Exxon is "actively exploring" the lithium market as EV demand grows
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Exxon CEO Darren Woods gave the strongest confirmation yet of the company's interest in lithium as electric vehicles boost demand.
Why it matters: Multiple U.S. oil companies see extraction and processing meshing with their skillsets — and now the most powerful player is among them.
Driving the news: "We're actively exploring that opportunity set and like what we're seeing so far," Woods told analysts on Exxon's earnings call Friday.
- Lithium is "really an extension of a lot of the current capabilities that we have."
State of play: "It requires a good understanding of the subsurface, requires a good understanding of reservoir management, requires drilling and injections," Woods said.
- Processing brine water to pull out lithium is "very consistent" with what occurs at Exxon refineries and chemical plants, he said.
- Woods argued Exxon can bring cost advantages and environmental ones to bear, contrasting what they're exploring to "open mining" in other nations.
What we don't know: A lot! Woods cautioned: "We're still early in evaluating the opportunity."
- Exxon has been said to be acquiring acreage in Arkansas, but reported investment levels are small relative to its budget.
- And Exxon's not commenting on a WSJ report that it plans to build one of the world's largest processing plants there.
The big picture: Chevron CEO Mike Wirth recently told Axios that his company may venture into lithium.
- Energy Intelligence reports that Pioneer Natural Resources "is in a similar initial conceptual evaluation stage."
- Occidental Petroleum is the "farthest along" as a subsidiary explores lithium brine mining tech that integrates into geothermal operations, they report.
Reality check: Oil companies are hardly ceding transportation to electricity over their core petro-products.
- Exxon, Chevron and the wider industry have recently attacked draft EPA climate rules for vehicles, arguing they're overly-reliant on EVs.
- They say standards should better encourage a range of technologies — EVs, hybrids, more efficient petroleum engines, renewable fuels and more.
Zoom out: Global lithium demand is rising fast. EV batteries and stationary storage are key reasons.
- Lithium demand tripled between 2017 and 2022, per International Energy Agency data, with lots more to come.
The bottom line: Lithium remains tiny compared to the fossil fuel sector, but demand may get too big for Big Oil to ignore.
