(Editor’s note: This is the second of a two-part commentary on the lithium play in south Arkansas.)
This week’s Arkansas Lithium Innovation Summit serves as an excellent opportunity to let the rapidly growing US battery industry know that Arkansas is the “Lithium State” and is open for business. The idea for this event was first instigated by Arkansas native and Director of Government Relations for Standard Lithium, Jesse R. Edmondson, who is a critical minerals geologist passionate about establishing sustainable domestic supply chains. Mr. Edmondson detailed his goals, “The two goals of this event are to: 1) Plant the flag of Arkansas into the middle of the US lithium-ion battery and EV supply chain, so that this entire industry sees that Arkansas should be considered a top state for building out this new industry, leveraging the globally significant lithium resource from the Smackover Formation, and 2) To get the state internally firing on all cylinders so that our federal/state/local officials, academia, infrastructure managers and existing industries are working together to seize this incredible opportunity and moment in time.”
Hugh McDonald serves our great State as the Secretary of our Department of Commerce and has been an integral part of the Arkansas Lithium Innovation Summit. Secretary McDonald masterfully captured the value of the Lithium Summit, “In Arkansas, we have the raw materials that will make our state a focal point for the lithium industry. Prominent companies, like Albemarle, Standard Lithium, Tetra, and ExxonMobil, have already established operations in Arkansas and are continuing to build out with production dates set at the end of the decade. Arkansas is on the verge of being a major player in this industry, which will have global implications and impact. We look forward to more companies doing business in our state, and they will find a favorable business environment with low taxes, pro-industry public policy and a strong workforce. During the Arkansas Lithium Innovation Summit, global experts, policymakers and industry experts will highlight the opportunities that our state has in the lithium industry and will show the advantages of doing business in Arkansas.”
As a refresher, Arkansas provides environmentally responsible lithium that supports the production of batteries for use in homes and cars. Our lithium boom goes beyond batteries in homes and EV cars, because it ties into our national security, military industry, energy security, electric distribution, etc.
I hope this 2nd part of a 3-part series provides a view of what is at stake and the strategic issues for leaders to discuss in productive conversations at this important Summit. Strategic discussion and even difficult subjects have to be on the table when this many of our state’s leaders are in the same room. We must take advantage of this opportunity so that we do not allow another FedEx to slip through our fingers.
Part 2 Overview
ExxonMobil, Tetra, Albemarle, Lanxess and SLI have all set their sights on the unique Lithium resources found within the Smackover formation in South Arkansas. As an Arkansan with roots back to 1828 in our state, I am thankful Lanxess and Standard Lithium partnered to prove a new technology would provide environmentally responsible access to the lithium in South Arkansas.
Exxon, Tetra and SLI are at a point of critical mass within the Arkansas Lithium opportunity as we establish a royalty structure. The Nation is watching us pioneer a new market segment, new technology, new production model, and new royalty structure. There is no precedent for us to copy, so we must be objective and fair so Arkansas can benefit from a new economic engine. The whole Nation can benefit from our impact upon national security, defense weaponry, battery supply chain, power grid, geothermal, etc.
Lithium demand and supply reached record levels that created a spike in pricing that reallocated priorities and investment. The lithium market price dropped most of last year, which has corrected to a transition of multiple reallocations. Many technology and investment decisions were made when Lithium was considered a supply chain risk and very expensive.
Lithium pricing and product allocation will reposition after more domestic supply creates stable prices that should redirect or reduce alternative materials investments. The behaviors of China and Russia raised additional red flags about supply chains and National security issues tied to lithium. Record high prices and supply concerns created the following dynamics:
- Raised the price of the EV cars to levels that decreased sales growth but expanded Hybrid car sales.
- Increased investment in Sodium and Zinc based alternatives to Lithium batteries.
- Developers of new products that utilize battery power shifted their designs to accommodate sodium or zinc batteries.
- Damaged Lithium processors in free market countries while Chinese state-run companies were protected.
In the last 6 months, Arkansas’ Lithium resource was proven to be credible as Standard Lithium (SLI) validated the efficacy of their new Direct Lithium Extraction (DLE) technology to extract Lithium from Smackover brine. SLI’s validation is so new that very few of the current market researchers include the new lithium resource in Arkansas. As you can see in the map below, we are not included in a map of projects and offtake agreements. from Dec 22, 2023. Like other outlets, the article is using old data or sales agreements that don’t consider Arkansas. SLI’s definitive feasibility study published just over two months ago on Nov. 20, 2023. Additionally, we are still two years away from SLI’s Arkansas lithium impacting the market. We are at a delineation of what I call the Pre DLE or Post DLE periods.
Corner the Market?
The intentional actions or ineptitude of outside forces have damaged markets to protect their position or damage competition. OPEC was not happy about the growth of US oil production via shale fracking, so they dropped oil prices below the break-even point of shale fracking to decimate our shale boom. China controls a large amount of the critical minerals in the battery supply chain. China has proven to flood the steel market with cheap steel to hurt US and European steel sectors. Why should we allow China’s state-controlled lithium companies to influence the lithium price?
Unfortunately, the market uses the Chinese price for lithium carbonate, which is marred by lack of transparency, China’s own desire to control the market, unreliable information, inconsistent quality and simple cornering of the market. US and European incentives spiked record demand for a limited supply of lithium and other battery supply chain minerals controlled by China. Market speculation then poured gas on the fire as you can see in the price chart below. The Chinese price reached record levels in 2022 but the price of lithium carbonate dropped almost 80% in 2023.
Many researchers speculate that China could use the volatility to hurt their competition and expand their control of the lithium market. Some outlets are reporting that Chinese state-run companies are buying up lithium feed stocks during this low-price cycle. Arkansas’ new domestic supply will eventually protect our Nation from supply disruptions, possible wars, price spikes, etc.
Lithium based products have become far too expensive because of the record high prices, so their sales have been terribly impacted. Lithium based product companies changed strategies and commitments when the market reached $60k-80k a ton for lithium carbonate from 2021 to 2023. Current lithium carbonate pricing is very low, but many lithium processors and battery manufacturers still have higher priced inventory to sell.
We should see another transition from high priced to lower priced inventories that will eventually lower the price of lithium-based products. Our current low lithium prices will lower the cost of lithium-based products because the battery will be much lower in cost. This transition provides the following impacts:
- Increase the sales of Utility scale storage (high volume lithium use)
- Increase the sales of powerwalls for home energy storage.
- Increase the sales of EV (battery = 40-50% of cost) and hybrid cars
- Increase market stability and customer trust.
Furthermore, the US market for Lithium products could improve because of our commitment to domestic DLE sources that are detailed here and in my previous articles. Wars and national security will lead to priorities that will incentivize domestic sources. We will see market improvement from the adjustment of vehicle manufacturer priorities from over-emphasis of EVs to a combined emphasis of EV and hybrid cars.
SLI details many of the pricing and transitional issues in their quarterly report that ended Dec. 31, 2023. “In 2023, the lithium sector has been under pressure, with lithium prices experiencing a significant decrease from the all-time highs seen in 2022, a situation compounded by the prevailing interest rate environment and other macroeconomic factors,” says Robert Mintak, CEO and Director of Standard Lithium. “Despite the industry-wide market challenge, the long-term fundamentals for lithium continue to be strong, particularly for projects situated in geopolitically stable regions such as the United States, where policy support and other key strategic advantages are enabling for project differentiation. The Smackover region, in particular, is attracting interest from major players in the global energy sector. Discussions around strategic partnerships, joint development opportunities, and long-term off-take are robust and moving forward. In response to these market dynamics, we are taking responsible and appropriate actions that are in the best interests of our shareholders, ensuring that Standard Lithium remains well-positioned to capitalize on what continues to be an exciting sector with extraordinary growth prospects.”
Please review the strategic issues below for part 2 that details the opportunities and threats we can optimize or reduce. Part 1 and part 2 support strategic discussions at the Summit, so that more of Arkansas’ batteries are connected and fully charged to propel us to a better future.
China is dominating the global battery supply chain. China mines and processes some of the lithium battery components and rare earth minerals used in the battery supply chain. China is the current leader in manufacturing and assembling the lithium batteries. We must increase domestic production of the lithium components required to be able to improve our energy system storage, improve energy security, manufacture advanced military products and manufacture alternative energy vehicles.
Recently, SLI has proven that Arkansas Lithium + DLE + brine wells will increase production of Lithium at surprising quality and quantities. We are now in a Post DLE market but the market still hasn’t officially recognized the positive impacts. The new lithium source in Arkansas, reopening of Albemarle’s mine in North Carolina, and the massive deposits recently found in the Western US have changed the supply chain risk dynamic. Most of the world has been using mines or evaporation ponds to extract Lithium, but now SLI has proven DLE is very productive in South Arkansas. DLE is much faster than evaporation process models that require up to an 18-month production cycle. Wars and catastrophes do not wait 18 months to ramp-up.
Modern warfare utilizes high-tech weapons that require remote power via batteries. In the 1970s, lithium batteries were first utilized in military equipment, space equipment and communications equipment of the US military. Now light weight lithium batteries with high density energy enable the US Military to have the best weapons used in land, sea and air operations. A critical application uses lithium batteries to protect encamped soldiers by replacing gas engine generators to keep the troops from being targeted via detection of sound and radiant heat from the gas engine generators. Numerous weapons that use lithium batteries range from drones, all electric drone ships, underwater unmanned mine searchers, night vision, tactical radios, thermal imagers, portable computing, missiles, video surveillance, lasers, acoustic, sensors, etc.
Strategic applications need mobile power so Lithium can improve our military superiority. “Current solid-state batteries that have high energy density have limited charge/recharge cycles …… in aggressive performance environments,” said Vishnu Sundaresan, MINT program manager in DARPA’s Defense Sciences Office. “The teams we’ve selected will develop and demonstrate novel morphogenic interface materials to enable long-lasting and high-performance solid-state batteries that power everything from warfighter battery packs to unmanned aerial and ground vehicles.”
Defense Advanced Research Projects Agency (DARPA) has been very concerned about the strategic issues and risk tied to critical minerals controlled by China and other bad actors. Our government agencies like DARPA have been funding expensive research to find alternatives for Lithium since it was considered to be very limited in supply. The recent validation of Arkansas Lithium confirms a large domestic supply of high-quality Lithium, which reduces the need for our government to invest in Lithium alternatives. Now domestic Lithium enables DARPA to firmly position Lithium as the strategic energy storage now and use the funds elsewhere.
A new DARPA program seeks to develop near-zero-power technologies that exist reliably for years and support growing network of mobile connected devices. State-of-the-art military sensors use “active electronics” to detect vibration, light, sound or other signals. The always-on status constantly consumes battery power which limits a sensor’s lifecycle to a few weeks or months. The constant need to redeploy power-depleted sensors is expensive, time-consuming and increases warfighter exposure to the enemy. Stable domestic sources and lithium that is now lower cost, enables DARPA to invest in higher performance Lithium and further improve weaponry by reducing active power requirements.
“It is the waiting for a specific event or activity that constrains mission life and drains the battery energy of these essential electronics,” said Troy Olsson, DARPA program manager. “By cutting reliance on active power and enhancing battery life, N-ZERO aims to enable wireless, ubiquitous sensing that is energy efficient and safer for the warfighter. Our goal is to use the right signal itself to wake up the sensor, which would improve sensors’ effectiveness and warfighters’ situational awareness by drastically reducing false alarms.”
Dr. Kathleen Hicks, Deputy Secretary of Defense, is the second person in command of the Department of Defense (DOD) as she oversees the operations and personnel of the entire U.S. military. According to the Deputy Secretary in a November 8, 2021, speech that, “…a healthy battery supply chain is essential to the military. When it comes to batteries, America needs to lead the world. That means innovation, but it also means manufacturing, ensuring we have healthy supply chains to get what we need, when we need it. It is estimated that investment committed to the global lithium-ion battery supply chain is approaching $1 trillion. The problem, however, is that China presently dominates that supply chain.”
She added that the DOD sustainability plan will be focused upon developing an electrified non-tactical vehicle fleet, “Electric vehicles are quiet. They have a low heat signature, and incredible torch, and because they tend to be low maintenance with fewer moving parts. They have the potential to reduce logistics requirements, all with these attributes can help give our troops an edge on the battlefield.” Additionally, Dr. Hicks stated, “currently the Department of Defense has about 170,000 non-tactical vehicles. The cars and trucks we use on our bases. That’s the largest fleet in the Federal government, next to the U.S. Postal Service.”
Deputy Secretary Hicks further detailed the importance of non-tactical vehicles in the military and the connection with other military elements, “The Army center, for instance, is developing a vehicle centric micro-grid, designed to provide on the go power for our next generation combat capabilities. At General Motors, I also had the opportunity to tour their battery lab. Battery technology and lithium-ion batteries specifically, are the lifeblood of electrification and the future auto industry, but batteries are also essential to thousands of military systems from handheld radios, to unmanned submersibles and to future capabilities like lasers, directed energy weapons and hybrid electric tactical vehicles.”
Deputy Secretary Hicks added that DOD wants to work with industry to develop our domestic supply chain which add more validity to the Arkansas lithium opportunity, “Improving the U.S. competitive position will create resilience of our domestic supply chains, and this will bring jobs to America and ensure our national security. DOD is committed to working with industry to increase resiliency in the supply chain, which strengthens our industrial base. The department has joined the Federal Consortium for Advanced Batteries, which is interested in ensuring a domestic supply of lithium batteries and is committed to accelerating the development of a robust and secure domestic industrial base.”
The DoD has published the Lithium Battery Strategy 2023-2030 which includes the primary recommendation for improving battery security as outlined in Securing Defense-Critical Supply Chains. The James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 started the initiatives to pursue internal DoD, industrial, interagency, and international opportunities and objectives. It also created the DoD Lithium Battery Science and Technology Strategy, as well as DoD investments in test and evaluation infrastructure, analytics and battery standardization.
Last October, the Office of the Assistant Secretary for Industrial Base Policy, through its Manufacturing Capability Expansion and Investment Prioritization (MCEIP) office, entered into an agreement with Albemarle Corporation to support the expansion of domestic mining and production of lithium.
“The agreement with Albemarle demonstrates the DoD’s ongoing commitment to meeting the needs of our warfighter, today and in the future,” said Mr. Anthony Di Stasio, MCEIP Director. “This investment directly supports President Biden’s April 2022 Presidential Determination for Critical Materials in Large-Capacity Batteries.”
The $90 million agreement under the Defense Production Act augments the MCEIP five-year investment plan to secure supply chains for minerals and materials critical to the DoD and the commercial sector. There is further evidence of DOD supporting industry to create better batteries for its war fighters, and it’s partnering with private companies like NanoGraf. “Just like we civilians are increasingly relying on cell phones and tablets and everything else, the modern soldier is also transitioning towards these really power heavy devices in the field, [like] night vision goggles, weapon optics, all of the communications devices, GPS,” said Chip Breitenkamp, NanoGraf vice president of business development. “All of those things require more and more power.
“If you take a look at what the soldier has to bring on the field already, between guns, ammunition, water, food, right now the best estimate that I’ve seen […] is that every soldier for every mission goes out with somewhere between 15 and 25 pounds of batteries just to power all of this stuff,” he continued. The Military benefits greatly from a Post DLE market. The DOD needs Arkansas to provide lithium for energy dense batteries to power high tech weapons, possibly missile systems made in Camden, logistics, and to reduce weight so soldiers have less fatigue and can operate longer before recharging their batteries.
Arkansas Can Improve the Power Grid, Energy Storage and Energy Efficacy in Vehicles
Vertical integration creates additional value that reduces the risk of investing in Arkansas. As I detailed in a previous article, “The Arkansas Advantage” is our unique vertical integration that positions our state as a major player in energy storage that provides another unique advantage.
We are uniquely positioned with lithium and electrical grade steel in an excellent location to make batteries and frames for powerwalls, hybrid cars and electric vehicles (EV). Arkansas is a major producer of the Advanced High Strength Steel (AHSS) that is used to build EV and Hybrid cars as well as battery frames for powerwalls (buildings), utility scale battery modules, and batteries for Hybrid & EV cars.
Our location between the Missouri, Texas and I-65 Auto assembly zones is an advantage when you consider the shipping costs of Steel and Lithium. Our advantage is even more pronounced for the assembly of powerwalls and vehicle battery modules, because the assembly’s percentage of steel and lithium are much higher than that in the high component mix assembly of a car. Arkansas is the superior location for assembly of powerwalls, utility scale and vehicle battery modules.
There is an element of our population that dislikes EV cars, but despite the recent media hype, EV cars really aren’t for everyone. The recent messaging forced the tried-and-true hybrid to take a back seat to the over emphasized EV product. Finally, the EV smoke cleared to expose the truth that EVs are great for metropolitan commuters that return home each night to re-charge. Now the hybrid is selling to the non-commuter market again.
Car buyers have already shifted to more hybrid vehicles instead of EVs. Hybrids will still create lithium demand, but they have smaller lithium-ion batteries than EVs. Ford doubled production plans for the hybrid F-150 pickup trucks for 2024. As a result of their new hybrid plans, Ford’s January 2024 sales reported an impressive 43% jump in Hybrid sales, which offsets an 11% drop in EV sales. They also reported a 2.6% sales increase of traditional vehicles in January. Ford’s recent sales increases do not include lower pricing for vehicles via the current low lithium prices.
Tesla built Giga Factories in very expensive San Francisco CA, Austin TX, Sparks NV and Buffalo, NY. Tesla could benefit greatly if they had a Giga Factory in Arkansas, which would improve their efficiency and logistics cost. The heaviest components of an EV car are the steel and lithium battery, which is uniquely available in Arkansas. Tesla is also dropping their prices to compete with the new EV competitors, so a better cost structure would allow them to create lower cost cars. It would also allow them to create entry level EVs to expand the great brand loyalty into a younger demographic. Tesla has tried to reduce costs by controlling more of the lithium supply chain – Would Tesla still decide to create their own lithium processing facility if the decision was made Post DLE with domestic sources at today’s lithium prices? As stated above, we are the superior location for assembly of Tesla’s powerwalls, vehicle battery modules and the large batteries for electric utility scale systems.
Speaking of utilities, the Energy Grid is a critical element of our American infrastructure. Our leaders have recognized we can stabilize the grid with lithium-ion batteries, thus utility-scale storage is predicted to grow 15-fold by 2030. Energy storage is going to redefine tomorrow’s energy grid with lithium-ion batteries for daily load balancing to reduce volatility from energy fluctuations. For example, load balancing switches between direct solar power and battery storage for evening power. The concept can apply to residential, commercial, or utility scale battery applications. Some reports predict that load balancing will comprise 61% the new energy storage systems by 2030.
Batteries are an important component of storage-as-a-transmission asset (SATA) for decentralized placement of customer-sited batteries and utility scale batteries to augment the current electricity grid. The use of SATA as neighborhood, local and regional batteries will initially upgrade the grid to capture and store alternative power generation in a “crawl-walk-run” scenario. It will require much more investment to progress to the “walk and run” phases. It is expensive to build a decentralized grid with upgraded transmission lines to safely manage renewable power in both directions.
The utility scale battery system implementations slowed when $60k-80k per ton lithium carbonate prices forced a lot of utilities to reduce their utility storage commitments over the last 2 years. Pre DLE supply chain disruptions will subside as Arkansas lithium hits the market. Utility scale battery systems require far more lithium than other applications. Now the lithium prices have dropped so much that Utilities can renew their commitments and implementation plans.
Unique Steel further sets Arkansas apart from the competition. Lee Morgan is CEO of The Systems Group in El Dorado that supplies both of Arkansas’ steel giants. Lee is glad the Arkansas steel companies could provide more value for Arkansas Lithium companies. Lee was proud to declare that, “after U.S. Steel opens our state’s 3rd AHSS mill, Arkansas will have the largest concentration of AHSS mills in the Nation and should become the largest flat rolled steel State in the Nation.”
Lee also opened my eyes to our additional energy advantage with the recent opening of U.S. Steel’s $450 million non-grain oriented (“NGO”) electrical steel line at its Big River Steel facility in Osceola. America needs to upgrade the electrical grid, integrate alternative energy and energy storage thus we need ultra-thin, and light-weight electrical steel with magnetic properties necessary for EV motors, as well as generators and transformers. Dan Brown, U. S. Steel’s Senior Vice President of Advanced Technology Steelmaking and Chief Operating Officer of Big River Steel Works said, “As the demand for electric vehicles increases, we are committed to providing the products necessary for efficiency and extended range in electric motors. We’re not just meeting demand; we’re driving progress towards a cleaner, greener future.”
NGO steel allows magnetic properties in all directions, being a perfect material for advanced electrical applications. NGO steels are more efficient than Grain Oriented electrical steels with magnetic properties that only flow in a single direction. NGO Steel with improved magnetic properties will improve the efficiency of electric motors; thus, it extends the range of a hybrid or EV car.
As discussed in my first lithium article, Geothermal could make the Arkansas lithium zone as green as possible and provide revenues that reduce costs and reduce risk. The limiting factor for geothermal has been high upfront costs for drilling NEW wells that may not be hot enough for power generation. Our brownfield advantage shows up again, because Arkansas already has numerous wells that negate the upfront costs, and we should know which wells are hot enough.
Geothermal is green enough that the DOE Geothermal Technologies Office (GTO) is investing in abandoned wells or co-production via its Wells of Opportunity initiative. Data from the U.S. Greenhouse Gas Emissions and Sinks (GHGI) for abandoned oil and gas well activity shows the U.S. had about 2.2 million abandoned wells in the 2021 GHGI inventory. Bromine-rich brines are typically recovered around 7,000 feet in the Smackover formation and still reach the surface at around 212 degrees.
Enhanced geothermal system (EGS) is the preferred target of Dr. Christopher Liner, the Associate Dean in the Fulbright College of Arts and Sciences at the University of Arkansas. Dr. Liner previously served as chair of the college’s Department of Geosciences and holds the Maurice F. Storm Chair of Petroleum Geology at the UofA. He previously worked for Conoco, Golden Geophysical Corp. and Saudi Aramco, and served as an industry consultant for various companies around the world, including in Iraq, Oman, Tunisia and Indonesia.
Dr. Liner is very confident that this is a great time for Geothermal in Arkansas. Dr. Liner was passionate when talking about the new Arkansas Geothermal Opportunity working group (ARGO) at the UofA, “Our ARGO team is focused on compiling down hole temperature data for the wells that are at least 9,000 feet deep, which is a depth that begins to provide reliable information on deep heat. The sweet spot for the geology in South Arkansas to provide consistent geothermal feasibility would likely be a 15,000 foot deep well. Our UA data base is compiling approximately 1,300 wells in Arkansas that are at least 9,000 feet deep, so we should have plenty of brownfield wells with solid potential for geothermal.”
Dr. Liner has ambition for a geothermal pilot project in Arkansas at about 15,000 ft deep which is easily feasible with today’s oil & gas drilling technologies. He is keenly watching the progress of the western US geothermal power projects like Fervo Energy’s Blue Mountain project.
Dr. Liner felt that the timing is right for Arkansas considering what is happening in Texas and Oklahoma, “Repurposing existing wells, including abandoned hydrocarbon wells, would significantly reduce the cost of deep geothermal developments.”
Texas created the report in May of 2023, from a multi-disciplinary, cross-collaborative effort, researchers at five Texas universities, the University Lands Office, and the International Energy Agency that published “The Future of Geothermal in Texas: The Coming Century of Growth & Prosperity in the Lone Star State.” A few things stand out from the report, “In fact, analysis in this Report and a prior related study concluded that it is likely hotter in the Texas subsurface than previously estimated, by as much as 15 percent. This difference is significant enough to improve both project economics, and technical feasibility of geothermal development in the State.”
The naysayers against Geothermal have mostly relied on the prohibitive cost of drilling new wells, old thermal exchange technologies, and now it appears obsolete subsurface temperature data. The oil and gas industry has developed and perfected innovative technologies and methodologies over the past 20 years that will improve geothermal capabilities and performance.
Past geothermal feasibility studies suffered by, “…underestimation, or failure to acknowledge the impact of technology transfer, fast innovation, and engagement at scale by the oil and gas industry, projected geothermal growth lingers consistently in the single or low double digits over the coming decades in energy transition reports and models. These numbers have failed to inspire entrepreneurs, funders, governments, the media, civil society, and even the oil and gas industry to recognize the sleeping clean energy giant beneath our feet as a potentially significant player in the energy transition. This dynamic presents Texas a unique opportunity to lead.”
The Texas report provides solid findings that say it is time for Arkansas to get serious about Geothermal, “As the world increasingly looks to transition to clean energy, geothermal energy, with its synergies with the oil and gas sector, has become a natural focus area for the oil and gas industry. Researchers in this study concluded after analysis that through know-how and existing technology transfer alone, the oil and gas industry could reduce the cost of geothermal development between 20 to 43 percent, depending on the type of geothermal technology, in the coming years.”
The Texas report adds, “Further, geothermal entrepreneurship has entered a period of renaissance, with more geothermal startups launching over the past two years than in the past ten years combined, many buoyed by oil and gas investments, and a majority being led by lifelong oil and gas industry veterans. Several of these companies are planning or currently executing pilot projects and demonstrations in Texas.” It is time for Arkansas to have a serious unbiased discussion about geothermal with existing brownfield wells. Our discussions should not include old negatively biased feasibility studies that are based on new greenfield wells.
R&D and Workforce Development
Site Selection magazine named Arkansas as the top state for workforce development in the South-Central region comprised of Alabama, Kentucky, Oklahoma, Louisiana, Mississippi, Tennessee and Texas. This is our time to shine Arkansas.
Our Lithium companies will need talent at all levels of their operations. SLI has partnered with South Arkansas College in El Dorado, Arkansas, for the new Catalyst Program, which is a collaborative effort between employer partners and sponsors to provide free, pre-employment training for individuals interested in the chemical production and services sector. The 16-week program provides a great opportunity for local workers, including high school seniors and GED-level, to learn new skills and advance their careers and ensures there is a short-term workforce development pathway that leads to high-wage careers.
The state could fund curriculum and research by Arkansas universities to provide valuable research and innovation to help us reach our best potential value. Arkansas Tech University has recently announced a degree modification within its Geology program to include a Geoscience degree to prepare students for the Lithium industry. Research is needed to support process intensification that could help anchor the lithium companies in Arkansas by providing process improvements that drive efficiency and improve profitability.
We must be competitive with research for our lithium companies, so they invest further in Arkansas lithium production. We can use more than financial incentives to compete with Louisiana and Texas, so we keep our share of the Lithium opportunity.
I have been fortunate to speak with the leaders of our two University systems – The University of Arkansas and Arkansas State University. Both Universities know this is an opportunity to show their strength in providing talent for new energy storage technologies, new chemical processing, process engineering and supply chain initiatives. Both Universities will have to work together to provide research assistance and a total solution, so that we reach our full potential.
Mike Malone, Vice Chancellor for Economic Development at the University of Arkansas knows that the Lithium opportunity provides a challenge that will only make the UofA better, “The University of Arkansas has a key role to play in advancing lithium development and related industries in the state of Arkansas. We are recognized as having the top supply chain management and transportation logistics program in the nation – a vital advantage when we highlight Arkansas’ concentration of steel mills, proximity to Texas auto production zones and the I-65 corridor, and abundance of sites throughout the state that could support battery manufacturing. The U of A is uniquely positioned to partner with the state and industry to provide the know-how that brings it all together and optimizes Arkansas’ vertical integration.
We also offer unique expertise and patents in lithium batteries and in the economic and ecological factors of extraction – key considerations for industry leaders like ExxonMobil who have identified the potential for lower-cost, more environmentally friendly lithium extraction from brine wells. The university’s Center for Advanced Spatial Analysis offers belowground expertise in both hydrocarbon and water, and our engineering departments boast experts in separation sciences, novel materials, and AI.
Another vital piece of the puzzle we can provide is the work-ready workforce – specifically our graduates in physics, engineering, geosciences, and supply chain management and transportation logistics. Many of our graduates are already in leadership roles at the lithium firms working in Arkansas and we expect to help these companies fill many more positions as they grow because our grads have not only completed rigorous coursework, but they’ve also conducted research alongside faculty and worked directly with industry.
Finally, like we did in partnership with the Arkansas Department of Commerce in organizing the CHIPS Summit in Fayetteville last fall, the University of Arkansas frequently convenes thought leaders from industry, academia and government to tackle challenges and capitalize on opportunities for our state. We’re pleased to be involved with the organizing of the Arkansas Lithium Innovation Summit because this is such a unique opportunity for our state and the University of Arkansas has a critical role to play in making it a reality.”
ASU is perfectly positioned to support the vertical integration with relationships and proximity to the steel mills that provide the core structural component of batteries for powerwalls, EVs and Hybrid cars plus the battery frames. NEA has large industrial sites that have been a candidate for multiple automobile assembly plants. The steel mills in NEA are already a major economic engine, but ASU recognizes the verticality for lithium can also create verticality for Arkansas steel.
Dr. Abhijit Bhattacharyya, Inaugural dean, College of Engineering and Computer Science at Arkansas State University is ready to support the economic engines of our state, “This is an exciting time to be in Arkansas. The expansion of the steel industry in the upper delta region of our state provides high-value Advanced High Strength Steels (AHSS) and Non-Grain Oriented steels, a must-have for the EV/Hybrid automotive manufacturing sector. This comes at a time when there is a surge of interest in Powerwalls, hybrid/electric vehicles which require Lithium as a power supply. The location of substantial amounts of the essential lithium in South Arkansas has drawn regional and national attention.
These opportunities will not only lead to an expansion of the workforce needs but also the promise of high paying jobs. The nexus of these opportunities also implies that AR could look forward to a future battery or automotive manufacturing facility being located in the state. The College of Engineering and Computer Science at Arkansas State University is hard at work to meet the workforce and research needs of the aforementioned industries. While the college has outreach efforts throughout the state, it has a long-standing and proud tradition of grooming and educating talent in the delta to become engineers and computer scientists.”
Shane Broadway, Vice-President for University Relations at the Arkansas State University System added, “Our A-State College of Engineering and Computer Science is very committed to meeting the workforce needs of the state, and especially the needs of advanced materials, artificial intelligence, and manufacturing. We are uniquely positioned next to the largest steel producing county in North America and already have developed strong ties with the steel industry and we are building on those ties to support their R&D needs. The focus on Lithium extraction is also timely for us as we have expertise in the college on advanced materials, environmental engineering, and electric vehicle research. We look forward to working with our colleagues from across the state as we have done for many years with the Arkansas Biosciences Institute to take advantage of these unique opportunity to grow our economy and provide the workforce that it needs.”
I hope Part 2 detailed how the whole Nation can benefit from our impact upon National Security, Defense weapons, Battery Supply Chain, Power Grid, and Geothermal. We are leading the way with the Smackover formation brine, DLE technology, new production model, and a new royalty structure. The DLE + Brine well production model is very credible after SLI validated their new Direct Lithium Extraction (DLE) technology’s ability to extract lithium from Smackover brine.
Arkansas and SLI should receive more recognition after the November 2023 announcement of SLI’s validation. In fact, the DLE credibility is so new that very few of the lithium market researchers include the new domestic lithium resource in Arkansas.
Arkansas and SLI have contributed to what I call the Pre DLE or Post DLE periods of this lithium market. Many new energy storage decisions will have Post DLE dynamics to influence their decisions. The National Security initiatives are prioritizing development of our domestic Lithium industry. The Lithium domestic supply and pricing appear to be stabilizing which will re-establish Lithium’s position as the top energy storage material. Utility scale batteries, EVs, Powerwalls, and Hybrids sales should increase as low-priced Lithium will eventually lower the price of batteries.
We have a unique combination of Lithium + Specialty Steels for EVs that provides the best ability to vertically integrate and create even more jobs. Arkansas has an opportunity to create jobs and royalties that improve our communities. The new jobs will need skills and training, so our education system will be extremely important at 2-year and 4-year institutions. This is our chance to further improve our State. This is our chance to continue the excellent economic development of the Sanders administration’s Department of Commerce. This is also our chance to start putting the past…in the past.
Brian Umberson is a native Arkansan and the principal of Umberson Technology Solutions, LLC. He has worked with venture capital startups in the biotech fields of diagnostics, food-borne pathogens, oil and gas microbes, biofuels, and medical devices. He previously gained experience in the automotive, steel and aerospace segments. He is active as a National Science Foundation I-Corps mentor, board member of the Arkansas Association for Food Protection, and a committee member of the International Avian Influenza Summit and co-founder of Bio+Nano+Ark.
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