Because the big oil companies are aiming for lithium extraction
Big oil companies like Exxon and Equinor are considering converting back to lithium mining. A new technology of direct extraction from salt water could revolutionize the industry and transform the US into a metal powerhouse for batteries. All the details
Some of the largest oil companies such as ExxonMobil, Equinor and Schlumberger are considering entering the lithium sector to diversify their business beyond fossil fuels and position themselves as key suppliers of a metal critical to the ecological transition. Lithium is the main raw material of batteries that power electric vehicles and that store the energy of wind and photovoltaic plants.
– Read also: Can we do without China for electric car batteries?
But before taking the step, oil & gas companies want to understand if their technical skills in pumping, treating and reinjecting liquids into the subsoil (crude oil and water, to be precise) can be used in the extraction of lithium from deposits unconventional salt water, or brine.
IS LITHIUM, INSTEAD OF RENEWABLES, THE OBVIOUS CHOICE FOR OIL COMPANIES?
Brian Menell, chief executive officer of TechMet, a US government-backed investment fund focused on mining, told the Financial Times that lithium mining is “a natural evolution for oil companies. “Lithium brines are an obvious choice” for these companies because “unlike charging networks [for electric cars, ed ] and wind farms, where they have no skills beyond project management, they are experts in pumping and in subsoil fluids.
In essence, what Menell means is that some oil companies want to avoid entering into direct competition with the electricity companies, which are much more expert in the construction of renewable parks; so, to preserve their economic centrality in a low-carbon future, they are thinking of converting the know-how to the extraction of critical minerals, a sector closer to their main business segment.
The TechMet fund owns a stake in EnergySource Minerals, a lithium-producing company backed by Schlumberger, a top oilfield services giant.
WHAT THE OIL & GAS COMPANIES DO IN PRACTICE
As the Financial Times writes, the entry of the large oil companies into the lithium market would give relief to the car manufacturers, engaged in the conversion to electric mobility and currently dependent, for raw material supplies, on small mining companies that may not be able to to guarantee the huge volumes of lithium required by the ecological transition.
Until now, however, the oil companies have largely confined themselves to speculation in lithium, rather than production: they have acquired minority stakes in specialized mining companies, they have licensed their mining technologies, they have bought some prospecting rights (the analysis geology, simplifying) of the deposits.
THE INVESTMENTS OF EXXONMOBIL, EQUINOR, OCCIDENTAL AND STELLANTIS
ExxonMobil of the United States recently spent more than $100 million to acquire an oil field in the Smackover area of Arkansas that contains lithium brine. As early as 2021, Equinor, a Norwegian, had bought a stake in the French company Lithium de France. Occidental, a major US producer of shale hydrocarbons, is the co-owner of TerraLithium, a company that develops lithium mining technologies. The metal also caught the attention of Michael Wirth, CEO of another American "Big Oil", Chevron.
Vulcan Energy , backed by Stellantis, is developing a direct lithium mining project in the Rhine Valley, Germany, using (renewable) geothermal energy to power the processes.
THE DIRECT EXTRACTION OF LITHIUM FROM THE BRINES
In recent years, the growth in lithium supply has been mainly due to the exploitation of Australian rock deposits; the metal can also be extracted from brines, which are instead concentrated in South America (in the so-called " triangle " formed by Chile , Argentina and Bolivia). China controls 28 percent of global lithium supplies through investment in overseas mines.
In order to really exploit the potential of brines, it is necessary to develop a new technology, the direct extraction of lithium: it has not yet established itself on a large scale, but it promises to have a lower environmental impact than conventional techniques because it allows for more accurate – filters or membranes are used – the metal from salt ponds, reducing water consumption .
Currently, the lithium found in the South American salt pans ( salar , in Spanish) is extracted from the evaporation ponds which eliminate any other element in the basin, with the exception of lithium. Direct extraction does the opposite. For this reason, the Goldman Sachs bank considers it "a potentially revolutionary technology" like hydraulic fracturing ( fracking ) for oil, opening up to the profitable exploitation of the vast unconventional hydrocarbon deposits in the United States.
In addition to speeding up the extraction process (days instead of months), direct extraction guarantees higher metal recovery rates compared to evaporation ponds (60-80 percent instead of 40-60 percent), allowing the exploitation of resources currently not economically competitive. Including wastewater from some oil fields and geothermal projects.
WILL THE UNITED STATES BECOME A LITHIUM SUPERPOWER?
Direct lithium extraction has been used for twenty-five years in Argentina and in some projects in China's Qinghai province. But it could see massive application in the Permian Basin, the most important oil field in the United States and the world, located between Texas and New Mexico. According to the consultancy Enverus, the exploitation of the wastewater used in the fracking of a single section of the basin could guarantee a production of 225,000 tons of lithium carbonate per year, for a value of 19 billion dollars.
There are direct lithium mining projects underway in the states of Nevada and Utah and also in Canada, in the oil province of Alberta. Investments in this technology are favored by both US (contained in the $369 billion dollar Inflation Reduction Act) and Canadian public incentives.
– Read also: Batteries: Canada spends everything on Stellantis and Volkswagen, but forgets metals
THE TECHNICAL DIFFICULTIES
Even if the adaptation of petroleum processes to lithium extraction seems an almost natural operation, in reality the raw mineral would not be enough to satisfy the needs of car manufacturers (which rather have processed material, suitable for use in batteries) ; furthermore, the lithium market is much smaller than that of oil and conversion costs may not bring satisfactory economic returns. According to calculations by the Financial Times , the lithium market could be worth 150 billion dollars a year; the oil market is currently worth 2.6 trillion.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/societa-petrolifere-estrazione-diretta-litio/ on Sun, 02 Jul 2023 05:44:48 +0000.