Exxon Mobil wants to be a major producer of lithium for electric car batteries. They’re doing this by drilling in Arkansas, as they announced on Monday. Earlier this year, Exxon bought 120,000 acres of a place in southern Arkansas called the Smackover Formation, which has a lot of lithium.
They plan to start making high-quality lithium for batteries at this location by 2027. Their goal is to provide enough lithium to make 1 million electric cars each year by 2030.
Exxon’s Big Move: Getting Into Lithium Production
Exxon mentioned in a statement that they are currently talking to possible customers, including electric vehicle and battery makers.
This move into lithium production is happening at a time when big oil companies are feeling the need to tackle climate change. Unlike Shell and BP, who are putting their efforts into renewable energy like wind and solar, Exxon is putting $17 billion into initiatives until 2027. Their focus is on cutting emissions with a focus on carbon capture, hydrogen, and biofuels.
Dan Ammann, who is the president of Exxon’s low carbon solutions business, Stated the importance of increasing the production of lithium within the country. According to Ammann, Exxon sees lithium as a long-term investment with significant growth potential, especially as the United States moves toward using more electric vehicles.
“We want to get in early,” Ammann stated that “Our goal is to take the lead in domestically producing lithium, ensuring it’s done with a positive environmental impact, and establishing that as the benchmark.”
The United States depends a lot on getting lithium from Argentina and Chile, even though it has some of the biggest lithium deposits globally, as per the U.S. Geological Survey. Currently, the U.S. only has one large-scale lithium production facility, located in Nevada.
Moreover, In the past month, it has been revealed that Exxon is set to acquire Pioneer Natural Resources for nearly $60 billion.
Lithium Battery Demand
The demand for lithium batteries is predicted to increase six times over in the U.S. by 2030, driven by the country’s move towards electric vehicles. This information comes from a February report by Li-Bridge, a battery industry group supported by the Department of Energy.
In the third quarter of 2023, electric vehicle sales increased by 50% compared to the same period in the previous year, as reported by Cox Automotive in October. Currently, only 1% of the total U.S. vehicle fleet consists of electric vehicles.
“We definitely need to reach a much higher percentage in the long run,” mentioned Ammann. “The growth is expected to be substantial and last for a long time. There might be some fluctuations and challenges along the way, but we see a significant and enduring opportunity for engaging in the long-term development of this industry.”
Exxon is applying drilling methods commonly used in oil and gas extraction to reach saltwater reservoirs containing abundant lithium, located 10,000 feet beneath the ground. The company extracts the lithium from the saltwater and converts it into high-quality material suitable for batteries right at the drilling site.
Interestingly, a research scientist at Exxon developed the lithium battery in the 1970s, but the company chose not to pursue this technology.
Exxon Mobil is making a big move to produce lithium for electric cars. Their investment in drilling operations in Arkansas and the $17 billion commitment sets them apart from other oil giants. The growing demand for lithium in the U.S. aligns with Exxon’s goal to supply 1 million electric cars each year by 2030.