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After Fierce Lobbying, Treasury Sets Rules for Billions in Hydrogen Subsidies

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After Fierce Lobbying, Treasury Sets Rules for Billions in Hydrogen Subsidies

The Biden administration on Friday made final its long-awaited plan to offer billions of dollars in tax credits to companies that make hydrogen, in the hopes of building up a new industry that might help fight climate change.

When burned, hydrogen mainly emits water vapor, and it could be used instead of fossil fuels to make steel or fertilizer or to power large trucks or ships.

But whether or not hydrogen is good for the climate depends on how it is made. Today, most hydrogen is produced from natural gas in a process that emits a lot of planet-warming carbon dioxide. The Biden administration wants to encourage companies to make so-called clean hydrogen by using wind, solar or other low-emission sources of electricity.

In 2022, Congress approved a lucrative tax credit for companies that make clean hydrogen. But the Treasury Department needed to issue rules to clarify what, exactly, companies had to do to claim that credit. The agency released proposed guidance in 2023 but many businesses have been waiting for the final rules before making investments.

The final guidelines that were released Friday followed months of intense lobbying from lawmakers, industry representatives and environmental groups and roughly 30,000 public comments. They include changes that make it somewhat easier for hydrogen producers to claim the tax credits, which could total tens of billions of dollars over the next decade.

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“Clean hydrogen can play a critical role decarbonizing multiple sectors across our economy, from industry to transportation, from energy storage to much more,” said David Turk, the deputy secretary of energy. “The final rules announced today set us on a path to accelerate deployment.”

Initially, Treasury had imposed strict conditions on hydrogen subsidies: Companies could claim the tax credit if they used low-carbon electricity from newly built sources like wind or solar power to run a machine called an electrolyzer that can split water into hydrogen and oxygen. Starting in 2028, those electrolyzers would have to run during the same hours that the wind or solar farms were operating.

Without those conditions, researchers had warned, electrolyzers might draw vast amounts of power from existing electric grids and drive a spike in greenhouse gas emissions if coal- or gas-fired power plants had to run more often to meet the demand.

Yet many industry groups and lawmakers in Congress complained that the proposed rules were so stringent, they could throttle America’s nascent hydrogen industry before it even got going.

Among the concerns: The technology to match hydrogen production with hourly fluctuations in wind and solar power is still in its infancy. Owners of nuclear reactors also said that they had been left out.

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So the final rules contain several significant tweaks:

  • Hydrogen producers will get two extra years — until 2030 — before they are required to buy clean electricity on an hourly basis to match their output. Until then, they can use a looser annual standard and still claim the tax credit.

  • In certain states that require utilities to use more low-carbon electricity each year, hydrogen producers will now have an easier time claiming the credit, on the theory that those laws will prevent a spike in emissions. For now, Treasury said, only California and Washington meet this criterion, but other states could qualify in the future.

  • Under certain conditions, companies that own nuclear reactors that are set to be retired for economic reasons can now claim the credit to produce hydrogen if it would help the plants stay open. Existing reactors that are profitable would not be able to claim the credit.

  • The final rules also lay out criteria under which companies could use methane gas from landfills, farms or coal mines to produce hydrogen — if, for instance, the methane would have otherwise been emitted into the atmosphere.

The guidelines “incorporate helpful feedback from companies planning investments,” said Wally Adeyemo, the deputy Treasury secretary.

Some hydrogen producers said that many, though not all, of their biggest concerns had been addressed in the final guidance, which runs nearly 400 pages.

“There’s a degree of relief that the rules are, on balance, an improvement from the original draft,” said Frank Wolak, chief executive of the Fuel Cell and Hydrogen Energy Association, a trade group. “But there’s a lot in the details that needs to be evaluated.”

The lack of clear guidance had been holding up investment, said Jacob Susman, chief executive of Ambient Fuels, a clean hydrogen developer that is planning roughly $3 billion in projects across the United States. “Now that we actually have something solid, we can get down to the business of building,” he said.

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Environmentalists said that most of the safeguards in the original proposal to prevent emissions from surging had been kept in place.

“The extra flexibilities granted to the green hydrogen industry are not perfect from a climate perspective,” said Erik Kamrath at the Natural Resources Defense Council. “But the rule maintains key protections that minimize dangerous air and climate pollution from electrolytic hydrogen production.”

The Energy Department estimates that the use of cleaner forms of hydrogen could grow to 10 million tons per year by 2030, up from virtually nothing today.

But political uncertainty looms. A new Congress could repeal the tax credits, although hydrogen generally enjoys support from both Democrats and Republicans and a number of oil and gas companies have invested in hydrogen technologies. The Trump administration could also revise the rules around the credits, although that could take years.

Economics are another hurdle. Producing cleaner hydrogen still costs $3 to $11 per kilogram, according to data from BloombergNEF. By contrast, it costs about $1 to $2 per kilogram to make hydrogen from natural gas.

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The new tax credit will be worth up to $3 per kilogram, which could bridge the gap in some cases but not all. Technology costs would have to decline sharply.

Even with hefty subsidies to produce hydrogen, it’s not clear that enough buyers will emerge. Around the world, hydrogen companies have canceled several major projects over the last few years because of lack of demand. Steel makers and electric utilities that might have interest in the fuel often balk at the costly equipment required to use it.

“These new rules will probably help, even if they don’t go as far as many in industry wanted,” said Aaron Bergman, a fellow at Resources for the Future, a nonpartisan Washington research organization. “But there’s still the challenge of finding the people to consume the hydrogen you produce.”

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Video Shows Mars and Deimos Close Up During ESA’s Hera Flyby

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Video Shows Mars and Deimos Close Up During ESA’s Hera Flyby

An asteroid-chasing spacecraft just swung past Mars on Wednesday. As it zipped by, it took hundreds of shots of the Red Planet, as well as several snaps of Deimos, one of the two small Martian moons.

The operators of the European Space Agency’s Hera spacecraft were bewitched by the sci-fi aesthetics of the pictures.

“We were waiting with impatience to get these images,” said Patrick Michel, the principal investigator for Hera, during a Thursday news conference at mission control in Darmstadt, Germany. When the first shots of the moon appeared, many of the Hera team members burst into cheers. “We’ve never seen Deimos in that way,” Dr. Michel said.

Navigators managed to fly Hera about 600 miles above Deimos, a craggy moon just nine miles long. The pass shows the object in remarkable detail — a small island gliding above the crater-scarred Martian desert.

During the news conference, Ian Carnelli, the Hera project manager, was misty-eyed. “I’m going to get emotional,” he said. “The excitement was such that we didn’t get any sleep.”

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Hera was using Mars in what is known as a gravity assist, both accelerating the spacecraft and adjusting its flight path. But its mission operators also wanted to take advantage of the Martian flyby and use it to test the mechanical eyes that will allow Hera to study the asteroid it is targeting, Dimorphos.

In the coming days, the mission’s scientists will reveal more photographs from Hera’s encounter with Mars, which may include shots of Phobos, the planet’s other moon.

As with any planetary flyby, there were some nerves about whether Hera would conduct its maneuvers properly and end up on the right trajectory. “The spacecraft behaved very well,” said Sylvain Lodiot, the Hera operations manager. “We’re on track to the asteroid system.”

Hera is headed to Dimorphos as a follow-up to a 2022 NASA mission, the Double Asteroid Redirection Test. DART deliberately crashed a spacecraft into that asteroid, aiming to change its orbit around a larger asteroid, Didymos. That was a test of whether a dangerous space rock bound for Earth could be deflected in a similar manner.

The experiment successfully changed the orbit of Dimorphos. But the asteroid’s physical nature, and its full response to DART’s collision, remains unclear; some evidence suggests that it acted like a fluid when hit, rather than a solid, causing it to eject a lot of debris and reshape itself.

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When it comes to stopping lethal asteroids from striking Earth, the more scientists know about their rocky enemies, the better prepared they will be should one come careening our way. To aid that effort, the European Hera mission will arrive at Dimorphos in late 2026 for a close-up study of the DART-impacted asteroid.

This Wednesday, during Hera’s flyby of Mars and Deimos, the spacecraft used three cameras — including a thermal infrared imager supplied by the Japan Aerospace Exploration Agency.

Mars’s two moons have mysterious origins. Both could be pieces of a disintegrating asteroid captured by the planet’s gravity, or perhaps the flotsam and jetsam leftover from a giant impact event on Mars.

Deimos is tidally locked, meaning one hemisphere permanently faces Mars. This near side is the one most commonly seen by spacecraft orbiting the planet, or by rovers driving across its surface. Hera managed to fly behind Deimos, meaning it caught a rare sight.

“It’s one of the very few images we have of the far side of Deimos,” said Stephan Ulamec, a researcher at the German Aerospace Center and member of the Hera team.

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This opportunistic peek at Mars and Deimos was exciting. But the team is especially thrilled that Hera is now on its way to its asteroid destination. “We’re all looking forward to what Didymos and Dimorphos will look like,” Dr. Michel said.

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James Reason, Who Used Swiss Cheese to Explain Human Error, Dies at 86

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James Reason, Who Used Swiss Cheese to Explain Human Error, Dies at 86

The story of how James Reason became an authority on the psychology of human error begins with a teapot.

It was the early 1970s. He was a professor at the University of Leicester, in England, studying motion sickness, a process that involved spinning his subjects round and round, and occasionally revealing what they had eaten for breakfast.

One afternoon, as he was boiling water in his kitchen to make tea, his cat, a brown Burmese named Rusky, sauntered in meowing for food. “I opened a tin of cat food,” he later recalled, “dug in a spoon and dolloped a large spoonful of cat food into the teapot.”

After swearing at Rusky, Professor Reason berated himself: How could he have done something so stupid?

The question seemed more intellectually engaging than making people dizzy, so he ditched motion sickness to study why humans make mistakes, particularly in high-risk settings.

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By analyzing hundreds of accidents in aviation, railway travel, medicine and nuclear power, Professor Reason concluded that human errors were usually the byproduct of circumstances — in his case, the cat food was stored near the tea leaves, and the cat had walked in just as he was boiling water — rather than being caused by careless or malicious behavior.

That was how he arrived at his Swiss cheese model of failure, a metaphor for analyzing and preventing accidents that envisions situations in which multiple vulnerabilities in safety measures — the holes in the cheese — align to create a recipe for tragedy.

“Some scholars play a critical role in founding a whole field of study: Sigmund Freud, in psychology. Noam Chomsky, in linguistics. Albert Einstein, in modern physics,” Robert L. Sumwalt, the former chairman of National Transportation Safety Board, wrote in a 2018 blog post. “In the field of safety, Dr. James Reason has played such a role.”

Professor Reason died on Feb. 4 in Slough, a town about 20 miles west of London. He was 86.

His death, in a hospital, was caused by pneumonia, his family said.

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A gifted storyteller, Professor Reason found vivid and witty ways to explain complicated ideas. At conferences, on TV news programs and in consultation with government safety officials around the world, he would sometimes deploy slices of cheese as props.

In one instructional video, he sat at his dining room table, which was set for a romantic dinner, with a bottle of wine, two glasses and a cutting board layered with cheese.

“In an ideal world, each defense would look like this,” he said, holding up a slice of cheese without holes. “It would be solid and intact.”

Then he reached for another slice, one with quarter-size cutouts. “But in reality, each defense is like this,” he said. “It has holes in it.”

The metaphor was easy to understand.

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“All defenses have holes in them,” Professor Reason continued. “Every now and again, the holes line up so that there can be some trajectory of accident opportunity.”

To explain how the holes develop, he put them in two categories: active failures, or mistakes typically made by people who, for example, grab the cat food instead of the tea leaves; and latent conditions, or mistakes made in construction, written instructions or system design, like storing two scoopable substances near each other in a cabinet.

“Nearly all organizational accidents involve a complex interaction between these two sets of factors,” he wrote in his autobiography, “A Life in Error: From Little Slips to Big Disasters” (2013).

In the Chernobyl nuclear accident, he identified latent conditions that had been in existence for years: a poorly designed reactor; organizational mismanagement; and inadequate training procedures and supervision for frontline operators, who triggered the catastrophic explosion by making the error of turning off several safety systems at once.

“Rather than being the main instigators of an accident, operators tend to be the inheritors of system defects,” he wrote in “Human Error” (1990). “Their part is that of adding the final garnish to a lethal brew whose ingredients have already been long in the cooking.”

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Professor Reason’s model has been widely used in health care.

“When I was in medical school, an error meant you screwed up, and you should just try harder to not screw up,” Robert Wachter, the chairman of the department of medicine at the University of California San Francisco, said in an interview. “And if it was really bad, you would probably get sued.”

In 1998, a doctor he had recently hired for a fellowship said he wanted to specialize in patient-safety strategy, to which Dr. Wachter replied, “What’s that?” There were no formal systems or methods in his hospital (or most others) to analyze and prevent errors, but there was plenty of blame to go around, most of it aimed at doctors and nurses.

This particular doctor had trained at Harvard Medical School, where they were incorporating Professor Reason’s ideas into patient-safety programs. Dr. Wachter, who began reading Professor Reason’s journal articles and books, said the Swiss cheese model was “an epiphany,” almost “like putting on a new pair of glasses.”

Someone given the wrong dose of medicine, he realized, could have been the victim of poor syringe design rather than a careless nurse. Another patient could have died of cardiac arrest because a defibrillator that was usually stored in the hallway had been taken to a different floor to replace one that had malfunctioned — and there was no system to alert anyone that it had been moved.

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“When an error happens, our instinct can’t be to look at this at the final stage,” Dr. Wachter said, “but to look at the entirety of the system.”

When you do, he added, you realize that “these layers of protection are pretty porous in ways that you just didn’t understand until we opened our eyes to all of it.”

James Tootle was born on May 1, 1938, in Garston, a village in Hertfordshire, northwest of London. His father, Stanley Tootle, died in 1940, during World War II, when he was struck by shrapnel while playing cards in the bay window of his house. His mother, Hilda (Reason) Tootle, died when he was a teenager.

His grandfather, Thomas Augustus Reason, raised James, who took his surname.

In 1962, he graduated from the University of Manchester with a degree in psychology. He received his doctorate in 1967 from the University of Leicester, where he taught and conducted research before joining the faculty at the University of Manchester in 1977.

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He married Rea Jaari, an educational psychologist, in 1964. She survives him, along with their daughters, Paula Reason and Helen Moss, and three grandchildren.

Throughout his career, Professor Reason’s surname was a reliable source of levity.

“The word ‘reason’ is, of course, widely used in the English language, but it does not describe what Jim is rightly famous for, namely ‘error,’” Erik Hollnagel, the founding editor of the International Journal of Cognition, Technology and Work, wrote in the preface to Professor Reason’s autobiography. “Indeed, ‘error’ is almost the opposite of ‘reason.’”

Still, it made sense.

“Jim has certainly brought reason to the study of error,” he wrote.

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Amid tense clashes between NASA and Musk, two NASA science missions launch on SpaceX rocket

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Amid tense clashes between NASA and Musk, two NASA science missions launch on SpaceX rocket

After every federal employee received an email asking them to list their recent accomplishments, SpaceX CEO Elon Musk took to his social media platform X, warning any employee who didn’t respond would be terminated. NASA, instead, asserted that replying was optional and that its leadership would handle the matter.
Two weeks after the clash, the space agency hitched a ride to orbit on a SpaceX rocket.

It’s another indicator that, despite an aggressive push by the Trump Administration and Musk to significantly reduce government spending and the federal workforce that have led to some tense public disputes, NASA’s space science missions — and its relationship with SpaceX, the dominant launch provider in the U.S. — have so far remained relatively unscathed.

The space agency narrowly escaped the mass firing of its probationary employees and has stayed out of the political crosshairs of Musk’s Department of Government Efficiency, which is working to slash funding at agencies like the National Institutes of Health and the Environmental Protection Agency.

It has also survived some strained squabbles with the SpaceX CEO, including Musk’s call to deorbit the International Space Station as soon as possible, before its scheduled 2030 decommissioning date.

Yet, tangible threats to the space agency’s status quo are looming on the horizon, space-policy experts say, including potentially significant budget cuts and staff reductions through the normal processes of government.

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“There’s a lot of this highly disruptive, very symbolic culture war … that’s taking a lot of attention,” said Casey Dreier, chief of space policy at the Planetary Society, a Pasadena-based nonprofit advocating for space science and exploration. “But the bigger issue is the more quotidian of, will NASA get the money it needs to do the projects it’s told to do.”

SpaceX launched two NASA spacecraft Tuesday — both part of the agency’s Explorers Program, designed to provide frequent flight and funding opportunities for space science missions — on its Falcon 9 rocket.

It included a spacecraft from NASA’s Jet Propulsion Laboratory in La Cañada Flintridge that will study the rapid expansion that occurred during the first split-second of the universe and a mission from the Southwest Research Institute, a private nonprofit organization based in Texas and Colorado, that will explore the dynamics of solar wind.

Despite the public clashes, a NASA spokesperson said the agency’s relationship with Musk’s company remains strong.

“NASA is working with partners like SpaceX to build an economy in low Earth orbit and take our next giant leaps in exploration at the Moon and Mars for the benefit of all,” the spokesperson said in a statement. “To date, NASA invested more than $15 billion in SpaceX for its work under numerous agency contracts.”

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The Falcon 9 has become one of the U.S.’ most prolific and reliable rides to space (and unlike SpaceX’s developmental Starship rocket, it does not frequently explode). Much of the rocket’s success is thanks to a nearly two-decade partnership with NASA.

The space agency funded the development of the rocket in 2006 as part of a push to foster a burgeoning private launch industry ahead of the retirement of the Space Shuttle. Two years later, SpaceX was the first private company to reach space with a liquid-fueled rocket, using a scaled-down precursor to the Falcon 9.

In the years since, NASA has given SpaceX billions in contracts to shuttle supplies and, later, astronauts to and from the ISS; launch science missions far beyond Earth’s orbit; and now, develop a spacecraft to deorbit the ISS in 2030 and the Starship rocket to carry humans back to the moon.

As SpaceX excelled in rocket development, other private launch companies — and NASA itself — struggled to keep up.

In 2014, NASA awarded Boeing $4.2 billion and SpaceX $2.6 billion to develop capsules to launch astronauts to the ISS. But while SpaceX has launched 10 missions to the ISS with NASA astronauts to date, Boeing has managed only one botched crewed test flight that left two U.S. astronauts on the ISS without a ride back, until SpaceX agreed to take them home.

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(Notably, that involved another incident pitting Musk against NASA, in which the former described the astronauts as “stranded,” despite the latter’s insistence that this was a mischaracterization.)

Meanwhile, NASA’s Space Shuttle successor, the Space Launch System, has accrued billions in cost overruns and years of delays. The rocket’s side boosters and engines were originally projected to cost $7 billion over 14 years of development and flights. That’s grown to at least $13.1 billion over 25 years, according to a report from the NASA Office of Inspector General.

The result: Over the years, America’s space agency has become increasingly dependent on SpaceX and Musk for access to space.

Then, the Trump administration created DOGE — a temporary organization in the executive office (and not an official government department) — and instated Musk as a special government employee to head it.

The administration began firing probationary employees — government workers in their first year of a new role, who are not yet considered full employees — across the federal government, including at the National Park Service, U.S. Agency for International Development, and most recently, the National Oceanic and Atmospheric Administration.

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On Feb. 18, NASA employees braced for a similar cut, but it never came. The agency announced it had worked with the Office of Personnel Management to avoid the firings and that about 5% of the workforce had resigned voluntarily as part of a separate program to reduce the size of the federal workforce.

Instead, the agency began undertaking a longer-term by-the-books reduction of staff mandated by an executive order. The agency, in a document outlining the process, stated it intends to proceed in a manner that “minimizes adverse impact on employees and limits disruption to critical Agency missions, programs, operations, and organizations.”

The agency is partnering with OPM and DOGE to carry out the reduction and does not have a specific percent reduction goal, a NASA spokesperson said in a statement.

At a Cabinet meeting, Musk said DOGE’s goal is not to be “capricious or unfair” and said the temporary organization has no target numbers. Instead, he wants to keep “everyone who is doing a job that is essential and doing that job well.”

NASA began the layoffs Monday with 23 employees in advisory science and policy offices, as well as a diversity, equity and inclusion branch.

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Employees at JPL, a government contractor funded by NASA but managed by Caltech, are exempt from the reduction, both NASA and JPL confirmed. However, the laboratory remains at the whims of federal funding for its missions.

While, publicly, NASA’s science funding has not seen the same level of scrutiny or cuts as other science agencies, Congress has a quick-approaching March 14 budget deadline, and, in line with the White House, the Republican-controlled chambers are set on decreasing federal spending.

The implications for NASA’s science programs could be significant.

In an example budget proposal for the 2023 fiscal year, Trump’s director of the Office of Management and Budget proposed slashing NASA’s science budget in half — which would far outpace previous budget cuts to the agency’s science programs.

Typically, NASA’s science budget follows the trends of the rest of the discretionary budget, which doesn’t include mandatory spending like Medicare and Social Security that is managed outside the typical budget process.

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“People love NASA, but in general, NASA’s budget doesn’t buck the trend of overall non-defense discretionary,” said Dreier. “If that pie gets bigger, NASA’s slice gets a little bigger, but if it gets smaller, NASA’s slice doesn’t stay big.”

When Congress has tough choices to make over which programs to fund, it’s often the science and technology side — and not the human spaceflight side — of the agency that sees the biggest cuts.

Notably — with representatives jockeying to bring funding to their own constituents — conservative-leaning states are home to NASA’s biggest human spaceflight centers, like the Kennedy Space Center in Florida and the Johnson Space Center in Texas. More liberal states are home to many of the science-focused centers, like JPL and Maryland’s Goddard Space Flight Center, which runs the Explorers Program.

And within the science spending, it’s the big flagship science missions, like the James Webb Space Telescope, that survive, whereas smaller missions, like those in the Explorers Program, end up on the chopping block.

The bigger missions often have many more advocates across the country ready to defend the programs, and stir up backlash if they’re canceled.

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The Senate has yet to hold hearings for Trump’s NASA administrator pick, Jared Isaacman, a Musk and SpaceX business partner who rode to space on a Falcon 9 rocket in 2021 as part of the first space mission with an all-civilian crew.

SpaceX did not respond to a request for comment.

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