Exxon unveils lithium ambitions

ExxonMobil has unveiled a major plan to develop lithium for electric vehicle batteries.

Why it matters: The announcement shows that one of the world's largest providers of fuel for combustion engines also has a detailed and long-term plan for doing the same for electric vehicles.

Driving the news: Exxon said it expects to begin extracting lithium from an Arkansas formation by 2027.

• The company this year reportedly paid over $100 million to acquire 120,000 acres in the state's so-called Smackover formation.

Yes, but: That's a tiny fraction of what Exxon agreed to pay last month to acquire oil and gas driller Pioneer Natural Resources.

Zoom in: Exxon plans to use direct lithium extraction, a nascent technique that essentially draws lithium from brinewater.

• The method is said to be more environmentally friendly than conventional mining. Part of the process also leverages Exxon's oil and gas drilling experience.

Of note: The approach is largely unproven, and other direct lithium extraction efforts have yet to kick into high gear.

• There's been at least one high-profile flameout: a Berkshire Hathaway-backed project in California once touted as a "flagship" of President Biden's domestic lithium development ambitions.

Meanwhile, getting permitting approvals remains a lengthy and challenging process. Exxon is one of several companies seeking to develop the Smackover formation. Companies are also eyeing projects in Nevada.

What's next: Exxon is planning initial production to supply about 100,000 EVs annually.

• By 2030, the "Mobil Lithium" effort aims to produce enough lithium for 1 million EVs per year.

💭 Our thought bubble: "2030's production target will be determined less by permitting and more by the success of direct lithium extraction" Axios Pro Energy Policy's Jael Holzman says. "Feasibility and practicality will be the true hurdles to overcome."