And then it looks like it’s headed in the right direction. That’s my take.
Shawn Severson: Thanks for that. That was helpful. And my next question is I understand you were at a staff conference last week, I believe, in London. What’s the takeaway from the user environment? And I don’t know if there’s more on the investment side there, on the user side, but just what are you hearing in the SAP markets? I mean, obviously, you guys have already had several great offtake agreements, but what’s the latest in the demand picture and what some of the key points are from the potential consumers?
Patrick Gruber: Well, I think that the airlines know that they have to do something. And so it’s a question of how do they do it, what do they do it, and what are the real terms? And that is, what are the real terms of contracts that lead to financeable debt deals? That’s going to be the critical issue that has to get resolved. And we’re working through partners on the customer side and the DOE on that issue. And everybody’s cooperative. I think that everybody recognizes that we’ve run into, they’ve all seen this McKinsey work, they’ve seen the competitive analysis, we’re very transparent about this stuff. And they see that the ATJ is the most cost competitive route to make SAF and to do carbon abatement. And an important point is this, I keep saying carbon abatement, this isn’t about the actual cost to reduce the carbon.
And so we’re at about $450 per ton or so is what we would pencil out to be today. And the next best alternative half hour would be about $600 to $700 a ton. Power to liquids, which everyone is so enamored with, it seems, for capturing CO2 and making liquids that might be $1,100 to $1,500 a ton. So we’re a fraction of the cost of some of those technologies. That data is sinking into people. And so ATJ is a fundamentally long run competitive product and technology. So it’s about sorting that out. So at that SAF conference, a lot of discussion was about the various technologies and the cost of carbon abatement, what’s real and what isn’t. And then there is a question of financiers where they say, they hear so much noise about all these different technologies, it’s confusing for them.
They have no idea because everyone says, I have the new answer. And it’s the greatest thing, it’ll be free and things like that. Hi, we can use three pounds of hydrogen to make a gallon of jet fuel like you would with power liquids. Oh, and it’ll be free, it’s stuff like that. And so it doesn’t, it isn’t, that isn’t real. So I think the reality of things are setting in for people. And of course, we come along and we’re like, hey, this is the real deal, let’s go. So we’ve got good partners that are being cooperative.
Shawn Severson: Thanks. And my last question, I want to follow up a little bit on what Amit had asked. And that was about the expenditures. I think when you start to peel back the layers, the company is in a substantially, very strong financial position and balance sheet. But I wanted to walk through, and I think you did a little bit in the new deck, which was very helpful, but walk through kind of what’s operating expenses in the plan for 2024 and what is, let’s say, spend that can be done, pushed out or timing dependent. So it’s a long way of asking, what do you really have to spend in 2024 and your flexibility in spending cash?
Patrick Gruber: Because the main mission of Gevo is to get the NZ1 operating. The number that I threw out there of that range in the beginning is the chunk of the money, the bulk of the money that we’re going to spend. If we strip everything away and say money that’s not recoverable someday, so not project money, then I think we’re left with maybe $12 million to $15 million or so of basic burn or what most companies would call basic burn. Now, we have a bunch of activities. We have a big — we’re spending a lot of effort and resources, people on government affairs and all the things related to make NZ1 successful and profitable, the engineering, and we’re developing some other sites. And so we bundle that all together. It’s in that range that we’re talking about already.
And we’ll moderate the spend throughout the year, depending upon how fast the DOE goes or how fast all the pieces and parts come together or if there’s some kind of a turmoil in the marketplace or whatever. So it isn’t like we’re just saying, shoot the whole lot and it’s all gone. We do careful moderation along the way. So that’s a long way of saying that when you get us down to the really basics, if you just looked at our management plus our R&D plus accounting and stuff like that, it’s a pretty small number.
Shawn Severson: Thanks, that was very helpful. Thanks, Pat.
Operator: Our next question will come from the line of Kumar Raju with BBG. Kumar, your line is now open.
Eric Frey: Kumar, are you there? Okay, let’s move on.
Operator: I’m showing no further questions in queue at this time. I’d like to turn the call back to Dr. Gruber for closing remarks.
