© Reuters. FILE PHOTO: The ExxonMobil logo is seen in this illustration taken October 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
By Ernest Scheyder
(Reuters) -Exxon Mobil will unveil its long-awaited lithium strategy on Monday with an announcement that it aims to begin production of the metal for electric vehicle (EV) batteries in Arkansas by 2026, according to a source with direct knowledge of the matter. the plans of big oil companies.
Exxon’s (NYSE:) expansion into the sector comes as emerging technologies aim to boost global production of the ultralight metal by filtering it from salty brine deposits found around the world and supplying it to battery makers eager for new sources. .
Exxon, which invented the lithium-ion battery in the 1970s but has moved away from the technology, plans to begin producing at least 10,000 metric tons per year of lithium in Arkansas by 2026 with partner Tetra Technologies (NYSE:) in what which has been called “Project Evergreen”, according to the source.
That initial production would be roughly equivalent to the amount needed to produce 100,000 electric vehicle batteries.
Reuters reported this year that Exxon had agreed to develop more than 6,100 lithium-rich acres in Arkansas with Tetra, which produces chemicals for water treatment and recycling.
Exxon has been drilling wells in Arkansas this year to study the vast Smackover Formation, a geological formation that stretches from Florida to Texas and is packed with brine rich in lithium and bromine. The company has also been testing an unproven direct lithium extraction (DLE) technology that will be crucial to commercial operations, according to the source, who was not authorized to speak publicly.
An Exxon spokesman declined to comment. A Tetra representative was not immediately available for comment.
For Exxon and other oil companies, lithium production offers the chance to sell a new product with relatively little added cost. Darren Woods, Exxon’s CEO since 2017, told investors during an Oct. 4 call that the lithium sector was “quite promising.”
He also said, “We see an opportunity to really take advantage of the things we’re pretty good at.”
Exxon, like other fossil fuel producers, has faced pressure to reduce carbon emissions from its operations. Reuters reported this year that Exxon shareholder Engine No. 1 had pressured the company to implement DLE.
Exxon is not expected to publicly announce which DLE technology it has chosen, according to the source. The company has a long-standing pattern of not disclosing some suppliers.
Reuters reported this year that Exxon and Chevron (NYSE:) held talks with International Battery Metals and EnergySource Minerals about licensing DLE technology.
OTHER SURFACES
Aside from its partnership with Tetra, Exxon also controls more than 100,000 acres in Arkansas from where it plans to begin lithium production by 2027, according to the source.
Exxon acquired that acreage this year from the private company Galvanic Energy, Reuters reported.
It was unclear whether Exxon plans to expand its lithium operations outside of Arkansas. Like all oil producers, Exxon extracts water containing traces of lithium as part of fossil fuel production. That could help the oil industry become the world’s largest supplier of lithium, if DLE technologies can be commercialized.
Exxon, like Albermarle (NYSE:), Standard Lithium and others aiming to produce the battery metal in Arkansas face a key regulatory hurdle. The southern US state, just north of Louisiana, has a royalty structure for bromine, which Albemarle has long produced there, but not for lithium, which could delay development in the short term.
The Arkansas Oil and Gas Commission, which conducts lithium operations in the state offshore, has said it plans to hold hearings on the matter.
Exxon plans to send at least six representatives to the Benchmark Minerals conference next week in Los Angeles, according to a list of attendees seen by Reuters. It would be the company’s first attendance at the important critical minerals conference.
