Thread regarding ExxonMobil Corp. layoffs

More greenwashing.

Exxon's Getting Into the Lithium Business. It Should Do This Instead.
Story by Al Root • 1h ago

https://www.msn.com/en-us/money/markets/exxons-getting-into-the-lithium-business-it-should-do-this-instead/ar-AA1eGJbu

Oil giant Exxon Mobil is looking to defend some of its turf by getting into the lithium business. That isn’t a great idea for a couple of reasons. Exxon might instead want to consider doing something else related to the energy transition.

Bloomberg reported this week that Exxon (ticker: XOM) was in talks with several auto makers and battery makers to supply lithium, a key component in lithium-ion batteries that store energy for electric vehicles. This week’s news follows reports from earlier this year that Exxon bought land in Arkansas that could be developed for lithium production and comments made by the company over the past week.

“So this, to us, feels like a potential win-win-win opportunity, a win using our capabilities, a win from an environmental impact standpoint, and a win in terms of supplying markets with a crucial component to electrification and EV,” said CEO Darren Woods on the company’s second-quarter earnings conference call on July 28. “So I think that’s kind of how we’re thinking about it. And we’re I’d say actively exploring that opportunity set and like what we’re seeing so far.”

Exxon didn’t respond to a request for comment from Barron’s about its plans.

The reason Exxon is interested in lithium is obvious. Electric vehicles are growing and threaten to lower the demand for gasoline. The International Energy Agency estimates there will be 350 million EVs worldwide by the end of the decade, up roughly tenfold from today. That would make EVs roughly 15% of all light vehicles on global roads, up from less than 2% now.

Exxon believes that its knowledge of drilling for oil and producing chemicals will help it produce lithium products. It might, but that isn’t really the point. There are a few other issues Exxon faces if it wants to become a lithium giant.

The first is resource quality. In mining, higher-cost assets tend to come online as demand for a commodity grows. Take iron ore. As steel demand grew over time, the industry started mining ore with 35% iron content, down from 65% iron content. That meant more material to move and extra processing. Exxon— if and when it gets into the lithium business—just won’t have the low-cost assets of Albemarle (ALB), SQM (SQM), and Livent (LTHM), three of the world’s largest lithium producers.

The second is why bother? It’s a problem of scale. Lithium really doesn’t solve Exxon’s problem. The revenue of the entire lithium business is a few billion dollars a year. The market capitalization of the three large lithium producers combined is roughly one-tenth the size of Exxon’s.

Lithium will grow but it won’t ever be like oil. An EV might have roughly $1,000 of lithium in it. A traditional car can burn some $20,000 of gasoline over its life.

Lithium isn’t consumed like oil. It stays with the car. What’s consumed in an EV is electricity. The batteries are the storage medium for electrons. In that way, EV batteries are more like a gas take than oil.

Exxon might want to consider getting into electricity. More EVs will eventually mean more demand for electricity and that is a big business. Tesla (TSLA) CEO Elon Musk predicts U.S. electricity demand eventually will double. What’s more, Americans already spend hundreds of billions of dollars on electricity each year.

They also spend hundreds of billions of dollars on gasoline dispensed at gas stations. The U.S. has far too few EV-charging stations. That’s another option for Exxon that will be a bigger business in terms of revenue than lithium mining.

News of a competitor may have sent lithium shares lower on Tuesday. Albemarle stock dropped 2%, similar to drops for shares of Livent and SQM. The S&P 500 fell 0.2%. The Dow Jones Industrial Average gained 0.2%.

Exxon stock dropped 0.6% Tuesday.

Write to Al Root at allen.root@dowjones.com

Exxon Mobil in talks with Tesla, Ford to supply lithium, Bloomberg Law reports
Reuters
July 31, 20234:36 PM CDT

https://www.reuters.com/business/autos-transportation/exxon-mobil-talks-with-tesla-ford-supply-lithium-bloomberg-law-2023-07-31/

July 31 (Reuters) - Oil major Exxon Mobil (XOM.N) is in talks with Tesla (TSLA.O), Ford Motor (F.N), Volkswagen (VOWG_p.DE) and other automakers to supply lithium for electric vehicle batteries, Bloomberg Law reported on Monday, citing people familiar with the matter.

The talks also include the likes of Samsung (005930.KS) and SK On Co, the report added.

Tesla, Ford, Volkswagen did not respond to Reuters requests for comment, while Exxon declined to comment.

Any discussions between Exxon and automakers would be very preliminary since Exxon has no way of producing the battery metal.

Reuters reported last month that Exxon had agreed to study ways with Tetra Technologies Inc (TTI.N) to develop more than 6,100 acres (24.7 square kilometers) in Arkansas containing lithium-rich brine. Exxon also earlier this year bought more than 100,000 acres in Arkansas from privately-held Galvanic Energy.

Extracting lithium from those brines will require Exxon to chose a direct lithium extraction (DLE) technology, something it has not yet done. Additionally, no DLE technology has ever worked at commercial scale, although multiple companies are racing to be the first.

Reuters also reported last month that Exxon has held talks with International Battery Metals (IBAT.CD) about licensing DLE technology.

Exxon's rapid expansion into the lithium sector comes amid growing interest from traditional energy companies and others into emerging technologies that aim to boost global supply of the ultralight metal.

Reporting by Sourasis Bose in Bengaluru and Ernest Scheyder in Houston; Editing by Krishna Chandra Eluri and Marguerita Choy

I wonder how many Houston based employees will transfer to Arkansas to support this acquistion.

Exxon and the Race for Arkansas Lithium
by Kyle Massey
Monday, Jun. 19, 2023 12:00 am 3 min read

The lithium mining bo-m is on in south Arkansas, and big fish are jumping into the subterranean water.

After years of development by Standard Lithium of Vancouver, British Columbia, which found ample quantities of lithium in the underground brine of the Smackover Formation, Exxon Mobil has entered the field, The Wall Street Journal reported May 22.

According to the Journal, Exxon spent more than $100 million to buy mineral rights leases on 120,000 acres in southern Arkansas from Galvanic Energy of Oklahoma City.

The land in Lafayette and Columbia counties may hold enough lithium to produce batteries for 50 million electric cars and trucks, Galvanic President and CEO Brent Wilson told Arkansas Business in a telephone interview. The underground mineral leases are on land generally south of Magnolia.

Wilson said his vision was to use well bores to pump up brine in the former oilfields, then extract elements for the renewable energy sector. Then the water would be pumped back in, leaving little footprint.

Of course, getting the lithium will now be Exxon’s project, and the petrochemical company’s approach could be different. “There’s more than one way to skin a cat,” as Wilson put it.

The brine was once a petroleum drilling byproduct when El Dorado and Smackover were oil bo-m towns. Of course, Exxon knows its way around a well and an oilfield. It could be drilling within months, the Journal reported.

Exxon is betting on a bo-m in lithium demand as the nation converts to electric vehicles over the coming years. The purchase from Galvanic gives it a footprint in a region that could be central to a new domestic lithium industry. According to the Journal, Exxon’s projections call for light-duty vehicle demand for internal combustion engine fuels to peak by 2025, “while EVs, hybrids and vehicles fueled by fuel cells” could command half of the new car market by 2050. The oil giant expects global EVs to reach up to 420 million by 2040, up from only 3 million in 2017.

Standard has been refining battery-quality lithium products at test plants in El Dorado, and it recently signed a joint development agreement with Koch Technology Solutions, an affiliate of Koch Engineered Solutions, to work together toward realizing a commercial lithium plant in El Dorado.

KTS is one of several Koch Industries subsidiaries working with Standard. Koch Strategic Platforms made a $100 million direct investment in Standard in 2021, disregarding claims by short-sellers that Standard Lithium had overhyped its technology and production capacity.

Albemarle, a major producer of bromine from the region’s brine, announced a $540 million investment last year in two bromine facilities in Magnolia, and it is also investigating lithium’s potential.

Standard Lithium’s test plants in El Dorado are hooked up to the bromine filtering infrastructure of the German multinational Lanxess, another key partner.

Galvanic’s Wilson certainly believes there’s an industry brewing in the Arkansas brine. He said his company searched all over the United States for four years, and “Smackover was the brightest of all the prospects.”

Brine drawn from deep test wells in Galvanic Energy’s lands yielded lithium concentrations ranging from 290 milligrams per liter to 520 milligrams per liter, some of the highest reported values among all North American brines.

Standard’s test plants have been stripping lithium from the brine with its own novel proprietary extraction method, but the deal with Koch Technology Solutions will integrate a Koch proprietary method, KTS Li-Pro Lithium Selective Sorption, into Standard Lithium’s work toward building a commercial plant.

“The agreement will further enhance Standard Lithium’s position to build the first U.S. commercial lithium project in several decades,” a company news release said.

KTS will also provide performance guarantees for the deployment and the technology to allow “high levels of commercial extraction,” the companies said.

It’s not a mining play. It’s leveraging our drilling / subsurface expertise. We produce brine (millions of barrels of salty water) when we drill for hydrocarbons. Brine contains all sorts of minerals including lithium. The trick is pulling out the lithium in a form that is useful to LiBs.

Looks like we are implementing the 1970's strategy of buying underdeveloped real estate (in this case drilling rights) and then holding onto it for fifty years to see if it will increase in value with time.

We can only hope that we do not have an environmental disaster by mining for lithium in Arkansas.

Exxon Mobil has purchased drilling rights in Arkansas in the south of the US, believed to be rich in lithium deposits. The move is part of the growing migration of oil majors towards critical minerals.

Another Ponzi scheme alongside CCS designed to bilk American taxpayers via the IRA.

Great investment. Not only will be mining for EV's, but the lithium is expected to also solve our systemic manic depression mood swings on campus.

Right off? 100 mill just doesn’t seem like a lot of seed money .

Any mining operation is inherently bad for the local environment. Look at that Kearl sh1t show in the boreal forests of Canada. Now a company like Exxon is going to make it a core business? I hope it's just a good real estate investment.

Let's start with the deep ocean mining too.
Lot's of recyclable plastics down in that Marianas Trench.

Maybe we need to start hiring mining engineers instead of petroleum engineers.