Smackover, Arkansas
Today is classic pseudo science. USA Today headlines blare out “Vast deposit of ‘white gold’ in Arkansas could be stunningly valuable”. Nothing so idiotic as a cub reporter with zero knowledge in an industry.
https://www.usatoday.com/story/news/nation/2024/10/23/lithium-deposit-under-arkansas-could-fix-global-ev-battery-problem/75808246007/
Arkansas may be home to a vast resource that could reshape the world’s energy needs: a valuable battery component called lithium that’s been nicknamed “white gold” and “the new gasoline.”
It’s an important discovery because renewable energy needs batteries and many batteries need lithium. But the resource is in short supply globally and especially in the United States.
A release this week from the U.S. Geological Survey suggests the U.S. might have all the lithium it needs in ancient brine which dates back to the Jurassic period and is buried deep below southern Arkansas.
With the article is a map showing the extent of the Smackover Formation, a Jurassic age formation that extends from Florida to Mexico in a wide arc, but is closest to the surface in Arkansas and parts of nearby Texas. The article quotes “estimates” of between 5 and 19 million tons of lithium. Such estimates are dubious at best. Remember when the oil shales of western Colorado were going to power us through the 21st century? Well all that oil is still there, in a form called kerogen, and not one barrel is being produced for oil we can actually use.
The first and most obvious problem is that the bulk of the Smackover formation is deep…20,000′ or more. That’s a per well cost that could push $20 million or more to drill and produce. Then enough of those wells have to be drilled that you not only can flow sufficient water through a processing plant to make extraction economic, but you will need wells to pump the depleted water back into the same formations. The bromine extraction plants that exist are allowing the company to extract lithium from the tailwaters of the plant. And it makes no sense to extract only the lithium and not extract bromine at the same time. But do we need bromine and what happens there if we over-produce? Prices collapse.
Next consider the methods of the USGS when they make such estimates. They are estimating the estimated Resources based upon the extent of the Smackover formation. They are not estimating the actual amount of lithium that is economically recoverable. That number is a tiny fraction of the total resources. And the USA Today article only gives one small sentence to the USGS lead author of the study.
With Lithium pricing below $10,000 per ton after a high of $60,000+, where is the economics? And of course, the mineral owners do need to get a slice of that pie. In Arkansas, the lithium miners are asking for a 1.8% royalty – compared to the normal 12.5 – 18.5% royalty paid for oil or gas. In Texas, however, miners have been paying up to 8% royalty for lithium Smackover leases.
The ‘science’ behind this is all hype, generated by a media that does not know what they are talking about. Take it with a grain of salt.