Good day, and welcome to the Clean Energy Fuels Q2 2022 earnings conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Robert Vreeland, Chief Financial Officer. Please go ahead, sir. Thank you, operator. Earlier this afternoon, Clean Energy Fuels released financial results for the Q2 ending June 30, 2022. If you did not receive the release, it is available on the investor relations section of the company's website at www.cleanenergyfuels.com, where the call is also being webcast. There will be a replay available on the website for 30 days. Before we begin, we'd like to remind you that some of the information contained in the news release and on this conference call contains forward-looking statements that involve risks, uncertainties, and assumptions that are difficult to predict. Words or expressions reflecting optimism, satisfaction with current prospects, as well as words such as believe, intend, expect, plan, should, anticipate, and similar variations identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in the Risk Factors section of the Clean Energy Fuels' Form 10-Q filed today. These forward-looking statements speak only as of the date of this release. The company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this release. Company's non-GAAP EPS and Adjusted EBITDA will be reviewed on this call and exclude certain expenses that the company's management does not believe are indicative of the company's core business operating results. Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for or superior to GAAP results. The directly comparable GAAP information, reasons why management uses non-GAAP information, a definition of non-GAAP EPS and Adjusted EBITDA, and a reconciliation between these non-GAAP and GAAP figures is provided in the company's press release, which has been furnished to the SEC on Form 8-K today. With that, I will turn the call over to our President and Chief Executive Officer, Andrew Littlefair. Thank you, Bob. Good afternoon, everyone, and thank you for joining us. We are very pleased with the results of the Q2 of this year, both by the numbers and by the trends that we see in our business with the strategies that we've put into place over a year ago. These strategies are beginning to show real results. Fuel volumes of 107 million gal were up year-over-year, more than 5% compared to the Q2 of 2021, and revenues came in at over $97 million. Comparing the revenue number from the Q2 of 2021 is hard because we had a large initial non-cash revenue charge related to the warrants we issued to Amazon last year. Taking last year's initial charge out, revenue in the Q2 of this year was up by 20%, despite the continued uncertainties of the economy, supply chain, COVID, and volatile energy prices. As we told you in our last call, our Adjusted EBITDA should increase throughout the year, which it did, from Q1's $3.3 million - $10 million in the Q2. Just as importantly, we saw the margin on our fuel volume increase 12% from the Q1 of this year to $0.28 gal. That's despite lower prices on the credits from California's Low Carbon Fuel Standard and the federal RIN program. I believe this is a testament to the diverse and recurring nature of our business model. Fortunately, the LCFS and RIN prices have stabilized and even risen slightly over the last month. In the Q2 of this year, we had positive cash flow from our operations, and we ended the quarter with $187 million in cash and equivalents after making additional investments in our RNG joint ventures with TotalEnergies and BP. This performance positions us with a strong balance sheet as we continue to expand our RNG production and supply offering. Anyone who has followed Clean Energy for very long knows that I'm the eternal optimist about the future of our proposition. I have to say, I cannot remember a time that I have been more enthusiastic about what's going on in the alternative fuel market, and specifically with renewable natural gas for heavy-duty vehicles. One of the reasons for the optimism was highlighted in an in-depth article that appeared a few weeks ago in one of the leading trade publications, Heavy Duty Trucking, about the new Cummins 15 L natural gas engine. Cummins officials quietly began to talk about this new product last year to those of us in the industry. Recently, they have stepped up their public communications like I have not really seen them do over the last two decades of our close association. Cummins' general manager for their natural gas business was quoted in the piece that customers have been asking for a 15 L engine for over 10 years, but Cummins wanted to wait to bring a larger engine to market until the time was right and they were confident there would be demand for it. Now is that time. The article goes into detail about how Cummins took the learnings of the previous generations of their 12, nine, and 6.7 L natural gas engines, and are confident that they have designed a larger engine that will be well received by the heavy duty truck market. Not only will this engine provide more power and torque, but it will do it weighing 500 lbs less than their current 15 L diesel engine. Cummins' enthusiasm for this new 15 L natural gas engine is powerful, to say the least. The new 15 L engine is already operational in China and is expected to be commercially available in the U.S. in 2024. Some of the largest fleets in the country plan to test the new engine early next year, including Walmart, Werner, and Tyson Foods, just to name a few. In fact, Cummins said it received requests from more than 400 different fleets to demonstrate the 15 L natural gas engine. These requests were from existing customers which had been operating the 12 L natural gas engine. Really for me, more exciting, many other fleets that have never looked at natural gas before wanted to be on the list. Puneet Jha, the General Manager at Cummins, said in the article that one of the main reasons why now is the right time to bring a larger natural gas engine for heavy-duty trucking to the market is the introduction and expanding availability of renewable natural gas. According to GNA Consulting, RNG represented 98% of all the natural gas consumed in the California vehicle market in 2021, and over 60% nationally. Now for Clean Energy, those figures are 100% in California and over 75% nationally. I've spent a lot of time on these calls regaling the environmental benefits of RNG, so I won't repeat myself other than to say it has a greater beneficial effect on climate change and reduction of greenhouse gas than electric. Why wouldn't a heavy duty truck fleet that is looking to reduce its emissions look at RNG? We have been hearing for many years about the hundreds of, quote-unquote, you know, reservations for new heavy duty electric trucks from a handful of OEMs with nothing but a few test trucks to show for it. I remind you that Elon Musk, who deserves a lot of credit, for his success in the electric passenger car market, rolled out with great fanfare the Tesla Semi in 2017 and said it would be commercially available in 2019. Yet here we are in the back half of 2022, and it's still not available. If Tesla is having difficulty with manufacturing a battery large enough to power a heavy duty truck, or it has rethought the obstacles involved, then I'm not sure who can anytime soon. If I were making a bet, I'd place a chip on a manufacturer of truck engines that's been in the business for over a century, and that has been also producing and improving natural gas engines for 20 years to offer a heavy duty fleet's commercial alternatives to diesel that will provide them the sustainability benefits they are looking for. You know, something else that Puneet with Cummins said in the article, and I wholeheartedly agree with him, is that he rejects the notion that RNG is a bridge fuel. Well now let's pivot to our upstream RNG business. It has been a little over 6 months since we rolled out our RNG plans on RNG Day, and I'm pleased to say we are not only executing on that plan, we are ahead of schedule in some key areas. For instance, we set a goal of executing contracts representing 25 million gal of low carbon dairy RNG by the end of the year, and it looks like we will be over 29 million gal. We wanted to have three dairy projects completed by the end of 2022, and it looks like we'll have four completed, three of which should be injecting RNG into the pipeline. Right now, we have seven projects under construction. We intended to have eight projects under construction by the end of the year, and we are on track to have nine by the end of the year. Another seven projects are in the final design and permitting stages. We know we've been bumping into representatives from other companies that have recently jumped into the RNG production business out in the farmland. What distinguishes Clean Energy from others with dairy owners is our ability to bring these savvy business owners a large customer base of fleets thirsty for more RNG demand. Few, if any other companies in the business can offer the assurance to have a steady monetization of dairy owners' RNG like we can because of our downstream fueling infrastructure. Now, there will be a seminal event that takes place on September 28 outside of Columbus, Ohio, that demonstrates exactly this point. As you know, we announced last year that Amazon contracted with us to build 19 new stations to fuel their rapidly growing fleet of RNG heavy duty trucks it is deploying. The Amazon fleet fuels with us daily all over the country and has already fueled at over 85 of our existing Clean Energy stations. Next month, we will be cutting a ribbon on the first of these 19 new stations that we designed and constructed from the ground up specifically for Amazon, but will also be available to other customers. Besides the local officials and Amazon executives joining me on stage in Columbus will be Evan Barton, Owner of the South Fork Dairy, a 3,300 milking cow farm in Newark, Ohio. We recently signed a contract with Evan to develop a digester that should produce 500,000 gal of RNG a year when completed. It will be a great demonstration of the beginning to end benefits of RNG, with the dairy owner who will be able to solve the issue of fugitive methane from his cows' manure, standing alongside a logistics operator who will be running a fleet of heavy duty trucks with the cleanest fuel in the world that originated from that dairy. The new station in Ohio looks awesome, with multiple fast-fill dispensers, 50 time-fill dispensers, and 110 parking spots for Amazon RNG trucks. Amazon is up to, I guess, over 3,000 RNG trucks purchased, with more to come, and their fuel volume at our existing stations grew by over 40% from January to June of this year. We expect that growth rate to only accelerate as these new stations come online. The station in Ohio is the first completed, but several more will be opening soon after that. A few other recent wins that I would like to quickly mention are the signing of contracts with three large new transit agencies in Fort Worth, Texas, Arlington, Virginia, and Sacramento, which represent over 5.8 million gal a year. We also are expanding with our longtime customer, South Jersey Gas, by building a new station for a larger natural gas fleet. Republic Services is adding another 110 RNG trucks here in California that will fuel at a station in Carlsbad. CalPortland, our good ready mix customer, continued to expand its RNG truck fleet last quarter. The finance program we have with Chevron to put new RNG heavy-duty trucks into the ports of L.A. and Long Beach continues to have success, with over 730 new trucks either already financed or working their way through the approval process. Much of this success is being driven by our grants department, which has secured grants through multiple California programs for dozens and dozens of heavy-duty trucks for our customers, in addition to the Chevron financing program. I'm pleased to report that fuel volumes in all of our segments, refuse, transit, heavy-duty trucking, and fleet services and airports, grew in the Q2. I've gone on a little long, and I know you're anxious to hear from Bob, but I hope you can fully appreciate where my optimism comes from that I mentioned at the top of my remarks. The prospects and opportunity offered by RNG have literally changed our business and given us the ability to be a significant player in the world's effort to tackle climate change. We are executing on all levels, from the RNG production side down to the construction and first-rate operations of fueling stations for new and expanding customers. With that, I'll hand the call back to Bob. Thank you, Andrew, and good afternoon to everyone. We had a good Q2 compared to a year ago, as well as a nice rebound from our Q1. Higher volumes and higher margin per gallon drove the better results. I'll jump into the overall results and then give some more color on some of the key metrics. Starting with our GAAP results, we reported a GAAP loss of $13.2 million for the Q2 of 2022, compared to a GAAP loss of $79.7 million last year. Now, last year's Q2 included contra revenue charges of $78.1 million from the Amazon warrant, but it also included $5.2 million in income related to the Alternative Fuel Tax Credit, which was not in our Q2 of 2022. The contra revenue charge related to the Amazon warrants in the Q2 of 2022 was $4.8 million. Last year's charge was much larger because it included an initial vesting charge that was within the $78 million of $76.6 million that was tied to the signing of the Amazon sales agreement. On a non-GAAP basis, our loss for the Q2 ending June 30, 2022 was $848,000 versus a non-GAAP income of $1.8 million a year ago, but last year included the $5.2 Million of Alternative Fuel Tax Credit income. Andrew had mentioned our Adjusted EBITDA was $10 million for the Q2 of 2022 versus $14 million a year ago. Again, the $14 million includes $5.2 million of Alternative Fuel Tax Credit income. On cash flows, our cash flow from operations in the Q2 of 2022 was $27.4 million, and our CapEx spending was $10 million. A year ago, our cash flow from operations was $9.7 million, with CapEx spending of $4.6 million. The increase in the cash flows in 2022 reflect both positive operating results and improved working capital. As I mentioned, the performance in the Q2 was driven by increased volumes and an increase in the margin per gallon. The volumes were up from a year ago and actually from the Q1 of 2022 across all the core sectors, refuse, transit, the fleet services and airports, and trucking. Our RNG volumes were 50 million gal in the Q2 of 2022, representing a 17% increase from a year ago and up 26% from the Q1 of 2022. On volumes that we've planned, as we've mentioned, we've planned for our volumes to build during the year. We saw that in the Q2, and it was nice to see the RNG volumes building as well. Our margin per gallon improved from $0.25 a gal in the Q1 of 2022 to $0.28 a gal in the Q2 of 2022. A year ago, our margin per gallon was $0.26. The improvement that we're seeing in this Q2 was principally due to higher fueling gallons, coupled with higher retail prices, along with the greater RNG gallons. This is where the diversity in our margin buildup works in our favor. I mean, we would prefer to have more stability across the commodity and the environmental credit pricing spectrum, but the Q2 demonstrated that our margin per gallon can increase in a higher retail fuel price market despite some headwinds on the environmental credit pricing. We see this dynamic going into the third and the Q4. What I mean there is that, yes, we have contemplated a lower RIN and LCFS pricing through the end of 2022, but we also see continued favorable margins at the retail level, as we saw in the Q2. Our fuel margins overall should come out as expected for 2022. Briefly on revenue, our effective revenue per gallon was $0.91 per gal in the Q2 of 2022, reflecting the impact of the higher pump prices mixed in with our maintenance prices, which are not very volatile at all. Now, the $0.91 per gal compares to an effective price of $0.67 a gal a year ago, and $0.88 in the Q1 of 2022. Particularly compared to last year, our revenue per gallon was up $0.24 a gal, and that contributed about $24 million to the year-over-year increase in revenue. Now, our commodity cost per gallon also rose, but that rose about $0.22 per gal. Between the rise in the revenue and cost per gallon, we gained $0.02 per gallon in our favor on the margin. $0.02 on 100 million gal is a meaningful number to the quarter. On the OpEx, our SG&A and also other costs in the RNG joint ventures for the quarter, for the Q2 of 2022 were in line with our expectations, so nothing significant to really call out on in that area. From a balance sheet standpoint, we did contribute $51.6 million into the separate BP joint venture to meet some capital calls relative to the dairy projects in that joint venture. We did that during the Q2, but at the end of the quarter, we had $187 million of cash and investments on our balance sheet. We've, as we've noted that we're in the process of securing a modest level of debt at the corporate level with the idea that as our RNG projects come online toward the end of this year, we will put more financing will be supported at the project level going forward. All that is still in play as we've discussed. With that, operator, we will open the call to questions. Thank you. If you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow us to know to reach our equipment. Again, press star one to ask a question. We'll take our first question today from Eric Stine with Craig-Hallum. Are you there? Eric, I didn't hear anything. I hear you now. Go ahead. Okay. All right. You hear me now. Good. Well, first maybe on the supply side, I know coming into the year obviously expecting significant demand for RNG, but knew that at least in 2022 it would be a challenge to keep up with that. So, I mean, obviously 50 million in the quarter, that's a strong number, but, you know, maybe where do you stand in supplying that RNG from third parties, you know, while you're working towards bringing on your own volumes? Uh- You know. Er- Go ahead. Go ahead, Bob. Bob, no, you have that RNG story. Eric Stine, I'll say, yeah, no. We are in good shape on that front. You know, we're still looking at the total that we had put out there, I think, around 194 million gal, and so all that's supported with appropriate supply. In fact, to that point, during the Q2, that was a big part of, you know, going up to $50 million from, you know, the Q1, we were about I think $39.7 million. It was a nice jump, and a lot of that was with new producers and new supply coming on. When we look, you know, we look good going out the rest of the year. Got it. I would assume that, I mean, you feel, you still feel very good about your goal by 2025 that 100% of your volumes will be RNG. You know, Eric, what I've been, you know, we've been doing, Bob and I've been doing different investor calls, and I think we've probably talked to you about this too. I mean, you know, that RNG Day, I would encourage people to try, you know, look at it to the extent they have some extra time, look at it because we really are, at least, you know, at present, six months in, we're really using that as a good template, as a good plan, and we're ahead of that plan. You know, as you know, in that plan, we talk about needing 105 million gal of our own equity dairy gas, and then, you know, combining that with third-party landfill and dairy gas going forward, 300 million gal or more of it. We still like that plan, and we're working for that, and we're ahead of it right now. Okay. You know, we're kind of on point and, you know, I hope we'll have to do more, right, on the, you know, to meet demand. Right now, you know, we have some of that built in, and it's, we're on it. Got it. Maybe just turning to Amazon, just to clarify, did you say up 40% year to date on volumes? Then curious, just what are you seeing in terms of, you know, their suppliers? I know obviously they're planning to use this in their own heavy duty fleet, but their intention is also to push it down to, others that they do business with. Yes, 40% when you look at January to the current volumes as of June, so they're up, right? That just means they're fielding more trucks. They're putting more drivers in trucks, more trucks. Now, you know, I gotta soft-land here on what I'm allowed to be talking about for Amazon. They want to control that. I did look at their sustainability report, which just released a few days ago, and that's where I got the 3,000 trucks that I felt comfortable mentioning to the market. Now, that's a 2021 number. Okay? You know, that's what they said they've purchased. Let's just say, Eric, that we continue to see more trucks being delivered on a weekly basis. I'll let them speak to the numbers. I know, you know, like everybody else, I noticed in some of the reports on truck builds here in this last quarter, way off. I mean, there is a choke point on delivery, you know, supply chain of people getting trucks. I'm sure that's affected Amazon as well, except they've ordered a lot of trucks, and we're seeing those begin to marshal at these new locations for us, and that's very exciting. You can see some of that online without me, you know, speaking on their behalf. You can see some pictures that have been released from them about trucks that have gathered at different locations that either are existing stations or some of our new ones. I'll just leave it at that, but we're excited about. Okay. their deployment. Yep. No, fair enough. Then lastly, just AFTC, I mean, what are your thoughts? You know, how are you feeling about the Inflation Reduction Act? If not in that bill, I mean, do you see other paths by the end of the year that could. Yeah. I mean, well, look, you know, we'd all, you know, Eric, we'd all go broke trying to necessarily guess on exactly how Washington's gonna work, right? As we all watch now, this, the new slimmed down deficit, Inflation Reduction Act is, the AFTC is in that, as you know. For those on the call that may not be familiar with that, the AFTC is in that bill for a three-year extension. It'd be retroactive for, you know, this year and then goes forward. You know, I just think that that underscores sort of the bipartisan nature. Now, I don't know whether or not that bill's gonna pass. You know, I mean, I think we have to see how they need the 50 votes on the Democrat side. I tend to think it will. There's a lot in that bill, and everyone in the green space, green transition space is all trying to get up to speed on exactly how all of these different provisions work and because there's a lot of new language in that bill. I think it's very supportive. It's supportive of the Alternative Fuel Tax Credit. It's supportive of biofuels. It's supportive of RNG. There's a lot more to learn there. You know, to speculate on whether or not I think that's gonna pass or not, I'm not sure. I like the fact that the Alternative Fuel Tax Credit keeps showing up in bipartisan, you know, in these bills. If the Reduction Act goes down, the Inflation Reduction Act goes down for whatever reason, I feel very confident we continue that the AFTC will find its way into an extender package or an omnibus bill, and it'll be enacted later in this Congress. Okay, thanks. You bet. Next, we'll hear from Rob Brown with Lake Street Capital Markets. Good afternoon, Andrew. Good afternoon, Bob. Hey, Rob. A couple of questions on kind of the demand environment. What are you seeing in terms of incremental interest with fuel prices here? Is it driving incremental demand, or is the demand really around the RNG's situation? No, I think it's both, Rob. I think it's a good question. I mean, it certainly has given impetus for discussions with our sales force and these large fleets. You know, I would imagine if you kind of roll back and, you know, that whole point I was talking about with Cummins and 400 fleet, you know, that really surprised me. I knew that there was 30 or 40 fleets that had, you know, some of the largest fleets had indicated to Cummins that they wanted to be involved in the testing of that new engine. 400 was strong, and I think that surprised everybody. I'm sure that has, you know, that all happened as this fly up in oil prices happened, and diesel prices went up substantially, and also the availability of RNG. I kind of think it's a twofer. It's certainly our sales force has had more discussions about the fuel pricing. You know, we can offer a very compelling fuel price right now, big discount to the current diesel. You know, look, there has been a reduction in the price of diesel kind of generally, you know, the West Coast is more expensive. We still see bad pricing for diesel out here in California at $6.50. Now it's come off, and the nation is still above $5. It's still very significant. We still can offer very compelling price for RNG for our customers. We're having those discussions, and I think that's important. Not only do we have a fuel price advantage compared to diesel, I mean, we have the cleanest fuel on the planet. It's a compelling market, you know. Being able to go to market with those two things is really strong. Okay. Okay, great. On the supports for the RNG market, how do you see that kinda coming through, and what's sort of the impact to you? Is it really on the production, supporting the production side, or do you see sort of help on the fuel downstream as well? You know, Rob, I'm sorry, I sort of missed the first part of your question. Yeah. Really, do you see additional R&D or dairy RNG support in this tax bill, and how does that impact you? Well, look, there's a bunch of different placeholders in there. I mean, I say placeholders. I mean, I think we're all trying to get our arms around. There's different things on kind of Investment Tax Credit kind of things. We just dropped our call, so it's just you. Can you hear me, Rob? Yep. Yep, I can hear you. Okay, good, 'cause I was just told that we dropped some of the others here dropped their call. There are some things on the Investment Tax Credit side, which we're trying to get our arms around and see exactly how that would play. That would be compelling. There's grant programs for equipment. And there's some credits, it looks like, you know, almost akin to the Alternative Fuel Tax Credit that looks like, depending on the carbon nature of the fuel that's for transportation that would be involved. You know, I don't wanna go too far here and get too speculative, but it looks like you cobble some of that together, there's a lot of support in there. A little bit more than I thought at first blush. Of course, there's the Alternative Fuel Tax Credit. I think you know, I guess, Rob, the way I look at it is, of course, we appreciate the fact that we have support and that we have bipartisan support for some of these things. I've never felt like you've heard me say over the years, I've never felt like we had to have any of this. You know, right now, RNG is compelling, you know, with the credits as it is, and these things just sweeten it. You know, it does cost more to bring RNG to, you know, to capture methane and put it in a pipeline and deliver it. It does cost more than fossil natural gas, and it's a lot cleaner, too, and it's a lot less carbon. We certainly appreciate it. We appreciate that there's a bunch of things like that in this bill. I'm sure it'll help drive demand on the supply side, you know. I think, you know, the RNG credits that might, let's call it, incentives that might be in this bill will help on the demand side as well. It's probably, you know, pretty good for us. Okay. Backhand turnover. Thank you, Andrew. I'll turn it over. Okay. Thanks, Rob. Thank you. Next, we'll hear from Manav Gupta with Credit Suisse. The first question I had was more on the CARB side. Looks like things are moving in the positive direction. Gavin Newsom actually sent a letter telling CARB they need to raise the targets for carbon reduction, and there are others out there who are basically saying, "Look, if CARB does follow through with some of that, there could be some support for LCFS prices." That's part one. For some reason, I don't know why this debate keeps coming back where people say, "Well, RNG will not be part of the LCFS credits," though CARB has been very supportive of the entire RNG proposal and even dairy farm RNG. If you could talk a little bit about what's going on at CARB and how you strongly feel that dairy farm RNG will remain a part of LCFS credits. Yeah. Manav, thanks for bringing that up. I mean, this is one of these things that just dies a very difficult death. I feel, there's an echo chamber going on here, based on the environmental justice community's, you know, desire that RNG, dairy RNG not be in the deal. I think we've had now several public workshops. We've had a scoping plan. I don't know how much more clear, ARB, the California Air Resources Board, can be about the fact that they see that, dairy RNG, you know, is an important component to the plan. I, you know, I keep addressing it. There's some in the analyst community that wanna keep talking about it. I don't know where it's coming from, but I. It looks to me like, and as you mentioned, the governor just has weighed in again. I think that when you look at all of the information that's recent on this, the draft scoping, this recent comments from the governor, the workshops, ARB's recognized that it's working and that it's likely that they're going to increase the compliance curves. I think all of this is gonna end up being supportive and constructive to low carbon fuel pricing in the future. Perfect. My second and quick follow-up is, I know you- Right. I don't want to speculate on the bill. But there is a 30% Investment Tax Credit in there specifically which could help you. This was not earlier available for biogas or RNG. Like, if this does go through, it means you can achieve a lot more with the same amount of capital because essentially you'll be getting paid back 30% of the money you spend through direct pay. Can you talk a little bit about how, if this does go through, that helps CLNE do more with the same amount of money? Manav, you're exactly right. I've been trying to be, you know, careful on it, not counting the chickens before they're hatched. You know, that is a very compelling in this bill, right? There's a tax credit that's a refundable tax credit, and yes, it would be significant for us because if you look at the years where that ITC would be involved, it matches up perfectly where we're spending several hundred million of dollars, right? You got it. It would reduce the capital, in effect, the capital that we'd be spending, and it would allow us to do more for less amount of money. It's powerful. Thank you so much. Thank you. Thank you so much for taking my question, sir. Yeah. You bet, bud. Operator, are there other questions? Yes, we do have a question from Matthew Blair with TPH&Co. Hey, good afternoon. I was hoping to understand a little bit more on the margin increase to $0.28 per gal this quarter from $0.25 last quarter. You know, it looks like your RNG share moved up to 47% versus 41%. It also looks like your COGS per gallon was actually exactly flat quarter over quarter, even though, you know, natural gas prices moved up quite a bit. I was hoping you could just kinda help us understand the dynamics there. Are there any hedges in place that helped protect you from rising natural gas prices in Q2? Yeah, Matthew. No. This is Bob. No, there's no hedging in there. I don't know exactly what you're looking at with the flat cost because our cost. Are you referring to the Q1? Right. Yeah. Right? Right. Yeah. Okay. Yeah, they were up a little bit from that, but, because we saw a fairly high commodity cost, you know, in the Q1 too, right? I mean, that was already a little bit baked into the Q1. Yeah. We didn't see a big. What we did see was, you know, kinda retail prices even moving further north. That's where we, you know, where just the economics of the underlying commodity kinda where we shine when that's going on 'cause there was not a big movement. when you say retail prices? In the cost, yeah. Are you okay? Are you referring to Well, I'm kinda benchmarking us. Just like diesel? I'm benchmarking us. Yes. Yeah. I mean, just to the environment out there, you know, I mean, that's our main. That's kinda the main competition and that's just the dynamics of, you know, how pricing moves, you know, natural gas versus, say, oil, right? I mean, I don't have a huge refined product going on, and so there's a bit, a leverage there on my commodity versus when pricing moves. You know? As the oil has been expensive and therefore diesel, then you're just at an overall higher price environment, but my commodity doesn't necessarily have to move in parallel to that. If I'm looking at this correctly, it looks like your overall station count actually went down by about 20 stations in Q2 versus Q1. Was that a result of- No of, like, high grading or? No, that's a result of how those, how they got reported. I think that the one that you're referring to has Canada in it. One of them has Canada in it, and the other one doesn't have it in it. Like, the recent one, we made a clearer indication of kinda US and Canada, and the prior one is combined. Okay. Thank you very much. Yeah. You're welcome. We'll now hear from Craig Shere with Tuohy Brothers. Hi, good afternoon, and congratulations on a good quarter. Thank you. Thanks, Craig. I guess what I wanna get at, because there's a lot of questions about LCFS and everything, but and tell me if I'm thinking about this all wrong or not, but it seems ultra-low CI fuel in quantity helps drive down LCFS. Displacing the landfill gas that's slightly positive CI with the ultra-low dairy, even if it's from third parties, adds to your margin. Right ... for whatever, I mean, who knows, like, another year and a half or whatever until new CARB targets kick in, if we see a broader market increase in the ultra-low dairy, you know, perhaps at a level or a rate that was quicker than you thought, that could be margin positive to you even as LCFS remains a little challenged for you too. Am I saying that right? Yeah. I mean, on the same volume count, if it's dairy versus landfill, correct. We would still- Yeah See a margin impact, a positive margin. That's correct. I'm not sure you wanna speak specifically to this, but maybe general color. Thoughts on as you had 50 million RNG gal in the quarter on the comparative mix of dairy in that and whether the pace of what is flowing through your nozzles is, you know, that the aggregate CI score is getting lower quicker than perhaps you thought? Yeah. I would say, on that, Craig, that we're kind of on plan with that. I mean, it's we're kind of on plan with that. I mean, we were with the CI and then the amount of low CI, it is certainly increasing. As a percentage of our, as a percentage of the, you know, the kind of the LCFS volumes, it's going up. We were planning that to go up. I can tell you that, you know, within the portfolio of the RNG that we deliver, that CI score is, you know, getting lower, and it's sub zero. sub-zero on average nationwide or just for California or nationwide? For all of the RNG. Just the RNG volumes. If you threw in all volumes, then you would start to go, you'd probably be a little bit north or, you know, maybe you'd be closer to zero or something. You know, I'm being very focused on the portfolio of RNG gallons and which, as we've said, is predominantly landfill at this moment. It's moving to low CI. Craig, your instinct, Craig, is right. It moves fast down, right? Because it's so low. Yeah. It does. It moved fast. I mean, you know, we're seeing it's moved fast even from Q1 to Q2 within our portfolio. Okay. That's what I was trying to get at a little bit. Again, what's driving the soft LCFS is also driving for your downstream higher margin. It's a natural hedge. You know, Craig, I think. I caught that on the neckline. Well, I think, Craig, if I understand, I kinda understand what you're saying is you're kind of cautionary saying, well, you know, could you end up being, you know. In effect, you have a little bit higher margin, but because you're gonna be generating more dairy in California, could you, in effect, be creating so many, you know, putting a damper on the, on the. I think, you know, in general that's right. I think, and I'm not smart enough yet, and there's probably people on the call that can model it quicker. But the difference of going from 20% compliance curve to 30% is kind of where I think you're gonna be headed. That's significant. So you're gonna need a lot of RNG. I don't know that you're gonna. You know, it's gonna. The speed is gonna pick up, you know, the reduction here. The compliance curve is steepening, right, over a shorter period of time, and it's gonna really. I think it's gonna end up putting a great deal of pressure on the pricing. I don't know how it offsets. I hear where you're coming from, but you see what I mean? I think that's a big difference between 20 and 30 in a 5-year period. Agreed. I appreciate the thought. Yeah. Next, we have a question from Pavel Molchanov with Raymond James. Thanks for taking the question. One of the other interesting provisions of the Inflation Reduction Act is a first-ever tax credit for green hydrogen. You've, you know, taken kind of a mixed perspective on hydrogen and transport historically. If this thing were to pass, would you be open to perhaps introducing a hydrogen fueling into any of your existing stations? You know, Pavel, as you know, we happen to think that RNG is maybe the best feedstock for that in the first place, right? We've long supported that. As you know, we have a hydrogen fueling station, and we're finishing one right now, and we just bid on two more. You know, but I really see this as. It's on the demand side, right? You gotta have vehicles. You gotta have better technology in terms of. I think this will all help on the hydrogen. You know, the last thing that anybody wants us to do is to start building speculative $25 million hydrogen fueling stations for no demand. You know, I'm sure this is gonna help in the market, but we've got, you know, quite a ways to go on the commercial viability of this, of green hydrogen. Yeah, we're open. We do it right now. We're probably a leader in it, you know, in many ways for transportation as it relates to our customers who are using all federal dollars, by the way. There isn't any private fleets that I know of in heavy duty in our sectors that can afford to do it. But where it makes sense and where folks are using federally funded projects, we're in the mix. To the extent that there's the demand or there's vehicles, and maybe this legislation will help push that forward, which I think goes out quite a few years, brings it forward, we'll be ready. We have the customers. We have the locations. Our stations can make themselves available to hydrogen. But we need a little help from the industry in terms of the reforming and cost. Cost is still super high on hydrogen. Let me ask a housekeeping question. Depreciation expense on the income statement was less than $11 million the last two quarters. You're guiding to $55 million for the year. It looks like it's gonna step up to, like, $16 million or $17 million per quarter. First of all, is that math accurate? If it is, what's the reason why? Yeah. Thanks, Pavel. I'm anticipating that we'll accelerate the depreciation on a certain number of sites that we will be relocating. You know, some of those are tied into the pilot locations where they have some remodeling, repurposing needs. We've kinda looked at that together to say, "Well, okay, if this isn't opened or volumes there, then, you know, together, okay, we'll move that equipment." I've put in an estimate of about $8 million or so for that kind of one-off event, if you will. That's not reflective of a, you know, of a new run rate. Okay. Understood. For next year, we should not assume these extra expenses. No. -continuing. Correct. We should still, I mean, there'll be a little bit as we bring on the Amazon stations, right? There will be some of that to go the other way, so it'll take it up. I don't know that I would say we're gonna be at this You know, $11 million a quarter, which would put us at $44 million, you know. I think as the stations come on, you could get another $4 million or $5 million a year. I think you'd be in that $50 million range for depreciation on kind of a normalized rate. Okay. Very helpful. Thank you for that. Yeah. Our final question today will come from Greg Wasikowski with Webber Research. Yeah. Hey, good afternoon, guys. How are you doing? Good. Good. Good. Thanks for squeezing me in here. Good ones are gone, so I'll just, I'll keep it to one. On the 15 L engine, when talking to customers about that, do you get a sense that there's a portion of fleet owners who maybe in the absence of the 15 L engine maybe would have already made the transition over to natural gas or would be making it imminently, but since the 15 L is kinda on the horizon in the next couple of years, they're just kinda hanging on and waiting for that? Oh, you know, Greg, it's a good question. I've been through this a long time with different versions, and you know, you're always a little worried about a chilling effect, right? Well, why would you buy something? I'm sure there's a little bit of that. I also, though, know that a lot of fleets in order to have sort of the universality and be able to move, you know, these big national fleets that wanna have the flexibility to put trucks, you know, kinda anywhere and in different, you know, hills and different terrains, operating characteristics. A lot of them wanted the 15 L. Years ago, I mean, I'll just use it, I'm not picking on them, I just know, and they were very candid about it. J.B. Hunt long thought that the 11.9 just wasn't exactly what they wanted. They felt like it really needed to be a 15 L. Frankly, you know, when you look at the market share of 75% or 80% of the big over-the-road guys, you know, purchase 15 L, that's what they want, and that's what Cummins understands. You know, could there be a little bit of people that, you know, decided, well, they don't want to go in or they're gonna have, you know, wait a year? I'm sure there will be some of that. On the other hand, the 11.9 is very well suited for day cab use. A lot of the regional, what we see in natural gas, RNG, a lot of it is, you know, all these Amazons are 11.9s, and because it's a day cab application, and they don't load out all those trucks, even the over-the-road trucks. It's plenty for them. I think you'll still see a pretty good demand on the 11.9 as you wait for the 15 L. Yeah, that's a good point on the Amazon trucks. All right. Thanks, Andrew. I'll leave it there. Okay. Thanks, Greg. That will conclude today's question and answer session. I'll now turn the conference over to Mr. Andrew Littlefair for any additional closing remarks. Operator, thank you. Thank you, everyone, for joining us today, and we look forward to updating you on our next quarter. Have a good day. Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.