By STEVE BRAWNER
Arkansas has a resource under its soil that could transform the state: lithium, the critical element needed for batteries in electric cars and cell phones, and for longer-term energy storage. Currently, the world depends on China to refine the lithium after it is extracted. Maybe Arkansas could become a leader in that, too.
Those were some of the takeaways from the 2nd annual Arkansas Lithium Innovation Summit Oct. 28-29 in Little Rock.
If you haven’t been paying attention to what’s been happening with lithium, you should. This may be the most important Arkansas business story since Sam Walton opened his first Walmart in Rogers in 1962.
The U.S. Geological Survey estimates that southwestern Arkansas has between 5 and 19 million tons of lithium in the saltwater brine contained in the Smackover Formation’s porous limestone. If it can be recovered – and big energy companies are betting it can – it would be enough lithium to meet the projected world demand in 2030 for lithium in car batteries nine times over.
In other words, lithium could be to Arkansas in the 21st century what oil was to Texas in the 20th century, or what gold was to California in the 19th.
The summit drew officials from major energy companies. Those included ExxonMobil, which has acquired the brine rights to 300,000 net acres and is drilling wells. The Wall Street Journal reported in 2023 that it had invested $100 million for what then were just the first 120,000 acres. Also speaking was a representative from Chevron, which has acquired the rights to 125,000 acres in Arkansas and east Texas. Standard Lithium, which has been in Arkansas since 2017, also owns the rights to 300,000 net acres. It plans to start construction next year on a $1.4 billion plant funded with help from a $225 million federal grant.
Two themes emerged from the sessions I covered on the morning of Oct. 28.
One is that the big energy companies see Arkansas as not only resource-rich but also a great place to do lithium business. The Smackover formation stretches across the southern United States from east Texas to the Florida panhandle, but south Arkansas is the center of the industry.
The state has a huge advantage in that it already has decades of experience regulating brine. That’s because it’s the world’s leading producer of another element, bromine, found therein. In fact, the state’s well-established regulatory framework was the reason ExxonMobil chose to come to Arkansas over other states, said the company’s lithium global business director, Patrick Howarth.
Arkansas also has a welcoming attitude toward the industry. Howarth said the state’s lithium summit is the biggest anywhere.
“I’ve worked on trying to establish energy projects in many jurisdictions around the world through my career, and I’ve never seen such strong support at the local level,” he said.
Texas, as noted previously in this column, also has lithium, but it’s behind Arkansas. Dr. Allison Kennedy Thurmond, vice president North America lithium for Equinor, which is partnering with Standard Lithium, said Arkansas has a “first-mover advantage.”
The other big theme at the summit’s first morning sessions was the need to counteract China’s dominance of the market. Like Arkansas, China has a lot of lithium. But unlike the United States, China made lithium a strategic priority many years ago. It has a big lead in the midstream process that occurs after extraction – where the lithium is purified and refined and made ready to go into a battery.
Those processes happen in China. It would be so much better from an economic and national security perspective if they were occurring in the United States.
As Gov. Sarah Huckabee Sanders pointed out, Arkansas can be the place where that happens.
“[W]e don’t just want to do lithium extraction,” Sanders said. “We want to build out the conversion, the refining and the manufacturing, all right here where this valuable resource sits.”
There are no guarantees in business, including in the energy sector. A few years ago, the state experienced a boom-and-bust cycle with the natural gas contained in the Fayetteville shale.
But the Fayetteville shale experience did not involve ExxonMobil and Chevron investing hundreds of millions of dollars between them. Arkansas was not leading the country for an emerging, critical resource like it is now.
Keep watching the lithium story. It could change the state.
Steve Brawner’s column is syndicated to 21 outlets in Arkansas. Email him at brawnersteve@mac.com.