Rails on production server with MySQL2 not working

Rails on production server with MySQL2 not working

I am unable to do anything such as rake db:create on my production
environment.
I've run gem install activerecord-mysql2-adapter and gem install mysql2
but both have been already install so I don't understand why I'm getting
below error message:
rake aborted!
Please install the mysql2 adapter: `gem install
activerecord-mysql2-adapter` (mysql2 is not part of the bundle. Add it to
Gemfile.)
/usr/local/rvm/gems/ruby-2.0.0-p247@global/gems/bundler-1.3.5/lib/bundler/rubygems_integration.rb:214:in
`block in replace_gem'
/var/www/tools/vendor/cache/ruby/2.0.0/gems/activerecord-3.2.14/lib/active_record/connection_adapters/mysql2_adapter.rb:3:in
`<top (required)>'
/var/www/tools/vendor/cache/ruby/2.0.0/gems/activesupport-3.2.14/lib/active_support/dependencies.rb:251:in
`require'
/var/www/tools/vendor/cache/ruby/2.0.0/gems/activesupport-3.2.14/lib/active_support/dependencies.rb:251:in
`block in require'
/var/www/tools/vendor/cache/ruby/2.0.0/gems/activesupport-3.2.14/lib/active_support/dependencies.rb:236:in
`load_dependency'
/var/www/tools/vendor/cache/ruby/2.0.0/gems/activesupport-3.2.14/lib/active_support/dependencies.rb:251:in
`require'
/var/www/tools/vendor/cache/ruby/2.0.0/gems/activerecord-3.2.14/lib/active_record/connection_adapters/abstract/connection_specification.rb:50:in
`resolve_hash_connection'
/var/www/tools/vendor/cache/ruby/2.0.0/gems/activerecord-3.2.14/lib/active_record/connection_adapters/abstract/connection_specification.rb:29:in
`spec'
/var/www/tools/vendor/cache/ruby/2.0.0/gems/activerecord-3.2.14/lib/active_record/connection_adapters/abstract/connection_specification.rb:130:in
`establish_connection'
/var/www/tools/vendor/cache/ruby/2.0.0/gems/activerecord-3.2.14/lib/active_record/railties/databases.rake:101:in
`create_database'
/var/www/tools/vendor/cache/ruby/2.0.0/gems/activerecord-3.2.14/lib/active_record/railties/databases.rake:62:in
`block (3 levels) in <top (required)>'
/var/www/tools/vendor/cache/ruby/2.0.0/gems/activerecord-3.2.14/lib/active_record/railties/databases.rake:62:in
`each'
/var/www/tools/vendor/cache/ruby/2.0.0/gems/activerecord-3.2.14/lib/active_record/railties/databases.rake:62:in
`block (2 levels) in <top (required)>'
/usr/local/rvm/gems/ruby-2.0.0-p247@rails3-bootstrap-devise-cancan/bin/ruby_noexec_wrapper:14:in
`eval'
/usr/local/rvm/gems/ruby-2.0.0-p247@rails3-bootstrap-devise-cancan/bin/ruby_noexec_wrapper:14:in
`<main>'
Tasks: TOP => db:create
What would be causing this issue?