ExxonMobil Corporation plans to become a “leading supplier” of lithium for electric vehicles (EVs) by the end of this decade and has begun drilling at a site in Arkansas estimated to hold significant deposits of the element.
Earlier this year, Exxon purchased 120,000 acres of a site in southern Arkansas that is considered to be “one of the most prolific lithium resources of its type in North America,” according to a Nov. 13 press release. The oil giant is now drilling the first lithium well at the site and aims to be a “leading supplier” of lithium to electric vehicles by 2030.
“By 2030, ExxonMobil aims to be producing enough lithium to supply the manufacturing needs of well over a million EVs per year. Discussions with potential customers, including EV and battery manufacturers, are ongoing,” it said.
At present, “virtually all lithium” is being produced outside of North America, Exxon said. The company expects demand for lithium to grow four-fold by 2030. Dan Ammann, president of ExxonMobil, insisted that the project is a “win-win-win.”
“It’s a perfect example of how ExxonMobil can enhance North American energy security, expand supplies of a critical industrial material, and enable the continued reduction of emissions associated with transportation, which is essential to meeting society’s net-zero goals.”
“Lithium is essential to the energy transition, and ExxonMobil has a leading role to play in paving the way for electrification,” he added.
Boosting the domestic production of lithium is part of this plan. In May last year, the Biden administration announced over $3 billion in investments to manufacture more lithium batteries and components.
While lithium battery vehicles are being touted as a transition toward green energy, experts warn that lithium can turn out to be far more damaging to the environment compared to fossil fuels.
As lithium products like batteries require a more material-intensive process, lithium mining has a higher carbon footprint than coal or oil extractions, thus producing more carbon emissions. “And as the demand for battery material increases, it doesn't make the process any easier,” Mr. Vegreville said.
Ramping Up Lithium ProductionIn a Nov. 13 interview with CNBC, Mr. Ammann said that Exxon is going to be “ramping up domestic production of lithium” with a “much smaller environmental footprint than the way that lithium gets produced elsewhere in the world today.”
“We're going to be drawing on decades of experience and knowhow inside of ExxonMobil to build a profitable and high-growth new business.”
Mr. Amman insisted that there is a “huge, huge, huge opportunity” for Exxon in the lithium industry. “If you look at the evolution of electrification of the light vehicle fleet, 1 percent of the U.S. vehicle fleet is electrified today. So there's still 99 percent to go.”
“We see lithium demand quadrupling by 2030 and continuing to ramp up significantly beyond that. So we view this as a very large, very long-term opportunity. And that's certainly the way that we're investing in this is to build a business very much for the long-term.”
Exxon is expecting the “big trend” of electrification of vehicles to continue, contributing to the growth of its lithium business.
“If today's demand for EVs is projected to 2050, the lithium requirements of the US EV market alone in 2050 would require triple the amount of lithium currently produced for the entire global market. This boom in demand would be met by the expansion of mining,” the report said.
“Large-scale mining entails social and environmental harm, in many cases irreversibly damaging landscapes without the consent of affected communities. As societies undertake the urgent and transformative task of building new, zero-emissions energy systems, some level of mining is necessary.”