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Energy transition opens challenges and new opportunities for global energy companies which could lead to realignment of power in energy sector. Some of them are making bets on direct participation in the development of renewable energy (e.g. bp and Shell invest in large-scale solar and wind projects), others (incl. ExxonMobil, Oxy, Equinor, Chevron, SLB) started to invest in green metals projects, incl. lithium.
According to International Energy Agency (IEA) demand for lithium might grow up to x10 times until 2040 which is primarily driven by the development of EV sector, where lithium is one of the key component of batteries production.
The move of global energy companies into lithium business makes a lot of sense, as unlike some other niche metals, lithium is relatively abundant, it just needs to be effectively extracted. The expertise energy companies can bring may help to ramp up lithium supply from areas where it was previously economically not justified.
Energy companies are investing in brine projects (as opposed to hard rock) that may use direct lithium extraction (DLE), which resembles pumping crude in some aspect. They are utilizing their own core capabilities in subsurface exploration, drilling and chemical processing. Having access to produced water reserves gives them advantage vs other industry players.
The challenge of economically extracting a marketable lithium product once the brine is at the surface is formidable. Technologies are in the process of being tested and just started to commercialise. Energy companies are at the beginning of their journeys in lithium business (e.g. ExxonMobil just recently drilled its first lithium well in Arkansas), scope and business case still to be proved. However, DLE is gathering pace, it can produce lithium in hours or days vs months or years on a fraction of the land and process brines with lower lithium concentration.
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