An Oil Giant is Going Woke

The U.S.’ largest publicly traded oil company is about to disrupt lithium production in a huge way

The lure that brought the giant into the lithium industry is profits. Analysts forecast global demand for lithium to quadruple by 2030. And the U.S. needs domestic lithium 

ExxonMobil (NYSE: XOM), the $416 Billion granddaddy of the oil industry, announced that it leased 120,000 acres of the Smackover Formation in Arkansas. This is a rock formation rich in saltwater brine. 

ExxonMobil is a world leader in extracting fluid from underground. Their geologists know how to drill wells. The real breakthrough is in the extraction technique. 

Called Direct Lithium Extraction (DLE), the process is a radical departure from the old technique. 

DLE radically reduces the footprint of the brine plant because it does not use separating ponds. You can see a summary of the process in the image.

ExxonMobil’s new division, called Mobil Lithium, plans to be in production by 2027. It targets lithium production equal to the needs of 1 million electric vehicles per year by 2030. 

DLE allows the company to pull brine from deep in the earth, separate just the lithium chloride, and reinject the rest of the water back into the ground.

It’s an excellent example of a company using old technology to meet a new demand.

DLE will improve lithium production by:

• Doubling the brine yield per volume
• Increase recovery from 40%-60% to 70% to 90%
• Improve brine economics.
• Eliminating the need for huge brine ponds
• Eliminating waste by reinjecting unused brine liquid

DLE comes with massive promise. And it isn’t just ExxonMobil marketing its new division. Here’s what Goldman Sachs says:

“The implementation of Direct Lithium Extraction (DLE) technologies has the potential to significantly increase the supply of lithium from brine projects (much like shale did for oil), nearly doubling lithium production on higher recoveries and improving project returns, though with the added bonus of offering ESG/sustainability benefits, while also widening rather than steepening the lithium cost curve.”

This could be a revolution in lithium production. And its epicenter is in southern Arkansas. This is another solid industry moving to the U.S. thanks to electric vehicles (EVs). The initiatives spurring the move to EVs is an echo of the move to personal automobiles from mass transit.

It will continue to be an exciting sector to observe and invest in.

For the Good,
Matt Badiali

Numbers You Need to Know

1871

Lithium was discovered by Johan Arfvedson in 1817 in Stockholm, Sweden.(Chemicool)

70 Years

Lithium has been the treatment of choice for patients with bipolar disorder for nearly 70 years. (National Library of Medicine)

3

Lithium is one of three elements produced by the big bang, along with hydrogen and helium. (ThoughtCo.)

What’s New in Sustainable Investing

Exxon Mobil Sets its Sights on Lithium Production in Arkansas

Oil titan ExxonMobil is making a major play for the lithium market, announcing plans to become a leading producer of lithium for electric vehicles (Yahoo Finance)

Lithium producers stay bullish on EVs despite growing headwinds

The world’s largest lithium producers say they remain bullish on long-term demand for the battery material in the midst of recent price drops fueled by growing worries that the global pace of electric vehicle adoption is slowing.(Reuters)

Video Of The Week