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CIRCULAR ECONOMY: Investing in SAF, CCUS and Waste-to-Value (PART 2 – CCUS) · WTR Small-Cap Spotlight

• 0:00
  SPEAKER_06: Hello, everyone, and welcome to this WTR Symposium series, Circular Economy, Investing in Staff, CCUS, and Ways to Value.
• 0:07
  SPEAKER_06: This is the second episode of our three-part symposium series exploring investment opportunities emerging from industrial decarbonization and the circular resource economy.
• 0:16
  SPEAKER_06: Our focus today is carbon capture, utilization, and sequestration, or CCUS.
• 0:22
  SPEAKER_06: I'm your host, John Sieverson, founding partner and CEO of Water Tower Research.
• 0:26
  SPEAKER_06: I'd also like to introduce my WTR research analyst, uh colleague and co-host for the symposium, Peter Gastreich, Managing Director of Energy Transition and Sustainable Investing Research.
• 0:38
  SPEAKER_06: Peter, welcome to the symposium.
• 0:40
  SPEAKER_04: Thanks, Sean.
• 0:41
  SPEAKER_04: Looking forward to our conversations today.
• 0:44
  SPEAKER_06: So before we start for the audience, Peter, could you share a little background on the symposium format and what we'll be doing today?
• 0:51
  SPEAKER_04: Yeah, absolutely, Sean.
• 0:52
  SPEAKER_04: But before we dive in, just a quick note here that you can find forward-looking statements and safe harbor statements for all the public companies in today's symposium by navigating to the investor tabs and latest IR presentations located on the company websites.
• 1:07
  SPEAKER_04: Today's podcast symposium cannot be reproduced or transcribed without written permission of Watertower Research.
• 1:12
  SPEAKER_04: Now, with that out of the way, a little on the purpose and format.
• 1:17
  SPEAKER_04: So our aim with the symposium is to identify high-growth long-term investment themes underserved by Cellside Research, populate leading companies and senior management around the theme, and package it in a punchy investor-friendly format.
• 1:31
  SPEAKER_04: We publish deep dive content before and after each symposium, and we'll have the recap reports coming out after.
• 1:38
  SPEAKER_04: It's very easy for our listeners to access those reports because our content at Watertower Research is entirely open access.
• 1:46
  SPEAKER_04: You can easily navigate through our website or through research aggregators like FactSet and Bloomberg, Sean.
• 1:53
  SPEAKER_06: Great.
• 1:54
  SPEAKER_06: Peter, if you tell us about the participating companies as well.
• 1:58
  SPEAKER_04: Yeah, absolutely.
• 1:59
  SPEAKER_04: So these companies joining us today are redefining how investors should think about carbon capture utilization and storage and showing how carbon has evolved from a compliance cost into a genuine driver of profit across aviation fuel, marine fuels, specialty alcohols, and fertilizers.
• 2:17
  SPEAKER_04: These companies are also benefiting from regulatory tailwinds, which have only accelerated with the Strait of Hormuz crisis.
• 2:24
  SPEAKER_04: Our lineup today includes Givo, Alto Ingredients, Cap CO2, and LSB Industries.
• 2:30
  SPEAKER_04: First up, Givo is a technology-driven SAF and low-carbon ethanol producer, which is today generating multi-stack revenue from its on-site carbon sequestration site in North Dakota.
• 2:42
  SPEAKER_04: Givo is pursuing multiple expansions at this site and is in parallel pursuing third-party sales of its spare CCS capacity, modular alcohol-to-jet technology, and carbon accounting services.
• 2:56
  SPEAKER_04: Alto ingredients can pivot between fuel-grade ethanol and higher margin specialty alcohols, depending on where the best returns are.
• 3:04
  SPEAKER_04: And on the CO2 side, they're already monetizing biogenic CO2 today with a sequestration pathway coming down the road.
• 3:12
  SPEAKER_04: CAP CO2 uses patented technology to convert captured biogenic CO2 at ethanol biorefineries into green methanol, opening up product markets that simply did not exist before for these types of facilities.
• 3:27
  SPEAKER_04: And finally, LSB Industries produces ammonia and nitrogen fertilizer products and has turned what used to be an emissions liability into cash flow, decarbonizing their production into high-value low-carbon ammonia and with minimal capital outlays.
• 3:42
  SPEAKER_04: So altogether, this is a great cross-section of how the CCS theme is playing out across different feedstocks and products and business models.
• 3:51
  SPEAKER_04: And we are glad to have all four of these companies with us today.
• 3:57
  SPEAKER_06: Great.
• 3:57
  SPEAKER_06: Thanks, Peter.
• 3:58
  SPEAKER_06: That's a great overview.
• 4:00
  SPEAKER_06: Sounds like a very interesting symposium.
• 4:02
  SPEAKER_06: Excited to get started.
• 4:04
  SPEAKER_06: So for our first guest, we're very pleased to welcome Dr.
• 4:06
  SPEAKER_06: Eric Fry, VP of Finance and Strategy at Givo.
• 4:11
  SPEAKER_06: Welcome, Eric.
• 4:12
  SPEAKER_06: Hey, Sean, good to be with you.
• 4:15
  SPEAKER_06: So, Eric, uh it's great to have you back and uh thank you for attending our symposium.
• 4:20
  SPEAKER_06: I'll kick off with the first question and then hand it over to Peter.
• 4:24
  SPEAKER_06: So, for investors new to Givo, can you give us a general overview of the company, including your operations and footprint, and importantly, you know, how carbon capture and sequestration is viewed as a competitive advantage for Givo?
• 4:38
  SPEAKER_05: Yeah, absolutely.
• 4:39
  SPEAKER_05: So thanks again to you and Peter.
• 4:40
  SPEAKER_05: Peter mentioned a little bit of what we do, but just to expand on that, we're a low-carbon drop-in fuels company where carbon capture and carbon management is essentially central to everything that we do.
• 4:52
  SPEAKER_05: Uh, and the vehicle for that is low-carbon ethanol.
• 4:56
  SPEAKER_05: So in the US, the cereal crop that goes in the door is corn and ethanol and corn co-products go out the door: protein for animal feed, corn oil, and you get sugar.
• 5:06
  SPEAKER_05: And you can ferment sugar into alcohols like ethanol that are blended into gasoline to power our vehicles.
• 5:12
  SPEAKER_05: But that's really a vehicle to reduce carbon footprint.
• 5:15
  SPEAKER_05: And the reason it's it's a vehicle to do that is because the process is intrinsically uh takes carbon dioxide out of the air on the front end because when you grow biomass, that's what you do.
• 5:27
  SPEAKER_05: And then in the middle part of the process, if you ferment beer in your garage, you get bubbles, or if you make champagne, you get bubbles.
• 5:34
  SPEAKER_05: And what are the bubbles?
• 5:35
  SPEAKER_05: Well, they're carbon dioxide.
• 5:36
  SPEAKER_05: And in this case, it's a biogenic carbon dioxide, so that's a good source to do carbon capture.
• 5:42
  SPEAKER_05: And in North Dakota, we have a good geology to do carbon capture, so we inject effectively that gas from the bubbles about a mile underground where it mineralizes and is uh certified to stay there for over a thousand years.
• 5:57
  SPEAKER_05: So people talk a lot about carbon capture and sequestration or CCS, but we're doing it.
• 6:02
  SPEAKER_05: Uh, it's not theoretical for us.
• 6:04
  SPEAKER_05: We're we've been operating this class uh six well for a while.
• 6:08
  SPEAKER_05: It's been operating, in fact, since 2022.
• 6:11
  SPEAKER_05: We have uh uh we're on track at an annual rate to sequester over half a million tons of carbon dioxide or avoid carbon emissions from use of our products uh per year, which is like taking 100,000 cars off the road.
• 6:25
  SPEAKER_05: So that's good, but it's also a good business because it it generates value in our products, either the value in the carbon itself that companies want to buy for carbon offsets, or the value in the products, their lower carbon products by being virtue of low carbon.
• 6:41
  SPEAKER_05: And that all sets up the table for us to do other uh low-carbon fuels and chemicals using that low carbon ethanol and that carbon capture as a feedstock.
• 6:52
  SPEAKER_04: Okay, thanks, Eric, for that uh context.
• 6:55
  SPEAKER_04: So you've touched on some of the you know key strategic pillars there.
• 6:58
  SPEAKER_04: Um and how should we think about uh you know taking this foundation and growing it?
• 7:03
  SPEAKER_04: And how will CCS you know fit into that broader uh growth strategy?
• 7:07
  SPEAKER_05: Yeah, so focusing on CCS, there's a couple of areas of growth that we have.
• 7:12
  SPEAKER_05: Uh, I guess for starters, I'd say that we're in development to use more of our pore space.
• 7:16
  SPEAKER_05: The pore space is the pores and the rock.
• 7:19
  SPEAKER_05: And just like an oil and gas company might have leases to use the geology to produce oil and gas, the analogy here is we have leases that give us the right to inject carbon dioxide.
• 7:30
  SPEAKER_05: And it turns out that our capacity is about a million tons per year, but we're only using 17% of that.
• 7:36
  SPEAKER_05: So, one way to use more of that and to put it to work is to enlist third parties to send us their carbon dioxide on rail cars, and we'll put it down a hole for them because we have the sink.
• 7:48
  SPEAKER_05: Uh, so that's one initiative that we're working on.
• 7:51
  SPEAKER_05: Another initiative is to simply expand our ethanol operations.
• 7:55
  SPEAKER_05: When you produce more ethanol, every pound of ethanol produces a pound of carbon dioxide, and so that also allows us to capture more carbon.
• 8:02
  SPEAKER_05: And then finally, we aim to uh uh build an alcohol to jet plant.
• 8:08
  SPEAKER_05: Uh, when you build an alcohol to jet plant, you convert that ethanol to sustainable aviation fuel.
• 8:13
  SPEAKER_05: We don't need to add more carbon capture to do that, but you're just putting that carbon capture to work in a more specialty product.
• 8:21
  SPEAKER_05: Ethanol is a great product if you're low carbon ethanol, but SAF is what the world wants even more.
• 8:27
  SPEAKER_05: Uh the demand for jet fuel is growing, and it's very difficult to electrify jet fuel.
• 8:32
  SPEAKER_05: So if you can put that low-carbon feedstock to work in a specialty product, a higher energy density, more valuable product, that's just getting more value out of that CCS that you're already doing.
• 8:47
  SPEAKER_04: So that's a very you know helpful picture in terms of that uh you know longer-term uh roadmap.
• 8:52
  SPEAKER_04: Um, I just want to shift gears uh a little bit to the macro environment.
• 8:56
  SPEAKER_04: Uh clearly there's a lot uh happening on the geopolitical front uh that's directly relevant to uh the markets that you serve.
• 9:03
  SPEAKER_04: Um, but with respect to you know staff and renewable fuels, uh, what do you see as the the near-term implications of the Strait of Hormuz uh crisis?
• 9:11
  SPEAKER_04: And do you see any structural changes emerging from this uh you know over the longer term?
• 9:17
  SPEAKER_05: Yeah, so I I think short-term events like the Strait of Hormuz crisis highlight supply chain fragility in global energy markets.
• 9:27
  SPEAKER_05: And clearly, as we've seen, they drive volatility in jet fuel prices.
• 9:31
  SPEAKER_05: Jet fuel prices have hit recent record highs as a result of that.
• 9:35
  SPEAKER_05: Um, and so those are bottlenecks that you can mitigate the risk of supply uh crunches from those types of bottlenecks and also price crunches from those bottlenecks by diversifying your resource.
• 9:51
  SPEAKER_05: And plant sugars are an abundant and growing resource that need more uses.
• 9:56
  SPEAKER_05: When you grow the cereal crops that make plant sugars, you get good things.
• 10:00
  SPEAKER_05: You get protein and vegetable oil that ultimately goes into the food supply.
• 10:05
  SPEAKER_05: Uh, but you also get sugar.
• 10:07
  SPEAKER_05: And goodness knows we don't need it necessarily need more sugar.
• 10:11
  SPEAKER_05: You can ferment sugar into ethanol for gasoline, uh, or you can convert it to jet fuel.
• 10:15
  SPEAKER_05: Those are all things that are in demand.
• 10:17
  SPEAKER_05: And if you think about the US fossil fuel complex, especially, uh, energy security really matters.
• 10:24
  SPEAKER_05: And the production, you know, we produce a lot of crude oil.
• 10:27
  SPEAKER_05: The U.S.
• 10:28
  SPEAKER_05: produces crude oil and in fact is a net exporter of crude oil.
• 10:31
  SPEAKER_05: But the question is the fuel.
• 10:32
  SPEAKER_05: The fuel capacity has not in, we have not built new jet fuel capacity in at least 25 years in this country.
• 10:39
  SPEAKER_05: And that capacity is concentrated on the Gulf Coast.
• 10:42
  SPEAKER_05: One severe weather event can easily take out 30% of your fuel production.
• 10:48
  SPEAKER_05: Whereas ethanol is a distributed resource.
• 10:51
  SPEAKER_05: There's about 180 to 200 ethanol plants distributed across the US-Midwest.
• 10:57
  SPEAKER_05: One event like the Strait of Hormuz or like a hurricane is not going to knock out all that supply.
• 11:02
  SPEAKER_05: And so it's good for energy resilience and energy security.
• 11:08
  SPEAKER_04: And of course, the you know, domestic policy backdrop has been evolving uh very quickly as well.
• 11:14
  SPEAKER_04: Uh, and that ties directly into the economics of uh of your business.
• 11:18
  SPEAKER_04: So, you know, there's been solid momentum, uh, for example, recently on the U.S.
• 11:22
  SPEAKER_04: regulatory front, uh, including the transition to the Section 45Z uh clean fuel production tax credit.
• 11:29
  SPEAKER_04: How should investors think about the uh economic impact uh both to Givo's operations and to the broader industry from um some of these uh you know uh some of this regulatory momentum in the US?
• 11:41
  SPEAKER_05: Yeah, so one thing that's important, just to put the 45Z production tax credit in context, um, first of all, it's effectively bipartisan.
• 11:49
  SPEAKER_05: Uh it goes back to the blenders tax credit, which has been, which was around for quite a long time under different administrations.
• 11:57
  SPEAKER_05: Then under the Biden administration, we had the Inflation Reduction Act that changed it to be the 45Z.
• 12:02
  SPEAKER_05: And then under the Trump administration, the Big Beautiful Bill extended that tax credit even further.
• 12:07
  SPEAKER_05: Our view is that it's likely to continue to be extended, but but currently it uh it expires eventually.
• 12:13
  SPEAKER_05: Uh and the key element of the 45Z is that it rewards performance.
• 12:17
  SPEAKER_05: So if you produce more, you get a bigger credit.
• 12:20
  SPEAKER_05: But also if you drive down your carbon intensity, you get a bigger credit.
• 12:24
  SPEAKER_05: And carbon intensity is a good proxy for good things.
• 12:29
  SPEAKER_05: Your carbon intensity goes down if you're more efficient.
• 12:32
  SPEAKER_05: Uh so if you invest in systems that use less energy or you or put the existing energy to work better, if it drives up yields, you drive down carbon intensity.
• 12:43
  SPEAKER_05: If you work with farmers to use less land per bushel or use less fertilizer per crop, you drive down carbon intensity.
• 12:52
  SPEAKER_05: So it's a good performance-based uh reward for things that we want to do.
• 12:59
  SPEAKER_05: And we're getting uh uh we're really maximizing, really putting it to full advantage by utilizing carbon capture.
• 13:06
  SPEAKER_05: Because in the process of ethanol production, carbon capture is a very efficient target if you have good rock underneath you.
• 13:14
  SPEAKER_05: Uh and so the 45Z, I think, represents a shift and a structural shift that kind of gets support, whether you're concerned about jobs in the Midwest and farmers and energy security, or whether you're concerned about driving down carbon intensity, there's now evidence of broad-based support for it.
• 13:34
  SPEAKER_05: And we like that.
• 13:35
  SPEAKER_05: We're investing in our asset to make it better so that we can maximize the credit that we get.
• 13:42
  SPEAKER_04: So as we wrap up, if we wanted to give uh investors a practical framework for uh following uh Givo going forward, uh, what are some of the key signposts that investors should be watching, you know, whether at Givo specifically or across the uh industry to gauge the progress?
• 13:59
  SPEAKER_05: Yeah, so you know, our our we put out our financial targets and what what those look like.
• 14:05
  SPEAKER_05: Uh, you know, compared to last year, we're targeting to approximately double or perhaps more than double our uh EBITDA, for example.
• 14:12
  SPEAKER_05: But going to more of the business, we're in the process of debottlenecking.
• 14:17
  SPEAKER_05: So we expand expect to expand our carbon capture by 10 or 15% alongside ethanol starting next year.
• 14:24
  SPEAKER_05: Uh we're working on in development for plans to do third-party CO2 by rail as well as uh a larger expansion, which would double our volume by 2028.
• 14:34
  SPEAKER_05: Uh, and then of course, we have our longer-term ATJ project to build a facility that converts ethanol to jet fuel.
• 14:41
  SPEAKER_05: For that, we're looking to get through our FEL3 stage of engineering.
• 14:44
  SPEAKER_05: We we completed FEL2 stage.
• 14:47
  SPEAKER_05: And we also have uh uh off-take contracts that encompass fixed prices, fixed and floor prices.
• 14:53
  SPEAKER_05: And we're looking to get more of those contracts, essentially.
• 14:56
  SPEAKER_05: Uh, those are the key things that I look out for in terms of Givo over the next call it six to twelve month kind of period.
• 15:04
  SPEAKER_04: Okay, well, thank you very much, uh Eric, for joining us today.
• 15:07
  SPEAKER_04: Uh, we'll need to wrap it up there, but uh really enjoyed this conversation.
• 15:10
  SPEAKER_04: It's always great to hear from you.
• 15:12
  SPEAKER_04: Uh, we'll continue to follow uh Givo very closely here at Watertower Research and uh definitely look forward to uh having you on us, uh having you on with us again for a future event.
• 15:22
  SPEAKER_04: Great.
• 15:22
  SPEAKER_04: Thanks, thanks, Peter and Sean.
• 15:25
  SPEAKER_04: So for our listen for our listeners, please stay tuned for our next speaker.
• 15:29
  SPEAKER_06: For our next guest, we're very pleased to welcome Brian McGregor, President Chief Executive Officer, and Rob Olander, CFO of Alto Ingredients.
• 15:37
  SPEAKER_06: Welcome, gentlemen.
• 15:38
  SPEAKER_06: Thanks, Sean.
• 15:39
  SPEAKER_06: Thank you.
• 15:40
  SPEAKER_06: So, Brian and Rob, it's great to have you on board for our symposium.
• 15:44
  SPEAKER_06: And I'm gonna start with the first question and Peter will follow up.
• 15:47
  SPEAKER_06: Uh, this one's for you, Brian.
• 15:48
  SPEAKER_06: So, for investors who are new to the company, could you provide a brief overview of ALTO ingredients, including your operations and what you consider your main competitive advantages?
• 15:59
  SPEAKER_06: Sure.
• 16:00
  SPEAKER_07: John, thanks for having us today.
• 16:02
  SPEAKER_07: If uh I were to try and summarize where what AUTO is today, to some degree it's an amalgam of a number of different companies, uh a couple of comp public companies at one time, but it really is at its core a producer of specialty alcohols and renewable fuels and uh other essential ingredients.
• 16:26
  SPEAKER_07: So pet foods, um, feed for animals, and and even some of our product goes into um proteins for beehives and the like.
• 16:36
  SPEAKER_07: So it's really quite broad.
• 16:38
  SPEAKER_07: We have five major facilities, two of which are located in the western United States, and then three are located on a single campus in central Illinois.
• 16:47
  SPEAKER_07: Uh, it is at the nexus of uh lots of transportation, including uh we're able to ship a lot of our product, particularly from the central Illinois area on the Illinois River, which is a tributary to the Mississippi.
• 17:01
  SPEAKER_07: So we get some of the best netbacks in the country with regards to transportation of our product, and we're able to sell in bulk, oftentimes and is very conducive for exports as well.
• 17:12
  SPEAKER_07: The company has over time, through acquisition and then rationalization, built around five core facilities that I mentioned earlier.
• 17:25
  SPEAKER_07: And it's really been a transition from what would be a sole commodity ethanol business to a more high-margin specialty focused platform.
• 17:35
  SPEAKER_07: So our focus, particularly as of late, has been around integrating the asset base and optimizing that and building a more productive and flexible um system.
• 17:48
  SPEAKER_07: Our facilities run the gamut of fairly new facilities in the in the ethanol relative time period.
• 17:56
  SPEAKER_07: But some of these facilities as well, or some of the equipment that we have is over 100 years in the making in some form or another.
• 18:03
  SPEAKER_07: So while they may not be as efficient at times, the older facilities, they may be able to produce or they produce a very differentiated product that allows us to be able to capture premium over what we would otherwise get if we were just operating in the in the you know commoditized ethanol space.
• 18:23
  SPEAKER_07: And so the other good thing about having these facilities is being able to differentiate and as well to be flexible and adapt as you've seen market changes.
• 18:33
  SPEAKER_07: I think it's a great example of how we've been able to adapt even as you know, with regulatory changes in Middle East.
• 18:40
  SPEAKER_07: Uh but in any case, uh it's it's being able to adapt and do what we can.
• 18:47
  SPEAKER_07: So what we've really been able to do is reposition Alto into a more flexible, margin-focused specialty ingredient business is probably a good way to summarize what we are today.
• 18:57
  SPEAKER_04: Okay, great.
• 18:58
  SPEAKER_04: Thanks uh for that overview, Brian.
• 19:00
  SPEAKER_04: Uh, could you extend a bit further uh and share Alto's growth plans and how carbon capture and sequestration uh fits in with that strategy?
• 19:09
  SPEAKER_07: Sure.
• 19:09
  SPEAKER_07: So while growth has historically in in some form or another been both organic and through um acquisition, our focus has as of late been particularly growth more around the bottom line, being able to optimize the use of the assets that we have in um existing today.
• 19:32
  SPEAKER_07: That said, as an example, we made an acquisition in January of last year, which was to integrate um gas liquid liquefication, CO2 liquefication at our Columbia facility, which is in Oregon, to be able to capture more of that value stream.
• 19:50
  SPEAKER_07: So we produce a food grade um CO2 that is actually being sold to industrial gas companies who are selling into the into the um Western US and the Pacific Northwest markets.
• 20:06
  SPEAKER_07: That those are particularly um good markets to be located in.
• 20:13
  SPEAKER_07: Most of the CO2 that comes into that region is not produced in that area, but often in the Midwest and or in the Gulf.
• 20:20
  SPEAKER_07: And so the cost of shipping that product is significantly more expensive, and you lose a lot of inventory as compared to being a producer locally.
• 20:28
  SPEAKER_07: So we're seeing the real benefits of that, and that's turned that facility really into a profit center for us.
• 20:34
  SPEAKER_07: So uh we're excited about that.
• 20:37
  SPEAKER_07: Also, there's good demand for the ethanol.
• 20:39
  SPEAKER_07: There's it's a low-carbon init fuel, and we're able to capture the low carbon init values around that with the sell of that ethanol.
• 20:47
  SPEAKER_07: So um, Rob will go into a little bit more detail on the 45Z portion of that, but again, those those are incredibly differentiated opportunities.
• 20:57
  SPEAKER_07: And then really it's about expanding the specialty alcohol portfolio.
• 21:02
  SPEAKER_07: And that's not just something that's been in the recent making that started in 2020, 2021.
• 21:08
  SPEAKER_07: We're able to adapt as those markets um developed, and then also as they evolve, there it provides opportunities to be able to now, as an example, sell uh on the export basis those products at a higher value than what we would otherwise get for just domestic fuel values.
• 21:26
  SPEAKER_07: I think the other part of growth for us is as I mentioned around carbon and what used to be a basically a waste product uh is now of high value, particularly in foreign markets.
• 21:45
  SPEAKER_07: While the US is demand for or desire to lower carbon footprints ebbs and flows to some degree with administrations, but as well with market dynamics.
• 21:57
  SPEAKER_07: What we have seen is a relatively good demand.
• 22:00
  SPEAKER_07: For and sustained demand for carbon, low carbon fuel sources or low carbon feedstock, so or ingredients that come from our facility.
• 22:11
  SPEAKER_07: And so that has been beneficial for us.
• 22:13
  SPEAKER_07: And so the other unique or differentiated or maybe the other word I'd use is quite a volume of eligible carbon for us is biogenic CO2 is at our peak in facility.
• 22:32
  SPEAKER_07: We produce on average over 600,000 metric tons a year.
• 22:37
  SPEAKER_07: And we sell a fraction of that.
• 22:38
  SPEAKER_07: We sell approximately 120,000, 130,000 metric tons a year of that CO2 for industrial applications.
• 22:47
  SPEAKER_07: But there's just such a significant opportunity to be able to do more with that, not only in with regards to uh on a utilization basis, but as well in the future as we continue to work with partners and the like to develop that into a sequestration opportunity.
• 23:03
  SPEAKER_07: There's we sit atop the Mohammed Aquifer, and there are opportunities to be able to tap into that on a selective basis.
• 23:13
  SPEAKER_07: So we're excited about that opportunity.
• 23:15
  SPEAKER_07: CCS is really an enabler and it strengthens the economics for our business.
• 23:21
  SPEAKER_04: Okay, great.
• 23:22
  SPEAKER_04: Thank you.
• 23:22
  SPEAKER_04: We'll come back in a moment to Rob.
• 23:24
  SPEAKER_04: You mentioned 45Z, but first I'd just like to zoom out uh to the macro environment uh for a moment.
• 23:30
  SPEAKER_04: Um, with respect to you know, especially alcohols and renewable fuels markets where Alto operates, what do you see as the implications of the Strait of Hormuz crisis?
• 23:40
  SPEAKER_04: You know, specifically, you know, does this disruption like this uh accelerate the case for domestic energy security and alternatives like ethanol?
• 23:48
  SPEAKER_04: Or are there other uh you know critical implications out there?
• 23:52
  SPEAKER_07: I think it certainly does.
• 23:54
  SPEAKER_07: I think we've seen a lot of that manifest.
• 23:56
  SPEAKER_07: Um it has been only 18 years in the making.
• 24:03
  SPEAKER_07: So it depends on how you measure the lifespan of something, but there's been a long effort to try and get E-15 adoption year-round.
• 24:11
  SPEAKER_07: And there uh there is clearly a bipartisan desire to adopt E-15 year-round.
• 24:21
  SPEAKER_07: I think that what may be the greatest um example of that is for the voters to to vote in California for E-15 adoption.
• 24:34
  SPEAKER_07: So while it's still in the final approvals or the regulatory approval process, it is fully accepted by and desired to be integrated into the US market or into the California market for a full year-round.
• 24:49
  SPEAKER_07: And it may actually end up being the the um the impetus for national adoption year-round.
• 24:59
  SPEAKER_07: But that just California alone would introduce an additional 650 million gallons of demand a year, and I think it's really important because it also provides a balance to what is otherwise uh you know an investment by this administration in supporting um the um production credits around this.
• 25:22
  SPEAKER_07: So they would go hand in glove, and I think would be significantly beneficial.
• 25:26
  SPEAKER_07: But I think those types of things are really a manifestation of some of these political challenges that we're we're currently facing and and and it also demonstrates, I think, the fragility of the global supply chains.
• 25:38
  SPEAKER_07: So it's important while we view this generally as um overall, clearly it's it's it's it's upsetting, but from a business perspective, there are opportunities for us, and but it also requires us that we adapt.
• 25:55
  SPEAKER_07: Right?
• 25:55
  SPEAKER_07: You're seeing interruptions in transportation, and when those interruptions occur, the world markets don't like a vacuum.
• 26:05
  SPEAKER_07: So they go out and they they procure logistics elsewhere, and so you're challenged to try and find and continue to produce sustainable ways to move your product.
• 26:15
  SPEAKER_07: And the the good news generally for us is that we've been able to be nimble and be responsive to those market dynamics.
• 26:24
  SPEAKER_07: So, you know, our hope is that we can this is resolved relatively quickly and that we see E15 adoption and all the other benefits associated with it because it's not really just about solving domestic fuel challenges, but more so um we think that it's gonna be sticking around for a while.
• 26:42
  SPEAKER_07: These you know, things don't move quickly when you're obligated to go out and fix contracts for you know relatively you know one year or longer periods of time to make sure you have the logistics that you need.
• 26:56
  SPEAKER_07: So um again, we're excited about the opportunities that that are in front of us and um and and are adapting where we need to for the um indirect impacts that we see as well from from um the unrest in the Middle East.
• 27:15
  SPEAKER_04: And so, you know, staying on the the policy front, and this may be a question uh for Rob, uh there has been you know clearly very solid momentum on the U.S.
• 27:24
  SPEAKER_04: regulatory side.
• 27:25
  SPEAKER_04: You mentioned uh E-15, uh you've got the Section 45Z clean fuel production tax credit.
• 27:31
  SPEAKER_04: Um, how would you characterize the impact of these policy tailwinds uh, you know, on um uh on the industry and how is uh Alto set to capitalize here?
• 27:41
  SPEAKER_03: Yeah, sure.
• 27:42
  SPEAKER_03: Um, you know, as you stated, there there have been some positive regulatory tailwinds um in the ethanol industry.
• 27:48
  SPEAKER_03: And one of the big ones has been the 45Z uh and the 45q production tax credits.
• 27:55
  SPEAKER_03: Uh, you know, these policies are are I intended to incent certain behaviors and um, I would say investment decisions to capitalize on those credits and to continue to lower our carbon footprint in the process.
• 28:09
  SPEAKER_03: Um, you know, for example, the 45Z tax credit allows producers to capture 10 cents for every gallon for every five-point CI or carbon intensity reduction that's below a 50 CI baseline.
• 28:24
  SPEAKER_03: Now, that benefit's capped at a dollar per gallon benefit.
• 28:28
  SPEAKER_03: Um, and the credit applies solely to transportation fuel as well.
• 28:32
  SPEAKER_03: Uh, ALTO has two facilities that are dedicated solely to renewable transportation fuel markets, and that includes our Columbia plant in Oregon and our dry mill in Illinois.
• 28:43
  SPEAKER_03: Uh last year we qualified for uh roughly 90 million gallons at 10 cents per gallon in these 45Z credits, and we expect to further qualify at the 20 cents per gallon level in 2026.
• 28:56
  SPEAKER_03: Um, ALTO and others, uh, in an effort to capitalize on this opportunity, are making investments uh in our plants.
• 29:03
  SPEAKER_03: For us specifically, um, you know, in these two facilities, we uh we planned a debottlenecking project uh later this quarter at our dry mill that will allow us to expand our production capacity by up to 5 million gallons.
• 29:18
  SPEAKER_03: We're also making investment decisions to address fermentation and reliability issues at our uh Columbia plant in Oregon, and that will improve our production uptime.
• 29:28
  SPEAKER_03: In an effort to lower our carbon intensity score, we're also uh assessing several options to either lower uh the consumption of utilities, um, specifically natural gas and electricity with more energy efficient equipment, um, and even the potential to use alternative energy sources.
• 29:47
  SPEAKER_03: Um, there's also a big opportunity, you know, that uh we are also exploring a longer-term relationship with farmers that are willing to support uh more carbon smart ag practices, and that would include like the low-till or the no-till um cover crops or the the use of uh you know reduced nitrogen fertilizers.
• 30:11
  SPEAKER_03: Uh, this program is complex and it'll take time to develop, but we're we're very optimistic about the the shared benefits with our ag partners.
• 30:19
  SPEAKER_03: Now, this 45Z program goes through uh 2029, but uh there's always the chance that it gets extended as well.
• 30:28
  SPEAKER_04: So looking ahead, this is probably probably we're kind of running uh um up on our time here, so just want to ask a final question.
• 30:35
  SPEAKER_04: Uh so for investors, you know, looking ahead, uh, what would be the key signposts that uh that they should be focusing on at Alto or within the broader industry?
• 30:46
  SPEAKER_07: Thanks, Peter.
• 30:47
  SPEAKER_07: Yeah, I think the the best way to respond to that is I don't know that you have to look very far into you can look at the performance of the company over the last now nine months.
• 30:57
  SPEAKER_07: And the ability to, you know, having right size of the company, focusing on the things that we can do that we have control over has been all important.
• 31:07
  SPEAKER_07: But there are significant growth opportunities and opportunities to take advantage of the assets that we have in the company itself to bring those to bear and to really see those and not only improve the top lane, but as well improve the bottom lane.
• 31:24
  SPEAKER_07: So it's really about again, the shift that we've made.
• 31:28
  SPEAKER_07: You'll certainly see a signpost, public signposts around if it's E15 adoption in California or across the nation full-time.
• 31:36
  SPEAKER_07: Clearly, additional improvements that we can be making at those facilities and the like is really um what you'll see.
• 31:44
  SPEAKER_07: And and we hope to continue to deliver on a sustained basis.
• 31:48
  SPEAKER_04: Okay, great.
• 31:49
  SPEAKER_04: Well, thank you very much, uh Brian and Rob for joining us.
• 31:52
  SPEAKER_04: This has been uh very comprehensive, and uh we we look forward to hopefully having you back again with us for another uh future event.
• 31:59
  SPEAKER_07: Thanks, Peter.
• 32:00
  SPEAKER_03: Thank you, Peter.
• 32:00
  SPEAKER_03: Thanks, Rob.
• 32:02
  SPEAKER_04: Great.
• 32:03
  SPEAKER_06: For our listeners, please stay tuned for our next speaker.
• 32:06
  SPEAKER_06: For our next guest, we're we are very pleased to welcome uh Jeff Bonner, Chief Executive Officer of Cap CO2 Solutions, and Sally Hart, VP of Communications.
• 32:15
  SPEAKER_06: Welcome, Jeff and Sally.
• 32:17
  SPEAKER_06: Glad to have you.
• 32:18
  SPEAKER_02: Thank you.
• 32:19
  SPEAKER_06: Thank you.
• 32:20
  SPEAKER_06: So, Jeff, it's great to have you back and thanks for joining our symposium.
• 32:23
  SPEAKER_06: Um, I'm going to kick off with the first question and uh then I'll pass it over to Peter for additional QA.
• 32:29
  SPEAKER_06: Um, so to start with, for investors who are new to your company, could you provide a brief overview of Cap CO2, including your operations and what you consider your main competitive advantages?
• 32:40
  SPEAKER_02: Sure.
• 32:41
  SPEAKER_02: Yeah, so CAP CO2 takes uh CO2 from ethanol plants and converts it to a very valuable uh fuel called methanol.
• 32:53
  SPEAKER_02: And we create it's a low carbon fuel and it's a very clean burning fuel.
• 33:00
  SPEAKER_02: So the shipping industry has adopted methanol as their next generation fuel.
• 33:07
  SPEAKER_02: And the ethanol plant, kind of uh nice uh dovetail, they really need to do something with their CO2.
• 33:16
  SPEAKER_02: It's the last major waste product they have not converted into uh a profit center.
• 33:23
  SPEAKER_02: And by turning the CO2 into methanol, not only um uh are we now making a valuable product, but also the the carbon score of their ethanol goes down.
• 33:35
  SPEAKER_02: So that qualifies them for tax credits, it qualifies them to sell in places that are uh particular about the carbon score of the ethanol.
• 33:45
  SPEAKER_02: So it just opens up a new world for them.
• 33:48
  SPEAKER_02: In particular, it opens up sustainable aviation fuel as a future direction for them.
• 33:55
  SPEAKER_04: Thanks for that overview, Jeff.
• 33:56
  SPEAKER_04: Uh staying with the big picture for a moment, uh, what would you like to tell investors about CAP CO2's uh commercial and uh growth strategy from here?
• 34:06
  SPEAKER_02: Well, uh, you know, our strategy is we're building our first plant in Laverne, Minnesota, southwestern Minnesota, alongside of an ethanol plant there.
• 34:16
  SPEAKER_02: And in fact, that ethanol plant, the agri energy ethanol plant, that's my background, the inside of that ethanol plant.
• 34:24
  SPEAKER_02: Um and uh from there, that is the final proof point for the technology, taking it from TRL7 to TRL9.
• 34:35
  SPEAKER_02: And that's uh we have a rapid expansion planned.
• 34:41
  SPEAKER_02: We have three other ethanol plants now signed up who want to be next after the one in Laverne is working.
• 34:50
  SPEAKER_02: And we have off-takers, people who want to buy the methanol, uh including local racetracks.
• 34:56
  SPEAKER_02: Race cars often run on methanol.
• 34:59
  SPEAKER_02: And uh we're also in conversations with shipping companies, nothing I can formally announce, but uh opportunities for much larger quantities of the methanol.
• 35:11
  SPEAKER_02: Uh and you Sally and Sally, anything else I should add there?
• 35:16
  SPEAKER_01: Uh I think it's important to note that our approach uses a patented technology that fits on site at the ethanol facility.
• 35:26
  SPEAKER_02: Very good.
• 35:27
  SPEAKER_02: Conventional methanol facilities are massive, cost a half a billion dollars, um, and you could never sit them at an ethanol plant.
• 35:36
  SPEAKER_02: Our technology is small and compact, about the size of a basketball court, and fits nicely on the ethanol plant footprint, and um obviously much less expensive to build and operate.
• 35:52
  SPEAKER_04: You mentioned uh sustainable aviation fuel, uh, and maybe we can you know uh use that to build a bit on your growth narrative there.
• 36:00
  SPEAKER_04: Could you walk us through how green methanol provides a pathway to sustainable aviation fuel?
• 36:06
  SPEAKER_02: We provide three things.
• 36:08
  SPEAKER_02: Um first of all, to qualify for sustainable aviation fuel, the ethanol needs to be low carbon.
• 36:17
  SPEAKER_02: And we do that.
• 36:19
  SPEAKER_02: The next thing is one of the best um feedstocks for sustainable aviation fuel is a combination of methanol and ethanol.
• 36:29
  SPEAKER_02: And you can imagine, boy, if our facility is at your ethanol plant, you've now got the perfect feedstock for sustainable aviation fuel right there on site.
• 36:40
  SPEAKER_02: You don't have to transport it anywhere.
• 36:42
  SPEAKER_02: So that's the second piece.
• 36:44
  SPEAKER_02: And the third thing is that when you actually make the sustainable aviation fuel, that emits CO2 as well, and we can capture that CO2 and turn that into methanol.
• 36:56
  SPEAKER_02: So three different benefits we provide kind of key enabling technologies for the South.
• 37:06
  SPEAKER_04: And so, you know, zooming out to the market environment, and of course, you're not at you know commercial operation uh at this point, but you know, today we have the uh you know blocking of the Strait of Hormuz, which has had significant impact on the global methanol and jet fuel markets.
• 37:22
  SPEAKER_04: How should we think about that for you know implications for methanol and SAF more broadly?
• 37:27
  SPEAKER_04: You know, are there, for example, structural implications here from a US energy security standpoint?
• 37:33
  SPEAKER_04: And how does this disruption kind of affect the outlook for for your company specifically?
• 37:39
  SPEAKER_02: They're huge.
• 37:40
  SPEAKER_02: The um there was a headline on the website, um, oilprice.com, which is not a head of website I normally go to, but someone found it and it said that again, I will read this directly.
• 37:57
  SPEAKER_02: Um, Hormuz shutdown sends capital flooding back into renewables.
• 38:03
  SPEAKER_02: And then an article discussing the details of that.
• 38:07
  SPEAKER_02: So, yes, absolutely.
• 38:10
  SPEAKER_02: Um, we are talking to shipping companies in Singapore, Korea, Japan, all very focused on that they have to up the urgency on their transition.
• 38:23
  SPEAKER_02: Um, and and that includes Europe as well.
• 38:26
  SPEAKER_02: There's another shipping company in Europe.
• 38:28
  SPEAKER_02: So um it may not be top of mind for the average American, but it is top of mind for people outside the US uh who have to buy a lot of fuel.
• 38:41
  SPEAKER_04: Okay, great.
• 38:42
  SPEAKER_04: And so focusing back on uh the company, so looking ahead, what are the key signposts that investors should be uh focusing on at CapCO2?
• 38:52
  SPEAKER_02: Yeah, um uh getting our plant uh built is a key.
• 38:57
  SPEAKER_02: There's a key uh milestone.
• 38:59
  SPEAKER_02: And up and running, we plan a big party in Laverne, uh, you know, when that's first uh up and running.
• 39:08
  SPEAKER_02: And uh from there, we have several candidates for the next size up.
• 39:15
  SPEAKER_02: It could be at Laverne and it could also be at some other strategically interesting places.
• 39:20
  SPEAKER_02: Um and uh what else beyond that?
• 39:26
  SPEAKER_02: The next step beyond that will be declaring the equipment ready for manufacturing and setting up a manufacturing plant so that instead of uh hand assembling the shipping crates, we're building them in one central spot and then delivering them on site to the ethanol plants.
• 39:48
  SPEAKER_04: Okay, great.
• 39:49
  SPEAKER_04: Well, thank you very much, uh Jeff and Sally, for joining us today.
• 39:52
  SPEAKER_04: We'll need to wrap it up there, but uh, it's been great to check in with you and hear about the incremental progress uh down in Luverne and and uh around the region.
• 40:00
  SPEAKER_04: So we'll look forward to uh hopefully having you join us again for a future event.
• 40:05
  SPEAKER_02: Excellent.
• 40:05
  SPEAKER_02: Thank you so much for the opportunity.
• 40:08
  SPEAKER_06: Yes, thank you.
• 40:09
  SPEAKER_06: So for our next guest, uh we're very pleased to welcome uh Mark Berman, Chief Executive Officer of LSB Industries.
• 40:15
  SPEAKER_06: Uh Mark, welcome.
• 40:17
  SPEAKER_00: Thank you.
• 40:17
  SPEAKER_00: Thanks for having me.
• 40:18
  SPEAKER_06: And uh thanks for attending our symposium.
• 40:20
  SPEAKER_06: It's great to have you back.
• 40:21
  SPEAKER_06: Uh, I'm gonna start with the first question and then hand it over to Peter for additional questions.
• 40:26
  SPEAKER_06: Uh but to begin with, uh, for investors new to your company, can you give a brief overview of LSB Industries, including your operations, and what you view as really your main competitive advantages?
• 40:38
  SPEAKER_00: Sure, I'd be happy to do that.
• 40:39
  SPEAKER_00: Um, so we are a nitrogen chemical company.
• 40:42
  SPEAKER_00: So basically we take natural gas, um, we upgrade natural gas to ammonia, and then we upgrade ammonia to other uh both um agricultural and industrial products.
• 40:54
  SPEAKER_00: We do that through three integrated uh plant sites, one in Oklahoma, one in Alabama, and one in Arkansas.
• 41:03
  SPEAKER_00: And um logistically, um, we're advantaged to uh a number of our different customers.
• 41:09
  SPEAKER_00: We try and, from an agricultural standpoint, stay within a 250-mile radius within our customers so that the freight rates uh are advantageous to us.
• 41:20
  SPEAKER_00: And then for our non-agricultural business, um, you know, we've got uh advantageous logistics to get out to a number of our customers, uh, whether it's the Gulf Coast from our plant in Arkansas or uh to the West uh western United States where a lot of the mining activity um is really exploding, and we've uh got a product that we sell for use in explosives.
• 41:46
  SPEAKER_00: So we think we're advantaged in a number of different uh ways from each of our locations, uh, but we also have a lot of growth opportunities in the business as our markets are really exploding.
• 41:57
  SPEAKER_00: And we can get into a little bit later about why that is and and certainly how the Middle East impacts uh our business today.
• 42:06
  unknown: Great.
• 42:06
  SPEAKER_04: Thanks for that overview, uh Mark.
• 42:08
  SPEAKER_04: Uh building on that, what can you tell investors about uh LSB's uh commercial and growth strategy and and particularly how you know carbon capture and sequestration fits into that?
• 42:19
  SPEAKER_00: Yeah, so ammonia production um produces a lot of CO2 emissions.
• 42:24
  SPEAKER_00: Uh we're actually one of the largest uh in the one we're an industry that's one of the largest in the CO2, the production of CO2.
• 42:33
  SPEAKER_00: And so we and and others in our industry have a real focus on how do we reduce CO2 emissions, NOx emissions, and of course, um when we're thinking about other environmental aspects, reduce power usage and water usage.
• 42:46
  SPEAKER_00: Um industry's been doing a good job for a long period of time.
• 42:50
  SPEAKER_00: Um we've tended to focus on carbon capture and sequestration.
• 42:54
  SPEAKER_00: So we've got a project that should be completed by the end of this year, where we'll capture four to five hundred thousand tons of CO2 a year, um, we'll liquefy it, and then we'll actually uh store it or inject it into a sequestration well that's on our property and store it in the ground.
• 43:13
  SPEAKER_00: Um so we're really excited about that because it not only reduces our CO2 emissions footprint as a company pretty significantly, but also um given the um IRS tax credits, 45Q tax credits, we're able to take advantage of that and get a return on the capital that we need to invest uh to actually carve uh capture the CO2 and sequester it.
• 43:36
  SPEAKER_00: But also then we have a low-carbon product that we can hopefully sell at a premium to what we sell at a carbonated product today.
• 43:43
  SPEAKER_00: So, again, as we look around the company, we're looking for other opportunities that we can really um reduce our uh CO2 and NOx emissions and really just you know, again, going forward, um be a big uh a good corporate steward uh The environment.
• 44:02
  SPEAKER_00: As far as growth strategies, internally we've got numerous opportunities to expand production capacity at our El Dorado facility.
• 44:11
  SPEAKER_00: We've previously announced that we are exploring the expansion of our ammonia production facility down there.
• 44:20
  SPEAKER_00: So that would add about another 100,000 tons per year of ammonia production.
• 44:25
  SPEAKER_00: And we have also looked at expanding our nitric acid plant, our AN plants, and maybe even building some new plants down at that facility.
• 44:36
  SPEAKER_00: At our other two facilities, we're exploring some expansion capabilities as well.
• 44:40
  SPEAKER_00: So, you know, we think we've got some really good growth opportunities internally.
• 44:44
  SPEAKER_00: And of course, we always look externally to see if there are opportunities to either acquire or merge with other companies.
• 44:52
  SPEAKER_04: And you know, shifting to the external environment, uh, the the conflict in the Middle East and the Strait of Hormuz crisis has removed significant nitrogen and urea supply uh from global markets, uh, and it looks like there's a notable supply gap that's uh emerging there.
• 45:07
  SPEAKER_04: Uh what do you see as the implications for uh ammonia and agricultural markets in both the the short term and long term from the crisis there?
• 45:15
  SPEAKER_00: Yeah, so the longer the the war in the Middle East goes on, um the uh more dire the crisis really gets.
• 45:23
  SPEAKER_00: Um I think people um maybe are very simplistic in the way that they're thinking about it, that okay, if there's a a you know peace agreement or a ceasefire, um it'll be in one month or two months and everything will be back to normal.
• 45:37
  SPEAKER_00: Um we've got hundreds, maybe even thousands, of ships that are backed up um in the strait and can't get out.
• 45:44
  SPEAKER_00: So there's got to be logistically some way to do that in a very orderly manner, and they'll be prioritized based on um some rationale, which uh, you know, I don't know that I can sit here and say what that would be today.
• 45:58
  SPEAKER_00: Um but you know, we've also um had supply disruptions of uh nitrogen fertilizers, and we've had plants that have been destroyed.
• 46:08
  SPEAKER_00: And so that destruction of plants and the repair of those plants um, you know, really will take some time.
• 46:15
  SPEAKER_00: So not only have we lost production during this period of conflict in any extended period of conflict, but we've also got supply that's been taken out of the marketplace even post-conflict that will have to be um repaired and put back into service.
• 46:32
  SPEAKER_00: And you know, my understanding on some of the plants, um, not just fertilizer plants, but as I mentioned earlier, we need natural gas to make nitrogen fertilizer.
• 46:41
  SPEAKER_00: There are some LNG plants that have some significant um you know uh uh disruption to them or uh or uh damage to them, and they may take years to really get back to normal.
• 46:54
  SPEAKER_00: So I think, you know, for sure uh for the rest of this year we'll see higher fertilizer prices as the um supply has been taken out of the marketplace and demand is still there.
• 47:07
  SPEAKER_00: And then I do believe that we'll see higher fertilizer prices um certainly in the first half of 2027.
• 47:15
  SPEAKER_00: And then that could force uh some demand destruction to just rebalance that supply and demand in the marketplace.
• 47:24
  SPEAKER_04: And staying with the you know policy and industry landscape, uh you recently joined a delegation of fertilizer industry leaders to meet with uh senior officials in the Trump administration.
• 47:34
  SPEAKER_04: Uh that administration has made domestic energy and food security a clear priority.
• 47:40
  SPEAKER_04: Um, what do you expect to achieve from those uh you know conversations and what are the broader implications uh for your company?
• 47:47
  SPEAKER_00: Yeah, I think as an industry, we're trying to work with the administration to see what we can do to help the farmer.
• 47:55
  SPEAKER_00: Um ultimately, you know, food supply and food security is really important for our country as it is for every country around the world.
• 48:03
  SPEAKER_00: Um so I think that, you know, from an industry standpoint, um, there are some things that we can do uh in the short term, but most of them, quite frankly, are in the long term, and that would be to increase domestic fertilizer production where it makes sense.
• 48:19
  SPEAKER_00: So the administration is looking at programs to help uh finance new facilities to be built or other facilities to be expanded.
• 48:28
  SPEAKER_00: And that could be in the form of um low-cost loans, it could be in the form of um grants, um, or it could be some other form like public-private partnership.
• 48:40
  SPEAKER_00: So I think, you know, I think what we're trying to figure out is how do we work with the administration to support their efforts and ultimately to support the farmer and the farmer's economics.
• 48:52
  SPEAKER_00: From a company standpoint, um, anytime we can get low-cost financing um or even grants, which um, you know, would be more akin to equity or non-dilutive equity, you know, we're certainly happy to explore that as we um continue to look at, as I mentioned earlier, internal expansion or even acquisition of other um fertilizer manufacturing facilities uh or even building new facilities.
• 49:21
  SPEAKER_04: So as the investors follow LSB's story uh in the broader fertilizer industry, uh what are the key signposts that they should be uh watching out for?
• 49:31
  SPEAKER_00: Well, I think as a company, we've got a lot of opportunities um internally to become more efficient, um, to streamline our processes.
• 49:40
  SPEAKER_00: And so, of course, um at the end of the day, that um that reduces our cost and increases our cash flow.
• 49:46
  SPEAKER_00: We've also got expansion opportunities, as I mentioned a couple of times earlier.
• 49:50
  SPEAKER_00: And so uh, you know, I think um anytime you're doing expansion on existing facilities, which is called a brownfield expansion, it's going to be cheaper than building new facilities.
• 50:01
  SPEAKER_00: So I think we have the ability to expand production capability and capacity at um relatively low capital cost compared to others around the world.
• 50:12
  SPEAKER_00: And then I think, you know, I would look for us to be a consolidator within the industry as the administration is really looking to um decentralize fertilizer production and really um have many more producers out there that aren't some of the largest producers.
• 50:32
  SPEAKER_00: And even though we might be the fifth largest ammonia producer, I think there's a clear um mark of uh delineation really between the top three and the rest of us.
• 50:43
  SPEAKER_04: Okay, great.
• 50:44
  SPEAKER_04: Well, thanks so much for joining us uh today, Mark, uh, for our symposium.
• 50:48
  SPEAKER_04: Uh we'll need to wrap it up there, but uh, you know, this has been great, uh great overview of your company, uh, your strategy, and uh, and a lot of you know important implications from some of these uh you know global events.
• 50:58
  SPEAKER_04: So we'll look forward to uh having you join us again for a future event.
• 51:02
  SPEAKER_04: But thanks, thank you very much.
• 51:03
  SPEAKER_00: Sounds great.
• 51:04
  SPEAKER_00: Appreciate it.
• 51:05
  SPEAKER_00: And thanks to be here.
• 51:07
  SPEAKER_04: Okay, so uh that's our final speaker for today, Sean.
• 51:10
  SPEAKER_04: So I'm gonna pass back over to you to wrap up uh part two of our symposium.
• 51:15
  SPEAKER_06: Great, thanks, Peter.
• 51:16
  SPEAKER_06: So that will wrap it up for part two of our WTR Symposium series, Circular Economy, Investing in SAF, CCUS, and waste to value.
• 51:24
  SPEAKER_06: Uh, please tune in on June 17th for the final installment of this symposium series, which uh will focus on waste to value, another great topic.
• 51:32
  SPEAKER_06: Uh, thank you to all of our guests for participating today.
• 51:35
  SPEAKER_06: And I'd also like to thank my equity research colleague, Peter Gastrike, for hosting this wonderful event.
• 51:42
  SPEAKER_06: And a special thanks to the producer and editor of the Symposium series, my WTR colleague Krista Fitzpatrick.
• 51:48
  SPEAKER_06: Um, thank you everyone for listening.
• 51:50
  SPEAKER_06: And don't forget to subscribe to our podcast, as well as visiting www.watertower research to read Peter's uh latest research on SAF, as well as access um numerous uh other small cap equity research reports, podcasts, fireside chats, conference, and conference schedules from WTR.
• 52:07
  SPEAKER_06: As a reminder, that's open access for all investors, and we'd encourage you to take a look.
• 52:12
  SPEAKER_06: Thank you, everyone.