Exxon Mobil aims to become a leading producer of lithium for electric vehicle batteries through a drilling operation the oil giant is launching in Arkansas, the company announced Monday.
Exxon earlier this year purchased 120,000 acres of a geological site in southern Arkansas called the Smackover Formation that is rich in lithium.
The company will start producing battery-grade lithium at the site as soon as 2027, and aims to supply enough of the mineral to support the manufacture of one million electric vehicles annually by 2030.
Discussions with potential customers such as electric vehicle and battery manufacturers are ongoing, Exxon said in a statement.
The lithium operation comes as the the major oil companies are under pressure to address climate change. While Shell and BP have focused on renewables such as wind and solar, Exxon is investing $17 billion through 2027 to reduce emissions with a focus on carbon capture, hydrogen and biofuels.
“Lithium is essential to the energy transition, and ExxonMobil has a leading role to play in paving the way for electrification,” Dan Ammann, president of Exxon’s low carbon solutions business, said in a statement.
Exxon is deploying drilling techniques used in oil and gas extraction to access saltwater reservoirs rich in lithium that are 10,000 feet below ground. The lithium is separated from the saltwater and turned into battery-grade material onsite, according to the company.
Demand for lithium batteries is expected to surge sixfold in the U.S. by 2030 as the nation shifts to electric vehicles, according to a February report from Li-Bridge, a battery industry group backed by the Department of Energy.
The U.S. is heavily reliant on imports from Argentina and Chile for its lithium needs despite having some of the largest deposits of the mineral in the world, according to the U.S. Geological Survey. The U.S currently has just one commercial-scale lithium production operation, in Nevada.
The lithium battery was invented by a research scientist at Exxon in the 1970s but the oil giant ultimately didn’t pursue the technology.