Kinder Morgan, Inc. (KMI) Earnings Call Transcript & Summary

Hey, good afternoon, everybody. Welcome to our Citi conference, our virtual conference. Super excited to have Steve Kean here from Kinder Morgan with us today to kind of go over the business model. Just for housekeeping, if you have any questions, you can just e-mail it to me. I'll ask Steve during the session. So that's how that will work. And with that, Steve, I mean I have a bunch of questions here already. But do you want to maybe kick it off with some opening remarks?

Yes, sure. I mean we went through -- not a lot to update from what we went through on our April call, but we do continue to see refined products volumes recover. We have seen some of what we talked a bit about on that call, which is some increased interest in what we do on the natural gas -- our natural gas business, increased value on storage, particularly in the aftermath of the winter storm. We've seen that manifest itself in some contract renewal rates to more attractive levels. We've made good progress on our Energy Transition Ventures group. I would have thought that we would have been spending all of our time here in these first few months since the formation in really just sort of sorting and calling mode. And certainly, there's been a lot of that going on, but they've actually got some live deals that they're working on already. So I think some good early progress that we're seeing there. And other than that, we continue to recover, along with everybody else, through the pandemic and the return to something more approaching normal. We continue to see growing demand in our export markets for natural gas and increased interest in biodiesel and other renewable fuels that we handle in our midstream assets today. So just continuing to march forward.

Got it. So I'm going to have to kick it off with the cybersecurity question. How are you guys positioned on that obviously given what's been happening with Colonial? Maybe can you walk us through how your system works on that?

Yes. It's something that we've been focused on for a very long time. It's something that's actually part of our governance process. We review with our Audit Committee every quarter, during our regularly scheduled Board meetings, how we're doing on cybersecurity, what's transpired, what we plan to do next, et cetera, et cetera. The important things in my mind that we've done, there are several. One is that we separate our SCADA system, so the part of our system that actually physically controls our assets, opens and closes valves, starts pump station and compressor units, et cetera, that system is separate from the rest of our business systems and separate from the Internet, and so less vulnerable to any kind of a hack or a takeover. And only certain people and only with certain recognized machines can actually access the system. And so that's an important precaution in protecting our physical system. Similarly, although SCADA is the most important thing to us, we're also segmenting other parts of our system. A couple of reasons for doing that. One is to increase the security of it but also to aid in containment. In the event that you do have some malware that gets in through a phishing episode or something like that, you can contain it and isolate it. We have a dedicated cybersecurity team. We have outside experts that help us with it. We subject ourselves to penetration tests from an outside firm. And if they find any open windows and doors, we go back in and close them. The other thing that I think has been very important for us is that when you are talking about, for example, state actors, this is an arms race. And as a private firm, there's only so much you can do to stay up with that arms race. We've been very fortunate in terms of the limited impacts that we've had, like from the SolarWinds incident, for example, and things like that, that have been topical or in the news. But we've affiliated ourselves closely with our government and with the various agencies in that government who are in the business of protecting against cyber threats, including to -- like our military, for example. And so they're able to tell and we let them inside to look to see if we've got anything harmful at play. And that's been extremely valuable to us. And so we did get, for example, the signatures from the attack that took place on Colonial. And we were able to run the scans through our system yesterday and discern that we didn't have any of that malware in our system, right? And so it's only because of that relationship that we're able to sort that kind of thing out. So look, this is a war that's never won completely, right? But we feel pretty good about our position and the precautions we've taken.

Got it. And look, you talked a little bit about the energy transition group. Can you maybe talk a little bit more about that? What kind of opportunities are you looking at? Just curious on what's going on there.

Yes, sure. So there are 2 -- really 2 parts of energy transition-related activities. There's a part that we're handling and have been handling in our existing business units. For example, handling biofuels and renewable diesel, things like that, but we do that today on our existing terminals business. We're looking at doing it, extending it to our refined products pipeline businesses as well. And so there are some good opportunities. Those opportunities continue to be pursued within the existing business unit. What the new -- What the Energy Transition Ventures group is to look at is kind of step out -- so for example, we do sequestration of carbon in our EOR business, but we don't capture it, right? We don't capture anthropogenic CO2. And so we're looking at doing that now. And it is economic to do that with the 45Q tax credits, at least for the fluid streams coming out of ethanol facilities and out of gas processing plants. And so that is part of this Energy Transition Ventures group. The other thing that they're looking at beyond carbon capture, they're looking at a number of different things, including some things that we probably won't pursue -- certainly won't pursue. But for example, they looked at whether we do our own renewable diesel refining or generation, if you will, and decided not to pursue that. But the other opportunity they're looking at is in renewable natural gas, which has been a thing for a long time, at least in the form of landfill gas, but there's a lot more room to run there. And it gets high RINs values, right, D3 RINs, very valuable RINs and also gets great credit. It's actually, in some forms, negative carbon intensity from a low carbon fuel standard standpoint in California, for example. And it's becoming economic because commercial customers are interested in it. So customers that operate fleets, for example, are interested in putting renewable natural gas in their CNG and even LNG trucking fleets. And so from a net 0 or from an emissions reduction standpoint, there are commercial customers who, if you will, you can lay off some of the risk on, the commodity price and RINs risk. So those are the 2 promising areas that we're looking at in that group right now. And as I said, they've got some live deals that they're examining in those 2 arenas.

Any color in terms of [ book size ] of these deals -- sorry, a couple of hundred million, billions?

Yes. Good question. I don't have a good answer for that yet. There's not a lot of M&A in that world with those 2 areas that I identified. And so it's likely to be more development kind of work. So you're spending millions or tens of millions on a project to develop one of those opportunities, and then you keep going and developing more of those. So less likely to be in big chunks and more of, I would think, the default thinking you should use is that we would pursue it as a developer, meaning we're going to be deploying capital in these opportunities as they come up and building out our footprint in these areas and building off of our existing footprint in the example of the CO2 capture and sequestration.

Got it. I mean obviously, look, you guys have a massive infrastructure footprint. Where do you see Kinder Morgan 5 years from today? Just in terms of any -- is there anything that's shuffling in terms of the business mix? Or what is your vision?

Yes. So I think it's -- we're going to look very similar to the way we look today. We've got a massive footprint in the natural gas sector with organic growth associated with that. And that growth is largely going to take place in places like Texas and Louisiana, which are more infrastructure-friendly. And that's primarily to serve -- in Texas, it's serving industrial and utility demand but also serving export markets. That's the real driver. And so that's why we believe 80% of the growth that's going to happen in natural gas between 2020 -- and others believe this. These are WoodMac, Wood Mackenzie numbers. 80% is going to take place between now and 2030 in Texas and Louisiana. And so we've got good opportunities there to expand our footprint, have good opportunities, I think, also, although it hasn't quite reached economic status yet, but to expand storage facilities and the like. I think that the more we rely on renewables in our power sector, the more there's going to be a call on storage because you can store natural gas much more cheaply and effectively and with much better duration than you can do grid-level battery storage for utility-scale power storage. And so I think there's going to continue to be growth in that natural gas footprint. It's over 60% of our segment EBDA today. It's more than 60% of our backlog today. So I think organic growth there. And the other thing that I think we will be attaching more assets to is our renewables business. Now we're not going to be -- I don't envision us being -- except in a very small way, like on our existing footprint, a renewable power player, right? But renewable liquids fuels, like we handle today, renewable natural gas, as I mentioned earlier, responsibly sourced gas, we have a low emission -- low methane emissions system, and we've marketed that to customers and have gotten one transaction off to date. But I think more in the liquids renewable fuels, I think you'll see us continuing to be a bigger and bigger player there from a midstream standpoint.

Got it. That makes sense. In the past, when it comes to M&A, part of the criteria was always it had to be leverage neutral. Is that still the case?

Yes. So it's been the case for a while. We've done a lot of work, as you know, on getting our credit metrics in line, getting an upgrade from all 3 ratings agencies to BBB flat. We have reduced debt by around $12 billion over the last 5 years. And so we like being a solid, strong investment grade, and we did a lot of work to get ourselves there. We're not anxious to lever up to do something and then spend years getting back here, right? So yes, we do look for leverage neutrality or, as we put it, leverage accretion, which is an additional criterion, and it's a barrier to M&A for sure. But it's something that we feel strongly about. We want to keep our balance sheet strong.

Got it. So I'm going to go back to the renewable stuff. So as you kind of -- as you look at these opportunities, how you're doing with carbon capture, whatnot, what are you most excited about right now?

Carbon capture and renewable natural gas. Hydrogen, as we've pointed out, you can blend hydrogen in an existing gas system to the 5% or 10% level. And -- but, but there are important integrity management considerations around that. Hydrogen in higher-strength steel tends to exacerbate stress corrosion cracking and embrittlement of the pipe. And so that shortens the useful life of your pipeline or it creates a threat, right, an integrity threat. And so I think what our gas team's view on this is that we're likely to see hydrogen more in isolated instances, maybe short hauls to industrial uses. It's still quite a ways off economically. Now having said that, I think that there is a desire to see progress made on developing hydrogen and developing the hydrogen economy. It would have to be subsidized. And that subsidy can take the form of a public utility company with a franchise, right, and a regulator who wants to encourage this kind of development to effectively allow those costs to be flowed through, right? So hydrogen runs between $19 and $35 an MMBtu depending on how it's made where natural gas is today $3, right? So it takes a lot to get it to a point -- at least on -- with the current technology, to get it to a point where it's economic on a straight-up basis. But I think there's enough interest in it that you will see -- in certain progressive state utility commissions and progressive utility companies, you will see some development and deployment of it. But we look at that as -- we have that in more of a long-term bucket, not in the near- or immediate-term bucket, like carbon capture and renewable natural gas.

Got it. Actually, on the carbon capture side, obviously, look, you guys own some of the largest CO2 pipelines out there. Can you maybe talk a little bit about how your business -- how your pipes are positioned in that?

Yes. For carbon capture and transport?

Yes.

Yes. Okay. So carbon, CO2 is more -- most efficiently moved if it's in liquid form. And so what that requires then is very high-pressure pipe and very fixed steel, right, heavy wall pipe. And we have the largest CO2 dedicated network in the country. Now it's primarily in the Southwest U.S. and extending into the Permian Basin in Texas. And so if you think about that, you've got to look at, well, what are the adjacent sources of manmade CO2 that are available to us? And as I mentioned before, it's really -- what's economic with the 45Q tax credits today, what's economic is ethanol plants and gas processing facilities. And we've got those. We've got those in -- particularly in gas processing facilities in the Permian Basin. And so we're looking at those nearby opportunities. We've got 4 or 5 that we're working on right now. It requires a carbon tax or some kind of a deeper subsidy or credit to make it economic to capture CO2 emissions from a power plant. But there is a big coal power plant not too far from our footprint that if it became economic to do so or if the utility desired to do it to the point of subsidizing it, right, that would be available to us as well. So to move CO2 efficiently, you need thick purpose-built pipe. It's not easy to convert or retrofit existing oil and petroleum and natural gas infrastructure for it. So we've got a -- we have an advantage there.

Got it. That makes sense. Just talking a little bit about -- the M&A market for assets just heated up a little bit. Anything that you guys are looking at right now to -- [ I don't want to say that before ], but maybe something to divest at this point?

Oh, we did a transaction on NGPL that's -- we just got an attractive value for, and we continue to own 37% and operate it. I think we've done -- everything is for sale at a price, of course. But I think we've done the pruning that we sort of set out to do with our asset base. But we are interested in looking at some things that are out on the market. I agree with your observation that some assets are starting to come to market. And some of those are interesting to us and like the assets that we own today, right? So we are looking at some of those. I mean the last one of those that we did, I think, was at the end of 2019, we bought an adjacent system to our Texas intrastate natural gas pipeline system. But we've looked at other things on the terminals and gas side and look forward to that market continuing to stay active, and hopefully, it can play a role in getting -- picking up a synergistic asset here and there.

Got it. So we have a couple of questions that came in here. One is, can you talk a little bit about thoughts on refined product segments? How is business faring in light of the COVID-19 recovery?

Yes. So business has been coming back. Every quarter has been up over the prior -- or I'm sorry, every month has been up over the prior month. As we've gone through the course of the year, we've started to see domestic jet fuel pick up, not international yet. So we see a big difference between Phoenix Sky Harbor, for example, and SFO and LAX in terms of the jet demand. But things are definitely coming back. Diesel demand has stayed very strong through the whole pandemic as we move to more of a delivery economy and some of the refiners were diverting some of their jet into diesel -- into making more diesel. Gasoline demand has picked up, and we are seeing proration on some of our Western pipes right now. So we have seen demand coming back. I think the big open question still is -- and so we are -- as we said on the first quarter call, we're a bit under our budget on refined products volumes. And part of that is the Jones Act business, which I can come back to in a moment. But we had some fairly optimistic projections in terms of getting back to 2019. Now it's starting to grow into those projections, and so seeing good recovery there. I think a longer-term question is just how much telecommuting remains in the market because that cuts into the commute. The commute is about 1/3 of gasoline consumption. And so if there's more telecommuting on a kind of a steady-state basis, that can cut into that demand, and I don't think we know the answer to that question yet. There's certainly some pent-up demand that we're now seeing get unleashed a bit, it appears. But I think the thing we have our eye on the most is how fast do we recover and how fast do people and do people ultimately get back to a normal environment of driving their cars and less telecommuting. And the other thing I would say there, too, Timm, is just we have -- in the U.S. Gulf Coast, which is the biggest refining center in the country, and it's the biggest on our asset footprint, those are highly competitive refineries. And so even if, for example, gasoline demand doesn't fully recover, we may be pushing less out over our truck rack in Pasadena, but we may be pushing more out over our docks on its way to Latin America and other -- in Europe and other places, too. So we could get it one way or the other.

Steve, maybe I can ask you about -- obviously, Colonial is shut down right now. Is that a big opportunity for you guys in terms of the Jones Act vessels?

I'm sorry, you -- the first part of that cut out. I didn't hear the premise.

Sorry, the Colonial pipeline.

Oh, yes.

That's shut down right now. Is that an opportunity for you guys?

It's not an immediate opportunity on the Jones Act side because it takes a while to reposition those vessels. The overflow, if you will, is going into ATBs, so the articulated tank -- tug barges. But I think it is revealing for everybody here that there was a little bit -- people were a little bit too vigorous during 2020 in terms of their cost cutting and cutting back on midstream infrastructure like terminals and Jones Act vessels and the like. And so I think this is revealing a bit that people do need more capacity there. And so I -- we believe that we will get a benefit from it, if you will, that's sort of a secondary benefit, right, not an immediate -- associated with the shutdown itself, but just sort of the wake-up call that I think the shutdown has brought. Where we are seeing tangible benefit right now, though I wouldn't call it material to the bottom line, but certainly some improvement, is our Southeast products pipeline, which runs from Baton Rouge all the way up to Washington National and Washington Dulles airports, and that serves the Southeast and Mid-Atlantic markets along the way. We're seeing additional throughput there. The 3 cycles for the balance of this month are full. We're nominated full for June. And so -- and also, I think we'll see some additional throughput through our terminal network that's attached to that system that's associated with barrels -- getting trucks to backfill for Colonial. We can't take care of all of it. The Colonial system is probably 3 to 4x the size of our pipeline system, but we can certainly accommodate some of it. So I think we'll get a little bit of a, call it, a medium-term benefit on the Jones Act side, and I think we'll see a short-term benefit from the increased throughput on our refined products assets in the Southeast.

Got it. Another question that just popped in. In terms of capital allocation, is debt reduction still the #1 priority at this point?

Yes. So we've got ourselves to our target in terms of the approximate 4.5x leverage metric debt-to-EBITDA. And so we're at 3.9 to 4x this year, but that's related to the Q1 profits that we made. But we're in the right place there. And so from that, really, what we look to do is exhaust our project opportunities that are at attractive returns well north of our cost of capital. We're kind of there on that. And then the next allocation really is -- we bumped the dividend up 3% this year, about 3% this year. So the next thing is share repurchases. And so we definitely -- particularly with the winter storm event and with the partial sale of NGPL, we have additional capacity to do that. But our guidance there has stayed the same all along, Timm, which is we don't publish a price, if you will. We do it opportunistically, do it based on returns versus the alternative uses, et cetera. But we have some additional capacity to do buybacks.

Okay. Got it. As you kind of look at the midstream industry, what keeps you up at night? I mean we just had a -- I guess, a policy change, a bunch of stuff that's going on. What are you most worried about?

Yes. I think it probably is on the policy front. I mean I think it's a worry that extends to, are we going to continue to see growth in natural gas? And that's partly a function of LNG, right? And that's, of course, partly -- it's a commercial function, but it's also a function of getting those additional expansions and facilities approved by DOE and getting their certificates at FERC. And so look, I'll put it this way. I mean I think that there was a reckoning at some point during the Obama administration when the realization came through very clearly that a big part of the key to U.S. job creation but also to addressing climate change was to invest in natural gas, right? And so we had a lot of LNG facilities certificated and approved and FID-ed during that time frame. We've had one FID-ed this year, but it was in Mexico, right, Costa Azul, which is served off of our El Paso Natural Gas system. But that's what I'm really anxious to see, and we've had some conversations with folks about that. If you look at what happened in the United States since 2007, and I think we got a chart here that maybe we can pull up on the screen. We've cut emissions as -- CO2 equivalent emissions by just under 900 million tonnes, right? And most of that, a little over 800 million tonnes came out of the power sector. And most of that was natural gas-related, right, displacing coal, certainly renewables, too, but natural gas displacing coal is a big part of that. There's no reason why we can't do that around the world. And so when I think about it, I think that an administration who is -- that's looking at this in a clear way is going to see that we can have an impact on the emissions coming from China and India, which is really where the issue is, right, if we can get more natural gas penetration and we can create more good-paying jobs in the industry by having it be U.S. natural gas that serves it, not Mozambique natural gas or something. And not to pick on that, but I mean I think we've shown that we are a very reliable source of natural gas in this country. We've got great infrastructure that can support those international markets. And so that's the thing that I'm hoping for, let me put it that way, that we continue to keep that avenue for growth going. But it is not assured, right? It's not assured. The rhetoric doesn't match it right now. And so the question again is, on further reflection and analysis, does this appear to be something that the administration wants to actively support? And we still don't know for sure on that.

Got it. Look, obviously, your asset network is -- I mean you touched so many different parts of the hydrocarbon value chain. What basin are you most excited about right now?

What basin?

Yes.

Yes. So the Permian continues to be -- it's the biggest basin. It's got the biggest rig count. The gas volumes have really -- even through the big oil downturn, right, the gas volumes have stayed pretty robust. And that's partly a function of the gas/oil ratio on wells goes up over time, right? So there -- it didn't take the same hit that crude production did, and it will be the fastest to recover. And rig efficiency gains have continued and continue -- I may not have these numbers precisely right, but one of our customers told us that in 2021 rig terms, they can do with 20 rigs the same that they could do with 50 rigs back in 2017, okay? So the efficiency gains just continue to move along. Even at this late stage, right, they continue to get better and better at it. And so that's an exciting development. And again, for infrastructure siting and permitting, that's a very good story for us because we can build the infrastructure -- like the infrastructure we just completed, we can build the infrastructure entirely within the state of Texas. We don't need a Federal Energy Regulatory Commission approval to do it. And you can move the gas from the in-state basins to the in-state outlets, the in-state markets or export outlets and do it in a much friendlier kind of permitting environment, right? So that's very exciting. The other thing that -- the other basin that we're focused on is Haynesville. We've lagged there a little bit versus our budget projections, but we're now starting to see wells coming online there. The breakeven costs are quite low, and it's quite economic to drill those dry gas wells in the Haynesville now. It's well positioned. We have an asset there that is underutilized. So it's a very capital-efficient source of growth for us as that production comes on and starts to fill that asset back up. So that's a positive for us, too. And just to complete the basin picture, I guess I'll say we're also investing in the Bakken. Our customers are doing very well up there, and we're investing capital up there to attach additional production. The Eagle Ford, as I've said many times, is really a knife fight. There's a lot of infrastructure there, and the production is not growing in a way that will fill that infrastructure. And so it's very, very price competitive. But the Permian, the Haynesville and the Bakken all look good to us.

Got it. So we have a couple more questions that popped in here. Can you talk -- [ a specific ] question. Can you talk about the current recontracting environment within your natural gas pipelines? Where do you see most headwinds?

Yes. So it's really on 2 pipes. It's FEP, which is Fayetteville Express. There aren't any rigs in the Fayetteville Shale, and there are 2 pipes coming out of it. So as those contracts roll off, there's really -- there's not much that can be done, right? I mean it's just that -- a pipe drains that basin. We looked at conversion opportunities and things like that. There's just really not much to be done there. So that's -- that plus Ruby. Ruby, similar situation. The -- as the contracts roll off, the spreads are fairly modest out there, $0.05 or $0.06, something like that. And it has value as another supply source, Rockies natural gas for the California market, so there's value there. But it doesn't really recover value unless and until Jordan Cove gets built, which, of course, that's been effectively shelved for the time being right now. So those are the 2. And so as you look at our -- we update our projections every year, Timm, as you know. And if you look at our numbers there on '21 and '22, that's mostly -- that's our contract renewal exposure as a percentage of segment EBDA. And that's mostly chewing through the Ruby and FEP. And then I would hope and think that we would start to see some tailwinds from there.

Got it. That makes sense. Another one just came in. Can you talk about how KMI's existing network of assets is positioned? Given the ongoing energy transition, green revolution, what are the competitive advantages?

Yes. So on liquid fuels, we're near all the major refining centers. And so that enables us to -- and we've got a big Lower River position as well. So when you think about renewable diesel and the like, we're well positioned on our existing asset footprint, and we're in active engagement on some deals, both on the West Coast as well as the Lower River region. And so we've got advantage there with the infrastructure in place and with docks and pipes and tanks and stuff like that, that we can accommodate renewable diesel, just like we do biofuels today, like ethanol and biodiesel. Our natural gas assets, so we've got the biggest network in the country. And to the extent that blended hydrogen makes sense, we're well positioned with the asset base that we have, although it does have the challenges that I mentioned earlier. And of course, well positioned for renewable natural gas from a transportation and storage standpoint as well. And so pipe in the ground is valuable. On the carbon capture front I already mentioned, we've got the pipe that can accommodate CO2 and do it in -- and transport it in liquid form. And so that's an advantage, too. So our installed infrastructure base is a significant advantage as you start to see changeover in liquid and gas fuel sources.

Got it. Another question that came in, more on the investment side. It's actually, how are your discussions going with investors? Are you getting a lot of traction with incremental investors just based on base of your asset network and whatnot?

I think our discussions with investors have been very good. I mean I think there's a lot of interest in the topics that you've covered here today, right? People are asking questions about sort of what's next on the energy transition front, how our network is positioned for it. Questions about leverage and M&A, I mean it's all been pretty constructive. We have gotten some uplift, if you will, from our ESG performance. We are ranked #1 for how we manage ESG risk in our sector by Sustainalytics. We've gotten upgraded by MSCI. That's increasingly important to investors. We're actually held in at least one ESG fund that I'm aware of. And so our approach -- how we're approaching this issue is important to more and more investors. And we've distinguished ourselves in that regard. And really, I mean what we've, I think, tried to do here over the years is distinguish ourselves for our customers and our partners from an ESG standpoint, from a reliability standpoint. As we showed during the winter storm, we prepared ourselves for that. We performed very well. We made money. We performed well for our customers in the wholesale energy markets there, able to get things done under difficult circumstances. We've got PHP -- the PHP pipeline completed across Texas with -- in the face of pretty significant landowner and environmental group opposition. And so those are the things that we're trying to do well as a company and distinguish ourselves from our peers. So efficient, safe, reliable, competitive and able to get things done in difficult circumstances.

Got it. The other question that just came in. It goes, would KMI do M&A, which included midstream and upstream, for the right opportunity?

Yes. Midstream, of course, is an easy yes. Upstream, probably not. Our upstream business really is our enhanced oil recovery business, a significant portion of which is CO2 source and transport. So it's a midstream-like asset on our pipeline network there. Enhanced oil recovery is a niche, right? And we have people -- we have a good EOR team. They know what they're doing. We've got billions of barrels of original oil in place that we've shown we can successfully extract using our CO2 resource, which is rare. It's a unique resource, a unique asset. And so very unlikely to do anything that's upstream outside of what we already do.

Okay. Got it. So we have 2 minutes left here, Steve. I want to give you the opportunity to -- anything you want to mention that we didn't go over? Any closing comments?

Yes. I think we've pretty much covered it, but I will add one more thing related to the storm. I mean it really did, I think, for our customers, reveal the value of having reliable deliverability in the form of gas storage capacity and pipeline capacity. And as the energy sector, particularly the electricity sector, moves more and more towards renewables, that's a big part of what we're marketing. We're marketing our deliverability to customers. It's less a matter of how many molecules they want to move through it than how much demand there is for the capacity on those peak periods. Energy storage is a big deal. It's a big deal. And this is where the storage happens. It's in the gas sector. It's not going to be batteries anytime soon, right? It's gas. And so I think we keep looking for opportunities to point that out to our customers. The storm gave us that opportunity. We're transacting and originating in the aftermath of that storm. And I think that's a great opportunity for us, and we hope to capitalize on it more in the coming months as we face renewals and hopefully attract increasing values from our storage.

Now Steve, we just got one final question here, so I'll just ask you this. Besides oil recovery, what are other uses of CO2?

Other uses of CO2, there's really not much. I mean it's -- there's some food-grade or food industry consumption. But the carbonated beverage market is not something that is a massive end use there. But there's really not much. So the alternative to EOR is just put it in the ground and sequester.

Okay. Got it. Look, we're at the -- I think we're at our allotted time here. So thank you very much for speaking to us today, and stay safe. And thanks, everybody, for joining us today, and take care.

All right. Thank you all. Have a great rest of the day.