists conveniently ignore). It may turn
      • i've read that at current consumption rates the US has enough oil to last us a few hundred years

        And then what? You've got to stop thinking short term, and look at the big picture.

  • by Dunbal (464142) * on Tuesday November 13, 2012 @09:11AM (#41966293)
    All these arguments fail to account for increasing US oil demand. They invariably keep demand fixed at today's demand. So while the US could "become the world's #1 producer by 2017", by 2020 it would probably be consuming everything it produces and be importing again. Provided China left any oil for anyone else by then...
    • Re:Except (Score:4, Informative)

      by ocop (1132181) on Tuesday November 13, 2012 @09:32AM (#41966443)
      Oil demand in the U.S. (and the OECD more broadly) has declined and flatlined following the "Great Recession". Even in light of the recovery, petroleum consumption has remained essentially flat, with maybe even a slight decline from 2009. The economic shock of 2008's oil prices has violently reoriented the economy in some ways, and it's hard to think of a reason that oil consumption will ever tick back up as new CAFE standards come into effect. The use of oil for heating and power generation has been in decline for decades--the remaining demand is for transportation and petrochemicals. EIA US consumption data here: http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WRPUPUS2&f=W [eia.gov]
  • by Anonymous Coward on Tuesday November 13, 2012 @09:19AM (#41966341)

    Global Warming is a liberal myth.
     
    Ok. So stop being a consumer. It's that simple. Sure, it means paying more and putting up with some things that oil consumers don't have to put up with but if you're so concerned than stop buying what they're selling. If enough people do it and if enough money goes into green tech than you'll be able to end the oil industry.
     
    If you're waiting for the government to hold your hand than you're going to wait a long time before they really abandon the oil culture. By a long time I'm talking generations.
     
    There's your choices. What's your next move? Grumble and accept your fate at the gas pumps or do you become forward thinking and move on from oil? I can tell you where I'd place my bets.

  • we consume about 18 million bbl/day of petroleum liquids. we produce 8, 3 of which is ethanol, and we're not going to just up and double our ethanol production.

    assuming, stupidly, that there's no growth whatsoever in demand over the next 2 decades in the US, or that improvements in efficiency and mileage will counter any growth in overall demand, we're going to add about 13 million bbl/day of tight oil in 20 years?

    or is natural gas going to swoop in and run all of our cars by then? this doesn't add up at al

  • by arkham6 (24514) on Tuesday November 13, 2012 @09:29AM (#41966421)
    I hate whenever i hear people say "Well, if we drilled more we could be self sufficient from foreign oil and have oil prices come down.

    NO, it does not happen that way.

    The US government does not drill oil. They lease out the mineral rights to companies such as shell, BP and Exxon who extract the oil and then __sell it on the world market__. Let me say that again. The oil goes into a central market and could be shipped anywhere if the costs are right. Just because its produced here does not mean it stays here.

    Another example was Norway after Hurricane Katrina. Their oil and gas prices jumped significantly after the hurricane in the gulf, yet they are a major exporter and producer. Why? Because supply went down after the storm, so prices had to go up. It didnt matter that they got all their own oil, the world markets made the prices go up.
    • exactly. even if we were to somehow conserve our way to half our current usage and go full-bore with hydrofracking basins (which wouldn't last long, those basins carry a few billion barrels), we'd still pay through the nose unless we full-on nationalized our oil market and kept it all for ourselves.

    • Yes, but the government can make it harder to import/export, and they can "encourage"(subsidize) companies that actively "drill" within our borders.

      I'm not saying I'd recommend that or that it would bring prices down, but the government has more than enough power to make it happen if you buy the right congressmen.

      • by mbkennel (97636)

        Actually, taxing exports requires a Constitutional amendment.

        • You assume they'll label it as a tax. While we might call it a tax, they'll call it the Bald Eagle Investment Bureau for Environmental Restoration Act.
    • by serviscope_minor (664417) on Tuesday November 13, 2012 @10:18AM (#41966931) Journal

      . The oil goes into a central market and could be shipped anywhere if the costs are right.

      That's a myth.

      Refineries are generally built to process oil from a particular field, or a particular class of fields. You can't ship tar sands off to a light sweet crude refinery and expect to actually be able to refine them.

      It's particularly bad for the heavier ones, like the sands and shales, since each deposit has a different set of impurities, which mean that different catalyst properties are required to avoid poisioning.

      Of course, the end products are interchangable: diesel is diesel and Jet A is Jet A. So a failure in one supply means that the price of end producs goes up, so people can charge more for the feedstocks.

  • by GeneralTurgidson (2464452) on Tuesday November 13, 2012 @09:33AM (#41966455)
    This post and a lot of comments make it seem like the oil produced would stay in our country and only used by us. Yea right, it would be sold to the highest bidder on the market, which will probably be China in a couple of years. Meanwhile our country is turned into a wasteland from this and fracking.
  • by FriendlyLurker (50431) on Tuesday November 13, 2012 @09:38AM (#41966499)
    From here [nakedcapitalism.com]

    "The second thing that nobody thinks very much about is the decline rates shale reservoirs experience. Well, I’ve looked at this. The decline rates are incredibly high. In the Eagleford shale, which is supposed to be the mother of all shale oil plays, the annual decline rate is higher than 42%. They’re going to have to drill hundreds, almost 1000 wells in the Eagleford shale, every year, to keep production flat. Just for one play, we’re talking about $10 or $12 billion a year just to replace supply. I add all these things up and it starts to approach the amount of money needed to bail out the banking industry. Where is that money going to come from? Do you see what I’m saying?"

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      From here [nakedcapitalism.com]

      They’re going to have to drill hundreds, almost 1000 wells in the Eagleford shale, every year, to keep production flat. Just for one play, we’re talking about $10 or $12 billion a year just to replace supply. I add all these things up and it starts to approach the amount of money needed to bail out the banking industry. Where is that money going to come from? Do you see what I’m saying?"

      The money comes from selling the oil. Either the price of oil rises to where extracting it from the shale is profitable, or the world transitions away from fossil fuels and it stays in the ground.

  • by fearofcarpet (654438) on Tuesday November 13, 2012 @09:44AM (#41966561)

    'The report confirms that, given the current policies, we will blow past every safe target for emissions,' says Levi. 'This should put to rest the idea that the boom in natural gas will save us from that.'

    Wait, what? There is an idea that natural gas will curb CO2 emissions? Natural gas may burn "cleaner" and it may have a slighter higher energy density, but that doesn't change the equation: CH4 + 2 O2 -> CO2 + 2 H2O. Are we really so bereft of a basic grasp of chemistry to think that the CO2 released from natural gas doesn't count?

    The link in TFA to The Oil Drum questions the whether shale oil can be competitive because of the costs associated with extraction; basically that the oil is too spread out in the shale. Those costs certainly aren't stopping them from trying. Why not put those resources into carbon-neutral energy generation? Fracking? Sure, let's give it a go, I'm like 85% sure it won't contaminate aquifers or cause earthquakes. Deep-water drilling? Sure, I like a good challenge and there's no chance that we'll wreck an entire ecosystem. Shale oil? There's only one way to find out if it's profitable! Solarthermal, biomass, photovoltaic, wind, tidal energy, geothermal? I don't know... sounds risky... and kinda hard... I'm not so sure I can make money with any of those... and I already picked out the paint for my new horizontal drilling rig.

    The agency's report was generally 'good news' for the United States says Michael A. Levi, senior fellow for energy and environment at the Council on Foreign Relations, because it highlights the nation's new sources of energy but Levi cautions that being self-sufficient does not mean that the country will be insulated from seesawing energy prices, since those oil prices are set by global markets

    Why exactly do we need to ramp up oil and gas production when the prices are set by an international cartel? We start pumping fossil fuels into the market and Saudi Arabia and Russia just turn down the facet; prices rise and they're making the same money as before by producing less. Yay, it was worth raping the environment to have no impact on energy prices because we're "self-sufficient" now!

    This headline reads to me like "US Would Become World's Top Phone Booth Producer by 2017." Are we all going to act surprised when that hippie fantasy we call a "green economy" becomes a reality for the EU or China? You know, like we were all shocked that Romney performed exactly as the polls predicted.

    Am I missing something here?

    • by mbkennel (97636)

      "Wait, what? There is an idea that natural gas will curb CO2 emissions?"

      For a given energy output, burning CH4 emits less carbon than burning long chain hydrocarbons (petroleum) or solid blocks of carbon (coal).

  • by dbIII (701233) on Tuesday November 13, 2012 @09:49AM (#41966613)
    To put things very simply, the largest problem is in-ground extraction of heated shale to get liquid causes expansion, making it hard to get to anything underneath (all the fractures and boreholes squeeze shut and the ground can hump up). Digging it up and doing stuff with it that way is like dealing with very very hard coal but with a lot less energy recoverable from it per unit volume, so almost always pointless since there are oil from coal techniques that would probably give you more for the same effort. Thus the depth of the reserves is fairly meaningless if you can only get to the top layer.
    Enough of that, I need to get some sleep so that I can get up early and not see the sun in the morning :)
  • Why can't they just use solar powered drills?
    • Not as looney as it sounds. You increase the effective net energy of crap hydrocarbons by using renewables as a power source for extraction.

  • It's all about NET energy. Otherwise, why bother? The total net energy contained by all the oil extracted up until now is MUCH greater than the energy contained in the oil that's left. So whether we've hit peak oil or not is irrelevant. What we're facing is the net energy cliff, at least as far as oil goes. Natural gas is a bright spot, assuming the government's numbers aren't political numbers. If they're real, domestic natural gas represents the equivalent of 44 years worth of oil. In reality, there will

  • by BlackPignouf (1017012) on Tuesday November 13, 2012 @10:00AM (#41966737)

    We're freakin' drug addicts :
    we need our daily dose, and when our shady dealer doesn't play fair, we look beneath the couch.
    We find some dirty old bag of crack, and scream "Yeah! We're saved! We solved our problem once and for all!"

    • > (...snip...) We find some dirty old bag of crack (...snip...)

        "We clear out the trash that's been down in the basement since we moved in, and discover an old, forgotten sub-basement built in the 19th century for coal that's filled with enough dirty old crack to to fill our own habit, plus the habits of the entire northeastern US, for the next 5000 years, and scream "Yeah! We're saved!..."

      There, fixed that for you.

  • Talking about EROI is about as meaningless as talking about ROI. Nobody cares about ROI in and of itself. You have to add time to the equation. The relevant measures in economy are measures of rate of return on investment. The relevant energy measures will always be measures of rate of energy return on energy investment.

    Simple thought experiment: Company A builds a hydroelectric dam that lasts for 120 years and has an EROI of 120. Company B builds wind turbines that last for 25 years and have an EROI of 30.

  • This means now the US can set about selling off our natural resources to the highest bidder like every other Third World shithole.

  • by MaWeiTao (908546) on Tuesday November 13, 2012 @10:12AM (#41966877)

    Currently petroleum is still relatively inexpensive. Why not keep these supplies untapped and in our back pocket for when there is real demand. Rushing to get at these reserves merely to push down prices slightly or reduce foreign dependency seems foolish.

    Furthermore, despite the incessant mantra, the majority of our oil does not come from the Middle East.

  • According to the Argonne National Laboratory, it takes two barrels of water to produce one barrel of oil shale liquid. A lot of the shale rock is out where water is already being fought over between farmers, cities, and Native Americans.
  • by yog (19073) *

    Lots for Americans to celebrate here:

    Anything that helps to wean us off Middle Eastern, North African, and Venezuelan oil is a good thing. War, support for nasty dictatorships, terrorism, patrolling the Persian Gulf: it all goes away, or becomes someone else's problem.

    Natural gas is a much cleaner way to generate electricity than coal.

    Jobs, and lots of them.

    Cheap gas = more local chemical and plastics plants, which depend on the stuff.

    Energy exports help our balance of trade.

    It helps prove that private se

  • by 140Mandak262Jamuna (970587) on Tuesday November 13, 2012 @11:08AM (#41967497) Journal
    Did the stone age end because we ran out of stones? Nah, it ended because we found better materials to make the tools, copper and then bronze. Later iron. Then steel.

    The age of petroleum, ushered in by the gusher in Titusville Pennsylvania in 1860s, will end with more than half the oil still left in the ground. Oil prices are very unlikely to top 120$ a barrel for sustained periods of time. It might spike to 150$, but will quickly drop back. Shale oil, tar sands oil, oil from coal, etc are all profitable at prices about 100$ a barrel. Solar and wind beat fossil fuels when oil goes above 100$ a barrel.

    The only huge problem is energy consumed at fixed points (homes, offices, factories) can be switched to alternative energy relatively easy. But the transportation sector (gasoline for cars, diesel for heavy vehicles, kerosene for aviation) is very heavily dependent on oil. They don't switch to alternative energy easily. But new technologies are emerging. But as the oil price goes up, things will start to change. 90% of the cars are driven less than 60 miles a day. Trucks can stretch the diesel by switching to more efficient diesel-electrics, CNG/LPG and other forms of fossil fuels that are not from Arabia. Arab oil is managed by the big oil companies who know all this. They keep the price to maximize profits without giving a toe hold for the alternative technologies. So it is very unlikely they will let the price spike much above 120$ a barrel. But all their manipulation will just delay the inevitable.

    We will leave most of the coal, natural gas and crude oil, in the ground.

  • by peter303 (12292) on Tuesday November 13, 2012 @12:40PM (#41968849)
    Right now we import 45% of our petroleum. [eia.gov] Adding 1.5 million barrels of production to regain worlds largest producer status would cut this to 30%. Optimistic projections are that further production increases plus conservation plus green energy might make US energy independent around 2030.
  • by T.E.D. (34228) on Tuesday November 13, 2012 @03:51PM (#41972237)

    This really shouldn't suprise anyone. For most of the history of Oil Production [theoildrum.com], the USA has been the world's largest producer. We only lost the title in the 70's (I was a kid, so yes, I remember us being the largest before). We never left the top three, and the Saudi's never outproduced us by a large percentage.

    I even remember back in the 70's being told that we had so much shale that we could easily keep leading the world, but it would probably stay put until we figured out a way to get it more cheaply, or the prices raised a fair amont.

    Both have happened, so here we are.

  • By moving our new commercial vehicles and large passenger vehicles to Nat Gas, we can drop the oil imports within 5 years. That was the intention of the Nat Gas Act. sadly, it was killed by idiots that only back oil. With gas/diesel, you have no economical alternative. Even at $150/bl, the ONLY bio-fuel that can compete would be Joules Energy. Yet, we have loads of idiots calling for us to stay with Oil.
    But small electric cars combined with Nat Gas larger vehicles that are then switched to serial hybrids using Nat Gas, will bring us Independence quickly. After all, it is the gal of oil that you do not need that is the easiest to solve.

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