Exxon Starts Lithium Drilling in Arkansas, Seeks to be ‘Leading Supplier’ by 2030

The company aims to mine enough lithium by 2030 to supply ‘well over a million EVs per year.’

A logo of the Exxon Mobil Corp is seen at the Rio Oil and Gas Expo and Conference in Rio de Janeiro, Brazil, on Sept., 24, 2018. Sergio Moraes/Reuters

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.

Exxon’s lithium drilling operation is happening amid the Biden administration’s push to expand electric vehicle use in the United States. President Joe Biden has set a goal of ensuring that at least half of all vehicles sold in the country by 2030 are electric.

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.

Even though lithium-ion batteries are “light-weight and convenient for modern-day electronics, they not only emit a large amount of carbon dioxide to produce, but they also tap into precious water reserves,” Matthieu Vegreville, chief operating officer of carbon accounting firm Greenly, told The Epoch Times last year.

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.

Lithium batteries were invented in the 1970s by a researcher working at ExxonMobil. However, at the time, the company did not see the technology as something worth pursuing.

Ramping Up Lithium Production

In 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.”

A worker is pictured with car batteries at a factory of Xinwangda Electric Vehicle Battery Co. Ltd., which makes lithium batteries for electric cars and other uses, in Nanjing in China's eastern Jiangsu Province, on March 12, 2021. STR/AFP via Getty Images

“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.

A report published by a team of scholars from Providence College and the University of California-Davis earlier this year warned that increased EV transition could lead to more environmental damage.

“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.”

A February report from Li-BRIDGE, a battery industry group, said that lithium demand in the United States could grow by “nearly 6x by 2030” owing to demand from “increased adoption of electric vehicles (EVs) and energy storage systems (ESSs) on the electrical grid.”

According to a 2023 report by the U.S. Geological Survey, the United States has a “net import reliance” on Argentina, Chile, China, and Russia for lithium. This is despite the United States accounting for 12 million tons out of the 98 million tons of global reserves of lithium.