Operator: Your next question comes from the line of Paul Cheng from Scotiabank.
Paul Cheng : First, congratulations to both Mike and Tim for the retirement and promotion. Thank you, Mike, for all the help. I guess that I have two questions in here. Mike or Tim, when you’re looking at how is the — it’s a little bit surprised that you’re saying it will take until the second half of this year to reach the normal noise runway given that you actually start up all the plan, say, one in the first quarter, the other one is in the second quarter. So maybe that you can give us a better understanding of why that we will — I think a lot of people would have thought that by now you will move into the normalized one way? And what have you learned so far from the operation? And also whether you have already certified for the LCFS by now?
So that’s on that. The second question is on the marketing. If I look at last year, for only 10 months of operations, you did about $63 million in EBITDA, much better than at the time of the acquisition, you were referring to about $50 million a year normalized cycle. So as last year just an exceptional year, and that the baseline is still 50% or would that business is actually much better than what you had been assuming?
Mike Jennings: Thanks, Paul. Tim and I will split this up. I’ll start with the renewables questions. And yes, to put it candidly, the renewables performance — operational performance to date is not what we planned, and it’s disappointing, but we’re pretty resilient and we’re going to fix this thing. So what’s in front of us? There are a number of things. First, process optimization and catalyst performance, getting the renewable diesel yields up and getting the units to run more consistently. We ran just 14,000 barrels a day, which is 60% utilization in the fourth quarter. In a process industry, Paul, as you well know, that is too low. That number needs to be more towards 90%. So in terms of availability and reliability of the underlying units and the catalyst performance getting the renewable diesel yield higher at the expense of naphtha yield, but as importantly, these processes are very hydrogen dependent, and we’ve got two things going on there.
First is base reliability of hydrogen production. And we’ve got a number of things working internally to improve that, but also with petroleum or conventional distillate margins as high as they are, we’re needing to optimize hydrogen use across these refineries. And that’s a competition at present. So longer term, we need to increase the availability of the high-purity hydrogen that feeds these plants. Nameplate-wise, they were expect to perform at capacity, and we found that we’re not there. So we have some initiatives working to improve that optimization within the refinery and longer-term improve gross availability of the hydrogen. So there’s a lot to do operational here in these current 6 months to get toward considerably higher throughputs and yields in these plants.
And no, we’ve not yet achieved that, but that is the pathway to profitability.
Tim Go: Paul, I’ll take your second question on marketing. This is Tim. Again, we’re very pleased with the results that we’ve seen on the marketing side. This is, again, one of our core objectives that we’ve been focused on as far as integration and again, for the reason for the Sinclair HollyFrontier merger. You’ve asked if we’re ready to change our $50 million a year mid-cycle, I’d say probably not at this point. But I would tell you that we are operating above mid-cycle right now. And we think that’s the case because with inventories being low across the country and demand being fairly high, especially in our areas that we operate in, which in the Rockies, in particular, have low inventories and high demand, we’re able to get a little bit more from our brand premium than maybe what we would during a mid-cycle type environment.
