Exxon Mobil CEO Darren Woods confirmed the Western major’s interest in lithium brine mining after months of silence amid reports of early-stage moves in the US onshore.
“We're … actively exploring that opportunity set and like what we're seeing so far,” Woods told analysts on Exxon’s second-quarter earnings call on Friday after he was prodded to comment on his firm’s participation in this space.
The Exxon boss avoided talking specifics in terms of how exactly the integrated major is “exploring” such opportunities. But various reports in recent months tie the company to a subsidiary holding saltwater brine rights in Arkansas’ promising Smackover formation and the partner in a memorandum of understanding to advance lithium extraction in the region.
But even with Exxon still looking to play its cards close to its vest, Woods opened up about his firm’s general rationale for investigating lithium as an emerging energy transition business.
“Since the very beginning, [we’ve] stayed focused on what I'd say is the molecule side of the [energy transition] equation, in carbon capture and hydrogen and biofuels,” Woods said. “But we're looking at, frankly, all the areas that we believe we have an expertise and a unique capability, and seeing if there's a fit for products or solutions that can help society decarbonize.”
In the case of lithium mining from underground brine reservoirs, the extraction and processing required are “very consistent with a lot of the things that we do in our refineries and chemical plants — and in fact, in some of our upstream operations,” Woods said.
These so-called “adjacencies” with existing capabilities, as Chevron CEO Mike Wirth has put it, have similarly compelled Chevron to start evaluating lithium brine mining. E&P Pioneer Natural Resources is in a similar initial conceptual evaluation stage, while Occidental Petroleum is the farthest along thanks to a subsidiary advancing lithium brine mining technologies that integrate into geothermal operations — another new energy space with natural synergies with oil and gas skillsets.
In broad terms, US oil and gas firms favor advancing new energy and low-carbon solutions boasting operational or logistical overlap with existing competencies over renewable power generation and distribution.
Investment Case
Woods noted that successful new energy opportunities must also have supportive supply-demand dynamics to build an investment case.
Here, the massive push toward vehicle electrification and battery storage needs to manage renewables’ power generation intermittency are expected to make lithium a critical resource that the world could find itself short of until supply capacity is built.
Woods called the lithium brine mining approach that Exxon is interested in a potential “win-win-win opportunity” since the extraction technique has a much lower environmental impact than open-pit mining and is expected to carry much lower costs.
Exxon executives didn’t offer any details into the company’s specific development plans, but the prior owner of the Smackover-based subsidiary Exxon now controls tested a patented modular direct lithium extraction technology that boasted high recovery rates and could use largely recycled fresh water.
