Supply/Demand Balance
Q: What is your view on current supply/demand balance?
A: Gary Simmons noted that U.S. gasoline demand is flat year-over-year, while diesel demand is down slightly. Increased refinery runs in the Middle East and sluggish economic activity led to inventory restocking and weaker margins. However, he believes the market has found a bottom, and long-term fundamentals are bullish due to limited new refining capacity and continued demand growth.

Capital Returns
Q: How will you approach buybacks and capital returns?
A: Homer Bhullar stated they have funded over $17 billion in shareholder returns since 2020 without leveraging the balance sheet. With a payout ratio of 87% for the second quarter and 80% year-to-date, they plan to continue leaning into buybacks, expecting any excess free cash flow to go towards share buybacks.

Margin Outlook
Q: Has your outlook on refining margins changed?
A: Lane Riggs affirmed their belief in a higher margin environment going forward. Despite recent margin weaknesses, he noted that refineries are making cuts at historically mid-cycle economic environments, reinforcing their view of higher margins for capital and higher mid-cycle margins in the future.

Market Share Growth
Q: How have you grown market share in diesel sales?
A: Gary Simmons attributed the 10% year-over-year increase in their diesel sales to their wholesale team's efforts and refinery rationalizations during COVID, which allowed them to expand market share.

West Coast Dynamics
Q: What's happening with West Coast operations and TMX impact?
A: Lane Riggs explained that the West Coast is their highest-cost region, with margins impacted by higher imports and softer demand. Gary Simmons added that the impact of the TMX pipeline is expected in the third quarter, reducing crude costs by $1.50 to $2 per barrel relative to Brent.

Heavy Sour Differentials
Q: What is your outlook for Gulf Coast heavy sour differentials?
A: Gary Simmons expects wider heavy sour differentials in the longer term as more OPEC production returns to the market, potentially late this year or early next year, creating meaningful and sustainable wider differentials.

Renewable Diesel to SAF Transition
Q: What uplift do you expect from shifting RD to SAF?
A: Eric Fisher indicated that Sustainable Aviation Fuel (SAF) offers a premium over Renewable Diesel (RD), providing stronger margins. While specifics weren't disclosed, he expressed confidence that they will meet their project economics and that the outlook is positive.

Policy Impact
Q: How might policy changes affect your operations?
A: Richard Walsh discussed that the removal of Chevron deference may lead to less agency overreach and more consistent judicial review, impacting interpretations on mandates like vehicle electrification. He anticipates these changes could happen more quickly than traditionally expected.

Capture Rates
Q: Have structural changes affected your capture rates?
A: Greg Bram noted that lower Q2 capture rates were due to seasonal RVP changes, strong crude market backwardation impacting acquisition costs by $0.80 to $0.90 per barrel, weaker co-product prices, and fewer opportunity feedstocks. He expects these factors to improve in future periods.

Ethanol Margins
Q: How sustainable is the uptick in ethanol margins?
A: Eric Fisher is positive about the ethanol outlook into next year, citing cheap natural gas and corn prices due to large carryout inventories. Regarding the Summit carbon capture project, while not their own, they view carbon sequestration as supportive for ethanol and plan to participate once operational.