Par Pacific(PARR) - 2021 Q4 - Annual Report

Refinery Operations - The Hawaii refinery operated at an average combined crude oil throughput of 82.0 Mbpd, or 87% utilization, for the year ended December 31, 2021[30]. - The Washington refinery operated at an average throughput of 36.3 Mbpd, or 86% utilization, for the year ended December 31, 2021[37]. - The Wyoming refinery operated at an average throughput of 16.9 Mbpd, or 94% utilization, for the year ended December 31, 2021[45]. - The company had a throughput of 135 Mbpd for the full year of 2021, with a $1 per barrel change in average gross refining margins potentially impacting annualized operating income by approximately$48.7 million[355]. - The company consumed approximately 135 Mbpd of crude oil during the refining process in 2021, with about 3% of this throughput accounted for as a fuel cost[358]. Financial Performance - The 3-1-2 Singapore Crack Spread averaged $6.22 per barrel during the year ended December 31, 2021, with a high of$10.49 per barrel in the fourth quarter[31]. - The Pacific Northwest 5-2-2-1 Index averaged $15.95 per barrel during the year ended December 31, 2021, with a high of$18.59 per barrel in the third quarter[38]. - The Wyoming 3-2-1 Index averaged $29.00 per barrel during 2021, with a high of$41.78 per barrel in the third quarter[46]. - The company had one customer in its refining segment that accounted for 13% of consolidated revenue for the years ended December 31, 2021, and 2020[120]. Storage Capacity - The Hawaii refinery has a total crude oil storage capacity of 3.4 MMbbls and refined product storage capacity of 3.3 MMbbls[27][28]. - The Washington refinery has a total crude oil storage capacity of 1.2 MMbbls and refined product storage capacity of 1.5 MMbbls[34]. - The Wyoming refinery has a total crude oil storage capacity of 267 Mbbls and refined product storage capacity of 513 Mbbls[42][43]. - The Washington logistics network has a storage capacity of 2.8 MMbbls and includes a proprietary 14-mile jet fuel pipeline serving Joint Base Lewis McChord[63]. - The logistics network in Hawaii includes a 27-mile pipeline network and a total storage capacity of 301 Mbbls across seven petroleum terminals[61]. Workforce and Diversity - The workforce consisted of 1,336 employees as of December 31, 2021, with 17% represented by the United Steelworkers Union[122]. - The company’s workforce included 49% minorities and 6% protected veterans as of December 31, 2021[123]. Environmental Compliance - The company reported a combined GHG emission total of 619,609 metric tons in 2020, which is 32% below the Title V permit limit[89]. - The GHG permit issued for the company's Hawaii refineries caps emissions at 904,945 metric tons per year, representing a 16% reduction from 2010 levels[89]. - The company’s Hawaii refinery has not been required to install new controls due to compliance with the National Ambient Air Quality Standards (NAAQS)[91]. - The company is subject to significant state and federal air permitting and pollution control requirements, with ongoing enforcement activities by the EPA[110]. - Compliance with the EPA's final rule on toxic air emissions from petroleum refineries has not materially impacted the company's financial condition or cash flows[111]. - The company believes it is in substantial compliance with environmental regulations, including the Clean Water Act and the Oil Pollution Act[105][104]. Market and Economic Conditions - The company expects a slow but steady recovery in Hawaii's economy, with unemployment dropping from 11.8% at the end of 2020 to 7.7% at the end of 2021[67]. - In South Dakota, tourism spending increased by 29.7% in 2021, reaching approximately $4.4 billion, with transportation services accounting for 19.1$1 change in the price of crude oil would result in a $2.1 million change to the fair value of the company's derivative instruments and cost of revenues[357]. - The company is exposed to market risks related to the volatility in the price of RINs required to comply with the Renewable Fuel Standard, with obligations based on a percentage of production from Hawaii, Wyoming, and Washington refineries[359]. - The company is subject to credit risk from nonpayment or nonperformance by counterparties and will continue to monitor the creditworthiness of customers[363]. Regulatory and Legislative Developments - The Renewable Fuel Standard (RFS) requires an increasing amount of renewable fuel to be blended into the transportation fuel supply, up to 36 billion gallons by 2022[94]. - The company anticipates compliance costs and uncertainties regarding the various requirements contained in the Energy Independence and Security Act (EISA) and RFS[99]. - The company has received extensions of small refinery exemptions from the EPA for its refineries, allowing for continued compliance with Tier 3 gasoline standards[96]. - The company is monitoring legislative developments in Washington, including a low-carbon fuel standard aimed at reducing carbon intensity by 20$215.6 million of indebtedness subject to floating interest rates, with a potential increase of 1% in variable rates resulting in an increase of approximately $3.8 million in Cost of revenues and$3.6 million in Interest expense annually[360]. - The company had entered into an interest rate swap at an average fixed rate of 3.91% to manage interest rate risk, which was set to expire on April 1, 2024[361]. - The company has contracts referencing LIBOR, with transition language in place, and does not expect the transition away from LIBOR to materially impact its financial condition[362].