Sam Margolin : Good morning, everyone. Thank you. I’m actually, I’m tempted to ask about commercial and turnaround integration again, because I do think that’s probably the most important thing from this call. But I think people got the picture there. Instead of asking about low carbon growth, and specifically SAF. And I’m asking because investors ask about it a lot, because airlines talk about it frequently. And both of your partners in the renewable fuels category are also sort of publicly, very pro SAF. And so it’d be great to get your thoughts on that category. And see if you think there’s any opportunity there. Thank you.
David Heppner: Thanks, Sam. Hey, this was Dave, let me step back a little bit and touch on first that one of our strategic growth pillars for the company is around maximizing the value of our renewable liquid fuels. And so while promptly, a lot of that has been focused on renewable diesel with our Dickinson and Martinez, and the pretreat facilities around those as we look forward that’s inclusive of Sustainable Aviation Fuel or SAF. So when you’re thinking about growth, it is also inclusive SAF. And so second thing I want to maybe touch on is that we are a very large supplier of fossil fuel, jet fuel today. And our goal is to supply the products that our customers want, and need going forward. So as they, as you stated, there’s a lot of chatter around SAF, we’re there to help meet that and why you’re hearing a lot of the chatter through the airline industries is because SAF is the most viable near term, decarbonization tools for that space.
So as we look forward, we are very active in that. The challenge is the premium required, as you look at the SAF whether it be a conversion of a Dickinson or Martinez produce SAF or new investment, these are multiyear very large capital projects. Having confidence in that premium to justify that investment is where that little opportunities exist today. So we are very active just as we were in RD and the evaluation, the studies of where to participate in SAF and I think you see a lot of it within MPC, but also within our subsidiary company Virent. They take sugars into sustainable aviation fuel, you’ve seen announcements with them on test flights with United, most recently won with the Emirates along with our JV partner Neste. So you can see We’re very active in the space of evaluating it, studying it, monitoring it and determining when is the right time to invest.
Operator: Our next question comes from Theresa Chen with Barclays.
Theresa Chen: Hi there. I just had a follow up question related to the Russia discussion, and specifically related to VGO and with the Russian’s VGO exports to Europe dissipating from market and lack of clarity where incremental VGO is going to come from and understand that could help definitely in cracks all else equal, but how should we think about how it impacts your capture and what your net VGO position is long or short and how it trickles through your system?
Rick Hessling: Yes, Theresa, this is Rick. So we’re short VGO, we’re out in the market, especially now more than ever, when it’s turnaround season and I will tell you the way we view this is this short and VGO is going to high grade up all capture specifically on Jet, diesel and light products. So we believe will be a recipient of it and that’ll show through via the cracks going forward. Specifically, I will tell you as these Middle Eastern refineries come online midsummer, Theresa, they will domestically consume VGO which, in turn will further short the market, which we believe to be a nice shot in the arm, kind of mid-year end year. So more to come on that. Just something to keep your eye on.
Theresa Chen: Thank you. And I also had a follow up question related to my comments about consumers potentially adjusting consumption patterns to lower retail fuel prices. Just curious what your views on elasticity is or are at this point. How does that reconcile with Brian’s comments about gasoline and potentially structurally being off about 3%?
Rick Hessling: Yes, Theresa, it’s a great question. It’s one that we look at and try to draw the right corollary too but we do see a degree of flexibility there. Of course, it depends on the market, depends on the extent of the retail prices. We have seen and I commented on the West Coast in my comments earlier, in what I didn’t mention, but we got under $5 a gallon on the West Coast in Q4. So that’s where we saw my view is we saw nice demand recovery as relates to retail prices. But our forward view is definitely instructed by a moderated view on retail pricing, which we do think will impact demand somewhere in the neighborhood of 2% to 3% depending on the market, but somewhere in the neighborhood of 2% – 3%.
Operator: Our next question comes from Jason Gabelman with Cowen.
Jason Gabelman: Yes, good morning. How’s it going? I don’t think you guys discussed the outlook maybe I missed it, the outlook for light heavy crude quality dips. Clearly, they’ve been very supportive in the past couple quarters to earnings. And I think many in the market, expect those to come in as refiners consume. The SPR releases, new capacity comes online. OPAC exports have fallen off a bit. Can you just discuss how you expect those differentials to trend throughout the year? Thanks.
Rick Hessling: Yes. Hi, Jason. It’s Rick. Very good question. So it’s kind of a tail of two ends. I’ll start with the front end here. Because as you look with what happened with the Keystone Pipeline outage, that back then barrels into Canada, Canadian inventories are high. We’ve had a lot of turnarounds in the US Gulf Coast. We’ve had winter storm Elliot back in barrels. So when you kind of add all of these together, along with a few of — a few folks in the in the Mid-Con specifically pad two having issues. We are seeing really robust spreads right now. And we continue to see that to hang on for a bit. As the year plays out, and things get back to normal. I would say you could see some fall off to the spread, but we’re still quite optimistic that it’s going to be a better spread than midcycle as we look at the year in total.
Jason Gabelman: Great, that’s helpful and just my follow up. I appreciate the comments on the Martinez project. And operationally, it sounds like everything’s going well there. I was wondering from an earnings perspective, how much you expect that project to contribute in 2023, just given the pretreatment unit won’t start up until later in the year. And at the numbers we look at, it seems like margins for projects that don’t have pretreatments are much more challenged than projects that do. So if you just talk about the earnings in 2023, and the potential step up from the project once that operation units online.
Brian Partee: Yes, this is Brian, Jason, I just maybe a reminder that we do have pretreatment capacity, not on site but off site. So both at Beatrice and Cincinnati facility, we’ve got substantial pretreatment capability there. So just kind of a reminder there, and I’ll refer it regarding the overall EBITDA or our economic outlook to Mike and Maryann.
Mike Hennigan: Yes, Jason, we don’t give specific individual facility earnings profiles. I know it’s a question and people have been trying to get their arms around. But the best guidance I can give you is if you look at the macroenvironment around the California market, and where each of the subsidies are trading, the key to remember because people ask us about LCFS. But there are other components to subsidy out there that all kind of worked together. And the three of them together have been relatively consistent, even though a lot of them are moving around a little bit. So that should help you a little bit as you model it. And then obviously, look at where feedstocks are trading and diesel’s trading.
Maryann Mannen: The other incremental comment that I would add to Mike’s also is remember when we completed the JV with Neste, one of the things that we were looking for was incremental improvement around our feedstock slate, and we got that with a partner in Neste. So even though we are sharing 50% of the project, we actually improve the economics of the project by the feedstock that Neste is obligated to bring through their partnership with us. So just another data point as you’re contemplating how to think about that.
Operator: Our next question, and our last question will come from Matthew Blair with TPH.
