Global energy giant ExxonMobil Corp. said Monday morning that it will begin drilling for lithium this month near Magnolia, a move Gov. Sarah Huckabee Sanders said could turn the page on a new chapter of the state's economy.
Sanders and Patrick Howarth, the lithium global business manager for ExxonMobil, announced the company's plans during a news conference at the state Capitol.
In a project the company is calling Mobil Lithium, ExxonMobil plans to tap into the Smackover formation, which runs through south Arkansas, for brine from which to extract lithium, an increasingly sought after mineral used to power electronics and build batteries for electric vehicles.
Earlier this year, the company acquired mineral rights from Galvanic Energy of Oklahoma City on 120,000 acreas near Magnolia for an estimated $100 million. It aims for first lithium production to begin in 2027.
"We're kicking off our drilling campaign this month, so we'll be drilling very shortly," Howorth said. "We acquired over 100,000 acres early this year of mineral rights, and we'll be progressing the development of that.
"In terms of the process, the Smackover formation in Arkansas is pretty deep — it's about 10,000 feet below the surface. We'll be drilling wells into that formation, extracting the brine to the surface, and then using modern processing techniques that are significantly lower environmental impact than the current methods to selectively extract [lithium] before putting the brine back in the ground."
Sanders said the investment would have an impact worth hundreds of millions of dollars to the state over many years.
"I think this is something that has the ability to have tremendous long-term economic impact," she said. "This isn't limited over the course of the next year or two, but something that could go on for decades. And that's certainly the hope. We know that the scale — and I'll be happy to bring Patrick back up here — could go into the hundreds of millions of dollars, just for Exxon's investment in the overall project."
More: Watch video of the governor's announcement here.
Members of Arkansas' congressional delegation praised the announcement in a news release. Columbia County Judge Doug Fields said work is starting in the area to prepared roads to the wells.
"This is going to be a big impact for south Arkansas, Columbia County, Lafayette County area," he said.
ExxonMobil joins other companies looking to unlock what's expected to be a major supply of domestic lithium in south Arkansas. Chief among them is Standard Lithium Ltd., based in Vancouver, British Columbia, which has been perfecting an extraction method in the area for six years and has the backing of Koch Industries of Wichita, Kansas, the second-largest privately held company in the U.S.
Earlier this year, Standard acquired a 118-acre tract in Lafayette County as a likely site for a $1.3 billion facility for producing battery-quality lithium hydroxide from the underground brines of south Arkansas. It is also building a smaller lithium plant south of El Dorado in conjunction with bromine producer Lanxess AG of Cologne, Germany.
In a statement, ExxonMobil said that it will use conventional oil and gas drilling methods to access lithium-rich saltwater from reservoirs about 10,000 feet underground. It will then use direct lithium extraction technology to separate lithium from the saltwater.
After that, the company will convert the lithium onsite into battery-grade material. The remaining saltwater will be re-injected into the underground reservoirs. The company said the DLE process produces fewer carbon emissions than hard rock mining and requires less land.
"This project is a win-win-win," Dan Ammann, president of ExxonMobil Low Carbon Solutions, said in a news release. "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."
Ammann also talked about the company's plans in an interview on CNBC earlier Monday.
ExxonMobil said that by 2030 it aims to be producing enough lithium to supply the manufacturing needs of more than a million electric vehicles per year.
The Smackover formation, which runs 400 miles from Texas to Florida, crosses Arkansas along a strip of its southern border and was the center of Arkansas’ oil and gas discoveries a century ago that put towns like El Dorado and Magnolia on the petrochemical map. The region has also been a hub for bromine, which has been drawn from the brine for more than 50 years.
With reporting by Kyle Massey.