Exxon Mobil mentioned on Monday that it deliberate to arrange a facility in Arkansas to produce lithium, a essential uncooked materials for electrical automobiles, which pose one of many largest challenges to the corporate’s oil enterprise.
Coming only a month after Exxon mentioned it will spend $60 billion to purchase Pioneer Natural Resources, the announcement alerts that the massive oil firm intends to hedge its massive bets on standard fossil fuels with not less than some investments in cleaner types of vitality which might be wanted to fight local weather change.
The announcement doesn’t signify a basic shift in company technique, however it’s an acknowledgment that battery-powered automobiles will more and more compete with automobiles and vans fueled by gasoline and diesel. It may additionally open the door for southern Arkansas to emerge as a significant supply of lithium. Most of the metallic at the moment comes from Australia and South America, and far of it’s processed in China.
“Electrification is going to be a major component of the energy transition, and we bring highly relevant experience to the production of lithium,” Dan Ammann, president of Exxon Mobil Low Carbon Solutions and a former high govt at General Motors, mentioned in an interview. “We see an opportunity to deploy that will be highly profitable.”
He mentioned the undertaking would “enable the continued reduction of emissions associated with transportation.”
Exxon introduced that it will start lithium manufacturing in 2027, with the purpose of manufacturing sufficient metallic to provide greater than 1,000,000 electrical automobiles a 12 months by 2030. The firm didn’t say how a lot it will make investments in the undertaking, however Mr. Ammann mentioned the corporate was prepared to spend “hundreds of millions” as a begin and would search for “more opportunities” to broaden lithium manufacturing.
An important element of lithium-ion batteries, lithium has turn out to be a prize in a world race between American corporations and companies in China, Russia and elsewhere. The United States produces solely a small quantity of lithium, although mining corporations are hoping to produce much more of it, together with in California, Nevada and North Carolina.
Exxon executives say the corporate’s experience in geology, drilling, hydraulic fracturing and chemical manufacturing will permit it to economically extract lithium from the soup of saltwater and minerals referred to as the “Smackover brine” discovered underground in Arkansas. Exxon added that 1000’s of depleted oil wells drilled over the past century may ultimately be rehabilitated to produce lithium.
In latest years, Exxon has doubled down on oil and pure fuel manufacturing in the Permian Basin, which straddles Texas and New Mexico, and in the deep waters off Guyana. Arkansas matches into its plans of concentrating its manufacturing shut to residence and away from the Middle East and Russia, the place Western oil corporations beforehand tried and largely failed to set up sustainable companies.
Some different oil corporations like BP, Eni and Equinor have invested in different types of vitality like photo voltaic, nuclear and wind, however Exxon has sought to improve its investments in fossil fuels whereas making an attempt to ramp up efforts at capturing and burying carbon emissions from business and producing hydrogen as a clear gas.
In Arkansas, Exxon plans to use a course of referred to as “direct lithium extraction,” a brand new know-how that makes use of solvents or membranes and filters to produce lithium from brine. Engineers and executives which might be pushing this methodology have mentioned it’s superior to open pit mines or evaporation ponds as a result of it’s quicker and wastes much less water. But no person has efficiently proved that the method can produce sufficient lithium for tens of millions of automobiles or stationary batteries.
Exxon, which bought drilling rights on 120,000 acres in Arkansas this 12 months, mentioned it will pump leftover brine again underground, and convert the lithium it mined to battery-grade materials close by. China dominates the tough enterprise of turning lithium discovered in the earth into the concentrated materials battery factories want.
Some vitality specialists are skeptical that direct extraction will work at massive scales and have mentioned Exxon’s effort could not improve the provision of lithium by a lot. Mr. Ammann mentioned he was assured the know-how would work.
Some environmentalists expressed halfhearted reward for Exxon’s lithium efforts.
“It’s an infinitesimal fraction of what Exxon does, and most of what it does is dreadful,” mentioned Dan Becker, director of the secure local weather transport marketing campaign on the Center for Biological Diversity. “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.”
The Inflation Reduction Act, signed by President Biden final 12 months, has helped spur efforts to produce lithium, make batteries and assemble electrical automobiles with beneficiant tax credit and different incentives.
Still, little new lithium manufacturing has come on line in the United States in latest years, and specialists word that establishing mines and processing vegetation right here may take a few years. Some corporations have been working for years to produce lithium from brine underneath the Salton Sea in California.
“It’s helpful, but it’s not going to be enough for critical metal independence to get away from China,” mentioned Benny Freeman, a chemical engineering professor on the University of Texas at Austin who’s lively in lithium analysis. “But this, plus the Salton Sea, is a good start.”
Mining specialists mentioned Exxon had the experience to discover lithium however may want outdoors assist to separate the metallic by way of filtration or purification from the salty liquids.
Exxon has held discussions with Tesla, Ford Motor and different automobile corporations to provide them with lithium. Other oil corporations, together with Chevron and Occidental, have additionally mentioned they’re taking a look at investing in lithium mining.
In a means, Exxon’s new enterprise in lithium is a return to its previous. In the Seventies, an Exxon chemist performed a number one position in creating the lithium-ion battery. Exxon even started manufacturing the batteries in 1976 however gave up after concluding that the marketplace for the batteries was too small.
The value of lithium has been falling in latest months as new provides have turn out to be obtainable in varied international locations and the expansion charge of electrical automobiles has slowed in China, Europe and the United States. But many vitality specialists anticipate a scarcity of the metallic by the top of the last decade, which may consequence in greater costs.