So we believe that’s what 2024 is about for us and that that provides a tremendous opportunity for our partner to get involved with us in the business as we position that facility for the long-term run.
Jason Gabelman: Got it. Thanks a lot for the color.
Operator: Our final question comes from the line of Brian Butler with Stifel. Your line is open.
Brian Butler: Hi, good morning. Thank you for fitting me in. Quick on the conventional piece based on the midpoint kind of your outlook for the fourth quarter, at current prices what would the gross margin on the conventional and the EBITDA be assuming again pricing doesn’t change from where we’re at?
Chris Carlson: I think a good question Brian. I think we’re all looking to the markets to kind of see where things land. Again, as our guidance as indicated in the last two quarters, we’re focused on OpEx per barrel and then CapEx. And it has been – or as James noted, the yields have dramatically improved. So I think the focus on the gas, jet and diesel yield that will give you your best indicator of where we’re going to land looking at the forward strip.
Brian Butler: Okay. And then I guess on the hedge piece, how much of that profit have you locked in? Can you give any color on the – maybe the dollar amount?
Chris Carlson: It’s hard to say because it’s going to move around. You can look to the current filing. And at September 30, I think it was right at $4 million for the gas hedges. But again, that’s going to bounce around through the quarter.
Brian Butler: All right. And then looking at the renewable diesel. At the current LCFS or the default and the current RIN price, is the renewable diesel profitable at full capacity? Or do you need – do we need to see the feedstock costs come down?
Doug Haugh: Yes. We’re – I would say marginally profitable on the current margin structure. Certainly, as we now get LCFS credits that’s helpful compared to where we were last quarter. So that’s pushing us to run at a little greater rate than we would have otherwise. But we really see the – I mean for us to ramp to full rates, we’d need to see feedstocks come down in price and have additional margin opportunities for us to chase at that hard all, right? So otherwise, we’re going to stick to our plan on really optimizing the lower carbon intensity feeds. We have a lot of technical work that we continue to do within the facility to make sure that again as we run forward certainly through 2024, but as we get to 2025 at full production rates that we haven’t left that work to do when the margin environment is there, right?
So we just have to be disciplined now get that work done and make sure that we’re in a long-term position to maximize run rates and margin opportunities when they’re layered. So it’s – yes, there’s some incremental margin per barrel. I got the earlier question that well then why don’t you just run at full rates. But that really puts the facility in a tough position when we’re trying to optimize different feedstock blends on a week-over-week basis. And as we’re doing all the intense data collection it takes to make sure that we’re really optimizing our carbon intensity work on the facility itself. So we’re going to maintain reasonable rates. Certainly, if there was really attractive margins then we would ramp rates and run at full rates. But we just haven’t seen feedstocks adjust to that cost level where it incentivizes us to do that at this time.
Brian Butler: Okay. And then one last one. On the feedstock optimization how much of an carbon intensity improvement or benefit do you get from running the other feedstocks over the default? I mean is it 50%? Is it 100%? How much of an increase can you see as you put in the new better lower CI score feedstocks?
Doug Haugh: Well, certainly, compared to the defaults we’d expect at least 50% improvement from where your defaults are. So it’s going to be — we don’t know exactly like where the soy will land. But if you look at other Gulf Coast processors on their — even the carbon intensity of their soy production versus the default of 65% I think many of them are in the low 50s. So you pick up — it’s not 50% on that one. But the overall blend when you look at much lower carbon intensity values on your tallows and your DCO in particular. And then obviously as we bring Yugo [ph] to bear all of those are going to result in dramatically lower carbon intensity for the pool.
Brian Butler: Okay. Thank you very much for taking the questions.
Operator: I will now turn the call back over to the speakers for final comments.
Ben Cowart: Thank you, operator. And thank you everybody. Before we sign off here this is Ben. I want to express my gratitude to our team once again for their outstanding work this quarter. In a dynamic business such as ours ability and our agility is very crucial. And I’m confident in our team’s ability as they have demonstrated over this past quarter. Moving ahead, we will continue to follow the road map we’ve established. We’re pleased with the capital investments made in these markets over the past few years. I think, we’re sitting in a very good place as far as capital efficiency, which we’ve laid the groundwork now for renewables and we brought together the synergies across our assets from feedstock origination to sustainable products being made from our legacy business.
We’ve enlisted the help of outside experts to model our business over the next five years. We see good long-term value creation. We will remain agile and pursue opportunities to deliver our best to our employees and our stakeholders. We look forward to sharing more as we’re able. Appreciate everybody taking the time on this call to lean in to Vertex and what we’re doing and we look forward to our call in the fourth quarter end. Thanks.
Operator: This concludes today’s call. We thank you for your participation. You may now disconnect.
