Well enough
Electric news from LA
Much ado has been made about the budding lithium industry in Arkansas, and for good reason. The metal is plentiful and accessible in LA (lower Arkansas), it’s vital for making electric vehicles, which is good for the air you breathe, and the metal under our feet has caught the eye of some major players, like ExxonMobil and Standard Lithium. Which are, and have been, investing big money. By big money, we mean billions—with a B.
It’s an industry whose ramp-up in the region has the potential to transform southern Arkansas back to what it used to be 100 years ago when it was a major oil-producing area. And the lithium industry is going to be around for decades.
Last week, lithium players were in Little Rock’s Robinson Center to attend the first Arkansas Lithium Innovation Summit. Among them were ExxonMobil Lithium Global Business Manager Patrick Howarth.
Unlike areas in Utah and Nevada where lithium extraction companies mine the mineral, and thus face local opposition, in LA the resource comes from underground water, some of which is accessible from wells that were drilled decades ago.
Without going into great detail, the direct lithium extraction (DLE) process separates the mineral from the water in which it lurks and is more environmentally friendly than mining for it on many levels—but namely once the lithium is extracted, the leftover water is reinjected into the well from which it came.
According to Aaron Gettinger’s story in Friday’s paper, Exxon aims to produce enough lithium to power 1 million electric vehicles a year by 2030. To do that, the company acquired 120,000 acres in southern Arkansas last year— and it expects to be producing lithium by 2027.
“We bring capital, we bring skill, and we bring experience, whether that’s producing affordable and reliable energy the world needs or the new businesses of the future,” Mr. Howarth said. “We plan to spend over $20 billion pursuing lower-emissions opportunities between 2022 and 2027. These include new businesses like [carbon capture and storage], hydrogen and, of course, lithium.”
Accessing the Smackover geological formation, which holds the lion’s share of the brine from which the lithium is extracted, requires geoscience and reservoir engineering capabilities. And it shouldn’t surprise anyone that the largest oil company in the world has those capabilities.
In addition to the luck of geography and geology Arkansans enjoy, we also have an existing regulatory structure that makes the state an attractive place to do this kind of business.
However, according to Arkansas’ Commerce Secretary Hugh McDonald, the state needs improvements like power, water, sewer, housing and transportation as well as a fair, predictable and competitive royalty structure. None of these are non-starters.
Mr. Howarth also announced an initial $100,000 infusion of cash in the ExxonMobil Charitable Endowment for Southwest Arkansas, which will go towards education, quality of life and public safety in Lafayette and Columbia counties.
Now, perhaps you think $100,000 might be a rounding error for a lot of ExxonMobil’s daily global transactions, but on a local level, it’s the equivalent of putting a stake in the ground and claiming territory in a community it plans to be part of for the foreseeable future.
Standard Lithium is already a visible presence in the area and it won’t be long at all before ExxonMobil is too.
Regardless of whether electric vehicles continue to gain significant market penetration in America, the industry is poised to thrive worldwide. And this state is uniquely positioned to take advantage of it. This is all good news for the state, the country and the planet.