Greetings. And welcome to Alliance Resource Partners Third Quarter 202 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Cantrell, Senior Vice President and Chief Financial Officer. Thank you. You may begin.

Thank you, Doug, and welcome, everyone. Earlier this morning, Alliance Resource Partners released its third quarter 2022 financial and operating results, and we will now discuss these results, as well as our perspective on market conditions and outlook. Following our prepared remarks, we will open the call to your questions. Before we beginning, a reminder that some of our remarks today may include forward-looking statements, subject to a variety of risks, uncertainties and assumptions contained in our filings from time-to-time with the Securities and Exchange Commission, and are also reflected in this morning’s press release. While these forward-looking statements are based on information currently available to us, if one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect, actual results may vary materially from those we projected or expected. In providing these remarks, the partnership has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, unless required by law to do so. Finally, we will also be discussing certain non-GAAP financial measures. Definitions and reconciliations of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures are contained at the end of ARLP’s press release, which has been posted on our website and furnished to the SEC on Form 8-K. With the required preliminaries out of the way, I will begin with a review of our results for the quarter and then turn the call over to Joe Craft, our Chairman, President and Chief Executive Officer for his comments. As announced earlier this morning, ARLP’s exceptional performance during the first half of this year continued into the 2022 quarter, as we reported record revenues and coal sales prices. In addition to these records, ARLP also posted increases…

Thank you, Brian, and good morning, everyone. I want to begin my comments this morning by thanking the entire Alliance organization for their hard work and dedication. Through their efforts, ARLP has delivered outstanding performance so far this year and we are on track to achieve record financial results in 2022, a significant accomplishment for a company with our 23-year growth history. I am extremely proud of all that has been accomplished and thankful for the unwavering focus of our teams on creating long-term value for all of our stakeholders. Attracting, retaining and properly incentivizing the talent necessary to drive execution of ARLP’s strategy is critical to our success. Since our inception, ARLP’s long-term incentive plan has been an important tool to motivate key employees by aligning their interest with the long-term performance of Alliance. To keep this plan in place for our future, ARLP recently filed a proxy solicitation, requesting that unitholders approve an increase to the number of units available for award under this plan. All additional units to be included in the amended plan can only be used for future LT -- LTIP grants and cannot be issued for any other purposes. The proxy advisory firms, ISS and Glass Lewis, have both recommended consent for our proposed plan amendment, and management encourages all unitholders to vote in favor of the proposal. In case you are wondering, yes, we have now viral photo of the coal miner who wanted so badly to be with his three-year-old son when the boy wanted to see the University of Kentucky Play basketball for the first time in his life. That he showed up at last weekend’s Blue-White scrimmage, still in his miners’ cloths. He is an employee at Alliance’s subsidiary at Excel Mining. Michael’s picture has captured the hearts of tens…

Thank you. [Operator Instructions] Our first question comes from the line of Nathan Martin with The Benchmark Company. Please proceed with your question.

Hey. Good morning, Joe, Brian. Thanks for taking the questions.

Good morning, Nate.

I want to start with 2023 first, maybe on the production update. I think last quarter, you guys mentioned, maybe you could grow production about 1 million tons year-over-year. Now we are guiding to a possible 2 million ton increase. First, maybe just for clarification, what production or sales number are you guys using as a base, given you mentioned some sales from this year could possibly carry over into 2023 due to the logistics? And then second, Joe, I think, you mentioned in the past, labor that kind of been a limiting factor to growth. I would love to get your update on labor as well? Thank you.

Yeah. For 2022 our guidance, we reduced that $35.9 million as our base for 2022. That means we moved about 900,000 tons of what we had committed in 2022 to roll over potentially into 2023. We are showing tons committed in 2023 in our guidance up to 32.9% at the end of the quarter. We probably added another -- we are in discussions to add probably another 1 million tons to that as we speak. As far as our production, again, that would take that $36 million roughly to $38 million next year, assuming that we can continue to staff as we are projecting. The last quarterly call, we talked about the Gibson South operation adding a unit and we had talked about staffing the day shift for that in October that was completed about mid-month. So we are ramping that up as we speak. The second shift, we have planned to come online in May of 2023. That’s what we are factoring in to the assumptions that would allow us to get to the 2023 2 million tons that we talked about. At some of our other operations, we have been adding some individuals that allow us just to additionally staff some of our support units, whether they be shuttle car opportunities and additional route bloaters that will increase some production. And then we talked also about adding another development unit in Hamilton that will allow us to have full production in Hamilton in 2023 as well. So that’s what we are assuming to achieve where we are to where we are going as far as our ability to secure the additional labor. We have seen the ability to do that. We think that things are improving in that area. We have been able to -- with the pricing we have implement some additional bonus opportunities that tie back to sales prices that has allowed us to be more competitive than most other opportunities or employment opportunities in the area. So we feel better today than we did last quarter about our ability to staff our operations.

Appreciate that color, Joe. And then maybe again on 2023, as you mentioned, you guys layered on like an additional, call it, 4 million tons to get to that 32.9 million ton number. So now we have a sizable chunk committed and priced. I think you mentioned last quarter and expectation to see price per ton increase somewhere in the neighborhood of $10 a ton year-over-year. Could we get an update there, just what maybe that pricing looks like on those 2023 tons? Thanks.

Yeah. I think we are on target to hit that number. So I think if we look at the $10 increase would be roughly 20% year-over-year on average sales price per ton basis. So I would say, where we are right now in our plans, and looking forward, we think that 20% plus or minus 5% is, probably, still a good estimate of where we will be in 2023 and a lot is going to just depend on where the markets go next year. We are pretty bullish on export pricing as we see Europe being -- their stockpiles being full today in anticipation of winter in the Russian-Ukraine situation. But next year, after they deplete those inventories, it’s going to be more difficult for them to replenish those inventories both natural gas and coal without the Russian production. It’s our opinion right now our base case that we are using as the -- that the Russian-Ukrainian conflict will continue to midyear next year. So that’s forming the basis of our judgments as to the opportunity in the export market, which will also put pressure on the domestic market. So we currently have 4 million tons unsold. If you assume that we can close these extra million tons that we are negotiating right now. I think we shipped the same amount of export next year as we do this year or as we plan to do this year, that would suggest $1.5 million would go to the export market and then $2.5 million is available to either go to the domestic market or the export market. And so we are in a similar situation this year that we were or in -- for 2023 that we were in 2022, where we have got significantly more demand than we have got supply. So we will have to go to our domestic customers and give them that opportunity again to say what do they want to do? Do they want to commit to that tonnage soon or would they prefer us just to go ahead and sell that in the export market. So that’s sort of where we stand and trying to determine exactly what 2023 might look like.

Got it. Thanks for those thoughts. And I think just to confirm, you said maybe exports could be flattish next year was that correct, Joe?

Well, I am just saying, if we do what we did this year, now we got 2.5 million tons left to sell, assuming we go to the 2 million tons. So depending on who wants that coal most, it could go with the domestic market, it could go to the export market. And if the demand is robust, it’s possible we could increase some of Gibson. The fifth unit that we have got based in our plan is a single minor unit. So we do have the equipment that where we could make that a super unit, and it will just depend on the market and our ability to get the people as the way that we could. Again, have a little bit more incremental production next year, we are not anticipating that as we are beating our plan together at these 10 seconds.

Got it. Makes sense. Thank you. And then maybe just one more before I turn it over. Regarding additional CapEx spending in 2022, I know you guys mentioned a couple of moving pieces. But could we please get maybe a little more specifics on the breakdown of where that additional looks like $70 million or so is being allocated? And then any early thoughts on 2023 CapEx, what that might look like? Maybe where do you think maintenance CapEx is currently trending, given all the inflationary pressures and labor costs we talked about? I know in your release, it still says $5.66 per ton, but just curious if there was any additional info there? Appreciate it.

Yeah. Sure, Nate. On the increase for 2023 between the reserves acquired adjacent to Tunnel Ridge and work that we are beginning to do to access the new reserve area adjacent to Riverview. In total for those two projects, we will be deploying about $120 million over three years, with approximately $38 million to $40 million of that actually being spent this year in 2022. And you are correct, the inflationary pressures that we have been experiencing this year, while we have seen some moderation or stabilization, if you will, in pricing, we certainly haven’t seen costs come down yet. We are actually right in the middle of our planning process, and as we always do, we will give an update on what we think maintenance capital will look like over the coming five years when we discussed it in January. So it may be a little bit premature to give guidance with precision for next year, but we will -- you should certainly expect to see an increase on a per ton basis and we will be providing more color on that at our next call.

Appreciate that, Brian. I will leave it there. Thank you guys for the time and best of luck in the fourth quarter.

Thanks, Nate.

[Operator Instructions] Our next question comes from the line of Mark Reichman with Noble Capital Markets. Please proceed with your questions.

Good morning and thank you for taking my question.

Good morning, Mark.

The first one was on the -- yeah -- the two transactions in the oil and gas royalty segment, what is your expectation in terms of just any of that in your 2022 guidance or what are your expectations for 2023, if you could just kind of elaborate on the impact of that acquisition?

When you are talking about 2022, you are referring to the increase in volumes that we provided…

Yeah.

…at least.

Yeah.

Yeah.

Yeah. How much of that is from this acquisition and what would a full year rate look like?

I would say the amount for 2022 is a mix of drilling activity on our base acreage prior to these transactions. But as you noted -- as hopefully you noted in our release, there are about 1,200 producing wells currently on that acreage, but we do anticipate a portion of the increase is also attributable to -- these two transactions. As I mentioned earlier in my comments to Nate, we are in the middle of our planning process, which includes an updated reserve report from our engineering advisers. So as you know, Mark, the volumes can get a bit complicated, if you have to take into account…

Yeah.

… not only new wells, drilling, et cetera, but also the decline curve.

Okay.

And again, it’s -- we will be providing a specific update in terms of what our view is for 2023 in January.

Well, Brian, I think, it’s great to see that you have been able to invest to grow your existing businesses. When you think about -- you are adding those units at Hamilton and Gibson South, but when you think about Riverview and Tunnel Ridge, how are you thinking about opportunities to boost production there? I think you mentioned some of those, you won’t really see an impact until 2025 and you are going to be making those three-year stage investments? And then just maybe lastly on to that, when you think about your acquisitions in kind of the oil and gas and the coal business, where did these kind of emanate from, I mean, what kind of led these opportunities and are there -- do you see a broader range of opportunities to invest money going forward?

I will touch on the oil and gas first and Joe will probably comment on the coal side following that. As you know, we have got our own internal technical group with regard to our oil and gas activity in particular. We are actively involved in evaluating opportunities where counterparties are looking to sell their positions. We also participate in a ground game, which is really more going in front of individual landowners to see if we can acquire their mineral interest that aren’t part of a larger package. So it’s -- we probably review in excess of 50 deals per year in the oil and gas space. We -- as we have always been, we are very disciplined in our underwriting there. So we get a lot of frogs, if you will, before we pick things that, ultimately, we believe we can acquire at pricing that’s going to give us an appropriate return. So it comes from a variety of sources on the oil and gas front. And Joe, may want to touch on the coal side.

Yeah. Tunnel Ridge, we are operating at full capacity. Going into 2023, we have got some shorter panels before we access the reserves that we just acquired. So that -- we just don’t have additional capacity in -- at Tunnel Ridge to increase production, no matter what the market is, as we flip forward to 2023. At Riverview, we would have some additional capacity. We are -- as I mentioned earlier, we are adding some people to increase production there as well, but it’s only incremental without adding any new units of equipment there. And we could -- we do have the plant capacity to do that. But as we are trying to transition, we believe based on our ability to attract the labor that we need to complete -- to increase that volume. We just can’t project that we can do that right now with any certainty. So that’s some upside, but it’s not built into our plans as we -- as we are currently evaluating our ability to increase production there in 2023.

Our next question comes from the line of David Marsh [ph] with Singular Research. Please proceed with your question.

Oh! Hey, guys. Thanks for taking the question. So you guys finished the quarter with a really robust liquidity position, probably, the most robust you have had in quite some time. Obviously, it looks like some of that’s going to go into CapEx, but could you talk about some thoughts around what you would do with the rest of that cash?

Our capital allocation strategies or objectives really has not changed since we had the conversation on our last call. So we will focus on maintaining our operations, as you just mentioned, and trying to make sure that we can maintain our low cost status and Brian just shared with you some of the allocations on our growth capital related to our existing operations by improving our cost structure going forward and our ability to potentially increase some tons in 2025. We have talked about our distributions. So we will continue to distribute out cash to our unitholders. We will look at some debt repayment as a possibility. As we guide our $400 million term note that comes due in two year or three years.

2025.

Yeah. Yeah. So we may look at taking some of that down. And then we are also committing to invest in the oil and gas segment, whatever generate -- whatever cash flow they generate, we anticipate we will continue to invest in the oil and gas minerals segment. And then we have got our new ventures group that we are building with staff to continue to look for investments that would be not related to either coal or oil and gas that would provide future growth opportunities as we evaluate opportunities in the transition area, so to speak. So that’s the areas of capital allocation that we are targeting today.

Yeah. We are also looking at our Matrix subsidiary that continues to develop technology and products that we think have long-term growth opportunities and we will be allocating capital to help them in their efforts as well.

Would LP unit repurchases be something that would be considered at some point and can you give us any kind of framework around how you think about that, please?

I think if we did any unit purchases, it would be very small. It would be only to potentially basically replace those units that would be issued under our long-term incentive plan, which are not very significant. So a buyback program of units is -- would be considered, but it’s not a top priority.

Got it. Thanks so much for taking questions. Appreciate it.

You bet.

Our next question comes from the line of Dave Storms with Stonegate Capital Markets. Please proceed with your questions.

Good morning, gentlemen. Thanks for taking my questions. Just one for me, when you talk about supply chain seeing an issue and specifically around the renewed potential for a strike, how are you thinking about the possibility of a strike happening and since that could be a pretty binary situation, what would expects look like at the strike take place first if the strike did not take place?

And I think on the rail strike…

Yeah.

… there’s continued negotiations. There are several of the various unions. There’s like a dozen different unions that are impacted by those negotiations in the rail sector. I think there’s several of them that have already voted down the most recent proposal. We know the railroads and the U.S. Government is involved along with labor unions. It’s a possibility. We are still believing that the federal government will be involved enough to prevent a major disruption to our economy that a rail strike would occur. So we are placing a low probability on it. However, it could happen. If it does happen, then there would be disruption obviously. We believe the railroads would still operate and then exactly how they would allocate that, it’s hard to judge. Most of our operations -- the majority of our operations are barge traffic as opposed to rail. I would expect that there would be more demand trying to move tons to utilities by large, but it’s just hard to predict exactly what would happen. From what we understand as to the issues that are still outstanding that they are negotiating with, it’s all about money and it doesn’t seem like they are -- I don’t know -- I don’t what the negotiations are, but it seems like that they are reasonably solvable, because it’s mostly just about money and not other working conditions or working standards that could get more emotional, I guess. But I don’t know don’t how to predict it, handicap that any more than what I just said I wish I could, but let’s hope that.

Yeah. Perfect. Thank you.

Our next question comes from the line of Mark Zand with Wexford. Please proceed with your question.

Hey, Joe. Hello, Brian.

Hi, Mark.

Brian, when -- can you give us an update on where you stand on your renegotiation of your revolver and when you think you would be in a position to begin to start to retire your bonds?

Sure. We are currently in discussions with our lead banks and are anticipating a formal launch to amend and extend. Our current revolving credit facility will happen sometime in the next few weeks and we are working -- we would be working to have everything wrapped up either before or very shortly after year-end to put a new facility in place. And I think you would -- the bonds today are trading at like 97.5% or so. To the extent we would have the ability to go in and begin bringing down the quantum of the outstanding debt at -- in open market purchases, you could see us start doing so first quarter of next year.

Good. Got it. Thanks. And then the one area that we were a little bit -- maybe hoping for a little bit better was sort of price realization from the Illinois Basin. You had a big jump between Q1 and Q2 and then Q2 over Q3 over Q2 was up $1, I think. And I guess our sort of hope was that you would be layering in sort of some higher priced spot sales. Can you give us any sense on where you think Q4 will be relative to where Q3 was in terms of realization for the Illinois Basin?

Yeah. If we are able to ship the tons that we have scheduled, in other words, if there’s no transportation interruptions we would -- should see about a 5% increase over the current -- the third quarter or that’s looking at the total, not by the Illinois Basin. But just if you look at consolidated for the coal, it would be close to $64, if we were able to ship what we have projected without interruption for the fourth quarter.

$64. That’s very helpful. Thanks, Joe. Good. Thanks very much, guys.

Thank you, Mark.

Our next question comes from the line of Lucas Pipes with B. Riley. Please proceed with your question.

Thank you very much for taking my question. Good morning, everyone. And Joe, it was great to hear your recognition of the workforce earlier. I also have a quick question on the pricing side. You mentioned the opportunities both in the domestic and export market, and you will sell the remaining tons for 2023 into the highest priced market. Where would you put the netbacks today for export tons for 2023 versus the domestic market? Thank you very much.

Good day. Lucas, we have seen API2 drop off pretty significantly from the last quarter. So today those prices would be comparable to domestic, probably, still maybe $15 above. But we do anticipate that the API2 is going to bounce back to something that we saw more of an average in 2022 than what it’s currently trading at. So we do think that there’s going to be quite a sizable spread between the export market and the domestic market in 2023. What’s happening in the domestic market in 2023 will somewhat be determined by natural gas in a way. Natural gas prices, there was an article in the Wall Street on Friday, talking about the pressure and prices going down than today just more, I don’t know what it’s doing right now. But when I look this morning it was up almost 10%. So natural gas can be volatile, as we know. So on the domestic side, I think, another thing, and I mentioned this, the last quarter and it’s continuing to prove to be true, is that the utility commissions are starting to ask tough questions to the utilities as to why they are making economic choices to burn natural gas when natural gas is higher than coal. So I think that there’s a desire for these utilities to more than likely have to or want to buy more coal next year than they have done in the past and that could potentially put some pressure on pricing to where -- what we may see currently in the trade publications as to what the price is. There could be some upward price pressure on the domestic prices as well. So we are in a very favorable pricing environment going into 2023.

Very helpful, Joe. And where would you put the 2023 pricing for Illinois Basin coal approximately for, again, 2023?

We are not in a position to tell you that. I mean, well, it’s so volatile, and again, we are in the middle of negotiations. It’s -- I just don’t feel comfortable being able to give you what our price expectation is at this time. I think that, as I mentioned earlier, when we look at the total average sales price, we do believe that, that 20% mark year-over-year is definitely achievable and there could be another 5% or so upside to that. If we are able to achieve the numbers, I am helping you in that regard without giving you a specific number for a particular coal mine or a particular mine if that’s constructive for you.

That’s helpful. Thank you. And then last one from me, the Mississippi River conditions, how do you expect that to play out? What’s embedded in your guidance in terms of continued disruption there? Thank you very much.

So we have additional -- we have volume in our current inventory that’s actually down at the docks, so ready to load our export commitment shipments for this year. So it is possible that it would affect the timing of additional shipments in the export market. It’s hard to predict, but we do believe that, it will be more of a timing issue as opposed to a volume issue. So we will be able to participate at the levels that I have discussed earlier. There may be a timing disruption, but not necessarily the financial impact over a five-month or six-month time horizon.

And if river conditions remain difficult, can you move more tons on to the rail or is...

I think those -- yeah. I think on the river conditions, we will have plenty of opportunity in domestic market as opposed to shipping it in the export market, because these are more lower Mississippi River issues that really affect the export market, not the domestic market. And the locks that we talked about, we believe there’s good progress on that, but we are -- it’s not going to affect our domestic shipments.

Very helpful. Joe and Brian, continue best of luck.

Thanks, Lucas.

Our next question comes from the line of Vish Iyer [ph], a Private Investor. Please proceed with your question.

Hey. Good morning, Joe and Brian. Hey. First and foremost, thanks for all the fantastic work and the fierce focus, the entire team, all the employees, the management, everybody has done. Very happy as an individual investor. Question with regards to the new ventures team in particular, again, it’s more of a perception at a time when we are actually really doing well with coal, oil, gas and everything looking at the geopolitics and how things are shaping up for the future, wouldn’t us be investing money with EV and other stuff part of new ventures, wouldn’t that be perceived as a distraction rather than trying to deploy that capital into maybe execution excellence with our coal and oil and gas? Thank you.

Yeah. We don’t consider it a distraction. We have got dedicated investments or a team investing or looking at those investments. So it’s not distracting anyone from pursuing what opportunities would be incremental to either oil and gas or our coal operations. So we just think that there’s a lot of opportunities that the government is incentivizing people to invest in. So and we think it’s prudent and the election -- midterm elections will sort of shed some light on the mood of the country as to where our future energy policy could go. I think that we are seeing some reassessment among utilities and governments around the world, as their commitment to move towards a Paris accord, their climate change objectives. So there has been a pause that, but there’s not been a movement away from that, so in most cases, the governments have said, well, we are going to have to push the pause button for right now, but that does not change our objective to still continue to move away from fossil fuels. So we just need to read the political situation and I think it’s just prudent for us to look for opportunities to invest in long-term investments, excuse me, in assets that can provide some additional diversification opportunities in our portfolio that could be very attractive investments given the incentives that the government is putting in place in those areas. But we will be prudent. We are not going to take risk that we don’t consider to be any different than what we have done for the last 20 something years. So we are very focused on making good cash flow, long-term investments that will allow us to sustain the type of performance that we have been known to do over the last 23 years of our history.

Okay. Thank you. Again, one follow-up question regards to with the ongoing rail strike and some of the stuff we see in Mississippi with the barges and stuff. Are there any particular execution excellence initiatives that is ongoing within ARLP to focus more on the excellence given some of these roadblocks that are outside of ARLP’s control that are coming up? Thank you.

I think with respect to how we manage our transportation for our coal business, it is a daily exercise. We are in constant contact, not only with our customers, but also with the transportation providers. That’s just the way you need to run your business, the current environment notwithstanding. So we are absolutely focused on it. We have teams dedicated to make sure that any challenges that we are experiencing are made very clear to customers and rails and barges and trucks and that’s not going to change. So we recognize how important it is and we have got people that are on it every single day.

Okay. Once again, as a small investor, thank you, Joe. Thank you, Brian. We are very, very happy to be associated with ARLP. Thank you.

Thank you, Vish.

Thank you.

Our next question comes from the line of Arthur Calavritinos with ANC Capital. Please proceed with your question.

Good. Thank you very much and great quarter, guys. It’s good to see the good guys do well. Let me ask you just something, I have been reading a lot on your net -- on the oil and gas business. Are you guys affected at all, I have been reading about the Waha terminal or hub area where some gas is it at negative prices. And forgive me for my ignorance of that question, but do you guys close to that, does it affect you or?

Yeah. So that’s in the Permian. It -- we believe it was an isolated incident that related to the pipeline that was having some maintenance issues at the time. So there was a buildup of gas that needed to be sold at a discounted price. We don’t think it’s a systemic issue. We think it -- we believe it’s an isolated incident.

Okay. Okay.

But -- yeah, obviously, we are in that basin. So it would affect some of our volumes, but it should not be a significant event for us.

Okay. And then in terms of the -- on coal, you said you had some, I guess, uncommitted tons and the European guys are looking at it. Our guys are looking at it. And is it a question of like either not -- I will say, either price or a guy just feeling I can get it when I need it and I am surprised nobody’s bid on it yet to take those tons. Is -- what’s sort of the thinking going on in terms of…

Yes. Yeah. Currently, you have got -- specifically to Europe, I mean, they -- their stockpiles are, they prepared for the winter and the Russian embargoes. Yeah, so they were able to accelerate shipments that they had in Russia under contracts with Russia before the embargo took effect in August this year. So there’s not a real need today for that tonnage, but there will be a need after the winter. So it’s a timing issue. And so they don’t, and as I mentioned, we are not too anxious to sell at these prices at API2, because there hasn’t been that much activity and that’s why you see the swing in prices over the last month. But once those buyers get into the start coming back to the market to replenish their stock then we anticipate those prices will rise. So there’s just not much…

Okay.

… activity right now, because sellers don’t want to sell at the prices and buyers don’t have any place to put it right now. So that’s what’s…

Okay.

… going on in these 10 seconds.

Okay. And then on the -- just a couple of more. Thank you very much for taking the questions. When I see General Motors, I see the auto guys, the bet -- you see it sequentially the bet on EV is just getting bigger and bigger. I mean, the whole ranch is bet on the EV. And I am just wondering what you guys look at, what do you think we start seeing or you guys are able to say, the EV market is contributing to this demand in electrons? Are we at that point where you are almost able to like point, and say, this is what’s going on for the demand for electricity or is it just -- I know it’s early, but the bets are getting bigger and bigger sequentially?

Yeah. So we personally don’t believe that the demand is being reflected in the IRPs that the utilities are posting. Some will say that it is. They look at different factors to the way they think that they can manage that and there’s still a lot of discussion that with the transition that wind and solar taking some of that load that might be specific to some of these factories, et cetera. When you think about EVs, yes, they are moving. Most -- the things that we are looking at as far as when we are going to start seeing numbers of vehicles that are actually being sold in the market growing, it’s probably two years away, 2025 -- 2024, 2025 and then you start looking at these plants that talk about converting as such basically 100% of their production to EVs by 2030, 2035. You still have quite a bit of cars on the road that are going to continue to be combustion engines, because people aren’t going to sell those cars immediately, you can have to replace them. A lot of the EVs are going to be -- they are still going to have their combustion engine. So we anticipate that we are not really going to see that until a couple of years from now and a lot is going to depend, again, back to this energy policy and how the elections turn out and how nations start thinking about their national security more so than their environmental policies that will help define the answer to your question.

Okay.

And another thing that I think is underestimated, which is sort of where you are going, that there’s going to be a large demand for power. I think another thing that’s underestimated is, the expectations of people to want to have those batteries do more and more, be charged faster and faster on the road and when you think of that, then that’s going to consume a lot more power than this current technology that’s being used in the cars today. So I think there’s going to be more demand for electricity that the customers are going to demand. If in fact, they do gravitate to the EVs as the auto sector is wanting them to do. So I think your point, if I am interpreting it properly is well stated that there will be a demand increase for electricity that probably is understated in the minds of most policymakers across the nation.

Yeah. Yeah. Agreed. Thank you. Yeah. Yeah. You put it better than I did. And then there was one other thing I was going to say on the, anyway, I lost my train of thought. The last thing is just a comment. I saw that thing with the basketball player at Nissan, I think you guys, with your lobbying muscle should turn that into a stamp, have the government turn it into a stamp. So it was really hard warming almost like a normal rocklish type of thing for the modern era, but well said, and I like the comments how you led that with the preamble. So thank you very much. It was great.

Thank you. Thanks, Arthur.

Thanks, guys.

There are no further questions. I’d like to hand the call back over to Brian Cantrell for closing remarks.

Appreciate it, Doug. And everyone, we appreciate your time this morning as well and also your continued support and interest in Alliance. Our next call to discuss our fourth quarter and full year 2022 financial and operating results is currently expected to occur in late January and we hope everyone will join us again at that time. This concludes our call for the day. Thanks to everyone for your participation and continued support of ARLP.

Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.