Chevron Corp. has entered the U.S. lithium extraction sector with the acquisition of about 125,000 net acres in the Smackover Formation in two separate deals. (Source: Shutterstock)
Editor's note: This story was updated to include comments from a Chevron New Energies spokesperson.
Chevron Corp. has entered the U.S. lithium extraction sector with the acquisition of about 125,000 net acres in the Smackover Formation in two deals, the energy company said June 17.
One leasehold position was acquired from TerraVolta Resources, while the other was acquired from East Texas Natural Resources. Financial details of the transactions were not discussed. The acreage together spans across Northeast Texas and Southwest Arkansas in what has become a hotbed of activity of companies extracting lithium from brine.
Chevron joins peers that include Exxon Mobil Corp., Occidental Petroleum and Equinor in the Smackover region. Here, oil and gas companies have been putting their subsurface expertise to use to boost domestic supply of the critical mineral used for electric vehicle batteries and energy storage systems, among other uses.
Jeff Gustavson, president of Chevron New Energies, called the acquisition a strategic investment to support energy manufacturing and expand U.S.-based critical mineral supplies.
“Establishing domestic and resilient lithium supply chains is essential not only to maintaining U.S. energy leadership but also to meeting the growing demand from customers,” Gustavson said. “This opportunity builds on many of Chevron’s strengths including subsurface resource development and value chain integration.”
The acquisition from TerraVolta and its investor, The Energy & Minerals Group, includes the sale of all equity interests in two of the company’s subsidiaries. It includes about 100,000 net acres in east Texas and southwest Arkansas, according to TerraVolta.
Currently, there is no active lithium production on the acquired acreage, a Chevron New Energies spokesperson told Hart Energy in an emailed statement.
TerraVolta’s Liberty Owl project in the Texarkana area was one of two lithium processing projects that the U.S. Department of Energy (DOE) on June 3 said it added to a list of projects set for streamlined permitting. The more than $1 billion planned commercial-scale lithium production and conversion facility received a $225 million award through the DOE’s Office of Manufacturing and Energy Supply Chains.
President Donald Trump in March issued an executive order aiming to expedite domestic production of critical minerals. The move is expected to help reduce reliance on foreign countries, including China which dominates the critical minerals supply chain.
Chevron plans to use the direct lithium extraction (DLE) process to extract the critical mineral from subsurface brines. Unlike traditional hard-rock mining or large-scale brine evaporation, the DLE method is considered more environmentally friendly as it takes up less land and requires less water. The process involves using adsorption, resin or membranes to extract lithium from brine. The emerging technology is also being used by several other companies, including Standard Lithium and its partner Equinor.
“This investment allows Chevron to leverage strengths to safely deliver lower carbon energy to a growing world,” Chevron told Hart. “It aligns with the company’s solution, scale and speed approach. We will first work on the development of the solution (DLE), demonstrate its performance and then make moves to scale, based on market conditions.”
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The U.S. Geological Survey (USGS) has described the Smackover Formation as a “hidden treasure” of potential lithium. Late last year, the USGS released results from a study showing between an estimated 5 and 19 million tons of lithium reserves could be located beneath southwestern Arkansas.
The Smackover Formation, which stretches from Texas to Florida, dates to the Jurassic period. It is also known for its oil and gas production, brine extraction and longtime pulp and paper operations.
For Chevron, it marks the “first step toward establishing a commercial-scale, domestic lithium business,” the company said.
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