Question-and-Answer Session
Operator
Thank you. (Operator Instructions) And our first question comes from Brett Wong from Piper Jaffray. Your line is now open.
Brett Wong – Piper Jaffray Co
Hi guys. Thanks for taking my question. First, the figure we’re all probably wondering and we’ll ask you, but if you can provide any color into your expectations for the 2014 RVO, anything that you guys are hearing with your team out there in Washington?
Dan Oh
Yes, it’s Dan here. Well, we have reverted too soon. We’ll hear it, because that’s what we continue to hear out of the EPA. That said, we do think it soon. It’s in the next 30 days or so. And there has been enough deliberation that when the initial numbers announced, it’s probably going to be the number, because you’d expect that the federal government will coordinated that, even though there may be a time between EPA proposal and OMB approval work in current.
We think it’s going to go up. We’re not sure how much. I think there has been a lot of positive and indicative commentary out of anyone presenting, but it’s going up, but it’s not there how much it will go up, but we expect to feel it [ph].
Brett Wong – Piper Jaffray Co
Great. Thanks Dan, and can you talk to or provide us a composition of your feedstock in the quarter? Just kind of wondering if you’ve made any adjustments from where you basically have operated that?
Dan Oh
Brett, we don’t give real precise on that, but as you can imagine when you saw attractive soybean oil prices, we probably were using a little bit more of that at certain plants, but we don’t give the exact breakdown.
Brett Wong – Piper Jaffray Co
All right, fair enough. And can you just maybe provide a little bit of more context around your CapEx expectations for REG Geismar? You mentioned the $15 million over the next 12 months, plus a small amount of that for the start-up. I am wondering what is going to go into that start-up? What’s that for, [indiscernible] operations that you guys are familiar and have experienced with? And then, what the kind of maintenance or ongoing CapEx is after that?
Chad Stone
So Brett, this is Chad. Just generally what we wanted to disclose that basically at 12-month window, we’re expecting approximately $15 million. Some of that you’d probably consider just normal startup and ramp-up procedures to take a plant from an idle state to ramp it back up. As Dan mentioned, the feedstock has been heading down there. Then there are some longer lead times, where we would like to make some long-term improvements or changes that we’ve talked before about improving pre-treatment to allow broader mix to the feedstocks and different things, but aside from that, you’ve got the immediate upfront start-up, which is a fraction and then some bigger longer lead time items.
Dan Oh
And of all that’s in logistics [ph].
Chad Stone
Yes.
Brett Wong – Piper Jaffray Co
Okay. And since you had a bit more time with the facilities now since the close, any risks that you guys are seeing in being able to kind of surprise that up beyond what you were seeing before?
Dan Oh
Well, there are two risks. First one is simply market and the spreads that are afforded in the market. That’s something the entire industry manages through. On the facility side, we have not been surprised by anything. So we’ve not been through whole start-up as you go through and work through all those items. There may be unknowns that we haven’t seen yet, but so far we’ve not been surprised and are moving ahead as planned.
Brett Wong – Piper Jaffray Co
Great. Thanks a lot guys.
Chad Stone
Thanks Brett.
Operator
Thank you. And our next question comes from Craig Irwin from Wedbush Securities. Your line is now open.
Craig Irwin – Wedbush Securities
Thank you, and good evening, and congratulations on solid performance in a very busy quarter. Dan, my first question that I wanted to ask is about REG Geismar. Can you maybe discuss with us similarities to the Seneca facility, the issues that you saw many years ago, when you bought Seneca. How you were able to send in your construction teams and remediate the asset and bring it back online. Should we look at that as sort of a roadmap that REG is going to follow with REG Geismar? Do you see similar issues and problems at that facility? And then, just a detailed question on Geismar. You mentioned the catalyst bed was replaced. Is this a CapEx that already landed on REG’s cash flow, or is this something that’s pending? And if you could clarify for us, at the beginning of last year, Syntroleum had identified a $7.2 million investment for the catalyst itself, and if you could clarify whether or not that’s already been replaced as well? Thanks.
Dan Oh
Thanks Craig, I’ll try to answer in reverse order, but the $15 million in general CapEx that will be applied over the next year does not include, because it was already done, the catalyst change out. So we’ve been able to study and look at that. We feel good about the work that was done. That will be part of the start-up procedure as we work through.
Then the broader question, while the back-end processes are different at Seneca and Geismar, the opportunities and these operate with high-acid raw materials, the metallurgy, the logistics improvements, the pre-treatment all these other things are quite frankly very similar, and complexities both around the river system, both – we’re not connected to large volume logistics. So as we get into the facility and we improve and grow its capability, I think we’ll be able to tack it in similar ways whether it be logistics or taking our expertise around different cocktails of high-acid raw materials and impurities, and then applying what today is a much stronger and more vibrant commercial system to support it through supply chain management for chemical sales [ph]. It’s a much broader and larger business.
So, I am certainly hopeful that we’ll be on accelerated plan versus Seneca, which took a few years to get done, but we’ll have to work through it. The plant has not operated for 18 months, but the reality is we have the IP, we have a combined and stronger engineering team, the folks who help develop it, the folks who help run it in our team together. We feel pretty good and pretty confident to bidding on the issue that we can bring it up.
Craig Irwin – Wedbush Securities
Great. And then an another question of clarification. So in your financial guidance, you said $10 million to $15 million for new investments in adjusted EBITDA. Can you clarify for us, whether or not there is any non-Geismar Syntroleum operations that you are continuing to fund? And if there are any other significant investments in there, their incremental that maybe would shed light on where you’re planning to focus for the future?
Dan Oh
Yes, I’ll let Chad answer it. Highest level, the super majority of our revenue is coming from biodiesel. And what we’re trying to do is help people understand what the core biodiesel business is doing in light of current market, and then look at the expense investment in light of new accounting rules around Life Sciences and Geismar, and to a small amount, our growing distribution business, but go ahead Chad.
Chad Stone
Yes, Dan, I agree with that. Just to add to that and clarify, Craig, that guidance also still includes the Life Sciences investment, roughly $3 million to $4 million per quarter of carrying costs, in addition to the Geismar and renewable diesel investments.
Dan Oh
And I would add that expense is going directly into discovery and development and research, that is in direct support of product development right now. So we’re not really carrying any business. They are taking that expense, so they convert it into the future pipeline right now. And we’re pleased with what we’ve found to be the case in our Life Sciences investment. We have been investing in bringing up the facility in Florida in support of small scale and sample production.
And we consider all of those activities on track, but we’re still not disclosing the pipeline right now.
Craig Irwin – Wedbush Securities
Great. And then my last question, if I may. The 2015 revenue from specialty chemicals, can you discuss what the gating factors will be for that initial revenue production? Do we need to see something completed at the facility in Florida? Do we need to see formal announcement of an executed contract? Is there any specific RD that needs to likely be wound up, and if you could bring that out for us, that would be very helpful?
Dan Oh
Craig thanks. I’ll keep it at a high level. We invested in, and are confident in our Life Sciences business in what we thought we were getting, which is a business that had spend a lot of time and learned a great deal and developed real capabilities around esters and fatty alcohols in a much broader ability to develop across a wider range of product families. And the most likely areas to produce products are in the ester and fatty alcohols. And we’ve shared in our investor presentation and we have investment presentations coming up, a chart that shows that at current trigger prices, trigger being the main feedstock for the fermentation, lower-volume, high-value specialty chemicals are the most likely products that’ll be coming out.
And in general, our Florida facility is in a position to be able to process different variations of those chemicals. It just gets down to the downstream refining. So ultimately we’re looking towards that range of small-volume high-value products. We’re very interested in having a wide array of products in that zone in using our multi-feedstock, multi-product focus to produce chemicals.
So we’re working on a business development basis with opportunities that may not be announced before the revenue. It may well be the case that we announce revenue as we announce the quarterly release. It simply depends on the markets we’ll be entering and we’ll share that as we get closer.
Craig Irwin – Wedbush Securities
Thanks again. Congratulations again on the strong results.
Dan Oh
Thank you.
Chad Stone
Thanks Craig.
Operator
Thank you. (Operator Instructions) One moment for questions. And our next question comes from Katja Jancic from Sidoti Company. Your line is now open.
Katja Jancic – Sidoti Company
Hi guys. I just have one question. Chad, you mentioned that there was a one-time charge of $1.9 million included in the SGA, if I am not mistaken?
Chad Stone
Yes, that’s right.
Katja Jancic – Sidoti Company
So excluding that, your SGA was around $13.7 million. Is this a run rate we can use or should we increase that, considering that you are going to be investing into research and development?
Chad Stone
I think that’s the right way to think of it. We are – we continue to grow, and you see that line item growing in a manageable way as we do that. We want to grow in a leveraged way, but that’s the right way to think of the quarterly run rate. And any other slight ramp-up throughout the year that we’ve given guidance on would assume kind of modest growth in SGA.
Dan Oh
Yes. And I think when you’re saying leverage, you’re referring to leveraging expertise and scaling on the expertise that we’re building.
Chad Stone
That’s right.
Dan Oh
Yes. So as we identify pipeline and product opportunities, we would expect to increase our team and support of that work, but we are doing that in a disciplined manner.
Katja Jancic – Sidoti Company
Okay. Thank you so much.
Chad Stone
Thank you.
Operator
Thank you. And our next question comes from John Quealy from Canaccord. Your line is now open.
John Quealy – Canaccord
Hi good afternoon. Do you hear me?
Dan Oh
Hi John.
Chad Stone
Yes.
John Quealy – Canaccord
Thanks. First congrats on the quarter. A question on the inventory side. How many gallons in the inventory right now – I’m just trying to put together if you needed to get more sales on the back half of the year. How much do you have in inventory you can sell right now?
Dan Oh
We probably run between 10 million and 16 million gallons. We’ve reduced – you probably saw us at peak inventory levels at the end of last quarter with what we had on hand. We’ve gone down I believe about 10 million gallons.
John Quealy – Canaccord
Yes. And then just the availability of third-party, the 10 million gallons in the quarter, if you had to, what do you think that addressable population is that we needed to get more third-party gallons?
Chad Stone
I think that’s what we found attractive to us, so that number isn’t the same from quarter-to-quarter, but it’s been – we don’t think there was lot more or we don’t think that there wasn’t anything marginal there. That was just kind of a reasonable expectation I would say.
Dan Oh
John, I think the market has elasticity if the spreads are there. So we do have working capital, I think that we could inform third-party, but as you get closer towards the end of the year, people start to get committed. So there’ll be some flexibility, but it’s not going to be wide open sort of thing in anyway.
John Quealy – Canaccord
Okay, great. Thanks. And then Dan, I know you guys – and Chad you gave good guidance on the adjusted EBITDA number including LS9 and Geismar. Can you talk through your comfort with those, sort of, estimates? Have you gone through everything? Are there anything surprises lurking, or that’s a pretty tight cash used number?
Chad Stone
Yes, I mean we’ve done a detailed analysis. We’ve closed on the transactions and have gotten inside, and have detailed thorough estimates. We always generally think of a reasonable range, but we’ve basically forecasted at a detailed level there.
Dan Oh
John, we’re comfortable.
John Quealy – Canaccord
Great guys. Sounds good. Good luck.
Dan Oh
Thank you.
Operator
Thank you. (Operator Instructions) One moment for questions. And our next question comes from Louis Navarro [ph] from Private Investor. Your line is now open.
Louis Navora [ph] – Private Investor
Good afternoon, gentlemen, and thank you for the great items and congratulations again for your brilliant dollar milestone in revenue and gallons as well this year. My question involves our United States Navy. Just before REG Geismar were entitled the plants, they produced products that the navy demonstrated in their [indiscernible] 2012 out in the Pacific, and they had a successful exhibition of using the fuel there. And then the Geismar plant went idle. Recently [Technical Difficulty] some leadership in the navy published that they maybe requesting purchase orders for the same biofuels that came at Geismar as early as January of this coming year. Has there been any communications with the United States Navy regarding their efforts for converting their entire fleet enterprise-wide by 2020? They referred to it as the latest Great Green Fleet [ph].
Dan Oh
On the one hand, the Navy is a DoD leading organization in terms of ensuring that they’ve got many different sources of energy to run the fleet and also be environmentally focused. And they have announced initiatives publicly to encourage the continuing usage of fuel. So yes, they’ve got processes out there that are ongoing. We don’t comment about any bidding we may or may not be doing. It would be inappropriate for us to do as a participant in the marketplace.
Louis Navora [ph] – Private Investor
Okay. Thank you.
Chad Stone
Thank you.
Operator
Thank you. And our next question comes from Craig Irwin from Wedbush Securities. Your line is now open.
Dan Oh
Craig, are you still there?
Operator
If your phone is mute Craig, please unmute it.
Craig Irwin – Wedbush Securities
Yes, sorry about that. A couple of quick follow-up questions. Chad, can you share with us the contribution from REG Life Sciences in the quarter. What the operating expense run rate was that you saw in the second quarter?
Chad Stone
Sure. Yes, it was, on an expense basis, basically $2.9 million of expense. On a impact to EBITDA, it was the $2.6 million that I mentioned.
Craig Irwin – Wedbush Securities
Okay, excellent. And then, Dan, in your prepared comments, you mentioned that you bought the land next to the Danville facility and had it successfully rezoned for commercial use. Can you share with us what your plans are with the land, whether or not this is tank farm, some other production area, or this is a strategic acquisition for longer term opportunities?
Dan Oh
Right now, it’s a opportunity that we’ve taken advantage of in terms – quite frankly for a few years, Craig. We’ve been assembling pieces of ground in that area, and we got a large enough mass of land to go to the City of Danville and the community in which we live there. And they were all very supportive of REG continuing operations.
So what we’ve gained is the ability to incrementally improve the facility. It might be a tank, it might be something else or to do something larger in the future, we’re still determining what’s appropriate, but we now have the flexibility to at least strengthen and make even more competitive what already is a great plant. And we’re pretty excited about that, but we’ve got no announced plans right now.
Craig Irwin – Wedbush Securities
Great. Thanks again for taking my questions.
Operator
Thank you. And our next question comes from Ryan Greener from Carlson Capital. Your line is now open.
Ryan Greener – Carlson Capital
Hi guys. Great quarter. Just a quick question. I hopped down way [ph], so apologies if it’s already been already asked, but curious to know your thoughts on whether or not there could be an impact on industry fundamentals with the report fire at the Diamond Green diesel facility? Thanks.
Dan Oh
Yes, we were very sad to hear about the fire, and we’ve got very good friends involved in the organization and across the board there. So we don’t really know anything other than what’s been in the press. I think it would be inappropriate for us to comment right now, we don’t know. And we need all the advanced biofuel we can get. So I am hopeful that they’ll be back up on line soon. I don’t know anything else.
Ryan Greener – Carlson Capital
Great, thanks.
Operator
Thank you. And I am showing no further questions. I would like to now turn the call back over to Dan for closing remarks.
Dan Oh
Thank you operator. Thank you for all your participation on today’s call and for your continued support. We appreciate your interest and look forward to reporting to you again next quarter on our progress. Before we conclude, Todd, is going to mention some upcoming conference appearances for REG. Todd?
Todd Robinson
Thanks Dan. We have five separate conference appearances coming up in the next two weeks, which are elaborated on Slide 17 and 18. Each one is invitation only. So please contact the sponsors if you want to attend and/or schedule a one-on-one meeting with us. All of the formal presentations will be webcast and available in the Investor Relations section of our website. Thank you all again. This concludes our call. You may now disconnect.
Operator
Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today’s program. You may all disconnect. Everyone have a wonderful week.