Carroll has a flair for recognizing a good narrative and condensing it down to its key aspects, and each version of Alice in Wonderland contains, without fail, something that piques my attention to some degree.
One of them came from The Wall Street Journal the previous week, which indicated that another major company, ExxonMobil, is studying the possibility of lithium deposits in south Arkansas present.
According to the Journal, Exxon paid more than $100 million to Galvanic Energy of Oklahoma City for the right to drill on 120,000 gross acres in the Smackover formation. These acres are located in Oklahoma.
According to the story, which cited “people familiar with the matter,” Exxon may start drilling on the potential within the next several months. According to observers, Exxon is aiming to establish a presence in an area that has the potential to become a significant supplier of lithium. Lithium is an essential component of the batteries that power electric vehicles.
Gaining Ground in a Different Field
According to the Journal, one of the reasons for this is the company’s own estimates which state that “light-duty vehicle demand for internal combustion engine fuels could peak in 2025, while EVs, hybrids, and vehicles powered by fuel cells could grow to more than 50% of new car sales by 2050.” In the meantime, Exxon believes that the number of electric vehicles on the planet might reach as high as 420 million by the year 2040, up from just 3 million in 2017.
I am aware that there are some individuals who are skeptical about such a near-term EV future and may believe those estimates to be overly optimistic. However, it is difficult to make a case against diversifying one’s portfolio or investigating one’s options. And the Journal argues that $100 million is a very small figure for a firm like Exxon, which generates over $414 billion in annual sales.
The work that other companies are doing to extract lithium from the abundant deposits of brine in the Smackover has been brought to the attention of the readers of Arkansas Business by Assistant Editor Kyle Massey. Most notably, Standard Lithium Ltd. of Vancouver, British Columbia, which has drawn investments totaling millions of dollars from affiliates and subsidiaries of Koch Industries located in Wichita, Kansas, has been brought to readers’ attention.
Tetra Technologies Inc., located in the Houston area, and Albemarle Corp., based in Charlotte, North Carolina, are at least two of the other businesses that are participating in the search. However, Exxon, which is a worldwide oil powerhouse, is now by far the most well-known name in the area.
In my article from the previous year, I stated that Koch’s investments in Standard Lithium’s work, combined with another position in Standard by its German partner Lanxess Corp., represented a vote of confidence in the company’s south Arkansas lithium prospects. This statement was based on the fact that Koch had invested in Standard Lithium’s work.
This initiative by Exxon, a business that built its bones in fossil fuels, is another positive hint that a new sector might be on the horizon for the region and all of its stakeholders.