Oil depletion Newsletter

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Oil depletion Newsletter

ODAC Newsletter - 13 March 2009

Welcome
to the ODAC Newsletter, a weekly roundup from the Oil Depletion
Analysis Centre, the UK registered charity dedicated to raising
awareness of peak oil.

In the run up to OPEC’s meeting in Vienna on Sunday,
the cartel is split along the usual lines, with Iran and Venezuela
calling for further cuts in output, and Saudi reported to prefer closer
adherence to existing quotas. In Guest Commentary this week, Sadad Al Husseini, former Executive Vice President for Exploration and Production at Saudi Aramco, offers five reasons why no further cuts are necessary. 

The US Energy Information Administration (EIA) cut its global oil demand forecast
yet again in its Short-term Energy Outlook released this week. The EIA
now expects demand to fall by 1.4mbd 2009, 200,000 barrels more than it
predicted only last month.

With no end to the economic gloom
and reports that China has filled its strategic oil reserve and is
reducing imports, some commentators anticipate a further price
collapse. Many energy companies are hurting even at current prices, but
Exxon in contrast promised this week to increase its 2009 capital spending and predicts global energy demand will grow 35% by 2030.

As the Copenhagen climate change summit approaches governments are
grappling with low carbon ways of meeting their future energy demand.
Spain, a country with no domestic fossil fuel resources, announced this
week that it is now producing nearly 30% of its electricity from locally installed renewables. Another possibility that is gaining currency is to combine a wide range of renewables through a supergrid although, as with carbon capture and storage, the concept has not yet been demonstrated at scale.

In the UK this week the Business Secretary, Lord Mandelson and the
Energy and Climate Change Secretary, Ed Miliband launched a new UK vision for a low-carbon industrial strategy.
However, with the cabinet reportedly split over funding, the document
was more fanfare than strategy. With growing concern that the UK is
becoming too reliant on gas for heat and power, and time running short
to replace opted-out coal and the ageing nuclear fleet, the
government’s low carbon credentials will soon be tested.

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time to add articles to our database, please contact us for more details.
 

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ODAC Newsletter - 25 September 2009

Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.

This week brought warnings on future oil prices and supply from both Andrew Sentance, a member of the Bank of England’s Monetary Policy Committee and Christophe de Margerie, CEO of Total. Mr Sentance used his speech at the British Institute of Energy Economics Sustainable Energy Seminar to warn that energy price volatility is one of the key threats to the future economy. His speech also pointed to supply and demand balance as the likely key cause of the upward movement in oil prices since the mid-2000s. De Margerie, speaking to the BBC warned that a lack of investment now would lead to a shortage by around 2015. He also stated that “the price of oil is at $60-70/barrel, we consider it is not enough to protect our long-term investment”.

Oil prices fell this week in response to higher than anticipated inventories and weak US economic data. Some commentators predict that prices may fall further in the short-term as crude inventories continue to outpace demand. If so, it is only likely to exacerbate existing investment challenges.

World leaders gathered this week at the UN, followed immediately by the G20 meeting in Pittsburgh. The week had been billed as crucial opportunity to build up momentum for action ahead of the Copenhagen Climate Change talks in December. By Thursday despite some eloquent rhetoric about the need to build a future for our children, it had become clear that the real focus is still on short-term economic recovery making it tough to reach a meaningful deal, especially with no US emissions bill in place yet. Add into the mix a coming oil shock which doesn’t even appear to be on the agenda and it is clear that working at the grassroots and local level will be essential to moving away from fossil fuels and building a resilient future.

Link to the ODAC report - Preparing for Peak Oil: Local Authorities and the Energy Crisis
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ODAC Newsletter - 16 October 2009

Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.

Oil prices rose this week breaking the $75/barrel mark for the first time this year. The gains were mainly fuelled by rising equity prices and a falling dollar. The mood of economic optimism was shared to a degree by OPEC with the organization increasing their 2010 demand forecast by 300,000 barrels/day. Most of that growth is predicted to be from the developing economies.

A new research report from IHS Cambridge Energy Research Associates (CERA) claims, not only that most new oil demand will come from emerging markets, but that OECD oil demand peaked in 2005 and is in decline. The press release goes on to say that the actual decline in demand will be modest, with petroleum destined to remain the major transport fuel for the next 25 years - a statement which utterly ignores the implications of peak oil.

Some of those who are concerned about this disconnect are looking for a possible lifeboat in the form of shale gas. In an article in this week’s Daily Telegraph, Ambrose Evans-Pritchard reports on the excitement emanating from the gas industry. In Guest Commentary this week ODAC trustee and author of High Noon for Natural Gas, Julian Darley, brings his perspective to this phenomenon.

The UK saw 2 high profile energy reports released in the last week, one from OFGEM and the other from the Committee for Climate Change, both of which highlight shortcomings in the government’s energy policy. Just as it looks increasingly likely that the Conservatives will be returned to power, it is becoming clear that the market driven energy policies which they set in motion, and were then adopted by New Labour, have created a legacy of declining infrastructure and a system, which despite much talk about ‘green’ investment, is still structurally tied to fossil fuels. To quote Jeremy Warner in the Telegraph this week, it seems that “Leaving it to markets to sort out may have been a mistake. Leaving it to ministers was a much bigger one.”

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ODAC Newsletter - 23 October 2009

Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.

This week ODAC welcomes the publication of two important reports. In its excellent Heads in the Sand report, Global Witness provides one of the clearest summaries of the peak oil issue to date, including a trenchant critique of the IEA’s position. The ‘ten things you ought to know about oil supply’ on page 6 acts as a handy reference and ought to be enough to trouble even the most optimistic observer.

The second report The Great Transition from the New Economics Foundation (nef), is a bold stab at a roadmap to address the issues of peak oil, climate change and ‘ecosystem pressure’. The approach, which borrows heavily from Transition [link] in terms of method and language, is an attempt to design a workable response to the challenges, with a focus on equity and a rebalancing of values.

As the oil price rose to $82/barrel, another high for the year despite the generally dismal economic picture, the usual suspects were hauled in for the blame line-up. Secretary-general of OPEC, Abdalla Salem El-Badri speaking at the annual Oil and Money conference in London, accused speculators of causing the rise, while others pointed to dollar weakness or economic recovery. In China, whose rampant economy barely paused for breath as the developed world plunged into recession last year, 3rd quarter growth hit 8.9%.

In Britain the cost of nuclear power was in the news as the government apparently prepares to unveil a new strategy. A report in the Guardian claimed the government plans to subsidize new nuclear power stations by establishing a floor of €30 for the carbon price, raising the average electricity bill £44 per year. But the story ignored the good arguments in favour of a minimum carbon price, which would also benefit renewables and discourage fossil generation.

UK residents are invited to sign a petition asking the government to respond to the recent report on Global Oil Depletion by the UK Energy Research Council (UKERC).

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ODAC Newsletter - 6 November 2009

Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.

Tuesday will see the release of the influential International Energy Agency World Energy Outlook (WEO) 2009. Last year’s blockbuster from the report was the declaration that the equivalent of 6 Saudi Arabia’s would need to come online by 2030 in order to meet demand and offset depletion of existing fields. Articles in the FT and Wall Street Journal based on leaks claim that this year’s report will see the IEA drastically cut its demand projections. The articles fail to deal with the supply side of the equation so we will need to wait till next week for that.

The IEA’s website claims that this year’s report will also cover in depth the role of gas in the energy mix including analysis of the impact of US unconventional gas. A short-term gas glut appears likely as a result of reduced demand due to the recession, increased LNG supplies and increased US domestic production. For Europe the opportunity to reduce dependence on Russia would undoubtedly be welcome, although the early moves in the annual winter chess game between Russia and Ukraine are already underway.

The other key area to be addressed in the WEO will be climate change. Last year’s report significantly stepped up language around the need for action. The IEA delivered an early version of its climate recommendations to the G8 Energy Ministers’ Meeting in May, but progress towards a meaningful deal has been slow in the interim. The backdrop for this year’s report will be very different from 2008. A year of recession has resulted in previously unimaginable spending on short-term economic measures. If such resources could only be focused on a clean energy infrastructure, just imagine what could be achieved.

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 "The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying."

 

 http://www.guardian.co.uk/environment/2009/nov/09/peak-oil-international-energy-agency

 

Interesting..

 a pinch of salt required.. market sensitive information is ripe for pump and dump manipulation..

 

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ODAC Newsletter - 13 November 2009

Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.

The IEA 2009 World Energy Outlook, the report which informs energy policy for 28 nations, was released on Tuesday in London. The report’s key focus this year was climate change. The Executive Summary states firmly the need to act now to avoid disastrous impacts, saying that a delay of even a few years could put the goal of limiting temperature increase to below 2C out of reach. Another theme of this year’s report is energy security with the assertion that on current trajectories there are serious risks especially with regard to electricity and oil.

Before the report was even released, an exclusive in the Guardian was published questioning its accuracy. The WEO reference scenario sees oil supply figures rise to 105mb/d by 2030; the Guardian piece alleges that a senior source at the agency stated that "Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources".

An FT commentary failed to see why the US would want to talk up future oil production prospects which would only show its increasing dependence on imports. This view however fails to take into account the fact that the US is the largest oil consumer in the world and therefore also hugely vulnerable to increasing prices – surely declining production prospects increases the power of exporters over importers.

The IEA of course denied the allegations outright pointing to its recent record of reporting global depletion rates and its energy security warnings. A report by the Uppsala World Energy Outlook however which reviewed the IEA’s 2008 projections does find the reference scenario to be highly optimistic, particularly with regard to assumptions for depletion rates used for fields yet to be developed and fields yet to find, which are about double what history says is normally achieved. Using typical historical rates would result in a shortfall of 20Mb/day on the prediction.

A first for this year’s report is a field by field analysis of gas depletion rates. It concludes that “close to half of the world’s existing production capacity will need to be replaced by 2030 as a result of depletion. This is the equivalent of twice current Russian production.” At the same time it states that “The world’s remaining resources of natural gas are easily large enough to cover any conceivable rate of increase in demand through to 2030 and well beyond, though the cost of developing new resources is set to rise over the long term”.

This summary of natural gas prospects and indeed this year’s WEO report overall follows on neatly from last years. The agency provides plenty of warnings, but their urgency is muted by assertions that it is all about investment - whether it be bringing six new Saudi Arabias on stream, replacing two Russias, or decarbonising energy at current rates of economic activity, everything is described as a question of finance. Given what has happened in the financial system in the last year this ought to strike fear, but instead it gives the impression of there being no limits except of a fiscal nature. One is left with the impression that the report does enough to vindicate the agency in the event of any energy crisis while not doing enough to prevent them.

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ODAC Newsletter - 20 November 2009

 

Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.

Oil prices fluctuated in the high $70’s this week reflecting the ups and downs of the dollar. Higher oil prices are loosening the discipline around the implementation of OPEC oil quotas as producers cash in. The additional supply is so far not impacting the price with the dollar the stronger driver. OPEC is due to meet again in December and pre-meeting rumours are that the quotas will remain unchanged. 

A week after the IEA was reportedly accused by whistleblowers of underplaying future oil supply constraints, IHS Cambridge Energy Research Associates (IHS/CERA) have released a report which is considerably more bullish than the WEO. CERA’s report contains a reference scenario which claims that oil production will remain on a growth curve until 2030 with no evidence of peaking; production will then continue on an undulating plateau at around 115mb/d till 2050. Like Tony Hayward at BP, CERA regards all limiting factors to this scenario as being above ground rather than below, although they allow themselves an extremely broad set of ‘aboveground driver’ caveats to explain any degree of variance in the future. 

This is in stark contrast with the recent Uppsala report, picked up in the Guardian this week, which analyses the impact of some previously unnoticed and extraordinarily optimistic assumptions in the IEA’s work, and calculates a shortfall of 26mb/d on the Agency’s 2030 oil supply projections. The arguments seem compelling, although some in the peak oil camp argue the study’s conclusions are unduly pessimistic.

Peak oil demand rather than supply, partly from a transition to renewables, is a key factor in both the IEA and CERA reports. International progress in driving such a transition forward appeared to stall this week as Danish Prime Minister Lars Løkke Rasmussen moved to reduce the role of the Copenhagen Climate talks by introducing the idea of a 2 step plan. His plan, to focus on a political accord in Copenhagen but push out the deadline for legally binding emissions targets, gained agreement from APEC (the forum for Asia-Pacific Economic Cooperation) leaders including President Obama causing consternation among environmentalists.

On Tuesday a joint statement from President Obama and Premier Hu of China raised hopes that a meaningful deal on emissions cuts might be reached in Copenhagen after all, though the lack of US legislation is clearly a significant hindrance. With a recent study warning that on current emissions the world is on course for a 6C rise in temperature there is a desperate need for bold leadership on all sides.

Join us! Become a member of the ODAC Newsgathering Network. Can you regularly commit to checking a news source for stories related to peak oil, energy depletion, their implications and responses to the issues? If you are checking either a daily or weekly news source and would have time to add articles to our database, please contact us for more details.

 

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ODAC Newsletter - 4 December 2009

ODAC Newsletter - 4 December 2009

 

Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.

Oil prices ended Thursday under $76/barrel following a week of mixed economic and geopolitical news. A surprise announcement at the end of last week that Dubai, that shining symbol of sustainable development in the Middle East, would not pay the interest on some of its massive debts on time, briefly rallied the dollar pushing down oil prices.  More bullish news came early this week from the developing economies with reports that India’s economy expanded above expectation at 7.9% for the quarter, while China announced its ninth month of continued growth in manufacturing output. This along with defiance from Iran over its nuclear program succeeded in pushing prices back up, until US reserve figures and disappointing service sector results cooled the market.

Overall prices remain in a fairly steady range despite news that OPEC is now producing at an 11 month high. Goldman Sachs however forecast this week that prices will rise to $110/barrel by 2011 due to rising demand from developing nations which will exhaust spare capacity. Many of the more optimistic oil supply forecasts rely on a significant increase in production of ‘unconventional’ oil, such as the tar sands, shale and coal-to-liquids fuels. In an article for the New Scientist, ODAC trustee David Strahan assesses the chances of non-conventionals filling the gap.

In the UK this week the government finally launched its ‘smart-metering’ program. The program is a key plank in plans to modernise the grid, in part to enable the wider deployment of renewables. Unfortunately, the renewable energy to power the grid suffered further setbacks from yet more stop-start government policy. A widely expected announcement on the rate for ‘feed in tariffs’ was delayed, and the government’s grant scheme for solar power was closed to applications after only half a year due to “unprecedented demand” – another chapter in the farcical history of the Low Carbon Building Programme.

The government’s chronic failure to provide effective support for renewables is mystifying and alarming: Germany, Spain and others have had great success with feed in tariffs, and DECC’s own figures show that ‘micropower’ could supply 6% of UK energy needs, according to Friends of the Earth. With Alistair Buchanan, Chief Executive of Ofgem warning that recent bleak predictions about UK power generation and pricing may have been optimistic there is surely no time to lose.

Join us! Become a member of the ODAC Newsgathering Network. Can you regularly commit to checking a news source for stories related to peak oil, energy depletion, their implications and responses to the issues? If you are checking either a daily or weekly news source and would have time to add articles to our database, please contact us for more details.

 

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In case anyone wants to go to the horses mouth http://www.odac-info.org/

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ODAC Newsletter - 11 December 2009

 

Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.

In a commentary published in The Times this week to coincide with the Copenhagen climate talks, Fatih Birol, Chief Economist of the International Energy Agency wrote that on existing energy demand projections “the world faces the prospect of a peak in conventional oil production in about 2020.” Contrary to assertions in the Economist, which is routinely wrong about oil, this is not a new position for Mr Birol, but echoes both recent interviews and the 2008 World Energy Outlook (WEO).  Dr Birol calls on governments to cut climate emissions by improving energy efficiency and decarbonising energy supplies, a call that ODAC wholeheartedly endorses. However, we fear that IEA forecasts of future conventional and non-conventional oil production remain highly optimistic, feeding a dangerous false sense of security amongst the governments that rely on them.
 
Among other questionable assumptions, the IEA’s forecast to 2030 relies on a near tripling of production in Iraq. Friday sees the next round of bidding for contracts to develop the country’s vast but under-exploited oil resources. The last auction, held in June, resulted in only one deal as oil companies played poker with the government over contract pricing. Friday’s sale is widely expected to be more successful as oil companies try to get their foot in the door before elections to be held next March. The current government is keen to strike deals, but companies will need to weigh the risk that contracts agreed now might not be honoured by the next administration. A series of 5 car bombs on Tuesday which killed and wounded hundreds of people provided a stark reminder that Iraq still presents appalling security risks.

In the UK this week the government released its pre-budget report setting out fiscal policy for the coming year.  The package, which saw a number of tax increases aimed at reducing the budget deficit, also contained a smattering of ‘green’ measures including a boiler scrappage scheme, tax advantages for micro power generation to supplement feed in tariffs - when they finally arrive - and an extension of the rail electrification programme. The measures are welcome but still show nothing of the urgency that is going to be required to seriously address peak oil or reduce emissions.

Join us! Become a member of the ODAC Newsgathering Network. Can you regularly commit to checking a news source for stories related to peak oil, energy depletion, their implications and responses to the issues? If you are checking either a daily or weekly news source and would have time to add articles to our database, please contact us for more details.

 

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ODAC Newsletter - 15 January 2010

 

Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.

Oil prices began the year with a rally, reaching nearly $84 a barrel as temperatures across much of the northern hemisphere required the heating to be turned up a notch. Prices began dropping back into the $70-80 range this week on not so hot economic news from the US, and on reports that Chinese authorities had moved to raise bank reserve requirements to prevent a credit boom after announcing strong export results for December. Any oil demand growth for 2010 is anticipated to come primarily from China and other developing economies rather than OECD nations. With some fearing that China’s economy will be the next bubble to burst there is much uncertainty as to which way the price is going to go.

Iran blamed the US and Israel for a bomb attack which killed a man described by Iranian media as a “nuclear physicist” – although those claims were soon exposed. The continued political tension both inside Iran and internationally in connection with its nuclear program is one of the geopolitical areas most likely to affect oil prices and supplies in 2010. Other possible flashpoints could be Iraq where elections will be held in March; Venezuela where Hugo Chavez faces a challenging year which has begun with power blackouts and a devaluation of the currency; and Nigeria where President Umaru Yar’Adua’s health may force a change of leader and thus threaten the fragile peace following last year’s amnesty with militants.

The UK began 2010 with freezing temperatures eliciting the issue of 4 gas balancing alerts from the National Grid.  In the event, although some businesses on interruptible contracts were cut off for a short time last week, the system squeaked through. The weather has highlighted the UKs increasing reliance on imported gas and lack of storage facilities at a time when dependency on gas imports is only likely to rise as domestic supplies decline and old coal and nuclear plants are closed down.

Plans to exploit domestic renewables were given a boost early in the year with the Crown Estate’s announcement of successful bidders for its nine 3rd Round offshore wind zones. According to the press release, a quarter of UK power needs could eventually be met from this round of bids alone. The challenges of wind power were however thrown into focus by the long period of high pressure which brought both the freezing weather and still conditions. Plans for a North Sea supergrid are aimed at mitigating such an impact.

The multiple challenges of profound oil and gas dependency in a world approaching peak oil, carbon emissions and infrastructure obsolescence - not to mention the deepest recession for decades - point to tough years ahead.  So far the political response has been to try to preserve business as usual but paint it with a slightly greener brush. Will 2010 be the year which elicits a new realism that we now face real limits to growth which will require fresh ideas and a new approach? Happy New Year!

If you are able to support our work with a donation it would be very much appreciated. Your contribution will help us continue our awareness-raising and outreach work.

 

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ODAC Newsletter - 23 April 2010

 

Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.

Oil demand was down this week – as were most European flight schedules. The eruption of the Eyjafjallajokull volcano wrought further damage to the airline industry, which is already on its heels as a result of high fuel prices and recession.  The incident also graphically illustrated the nature of our reliance on global transport systems - currently almost entirely fuelled by oil - and gave rise to some musings on whether this might be a snapshot of the future rather than merely a temporary blip.

That we may face peak oil in the near future appears to be moving ever more into mainstream thinking. In the FT this week Kate McKenzie summarised the growing consensus around an oil crunch, even if the language and emphasis from the various groups, ranging from the UK industry taskforce (ITPOES) to the US military, differs.

The other rather crucial point of difference is on what such an oil crunch would mean. This was highlighted during Tuesday’s climate and energy hustings hosted by The Guardian. At the event the three candidates to be the next secretary of state for energy and climate change were questioned by a ticketed audience on their plans. ODAC trustee David Strahan asked a question about peak oil, which was treated far more seriously than in previous elections, yet candidates still showed a lack of understanding of the issue and its likely ramifications. See David’s ODAC Guest Commentary for his summary and for a link to audio of the peak oil responses.

In other news this week, the leaders of the Gas Exporting Countries Forum, who control 70% of the world’s gas, met this week. The key outcome appears to have been support for continued efforts to link gas prices to oil. Should unconventional gas continue to boom as many forecast, however, defending the oil price linkage may prove difficult. One man who is not convinced by the hyperbole is Henry Groppe of Texas petroleum industry analysts Groppe Long & Littell, a remarkably accurate forecaster of the oil market over many decades. In his view estimates of economically recoverable volumes of gas from shale are optimistic. Based on rapid decline rates of shale wells, and a slowdown in production due to the economy he is predicting a tightening of the gas market as soon as the end of summer.

Join us! Become a member of the ODAC Newsgathering Network. Can you regularly commit to checking a news source for stories related to peak oil, energy depletion, their implications and responses to the issues? If you are checking either a daily or weekly news source and would have time to add articles to our database, please contact us for more details.

 

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