An oil industry adage says if you’re looking to find the expert in the room on a big undertaking, “look for the guy who says it’s going to cost the most and take the longest.”
A big lithium boom in South Arkansas will demand costly engineering and construction, experts say. Companies like Exxon Mobil, Tetra Technologies and Standard Lithium have discovered promising amounts of lithium in the underground brines of the Smackover geological formation, which lies nearly 8,000 feet below the woods and fields of south Arkansas. That brine now feeds bromine production at Lanxess AG and Albemarle in Union and Columbia counties.
Extracting lithium from that brine will be hard, and building up the infrastructure will keep engineers busy for years, according to Robert M. Reynolds, president of Shuler Drilling of El Dorado.
Dave Gibbs, CEO of Mission Creek Resources LLC of Texas and a petroleum engineer with long experience in the oil and brine fields of south Arkansas, also expects challenges in ramping up lithium extraction to commercial scale.
Gibbs worked with Standard Lithium on a test plant that has been making small batches of lithium carbonate, a prized battery-making ingredient, for several years in El Dorado.
The test plant processes about 1,700 barrels of brine a day, making use of Lanxess’ brine infrastructure.
“A commercial-size plant will need to be at least 100,000 barrels, or 50 times what they’re processing right now,” Gibbs said. “There is a far cry between a small bench-scale laboratory test and actually making that happen on a commercial scale.”
To provide all that brine, lithium producers will need supply wells and brine disposal wells, because almost all of the water has to be returned underground. “The brine has got to go back downstairs; there’s not a pond anywhere big enough to hold it all,” Reynolds said.
Roads, Bridges, Power Lines
The brine supply wells cost up to $20 million each; the disposal wells $15 million, and that’s assuming a company has existing roads, bridges, culverts, power lines and pipelines in place.
For undeveloped tracts — like 118 acres chosen for Standard Lithium’s South West Arkansas Project in Lafayette County and land in Lafayette and Columbia counties where Exxon Mobil subsidiary Saltwerx LLC and Tetra Technologies have sited their Evergreen Brine Unit — preparing for drilling could be more expensive than the wells themselves, Reynolds said.
“It will be an investment of hundreds of millions if not billions of dollars,” he said. “The soil has to be stabilized. The road has to be all-weather around the clock, 24/7/365, so they can physically check on that well at least twice a day. In the event that some maintenance is needed, they need to be able to carry that out.
“They’ve got to have a lot of electric power. And to transport that brine supply to a central product processing plant several miles away, there has to be a pipeline. And likewise, the stripped brine — what they call tail brine — has to be piped from the processing plant to the disposal well that puts it back into the same rock formation that it came from.”
‘A Bazillion Dollars’
Reynolds said the cost of the roads, power lines and pipelines will probably be greater than the well costs. Bromine producers spent untold millions over the past six decades to build an infrastructure. “Even if you had [the bromine producers’] accounting records, you’d have to apply inflation factors to get to reality, a bazillion dollars. What would it cost us to get a standalone brine supply processing and disposal operation where none now exist? This is an incredible amount of money.”
Excavation contractors in El Dorado and Magnolia have extensive experience in preparing the ground for brine infrastructure, Reynolds said. “They’re the same ones that do it for the oil and gas industry. But the big difference is that brine supply wells are a much larger undertaking than an oil and gas well. The hole in the ground is a lot bigger, and they use a much larger and more expensive pipe in those holes.” The production equipment itself is also larger than in oil and gas wells.
The lithium brine infrastructure construction timeline could be five or six years, Reynolds said.
“There will be a slow buildup. You can’t do all of these things simultaneously.”
Electric motors run the pumps that pull up the brine, hanging down 5,500 feet from the land’s surface, where the temperature is 180 degrees. “The smallest ones are about 750 or 1,000 horsepower, and the biggest ones are 2,000 horsepower,” Reynolds said. “There will also be communication systems to control those wells.”
It’s all modern industrial infrastructure, and the bromine industry offers a clear analogy, Reynolds said.
‘Catbird Seat’
“It has taken them 60 years to develop that infrastructure. And there are only two companies in Arkansas which have the right to produce brine and do produce brine. That is Lanxess in Union County and Albemarle in Columbia County. There’s a handful of companies out there who have leased [land and mineral rights] in Lafayette, Miller and Columbia counties, but those companies have never produced a drop of brine or any mineral associated with brine. That includes Exxon Mobil and Tetra, and others we don’t even know who they are. But the bottom line is that Lanxess and Albemarle are in the catbird seat.”
Standard Lithium is well positioned because of its partnership with Lanxess, Reynolds said. “Nobody else has got a pilot plant running in south Arkansas; Lanxess is also a significant shareholder in Standard Lithium. The original financing that Standard Lithium was trying to accomplish had not been completed; they didn’t have enough money in hand to build a pilot plant. Lanxess stepped up and provided that funding in exchange for stock warrants, which Lanxess has since exercised.”
Gibbs, of Mission Creek Resources, noted that lithium is the lightest metal on earth.
“That’s why it’s so useful in electric vehicles,” he said. “It has an atomic weight of 3, which means the only lighter elements are helium and hydrogen. It’s a very useful electrolyte that has been used in pharmaceuticals and a little bit in pigmentation. But far and away the biggest market for lithium development is the battery market.”
The underground brine was once a nuisance byproduct of oil and gas drilling in south Arkansas, but bromine from it became a marketable commodity in the 1950s.
Producers sell most of the bromine to plastics manufacturers, mostly in China.
“Bromine is what they use to suppress flammability in plastic,” Reynolds said. “Automobiles, computers and household stuff have so much plastic, if it ignited it would burn you. Bromine keeps it from igniting.”
What Lies Beneath
If a picture is worth a thousand words, a rock sample is worth a thousand pictures to Robert Reynolds.
Reynolds, president of Shuler Drilling of El Dorado, has been digging thousands of feet deep and millions of years back into south Arkansas’ past over a five-decade career in the Smackover geological formation.
Core samples from a few of the 2,100 wells he has worked on are “great paperweights” in his photograph- and map-papered office. One Jurassic Smackover limestone rock stained by residual crude oil came from 7,800 feet below the surface and goes back more than 175 million years. “That’s me in a nutshell,” Reynolds said. “I don’t have any other activities. It’s all rocks, dirt, mud, water, oil, gas and brine.”
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