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Exxon Mobil Ventures into Lithium Production for Electric Vehicles with Arkansas Drilling Operation
In a bold move signaling its commitment to the electric vehicle (EV) revolution, Exxon Mobil announced plans to establish itself as a leading lithium producer for EV batteries through a drilling operation in Arkansas. The oil giant has purchased 120,000 acres of land in the lithium-rich Smackover Formation and aims to begin lithium production as early as 2027.
This strategic initiative aligns with Exxon’s goal to supply enough battery-grade lithium to support the manufacturing of 1 million electric vehicles annually by 2030. Discussions with potential customers, including electric vehicle and battery manufacturers, are already underway.
The decision to venture into lithium production comes at a time when major oil companies face increasing pressure to address climate change. While counterparts like Shell and BP have been focusing on renewable energy sources such as wind and solar, Exxon is investing $17 billion through 2027 in emission reduction initiatives, emphasizing carbon capture, hydrogen, and biofuels.
Dan Ammann, President of Exxon’s low carbon solutions business, emphasized the significance of domestic lithium production in the energy transition. Viewing lithium as a long-term investment with high growth potential, Ammann stated, “We want to get in early, lead the way on domestic production of lithium, do it with a very favorable environmental footprint and set that as the standard.”
Despite having substantial lithium deposits within the country, the U.S. relies heavily on imports from Argentina and Chile for its lithium needs. The move by Exxon aims to address this reliance and strengthen domestic lithium production.
The U.S. Geological Survey notes that the U.S. currently has only one commercial-scale lithium production operation in Nevada. With the surge in demand for lithium batteries expected to grow sixfold by 2030 as the nation transitions to electric vehicles, Exxon’s Arkansas operation is poised to play a crucial role in meeting these evolving needs.
Electric vehicle sales surged by 50% in the third quarter of 2023 compared to the same period last year, according to a report from Cox Automotive. However, electric vehicles currently constitute only 1% of the total U.S. vehicle fleet, indicating significant room for growth in the coming years.
Exxon’s approach involves deploying drilling techniques traditionally used in oil and gas extraction to access saltwater reservoirs rich in lithium, located 10,000 feet below ground. The extracted lithium is then processed onsite to produce battery-grade material.
This ambitious venture signifies Exxon’s proactive stance in the burgeoning electric vehicle market, tapping into its legacy while strategically positioning itself as a major player in the sustainable energy landscape.