Minnesota

StarTribune: Central to Enbridge’s New MN Pipeline Request is How Much Oil is Needed

March 24, 2018
Central to Enbridge’s New Minnesota Pipeline Request is How Much Oil is Needed
By Mike Hughlett

At Flint Hills Resources’ sprawling refinery in Rosemount, Enbridge’s proposed new oil pipeline is seen as vital. Flint Hills wants to increase production there, but says it needs more oil to do so and Enbridge is its main supplier.

Enbridge says its six pipelines across northern Minnesota are so full that oil is being rationed, hurting refineries across the Midwest including Flint Hills. Enbridge wants to spend $2.6 billion to replace its aging and corroding Line 3. It says without the increased capacity from that project, the rationing — or apportionment as it’s known in the oil business — will just get worse.

“The current Enbridge Mainline fails to meet refinery demand for crude oil, despite a series of expansions over the last 15 years,” Neil Earnest, a consultant for Enbridge, said in testimony filed with state regulators.

And the company forecasts continuing growth in Canadian oil production well into the 2030s, even as changes in the global auto market portend weaker gasoline demand and national experts have predicted market changes because of that.

The need for that oil will play a key role when the Minnesota Public Utilities Commission decides on Enbridge’s request to build its new Line 3, a decision expected in June.

The Minnesota Department of Commerce — tasked with looking out for the public interest in pipeline matters — said the need for Enbridge’s oil isn’t enough to trump the potential risks to society, especially oil spills in pristine waters and wildlife areas.

Further, Commerce has questioned the accuracy of Enbridge’s forecast of future need and so-called negative effects of rationing.

For the oil industry, apportionment is evidence of “a system not running properly,” said Jake Reint, spokesman for Flint Hills’ Pine Bend refinery in Rosemount, one of the largest in the Midwest. Flint Hills is an arm of Wichita-based Koch Industries.

Reint said the refinery is not running as efficiently as it should and continued apportionment could lead to canceling future projects.

Flint Hills has spent about $750 million in upgrades at Pine Bend over the past five years, with some projects still ongoing (and oil output increasing). Another $600 million of investments are planned.

They would allow Flint Hills to further increase production from around 300,000 barrels per day now up to 339,000 barrels per day.

“Without the crude oil, it just doesn’t make as much economic sense,” Reint said.

Canada is the biggest source of U.S. oil imports, and Enbridge’s Minnesota pipeline corridor is the main artery of Canadian crude.

The Minnesota pipeline corridor delivers about 70 percent of the crude oil required at Midwest refineries served by Enbridge, the company says. It would not break out how much is used in Minnesota.

More than 20 percent of the oil flowing through Minnesota goes to the middle of the country or the Gulf Coast, routed through Enbridge’s big terminal in Superior.

As Canadian oil production has increased in the last several years, pipeline backups have followed. “Since 2014, we have been in almost continual apportionment,” Earnest, the Enbridge consultant, said in an interview.

For much of 2017, Enbridge’s apportionment was about 20 percent for Canadian heavy crude, meaning oil producers could have shipped 20 percent more given their own supply coupled with demand from refineries downstream.

The current Line 3, because of its age, can only run at 51 percent of its 760,000 barrel-per-day capacity. A replacement would restore full flow, and allow for 155,000 barrels per day more if eventually needed and approved by regulators.

Without a new Line 3, Enbridge forecasts apportionment of over 20 percent this year through 2020, rising to over 30 percent in 2021 and beyond.

Commerce questions the accuracy of Enbridge’s oil forecasts. Demand for gasoline and diesel fuel, it says, is likely to fall in the long-term as electric vehicles take off and fuel efficiency grows in traditional cars.

Crude demand will be dented, it said in a regulatory filing, potentially causing an oil glut and pushing down petroleum prices: “Global oil oversupply clearly could reduce demand for transportation of crude oil on the Enbridge Mainline which, in turn, could reduce [Enbridge’s] modeling projection of the use of that system.”

The wild card in the oil demand outlook is the future of electric vehicles (EVs).

Now, they’re a very small market. But if costs for EVs fall and demand for them grows as expected, they could displace oil demand and force automakers to increase the fuel efficiency of gas and diesel vehicles, according to a 2017 Wood Mackenzie report.

“For oil producers, the threat of EVs is existential,” the report said.

Boston Consulting Group, in a study released last month, said electric cars could represent more than 20 percent of new vehicle registrations by 2030. The company’s research suggests gasoline demand would drop by 10 to 15 percent by 2025, and by 30 to 35 percent by 2035.

“Global oil demand, as alternatives come online and as efficiency gains are realized, is expected to flatten, peak and decline, though it’s not a disruptive [steep] decline,” said Clint Follette, a managing director at Boston Consulting.

Enbridge doesn’t foresee a decline, at least in the next 20 years or so.

In a PUC filing, the company says that even if electric vehicles capture 75 percent of the North American auto market by 2035, its Minnesota pipeline corridor would still be operating at full capacity.

Canadian oil producers are coping with a bottleneck that goes beyond Enbridge because of a lack of pipeline capacity coming out of Canada, oil industry analysts say.

“They are getting a much lower value for their crude,” said John Coleman, a senior analyst with energy consultancy Wood Mackenzie. (Conversely, the Canadian discount helps U.S. refiners like Flint Hills, since they’re buyers).

Oil analysts expect that Enbridge’s new Line 3 will be the first of three proposed Canadian oil pipelines to come online to help alleviate the capacity shortage. However, like Line 3, the two other big oil pipelines have also faced considerable opposition.

Even with capacity upgrades, Canadian oil has another problem.

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Toledo Blade: Congressmen, ELPC, Demand Faster Action on Asian Carp

 
Congressmen Demand Faster Action on Asian Carp
by Tom Henry

Twenty-six members of Congress — including U.S. Reps. Marcy Kaptur (D., Toledo), Bob Latta (R., Bowling Green), Tim Walberg (R., Tipton), and Debbie Dingell (D., Dearborn) — have joined numerous other elected officials in demanding more aggressive action from the Army Corps of Engineers against destructive Asian carp threatening to enter the Great Lakes near Chicago.

A bipartisan letter submitted Friday said the congressmen are firmly holding the Corps to an early 2019 deadline for completing the most crucial report to date for a long-term fix, called the Brandon Road Lock & Dam Study.

It affects the future of the Brandon Road lock near Joliet, Ill., and the series of Chicago-area waterways that artificially connect the Mississippi River and Great Lakes basins. That connection, made in the early 1900s, has made it possible for invasive carp moving north along the Mississippi to someday enter the Great Lakes via Lake Michigan.

The letter, submitted on the final day the Corps was accepting formal comments to its tentatively selected plan, mirrors one submitted earlier by several U.S. senators from the Great Lakes area, including Rob Portman (R., Ohio) and Debbie Stabenow (D., Mich.), co-chairs of the Senate Great Lakes Task Force, and U.S. Sen. Sherrod Brown (D., Ohio), U.S. Sen. Gary Peters (D., Mich.), and senators from Minnesota, Wisconsin, Illinois, and New York who are members of that task force.

“Current estimates show it will take as long as eight years to have a barrier installed at the Brandon Road Lock and Dam — a time frame which is unacceptable,” Miss Kaptur said. “With the Asian carp on the doorstep of our region’s most vital natural resource, we have a small window of opportunity to stop this invasive species. Once the Asian carp are in the Great Lakes, it will be too late to stop the destruction they will cause.”

The Corps is looking at fortifying electric barriers and taking other measures to thwart the movement of carp and other exotics. But it has said it is unlikely to act on several measures before 2025, a timeline that senators and now congressmen have said is unacceptable.

Ohio Attorney General Mike DeWine, a 2018 gubernatorial candidate, likewise joined the fray late last week by telling the Corps in his formal comments that it should close the Brandon Road lock while also recognizing its obligation to meet previously agreed-upon deadlines.

While the Corps has tentatively selected a plan that uses electrical fences, noise, and water jets to keep out invasive species, Mr. DeWine and the large contingent of congressional members believe that doesn’t go far enough — especially after reports in June of a silver Asian carp found 9 miles from Lake Michigan, beyond the electric barriers.

The attorney general said the Corps should implement the lock closure alternative, which will be the most effective and cheapest to construct.

The Chicago-area decision affects Ohio because Lake Erie is the epicenter of the Great Lakes region’s $7 billion fishery, valued at more than all commercial and recreational fishing in U.S. waters along the Atlantic and Pacific oceans and the Gulf of Mexico.

More fish are spawned and caught in Lake Erie than the other four Great Lakes combined.

Researchers have said Ohio’s tourism and recreation industries would greatly suffer if Asian carp found their way to western Lake Erie.

Mr. DeWine also encouraged the Corps to work on plans for a multibillion-dollar, complete hydrologic separation of the Mississippi River and Great Lakes basins to block the spread of Asian carp.

A contingent of five major environmental groups — the Alliance for the Great Lakes, the Environmental Law & Policy Center, the Natural Resources Defense Council, Prairie Rivers Network, and the Illinois chapter of the Sierra Club — also demanded a more aggressive response from the Corps via 21 pages of joint comments submitted Friday.

“Now is the time for all effective and necessary action steps,” Howard Learner, executive director of the Chicago-based Environmental Law & Policy Center, said. “Further delays risk Asian carp getting into Lake Michigan while the Army Corps is fiddling. Prevention solutions now are wise investments.”

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Great Lakes Now: ELPC’s Learner Tells US Army Corps to Stop Fiddling, Act Fast on Asian Carp Report

Pace of Asian Carp Plan “taking far too long”
Michigan Senators Critical of Timetable

by Gary Wilson

The debate about how to stop Asian carp from entering the Great Lakes hit another milestone last week as the Army Corps of Engineers’ extended comment period on a potential solution came to a close.

The controversy is now in its second decade.

The opportunity to comment was expanded to accommodate a previously unscheduled session in New Orleans. The extension angered Michigan Senators Debbie Stabenow and Gary Peters who say the “process is taking far too long.”

The Corps has been seeking public input on its plan, known as the Brandon Road Lock study, since September. If implemented, the plan would provide a suite of options to keep carp out of the Great Lakes.

in a letter to the Corps, Stabenow and Peters questioned why the New Orleans meeting wasn’t scheduled earlier.

The Brandon Road Lock, 50 miles from Lake Michigan, near Joliet, Illinois, is thought to be a choke point for stopping Asian carp.

But the final Army Corps report isn’t due until August of 2019, and Stabenow and Peters want that date moved up by eight months to January.

The senators expressed frustration that the Trump administration had delayed release of the report early in 2017.

Illinois Lt. Governor Evelyn Sanguinetti called for the report to be delayed in a column published in the Chicago Tribune in early 2017. Shipping interests in Illinois have lobbied against the Army Corps plan.

In their letter, Stabenow and Peters also questioned the Corps’ economic analysis of the impact of Asian carp on the Great Lakes.

“The (Army Corps) should not ignore the impact of Asian carp on several important industries – including recreation and tourism – or the economic impacts to the other Great Lakes besides Lake Erie,” the senators wrote.

Lake Erie’s fishery is the largest in the Great Lakes and thought to be the most vulnerable to an Asian carp invasion.

In a similar letter to the Army Corps, 28 members of the U.S. House from the Great Lakes region called for the original project timeline to be followed.

“Fiddling”

Input from environmental groups followed previously held positions but also sought to spotlight economic impacts.

Howard Learner said in a statement released to Great Lakes Now that the Army Corps’ proposals are a “starter.”

But Learner said they are “short of what’s needed to avoid the economic and ecological disaster if our public officials don’t prevent Asian Carp from entering the Great Lakes.”

He accused the Corps of “fiddling,” which would lead to additional delays.

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Press Release: ELPC Commends Full Funding for Great Lakes Restoration Initiative

FOR IMMEDIATE RELEASE

SEPTEMBER 14, 2017

ELPC Commends Full Funding for Great Lakes Restoration Initiative 

House Rejects Trump Administration’s Zeroing Out FY 2018 Budget for this Successful Program 

 

STATEMENT BY HOWARD A. LEARNER

Executive Director, Environmental Law & Policy Center

 

CHICAGO – Howard Learner, Executive Director of the Environmental Law & Policy Center, said in response to the U.S. House of Representatives’ approval of full funding for the Great Lakes Restoration Initiative (GLRI) as part of the fiscal year 2018 budget:

“The Environmental Law & Policy Center commends the bipartisan legislators who worked together to reject the Trump Administration’s cuts and provide full funding of $300 million for the successful Great Lakes Restoration Initiative,” Learner said. “This program has supported more than 3,000 sensible projects to protect and restore the Great Lakes since 2011. That’s great value for all of us who live, work and play in the Great Lakes. We urge the U.S. Senate to include full funding as it considers the budget.”

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The Detroit News: ELPC’s Learner says “This isn’t the Time for Halfway Measures” to Protect the Great Lakes from Asian Carp

The Detroit News

Army Corps Unveils $275 Million Plan to Battle Asian Carp
By Melissa Nann Burke

Environmental groups and Gov. Rick Snyder demanded immediate action on Monday after the Trump administration released a long-awaited report on a $275 million plan to control the invasive Asian carp before it reaches the Great Lakes.

The report by the U.S. Army Corps of Engineers lays out tentative measures that include installing a new electric barrier to repel or stun the destructive fish and underwater speakers generating “complex noise” to deter them from traveling beyond the lock and dam at Brandon Road near Joliet, Illinois. It came after five months of prodding from bipartisan members of the Michigan delegation and others.

The Army Corps stopped short of recommending closure of the Brandon Road lock, citing the potential economic impact on the barge and shipping industry.

Snyder said Monday that steps laid out in the report “must be taken” to stop the advancing Asian carp, calling for “immediate, decisive action.”

“It is time for all the Great Lakes states and Canadian provinces — and all who care about the lakes — to come together to demand action at Brandon Road Lock and Dam, a critical pinch point for stopping invasive carp,” he said.

But construction is likely years away. The agency will collect public comments for 45 days, then begin a feasibility study, followed by reviews by federal and state agencies and a Chief of Engineers report, which is not expected until August 2019.

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Associated Press: ELPC’s Learner says It’s “Time for Serious Preventative Actions to Keep Asian Carp Out of the Great Lakes”

Report Proposes Steps to Keep Asian Carp out of Great Lakes
By John Flesher

TRAVERSE CITY, Mich. (AP) — A federal report released Monday proposes a $275 million array of technological and structural upgrades at a crucial site in Illinois to prevent invasive Asian carp from reaching the Great Lakes and its vulnerable fish populations.

The U.S. Army Corps of Engineers outlined its tentative plan in a report that had been scheduled for release in February but was delayed by the Trump administration, drawing criticism from members of Congress and environmental groups.

It analyzes options for upgrading the Brandon Road Lock and Dam near Joliet, a complex on the Des Plaines River southwest of Chicago that is considered a bottleneck where defenses could be strengthened to prevent carp populations in the Mississippi River watershed from migrating into Lake Michigan.

Scientists say if the large, voracious carp become established in the Great Lakes, they could devastate the region’s $7 billion fishing industry by crowding out native species.

The Army corps said the plan outlined in the 488-page document is intended to block the path of invasive species “while minimizing impacts to waterway uses and users.” Elected officials and business leaders in Illinois and Indiana have said that significant changes to the Brandon Road complex could hamper cargo shipment on the busy waterway.

Among technologies the report endorses is using sound systems to create “complex noise” underwater that would deter fish from the Brandon Road area, plus installing a new approach channel and placing an electric barrier at its downstream end that would repel fish and stun them if they get too close. Brandon Road is several miles downstream from an existing barrier network.

Other measures would include installing water jets to wash away “small and stunned fish” that might be caught up around barges, plus a new lock where floating invasive species could be flushed away.

The report says the federal government would pay 65 percent of the costs project’s costs, with the rest coming from a “non-federal sponsor.”

The corps will take public comments on the report until Sept. 21. After a feasibility study and series of federal and state reviews, a final report is scheduled for release in August 2019. Congressional approval and funding would be required to get construction underway.

“The Army Corps report makes clear that it’s time for serious preventative actions to keep Asian carp out of the Great Lakes,” said Howard Learner, executive director of the Chicago-based Environmental Law and Policy Center. “The ecological and economic costs of further delays are not sensible or acceptable.”

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Toledo Blade: Report Proposes Plan to Deter Asian Carp From Entering Great Lakes

Report Proposes Plan to Deter Asian Carp From Entering Great Lakes
by Tom Henry

The U.S. Army Corps of Engineers is recommending the electrical barrier near Chicago that has been used to deter Asian carp from entering Lake Michigan be augmented with complex noise, water jets, an engineered channel, and other structural improvements such as a flushing lock, and a mooring area.

The Corps is not recommending a complete separation of the Great Lakes and Mississippi River watersheds, as many Great Lakes scientists and policy-makers, such as Ohio Attorney General Mike DeWine and U.S. Rep. Marcy Kaptur (D., Toledo) have urged for years to provide optimal protection for the region’s $7 billion fishery. The issue has long pitted the Chicago-area shipping industry and Lake Erie sportsmen. The shipping industry wants the status quo while Lake Erie – which spawns more fish than the rest of the Great Lakes combined – could have the most to lose if Asian carp are able to colonize the lake system, regardless of the entry point.

The long-awaited, 488-page Corps report went online Monday at http://bit.ly/2vIibCN. Miss Kaptur pushed for its release after the Great Lakes congressional delegation learned the study was completed in early 2017 but that the Trump administration was keeping it from being made public.

Six alternatives were considered.

The Corps would pay for 65 percent of the estimated $275 million of work outlined, or $179 million. The other $96 million would be paid by non-federal sources. The focus area for the work is the Brandon Road Lock and Dam near Joliet, Ill.

In its report, the Corps called its plan the “Technology Alternative – Complex Noise with Electric Barrier” plan.

That option is recommended “because it meets the project objective by reducing the risk of Mississippi River basin [aquatic invasive species] establishment in the Great Lakes basin to the maximum extent possible, and it provides for continued navigation,” the Corps said in its report, adding that the plan “will be most effective if the electric dispersal barrier operates continuously at optimal parameters to deter fish.”

The Corps is taking comments on its recommendation until Sept. 21. It is making plans for two public meetings.

On June 22, a silver Asian carp – the type so sensitive to boat motor vibrations they flop out of water – was found nine miles from Lake Michigan near the T.J. O’Brien Lock and Dam, upstream from a series of electrical barriers designed to keep it out.

Howard Learner, Chicago-based Environmental Law & Policy Center director, said the report “makes clear it’s time for serious preventative actions to keep Asian carp out of the Great Lakes.”

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Christian Science Monitor: Battle Over the Clean Water Rule; What’s at Stake?

Christian Science Monitor

Battle over the Clean Water Rule: What’s at stake?

By Amanda Paulson

Just who gets to regulate America’s many seasonal streams and wetlands?

That’s a question that has long been contentious.

At the end of June, Environmental Protection Agency Administrator Scott Pruitt formally proposed revoking the Obama-era Clean Water Rule, also known as the “Waters of the US” rule, or WOTUS.

Mr. Pruitt was acting on an executive order signed by President Trump back in February. And depending on whom you talk to, the move to repeal the rule is either an environmental disaster that opens up America’s waterways to pollution and development and puts Americans’ drinking water at risk, or a common-sense action that gets rid of a rule particularly despised by many farmers, ranchers, and developers and returns regulatory authority to states.

Q: What is the rule?

The term “Waters of the United States” comes from the landmark 1972 Clean Water Act. The 2015 Clean Water Rule was designed to provide long-sought guidance on just which “navigable waters” fall under federal jurisdiction and are covered by the protections in that act.

Some waters, including permanent rivers and streams, clearly meet the definition. But many wetlands, seasonal streams, and ditches don’t necessarily qualify: They’re not connected to US waterways much of the time, even though they may ultimately feed into them.

In a 2006 US Supreme Court ruling to determine the jurisdiction, Rapanos v. United States, the court was split. Four conservative justices, led by Justice Antonin Scalia, offered a constrained definition that includes only “relatively permanent bodies of water.” Justice Anthony Kennedy concurred, but added that it should also include wetlands and intermittent streams that have a “significant nexus” to those waters – an opinion that has largely governed decisions since.

The Clean Water Rule carried over existing exemptions for things like agriculture and ranching. It has never taken effect, as lawsuits from states (including one involving Mr. Pruitt when he was Oklahoma attorney general) are working their way through the courts.

Q: What change is the EPA proposing?

The rule the EPA has put forward – currently in the 30-day comment period – would mean going back to the standards used 10 years ago. Since the Clean Water Rule is currently under a stay, it wouldn’t actually change practice on the ground.

There’s also some question about whether the repeal is fully legal – and it’s likely to be challenged in court. The EPA “can’t declare that within 30 days it’s going to stop following the law and ignore the standards that have been adopted” through long-standing administrative procedure, says Howard Learner, executive director of the Environmental Law & Policy Center, which supports the Clean Water Rule.

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Crain’s Chicago Business: House Panel Rejects Trump’s Great Lakes Cuts

House Panel Rejects Trump’s Great Lakes Cuts

By Greg Hinz

With a big assist from a bipartisan pair of lawmakers from Ohio, it looks like plans by the Trump administration to slash funding for the Great Lakes Restoration Initiative are on the way to being derailed.

As previously reported, Trump proposed cutting the program—which pays for everything from sewage treatment plants in Milwaukee and water-permeable concrete in Uptown to electronic barriers to keep Asian carp out of Lake Michigan—a whopping 97 percent. Trump aides said that and other kinds of spending have to go to make room for tax cuts to stimulate the economy.

​ But yesterday, GOP Rep. David Joyce and Democratic colleague Marie Kaptur, both from the Toledo area, convinced the House Appropriations Committee’s Subcommittee on Interior, Environment and Related Agencies to include the normal $300 million in the pending fiscal 2018 federal budget.

The action is only “a first step,” said Howard Learner, head of the Environmental Law & Policy Center here. But the full appropriations committee likely will go along with the subcommittee, and traditionally so does the full House. It’s worth noting that House Speaker Paul Ryan of Wisconsin comes from a lakefront district.

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PRESS RELEASE: ELPC Commends U.S. House Committee’s Action to Fully Fund Great Lakes Restoration Initiative

FOR IMMEDIATE RELEASE                                          Contact: Judith Nemes                                                                                                                                                       ELPC Commends U.S. House Committee’s Action to Fully Fund Great Lakes Restoration Initiative 

 STATEMENT BY HOWARD A. LEARNER

EXECUTIVE DIRECTOR, ENVIRONMENTAL LAW & POLICY CENTER

Howard Learner, Executive Director of the Environmental Law & Policy Center, said in response to the U.S. House Appropriations Interior, Environment and Related Agencies Subcommittee acting to fully fund the $300 million Great Lakes Restoration Initiative in the FY 2018 Environmental Protection Agency’s budget:

“This is a big first step forward for protecting the Great Lakes and achieving full funding for the Great Lakes Restoration Initiative. The U.S. House of Representatives’ Appropriations Committee rejected President Trump’s zeroing out FY 2018 budget funding for the Great Lakes Restoration Initiative.  With bipartisan support, the Committee restored the full $300 million of funding for the sensible and successful Great Lakes Restoration Initiative (GLRI).

“Since GLRI was launched in 2010, it has provided vital funding to protect and restore the largest system of fresh surface water in the world. GLRI projects also protect safe clean drinking water for 42 million people and support a $62 billion economy based on fishing, boating, and recreational activities.  That’s great value for all of us who live, work and play in and around the Great Lakes.

“Members of Congress across the Midwest heard loud and clear from their constituents that the Trump Administration’s completely eliminating GLRI funding in the FY 2018 is a bad idea.  We especially thank Representatives David Joyce (R-OH) and Marci Kaptur (D-OH) for their leadership in supporting the $300 million of appropriations for the Great Lakes Restoration Initiative programs.

“Unfortunately, the House Subcommittee also carries out the Trump Administration’s harsh EPA budget cuts that will compromise the EPA’s ability to advance healthier clean air and protect safe, clean drinking water protections that are vitally important to our health.   The American people deserve better protection than that for our core clean air and clean water values.”

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