Jul 31, 2023 - Energy & Environment

Exxon is "actively exploring" the lithium market as EV demand grows

Illustration of an oil barrel with a positive and negative sign on either end, like a battery.

Illustration: Shoshana Gordon/Axios

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.

Go deeper