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spk00: Good morning and thank you for standing by. Welcome to the Q3 2021 New Star Energy LP Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. I would now like to turn the conference over to your host, Pam Smith. Vice President of Investor Relations. Please go ahead.
spk06: Good morning and welcome to today's call. On the call today are NuSTAR Energy LP's President and CEO, Brad Barron, and our Executive Vice President and CFO, Tom Schoaf, along with other members of our management team. Before we get started, we would like to remind you that during the course of this call, NuSTAR management will make statements about our current views concerning the future performance of NuSTAR that are forward-looking statements. These statements are subject to the various risks, uncertainties, and assumptions described in our filings with the Securities and Exchange Commission. Actual results may differ materially from those described in the forward-looking statements. During the course of this call, we will also refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered as alternatives to GAAP measures. Reconciliations of certain of these non-GAAP financial measures to US GAAP may be found in our earnings press release with additional reconciliations located on the financials page of the investor section of our website at NewStarEnergy.com. With that, I will turn the call over to Brad.
spk03: Good morning. Thank you all for taking the time to join us today. We have a lot of positive news for you today on our successful closing on the sale of the Eastern US Terminal Package, our solid results for the third quarter, and also our expectations for full year 2021. Starting with the sale, in October, we announced that we closed on our $250 million sale of Eastern US terminal facilities to Sunoco LP. As promised, we're deploying those sales proceeds to lower our leverage, and we now expect our year-end debt to EBITDA metric to be below four times. We also continue to expect to self-fund all of our spending from our internally generated cash flows in 2021 and beyond. With the sale, we've taken another important step in executing on our plan to optimize our business and strengthen our balance sheet in order to focus 100% of our resources on our core asset footprint, including our refined products assets, our crude assets, which include our Permian and Corpus Christi systems and St. James facility, our West Coast renewable logistics network, and our ammonia system. Now to turn to some highlights of our third quarter results. This quarter, we once again delivered solid results under challenging conditions and demonstrated the strength and resilience of our assets as we generated adjusted EBITDA for the third quarter comparable to 3Q 2020 and up 5% over pre-pandemic 3Q 2019, as well as DCF up 10% over 3Q 2020 adjusted DCF. Starting with refined products, in the third quarter, we continued to see solid, steady refined product demand in the markets we serve. maintaining a strong 105% pre-pandemic demand on pace with second quarter of this year. Our third quarter refined product throughputs were up 16% over 3Q 2020 and up 8% over 3Q 2019. We continue to expect our refined product systems to perform at or above 100% of our pre-pandemic run rate for the remainder of 2021. Steady recovery in refined product demand has also continued to stoke rebound in U.S. refiners' demand for crude, which has contributed to higher throughputs for our crude pipelines in the third quarter, up 11% over 2Q21 and 3Q2020. Rebounding crude demand in the U.S. and abroad has in turn driven higher than forecasted global crude prices, which has lifted U.S. shale production primarily in the Permian Basin. Thanks once again to our Permian Crude Systems Core of the Core Premier Location, lowest producer costs, and highest product quality, we've seen strong volume improvement there. We're happy to report that in the third quarter, our Permian systems volumes grew to a record-breaking average of 502,000 barrels per day. That's up 12% over 2Q of this year, up 19% over 3Q last year, and up 11% over the peak pre-COVID quarterly average, which occurred in the first quarter of 2020. In October, our Permian volumes continued to rebound ahead of the rest of the Permian Basin, an increase to an average of 512,000 barrels a day. And we're now forecasting we will exit 2021 at around 514,000 barrels per day, which is up from the 500,000 barrels a day we forecasted in the second quarter. Looking back to the beginning of this year, we're even more encouraged by the fact that our Permian system is up an impressive 9% from the 470,000 barrels per day we expected back in February. We still forecast Eagle Ford and WTI volumes in our Corpus Christi crude system at our MBC levels for the rest of the year, but we've seen modest incremental improvement in recent months in WTI long-haul barrels from the Permian, which we hope is the early indication of future improvement with rising global demand. Improving global demand combined with sustained healthy U.S. shale production growth should increase U.S. crude exports over time, which should also improve volumes on our Corpus Christi crude system, as well as at our St. James Terminal. where we also expect to begin benefiting from inbound barrels from the reversal of cap line starting in 2022. Turning to our renewable fuel system on the West Coast, as we've discussed in prior quarters, through our West Coast Renewable Fuels Network, New Star plays an integral role in facilitating the low-carbon renewable fuels that significantly reduce emissions from transportation. New Star currently handles an impressive share of California's renewable fuels. According to the latest available data from the state of California for the second quarter of 2021, New Star handled about 7% of California's total biodiesel volumes, over 20% of California's ethanol, and close to 30% of the state's renewable diesel volumes. This data doesn't yet include the growing proportion of renewable jet that we handle in the region, which is substantial. We expect New Star's leadership in the low-carbon fuel transition in California and across the West Coast to continue to grow as we complete our planned tank conversion projects there. And we plan to continue to develop projects to expand our renewable fuel logistics services as low carbon fuel legislative mandates proliferate and customer demand increases. Turning to ammonia, throughput on our ammonia system was up 39% compared to the same quarter last year. As we touched on last quarter, we're working to increase our systems utilization even more through low spend, high return projects to connect and extend our system to new and current customers. These projects would supply ammonia for current applications like the fertilizer that augments U.S. food production as well as corn for ethanol production across the Midwest. And we're looking to ammonia's future as well. Green ammonia for existing applications and for exciting opportunities like renewable electricity generation and safe, efficient transportation for hydrogen to power fuel cell vehicles. We look forward to being able to provide more details on these projects to increase our ammonia systems utilization and profitability in the short and longer term at multiple locations on our system, which spans 2,000 miles from Louisiana up to and across the Mid-Continent. I'm proud of the part that NuSTAR plays today in transporting traditional ammonia to support our nation's food and ethanol production. We're also excited about NuSTAR's developing role in the future of ammonia and hydrogen. So we're pleased with the strong results that our business generated in the third quarter as the world has continued to bounce back from the lingering impact of the pandemic. We're expecting our full year 2021 results to demonstrate, once again, the strength and resilience of our assets, our employees, and our business. With that, I'll turn it over to Tom to give you more details on New Star's results and outlook.
spk05: Thanks, Brad, and good morning, everyone. Before I get started, I want to note that our third quarter 2021 results include a $130 million non-cash charge related to the sale of our eastern U.S. terminal operations. and a $59 million non-cash impairment charge on a portion of our Houston 12-inch pipeline, as well as a $9 million gain from our insurance proceeds to rebuild tanks at our Selby terminal. And the results we are presenting today are adjusted to exclude those items. As Brad mentioned, our third quarter 2021 results demonstrate the strength of our assets, even as global demand continues to rebound from 2020 pandemic lows. Our DCF available to common limited partners was 92 million in the third quarter, up 8 million, or 10%, compared to the third quarter 2020's adjusted DCF of 84 million. And our distribution coverage ratio to the common limited partners was 2.1 times. This quarter, we generated adjusted EBITDA of 177 million, which is comparable to the third quarter 2020 results. Turning now to our segments, Third quarter 2021 adjusted EBITDA in our pipeline segment was 145 million, up 16 million or 12% compared to 129 million in the third quarter of 2020. We saw sustained solid rebound in our pipeline segment throughput volumes compared to 2Q 2021, 3Q 2020, and pre-COVID 3Q 2019. Our third quarter 2021 adjusted EBITDA in our storage segment was 59 million, down 15 million compared to EBITDA of 74 million in the third quarter of 2020, driven by the roll-off of 2020 Contango contracts at Point Tupper and Piney Point, as well as from customer transitions, tank maintenance and preparation for Hurricane Ida, mainly at St. James and Point Tupper. At the end of the third quarter of 2021, our debt balance was $3.4 billion, and we had over $900 million available on our billion-dollar revolving credit facility. We ended the third quarter with debt-to-EBITDA ratio of 4.1 times, which we expect to improve through the end of the year. Turning to our full-year 2021 projections, taking into account the eastern U.S. terminal sale, we expect NewSTAR's 2021 adjusted EBITDA to be in the range of $685 to $715 million, slightly higher than the previous expectations, And as Brad noted, we continue to expect to self-fund all of our 2021 spending from internally generated cash flows. Moving to strategic capital, we plan to spend $140 to $160 million in 2021. Of our total 2021 strategic spending, approximately $35 million is for Permian system and around $50 million is for our West Coast Renewable Fuels Network. In addition, We continue to expect to spend 35 to 45 million on reliability capital spending in 2021. Based on these projections, we expect our debt to EBITDA ratio at the end of 2021 to be below four times. And we will be achieving these solid results while generating internal cash flows to meet all of our spending needs. And with that, I'll turn the call back over to Brad.
spk03: Thanks, Tom. The recovery in the global economy, along with strong energy prices, has been encouraging signs for 2022. Once again, this past quarter, we've continued to deliver on our commitment to all of our stakeholders. We've strengthened our balance sheet. We're generating strong results. We're developing and executing on low multiple organic growth projects for both traditional and renewable fuels across our footprint. We're funding all of our spending from our internally generated cash flows. and we're operating sustainably for protecting our employees, our communities, and the environment. You will see in our recently posted sustainability report, which augments the presentation we released in July, that our record demonstrates our commitment to sustainability. We're proud of the work we do, and we're committed to doing it well. Through our employees' hard work, New Start plays a crucial role in safely and reliably moving the energy that powers the day-to-day lives of millions of people across our footprint here in the U.S. and abroad. Traditional sources of energy, like petroleum products we transport and store, will continue to be an important part of our energy supply, both in the U.S. and across the globe for many decades to come. At the same time, we're working to assure new stars instrumental in emerging energy opportunities that lower emissions and generate solid returns, notably our West Coast Renewable Fuels Network and new projects and development for our ammonia systems. By taking an all-of-the-above approach to our project development and staying committed to doing the right thing for our unit holders, our employees, our communities, and our planet, we are building a resilient, financially flexible business positioned to build value now and in the future. And with that, I'll open it up for Q&A.
spk00: Thank you. And as a reminder, if you have a question at this time, please press the star, then the number one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. We'll pause for a moment to compile the Q&A roster. Your first question comes from the line of Teresa Chen from Barclays. Your line is open.
spk07: Hi, everyone. Good to hear all the color on the fundamental strength and tailwinds heading into the end of the year next. I'd first like to start on what you're seeing in the Permian as far as taking your exit rate higher. And just given the current commodity backdrop, what are you hearing on the ground from your producers as far as activity and plans going forward?
spk04: So, Teresa, this is Danny Oliver. You know, we continue to see the growth driven by the privates. The publics are still being very disciplined in their activities. capital spend, and so far that's what they're indicating as we move into 22 as well, even here in an $80 crude environment. So we expect to see more of that, but the increase in our exit rate is really all due to the privates just rolling some projects up into the current year. Got it.
spk07: And then on the refined product side, given the significant strength you've seen across your assets, even relative to pre-pandemic levels, do you think this is in part just related to pent-up demand that's going to wane over time, as in if people aren't willing to get on the plane, they'd rather drive, but in 2022 and beyond, maybe it normalizes? As far as the 2022 outlook and such, how do you think this trends?
spk04: I think we'll continue to see, you know, 100 plus percent of pre-pandemic levels. You know, most of these markets grew about, let's call it 1% or so a year. And then we had a year where, you know, in 2020, where because of the pandemic, obviously demand fell off. And I think we're just catching up a little bit on, you know, a couple of years of 1 or so percent growth.
spk03: The thing I would also point out is where our assets sit is a real advantage for us. We don't do a lot of refined products on the coast. Our refined products pipeline systems are up through the Midwest, and so that demand is going to remain steady. I do think you have a point. I think people are going to drive more than they're going to fly. They're going to drive if they possibly can. Flying is difficult right now, and I would expect that to continue throughout 2022. I can't say how far beyond that it goes, but I see – strong results for our prime product systems going forward.
spk07: Got it. And lastly, if I may, on your West Coast biofuel expansion, clearly you've been an active participant for a number of years now in biofuels handling and general energy transition themes. And I was wondering just, you know, in terms of the next steps, How much more CapEx or project spending will be necessary from here? Because I believe initially there was some money to be spent to convert the high-sulfur fuel oil tanks, and now you're converting the ULSD tanks. So how should we think about operating leverage across that system as time goes on?
spk04: So the capital spend on the West Coast specifically will start to wane after this year. This is probably our biggest year of capital spend. Once we've got the projects behind us to dedicate some storage to the renewables and be able to get that to the truck rack and keep it segregated, the spend going forward to swing tanks will be very minimal.
spk07: Thank you.
spk04: Thank you. Thank you.
spk00: And I'm showing no further questions at this time. I would like to turn it back to Pam Schmidt for any further comments.
spk06: All right. Thank you very much, Patricia. We would once again like to thank everyone for joining us on the call today. If anyone has any additional questions, please feel free to contact New Star Investor Relations. Thanks again and have a great day.
spk00: And this concludes today's conference call. Thank you all for joining. You may now disconnect. Thank you. Thank you. you Thank you. music music
spk01: Thank you.
spk00: Good morning and thank you for standing by. Welcome to the Q3 2021 New Star Energy LP Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. I would now like to turn the conference over to your host, Pam Smith. Vice President of Investor Relations. Please go ahead.
spk06: Good morning and welcome to today's call. On the call today are NuSTAR Energy LP's President and CEO, Brad Barron, and our Executive Vice President and CFO, Tom Schoaf, along with other members of our management team. Before we get started, we would like to remind you that during the course of this call, NuSTAR management will make statements about our current views concerning the future performance of NuSTAR that are forward-looking statements. These statements are subject to the various risks, uncertainties, and assumptions described in our filings with the Securities and Exchange Commission. Actual results may differ materially from those described in the forward-looking statements. During the course of this call, we will also refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered as alternatives to GAAP measures. Reconciliations of certain of these non-GAAP financial measures to US GAAP may be found in our earnings press release with additional reconciliations located on the financials page of the investor section of our website at NewStarEnergy.com. With that, I will turn the call over to Brad.
spk03: Good morning. Thank you all for taking the time to join us today. We have a lot of positive news for you today on our successful closing on the sale of the Eastern US Terminal Package, our solid results for the third quarter, and also our expectations for full year 2021. Starting with the sale, in October, we announced that we closed on our $250 million sale of the Eastern US terminal facilities to Sunoco LP. As promised, we're deploying those sales proceeds to lower our leverage, and we now expect our year-end debt to EBITDA metric to be below four times. We also continue to expect to self-fund all of our spending from our internally generated cash flows in 2021 and beyond. With the sale, we've taken another important step in executing on our plan to optimize our business and strengthen our balance sheet in order to focus 100% of our resources on our core asset footprint, including our refined products assets, our crude assets, which include our Permian and Corpus Christi systems and St. James facility, our West Coast Renewable Logistics Network, and our ammonia system. Now to turn to some highlights of our third quarter results. This quarter, we once again delivered solid results under challenging conditions and demonstrated the strength and resilience of our assets as we generated adjusted EBITDA for the third quarter comparable to 3Q 2020 and up 5% over pre-pandemic 3Q 2019, as well as DCF up 10% over 3Q 2020 adjusted DCF. Starting with refined products, in the third quarter, we continued to see solid, steady refined product demand in the markets we serve. maintaining a strong 105% pre-pandemic demand on pace with second quarter of this year. Our third quarter refined product throughputs were up 16% over 3Q 2020 and up 8% over 3Q 2019. We continue to expect our refined product systems to perform at or above 100% of our pre-pandemic run rate for the remainder of 2021. Steady recovery in refined product demand has also continued to stoke rebound in U.S. refiners' demand for crude, which has contributed to higher throughputs for our crude pipelines in the third quarter, up 11% over 2Q21 and 3Q2020. Rebounding crude demand in the U.S. and abroad has in turn driven higher than forecasted global crude prices, which has lifted U.S. shale production primarily in the Permian Basin. Thanks once again to our Permian Crude Systems Core of the Core Premier Location, lowest producer costs, and highest product quality, we've seen strong volume improvement there. We're happy to report that in the third quarter, our Permian systems volumes grew to a record-breaking average of 502,000 barrels per day. That's up 12% over 2Q of this year, up 19% over 3Q last year, and up 11% over the peak pre-COVID quarterly average, which occurred in the first quarter of 2020. In October, our Permian volumes continued to rebound ahead of the rest of the Permian Basin, an increase to an average of 512,000 barrels a day. We're now forecasting we will exit 2021 at around 514,000 barrels per day, which is up from the 500,000 barrels a day we forecasted in the second quarter. Looking back to the beginning of this year, we're even more encouraged by the fact that our Permian system is up an impressive 9% from the 470,000 barrels per day we expected back in February. We still forecast Eagle Ford and WTI volumes in our Corpus Christi crude system at our MBC levels for the rest of the year, but we've seen modest incremental improvement in recent months in WTI long-haul barrels from the Permian, which we hope is the early indication of future improvement with rising global demand. Improving global demand combined with sustained healthy U.S. shale production growth should increase U.S. crude exports over time, which should also improve volumes on our Corpus Christi crude system, as well as at our St. James Terminal. where we also expect to begin benefiting from inbound barrels from the reversal of cap line starting in 2022. Turning to our renewable fuel system on the West Coast, as we've discussed in prior quarters, through our West Coast Renewable Fuels Network, New Star plays an integral role in facilitating the low-carbon renewable fuels that significantly reduce emissions from transportation. New Star currently handles an impressive share of California's renewable fuels. According to the latest available data from the state of California for the second quarter of 2021, NuSTAR handled about 7% of California's total biodiesel volumes, over 20% of California's ethanol, and close to 30% of the state's renewable diesel volumes. This data doesn't yet include the growing proportion of renewable jet that we handle in the region, which is substantial. We expect NuSTAR's leadership in the low-carbon fuel transition in California and across the West Coast to continue to grow as we complete our planned tank conversion projects there. And we plan to continue to develop projects to expand our renewable fuel logistics services as low carbon fuel legislative mandates proliferate and customer demand increases. Turning to ammonia, throughput on our ammonia system was up 39% compared to the same quarter last year. As we touched on last quarter, we're working to increase our systems utilization even more through low spend, high return projects to connect and extend our system to new and current customers. These projects would supply ammonia for current applications like the fertilizer that augments U.S. food production as well as corn for ethanol production across the Midwest. And we're looking to ammonia's future as well. Green ammonia for existing applications and for exciting opportunities like renewable electricity generation and safe, efficient transportation for hydrogen to power fuel cell vehicles. We look forward to being able to provide more details on these projects to increase our ammonia systems utilization and profitability in the short and longer term at multiple locations on our system, which spans 2,000 miles from Louisiana up to and across the mid-continent. I'm proud of the part that NuSTAR plays today in transporting traditional ammonia to support our nation's food and ethanol production. We're also excited about NuSTAR's developing role in the future of ammonia and hydrogen. So we're pleased with the strong results that our business generated in the third quarter as the world has continued to bounce back from the lingering impact of the pandemic. We're expecting our full year 2021 results to demonstrate, once again, the strength and resilience of our assets, our employees, and our business. With that, I'll turn it over to Tom to give you more details on New Star's results and outlook.
spk05: Thanks, Brad, and good morning, everyone. Before I get started, I want to note that our third quarter 2021 results include a $130 million non-cash charge related to the sale of our eastern U.S. terminal operations. and a $59 million non-cash impairment charge on a portion of our Houston 12-inch pipeline, as well as a $9 million gain from our insurance proceeds to rebuild tanks at our Selby terminal. And the results we are presenting today are adjusted to exclude those items. As Brad mentioned, our third quarter 2021 results demonstrate the strength of our assets, even as global demand continues to rebound from 2020 pandemic lows. Our DCF available to common limited partners was 92 million in the third quarter, up 8 million, or 10%, compared to the third quarter 2020's adjusted DCF of 84 million. And our distribution coverage ratio to the common limited partners was 2.1 times. This quarter, we generated adjusted EBITDA of 177 million, which is comparable to the third quarter 2020 results. Turning now to our segments, Third quarter 2021 adjusted EBITDA in our pipeline segment was 145 million, up 16 million or 12% compared to 129 million in the third quarter of 2020. We saw sustained solid rebound in our pipeline segment throughput volumes compared to 2Q 2021, 3Q 2020, and pre-COVID 3Q 2019. Our third quarter 2021 adjusted EBITDA in our storage segment was 59 million, down 15 million compared to EBITDA of 74 million in the third quarter of 2020, driven by the roll-off of 2020 Contango contracts at Point Tupper and Piney Point, as well as from customer transitions, tank maintenance and preparation for Hurricane Ida, mainly at St. James and Point Tupper. At the end of the third quarter of 2021, our debt balance was $3.4 billion, and we had over $900 million available on our billion-dollar revolving credit facility. We ended the third quarter with debt-to-EBITDA ratio of 4.1 times, which we expect to improve through the end of the year. Turning to our full-year 2021 projections, taking into account the eastern U.S. terminal sale, we expect NewSTAR's 2021 adjusted EBITDA to be in the range of $685 million to $715 million, slightly higher than the previous expectations, And as Brad noted, we continue to expect to self-fund all of our 2021 spending from internally generated cash flows. Moving to strategic capital, we plan to spend $140 to $160 million in 2021. Of our total 2021 strategic spending, approximately $35 million is for Permian system and around $50 million is for our West Coast Renewable Fuels Network. In addition, We continue to expect to spend $35 to $45 million on reliability capital spending in 2021. Based on these projections, we expect our debt to EBITDA ratio at the end of 2021 to be below four times. And we will be achieving these solid results while generating internal cash flows to meet all of our spending needs. And with that, I'll turn the call back over to Brad.
spk03: Thanks, Tom. The recovery in the global economy, along with strong energy prices, has been encouraging signs for 2022. Once again, this past quarter, we've continued to deliver on our commitment to all of our stakeholders. We've strengthened our balance sheet. We're generating strong results. We're developing and executing on low multiple organic growth projects for both traditional and renewable fuels across our footprint. We're funding all of our spending from our internally generated cash flows. and we're operating sustainably for protecting our employees, our communities, and the environment. You will see in our recently posted sustainability report, which augments the presentation we released in July, that our record demonstrates our commitment to sustainability. We're proud of the work we do, and we're committed to doing it well. Through our employees' hard work, New Start plays a crucial role in safely and reliably moving the energy that powers the day-to-day lives of millions of people across our footprint here in the U.S. and abroad. Traditional sources of energy, like the petroleum products we transport and store, will continue to be an important part of our energy supply, both in the U.S. and across the globe for many decades to come. At the same time, we're working to assure new stars instrumental in emerging energy opportunities that lower emissions and generate solid returns, notably our West Coast Renewable Fuels Network and new projects in development for our ammonia systems. By taking an all of the above approach to our project development and staying committed to doing the right thing for our unit holders, our employees, our communities, and our planet, we are building a resilient, financially flexible business positioned to build value now and in the future. And with that, I'll open it up for Q&A.
spk00: Thank you. And as a reminder, if you have a question at this time, please press the star, then the number one on your touchstone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. We'll pause for a moment to compile the Q&A roster. Your first question comes from the line of Teresa Chen from Barclays. Your line is open.
spk07: Hi, everyone. Good to hear all the color on the fundamental strength and tailwinds heading into the end of the year next. I'd first like to start on what you're seeing in the Permian as far as taking your exit rate higher. And just given the current commodity backdrop, what are you hearing on the ground from your producers as far as activity and plans going forward?
spk04: So, Teresa, this is Danny Oliver. You know, we continue to see the growth driven by the privates. The publics are still being very disciplined in their activities. capital spend, and so far that's what they're indicating as we move into 22 as well, even here in an $80 crude environment. So we expect to see more of that, but the increase in our exit rate is really all due to the privates just rolling some projects up into the current year.
spk07: Got it. And then on the refined product side, given the significant strength you've seen across your assets, even relative to pre-pandemic levels, do you think this is in part just related to pent-up demand that's going to wane over time, as in if people aren't willing to get on the plane, they'd rather drive, but in 2022 and beyond, maybe it normalizes? As far as the 2022 outlook and such, how do you think this trends?
spk04: I think we'll continue to see, you know, 100 plus percent of pre-pandemic levels. You know, most of these markets grew about, let's call it 1% or so a year. And then we had a year where, you know, in 2020, where because of the pandemic, obviously demand fell off. And I think we're just catching up a little bit on, you know, a couple of years of 1 or so percent growth.
spk03: The thing I would also point out is where our assets sit is a real advantage for us. We don't do a lot of refined products on the coast. Our refined products pipeline systems are up through the Midwest, and so that demand is going to remain steady. I do think you have a point. I think people are going to drive more than they're going to fly. They're going to drive if they possibly can. Flying is difficult right now, and I would expect that to continue throughout 2022. I can't say how far beyond that it goes, but I see – strong results for our prime product systems going forward.
spk07: Got it. And lastly, if I may, on your West Coast biofuel expansion, clearly you've been an active participant for a number of years now in biofuels handling and general energy transition themes. And I was wondering just, you know, in terms of the next steps, How much more CapEx or project spending will be necessary from here? Because I believe initially there was some money to be spent to convert the high-sulfur fuel oil tanks, and now you're converting the ULSD tanks. So how should we think about operating leverage across that system as time goes on?
spk04: So the capital spend on the West Coast specifically will start to wane after this year. This is probably our biggest year of capital spend. Once we've got the projects behind us to dedicate some storage to the renewables and be able to get that to the truck rack and keep it segregated, the spend going forward to swing tanks will be very minimal.
spk07: Thank you.
spk04: Thank you. Thank you.
spk00: And I'm showing no further questions at this time. I would like to turn it back to Pam Schmidt for any further comments.
spk06: All right. Thank you very much, Patricia. We would once again like to thank everyone for joining us on the call today. If anyone has any additional questions, please feel free to contact New Star Investor Relations. Thanks again and have a great day.
spk00: And this concludes today's conference call. Thank you all for joining. You may now disconnect.
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