Released February 08, 2024 | SUGAR LAND
en
Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Lithium suppliers are chiming in as Annie did, crying, "Tomorrow, Tomorrow, I love ya, Tomorrow!" They're hoping the International Energy Agency's (IEA) predictions of a 2030 explosion in lithium demand--which would rescue commodity pricing--comes true.
That's because today's lithium price is down 80% from the December 2022 spike that reached $80,000 per metric ton. Oil companies like ExxonMobil (NYSE:XOM) (Spring, Texas), along with Occidental Petroleum (NYSE:OXY) (Houston, Texas), Imperial Oil (Calgary, Canada), and others small and large are betting that Annie and the IEA are right, as they invest millions into pure lithium plays, along with researching ways to economically and efficiently extract the metal from the copious flows of produced water that accompanies their oil production. ExxonMobil has announced plans to begin producing electric vehicle (EV) batteries from its recently-purchased Arkansas fields as soon as 2027.
A produced water recycling facility owned by Permian Basin producer Double Eagle Energy Holdings IV was the subject of a recent lithium extraction pilot project. In a press release dated January 30, mineral extraction company Element3 (Fort Worth, Texas) announced it had successfully extracted lithium chloride from produced water at Double Eagle's facility.
The test's reported breakthrough resides in the fact that the procedure did not first require concentrating the produced water. Eliminating that costly step would make that company's procedure more likely to be profitable. That also depends also on the costs of other processing such as storage and transport, not to mention the aforementioned commodity price of lithium itself.
Should lithium production from produced water become workable (likely to be years in the future, although many entities are researching the options), it would allow producers to monetize a substance that has been a nuisance. The injection of produced water into saltwater disposal wells (SWDs) has been associated with earthquakes in the Permian Basin and some areas in Oklahoma. Although extracting lithium from the approximately one trillion gallons of produced water would still leave most of the water to be dealt with, the income derived from lithium sales allay some of the higher cost of treating that water for agricultural or municipal use. Those uses would keep it out of SWDs.
Why Is Lithium Down--and Will It Come Back?
Few experts doubt that lithium will rise again, because the energy transition that requires the metal for batteries in EVs and for baseline power in wind and solar farms, is not going away.
The anomaly over recent months was that production rose much faster than demand did, as more mines came online. A previous Industrial Info Resources story noted, "Worldwide lithium production for 2022 rose to 130,000 metric tons, a record, and a significant jump from 2021's previous record of 107,000 metric tons."
Industrial Info's Joe Govreau notes that 30 of the 79 currently operating lithium mines came online in the last two years, accounting for most of the production growth. "That's a lot of new capacity for a relatively small market," he pointed out.
One reason for the demand slowdown is that EV sales grew at a much slower rate in 2023, and the same is expected in 2024, says Wood MacKenzie's (Wood Mac) Allan Pedersen, the firm's principal analyst for lithium. "Global plug-in EV sales are projected to rise by 33% this year, a significant drop from the average annual growth rate of 71% observed between 2021 and 2023. Lower government incentives and inadequate charging infrastructure are expected to curtail EV sales in 2024." As production continues to rise, this will likely keep stockpiles higher and prices lower in 2024.
The IEA sees lithium demand rising more than two and a half times its 2022 levels by 2030, as more government mandates on EV sales take effect. Because of the general understanding that this metal and all the REMMs (rare, earths, metals, and minerals) will be in continuing demand for the foreseeable future, lithium investments continue with the hope that they will pay off later, if not sooner.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
That's because today's lithium price is down 80% from the December 2022 spike that reached $80,000 per metric ton. Oil companies like ExxonMobil (NYSE:XOM) (Spring, Texas), along with Occidental Petroleum (NYSE:OXY) (Houston, Texas), Imperial Oil (Calgary, Canada), and others small and large are betting that Annie and the IEA are right, as they invest millions into pure lithium plays, along with researching ways to economically and efficiently extract the metal from the copious flows of produced water that accompanies their oil production. ExxonMobil has announced plans to begin producing electric vehicle (EV) batteries from its recently-purchased Arkansas fields as soon as 2027.
A produced water recycling facility owned by Permian Basin producer Double Eagle Energy Holdings IV was the subject of a recent lithium extraction pilot project. In a press release dated January 30, mineral extraction company Element3 (Fort Worth, Texas) announced it had successfully extracted lithium chloride from produced water at Double Eagle's facility.
The test's reported breakthrough resides in the fact that the procedure did not first require concentrating the produced water. Eliminating that costly step would make that company's procedure more likely to be profitable. That also depends also on the costs of other processing such as storage and transport, not to mention the aforementioned commodity price of lithium itself.
Should lithium production from produced water become workable (likely to be years in the future, although many entities are researching the options), it would allow producers to monetize a substance that has been a nuisance. The injection of produced water into saltwater disposal wells (SWDs) has been associated with earthquakes in the Permian Basin and some areas in Oklahoma. Although extracting lithium from the approximately one trillion gallons of produced water would still leave most of the water to be dealt with, the income derived from lithium sales allay some of the higher cost of treating that water for agricultural or municipal use. Those uses would keep it out of SWDs.
Why Is Lithium Down--and Will It Come Back?
Few experts doubt that lithium will rise again, because the energy transition that requires the metal for batteries in EVs and for baseline power in wind and solar farms, is not going away.
The anomaly over recent months was that production rose much faster than demand did, as more mines came online. A previous Industrial Info Resources story noted, "Worldwide lithium production for 2022 rose to 130,000 metric tons, a record, and a significant jump from 2021's previous record of 107,000 metric tons."
Industrial Info's Joe Govreau notes that 30 of the 79 currently operating lithium mines came online in the last two years, accounting for most of the production growth. "That's a lot of new capacity for a relatively small market," he pointed out.
One reason for the demand slowdown is that EV sales grew at a much slower rate in 2023, and the same is expected in 2024, says Wood MacKenzie's (Wood Mac) Allan Pedersen, the firm's principal analyst for lithium. "Global plug-in EV sales are projected to rise by 33% this year, a significant drop from the average annual growth rate of 71% observed between 2021 and 2023. Lower government incentives and inadequate charging infrastructure are expected to curtail EV sales in 2024." As production continues to rise, this will likely keep stockpiles higher and prices lower in 2024.
The IEA sees lithium demand rising more than two and a half times its 2022 levels by 2030, as more government mandates on EV sales take effect. Because of the general understanding that this metal and all the REMMs (rare, earths, metals, and minerals) will be in continuing demand for the foreseeable future, lithium investments continue with the hope that they will pay off later, if not sooner.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
