NASDAQ:CLNE Clean Energy Fuels Q3 2024 Earnings Report $1.46 +0.03 (+1.74%) As of 03:37 PM Eastern This is a fair market value price provided by Polygon.io. Learn more. Earnings HistoryForecast Clean Energy Fuels EPS ResultsActual EPS$0.02Consensus EPS -$0.02Beat/MissBeat by +$0.04One Year Ago EPS-$0.12Clean Energy Fuels Revenue ResultsActual Revenue$104.90 millionExpected Revenue$100.64 millionBeat/MissBeat by +$4.26 millionYoY Revenue Growth+9.70%Clean Energy Fuels Announcement DetailsQuarterQ3 2024Date11/6/2024TimeAfter Market ClosesConference Call DateWednesday, November 6, 2024Conference Call Time4:30PM ETUpcoming EarningsClean Energy Fuels' Q1 2025 earnings is scheduled for Thursday, May 8, 2025, with a conference call scheduled at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Clean Energy Fuels Q3 2024 Earnings Call TranscriptProvided by QuartrNovember 6, 2024 ShareLink copied to clipboard.There are 12 speakers on the call. Operator00:00:00everyone, and welcome to today's Clean Energy Fuels Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen only mode. Later, you will have the opportunity to ask questions during the question and answer session. Please note this call may be recorded. And I will be standing by if you should need any assistance. Operator00:00:26It is now my pleasure to turn the conference over to Mr. Robert Vreeland, Chief Financial Officer. Please go ahead, sir. Speaker 100:00:34Thank you, operator. Earlier this afternoon, Clean Energy released financial results for the Q3 ending September 30, 2024. If you did not receive the release, it is available on the Investor Relations section of the company's website at www.cleanenergyfuels.com, where the call is also being webcast. There will be a replay available on the website for 30 days. Before we begin, we'd like to remind you that some of the information contained in the news release and on this conference call contains forward looking statements that involve risks, uncertainties and assumptions that are difficult to predict. Speaker 100:01:08Such forward looking statements are not a guarantee of performance and the company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in the Risk Factors section of Clean Energy's Form 10 Q filed today. These forward looking statements speak only as of the date of this release. The company undertakes no obligation to publicly update any forward looking statements or supply new information regarding the circumstances after the date of this release. Company's non GAAP EPS and adjusted EBITDA will be reviewed on this call and exclude certain expenses that company's management does not believe are indicative of the company's core business operating results. Speaker 100:01:51Non GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for or superior to GAAP results. The directly comparable GAAP information, reasons why management uses non GAAP information, a definition of non GAAP EPS and adjusted EBITDA and a reconciliation between these non GAAP and GAAP figures is provided in the company's press release, which has been furnished to the SEC on Form 8 ks today. With that, I will turn the call over to our President and Chief Executive Officer, Andrew Littlefair. Speaker 200:02:27Thank you, Bob. I'm pleased to report that our strong performance in the first half of the year continued through Q3. Reported $21,300,000 in adjusted EBITDA for the quarter versus $14,200,000 in the Q3 of last year. Sold 60,000,000 gallons of RNG during the quarter and brought in $105,000,000 of revenue versus $96,000,000 for the same quarter in 2023. And we ended the quarter with a little over $243,000,000 in cash and investments. Speaker 200:02:58All in all, very solid quarter. I'd like to remind everyone that this performance is based on Clean Energy's underlying fuel business with a solid distribution network, allowing us the ability to offer solutions to customers that are right for their specific operations. As an example, during the Q3, we opened another state of the art station through our contract with Amazon in Bordertown, New Jersey. We are already seeing steady fuel volume from Amazon trucks utilizing both time fill posts, specifically built for them as well as the publicly accessible fast fill dispensers. Bordentown Station is strategically located along one of the busiest trucking corridors in the country, right off the New Jersey Turnpike in Interstate 295 halfway between New York City and Philadelphia. Speaker 200:03:54The fuel volume from the Amazon trucks will anchor the station as well as the other 17 that we've built under that contract. But an additional benefit is that these stations have allowed us to expand our fueling network by almost 15% this past year for other heavy duty truck fleets. These stations are in key locations in preparation for the future adoption of renewable natural gas fueling associated with Cummins X-fifteen N. Peterbilt and Kenworth trucks that are equipped with the X-fifteen N continue to be tested by the most important fleets around the country and are receiving extremely good reviews. The likes of Werner, Walmart, UPS, Knight Swift are running these trucks non stop over the toughest of terrains. Speaker 200:04:44We are particularly excited about launching our own X-fifteen and demo truck program last quarter. Clean Energy's new Peterbilt 579 day cab tractor equipped with an X-fifteen was delivered to the first customer JB Hunt in September. JB Hunt tested it for several weeks in and around Southern California and Nevada. It was then handed off to Juan and is booked through next year working its way across the country. In fact, J. Speaker 200:05:15B. Hunt has asked to get back in the queue to operate the truck again along different routes. Fleets are gathering important data and experience from testing the X15N. For instance, during their experience operating our demo truck, J. B. Speaker 200:05:30Hunt found that the truck got significantly better fuel mileage than the 12 liter, while the drivers noticed the additional power and torque. Ruan ran the truck from Fontana, California down to the Mexican border and over different terrains, highways and urban routes. We believe truck orders and deployments will increase next year, which we would expect to drive additional fuel volumes at our stations in the second half of the year. Our friends to the north are also giving us reason for optimism about the X-fifteen N's impact on the heavy duty market. Bob and I were in Calgary, Canada a few weeks ago to celebrate the opening of a station that we constructed under our partnership with Tourmaline, one of the largest natural gas E and P companies in Canada. Speaker 200:06:19I stood with Mike Rose, Tourmaline's CEO in front of multiple Mullen and Martin Brower natural gas heavy duty trucks to cut the ribbon at the Calgary station. Bernie Mullen, the CEO of 1 of Canada's largest third party carriers explained very nicely at the event that with the long distance routes, cold weather and extreme terrain in Western Canada, natural gas is really the only alternative fuel solution that works. Canada is serious, if not more so than the U. S. About reducing emissions, which is why they are embracing and promoting natural gas heavy duty trucking. Speaker 200:06:59Another clean energy tourmaline station in Grand Prairie, Alberta opened at the same time as the Calgary station and with an existing station in Edmonton, we now have the first link to a new natural gas fueling corridor for heavy duty trucks in Western Canada. We recently broke ground on the 4th additional station and identified locations for 3 others, which is perfect timing for the arrival of the Cummins X-fifteen N in Canada. We offer the transit market different fueling solutions and it continues to remain strong. As an example, we announced last quarter that one of our largest agencies in the country, Harris County MTA in Houston awarded Clean Energy a contract to build a private fueling station, which is one of the largest transit stations ever awarded to us. Station is expected to use about 2,000,000 gallons a year to fuel Houston buses. Speaker 200:07:54We currently provide 60 different transit sites for 32 customers around the country with RNG. In fact, just last week, we moved NICE, the largest transit agency in Long Island, New York from CNG to RNG benefiting the bus system both sustainably and financially. Another solution that we offer transit agencies is the construction and maintenance of hydrogen stations as agencies begin to explore that alternative. As you know, we were awarded the contract to build a hydrogen station for Foothill Transit and completed it earlier this year. Foothill is already expanding the number of fuel cell buses that will be utilizing the station. Speaker 200:08:37And hot off the presses late last week, we were awarded a contract by Riverside Transit Agency here in Southern California to build a new state of the art hydrogen station. As we said, after 27 years of being the leading alternative fuel company, we will go where our customers go and have the capability to provide them with a superior experience with multiple solutions. The beauty of RNG is that it can be used as the fuel itself or as the cleanest feedstock for other alternatives. Turning to our RNG production business, we continue to make good progress on our projects in dairy farms across the U. S. Speaker 200:09:16We currently have 6 operating projects, 2 projects under construction that are expected to come online in the second half of twenty twenty five and other RNG projects in advanced development through our new partnership with Mas Energy. I spoke about the new relationship with Darryl Mas on our last call as the ink was barely dry on the contract. Over the last 3 months, we have only become more bullish about the partnership with Mas. We've identified locations in Georgia, Florida, New Mexico, Nebraska and South Dakota to construct RNG projects utilizing the covered lagoon method that Mas has perfected. Let me end my remarks by addressing what is top of mind for all of us. Speaker 200:10:02Here we are a day after an election with the unknowns of a new administration in Congress. And to heighten the regulatory drama even more, the California Air Resources Board is meeting tomorrow to address the future of the state's low carbon fuel standard program. On the latter, we have worked with a broad coalition of partners supporting the LCFS and feel relatively optimistic that the members of CARB will vote to approve supportive adjustments to the LCFS. The RNG production and transportation industries work with CARB to improve certain aspects of the program and we should be pleased with the final product. California will continue to be a leader in supporting low carbon transportation, which should result in stronger credit prices. Speaker 200:10:51Now on the federal side, I have a level of comfort that RNG will continue to be seen as a rational alternative with the new administration in Congress. All the criticism of environmental policies from President Trump as well as important members of Congress who will be in the leadership have been aimed at those that only support a single technology, electric vehicles. We believe that there will be strong support for emissions reductions, but that needs to be accomplished by market forces rather than government picking new technology. As an example, as you know, the current alternative fuel tax credit is set to expire at the end of this year. Expirations of the AFTC have come in presidential election years as well as off years of Republican administrations and Democratic. Speaker 200:11:42And it continues to be extended either in a lame duck session or Congress or even after the expiration date through some sort of tax policy vehicle. And it receives bipartisan support when it is extended. However, for now, its status for 2025 is uncertain. In addition to the FTC, we are hopeful that the RNG tax credit will be taken up next year by Congress. Very strong bipartisan members in both the U. Speaker 200:12:12S. Senate and the House are sponsoring the legislation with a combination of urban congressional members seeking cleaner air and rural members that like the economic development in their states and districts. The RNG industry continues to await final guidance on Section 45z production tax credit. This PTC, which begins in 2025, will play a role in supporting low carbon fuels like the dairy RNG that we produce and deliver through our station network. We believe that with the support from the transportation and agricultural industries, either the current administration will issue the guidance before leaving or the next administration will release the final guidance soon after settling in. Speaker 200:12:59So there is a lot of wood to chop on the regulatory and legislative front. Fortunately, we have never been totally reliant on grants or direct subsidies. We continue to operate our business with a realization that different outcomes could happen. As I've given you a few examples, we have an underlying business that remains strong based on the integrated platform, a full suite of services to offer customers to decarbonize their operations with RNG and a recurring financial model. And with the introduction of an exciting new engine for the heavy duty market, we believe RNG will continue to gain acceptance when other technologies continue to struggle. Speaker 200:13:38And with that, I'll hand the call back to Bob, who will give more detail about a strong quarter. Speaker 100:13:44Thank you, Andrew, and good afternoon to everyone. The Q3 of 2024 was another good quarter of financial results. Our revenues, GAAP net loss and adjusted EBITDA for the Q3 2024 were all much improved over last year. Revenues were higher than last year, principally from a higher mix of station fueling gallons, higher RIN credits, higher alternative fuel tax credit revenues and service revenues. LCFS revenues were less than a year ago mainly due to the lower credit prices in 2024 versus 2023. Speaker 100:14:26We continue to see good margins from our fueling gallons like we have seen in the 1st two quarters, where there has been a favorable commodity spread between the price of oil and natural gas, giving support to a higher base commodity margin. And coupled with the higher RIN credit revenue from pricing and from receiving greater share of the RIN on higher RNG volumes. Considering our net results for the year through September 2024, this puts us in a good position relative to our 2024 outlook for our net GAAP earnings and adjusted EBITDA, so our 2024 outlook remains unchanged. Our RNG volumes of 59,600,000 gallons for the Q3 of 2024 grew at 5.1% compared to the Q3 of last year where volume RNG volume was 56,700,000 gallons. I will point out that last year's RNG gallons included about 4,000,000 gallons of RNG that were kind of one off deliveries that did not repeat in 2024. Speaker 100:15:36The credit prices average credit prices for the Q3 of 2024 averaged $3.35 for the RINs and $55.67 for the LCFS. That compares to last year where the average RIN was $3.01 and the LCFS was $74.20 quite a difference. For our RNG production upstream operations, we reported a lower GAAP net loss and lower negative adjusted EBITDA in the 3rd quarter versus the 1st two quarters of this year as we began to produce RNG and monetize the credits being generated. And almost half of the net loss for this third quarter was actually attributed to our operations around our project in Idaho, which is not expected to begin producing RNG until the Q4 of 2025. Our cash flow from operations for the Q3 of 2024 was $21,400,000 versus $7,700,000 a year ago. Speaker 100:16:44And as Andrew pointed out, we ended September with $243,500,000 in cash and investments, but we did fund a capital call into our Mas dairy joint venture arrangement of approximately $30,000,000 in October. And I think my last comments here, I'd like to just take a moment to look at 2025. As we normally do, we will provide our annual guidance on our next call in February. I won't go into great details here, but I did want to give some insight and emphasize some areas to help set expectations for 2025. There are 3 areas I wanted to touch on. Speaker 100:17:32The first being to reiterate Andrew's point on the alternative fuel tax credit that expires at the end of 2024. And of course, it is not known whether that would be reinstated. So that AFTC revenue and earnings could be about $22,000,000 to us in 2024 that may not as of now repeat in 2025. So that's particularly important if you're trending off of 2024. 2nd and to also highlight Andrew's point on the X15 in is it's important to note that we see those volumes happening at our stations in the second half of twenty twenty five. Speaker 100:18:20And that as we all know, the volume is very important, but that timing is important as well to our results. And third, on our RNG production from our equity investment joint ventures, we are looking at a volume output in the range of 4000000 to 6000000 gallons for 2024. That's 4000000 to 6000000 gallons for 2025. Sorry, I think I said 24. This considers where we are today with production and looking at how these projects should continue to ramp up volume through 2025. Speaker 100:18:58The related economics generated from those gallons is something that is still being evaluated, mainly because there's no guidance yet on the production tax credit, which could have a significant favorable impact. And we are really still in kind of ramp up mode on those projects. Importantly, I think the gallon estimate should help. And hopefully, these three points here is helpful as you start to shape your models for 2025. And with that, operator, we can open the call for questions. Operator00:19:35Thank We'll go first to Rob Brown with Lake Street Capital. Speaker 300:19:55Hi, Rob. Hi, good afternoon. Hi, good afternoon. I guess just first on the kind of the Moss partnership, what's sort of the set of opportunities there and how quickly kind of did those come on quicker than the other RNG facilities as they get built given the design? Speaker 100:20:20Well, Darryl Speaker 200:20:22has a stable, gosh, I think over time he's built brought online 60 projects. These contemplate these are the first 4 of 6 that we kind of anticipate doing. Now we're working with Daryl all the time on different projects and off takes. And so we've got a lot of things going on. And so we have kind of a fluid series discussion with them. Speaker 200:20:49We like Darryl very much. So these are this will be the first four. It involves more than 4 dairies. So we've talked about that on the other calls. We have a few different dairies. Speaker 200:21:04And I would say, Rob, while Daryl has a very good operating history, construction history, she's been a pioneer in the covered lagoon model. These projects still take the better part of over a year to bring on online. So it's my hope that we'll see some that will be kind of in the commissioning toward the end of 2025, but they're really late 'twenty five, early 'twenty six kind of projects. So that's kind of the way these things Speaker 100:21:35go. And we're getting as many of those frankly under construction this year. That's key to the ITC. Yes. Speaker 200:21:46So they'll be they're all going to be underway to qualify for the ITC, but the Speaker 100:21:52immediate ones, we kind of have that line of sight and we're going to get those going. Speaker 300:21:58Yes. Good. And then on the 15 liter rollout, you gave some good color about some of the trials going on and gallon volume ramp in the back half of the year. But how do you sort of foresee that going into fleets? Are these sort of the traditional model where there's groupings and they ramp over time? Speaker 300:22:17Or do you see some people thinking about bigger rollouts at this point given the maturity? Speaker 200:22:22Well, Rob, we as you know, we've been talking about this now a long time. So it's kind of like Johnny OneNote. But I mean, we do continue to be very optimistic about the X15N. It is as we've discussed, I think it's important to remind everybody, it's a really big piece of the over the road engine market. I mean, 70% of all the trucks that are purchased are 15 liter. Speaker 200:22:47We haven't had that, so it's key. But this is a new introduction. I kind of tuned in the other day to this to Cummins conference call and the comments made by the CEO where she and look, I'm out of the business projecting numbers all the time, right. I've gotten in trouble with that many years ago, but I did pay close attention to her mentioning 250 that were ordered by UPS. What I like about where we are today in this kind of this period, we've been in this business a long time as we're now dealing with some of the largest fleets in the world that operate the largest fleets that buy. Speaker 200:23:28So when I casually mentioned Knight Swift, well, listen, Knight Swift on a normal year purchases 5,200 trucks just to replace. So you're finally getting with the really the very significant fleets that have some real purchasing power. Now the 250, I was very pleased to see that. I'd like to think we're at a introduction of natural gas and RNG where we're kind of past 1 Z, 2 Zs and we're into a little bit larger deployments, which this UPS would suggest. But this is a new project product. Speaker 200:24:08So you're still going to have folks wanting to get comfortable with 25 50 type orders. I think that would be kind of the expectation. In conversation with 1 of the senior marketing officers at Cummins, he said what we're really focused on as we approach the market with the 15N is the breadth of fleets that we can bring into this. He said it's hard to build exciting volume if you're only relying on 4 really large fleets. So you want to see as you introduce this significantly and as the CEO of Cummins talked about 8% penetration over time, which would be significant, you need breadth of the market to be able to have lots of different fleets ordering these vehicles. Speaker 200:24:53So I like where we are. It could happen faster for me, but we see an orderly transition. We see the customers beginning to order. We know that there's negotiations on pricing, kind of that's the way these things work and it looks like it's going well. Speaker 300:25:15Okay, great. Thank you. I'll turn it over. Operator00:25:20We'll move next to Samya Jain with UBS. Speaker 400:25:24Hey. Yes, so we had read that comments had confirmed that UPS purchased 250 natural gas powered X-fifteen engines in part of their decarbonizing efforts. Do you guys have any insight or outlook on that and how that play a role with clean CLNE or in general? Speaker 100:25:44Well, they're a leader. I mean, UPS is kind of a leader, the fact they jumped out there, right, Andrew? Well, I mean, they've always been, right? Speaker 200:25:51I mean, I made my first natural gas deal with UPS and back when I worked at Mesa with Boone Pickens almost 30 years ago. So, I mean, UPS has always been a pioneer at this and has always been involved. So, this doesn't surprise me. It's a look, I'm taking the word of Cummins Engine CEO who mentioned it, right? I don't have any independent corroboration. Speaker 200:26:16We provide a lot of R and G to UPS. So, I guess by virtue of that, we'll end up selling them a lot of RNG. Speaker 100:26:27Okay. I think that's a strong endorsement of the engine. Speaker 200:26:30I mean, nobody has used more natural gas vehicles for longer and different kinds of them than UPS. I think UPS is somewhere around a 1,000,000,000 correct me if I'm wrong on this, Bob, I think they're approaching a 1,000,000,000 miles on natural gas. Absolutely. So they've been at this a long time. Speaker 100:26:54That's a good sign. We see that as a very good sign. Speaker 400:26:57Got it. Great. Thanks. Operator00:27:08We'll move next to Matthew Blair with TPH. Speaker 500:27:12Thank you and good morning Andrew and Bob. Bob, I wanted to ask a couple of questions on that RNG production guidance, the $4,000,000 to $6,000,000 for 2025. Is that a gross number or is that net, including your partners? And then 2 No, that's what Speaker 100:27:31would be produced at the projects. And then, and then wheels, we split the economics that comes off of that. But when I'm speaking of what the projects will produce, I'm going to always try to do that at what that what the DERs will produce. And then when we get into some economics, we might talk about, hey, we get 50% of that dollar value. Speaker 500:27:57Got it. So it's a gross number. And then you mentioned that the economics on that, we'll see on the 45 Z. But what about the California LCFS credit for that production? Where do you stand on applying for credits? Speaker 500:28:15As of the back half of twenty twenty five, would it be your expectation that you would be receiving California LCFS credits for that production or is that something that can get pushed into 2026? Speaker 100:28:27No, we would perceive that we would see LCFS credits from that production. We're in that process now with the normal kind of stabilization, which you have to get to a kind of a stabilized run rate, if you will. And then you get your application in and then we'll get that done. But we can get we can go off of a temporary CI while we're in that process. And then we'll see how CARB comes out and are anticipating that they'll allow a kind of a look back to up too when we talk about the temporary CI versus a provisional CI. Speaker 100:29:13But we'll see it in that. Sounds good. Speaker 500:29:16Okay. Sounds good. And then lastly, with the X15N, I was hoping you could help us think about the payback period that some of the customers might enjoy on the engine. Some of our rough numbers, we've heard that the premium for trucks with the engine is around $40,000 to $50,000 We're assuming about 120,000 miles per year, about a 6 mpg. And so if you assume about a dollar spread between diesel and natural gas, that would be a payback of either 2 or 2.5 years on the trucks. Speaker 500:29:53Does that match up with what you're thinking? Or are there any of those numbers Speaker 200:29:57that you're seeing? No, Matt, I think that's kind of close. I mean, actually the incremental could be a little bit more than that. You got to remember there's a fuel package in there. Right now as these are being introduced that you could have an engine premium somewhere in that neighborhood. Speaker 200:30:15So just frankly look at something that's closer to 75,000 and then use 15,000 gallons, diesel gallons and then figure that the customer might be able to enjoy more of a savings per gallon, maybe closer to $1.5 So what we've all we're kind of getting to where you are, but what we've always strived to do and what we know gets us into serious negotiations. And I think it's a good point, Matt. You know what, all fleets want to try to be sustainable today for the most, but you know what, it has to be economic. And that's just in fact the life. And so we try to engineer it so that we get and we know that we can have a fruitful discussion and negotiation with our customers when we get inside a 2 year payback. Speaker 100:31:22Great. Thank you. Yes, you bet. Operator00:31:28We'll go next to Craig Shere with Tuohy Brothers. Speaker 600:31:32Hi, Speaker 700:31:33congratulations on a strong quarter. Thanks for taking the questions. So what was the upstream JV production run rate in the quarter versus that 4000000 to 6000000 guide for next year? Speaker 100:31:53Let's see. It was about, I'm going to say 87,000 mms in the quarter. So that would be about 2,800,000 gallons annually. So good question, Craig. I mean, so 4 to 6 is coming off of where we're at right now of 2,800,000. Speaker 100:32:21But keep in mind that these literally kind of went into operations in the Q3, okay. So you're just getting going on this. But at the same time, we're we know it takes a little bit of time to really get the thing ramped up. I mean, but we are seeing that they can be ramped up, okay. So they're not all the same, but like our deal in Texas is, oh my gosh, I think we've kind of started out counting 1,000 M's in a month and that thing is on its way to 9,000. Speaker 100:33:10So you can And the ramp doesn't happen, it just takes time. Speaker 700:33:18Right. Apart from the ramp, you would have had limited LCFS monetization, right? So that as these things ramp and okay. Speaker 100:33:29Yes. Speaker 700:33:31Okay. And so I guess as they ramp and you get the LCFS monetization, the upstream drag kind of really notably narrowed in the Q3. Could this zero out and start turning positive over the next quarter or 2? Speaker 100:33:54I'd be careful there. I'm going to probably just say no. Okay. Look, here's the thing. We have a couple of dynamics there. Speaker 100:34:05They'll get better. The operating ones will get better. And maybe they could get closer to maybe they could get kind of closer to breakeven. We're also working on, I'll say, potentially the largest digester project in the world in Idaho. This thing is and it's a beautiful thing, but the arrangement up there, we end up with some operating costs going on while we're constructing that. Speaker 100:34:36And so those will continue. And so if the operating projects don't produce enough earnings, then you could still see some negative. But frankly, if the PTC comes in and starts in 2025, that kind of that potentially changes that whole dynamic right there. I'm just we're being cautious on the PTC, but there's no reason to think that it's not going to happen. And folks have talked about could it be $6 a gallon. Speaker 100:35:08And so we'll see on that. That's kind of how that comes together. Speaker 700:35:18Okay. And the nearly $60,000,000 RNG sales in the quarter, so there's no one time stuff. It was all through your downstream network. And is that a quarterly record? Speaker 100:35:36It's very close. It could be. Thank you, Craig. And I should have you know why I should have said that. Speaker 200:35:42We're very proud of that record. So we are Speaker 100:35:46right. But you don't want to say it and then say that we had some of the out of the network stuff. But no, this was this was kind of straight up what we Speaker 700:35:56do. For your core downstream distribution. Speaker 100:35:59Core downstream distribution. Speaker 800:36:02Yes. Speaker 700:36:02Okay. And there's no reason to think that because you had a good, I think it was 4% plus sequentially, you're talking about year over year. Is there any reason to think that this trend isn't going to continue into next year on a quarterly basis or how should we think about that? Speaker 200:36:27Well, Speaker 100:36:29there's no real look, I think the trend can continue. I don't know if you'll it can be a little lumpy with as we've seen in the past with sometimes supply and that. But it's all kind of tied into general volume and adoption and the growth in so that has to happen. It's not just RNG. It's also predicated on and we see that happening. Speaker 100:36:55So I think kind of a gradual increase is what we expect. Speaker 700:37:01Got you. And last one for me. I want to try to better understand the economics to clean of the hydrogen filling stations versus the CNG filling stations? And to the degree you can set up a fuel supply sourcing H2 from RNG that you procure, I mean, that your margins increase that much more. Speaker 200:37:35This is early days on these hydrogen projects and this is for the transit properties. And so these are really projects and we have long standing relationships with these transit properties. We're building these stations. We have a construction and management fee built into those projects. Usually the fuel supply arrangement is separate. Speaker 200:38:04And as you well know, the hydrogen and often these projects call for a 1 third green hydrogen, that's not the easiest thing to come by. And so these are really usually their structure is pass throughs. There may be a day where you would be more like our normal business, but today we're providing a service to our customers. We're making money on these things as we build them, but it's not it's more of a construction service arrangement. Not a lot of risk on fuel supply at this point. Speaker 100:38:45Yes. You've got multiple stakeholders, partners supplying this hydrogen fueling station. We have our part, but we're not jumping in and becoming the hydrogen supplier at this time. Speaker 200:39:05Now we're seeing a lot of interest on it. We're seeing a lot of interest on the transits on this. And I'd like to think that we're doing well. We've got several in the queue right now that we're bidding on. So that's always been our strategy is to try to do what it is the customer as we could be helpful. Speaker 100:39:29Yes. And we've said it. I mean, the hydrogen world, it's what we do today, right, delivering highly pressurized gas into vehicles. And so we can do it and we're proving that with the transit, but we're not getting out ahead of ourselves on that. We're accommodating our customers, but we're good at it. Speaker 700:39:53Understood. Thank you. Operator00:39:58We'll go next to Eric Stine with Craig Hallum. Speaker 900:40:02Hi, Andrew and Bob. Speaker 100:40:03Hi, Eric. Hey. Speaker 900:40:05Hey. So I'm jumping around on calls, so I can virtually guarantee I'm going to ask a question that someone else has, but I will give it a shot. Oh, boy, yes, I'll give it a shot. Just in light of the election outcome, I've read quite a bit that California has taken a number of measures to kind of ring fence the LCFS. Any thoughts on that in addition to I know we've got a meeting coming up here in a couple of days, any thoughts on what the outcome there might be as well? Speaker 900:40:41And you can tell me that it's already been asked and I can read the transcript later. Speaker 200:40:47No. It has not been asked. Good question. Speaker 900:40:49Okay. Speaker 200:40:51And I've read a lot of the things that you've read and I hear about them wanting to sort of protect the program. Usually that kind of thing has been more focused on the waiver and how they would get around what if the EPA somehow didn't grant them a waiver on the different truck rules. That's how I've always read that. Now on the LCFS, I'm not sure, Eric. I'll have to get back to you on that. Speaker 200:41:21That's not really ringing a bell. I mean, I think the LCFS is alive as well. It's part of the it's a 10 year program. As I mentioned on the call, Eric, that Speaker 100:41:34you didn't maybe didn't hear, Speaker 200:41:35I mean, there's a vote tomorrow on kind of Speaker 100:41:38the next pool. Speaker 900:41:40Yes. I'm curious on your thoughts on that. Speaker 200:41:43Well, I think that's going to sort itself out. I think that's largely going to get squared away tomorrow. You're going to increase the compliance curve. You're not going to have any draconian rules about saying you can't use dairy gas and can't be cows in California. All that stuff that was once talked about is kind of going away. Speaker 200:42:05And avoided methane will qualify. The booking claim will be in place for several more years. This program will sort of largely be in effect for about another 6, 7 years, as long as you do projects up until then. And the compliance curve will ramp down and there'll be an automatic feature that I think it'll get adopted to. So I think generally, it's good news for the industry and it will be constructive to prices and you'll begin to work the bank off. Speaker 200:42:36There's an oversupply credits and it won't happen overnight. I imagine it will be supportive to an increasing price over time and you'll largely work off a lot of the oversupply in 2025. And by the time you get to 2026, you'll have worked off a substantial portion of that credit bank. Speaker 100:42:59That's how I see it. Speaker 900:43:01Okay. All right. That is helpful. And yes, we'll be watching here tomorrow, right, I guess that vote. And maybe just on the 45C, I mean, I know we're still waiting on guidance there. Speaker 900:43:16And just curious, I know you get asked this every quarter, when do you think that guidance could come? Has there been any change to what you think it might look like? And again, I guess, coming back to the political outcome yesterday, does that impact what you think the 45z is, or the form it may take given the outcome? Speaker 200:43:40Well, I've been wrong on that one. I just knowing the interest in how important these kinds of program were to the Biden administration, I just had it and my conversations with key members in the White House, I just figured they would have gotten that thing done and got it put to bed and it hasn't been. And so now we've heard like you probably have heard that they're going to promulgate that draft rule after the election, but before they go out of office. Now, you know, there's a timing associated with that. And so they better do it pretty soon so that it becomes effective, you know, with the common period and all before they leave leave office. Speaker 200:44:26There's been there have been some that said have discussed, well, maybe we should get rid of the elements of the IRA, get rid of the thing altogether. But then there's been letters from the speaker and to the leadership saying, no, wait, wait, wait a minute, don't take a meat cleaver to the IRA. There's a lot of good stuff in there for rural America and for biofuels. So having said all that, I think what you're going to see is I think this administration probably will put the rule put the these rest of the IRA rules out pretty soon. And some of them will get maybe just before the next President takes President Trump takes over will get finalized and maybe some won't. Speaker 200:45:12I think you'll have the Congress look at the IRA carefully and look for certain things, certain programs that they may want to trim, may want to use a scalpel rather than a big cleaver at the whole thing. And so I think there's going to be a lot of support for elements of the IRA, but there will be some trimming, I believe. And I think, you know, largely, the 45 z will have pretty good bipartisan support, kind of how I see it. And Mhmm. And and, you know, that's just kind of where we are. Speaker 200:45:46So I I just, saw. It's hard to tell. It's hard to you've got Mr. Musk involved now. So how does that affect certain elements of it? Speaker 200:45:56But it's a little hard to tell. But what I've seen over the time is this has gotten to be more bipartisan as you really begin to look at it, right? Even when you go look at our piece of the business, you have dairies in rural districts that are in red states and you have blue states and blue cities that want this stuff. So it's complicated. Speaker 900:46:26Alright. Well, I appreciate the thought. Yeah. Speaker 200:46:28I think it'll largely go into effect over time. Speaker 900:46:33Okay. All right. I'll take the rest offline. Thanks a lot. Speaker 300:46:37Okay. Operator00:46:40We'll move next to Pavel Molotov with Raymond James. Speaker 1000:46:45Thanks for taking the question and appreciate all the political commentary, very helpful. On a different topic, you guys have been selling to Houston Metro for I think as long as the company has been around. So when you say the first private station for Houston Metro, can you just explain how that's different from what you've been doing with that customer? Speaker 200:47:15I'm kind of looking around the room here Pavel, I have some folks. I you know what, I called on Houston Metro to get them to go from diesel to natural gas like 25 years ago. I met with the Mayor of Houston, Bob LaDeer like 20 years ago, a long time. So I've been at it. We our team met a long time, but we haven't been doing business with the Houston Metro. Speaker 200:47:36So they finally came to the program and asked us and we bid on a big fueling station where they're going to take their first 120 buses are going to go to natural gas, it's really big. Speaker 100:47:52Yes, that's right. No, that's right, Andrew. Speaker 200:47:55So it's new. They were one of the holdouts in the country. Look where they are. They're down in the oil and gas areas. So they were just slower to come to the program. Speaker 100:48:06Yes. Pavel, I don't maybe you're thinking of Dallas, but Speaker 200:48:08Dallas, we've been doing for years. Speaker 100:48:11They've been like this kind of just they hadn't we haven't done anything for them. So it was very exciting that they have decided they're going all in. Speaker 1000:48:23Okay. Yes, that's helpful. I think the your right, I was probably thinking of the that other city in Texas. Exactly. Speaker 200:48:32Yes, there's a bunch of others. Speaker 100:48:34That's the big one for us. Speaker 1000:48:36That's right. Let me ask the kind of a CFO question. The financing Operator00:48:46that Speaker 1000:48:46you guys did just about a year ago at the end of 2023 for $300,000,000 have you pulled down pretty much all of that? And if so, will there be a need to raise any additional capital to get through next year's CapEx? Speaker 100:49:10No, we haven't pulled it down and there won't be a need on that. I'll I mean, we have 100,000,000 dollars that we haven't pulled, that is available to us. So if something came along that, was kind of incremental to our growth plan right now, we would utilize that. But for what we have in front of us, we're good. Speaker 900:49:39Understood. Speaker 1000:49:44Good. We'll be watching the LCFS flow tomorrow. Speaker 200:49:50Yes, exactly. You better get some popcorn and a pillow because I think it's going to go on for about 5 hours. Speaker 1000:49:58Appreciate it. Speaker 200:49:59Oh, it's Friday. I keep that. Thank you. Speaker 500:50:04Friday. Operator00:50:06We'll move next to Betty Dang with Scotiabank. Speaker 400:50:10Thanks. Hey, Andrew. Hey, Bob. Speaker 100:50:13Hi, Betty. Speaker 400:50:13I wanted to ask for hello, for an earlier question. You talked about your project in Idaho that is incurring operating costs during the construction phase. Could you elaborate a bit there? And is this common for your RNG projects under construction? Speaker 100:50:35It is not common, but this was unique and part of the uniqueness is the potential and the size of this deal that kind of came our way together with our partner on that. But so it factored into the arrangement factored into really the overall picture and what the ultimate outcome could be on this project. So I'll just say that's how this thing evolved, but it really relates to us doing building and performing work around the handling of manure. And we knew that we knew when we kind of went in that that would there would be kind of a cost to that. So it's built into our overall kind of project returns of what we would be doing. Speaker 100:51:27But that piece is so instrumental also to the ultimate end operation of the digesters that we really we did want to take a kind of almost a significant stake in and we're willing to around that kind of handling of manure. But just frankly, the way the accounting works on that is that you're not going to put that activity into the cost of building those digesters. Although from a return standpoint, we really viewed it that way knowing that we'd have a period of operating this. So in the end, this will, in our view, very much help the efficiency of this project. The fact that we've been more involved in that front end process. Speaker 100:52:22On say on smaller dairies, we can it's we can look to the dairyman farmer in that kind of that critical manure handling piece. So that's really almost before our project and then we construct the project. This one we chose to kind of get into that piece as well. But that will carry on, like I said, until we're producing the RNG that will kind of continue, but we'll then have the whole economics of the dairy project and we're looking at the Q4 of 2025. Speaker 400:53:12Okay, understood. So kind of a one off here. For my next question, I wanted to ask in your opening remarks, you talked about how you're receiving a greater share of the RINs. Is that just coming from the mix, including more of your own RNG production? Or would that be from, your share with your RNG suppliers going higher? Speaker 100:53:41Yes, it's principally on the share and the supplier and just the market dynamics. We talked about that. We have talked about that because about I'll say last year that number was kind of coming down. And we said that we were working at that and some of that's dictated by market dynamics and kind of who owes leverage and that sort of thing. And we saw that we would be able to kind of leverage our position in that space. Speaker 100:54:15And so we're seeing some of that. Speaker 400:54:19Great. Okay. Thank you. Operator00:54:25We'll move next to Dishan Eli with Jefferies. Speaker 600:54:29Hey, guys. Thanks for taking my question. I've been jumping between calls. I'm not sure this has been asked already. So the first question was on just the guide, the full year guide. Speaker 600:54:42Usually 4Q tends to be the higher watermark, at least it's been in the last year. And then if you keep that cadence, then we could see you guys beating your full year guide. Is there anything that I'm missing to think about for 4Q, like any puts and takes there? Speaker 100:55:05No, Dushyant, look, I would say that the kind of the high watermark sometimes can be Q3, Q4 is okay, but we've also seen Q4s with that have come off a little bit from the Q3. So if we absolutely repeated it, then we'd be at that high end, frankly, maybe exceed that high end there. So but we gave the range and I wasn't going to micromanage this thing. We gave a range of 62% to 72% and based on our results thus far, we feel like, okay, well, that stays put. And if we go over it a little bit, great. Speaker 100:55:56But if we don't, we're still within our range. Speaker 600:56:00Got it. No, that's helpful. And then the second question was just on, I guess, this has been asked a couple of times, I'm sure already, just on elections, but more so, how do you think about the RVO obligations next year with the new administration with these events? There are many things to consider like the facility loss waivers or even small refinery exemptions, kind of how do you think about all that going into next year? Speaker 1000:56:30And just maybe the impact to Speaker 100:56:31the future? Speaker 200:56:32So, look, we that's a little bit of crystal ball, right? So, we know that the next EPA is going to look at that. We're all over that. We understand it. There could be small funding exemptions and all. Speaker 200:56:47So, there will be another RVO. Will it really will they set it next year, I don't know, it may slick a little bit. So we'll kind of see, but yes, we'll work on Speaker 100:57:01it. Yes, hard and form of view on that at the moment. Speaker 600:57:06Okay. Thank you. Operator00:57:10We'll move next to Jason Gabelman with TD Cowen. Speaker 1100:57:15Hey, good afternoon. Thanks for taking my questions. Speaker 100:57:19I Speaker 600:57:19wanted to ask on Speaker 1100:57:21I wanted to go back to the upstream RNG projects that are ramping up. And I think we've thought about OpEx kind of being $3 per gallon there. Now that some of your assets are kind of hitting steady state, is that the right number? And then similarly on kind of the credit value that you capture, I think the rule of thumb was kind of around 70% of whatever the credit is you would capture in the upstream assets. Is that still fair? Speaker 100:57:57I think the OpEx is ballpark steady state. I'm going to tell you we're not there right now. But well, not on all of them. And it just like anything has kind of ends up being predicated on your throughput. And so we're ramping that, but it's achievable and in the ballpark. Speaker 100:58:24And then on the share of the credits, I think you're well, I mean, you're generally in the eightytwenty retaining 80. But look, the market we'll have to we kind of have to see a little bit on the PTC. There's that's out there. There's a little bit of maneuvering around who keeps to that one's values and therefore we're on both sides of the fence there. So on our projects, we'll do things that certainly at arm's length between ourselves. Speaker 100:59:08But I think when we're when we are in the marketplace, we have a valuable asset in our distribution. And so we make sure that we get our fair share of the credits from that downstream position. And then on the as we're the producer, well, we're going to be the main customer for that. But the eighty-twenty is in the ballpark, but you may hear someone gets more than that or a little less, but I think that would be moving by 5 points or something either way. Speaker 1100:59:52Okay. And my other question is on the upstream project backlog. And I know you've kind of moved away from really quantifying the backlog. But just in terms of the direction of travel, would you say that backlog is still growing? Has there been a pause given the uncertainty both in LCFS vote and just ahead of the election? Speaker 1101:00:18Just some color around how that backlogs trended would be helpful. Speaker 101:00:24Yes. I would say it's I'm not going to go full pause on that kind of thing. I mean, we're being prudent and cautious. I think how we at the moment, the way we view this is that we have not all that we can handle, but we've got a good slate of projects that we're bringing on that we've got with Daryl Mas. We've got another one in Texas. Speaker 101:00:56So we're staying disciplined, but I don't want anyone to think that some backlog is kind of drying up or anything like that. We're moving forward, but we're being disciplined with our capital. And we're kind of cognizant of getting returns. And so we're just mindful of wanting the timeframe on that. So we may look we look at we're looking at everything. Speaker 601:01:30Okay. Thank Speaker 1101:01:32you for the answers. Speaker 101:01:34You bet. We'll move Operator01:01:36next to Paul Cheng with Scotiabank. Speaker 801:01:39Hey, guys. Just want to follow-up with Betty's earlier question. You're getting a little bit higher share of the green. Can you quantify that? I mean, what percentage that you are getting more? Speaker 801:01:55Is it 1%, 2% and also whether you're seeing that trend continuing into next year? Speaker 101:02:01Well, Paul, I would say, look, on the RIN, you can kind of engineer the math on that really almost from our statements and assuming index and all that, you'll see a little bit more. But I can say that maybe it's closer to 5% last year was like 3.5%, like our net net take on the rent. Speaker 801:02:36So you're saying that it's 3.5%? Speaker 101:02:41Well, it was. And I'm saying that we've now trended past probably past 5%. Speaker 801:02:48Right. And that do you see that continue or that there's a couple of projects that allow you to do that in the Q3 or Speaker 101:03:00Yes, we're just about 5%. Sorry, not past it. Speaker 801:03:04Yes. But I guess the question is that do you think this trend is actually repeatable? I mean, what's the resistance when you're talking to your supplier at this point? Speaker 101:03:21Well, there's a limit. There's a limit on there's look, the market, there's all kinds of dynamics there, Paul. I would say that we're we are trying to cut deals appropriate for us at the producers, but then you also have customers that want to share and their sophistication is growing. So and then that market, everybody's wanting to put their RNG places. So we have improved in that area, but there is resistance in the form of just market dynamics, competition, customers wanting more shares. Speaker 101:04:03So it's a good trend, but it's not going to go to the moon here overnight. Speaker 801:04:11And that also the other question is a little bit of the curve form maybe. In the U. S. And in Canada, it seems like you get pretty excited about the outlook in Canada. If you're comparing the 2 operation, how is the profitability look like when you're comparing them? Speaker 801:04:31And also that do you have a plan, how many station you're trying to build out in Canada versus in the U. S? Because in the past, I don't think you have really focusing on building out the Canadian network. It seems like most of the station is in the U. S. Speaker 101:04:47U. S. Paul, Speaker 201:04:51we're starting carefully, right? In Canada, you really needed and before you want to get too far ahead of yourself, you needed the X15N, right? You needed the larger engine that can handle the grades. Frankly, you actually need an 18 speed transmission to handle the Western Canada. So with our partner Tourmaline, the concept is to build out a network running from Alberta West to the Pacific Ocean. Speaker 201:05:27And it'll start with 7 stations that will eventually when you build out the different nodes on that, you could see it, it would have day where it would have 20 stations. And you'll also then go east. Speaker 101:05:42But Speaker 201:05:45you got to be a little careful here, you got to grow the market at the same time you build stations. And so I like the way it's working. I've done that we've done that before in our history of our company. And so we've kind of very engaged partners. We have very engaged fleets. Speaker 201:06:01We have some of the most significant dealer networks, fleets in the country. I like the way it's going. The economics in Canada is very strong, very cheap natural gas. Today, it's fossil natural gas. Over time, it'll move to a portion of will be RNG. Speaker 201:06:26You could save the customer 50% on the cost of what they're paying for diesel. So the economics sing in Canada. And so we're ready to get the X15 there. We're ready we have to get the 18 speed transmission as well. We'll have those stations at least the beginning of Speaker 101:06:45the Western network at about the Speaker 201:06:47time that those trucks are available. Speaker 801:06:49I guess, Andrew, my question is that the way how you make money out of those station, is it the same way in Canada as the way that how you've been doing it in the U. S? I guess Speaker 201:07:00that's the same Speaker 801:07:02business model or that is going to be different? Speaker 201:07:05Sorry, I went along. Yes, it's the same model, Speaker 101:07:10same model. Okay, we do. Speaker 301:07:12Thank you. Speaker 101:07:12We'll say yes. All right. Sorry. Operator01:07:19And with that, we have no other questions holding. I would like to turn the call back over to Andrew Littlefair for any additional or closing comments. Speaker 201:07:27Thank you, operator. I want to thank everyone for listening this afternoon, and we look forward to updating you on our progress next quarter. Operator01:07:37Thank you. Ladies and gentlemen, that does conclude today's program. We thank you for your participation. You may disconnect at any time. Speaker 201:07:45Thank you.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallClean Energy Fuels Q3 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Clean Energy Fuels Earnings HeadlinesDecarbonization improves energy security for most countries, study findsApril 9, 2025 | msn.comNearly 41% of global power came from clean energy last yearApril 9, 2025 | msn.comCrypto’s crashing…but we’re still profitingMost traders are panicking right now. Bitcoin’s dropping. Altcoins are bleeding. The stock market’s a mess. The news is screaming fear. But while most traders watch their portfolios tank…April 25, 2025 | Crypto Swap Profits (Ad)Clean Energy Fuels Has Never Been Cheaper, But Risks Are Getting More PronouncedMarch 28, 2025 | seekingalpha.comClean Energy resumes share repurchase programMarch 27, 2025 | markets.businessinsider.comClean Energy to commence stock repurchase programMarch 27, 2025 | msn.comSee More Clean Energy Fuels Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Clean Energy Fuels? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Clean Energy Fuels and other key companies, straight to your email. Email Address About Clean Energy FuelsClean Energy Fuels (NASDAQ:CLNE) provides natural gas as alternative fuels for vehicle fleets and related fueling solutions in the United States and Canada. It supplies renewable natural gas (RNG), compressed natural gas (CNG), and liquefied natural gas (LNG) for medium and heavy-duty vehicles; and offers operation and maintenance services for public and private vehicle fleet customer stations. The company also designs, builds, operates, and maintains vehicle fueling stations; and sells and services compressors and other equipment that are used in RNG production and fueling stations. In addition, it transports and sells CNG, RNG, and LNG through virtual natural gas pipelines and interconnects; sells U.S. federal, state, and local government credits, such as RNG as a vehicle fuel, including Renewable Identification Numbers and Low Carbon Fuel Standards credits; and obtains federal, state, and local credits, grants, and incentives. Further, the company focuses on developing, owning, and operating dairy and other livestock waste RNG projects. It serves heavy-duty trucking, airports, refuse, public transit, industrial, and institutional energy users, as well as government fleets. 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There are 12 speakers on the call. Operator00:00:00everyone, and welcome to today's Clean Energy Fuels Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen only mode. Later, you will have the opportunity to ask questions during the question and answer session. Please note this call may be recorded. And I will be standing by if you should need any assistance. Operator00:00:26It is now my pleasure to turn the conference over to Mr. Robert Vreeland, Chief Financial Officer. Please go ahead, sir. Speaker 100:00:34Thank you, operator. Earlier this afternoon, Clean Energy released financial results for the Q3 ending September 30, 2024. If you did not receive the release, it is available on the Investor Relations section of the company's website at www.cleanenergyfuels.com, where the call is also being webcast. There will be a replay available on the website for 30 days. Before we begin, we'd like to remind you that some of the information contained in the news release and on this conference call contains forward looking statements that involve risks, uncertainties and assumptions that are difficult to predict. Speaker 100:01:08Such forward looking statements are not a guarantee of performance and the company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in the Risk Factors section of Clean Energy's Form 10 Q filed today. These forward looking statements speak only as of the date of this release. The company undertakes no obligation to publicly update any forward looking statements or supply new information regarding the circumstances after the date of this release. Company's non GAAP EPS and adjusted EBITDA will be reviewed on this call and exclude certain expenses that company's management does not believe are indicative of the company's core business operating results. Speaker 100:01:51Non GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for or superior to GAAP results. The directly comparable GAAP information, reasons why management uses non GAAP information, a definition of non GAAP EPS and adjusted EBITDA and a reconciliation between these non GAAP and GAAP figures is provided in the company's press release, which has been furnished to the SEC on Form 8 ks today. With that, I will turn the call over to our President and Chief Executive Officer, Andrew Littlefair. Speaker 200:02:27Thank you, Bob. I'm pleased to report that our strong performance in the first half of the year continued through Q3. Reported $21,300,000 in adjusted EBITDA for the quarter versus $14,200,000 in the Q3 of last year. Sold 60,000,000 gallons of RNG during the quarter and brought in $105,000,000 of revenue versus $96,000,000 for the same quarter in 2023. And we ended the quarter with a little over $243,000,000 in cash and investments. Speaker 200:02:58All in all, very solid quarter. I'd like to remind everyone that this performance is based on Clean Energy's underlying fuel business with a solid distribution network, allowing us the ability to offer solutions to customers that are right for their specific operations. As an example, during the Q3, we opened another state of the art station through our contract with Amazon in Bordertown, New Jersey. We are already seeing steady fuel volume from Amazon trucks utilizing both time fill posts, specifically built for them as well as the publicly accessible fast fill dispensers. Bordentown Station is strategically located along one of the busiest trucking corridors in the country, right off the New Jersey Turnpike in Interstate 295 halfway between New York City and Philadelphia. Speaker 200:03:54The fuel volume from the Amazon trucks will anchor the station as well as the other 17 that we've built under that contract. But an additional benefit is that these stations have allowed us to expand our fueling network by almost 15% this past year for other heavy duty truck fleets. These stations are in key locations in preparation for the future adoption of renewable natural gas fueling associated with Cummins X-fifteen N. Peterbilt and Kenworth trucks that are equipped with the X-fifteen N continue to be tested by the most important fleets around the country and are receiving extremely good reviews. The likes of Werner, Walmart, UPS, Knight Swift are running these trucks non stop over the toughest of terrains. Speaker 200:04:44We are particularly excited about launching our own X-fifteen and demo truck program last quarter. Clean Energy's new Peterbilt 579 day cab tractor equipped with an X-fifteen was delivered to the first customer JB Hunt in September. JB Hunt tested it for several weeks in and around Southern California and Nevada. It was then handed off to Juan and is booked through next year working its way across the country. In fact, J. Speaker 200:05:15B. Hunt has asked to get back in the queue to operate the truck again along different routes. Fleets are gathering important data and experience from testing the X15N. For instance, during their experience operating our demo truck, J. B. Speaker 200:05:30Hunt found that the truck got significantly better fuel mileage than the 12 liter, while the drivers noticed the additional power and torque. Ruan ran the truck from Fontana, California down to the Mexican border and over different terrains, highways and urban routes. We believe truck orders and deployments will increase next year, which we would expect to drive additional fuel volumes at our stations in the second half of the year. Our friends to the north are also giving us reason for optimism about the X-fifteen N's impact on the heavy duty market. Bob and I were in Calgary, Canada a few weeks ago to celebrate the opening of a station that we constructed under our partnership with Tourmaline, one of the largest natural gas E and P companies in Canada. Speaker 200:06:19I stood with Mike Rose, Tourmaline's CEO in front of multiple Mullen and Martin Brower natural gas heavy duty trucks to cut the ribbon at the Calgary station. Bernie Mullen, the CEO of 1 of Canada's largest third party carriers explained very nicely at the event that with the long distance routes, cold weather and extreme terrain in Western Canada, natural gas is really the only alternative fuel solution that works. Canada is serious, if not more so than the U. S. About reducing emissions, which is why they are embracing and promoting natural gas heavy duty trucking. Speaker 200:06:59Another clean energy tourmaline station in Grand Prairie, Alberta opened at the same time as the Calgary station and with an existing station in Edmonton, we now have the first link to a new natural gas fueling corridor for heavy duty trucks in Western Canada. We recently broke ground on the 4th additional station and identified locations for 3 others, which is perfect timing for the arrival of the Cummins X-fifteen N in Canada. We offer the transit market different fueling solutions and it continues to remain strong. As an example, we announced last quarter that one of our largest agencies in the country, Harris County MTA in Houston awarded Clean Energy a contract to build a private fueling station, which is one of the largest transit stations ever awarded to us. Station is expected to use about 2,000,000 gallons a year to fuel Houston buses. Speaker 200:07:54We currently provide 60 different transit sites for 32 customers around the country with RNG. In fact, just last week, we moved NICE, the largest transit agency in Long Island, New York from CNG to RNG benefiting the bus system both sustainably and financially. Another solution that we offer transit agencies is the construction and maintenance of hydrogen stations as agencies begin to explore that alternative. As you know, we were awarded the contract to build a hydrogen station for Foothill Transit and completed it earlier this year. Foothill is already expanding the number of fuel cell buses that will be utilizing the station. Speaker 200:08:37And hot off the presses late last week, we were awarded a contract by Riverside Transit Agency here in Southern California to build a new state of the art hydrogen station. As we said, after 27 years of being the leading alternative fuel company, we will go where our customers go and have the capability to provide them with a superior experience with multiple solutions. The beauty of RNG is that it can be used as the fuel itself or as the cleanest feedstock for other alternatives. Turning to our RNG production business, we continue to make good progress on our projects in dairy farms across the U. S. Speaker 200:09:16We currently have 6 operating projects, 2 projects under construction that are expected to come online in the second half of twenty twenty five and other RNG projects in advanced development through our new partnership with Mas Energy. I spoke about the new relationship with Darryl Mas on our last call as the ink was barely dry on the contract. Over the last 3 months, we have only become more bullish about the partnership with Mas. We've identified locations in Georgia, Florida, New Mexico, Nebraska and South Dakota to construct RNG projects utilizing the covered lagoon method that Mas has perfected. Let me end my remarks by addressing what is top of mind for all of us. Speaker 200:10:02Here we are a day after an election with the unknowns of a new administration in Congress. And to heighten the regulatory drama even more, the California Air Resources Board is meeting tomorrow to address the future of the state's low carbon fuel standard program. On the latter, we have worked with a broad coalition of partners supporting the LCFS and feel relatively optimistic that the members of CARB will vote to approve supportive adjustments to the LCFS. The RNG production and transportation industries work with CARB to improve certain aspects of the program and we should be pleased with the final product. California will continue to be a leader in supporting low carbon transportation, which should result in stronger credit prices. Speaker 200:10:51Now on the federal side, I have a level of comfort that RNG will continue to be seen as a rational alternative with the new administration in Congress. All the criticism of environmental policies from President Trump as well as important members of Congress who will be in the leadership have been aimed at those that only support a single technology, electric vehicles. We believe that there will be strong support for emissions reductions, but that needs to be accomplished by market forces rather than government picking new technology. As an example, as you know, the current alternative fuel tax credit is set to expire at the end of this year. Expirations of the AFTC have come in presidential election years as well as off years of Republican administrations and Democratic. Speaker 200:11:42And it continues to be extended either in a lame duck session or Congress or even after the expiration date through some sort of tax policy vehicle. And it receives bipartisan support when it is extended. However, for now, its status for 2025 is uncertain. In addition to the FTC, we are hopeful that the RNG tax credit will be taken up next year by Congress. Very strong bipartisan members in both the U. Speaker 200:12:12S. Senate and the House are sponsoring the legislation with a combination of urban congressional members seeking cleaner air and rural members that like the economic development in their states and districts. The RNG industry continues to await final guidance on Section 45z production tax credit. This PTC, which begins in 2025, will play a role in supporting low carbon fuels like the dairy RNG that we produce and deliver through our station network. We believe that with the support from the transportation and agricultural industries, either the current administration will issue the guidance before leaving or the next administration will release the final guidance soon after settling in. Speaker 200:12:59So there is a lot of wood to chop on the regulatory and legislative front. Fortunately, we have never been totally reliant on grants or direct subsidies. We continue to operate our business with a realization that different outcomes could happen. As I've given you a few examples, we have an underlying business that remains strong based on the integrated platform, a full suite of services to offer customers to decarbonize their operations with RNG and a recurring financial model. And with the introduction of an exciting new engine for the heavy duty market, we believe RNG will continue to gain acceptance when other technologies continue to struggle. Speaker 200:13:38And with that, I'll hand the call back to Bob, who will give more detail about a strong quarter. Speaker 100:13:44Thank you, Andrew, and good afternoon to everyone. The Q3 of 2024 was another good quarter of financial results. Our revenues, GAAP net loss and adjusted EBITDA for the Q3 2024 were all much improved over last year. Revenues were higher than last year, principally from a higher mix of station fueling gallons, higher RIN credits, higher alternative fuel tax credit revenues and service revenues. LCFS revenues were less than a year ago mainly due to the lower credit prices in 2024 versus 2023. Speaker 100:14:26We continue to see good margins from our fueling gallons like we have seen in the 1st two quarters, where there has been a favorable commodity spread between the price of oil and natural gas, giving support to a higher base commodity margin. And coupled with the higher RIN credit revenue from pricing and from receiving greater share of the RIN on higher RNG volumes. Considering our net results for the year through September 2024, this puts us in a good position relative to our 2024 outlook for our net GAAP earnings and adjusted EBITDA, so our 2024 outlook remains unchanged. Our RNG volumes of 59,600,000 gallons for the Q3 of 2024 grew at 5.1% compared to the Q3 of last year where volume RNG volume was 56,700,000 gallons. I will point out that last year's RNG gallons included about 4,000,000 gallons of RNG that were kind of one off deliveries that did not repeat in 2024. Speaker 100:15:36The credit prices average credit prices for the Q3 of 2024 averaged $3.35 for the RINs and $55.67 for the LCFS. That compares to last year where the average RIN was $3.01 and the LCFS was $74.20 quite a difference. For our RNG production upstream operations, we reported a lower GAAP net loss and lower negative adjusted EBITDA in the 3rd quarter versus the 1st two quarters of this year as we began to produce RNG and monetize the credits being generated. And almost half of the net loss for this third quarter was actually attributed to our operations around our project in Idaho, which is not expected to begin producing RNG until the Q4 of 2025. Our cash flow from operations for the Q3 of 2024 was $21,400,000 versus $7,700,000 a year ago. Speaker 100:16:44And as Andrew pointed out, we ended September with $243,500,000 in cash and investments, but we did fund a capital call into our Mas dairy joint venture arrangement of approximately $30,000,000 in October. And I think my last comments here, I'd like to just take a moment to look at 2025. As we normally do, we will provide our annual guidance on our next call in February. I won't go into great details here, but I did want to give some insight and emphasize some areas to help set expectations for 2025. There are 3 areas I wanted to touch on. Speaker 100:17:32The first being to reiterate Andrew's point on the alternative fuel tax credit that expires at the end of 2024. And of course, it is not known whether that would be reinstated. So that AFTC revenue and earnings could be about $22,000,000 to us in 2024 that may not as of now repeat in 2025. So that's particularly important if you're trending off of 2024. 2nd and to also highlight Andrew's point on the X15 in is it's important to note that we see those volumes happening at our stations in the second half of twenty twenty five. Speaker 100:18:20And that as we all know, the volume is very important, but that timing is important as well to our results. And third, on our RNG production from our equity investment joint ventures, we are looking at a volume output in the range of 4000000 to 6000000 gallons for 2024. That's 4000000 to 6000000 gallons for 2025. Sorry, I think I said 24. This considers where we are today with production and looking at how these projects should continue to ramp up volume through 2025. Speaker 100:18:58The related economics generated from those gallons is something that is still being evaluated, mainly because there's no guidance yet on the production tax credit, which could have a significant favorable impact. And we are really still in kind of ramp up mode on those projects. Importantly, I think the gallon estimate should help. And hopefully, these three points here is helpful as you start to shape your models for 2025. And with that, operator, we can open the call for questions. Operator00:19:35Thank We'll go first to Rob Brown with Lake Street Capital. Speaker 300:19:55Hi, Rob. Hi, good afternoon. Hi, good afternoon. I guess just first on the kind of the Moss partnership, what's sort of the set of opportunities there and how quickly kind of did those come on quicker than the other RNG facilities as they get built given the design? Speaker 100:20:20Well, Darryl Speaker 200:20:22has a stable, gosh, I think over time he's built brought online 60 projects. These contemplate these are the first 4 of 6 that we kind of anticipate doing. Now we're working with Daryl all the time on different projects and off takes. And so we've got a lot of things going on. And so we have kind of a fluid series discussion with them. Speaker 200:20:49We like Darryl very much. So these are this will be the first four. It involves more than 4 dairies. So we've talked about that on the other calls. We have a few different dairies. Speaker 200:21:04And I would say, Rob, while Daryl has a very good operating history, construction history, she's been a pioneer in the covered lagoon model. These projects still take the better part of over a year to bring on online. So it's my hope that we'll see some that will be kind of in the commissioning toward the end of 2025, but they're really late 'twenty five, early 'twenty six kind of projects. So that's kind of the way these things Speaker 100:21:35go. And we're getting as many of those frankly under construction this year. That's key to the ITC. Yes. Speaker 200:21:46So they'll be they're all going to be underway to qualify for the ITC, but the Speaker 100:21:52immediate ones, we kind of have that line of sight and we're going to get those going. Speaker 300:21:58Yes. Good. And then on the 15 liter rollout, you gave some good color about some of the trials going on and gallon volume ramp in the back half of the year. But how do you sort of foresee that going into fleets? Are these sort of the traditional model where there's groupings and they ramp over time? Speaker 300:22:17Or do you see some people thinking about bigger rollouts at this point given the maturity? Speaker 200:22:22Well, Rob, we as you know, we've been talking about this now a long time. So it's kind of like Johnny OneNote. But I mean, we do continue to be very optimistic about the X15N. It is as we've discussed, I think it's important to remind everybody, it's a really big piece of the over the road engine market. I mean, 70% of all the trucks that are purchased are 15 liter. Speaker 200:22:47We haven't had that, so it's key. But this is a new introduction. I kind of tuned in the other day to this to Cummins conference call and the comments made by the CEO where she and look, I'm out of the business projecting numbers all the time, right. I've gotten in trouble with that many years ago, but I did pay close attention to her mentioning 250 that were ordered by UPS. What I like about where we are today in this kind of this period, we've been in this business a long time as we're now dealing with some of the largest fleets in the world that operate the largest fleets that buy. Speaker 200:23:28So when I casually mentioned Knight Swift, well, listen, Knight Swift on a normal year purchases 5,200 trucks just to replace. So you're finally getting with the really the very significant fleets that have some real purchasing power. Now the 250, I was very pleased to see that. I'd like to think we're at a introduction of natural gas and RNG where we're kind of past 1 Z, 2 Zs and we're into a little bit larger deployments, which this UPS would suggest. But this is a new project product. Speaker 200:24:08So you're still going to have folks wanting to get comfortable with 25 50 type orders. I think that would be kind of the expectation. In conversation with 1 of the senior marketing officers at Cummins, he said what we're really focused on as we approach the market with the 15N is the breadth of fleets that we can bring into this. He said it's hard to build exciting volume if you're only relying on 4 really large fleets. So you want to see as you introduce this significantly and as the CEO of Cummins talked about 8% penetration over time, which would be significant, you need breadth of the market to be able to have lots of different fleets ordering these vehicles. Speaker 200:24:53So I like where we are. It could happen faster for me, but we see an orderly transition. We see the customers beginning to order. We know that there's negotiations on pricing, kind of that's the way these things work and it looks like it's going well. Speaker 300:25:15Okay, great. Thank you. I'll turn it over. Operator00:25:20We'll move next to Samya Jain with UBS. Speaker 400:25:24Hey. Yes, so we had read that comments had confirmed that UPS purchased 250 natural gas powered X-fifteen engines in part of their decarbonizing efforts. Do you guys have any insight or outlook on that and how that play a role with clean CLNE or in general? Speaker 100:25:44Well, they're a leader. I mean, UPS is kind of a leader, the fact they jumped out there, right, Andrew? Well, I mean, they've always been, right? Speaker 200:25:51I mean, I made my first natural gas deal with UPS and back when I worked at Mesa with Boone Pickens almost 30 years ago. So, I mean, UPS has always been a pioneer at this and has always been involved. So, this doesn't surprise me. It's a look, I'm taking the word of Cummins Engine CEO who mentioned it, right? I don't have any independent corroboration. Speaker 200:26:16We provide a lot of R and G to UPS. So, I guess by virtue of that, we'll end up selling them a lot of RNG. Speaker 100:26:27Okay. I think that's a strong endorsement of the engine. Speaker 200:26:30I mean, nobody has used more natural gas vehicles for longer and different kinds of them than UPS. I think UPS is somewhere around a 1,000,000,000 correct me if I'm wrong on this, Bob, I think they're approaching a 1,000,000,000 miles on natural gas. Absolutely. So they've been at this a long time. Speaker 100:26:54That's a good sign. We see that as a very good sign. Speaker 400:26:57Got it. Great. Thanks. Operator00:27:08We'll move next to Matthew Blair with TPH. Speaker 500:27:12Thank you and good morning Andrew and Bob. Bob, I wanted to ask a couple of questions on that RNG production guidance, the $4,000,000 to $6,000,000 for 2025. Is that a gross number or is that net, including your partners? And then 2 No, that's what Speaker 100:27:31would be produced at the projects. And then, and then wheels, we split the economics that comes off of that. But when I'm speaking of what the projects will produce, I'm going to always try to do that at what that what the DERs will produce. And then when we get into some economics, we might talk about, hey, we get 50% of that dollar value. Speaker 500:27:57Got it. So it's a gross number. And then you mentioned that the economics on that, we'll see on the 45 Z. But what about the California LCFS credit for that production? Where do you stand on applying for credits? Speaker 500:28:15As of the back half of twenty twenty five, would it be your expectation that you would be receiving California LCFS credits for that production or is that something that can get pushed into 2026? Speaker 100:28:27No, we would perceive that we would see LCFS credits from that production. We're in that process now with the normal kind of stabilization, which you have to get to a kind of a stabilized run rate, if you will. And then you get your application in and then we'll get that done. But we can get we can go off of a temporary CI while we're in that process. And then we'll see how CARB comes out and are anticipating that they'll allow a kind of a look back to up too when we talk about the temporary CI versus a provisional CI. Speaker 100:29:13But we'll see it in that. Sounds good. Speaker 500:29:16Okay. Sounds good. And then lastly, with the X15N, I was hoping you could help us think about the payback period that some of the customers might enjoy on the engine. Some of our rough numbers, we've heard that the premium for trucks with the engine is around $40,000 to $50,000 We're assuming about 120,000 miles per year, about a 6 mpg. And so if you assume about a dollar spread between diesel and natural gas, that would be a payback of either 2 or 2.5 years on the trucks. Speaker 500:29:53Does that match up with what you're thinking? Or are there any of those numbers Speaker 200:29:57that you're seeing? No, Matt, I think that's kind of close. I mean, actually the incremental could be a little bit more than that. You got to remember there's a fuel package in there. Right now as these are being introduced that you could have an engine premium somewhere in that neighborhood. Speaker 200:30:15So just frankly look at something that's closer to 75,000 and then use 15,000 gallons, diesel gallons and then figure that the customer might be able to enjoy more of a savings per gallon, maybe closer to $1.5 So what we've all we're kind of getting to where you are, but what we've always strived to do and what we know gets us into serious negotiations. And I think it's a good point, Matt. You know what, all fleets want to try to be sustainable today for the most, but you know what, it has to be economic. And that's just in fact the life. And so we try to engineer it so that we get and we know that we can have a fruitful discussion and negotiation with our customers when we get inside a 2 year payback. Speaker 100:31:22Great. Thank you. Yes, you bet. Operator00:31:28We'll go next to Craig Shere with Tuohy Brothers. Speaker 600:31:32Hi, Speaker 700:31:33congratulations on a strong quarter. Thanks for taking the questions. So what was the upstream JV production run rate in the quarter versus that 4000000 to 6000000 guide for next year? Speaker 100:31:53Let's see. It was about, I'm going to say 87,000 mms in the quarter. So that would be about 2,800,000 gallons annually. So good question, Craig. I mean, so 4 to 6 is coming off of where we're at right now of 2,800,000. Speaker 100:32:21But keep in mind that these literally kind of went into operations in the Q3, okay. So you're just getting going on this. But at the same time, we're we know it takes a little bit of time to really get the thing ramped up. I mean, but we are seeing that they can be ramped up, okay. So they're not all the same, but like our deal in Texas is, oh my gosh, I think we've kind of started out counting 1,000 M's in a month and that thing is on its way to 9,000. Speaker 100:33:10So you can And the ramp doesn't happen, it just takes time. Speaker 700:33:18Right. Apart from the ramp, you would have had limited LCFS monetization, right? So that as these things ramp and okay. Speaker 100:33:29Yes. Speaker 700:33:31Okay. And so I guess as they ramp and you get the LCFS monetization, the upstream drag kind of really notably narrowed in the Q3. Could this zero out and start turning positive over the next quarter or 2? Speaker 100:33:54I'd be careful there. I'm going to probably just say no. Okay. Look, here's the thing. We have a couple of dynamics there. Speaker 100:34:05They'll get better. The operating ones will get better. And maybe they could get closer to maybe they could get kind of closer to breakeven. We're also working on, I'll say, potentially the largest digester project in the world in Idaho. This thing is and it's a beautiful thing, but the arrangement up there, we end up with some operating costs going on while we're constructing that. Speaker 100:34:36And so those will continue. And so if the operating projects don't produce enough earnings, then you could still see some negative. But frankly, if the PTC comes in and starts in 2025, that kind of that potentially changes that whole dynamic right there. I'm just we're being cautious on the PTC, but there's no reason to think that it's not going to happen. And folks have talked about could it be $6 a gallon. Speaker 100:35:08And so we'll see on that. That's kind of how that comes together. Speaker 700:35:18Okay. And the nearly $60,000,000 RNG sales in the quarter, so there's no one time stuff. It was all through your downstream network. And is that a quarterly record? Speaker 100:35:36It's very close. It could be. Thank you, Craig. And I should have you know why I should have said that. Speaker 200:35:42We're very proud of that record. So we are Speaker 100:35:46right. But you don't want to say it and then say that we had some of the out of the network stuff. But no, this was this was kind of straight up what we Speaker 700:35:56do. For your core downstream distribution. Speaker 100:35:59Core downstream distribution. Speaker 800:36:02Yes. Speaker 700:36:02Okay. And there's no reason to think that because you had a good, I think it was 4% plus sequentially, you're talking about year over year. Is there any reason to think that this trend isn't going to continue into next year on a quarterly basis or how should we think about that? Speaker 200:36:27Well, Speaker 100:36:29there's no real look, I think the trend can continue. I don't know if you'll it can be a little lumpy with as we've seen in the past with sometimes supply and that. But it's all kind of tied into general volume and adoption and the growth in so that has to happen. It's not just RNG. It's also predicated on and we see that happening. Speaker 100:36:55So I think kind of a gradual increase is what we expect. Speaker 700:37:01Got you. And last one for me. I want to try to better understand the economics to clean of the hydrogen filling stations versus the CNG filling stations? And to the degree you can set up a fuel supply sourcing H2 from RNG that you procure, I mean, that your margins increase that much more. Speaker 200:37:35This is early days on these hydrogen projects and this is for the transit properties. And so these are really projects and we have long standing relationships with these transit properties. We're building these stations. We have a construction and management fee built into those projects. Usually the fuel supply arrangement is separate. Speaker 200:38:04And as you well know, the hydrogen and often these projects call for a 1 third green hydrogen, that's not the easiest thing to come by. And so these are really usually their structure is pass throughs. There may be a day where you would be more like our normal business, but today we're providing a service to our customers. We're making money on these things as we build them, but it's not it's more of a construction service arrangement. Not a lot of risk on fuel supply at this point. Speaker 100:38:45Yes. You've got multiple stakeholders, partners supplying this hydrogen fueling station. We have our part, but we're not jumping in and becoming the hydrogen supplier at this time. Speaker 200:39:05Now we're seeing a lot of interest on it. We're seeing a lot of interest on the transits on this. And I'd like to think that we're doing well. We've got several in the queue right now that we're bidding on. So that's always been our strategy is to try to do what it is the customer as we could be helpful. Speaker 100:39:29Yes. And we've said it. I mean, the hydrogen world, it's what we do today, right, delivering highly pressurized gas into vehicles. And so we can do it and we're proving that with the transit, but we're not getting out ahead of ourselves on that. We're accommodating our customers, but we're good at it. Speaker 700:39:53Understood. Thank you. Operator00:39:58We'll go next to Eric Stine with Craig Hallum. Speaker 900:40:02Hi, Andrew and Bob. Speaker 100:40:03Hi, Eric. Hey. Speaker 900:40:05Hey. So I'm jumping around on calls, so I can virtually guarantee I'm going to ask a question that someone else has, but I will give it a shot. Oh, boy, yes, I'll give it a shot. Just in light of the election outcome, I've read quite a bit that California has taken a number of measures to kind of ring fence the LCFS. Any thoughts on that in addition to I know we've got a meeting coming up here in a couple of days, any thoughts on what the outcome there might be as well? Speaker 900:40:41And you can tell me that it's already been asked and I can read the transcript later. Speaker 200:40:47No. It has not been asked. Good question. Speaker 900:40:49Okay. Speaker 200:40:51And I've read a lot of the things that you've read and I hear about them wanting to sort of protect the program. Usually that kind of thing has been more focused on the waiver and how they would get around what if the EPA somehow didn't grant them a waiver on the different truck rules. That's how I've always read that. Now on the LCFS, I'm not sure, Eric. I'll have to get back to you on that. Speaker 200:41:21That's not really ringing a bell. I mean, I think the LCFS is alive as well. It's part of the it's a 10 year program. As I mentioned on the call, Eric, that Speaker 100:41:34you didn't maybe didn't hear, Speaker 200:41:35I mean, there's a vote tomorrow on kind of Speaker 100:41:38the next pool. Speaker 900:41:40Yes. I'm curious on your thoughts on that. Speaker 200:41:43Well, I think that's going to sort itself out. I think that's largely going to get squared away tomorrow. You're going to increase the compliance curve. You're not going to have any draconian rules about saying you can't use dairy gas and can't be cows in California. All that stuff that was once talked about is kind of going away. Speaker 200:42:05And avoided methane will qualify. The booking claim will be in place for several more years. This program will sort of largely be in effect for about another 6, 7 years, as long as you do projects up until then. And the compliance curve will ramp down and there'll be an automatic feature that I think it'll get adopted to. So I think generally, it's good news for the industry and it will be constructive to prices and you'll begin to work the bank off. Speaker 200:42:36There's an oversupply credits and it won't happen overnight. I imagine it will be supportive to an increasing price over time and you'll largely work off a lot of the oversupply in 2025. And by the time you get to 2026, you'll have worked off a substantial portion of that credit bank. Speaker 100:42:59That's how I see it. Speaker 900:43:01Okay. All right. That is helpful. And yes, we'll be watching here tomorrow, right, I guess that vote. And maybe just on the 45C, I mean, I know we're still waiting on guidance there. Speaker 900:43:16And just curious, I know you get asked this every quarter, when do you think that guidance could come? Has there been any change to what you think it might look like? And again, I guess, coming back to the political outcome yesterday, does that impact what you think the 45z is, or the form it may take given the outcome? Speaker 200:43:40Well, I've been wrong on that one. I just knowing the interest in how important these kinds of program were to the Biden administration, I just had it and my conversations with key members in the White House, I just figured they would have gotten that thing done and got it put to bed and it hasn't been. And so now we've heard like you probably have heard that they're going to promulgate that draft rule after the election, but before they go out of office. Now, you know, there's a timing associated with that. And so they better do it pretty soon so that it becomes effective, you know, with the common period and all before they leave leave office. Speaker 200:44:26There's been there have been some that said have discussed, well, maybe we should get rid of the elements of the IRA, get rid of the thing altogether. But then there's been letters from the speaker and to the leadership saying, no, wait, wait, wait a minute, don't take a meat cleaver to the IRA. There's a lot of good stuff in there for rural America and for biofuels. So having said all that, I think what you're going to see is I think this administration probably will put the rule put the these rest of the IRA rules out pretty soon. And some of them will get maybe just before the next President takes President Trump takes over will get finalized and maybe some won't. Speaker 200:45:12I think you'll have the Congress look at the IRA carefully and look for certain things, certain programs that they may want to trim, may want to use a scalpel rather than a big cleaver at the whole thing. And so I think there's going to be a lot of support for elements of the IRA, but there will be some trimming, I believe. And I think, you know, largely, the 45 z will have pretty good bipartisan support, kind of how I see it. And Mhmm. And and, you know, that's just kind of where we are. Speaker 200:45:46So I I just, saw. It's hard to tell. It's hard to you've got Mr. Musk involved now. So how does that affect certain elements of it? Speaker 200:45:56But it's a little hard to tell. But what I've seen over the time is this has gotten to be more bipartisan as you really begin to look at it, right? Even when you go look at our piece of the business, you have dairies in rural districts that are in red states and you have blue states and blue cities that want this stuff. So it's complicated. Speaker 900:46:26Alright. Well, I appreciate the thought. Yeah. Speaker 200:46:28I think it'll largely go into effect over time. Speaker 900:46:33Okay. All right. I'll take the rest offline. Thanks a lot. Speaker 300:46:37Okay. Operator00:46:40We'll move next to Pavel Molotov with Raymond James. Speaker 1000:46:45Thanks for taking the question and appreciate all the political commentary, very helpful. On a different topic, you guys have been selling to Houston Metro for I think as long as the company has been around. So when you say the first private station for Houston Metro, can you just explain how that's different from what you've been doing with that customer? Speaker 200:47:15I'm kind of looking around the room here Pavel, I have some folks. I you know what, I called on Houston Metro to get them to go from diesel to natural gas like 25 years ago. I met with the Mayor of Houston, Bob LaDeer like 20 years ago, a long time. So I've been at it. We our team met a long time, but we haven't been doing business with the Houston Metro. Speaker 200:47:36So they finally came to the program and asked us and we bid on a big fueling station where they're going to take their first 120 buses are going to go to natural gas, it's really big. Speaker 100:47:52Yes, that's right. No, that's right, Andrew. Speaker 200:47:55So it's new. They were one of the holdouts in the country. Look where they are. They're down in the oil and gas areas. So they were just slower to come to the program. Speaker 100:48:06Yes. Pavel, I don't maybe you're thinking of Dallas, but Speaker 200:48:08Dallas, we've been doing for years. Speaker 100:48:11They've been like this kind of just they hadn't we haven't done anything for them. So it was very exciting that they have decided they're going all in. Speaker 1000:48:23Okay. Yes, that's helpful. I think the your right, I was probably thinking of the that other city in Texas. Exactly. Speaker 200:48:32Yes, there's a bunch of others. Speaker 100:48:34That's the big one for us. Speaker 1000:48:36That's right. Let me ask the kind of a CFO question. The financing Operator00:48:46that Speaker 1000:48:46you guys did just about a year ago at the end of 2023 for $300,000,000 have you pulled down pretty much all of that? And if so, will there be a need to raise any additional capital to get through next year's CapEx? Speaker 100:49:10No, we haven't pulled it down and there won't be a need on that. I'll I mean, we have 100,000,000 dollars that we haven't pulled, that is available to us. So if something came along that, was kind of incremental to our growth plan right now, we would utilize that. But for what we have in front of us, we're good. Speaker 900:49:39Understood. Speaker 1000:49:44Good. We'll be watching the LCFS flow tomorrow. Speaker 200:49:50Yes, exactly. You better get some popcorn and a pillow because I think it's going to go on for about 5 hours. Speaker 1000:49:58Appreciate it. Speaker 200:49:59Oh, it's Friday. I keep that. Thank you. Speaker 500:50:04Friday. Operator00:50:06We'll move next to Betty Dang with Scotiabank. Speaker 400:50:10Thanks. Hey, Andrew. Hey, Bob. Speaker 100:50:13Hi, Betty. Speaker 400:50:13I wanted to ask for hello, for an earlier question. You talked about your project in Idaho that is incurring operating costs during the construction phase. Could you elaborate a bit there? And is this common for your RNG projects under construction? Speaker 100:50:35It is not common, but this was unique and part of the uniqueness is the potential and the size of this deal that kind of came our way together with our partner on that. But so it factored into the arrangement factored into really the overall picture and what the ultimate outcome could be on this project. So I'll just say that's how this thing evolved, but it really relates to us doing building and performing work around the handling of manure. And we knew that we knew when we kind of went in that that would there would be kind of a cost to that. So it's built into our overall kind of project returns of what we would be doing. Speaker 100:51:27But that piece is so instrumental also to the ultimate end operation of the digesters that we really we did want to take a kind of almost a significant stake in and we're willing to around that kind of handling of manure. But just frankly, the way the accounting works on that is that you're not going to put that activity into the cost of building those digesters. Although from a return standpoint, we really viewed it that way knowing that we'd have a period of operating this. So in the end, this will, in our view, very much help the efficiency of this project. The fact that we've been more involved in that front end process. Speaker 100:52:22On say on smaller dairies, we can it's we can look to the dairyman farmer in that kind of that critical manure handling piece. So that's really almost before our project and then we construct the project. This one we chose to kind of get into that piece as well. But that will carry on, like I said, until we're producing the RNG that will kind of continue, but we'll then have the whole economics of the dairy project and we're looking at the Q4 of 2025. Speaker 400:53:12Okay, understood. So kind of a one off here. For my next question, I wanted to ask in your opening remarks, you talked about how you're receiving a greater share of the RINs. Is that just coming from the mix, including more of your own RNG production? Or would that be from, your share with your RNG suppliers going higher? Speaker 100:53:41Yes, it's principally on the share and the supplier and just the market dynamics. We talked about that. We have talked about that because about I'll say last year that number was kind of coming down. And we said that we were working at that and some of that's dictated by market dynamics and kind of who owes leverage and that sort of thing. And we saw that we would be able to kind of leverage our position in that space. Speaker 100:54:15And so we're seeing some of that. Speaker 400:54:19Great. Okay. Thank you. Operator00:54:25We'll move next to Dishan Eli with Jefferies. Speaker 600:54:29Hey, guys. Thanks for taking my question. I've been jumping between calls. I'm not sure this has been asked already. So the first question was on just the guide, the full year guide. Speaker 600:54:42Usually 4Q tends to be the higher watermark, at least it's been in the last year. And then if you keep that cadence, then we could see you guys beating your full year guide. Is there anything that I'm missing to think about for 4Q, like any puts and takes there? Speaker 100:55:05No, Dushyant, look, I would say that the kind of the high watermark sometimes can be Q3, Q4 is okay, but we've also seen Q4s with that have come off a little bit from the Q3. So if we absolutely repeated it, then we'd be at that high end, frankly, maybe exceed that high end there. So but we gave the range and I wasn't going to micromanage this thing. We gave a range of 62% to 72% and based on our results thus far, we feel like, okay, well, that stays put. And if we go over it a little bit, great. Speaker 100:55:56But if we don't, we're still within our range. Speaker 600:56:00Got it. No, that's helpful. And then the second question was just on, I guess, this has been asked a couple of times, I'm sure already, just on elections, but more so, how do you think about the RVO obligations next year with the new administration with these events? There are many things to consider like the facility loss waivers or even small refinery exemptions, kind of how do you think about all that going into next year? Speaker 1000:56:30And just maybe the impact to Speaker 100:56:31the future? Speaker 200:56:32So, look, we that's a little bit of crystal ball, right? So, we know that the next EPA is going to look at that. We're all over that. We understand it. There could be small funding exemptions and all. Speaker 200:56:47So, there will be another RVO. Will it really will they set it next year, I don't know, it may slick a little bit. So we'll kind of see, but yes, we'll work on Speaker 100:57:01it. Yes, hard and form of view on that at the moment. Speaker 600:57:06Okay. Thank you. Operator00:57:10We'll move next to Jason Gabelman with TD Cowen. Speaker 1100:57:15Hey, good afternoon. Thanks for taking my questions. Speaker 100:57:19I Speaker 600:57:19wanted to ask on Speaker 1100:57:21I wanted to go back to the upstream RNG projects that are ramping up. And I think we've thought about OpEx kind of being $3 per gallon there. Now that some of your assets are kind of hitting steady state, is that the right number? And then similarly on kind of the credit value that you capture, I think the rule of thumb was kind of around 70% of whatever the credit is you would capture in the upstream assets. Is that still fair? Speaker 100:57:57I think the OpEx is ballpark steady state. I'm going to tell you we're not there right now. But well, not on all of them. And it just like anything has kind of ends up being predicated on your throughput. And so we're ramping that, but it's achievable and in the ballpark. Speaker 100:58:24And then on the share of the credits, I think you're well, I mean, you're generally in the eightytwenty retaining 80. But look, the market we'll have to we kind of have to see a little bit on the PTC. There's that's out there. There's a little bit of maneuvering around who keeps to that one's values and therefore we're on both sides of the fence there. So on our projects, we'll do things that certainly at arm's length between ourselves. Speaker 100:59:08But I think when we're when we are in the marketplace, we have a valuable asset in our distribution. And so we make sure that we get our fair share of the credits from that downstream position. And then on the as we're the producer, well, we're going to be the main customer for that. But the eighty-twenty is in the ballpark, but you may hear someone gets more than that or a little less, but I think that would be moving by 5 points or something either way. Speaker 1100:59:52Okay. And my other question is on the upstream project backlog. And I know you've kind of moved away from really quantifying the backlog. But just in terms of the direction of travel, would you say that backlog is still growing? Has there been a pause given the uncertainty both in LCFS vote and just ahead of the election? Speaker 1101:00:18Just some color around how that backlogs trended would be helpful. Speaker 101:00:24Yes. I would say it's I'm not going to go full pause on that kind of thing. I mean, we're being prudent and cautious. I think how we at the moment, the way we view this is that we have not all that we can handle, but we've got a good slate of projects that we're bringing on that we've got with Daryl Mas. We've got another one in Texas. Speaker 101:00:56So we're staying disciplined, but I don't want anyone to think that some backlog is kind of drying up or anything like that. We're moving forward, but we're being disciplined with our capital. And we're kind of cognizant of getting returns. And so we're just mindful of wanting the timeframe on that. So we may look we look at we're looking at everything. Speaker 601:01:30Okay. Thank Speaker 1101:01:32you for the answers. Speaker 101:01:34You bet. We'll move Operator01:01:36next to Paul Cheng with Scotiabank. Speaker 801:01:39Hey, guys. Just want to follow-up with Betty's earlier question. You're getting a little bit higher share of the green. Can you quantify that? I mean, what percentage that you are getting more? Speaker 801:01:55Is it 1%, 2% and also whether you're seeing that trend continuing into next year? Speaker 101:02:01Well, Paul, I would say, look, on the RIN, you can kind of engineer the math on that really almost from our statements and assuming index and all that, you'll see a little bit more. But I can say that maybe it's closer to 5% last year was like 3.5%, like our net net take on the rent. Speaker 801:02:36So you're saying that it's 3.5%? Speaker 101:02:41Well, it was. And I'm saying that we've now trended past probably past 5%. Speaker 801:02:48Right. And that do you see that continue or that there's a couple of projects that allow you to do that in the Q3 or Speaker 101:03:00Yes, we're just about 5%. Sorry, not past it. Speaker 801:03:04Yes. But I guess the question is that do you think this trend is actually repeatable? I mean, what's the resistance when you're talking to your supplier at this point? Speaker 101:03:21Well, there's a limit. There's a limit on there's look, the market, there's all kinds of dynamics there, Paul. I would say that we're we are trying to cut deals appropriate for us at the producers, but then you also have customers that want to share and their sophistication is growing. So and then that market, everybody's wanting to put their RNG places. So we have improved in that area, but there is resistance in the form of just market dynamics, competition, customers wanting more shares. Speaker 101:04:03So it's a good trend, but it's not going to go to the moon here overnight. Speaker 801:04:11And that also the other question is a little bit of the curve form maybe. In the U. S. And in Canada, it seems like you get pretty excited about the outlook in Canada. If you're comparing the 2 operation, how is the profitability look like when you're comparing them? Speaker 801:04:31And also that do you have a plan, how many station you're trying to build out in Canada versus in the U. S? Because in the past, I don't think you have really focusing on building out the Canadian network. It seems like most of the station is in the U. S. Speaker 101:04:47U. S. Paul, Speaker 201:04:51we're starting carefully, right? In Canada, you really needed and before you want to get too far ahead of yourself, you needed the X15N, right? You needed the larger engine that can handle the grades. Frankly, you actually need an 18 speed transmission to handle the Western Canada. So with our partner Tourmaline, the concept is to build out a network running from Alberta West to the Pacific Ocean. Speaker 201:05:27And it'll start with 7 stations that will eventually when you build out the different nodes on that, you could see it, it would have day where it would have 20 stations. And you'll also then go east. Speaker 101:05:42But Speaker 201:05:45you got to be a little careful here, you got to grow the market at the same time you build stations. And so I like the way it's working. I've done that we've done that before in our history of our company. And so we've kind of very engaged partners. We have very engaged fleets. Speaker 201:06:01We have some of the most significant dealer networks, fleets in the country. I like the way it's going. The economics in Canada is very strong, very cheap natural gas. Today, it's fossil natural gas. Over time, it'll move to a portion of will be RNG. Speaker 201:06:26You could save the customer 50% on the cost of what they're paying for diesel. So the economics sing in Canada. And so we're ready to get the X15 there. We're ready we have to get the 18 speed transmission as well. We'll have those stations at least the beginning of Speaker 101:06:45the Western network at about the Speaker 201:06:47time that those trucks are available. Speaker 801:06:49I guess, Andrew, my question is that the way how you make money out of those station, is it the same way in Canada as the way that how you've been doing it in the U. S? I guess Speaker 201:07:00that's the same Speaker 801:07:02business model or that is going to be different? Speaker 201:07:05Sorry, I went along. Yes, it's the same model, Speaker 101:07:10same model. Okay, we do. Speaker 301:07:12Thank you. Speaker 101:07:12We'll say yes. All right. Sorry. Operator01:07:19And with that, we have no other questions holding. I would like to turn the call back over to Andrew Littlefair for any additional or closing comments. Speaker 201:07:27Thank you, operator. I want to thank everyone for listening this afternoon, and we look forward to updating you on our progress next quarter. Operator01:07:37Thank you. Ladies and gentlemen, that does conclude today's program. We thank you for your participation. You may disconnect at any time. Speaker 201:07:45Thank you.Read morePowered by