ExxonMobil to begin lithium extraction in Arkansas as officials hope for the start of a boom
Oil and gas giant ExxonMobil this month plans to drill its first well in Southwest Arkansas for lithium, a critical component in electric vehicle batteries.
The company’s Monday announcement has significant implications for the global energy sector and for South Arkansas, where local and state officials have been building up the economic promise of lithium mining.
The announcement was also the logical next step for ExxonMobil, which earlier this year secured the mineral rights to more than 120,000 acres in Columbia and Lafayette counties. An Exxon subsidiary last month also acquired three drilling permits from the Arkansas Oil and Gas Commission.
The company’s efforts will focus on the Smackover Formation, considered one of the most lithium-rich areas in North America.
Exxon officials hope the production stage can begin by 2027, ramping up so that by 2030 the company can produce enough lithium to power the supply of one million new EVs per year.
“Lithium is essential to the energy transition, and ExxonMobil has a leading role to play in paving the way for electrification,” said Dan Ammann, president of ExxonMobil Low Carbon Solutions. “This landmark project applies decades of ExxonMobil expertise to unlock vast supplies of North American lithium with far fewer environmental impacts than traditional mining operations.”
For Arkansas, the development could have long-lasting implications for jobs and economic investment, though specific estimates weren’t available Monday.
Gov. Sarah Huckabee Sanders celebrated Exxon’s news at a Monday morning press conference, saying the first well will be near Magnolia. If successful, she said, “you can expect wells all around south Arkansas.”
“South Arkansas is our state’s all-around energy capital, producing oil, natural gas, and now — thanks to investments like ExxonMobil’s and their combination of skills and scale — lithium,” Sanders said. “My administration supports an all-of-the-above energy strategy that guarantees good, high-paying jobs for Arkansans. And we’ll continue to cut taxes and slash red tape to make that happen.”
Boom or bust
Optimism ruled the day, but questions and hurdles remain, not only for ExxonMobil, but other domestic lithium extractors.
Those range from bureaucratic hurdles to uncertainty about the royalty structure for lithium brine.
But the chief question is: Can this whole process be profitable?
Companies like Exxon must pull brine from deep beneath the earth’s surface. Brine is mainly saltwater that is enriched with other minerals, like bromine and lithium in South Arkansas.
Those other minerals must be extracted through processes that can be both expensive and detrimental to the environment, but companies have pitched new extraction technologies as cleaner alternatives to traditional methods, like open-pit mining and evaporation ponds.
“ExxonMobil will utilize direct lithium extraction (DLE) technology to separate lithium from the saltwater,” the company’s news release reads. ”The lithium will then be converted onsite to battery-grade material. The remaining saltwater will be re-injected into the underground reservoirs. The DLE process produces fewer carbon emissions than hard rock mining and requires significantly less land.”
Exxon joins another company that has already been investigating the prospect of lithium extraction through a demonstration project. In 2020, Canada-based Standard Lithium began a pilot project extracting lithium from brine already mined by a company focused on bromine extraction. (Bromine became the focus of mining efforts along the Smackover Formation through the mid-to-late 20th century.)
Questions may persist about the supply side of the equation, but the demand side is much clearer. Demand for lithium, which was placed on the U.S. government’s list of critical minerals in 2022, is projected to “grow by a factor of 5 to 10 in the next decade,” according to the Department of Energy’s National Blueprint for Lithium Batteries 2021-2030.
In addition to electric cars, lithium is used in cell phone batteries, small electronics, energy storage systems and other growing technologies.
While environmental advocates have raised some concerns about the potential impacts of lithium extraction, environmentalists do welcome the addition of more lithium and lithium battery-powered devices and vehicles.
Concerns have also been eased because much of the mining will use existing wells and infrastructure, limiting additional disruptions to the surrounding ecosystems.
Dan Becker, director of the safe climate transport campaign at the Center for Biological Diversity, couched his praise for Monday’s news to the New York Times.
“It’s an infinitesimal fraction of what Exxon does, and most of what it does is dreadful,” Becker said. “But we do need lithium, and it’s better that it comes from a spoiled industrial site where oil drilling used to take place than from a pristine place.”
Praise from the state’s congressional delegation was much more effusive, especially from U.S. Rep. Bruce Westerman, who represents most of the affected portion of Arkansas and also chairs the House Committee on Natural Resources.
“Southwest Arkansas has the capabilities to be a leader on the global stage for lithium production,” Westerman said in a statement. “Investments like ExxonMobil’s will position the Natural State to play an active role in easing our dependence on our foreign adversaries for this mineral, which plays a major role in much of our daily lives. This announcement has the opportunity to bolster our state’s lithium sector, ushering in new jobs for Arkansans and a broad economic impact on the 4th District.”