“Fracking” is an expletive in environmental circles. Yet the spirit of shale is creeping into a business with transformational potential for the energy transition. Schlumberger NV, the industrial giant best known for sucking oil and gas from shale, the seabed (and other places besides), this week announced a breakthrough in direct lithium extraction, or DLE.
Lithium is the essential metal in the batteries that power electric vehicles and store energy on the grid, both pillars of decarbonization. Roughly a third of current production involves pumping lithium-rich brines into giant pools and using natural evaporation to leave concentrated salts. This method, exemplified by giant ponds in the Atacama desert in South America, is cheaper than the other main method, mining (the sun provides free energy for one thing). But it needs a lot of land and water — often in places where fresh supplies are scarce — and is slow. Plus, evaporation typically captures only about 40%-60% of the lithium present in the brine, whereas mining recovers more like 70%.
DLE offers a way to address evaporation’s shortcomings, mainly by speeding things up. Rather than being pumped into big pools for months and months of evaporation, DLE uses membranes, adsorbents and other technologies to directly extract lithium from brines far quicker and with a much smaller footprint. Schlumberger claims its demonstration plant in Nevada captured 96% of lithium from brine 500 times faster than traditional evaporation using only 10% as much land.
Efficiencies of this magnitude have the potential to unlock vast lithium resources in the US, ultimately reordering the global playing field in an echo of how shale challenged oil’s power structure over the past two decades.
Addressing the obvious caveat: All Schlumberger disclosed here are some headline figures from a pilot that didn’t include the all-important one of cost. In a lithium industry replete with startups touting this or that game changer, all such announcements should be treated with caution.
Yet Schlumberger is hardly some junior miner trying to raise cash to appraise some godforsaken patch of scrubland. It isn’t a producer at all, but rather a services provider; a facilitator happy to sell you the (complicated) pickaxe to extract whatever commodity you happen to value. Schlumberger’s DNA is coded with crude but it clearly sees EVs and grid batteries as viable long-term bets and seeks to capitalize on the associated lithium demand.
Any part of the oil complex muscling into transition territory is liable to draw skepticism. Exxon Mobil Corp.’s foray into DLE with the acquisition of 120,000 acres in Arkansas raised eyebrows last year because, well, it’s Exxon. I remember well the oil major’s earlier transition-adjacent project to derive biofuel from algae; not least because Exxon advertised it so heavily and any mention of it in conversation at industry events was liable to draw wry smiles and eye rolls.
Then again, Exxon signed a preliminary agreement with a serious battery maker, South Korea’s SK On Co., in June to begin supplying lithium from 2027. Moreover, oil majors have deep experience in exploration, permitting and licensing — all useful in lithium development, too. And since oil and gas production, especially fracking, involves the movement of copious amounts of water, the oil industry is already in the water management business to some degree by default.
Plus, Exxon has a huge balance sheet. DLE technology has been around for decades, but given the variability of brine concentrations and geology, getting it to commercial scale in the relatively virgin territory of the US requires money, patience and a willingness to experiment with different extraction technologies. As it stands, lithium prices aren’t exactly a capital magnet, currently undergoing a bust as supply predicated on surging EV demand has collided with slowing growth.
