Energy Analytics Energy Transition

Securing domestic supply of lithium

byGraham Bain

In last week’s issue of Energy Transition Today, we discussed the significant drop in solar capture prices in California over the past five years. This decline presents a valuable opportunity for solar projects to utilize co-located battery storage, charging them with affordable solar power during daylight hours and discharging the stored energy in the evening to capitalize on higher peak pricing. From co-located battery storage to electric vehicles, we see rising demand for battery production and battery metals like lithium, and by 2035 we anticipate lithium demand to increase by 350,000 tonnes from 2019 levels.

Currently, 95% of the global lithium supply is mined in just four countries: Australia, Chile, China and Argentina. The U.S. only contributes 1%, illustrating the need to secure local production as demand increases. Recent government policy changes offer hope, with the Defense Production Act allocating up to $1 billion per year to boost domestic mineral development and the Inflation Reduction Act introducing a 10% critical minerals tax credit on mining and refining.

However, bringing new mines online can take decades and evaporative salars have geographical limitations due to their need for extremely dry environments. This is where direct lithium extraction (DLE) comes into play. Currently being tested for commercial viability, DLE has the potential to extract lithium from large volumes of low-concentration lithium brines. If successful, DLE could unlock almost limitless domestic lithium production, either from dedicated brine resources or from the approximately 3 billion barrels of oilfield wastewater produced monthly in North America.

FIGURE 1 | Yearly Lithium Production and Revenue Potential

Source | Enverus Foundations, Alberta Geological Survey.

Figure 1 shows the potential for lithium extraction and revenue from wastewater for five operators in the Delaware Basin. With a total of 29,000 tonnes/year, generating $600 million in additional revenue at a $20,000/tonne spot price, the implications are clear. If DLE proves successful, it could not only meet domestic lithium demands but also generate significant revenue in the process.

Highlights from Energy Transition Research

A Simple Guide to Energy Transition Metals

This report presents a supply and demand outlook for metals that will be crucial in supporting the decarbonization of the energy system.

A Simple Guide to Synthetic Fuels

What will it take for synthetic fuels to play a significant role in the replacement of hydrocarbons in the transportation sector?

The Inflation Reduction Act – Impact on CCUS

This report explores the impacts of the Inflation Reduction Act on the development of CCUS projects in the United States.

Energy is changing. Connect weekly with the ideas that are leading the way.

Button - Subscribe to Energy Transition Today

About Enverus Intelligence®| Research
Enverus Intelligence Research, Inc. is a subsidiary of Enverus and publishes energy-sector research that focuses on the oil and natural gas industries and broader energy topics including publicly traded and privately held oil, gas, midstream and other energy industry companies, basin studies (including characteristics, activity, infrastructure, etc.), commodity pricing forecasts, global macroeconomics and geopolitical matters. Enverus Intelligence Research, Inc. is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. Click here to learn more.

Graham Bain

Graham Bain

Graham joined Enverus Intelligence Research (EIR) in 2020 with the acquisition of RS Energy Group. As lead of the subsurface group on the Energy Transition Intelligence team, Graham creates intelligent connections between the subsurface, emerging energy and carbon innovation technologies through a deep understanding of geosciences and the energy transition. Prior to EIR, Graham worked as an analyst for the Alberta Energy Regulator with a focus on the Athabasca oil sands, and as a geologist in training for a Calgary-based exploration company.

Subscribe to the Enverus Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Related Content

Enverus Blog
Power and Renewables
ByKatherine Paton-Ilse

In an era where electricity demands continue to escalate, the importance of a reliable and efficient electrical grid cannot be overstated. Transmission lines form the backbone of the power grid, crucial for transmission and distribution of electricity from power generation...

ByAndrew Dittmar

In a year that began with lackluster minerals-focused M&A activity, there were signs of life in Q2 with the first transaction exceeding $10 million as Kimbell Royalty Partners acquired MB Minerals for $143 million. Compared to operating company M&A, even this...

Enverus Blog - Analyst takes: 6 January energy trends you need to know
ByErin Faulkner

Over the last few quarters, executives at U.S. upstream operators have grown accustomed to analysts asking about cost inflation. It’s an inevitable part of every conference call. During the late July to mid-August earnings season for Q2, the question shifted...

Enverus Blog - Energy Transition Today: EPA jumpstarts EV uptake
Energy Transition
ByKevin Kang

Behind the meter (BTM) solar is a key factor in decreasing load in CAISO, especially in California where it has the most impact on annual demand. The state’s potential for nearly 195 GW of rooftop solar capacity exists, although its...

Enverus Blog - 3 price management capabilities to offset cost inflation
Energy Transition
ByKiana Cruz

Seismic surveys are a vital tool in the oil and gas industry. Effective use of seismic surveys allows industry professionals to identify prospects, assess potential resources, reduce risk and even quantify reserves – in short, to make well-informed decisions that...

Energy Transition
ByAlex Nevokshonoff

While we are still waiting for guidelines from the IRS regarding hydrogen incentives released with the Inflation Reduction Act (IRA) last year, it is clear that supportive policy must be in place for green hydrogen to compete in existing hydrogen...

Enverus Press Release - Breaking down the CCUS basins
Energy Analytics Energy Transition

Panel discussion with CCUS experts from Enverus EVOLVE Conference Introduction CCUS offers a promising solution to curb greenhouse gas emissions by capturing CO2 from industrial sources and power plants and storing it underground. CCUS has gained significant attention in recent...

Analyst Takes
ByChris Griggs

As we usher in the month of August, it’s an ideal moment for retrospection on the past month’s shifts and trends in the energy sector. Our proficient Enverus Intelligence® | Research (EIR) team has delved into critical trends and innovations,...

Energy Transition
ByCarson Kearl

The Vogtle Unit 3 nuclear reactor began its commercial operations at the end of July. Based in Georgia, the facility will provide clean electricity to the southeast U.S. for likely longer than the next half-century. This marks the first U.S....

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Sign up for our Blog

Register Today

Get Energy Transition Research updates straight to your inbox by filling out the form below.

Sign Up

Power Your Insights

Connect with an Expert

Access Product Tour

Speak to an Expert