Magazine October 2018

Arkansas Set to Play Major Role in Electric Vehicle Market

Arkansas

Arkansas

By Dustin Jayroe

Earlier this year, Standard Lithium Corp. entered into an agreement with TETRA Technologies to acquire the rights to 33,000 acres of brine leases in southern Arkansas to conduct exploration, production, and extraction of lithium. TETRA will receive a 2.5 percent royalty on gross revenue received from the sale of lithium at these properties.

In the expanding market of electric vehicles, lithium is one of the most important ingredients for battery production via lithium-ion technology. Even as technology advances beyond some current battery ingredients, lithium will still be vital, by most experts’ analysis. Be it lithium-ion now, and either lithium-air or lithium-organic as we progress – lithium should remain. According to consultant McKinsey & Co., the demand for lithium will triple by 2025.

This potential demand will far outweigh current availability, meaning that increased lithium production today will be necessary for supplying the electric vehicle market of tomorrow.

Standard Lithium Corp. aims to compete in providing that lithium supply, in part by tapping into the lithium rich reserves of the bromine production industry in Arkansas.

Commercial recovery of bromine in Arkansas began in Union County in 1957, after chemists from the then-Arkansas Geological Commission (now Arkansas Geological Survey) found high levels of bromine in the Smackover oil field brines. Up to that point, these brines were discarded as waste. Since then, production in Arkansas has boomed, making Arkansas one of the world’s leading producers of bromine.

Most of the uses for bromine involve flame retardants, but it is also used for medicines, insect sprays, and disinfectants, among many other products.

Essentially, the bromine industry creates a by-product that goes unutilized, called “tail brine” that is injected back into underground aquifers. This brine is rich in lithium, and until now has gone unused. Hundreds of thousands of barrels containing this brine are re-injected back into the ground every single day. Since Arkansas is one of the world’s largest bromine producers, and this brine has been accumulating because of that production for years, The Natural State has incredibly vast lithium reserves in what is deemed the “Smackover Formation.”

Arkansas

The Smackover Formation is an underground, mineral-rich reservoir of brine in south Arkansas. During the earth’s Jurassic Period (206 to 144 million years ago), bromine was released from decomposing organisms, resulting in the underground brines that we have today. It is believed that the brines in the Smackover Formation came from the Louann Salt Formation, which formed in the Gulf of Mexico during the mid-Jurassic period.

According to the Arkansas Oil and Gas Commission, over 9 billion gallons of brine is created in the state per year, and almost all of this comes from the Smackover Formation. These brines are estimated to contain around 400 milligrams of lithium per liter.

The U.S. Geological Survey estimates that the potential bearing of the Smackover Formation is one million metric tons of lithium. The global lithium industry only produces about 45,000 metric tons of lithium per year currently.

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The agreements that Standard Lithium have reached will allow them to install “pilot” plants within already operating chemical plants and tie into operational brine pipelines. They will be analyzing samples extracted from the ground every day and will not require substantial project development. This method of coordination with existing entities will allow them to bypass regulations and significant additional investment and instead focus the bulk of their efforts on research to efficiently separate lithium from the brine.

President and COO of Standard Lithium, Dr. Andy Robinson, says that they chose the Smackover Formation because it, “combines a very large resource potential, with well-studied and documented geology and hydrogeology, along with a permitting regime that has a long history of approving operations that remove, process and re-inject massive volumes of brine.”

Robinson also commented that southern Arkansas is the “perfect location” for a lithium brine processing operation and that the Smackover Formation could be “one of the most promising regions to develop.”

The company brings plenty of expertise to their newfound operation in Arkansas. Founded in 1998 in Vancouver, Canada, they have conducted similar projects in California and Nevada, and recently locked in a supply deal with Tesla Motors, Corp. Tesla needs to lock in future sources of lithium as they ramp up production on their electric vehicle lines. Standard Lithium has also appointed a Nobel Laureate, Professor Barry Sharpless, to their Scientific Advisory Council.

Standard Lithium plans to lead the next generation of lithium producers. They employ a low risk, high reward approach, by “minimizing project risks at selection stage; resource, political and geographic, regulatory and permitting, and by leveraging advances in lithium extraction technologies and processes.”

The future as we understand it right now almost certainly involves the eventual replacement of gas-powered vehicles with those that operate on electricity. Arkansas may now have a key role in that future.

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