Andy Foster: On Q2, it was restart. We only really operated for one-third of the quarter, and the combination of yields and just some one-time charges around contracts we had with customers, et cetera, really led to the EBITDA. In fact, there are — it was not a large amount from any single thing, but you just add up to some smaller things related to the start. And so we see if these is one-time startup related costs. In terms of Q3, margins going into Q3 were much better. We’re still looking to get our production to be at full maximum and take full advantage of the current margin environment. We’re about one month into Q3, and we’ll see how corn does. But corn has shown a low price trend, let’s say, and unless there’s some strange weather effect, that appears to be the market condition that we’re in.
Really good questions around ethanol, I personally am looking for E15 to increasingly be part of the discussion we have over the next year or two. E15 is taking our national consumption of ethanol from a 10% blend, which is roughly 14 billion gallons, to over 20 billion gallons. Well, the entire production capacity in the entire United States is only 17 billion gallons, of which we export a little less than 2 billion gallons. So E15, a 15% blend of ethanol accepted in 49 states by the way, it’s not currently allowed in California. California is a 90% petroleum gasoline mandate. And so we are working closely with our friends at CARB to complete a multi-year process to get 15% blend approved in California. We’re the only state that can set our own blending rules by the way, and that would in California alone be over 700 million gallons a year of new ethanol demand in a state that already consumes over 1.2 billion gallons.
So we’re looking at some external realities of E15 being allowed at all 50 states as being the really underlying demand driver. Last little point I would make is that we sell our ethanol for roughly $2.50 or $2.60 a gallon, but then we turn around and across the street, we pay $4.50 to buy it back. It’s a 10% blend, but we’re paying $2 a gallon more for it. And so there are significant margin opportunities in the Ethanol business simply by solving the supply demand curve, and that’s what E15 is doing gradually over the next year or two.
Matthew Blair: Sounds good. Thanks for your comments.
Andy Foster: Sure. Thank you, Matthew.
Operator: Your next question is coming from Amit Dayal with H.C. Wainwright. Please pose your question. Your line is live.
Amit Dayal: Thank you. Hi, guys. So with respect to the Keyes plants, Eric, I mean, are we running at full capacity for the third quarter now?
Eric McAfee: We’re going to be by the end of the third quarter for sure. Really August and September. July was another ramp up, as I mentioned, June, July were a ramp up months. So August and September, we expect to be at full capacity.
Amit Dayal: Understood. Okay, thank you for that. And then the eight digesters targeted for this year, will they be completed and brought online this year, or will that spill into 2024?
Eric McAfee: We have, what half of those under construction?
Andy Foster: Yes, there’s probably five of those. Four or five of those that are currently under construction. We may have one or two of those completed by the end of the year, but I’d say kind of a safe timeline for you to think about is by the end of Q1 of next year we’ll have all eight of those completed in online.
Amit Dayal: Thank you.
Andy Foster: But again, they’re sort of sequential, and we should have a few of those will be online this year I think. It gets weird with what kind of winter are we going to have? And if we have a winter like we did last year, it might slow some things down, but by and large, we’re pretty far along on a few of those. So we’ll definitely have two to three more that should be completed by the end of this year.
Amit Dayal: And the size that are operating guys, are they running as expected? Are they running at full capacity, et cetera?
Eric McAfee: Yes, we’ve actually been — we’ve been very happy with our operational uptime and performance. It’s exceeded our expectations, honestly. And production is because these are ambient temperature digesters, production is really dependent on the weather. The weather in California this winter or this summer has been slightly cooler than normal, so that has a little bit of an impact. But as far as the nuts and bolts of how these things are running, we’ve been very, very happy with the performance of the equipment and the pipeline and the RNG upgrading facility and everything that’s associated with this project. We’ve been very happy with the operational uptime and efficiency.
