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Ethanol, Imports, and the MTBE Effect

I am traveling later this week, and will be on the road for nine days (Colorado, New York, Massachusetts). I was trying to wrap up the loose ends from my previous post with a much more comprehensive look at the ethanol/import issue before I travel. However, there are a couple of questions I had for the EIA before I finish up. As soon as I hear back from them, I will post a number of graphs and I will put my spreadsheet up so everyone can pick through it. But if I don’t hear back within a couple of days, it may be a while before I can put up the final installment.

But so far, it still looks like my initial observation was correct: Ethanol has not reduced our oil imports. Our oil imports have fallen over the past couple of years, but here is why:

Net Crude Imports Versus Total Demand. Source: EIA

I will clean that graph up in the final posting. It should be obvious, but the import scale is on the left. Bear in mind that the ethanol production numbers do show up in the demand numbers. Thus, whether petroleum demand was impacted by ethanol displacement is irrelevant in that demand number, since whatever is no longer counted as petroleum is counted as ethanol.

If you notice, “Imports” track “Demand” very closely, except demand fell faster in 2008 than did imports. If ethanol was actually impacting imports, what I would expect to see is the import line negatively trending away from the demand line. For instance, since ethanol began to really ramp up in 2002, we are producing an incremental 7 billion gallons per year with an energy content of over 250,000 bbl/day of finished petroleum products. The change in demand through 2002 was down slightly. Yet imports actually rose slightly. If ethanol was impacting imports this is where I would expect to see it; with imports falling faster than demand fell (or rising more slowly than demand rises as ethanol makes a contribution).

The MTBE Effect

One reader asked a great question – just the kind of question I like to get following these essays. The blending of the oxygenate methyl tertiary butyl ether (MTBE) was phased out in 2006. In order to meet the oxygenate requirements for specific areas of the country, ethanol replaced MTBE in the gasoline blending pool. So is it possible that the reason petroleum imports didn’t fall as ethanol ramped up was that ethanol was being used to replace MTBE? If MTBE was being made with domestic products that are not captured in the liquid demand summary, then it would be theoretically possible for ethanol to replace MTBE with no impact on imports. That sent me on a mission into the EIA archives digging through historical MTBE data.

The MTBE picture is complicated, and thus I expect there to be many opinions on how to handle it. Until 2008, the EIA published a monthly supply/demand picture on MTBE. The report is called Monthly Oxygenate Report, and the historical data are still all there. Figure 29 of this USGS report confirms that MTBE production had plateaued in the years 1999-2002 at just over 3 billion gallons per year. During 2002, production dropped sharply as it started to be phased out. If you look at this year end 2003 report, they show historical production separated into merchant plants and captive plants. (See Table D-4). The EIA defines a merchant plant as one that isomerizes normal butane to isobutane, dehydrogenates isobutane to isobutylene, and then reacts the isobutylene with methanol to produce MTBE. The definition of a captive plant is one that takes isobutylene, produced as a byproduct of refinery operations, and reacts it with methanol to produce MTBE.

The previous definitions are important for understanding how the MTBE phase-out should have impacted the import picture. Because butane is captured both in the import numbers and in the petroleum demand numbers, any ethanol that displaced MTBE should have backed out butane imports – thus lowering total imports. But, MTBE is partially produced from methanol, which is generally produced from domestic natural gas. Natural gas is not captured in the petroleum imports number, nor is it captured in the demand number. Thus, ethanol that backed out MTBE would not have impacted the natural gas piece that went into MTBE. So what we have then is that some of the ethanol ramp-up would have been diverted into MTBE replacement without being expected to have impacted demand.

How much? The portion that came from the natural gas. The MTBE reaction as stated above requires isobutylene and methanol. One molecule of MTBE has one molecule of embedded methane (via methanol). Let’s make the best case assumption that all MTBE production was replaced by ethanol. In 2002, ethanol production was really ramping up and MTBE was falling off the plateau. So let’s take the last year of strong production, 2001, and assume that must be replaced by ethanol. In 2001, MTBE production averaged 212,000 bbl/day for the year (per the previous historical report). The EIA did a comprehensive study of the MTBE replacement issue in 2006, and they concluded that from the oxygenate perspective, it takes 9 barrels of ethanol to replace 10 barrels of MTBE.

So to replace 212,000 bbl/day of MTBE was going to require 191,000 bbl/day of ethanol, which is 2.9 billion gallons per year. 191,000 bbl/day of ethanol production has the energy content of about 115,000 bbl/day of oil. In the absence of the MTBE issue, this is how much petroleum product imports I would expect to be backed out as ethanol displaced MTBE. But we need to prorate it by the isobutylene content, which is 64% of the mass of MTBEs. Thus, I would still expect the ethanol that backs out MTBE to displace imports equal to 64% of the 115,000 barrels, which would be 74,000 bbls.

There are two other factors that complicate matters even more. Since ethanol has a lower energy content, when ethanol displaces MTBE other components need to be added to compensate for the loss of energy. That may result in addition imports to keep the BTU content of the gasoline pool constant. Further, because the vapor pressure of ethanol is higher, certain components like butane and pentane must be backed out of the gasoline and replaced with other components that may need to imported. However, the latter shouldn’t have much impact on imports, because butane and pentane are already captured in both the import number and in the product supplied number.

Bottom line? We should still expect to see imports backing out even as MTBE is replaced by ethanol. Further, the MTBE phase-out was completed in the first half of 2006, so there is no longer any complication from that. And 2007 and 2008 also show no compelling case that ethanol is backing out imports.

Conclusion

It still appears to me that ethanol has had no impact on oil imports. However, it is not yet clear to me why this would be the case, so I am digging to better understand. It may be that we are just trying to see a change that amounts to noise in the overall demand picture. In that case, the ethanol contribution is really put into perspective and readers may understand why I am focused on other solutions; solutions that I think can ultimately make a bigger impact.

It may be that something is still missing from the picture, which is one of the reasons I have contacted the EIA for some additional clarifications. I think the conclusion in any case is that ethanol backs out approximately zero imports, plus or minus some very small number.

So those like the RFA who make claims like thisFACT: The production and use of 9 billion gallons of ethanol in 2008 displaced the need for 321.4 million barrels of oil – are simply promoting misinformation.

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September 30, 2009 - Posted by | EIA, Energy Information Administration, ethanol, mtbe, oil imports, Renewable Fuels Association

75 Comments

  1. I have not read your complete post yet, but I object to the scales in the graph not matching. I am not bothered that the 0 points are in different places (to account for domestic production). But I am disturbed that going up one line on the left represents 2 million BPD while on the right represents only 1 million BPD. That looks like making mischief with data to me.

    Comment by Clee | September 30, 2009

  2. If you notice, "Imports" track "Demand" very closely, except demand fell faster in 2008 than did imports.It's not that easy to tell when a 1 million bpd drop in demand looks to the eye to be twice as big as a 1 million barrel per day drop in imports because of the differences in the scales.But we need to prorate it by the isobutylene content, which is 64% of the mass of MTBEs. Why by mass, why not volume or energy content? Isn't isobutylene 81% of the energy content of the MTBE?In 1998 the petroleum refining industry accounted for 7.5% of the total U.S. energy consumption, according tohttp://www.eia.doe.gov/emeu/mecs/iab98/petroleum/energy_use.htmlPart of that energy was bought from outside sources, but part of it came from the byproducts of refining the crude. Also, some of the energy was used for the refining operations and some of the energy was used to make petrochemicals and other non-fuel products.It is not clear to me if the amount of petroleum raw materials used to make non-fuel products is included in the EIA numbers for petroleum imports or not.It is not clear to me if the the petroleum inputs used as process energy to make non-fuel products and the petroleum inputs used as process energy to refine the crude are included in the demand number. Could these cause any of the discrepancy that you are seeing?

    Comment by Clee | September 30, 2009

  3. Are they still producing the same amount of isobutane as before? If so, what is it being used for?

    Comment by rufus | September 30, 2009

  4. Another excellent post by RR.And here is the key point: Ethanol is just noise in the overall picture, whatever its impact. It just ain't big enough to do us any substantial good.If we (the United States) truly want energy independence, ethanol is no the answer.Much, much higher mpgs on motor vehicles, and CNG vehicles, and PHEV vehicles are the answer, and possibly mass transit and scooters.With the exception fo the pending PHEVs, all of this is known and technically possible. Cars are on the market throughout the globe thst get 50 mpg plus. There are 10 million CNG vehicles globally, and they work fine (and we have epic supplies of NG). The PHEV may be the death knell for the oil industry. If it can be commercialized, oil demand could plummet.Next to these giant and doable and even desirable solutions, ethanol looks small, unimportant and dubious.

    Comment by Benny "Boom, No Doom" Cole | September 30, 2009

  5. Although, you may want to consider, Benny, that ethanol is an "International" solution. A poor Kenyan might not have access to nat gas, or the money to buy a PHEV, but he can raise cassava to make ethanol.In fact, ethanol refineries are going up in Africa, S. America, India, Asia, China, and the South Pacific.Personally, I think the medium-term solution for the OECD nations will be the "Volt" type cars; but, we might need some help in 2011/2020. That will HAVE to come from ethanol.

    Comment by rufus | September 30, 2009

  6. I tend to agree with this post. Ethanol is just amounting to "noise" in the current economic picture because it is not currently capable of making a large impact. But what about sugarcane based ethanol? Sugarcane can produce ethanol far more efficiently that corn. Brazil powers a huge percentage of its vehicles from ethanol from sugarcane. Granted, we don't have the climate in much of the US to grow sugarcane, but what about Cuba and islands in the Caribbean? It seems as though this may be an opportunity to increase energy security, address climate change, and create economic opportunities for some poor nations that have advantageous resources.

    Comment by Anonymous | September 30, 2009

  7. Rufus:Ethanol may have a future in low-wage countries with the right climate. Cassava can be grown in Thailand, and they do convert it to ethanol, for example.Still, there are nagging problems using the ethanol, in cars that normally run on diesel. (Thailand is diesel country).I still wonder why not a parallel track of purely ethanol cars, that use much higher compression ratios to take advantage of the high octane?Like you, I think the long-term solution is PHEVs, and biofuels. We will need so little fuel, the biofuel will be enough. A PHEV, with a pure ethanol generator, makes sense to me. IN the US, there are a few plants that convert pototo skins to ethanol. Potatoes are a much-higher yeilding crop than corn, btw. It seems to me if we want etahnol, we should grow potatoes and convert to ethanol. That is also known as vodka, btw. After reading all your posts, Rufus, we need a few shots of vodka.

    Comment by Benny "Boom, No Doom" Cole | September 30, 2009

  8. They pay me $0.05 per comment, and all the Vodka I can drink. :)*Hic*

    Comment by rufus | September 30, 2009

  9. I am disturbed that going up one line on the left represents 2 million BPD while on the right represents only 1 million BPD. That looks like making mischief with data to me.As I said, I will be cleaning up the final graphs. I put that up quickly, and it was auto-scaled. I noticed the mismatch after I posted it, but didn't consider it a big deal because I can see from the data that this won't solve the problem. In fact, it makes the situation look better in 2007 and worse in 2008.Cheers, Robert

    Comment by Robert Rapier | September 30, 2009

  10. ETBE is ethanol+isobutylene, so a 1:1 replacement isn't to be expected in any case. Isobutane-Isobutylene production peaked around 2000, and is dipping into negative territory these days. The curve shows up clearly on the EIA graph. They provide a "historical" pdf for Feb 2009, perhaps the Oxygenate Report isn't moribund after all. PADD III produced 1,263 mg for Dec 2008, so demand is still there – I used to have a doc bookmarked that seemed to show bans nationwide but can't find it, and looking around for the same now I just see stuff like this: Which states have MTBE bans? The answer being not many, actually. MTBE State Bans | Baron and Budd, P.C. claims to be up to date as of last Dec, and shows most of the country failing to take an interest as well. Thanks for that EIA report – they talk about bottlenecks in storage leading to higher imports of ethanol, something I'd noticed as well. Perhaps we'll see this stay flat; will have to check the STEO in this regard when I have a chance later.

    Comment by Kevin Rietmann | September 30, 2009

  11. Which states have MTBE bans? The answer being not many, actually. MTBE State Bans | Baron and Budd, P.C. claims to be up to date as of last Dec, and shows most of the country failing to take an interest as well.However, it has been phased out in all states. No refiner was willing to accept further liability after the groundwater issue came up. So U.S. refiners completely phased it out in 2006 – even where there were no bans. All production today comes from merchant plants and is exported.RR

    Comment by Robert Rapier | September 30, 2009

  12. Are they still producing the same amount of isobutane as before? If so, what is it being used for?I don't know whether the same amount is being produced, but isobutane has a home in refineries as feed to alkylation units. RR

    Comment by Robert Rapier | September 30, 2009

  13. Why by mass, why not volume or energy content? Isn't isobutylene 81% of the energy content of the MTBE?It would be much harder to quantify the energy content numbers, because the methane piece is via methanol production. If you were going to do the allocation based on energy, you have to add up the inputs that went into that, and it just adds more complexity. I don't know that there is any reason you couldn't do it by volume. That's one of the things I struggled with was determining how to do the allocation.By the way, that comment you made after the last post was #200. First time any post here ever got 200 comments. As the comments on some of these posts gets greater, it really has me once again thinking of going to a dedicated server and a different format. Something like the threaded comment format of peakoil.com, but just on energy in general.RR

    Comment by Robert Rapier | September 30, 2009

  14. Re: peakoil.com, I do like the forum layout best; blog entries have a limited lifespan, and blogger/blogspot are very limited with the inability to post images etc. in the comments section.You could always start a thread over at peakoil.com, bookmark it if the admins/mods won't make it a Sticky, and just set up shop. A few cornucopians might pass through now and then, nothing new there. Some of the members over there like pup55 have a keen interest in refinery operations and the like, too.

    Comment by Kevin Rietmann | September 30, 2009

  15. Ben,Slightly off topic but…"Sales of natural gas powered cars increase in Germany"by Xavier Navarro (RSS feed) on Sep 30th, 2009 at 4:03PM"Despite the general economic downturn – felt in Germany as much as anywhere else – sales in Germany of natural gas (CNG) powered cars increased by 14 percent this year. Specifically, the increase saw 6,561 more CNG vehicles sold this year so far, adding about 80,000 CNG vehicles to German roads.John

    Comment by Anonymous | September 30, 2009

  16. Slightly o/t but related: I think this is a play on the bankrupt ethanol plants.Environmental Capital: Daily analysis of the business of the environment by The Wall Street Journal. "Size Matters: Biobutanol is Latest (Small) Biofuel Aspirant" by Russell Gold on September 30, 2009Gevo said this morning that it had successfully retrofitted a demonstration-scale ethanol plant to make biobutanol. …biobutanol has some clear advantages. There is no blend wall … and Gevo, which is backed by investors including Khosla Ventures, Burrill & Co. and Total SA – says that “standard automotive engines can run on biobutanol blended into gasoline at any ratio.” …experts say that biobutanol can be put into pipelines and refineries without problems. …Here’s the catch. … No one has built a biobutanol biorefinery at a commercial scale. … So nobody knows if this is economic at scale.The Wall Street Journal: "Makers of Ethanol Ponder Alternative" by Russell Gold on September 30, 2009 at page B4.

    Comment by Fat Man | September 30, 2009

  17. RR:As always an excellent post.Here is my analysis1. It appears that ethanol use in reformulated gasoline jumped sharply in 2006, but has stayed steady at about 3 million barrels per day since then.http://tonto.eia.doe.gov/dnav/pet/hist/wg1tp_nus_2w.htmThis data sheet seems to indicate that ethanol is added to gasoline at 5.8% by volume, when used as a replacement for MTBE:http://www.eia.doe.gov/emeu/steo/pub/special/mtbe.So my math is that this consumes about 2.7 Billion GPY of ethanol.2. I still think that this quantity should be used in full and not some percentage of it as the replacement value of the ethanol vs MTBE, because it appears that the isobutane that was used to make MTBE is now used for a non-gasoline making purpose, and therefore is a lost crude to gasoline efficiency at the refinery and would therefore consume ethanol without reducing crude oil requirements. The logic used in the original post would only apply if the isobutane is being reformulated and used in gasoline in some form other than MTBE.3. The chart only discusses imports, but the original statement didn't say that ethanol was displacing imports. It said it was displacing gasoline. During the time period discussed production of domestic crude declined from about 5.8 MMBPD in 2002 to about 5.0 MMBPD in 2008. This is a difference of 12 Billion gallons/year. see:http://tonto.eia.doe.gov/dnav/pet/hist/mcrfpus1m.htmFor ethanol to displace imports, it would have to displace the 2.7 Billion gallons/year needed to displace MTBE, and the 12 Billion gallons per year of reduced domestic production. Which by my math is: 12 Billion gallons of crude x 44% = 5.3 gallons gasoline = 9.1 billion gallons of ethanolSo if my logic is correct, to reduce imports, the increase in ethanol production would have needed to exceed 2.7 + 9.1 = 11.8 Billion gallons/yr, which it has not done.But this does not necessarily invalidate the original statement that ethanol has displaced the need for some barrels of oil (note that the original statement put out by the RFA does not reference imports), although by my math it appears that it is closer to 7.5 – 2.7 = 4.8 billion gallons of ethanol that is displacing gasoline = 2.8 billion gallons of gasoline equivalent = 6.3 billion gallons of crude = 150 million barrels/year of crude.Does this all make sense?

    Comment by dupa | September 30, 2009

  18. John-CNG cars are used globally. It is ironic that the United States–with a epic surfiet of natural gas–cannot seem to take advantage of CNG. I think we will see a couple states, such as Utah and Oklahoma–lead the way. This may unfold over years. I do not think oil will become expensive again for years and years. So the migration to CNGs and PHEVs will be retarded.Another irony is, if we aggressively switched to CNG, it would help depress oil prices for another couple decades–making gasoline cars more attractive.

    Comment by Benny "Boom, No Doom" Cole | September 30, 2009

  19. Ben,You are probably right about the projected price "wars" that might unfold.When you first mentioned CNG a while back, I checked it out and was surprised to find that the countries that use the most natural gas in their vehicles are not the Far Eastern countries as you might suppose, but rather the South American countries.I think there is even a CNG train running somewhere in Ecuador or maybe Peru. (I can't remember)John

    Comment by Anonymous | September 30, 2009

  20. John, but OT:By JACK Z. SMITHjzsmith@star-telegram.comThe search for unconventional natural gas deposits in areas like the Barnett Shale of North Texas not only is dominating gas drilling in the United States, but it will also become pervasive worldwide.That was the message given Tuesday by two experts at the opening of a three-day energy conference in the Fort Worth Convention Center."I think unconventional gas is the future, both in the U.S. and overseas," said Vello Kuuskraa, president of Advanced Resources International, known for his work in energy economics and petroleum recovery technologies.Unconventional gas includes shale gas, tight gas and coal-bed methane, deposits that require measures such as horizontal drilling and hydraulic fracturing to enhance their recovery and make them economically feasible.Unconventional gas accounts for more than half of U.S. production, Kuuskraa said, even though what he called two new "rock stars" among shale fields — the Haynesville Shale in northwest Louisiana and East Texas, and the Marcellus Shale in the Appalachian region of the eastern United States — are just beginning to be significantly developed.Meanwhile, Kuuskraa said he expects his end-of-the-year calculations to show that the Barnett Shale has become the biggest gas-producing area in the U.S., outstripping the San Juan Basin in New Mexico and Colorado.This is amazing. What we still call "unconventional" has become the norm. And is going global. And is still an infant technology. Who knows what the future will bring, but we can guess that people will get better and smarter at drilling shale gas, thus lowering costs.I just don;t see any doom scenarios that make sense.

    Comment by Benny "Boom, No Doom" Cole | September 30, 2009

  21. What does macro data based on EIA data with a large confidence interval have to do with micro data from ethanol collected with very accurate instrumentation traceable to the national bureau of standards?Wait for it!Nothing!Convoluted arguments presented by folks like Avery Lovins at the RMI are always wrong. Lovins does not care because he does not make a living in field where being wrong matters. A simple example is a new geothermal power plant in Utah that sell 5 MWe of renewable energy to city in California. However, the geothermal power plant is buying 4 MWe of of coal generation to run pumps. The design is for 14 MWe. While I could draw a conclusion about all renewable energy projects, I think I will wait and see what happens. I know from experience that new designs and new power plants take times to work out the bugs and become reliable.But I can use RR's methodology to come to a more logical (but no less ridiculous) conclusion. Renewable energy electricity projects are causing the US to become more dependent on foreign oil. These projects are most often in remote location requiring long commutes for construction workers using lots of fuel. Since the only use for oil generated electricity is to provide peaking power and to back unreliable renewable energy sources. Rather than subsidizing these new energy projects we should just put these construction workers on welfare reducing our dependence foreign oil. The point here is that each energy project must judged on it's own merits rather than macro parameters.

    Comment by Kit P | September 30, 2009

  22. A poor Kenyan might not have access to nat gas, or the money to buy a PHEV, but he can raise cassava to make ethanol.Rufus~What would this poor Kenyan use to supply the thermal energy to run his still? You said no natural gas, and the womenfolk in the village probably have to range over 10-20 miles just to collect firewood for cooking.Or are you working on a solar-powered alcohol still?

    Comment by Wendell Mercantile | September 30, 2009

  23. Well, in this case I guess they could allow the mash to dry, and burn it.And, actually, a solar-still would be cheap to make. It could work in Kenya.

    Comment by rufus | October 1, 2009

  24. "Moonshine is any distilled spirit made in an unlicensed still. As with all distilled spirits, yeast ferments a sugar source to produce ethanol, then the alcohol is extracted through distillation using a still."–WikipediaDid not the old moonshiners just make ethanol, without any heat source? Why would Kenyans need natural gas?I never made moonshine, but I think it just ferments, more or less. I led a deprived childhood. Never shot a boar either. Or played a fiddle. Dang.

    Comment by Benny "Boom. No Doom" Cole | October 1, 2009

  25. Are you trying to be funny? The heat is not so much for making the ethanol, it's for extracting it, as the wiki said. Click on "still" if you don't think that requires heat.

    Comment by Clee | October 1, 2009

  26. You have to be able to maintain your liquid at a 180 some-odd degree level for a couple of hours to distill out the water. It's not rocket science.I'm just guessing, but I'd imagine a cheap still would require between 30 to 40 thousand btus to distill a gallon of ethanol.Cow dung would do. The mash should do it. They could mix a little of the ethanol back in, but that would be an expensive solution. Anyway, I'm not proposing that little poor individual subsistence farmers would have their "own" still. Villaes might, though.

    Comment by rufus | October 1, 2009

  27. "I just don;t see any doom scenarios that make sense."Benny — on a technical level, I agree with you that there is no need for doom. Looks like those Canadians caught the Anthropogenic Global Warming alarmists cherry picking their disturbing "data" again. CO2 is not a problem. Nuclear "waste" (aka "fuel") is not a problem. There is rather a lot of gas in the world, as you point out. And human creativity is not dead — maybe Bussard fusion will give us a fuel source that will last as long as the Sun.There are two reasons, though, to approach the future with caution.First, mankind's stupidity. Like, let's cancel missile defense in Poland while Iran is secretly building nuclear manufacturing sites. Britsh Prime Minister Chamberlain's foolishness has become legendary; unfortunately, history repeats.Although AGW alarmism is scientifically a dead man walking, lots of little zombies are still chugging on that Kool-Aid. When CNG vehicles start to look serious, you are going to hear a lot of opposition from those empty headed followers of fashion.Second, technical solutions to future power supplies are feasible, but that does not mean they are simple. I worry about the human tendency to trivialize problems. Look at how much time has been wasted here on ethanol, when it is very readily apparent that it does not amount to a hill of beans. CNG vehicles have got their advantages — but it is a task of decades to get them to the point where they would really be making a difference to total fuel demand It takes about 5 years just to design & tool up to manufacture a new vehicle, for example.By the time we do get fully geared up on CNG vehicles, we will have doubled US gas demand and will be starting to hear about Peak Gas. CNG is a transitional fuel — but transition to what?So there is no need for despondency, but let's not underestimate the challenge either.

    Comment by Kinuachdrach | October 1, 2009

  28. instead of recycling natural gas into ethanol, the Kenyans can recycle biogas into ethanol. Don't see why they'd bother though.

    Comment by Clee | October 1, 2009

  29. Because they can run their cars, trucks, tractors, and generators on it?

    Comment by rufus | October 1, 2009

  30. Kinuachdrach said: "CO2 is not a problem … Although AGW alarmism is scientifically a dead man walking, lots of little zombies are still chugging on that Kool-Aid."Uh, Mr K., did you not just a few short threads ago present as your best evidence for your outlandish claim a conversation with some geologist? And said geologist argued that the solubility of chalk shows that the oceans are "starved of carbon". And did we not establish (in the last two comments here) that said geologist was talking through his butt cheeks?If global warming is back on death row, does that mean you have some actual evidence this time? Or has the statute of limitations on the last debunking just expired?

    Comment by PeteS | October 1, 2009

  31. McIntyre finally got the "Data." The Briffa Hockey Stick is dead'ern a . . . . well, "hockey stick."It was a MASSIVE FRAUD!

    Comment by rufus | October 1, 2009

  32. Because they can run their cars, trucks, tractors, and generators on it?Ah, right. I misread. I thought you said those poor Kenyans couldn't afford cars.

    Comment by Clee | October 1, 2009

  33. Just new cars. Or expensive conversions.

    Comment by rufus | October 1, 2009

  34. What does macro data based on EIA data with a large confidence interval have to do with micro data from ethanol collected with very accurate instrumentation traceable to the national bureau of standards?What does a data-driven argument have to do with a hand-waving argument? Answer: Both are in Kit's arsenal. Sometimes he will try to make data-driven arguments (like the time he claimed that natural gas prices fell under President Bush by cherry-picking two data points) and if he can't win the data-driven argument he will use the hand-waving argument as he did here.RR

    Comment by Robert Rapier | October 1, 2009

  35. Cow dung would do.Rufus, Rufus, Rufus ~They need the cow dung to fertilize those cassava plants whose fruit you think those poor Kenyans can ferment and distill.So where's the heat come from to run their still?No natural gas. No cars with which to range long distances to scavage firewood. And what little firewood they have for cooking the women have to walk miles to gather.You say a solar powered still is possible? If its possible, why don't the Brazilians — who are at a very favorable latitude for solar power — use the Sun to run their sugar alcohol stills?

    Comment by Wendell Mercantile | October 1, 2009

  36. Because they can run their cars, trucks, tractors, and generators on it?Rufus~If they have cars, trucks, tractors, and generators, why do you characterize them as "poor Kenyans?"

    Comment by Wendell Mercantile | October 1, 2009

  37. I have just observed what appears to be a bug in the comments. As noted, the previous post got 200 comments. A poster made comment 201, but it didn't show up. (Comments are e-mailed to me, so I got it). If I go to post a new comment, then I see that there are 200 comments on Page 1, but there is a link to Page 2 (which was not visible when I was just viewing comments. So I will reproduce the post from poster Neurot below, and then anaswer it.RR

    Comment by Robert Rapier | October 1, 2009

  38. regarding your 6 billion gallons being 1/2 of 1% of the total petroleum usage: ethanol isn't trying to replace diesel fuel, for example – so what's the point of factoring in diesel and other fossil fuels? You're making a strawman argument by doing that, which I don't think is your intention. The market for ethanol is the 200 billion gallons per year of gasoline – and based on current compatibility, it's 10% of that, so 20 billion gallons per year. Due to lower BTU content, that will displace 15 billion gallons of gasoline, or 7% if we get to that point. At 9BBGY today, it's more like 4% of the product it's actually intending to replace.I think this is a case of you overanalyzing to the point where the end number is not very useful. Kind of like saying "if we could only harness all of the sun's energy on earth, we'd have enough every 20 minutes to power the whole world for a year".No offense, cause I love your blog – keep up the good work!

    Comment by Neurot | October 1, 2009

  39. You're making a strawman argument by doing that, which I don't think is your intention.No. The RFA and many ethanol proponents make an argument based on oil displacement – as I quoted in this thread. And since gasoline imports are included in the Petroleum Imports number, it is certainly valid to look at impact on total petroleum demand (especially given that this is explicitly what the RFA claims). The market for ethanol is the 200 billion gallons per year of gasoline – and based on current compatibility, it's 10% of that, so 20 billion gallons per year.That's been done, too, although I need to update it:The Mythical Ethanol ThreatI need to update that for the next post, because this would be the place you would see it if there is anything to be seen.RR

    Comment by Robert Rapier | October 1, 2009

  40. Quick! Rufus! Refute this study:Study: More biofuel corn would hurt waterPurdue University researchers said their study of Indiana water sources found those near fields that practice continuous-corn rotations had higher levels of nitrogen, fungicides and phosphorous than corn-soybean rotations."When you move from corn-soybean rotations to continuous corn, the sediment losses will be much greater," Associate Professor Indrajeet Chaubey, who co-led the study, said. "Increased sediment losses allow more fungicide and phosphorous to get into the water because they move with sediment."U.S. Department of Agriculture data show corn acreage has increased with the demand for ethanol to 93 million acres in 2007, an increase of 12.1 million acres that year.Oil industry must be behind it, yeah?RR

    Comment by Robert Rapier | October 1, 2009

  41. Wouldn't those poor Kenyans be eating the cassava and nutritious potato skins rather than turning it into ethanol, or otherwise using the land to grow food?Wendell wrote: why don't the Brazilians — who are at a very favorable latitude for solar power — use the Sun to run their sugar alcohol stills?Because they have to get rid of the bagasse anyway.http://www.renewableenergyworld.com/rea/news/article/2009/09/biopower-in-asia-growth-in-cogeneration-and-power-production"Most of the sugar cogeneration systems developed in sugar mills during early days were purposely designed with lower efficiency in order to get rid of all the bagasse produced – and there were no schemes available to sell excess electricity to the grid."

    Comment by Clee | October 1, 2009

  42. No, that's common sense. Corn has higher erosion than soybeans. So, if you raise corn back to back, instead of in rotation with soybeans you Will have more run-off.The question is: Is it significant? First, not a whole lot of corn is raised back to back. There are big advantages to raising corn, and soybeans in rotation. There was more corn on corn in 2007 when everyone thought they could sell all the corn they could possibly raise, and the price was going to go to $5.00 +, and stay there, but ever-increasing yields, and more corn raised "globally" put the squash to that idea.In 2007 we planted 91 Million Acres of corn. This year is was about 86 Million Acres.Oh, and run-off has been declining for years. You don't want to forget, erosion costs the farmer money. No one wants to see their soil nutrients washed out to sea. And, the higher the cost of fertilizer, the Less you want it to happen. By the way, the "hypoxia" zone was much reduced this year.

    Comment by rufus | October 1, 2009

  43. Guys, I just used cassava as an example because it's the only crop that Africa has a surplus of. It'll grow Anywhere, and you can't possibly eat as much as you can grow. It needs very little water, and no fertilizer.As a result, there's virtually no market for it. You can remove the starch, produce ethanol, and either burn the remaining, eat it, or feed it to the cattle.Africa is a huge continent. You can grow Anything there you can grow in N. America, and a Lot of it. I have seen several articles, recently, about Large Ethanol Refineries being built in various African Countries.

    Comment by rufus | October 1, 2009

  44. Three Things that NO Government, really, wants you to have:1) The Internet2) A Still3) A RifleThink about it.

    Comment by rufus | October 1, 2009

  45. First, not a whole lot of corn is raised back to back. There are big advantages to raising corn, and soybeans in rotation.Rufus~That's true. My grandfather who ran a farm knew that. He raised corn, oats, beans, dairy cows, chickens, hogs and rotated religiously. And most of his fertilizer came from the cows and pigs.But here in my neck of the woods, corn-on-corn is now the common practice. Some fields have seen nothing but corn for several years.And they do it because they can just keep dumping on nitrogen, insecticides, herbicides, and fungicides — all made from petroleum or natural gas by the way.Modern farmers think preserving the health of the soil through careful crop management is for old-timers. A lot of the soil in the Corn Belt is now just a sterile matrix to hold seed corn in place while the chemicals do their thing.

    Comment by Wendell Mercantile | October 1, 2009

  46. That's painting with a pretty broad brush, Mercantile. All farmers aren't "great" farmers, but most of them are pretty good.I'll bet if you think about, though, you've seen less corn on corn this year than you did two years, ago. Nitrogen is much more expensive, and corn is back down to six cents/lb.

    Comment by rufus | October 1, 2009

  47. Case in point: Illinois corn, and bean farmers are expected to Lose Money, this year –Feritilizer Costs up 300%. Seed up 360%

    Comment by rufus | October 1, 2009

  48. “he can't win the data-driven argument he will use the hand-waving argument as he did here.”More examples of RR’s idea of civility!I am not trying to win an argument merely pointing out to readers that RR methods are flawed. Junk in junk out! Association is not causation.The methods I use are called cause and effect. Find the root cause of a problem and you can fix it.“like the time he claimed that natural gas prices fell under President Bush by cherry-picking two data points”RR’s assumes that because someone stops debating with him that he has won the debate. If I have provided my point of view for others to read and feedback does not suggest that I got it wrong; then why continue the debate until there is a loss of civility accident (LOCA)?On the topic of ethanol, Rufus is doing a fine job of caring on the debate. I see no indication that he does not have an open mind or a lobbyist. He is tough minded. It is the job of the navy to marines to the beach and provide cover fire.To be sure I have never lost and argument with a marine that involved obscenities (is there any other kind). It has to be an important issue to verbally harass a marine. Something like parking spaces or the merit of different kinds of pad locks. To an outside observer this might look like a LOCA but it is just two guys being guys in the context of their society convention. This called meta-ethical relativism.

    Comment by Kit P | October 1, 2009

  49. We learned two things early on. The Navy had "Real" food, and the Seabees "Always" had cold beer.Oh, and the sound of those big, ol' 16 in. shells going overhead was pretty sweet, too.

    Comment by rufus | October 1, 2009

  50. Kinu-Do not become too doomish just becuase we have a stupid government.You want stupid? How about FDR being unable to convince a US Congress to enter WWII–until the Japanese bombed Pearl Harbor. What do you make of those guys in Congress back then? They make Chamberlain look like a hawk. In particular, Senator Taft, R, Ohio, never wanted to take on the Nazi war machine. How about Nixon trying wage and price controls?How about LBJ sending 500,000 troops into Vietnam, one of the hugest and least successful outlays of man and money of all time?We have had stupid before, and tons of it, both parties.We have mediocrity now. But the technical advances we have today, thanks to our highly developed cadre of venture capitalists and the spread of information by Internet, in unmatched in history.Think about it–in the four-year window of higher oil prices (2004-2008) we had rapid advances in PHEVs, and an runaway explosion of natural gas production.Thanks to the free enterprise system, and the public underpinnings and infrastructure our country provides, meaning schools, streets, court system etc. We don't give ourselves enough credit. We have created a perpetual wealth machine.As long as a healthy fraction of our economy is in the free enterprise system (75 percent or more), and our public sphere keeps the streets safe, and educates the masses, etc. it is going to be a better world. The best days are ahead–I wish I could live another 100 years. I think the world of tomorrow will be more prosperous and cleaner than ours.Only war, the first idiocy of man, can stop it. Would that I could wave a wand, Kinu, would that I could wave a wand….

    Comment by Benny "Boom, No Doom" Cole | October 1, 2009

  51. Kit and Rufus, please get a room.

    Comment by Anonymous | October 1, 2009

  52. Clee and Rufus:Yes, I lost my marbles for a second. Of course, to distill something, you need a heat source. I was thinking of a different process.Forgive me, I had a urbane set of parents, and never got to get my hands dirty until I left home.Like I said, no hunting boar, no stills, no overalls, no fooling around with girls in haystacks.Read a lot of books, though. Woo-hoo.

    Comment by Benny "Boom, No Doom" Cole | October 1, 2009

  53. Ethanol is just noise in the overall picture…The PHEV may be the death knell for the oil industry.For crying out load, Benny, at least be consistent. PHEV is not even noise yet…

    Comment by Optimist | October 1, 2009

  54. In fact, ethanol refineries are going up in Africa, S. America, India, Asia, China, and the South Pacific.Sadly, these guys are following the (headless) leader. Tragic mistake…No one has built a biobutanol biorefinery at a commercial scale. … So nobody knows if this is economic at scale.They did and we do: ABE fermentation is a process that uses bacterial fermentation to produce acetone, butanol and ethanol from starch. It was the primary process used to make acetone during World War II, such as to produce Cordite. Bottom line: ABE fermentation however, is not profitable when compared to the production of these solvents from petroleum.What was that about the definition of madness?By the way, the "hypoxia" zone was much reduced this year.You mean the dead zone, I presume. Your point? High oil prices translate into higher fertilizer prices, which translate into fertilizer conservation and a smaller dead zone.The beauty of high oil prices, eh?

    Comment by Optimist | October 1, 2009

  55. optimist-You said it, "yet."My own two cents is that if GM had been a strong company, and had introduced the PHEV as a Cadillac, people would be wowed by this new luxury feature that helps you snub those smelly gasoline stations, and gets you a blended mileage of more than 100 mpg.Yes, it is a couple more years away, and a full 10 years until 2nd and 3rd gen cars start to prove out.I will say this: If we ever have gas lines again (remember 1980), people will buy every PHEV made. Imagine driving to work while others wait in line for gasoline, get in fistfights etc. Doomers say that scenario is coming again. I imagine cngvehicles.net, where you can buy a CNG car for under $10k, will also do a booming business. Time will tell.One thing I am sure of: The OPEC-thug business model, that of threatening your customers with high and erratic prices and unreliable supply, is not one taught at Harvard Business School. I doubt it will work.One more price spike, and customers will migarte elsewhere. They already are.

    Comment by Benny "Boom, No Doom" Cole | October 1, 2009

  56. Here is a link to the abstract for the RR linked.http://scitation.aip.org/getabs/servlet/GetabsServlet?prog=normal&id=JOEEXX000001000001000059000001&idtype=cvips&gifs=yes “Modeling results indicated ….”Since RR misrepresented the facts he now has a homework assignment to read the paper to find out the the significance of the difference and if any surveys were conducted to the extent of not rotating corn with other crops. Then RR can go to the front of the class and write 100 times on the chalk board, “I will not use news stories with out checking facts.”

    Comment by Kit P | October 1, 2009

  57. Since RR misrepresented the facts…LOL! Kit presents half a sentence from an abstract, and accuses me of misrepresenting results. Priceless!Kit, I have access to more than the abstract. I have the paper. I have read the paper. One thing you have to understand about models is that they can be garbage or they can be decent representations that describe what is really happening. When the model is completed, though, it is important to validate it by checking against actual observed results. Now I wouldn't expect a pseudo-engineer such as yourself to appreciate this, but the real scientists and engineers who will understand. What you didn't get from the abstract is that the model was validated against actual samples, and there was in fact a considerable amount of sampling that was discussed in the paper. So you really should check your facts before rushing to accuse someone else.Then RR can go to the front of the class and write 100 times on the chalk board, “I will not use news stories with out checking facts.”You are nothing if not ironic. Now, if you are finished making a jackass of yourself, I have a plane to catch.RR

    Comment by Robert Rapier | October 2, 2009

  58. PeteS proudly wrote: "And did we not establish (in the last two comments here) that said geologist was talking through his butt cheeks?"No, Pete, we did not. Just because someone does not deign your comment worthy of a response, does not mean your point was a solid one.Look at all the time & effort that has been wasted on ethanol on this very blog — to say nothing of the scarce planetary resources that have been poured into a black hole. And this when it is readily apparent even to a bear of small brain that ethanol does not amount to a hill of beans in terms of global energy needs. Simple story — there is a lack of correlation between atmospheric CO2 content and global temperature, in present times, historic times, and geological times. Sort of hard for any serious person to support a genuine scientific argument for causation in the absence even of correlation.But the indefatiguable Rufus shows that beliefs can far outlive theories. Considering the tax & regulatory bonanza that the Political Class plans to reap from the alleged Anthropogenic Global Warming scam, it is not surprising that there should be a gap between science & public policy.You mentioned earlier, Pete my man, that while you are a True Believer, your attitude is to wait & see before spending vast sums of finite resources on trying to stop alleged AGW. Very sensible. I would be happy to adopt the same approach, albeit for different reasons.There is an important issue here for future global energy supplies. Despite the enthusiasms of some, the clear fact is that human beings have not yet found any energy source for mobile equipment that even comes close to hydrocarbon liquids — easy to handle at ambient conditions, and energy dense. In a sensible world, we would plan on continuing to use liquid hydrocarbons for transportation/mobile fuel until we eventually develop something (currently unknown) that is better, faster, cheaper.But how can we do that in a world where conventional oil supplies will certainly fall short of demand at some time in the future, be it near or far? Technically, the obvious route is by using heat from nuclear fission plants to "mine" liquid hydrocarbon fuels from heavy oil, tar sands, coal, and oil shales.That is the smart direction for the future. We should not let some discredited junk science on alleged Anthropogenic Global Warming get in the way.

    Comment by Kinuachdrach | October 2, 2009

  59. Needed to make an edit to the cellulosic post, but can't do it with my iPhone. Will try to fix tomorrow and repost, but about to board a plane.

    Comment by Robert Rapier | October 2, 2009

  60. My own two cents is that if GM had been a strong company, and had introduced the PHEV as a Cadillac, people would be wowed by this new luxury feature that helps you snub those smelly gasoline stations, and gets you a blended mileage of more than 100 mpg.Well, it's your opinion and you're entitled to it. Personally, I'd like to see the Volt go from vaporware to showroom before I'm crediting it with anything.If we ever have gas lines again (remember 1980), people will buy every PHEV made.And we only got gas lines when Mr. Honest Nixon tried to control prices. As long as the prostitutians stay out of it, we won't have gas lines. Gas prices, on the other hand…Imagine driving to work while others wait in line for gasoline, get in fistfights etc. Doomers say that scenario is coming again.You must be grasping for straws if you, Benny No Doom borrows an argument from the doomers.As stated before, Peak Oil is a religion. You can't reason with its disciples.One more price spike, and customers will migarte elsewhere. They already are.True. But the PHEV may not be an a position to benefit (yet?).We'll see.

    Comment by Optimist | October 2, 2009

  61. Will try to fix tomorrow and repost, but about to board a plane.Will our comments be reposted, assuming they are still relevant?

    Comment by Optimist | October 2, 2009

  62. But how can we do that in a world where conventional oil supplies will certainly fall short of demand at some time in the future, be it near or far?The easy answer is leave it to the free market. There is no shortage that a high enough price ($200/bbl? $500/bbl? $1,000/bbl?) can't fill…Not pretty, but efficient.

    Comment by Optimist | October 2, 2009

  63. Kinu wrote: No, Pete, we did not [establish that said geologist was talking tommyrot]. Just because someone does not deign your comment worthy of a response, does not mean your point was a solid one.Oh ok. So is there any point in me mentioning that I dug up an even more directly relevant quote, complete with references, that makes a nonsense of your calcifying organisms dissolving because the ocean is so "starved of carbon"?You mentioned earlier, Pete my man, that while you are a True Believer, your attitude is to wait & see before spending vast sums of finite resources on trying to stop alleged AGW. Very sensible…No, I mentioned earlier that I was persuaded on balance of probability. You then condescended to converse about it 'cos "maybe I'd read some of the science". Unfortunately it was YOU who then turned out to be the peddlar of junk science. Simple story — there is a lack of correlation between atmospheric CO2 content and global temperature, in present times, historic times, and geological times. Sort of hard for any serious person to support a genuine scientific argument for causation in the absence even of correlation.If it's so simple, why the junk science? As it happens there is no shortage of correlation — I hope what you really meant to say is that the causality appears reversed for previous warmings, that the CO2 appears as feedback instead of forcing. That's explained (allegedly) by the fact that there's never been any "A" with the "GW" before. Serious question in the light of the foregoing: have YOU read any of the science? Such handwaving dismissal as you've engaged in sounds just a bit too over-zealous to me. I want to be convinced that AGW isn't happening, but I'd need more of the science and less of the cognitive biases(This is probably wandering too far O/T for this blog though)

    Comment by PeteS | October 2, 2009

  64. Rex Tillerson – Exxon CEO – U.S. Gasoline Demand has Peaked, will Decline – partly due to ethanolBut "imports" not affected (nah, I added that part, myself.)

    Comment by rufus | October 2, 2009

  65. Oh, I see, Rufus, now you're one happy to agree with the opposition – when it suits you.Let's see:1. Rex Tillerson is a specialist on biofuels? I'd go with RR, thanks. I notice Tillerson didn't mention any numbers…2. Think Tillerson is being honest? Or is he trying to deflect criticism from those who believe Big Oil is out to kill biofuels?Weak…

    Comment by Optimist | October 2, 2009

  66. Whatever

    Comment by rufus | October 2, 2009

  67. BTW, the 2016 Olympics are going to Rio de Janiero, Brazil. You know, the country that uses more ethanol than gasoline. Boy, they must get awfully lousy gas mileage down there, huh?

    Comment by rufus | October 2, 2009

  68. You mean the guys who drilled their way to independence, and also happen to make a bit of ethanol? Out of a crop more suited for it, that also uses less fertilizer, those guys?Mileage? Whatever.

    Comment by Optimist | October 2, 2009

  69. Rufus,Argentina and Brazil are the two countries with the largest fleets of CNG vehicles, with a combined total fleet of more than 3 million vehicles by 2008. …Who knows? …….. by 2016 you might have to drive a CNG vehicle to the Ganes……..John

    Comment by Anonymous | October 2, 2009

  70. OT, but I have been thinking about this topic, and my wife is not interested.This is a comment by Prabakhar Patil, the CEO of Compact Power Inc, the subsidiary of LG Chem that has been working with GM to produce the Volt’s battery packs."The other perspective is that lithium ion in the 17 years since it was first introduced has come down by a factor of 14 in terms of dollars per kwh and it’s not done. It will continue to come down not at the same rate, but I fully expect over the next 5 to 10 years for the cost to get better by anywhere from a factor of 2 to 4 in terms of dollars per kwh as compared to where we are now."I have been wondering if lithium batteries will follow somewhat the same footsteps as computer power. This is, get batter and better for a long time.This guy is saying that in 5-10 years, lithium batteries should be at least twice as good as they are now. Maybe four times as good, per dollar.If the upper end is reached, then PHEVs look deadly for the ICE trade. And the oil industry? Sickly outlook, I must say.Time will tell if lithium batteries can get that much better. BTW, this guy had an interesting idea: The "used" lithium batteries form a Volt still have utility value, but are not so good for cars. He says if they can be sold for some sort of storage use, then the cost of lithium batteries comes down even more. Who knows? Maybe we line them up in banks next to solar plants, and get nighttime juice.

    Comment by Benny "Boom, No Doom" Cole | October 2, 2009

  71. Maybe for backup for your roof-top solar, Benny.

    Comment by rufus | October 2, 2009

  72. Rufus-Maybe. The batteries lose their utility for cars when they drop below 75 percent of original capacity…but still good for other uses. Maybe you will turn off your ethanol generator at night for quiet, and go on batteries. BTW, the next-to-last issue of The New Yorker has an article on bio. If these guys are right, we may see biofuels yet. They are splicing genes, making new creatures. Sounds like science fiction. If we live long enough, we may even see a woolly mammoth again. Evidently, they have the DNA from mammoth hair. Somehow they fertilize an elephant. Now, there is a job even beyond my capacities.

    Comment by Benny "Boom, No Doom" Cole | October 2, 2009

  73. Benny, we'll have $1.00 Watt-installed solar in a few years.Add your used lithium ion batteries to an affordable solar set-up, a Volt with a flex-fuel back-up, and let the nay-sayers kiss your independent ass.We're in for a few tough years, but I like what I see on the other side.

    Comment by rufus | October 2, 2009

  74. Love your optimism guys, but reality calls:1. GM bugs are GREAT for pharmaceuticals and OK for food. Fuel production, not so much. I trust thermo-chemical will be the place to invest.2. Combine a Volt with Flex-fuel? Yeah! Stick a gimmick on vaporware and you get gimmicky vaporware? A vapory gimmick? Exciting stuff!!!3. You can see the other side prophet Rufus? Let me guess: more ethanol? Or did you consume more ethanol (in the present tense) to see the other side?4. Whether we're in for a rough time or not: it will be made worse when the prostitutians try to pick winner (who just so happen to have the most/richest lobbyists), such as hydrogen, ethanol, a particular company's PHEV…5. If you ask me, the story of the week goes to this: OriginOil’s Attached Growth System uses types of algae that will attach to surfaces… (most of the rest is BS IMHO). Now all you need is several hundred (thousand?) miles of steel cable (both as support and fertilizer), attached to some floats, a quiet spot in the Pacific (of course the dead zone in the Gulf of Mexico would work great) and some kind of robotic harvester going around collecting the biomass…

    Comment by Optimist | October 3, 2009

  75. Rex Tillerson – Exxon CEO – U.S. Gasoline Demand has Peaked, will Decline – partly due to ethanolThis isn't the first time an oil CEO has said this, but I think it is primarily to deflect criticism that they aren't building new refineries. After all, why should they build new refineries if Congress is mandating a huge expansion in ethanol? But they are still investing in increased refining capacity; something they would not do if they really believed ethanol was going to reduce gasoline demand.I have my gasoline/ethanol graph ready to go in the next post. RR

    Comment by Robert Rapier | October 3, 2009


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