Big Oil Becomes Big Battery
The soft, silver-white, and highly-reactive alkali metal Lithium is the lightest solid metal on Earth with the lowest density. In addition to being a key element to memorize in your high-school chemistry class, Lithium has multiple uses in the real world. Its unique properties make it an ideal driver of electrochemical reactions in rechargeable batteries, consumer electronics, energy grid storage, and electric vehicles. With a growing focus on renewable electric power, lithium-ion batteries have more demand than ever before. More specifically, demand is projected to increase tenfold between 2020 and 2030, creating a market value increase of 6.68 billion U.S. dollars.
In a sense, Lithium is the new oil. We need it to power every part of our daily lives, including the device you’re reading this article on. As such, lithium mining and processing have become profitable industries for companies to enter into. But, the key players involved are not who you might expect.
ExxonMobil, which produces around 2.5 million barrels of crude oil daily and is currently responsible for 3% of the world’s supply, is now aiming to mine enough lithium to equip 1 million electric vehicles a year by 2030. Occidental, another huge oil and gas producer in North America, recently patented its TerraLithium technology to extract lithium from brine and is collaborating with Berkshire Hathaway to commercialize it. Equinor, a petroleum refining company responsible for around 70% of the total oil and gas production on the Norwegian continental shelf, recently entered into an agreement with Standard Lithium Ltd to acquire a 45% share in two lithium project companies in Arkansas and Texas.
These companies have a lot in common. Firstly, they are all involved in the oil, petroleum, and petrochemical industry in some way or another but are attempting to diversify their revenue streams through lithium, marking the transition to renewable energy. Secondly, the specific type of lithium mining they are doing is untraditional: rather than extracting the lithium from rock, they are utilizing a process known as brine extraction.
Brine is a naturally-occuring salt solution that can be found in seawater, groundwater, and surface water. But, the brine containing lithium is located 10,000 feet underground. In the process of extracting lithium from this brine, the liquid is pumped to the surface and filtered using chemical solvents and ion exchange. Then, the lithium is stripped from resin before the brine is pumped back underground. This process is considered relatively sustainable because it uses 95% less energy, 84% less water, and produces 86% fewer emissions than lithium mining from rock ores.
Pointing back to the key players mentioned earlier in this article, it is important to note that the overwhelming majority of companies extracting lithium from brine are also involved in crude oil production. This is because these companies are attempting to capitalize on the core capabilities they possess: subsurface exploration, drilling, and chemical refining. In fact, there is not a whole lot of additional investment that needs to be made by oil companies to penetrate the lithium market. They are simply applying the same knowledge and expertise gained from decades of oil extraction to a different material. As Colin McLelland put it, “The expertise these companies can bring may also help to ramp up lithium supplies from areas where it was previously uneconomic to extract the metal.” Even with an entirely new market, the same players will continue to dominate the industry, preventing startups from thriving. If you thought the renewable transition would kill Big Oil, you were beyond wrong.
Sources:
https://electrek.co/2023/11/13/exxonmobil-begins-lithium-drilling-us-ev-supply-leader-money/
https://www.mining.com/big-oil-seizes-lithium-opportunities/
https://www.equinor.com/energy/oil