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Abandoned Oil Wells Offer New Source Of Lithium

Direct extraction could be the next big thing in mining for lithium-one of the most crucial minerals for the energy transition. Start-ups created in recent years are now looking to extract lithium from the brine underneath abandoned oil wells, where the resource is more or less estimated, and most of the drilling has been done.   

The technology is still in the early stages of development and needs to be further refined and scaled to achieve commercialization. But if the start-ups achieve a breakthrough soon, as many of them believe, direct lithium extraction from brine in abandoned oil wells could upend the lithium mining industry as this type of extraction promises to be less destructive and use less freshwater than traditional mining. It could also make obtaining permitting easier, considering that abandoned wells have already been drilled and may not be in too remote areas without roads and infrastructure like many traditional lithium deposits. 

Another problem the new technology has to solve is the chemicals needed to separate the lithium from the brine because they would depend on the specifics of the location, according to Bloomberg.    

Still, start-up founders are optimistic that they can perfect the technology and achieve scale to disrupt the traditional, more harmful way of extracting the most important energy transition material whose demand is set to soar in the coming years and decades. 

For example, Prairie Lithium, a company based in the Williston Basin in Canada, bought last year three additional wells from a Saskatchewan-based oil producer that were set to be abandoned due to limited oil production. 

"Although the wells no longer have use for oil production, they do provide Prairie Lithium with the opportunity to access the production and disposal formations required for its lithium operations," the company said in September 2022.  

Last month, Prairie Lithium received funding from the Critical Mineral Research Development and Demonstration (CMRDD) program from Natural Resources Canada (NRCan) for direct lithium extraction (DLE) technology development. 

"The grant allows us to accelerate our DLE technology development with the goal of getting to commercial scale lithium production as quickly as possible," said President and CEO Zach Maurer.

Another company is Edmonton-based Recion Technologies, focused on technology development and commercialization of a proprietary and patent-pending process that it has developed to extract, purify, and produce lithium products from a variety of lithium-bearing saline waters, including oilfield brines found in Western Canada. 

Recion Technologies co-founder Daniel Alessi told Bloomberg that costs are currently very high for start-ups. But he added, "They aren't turning a profit now, but I think you'll see them operating commercial plants in the near future." 

E3 Lithium, another Canadian lithium extraction start-up, received earlier this month a license from the Alberta Energy Regulator (AER) to construct and operate the necessary equipment to run a direct lithium extraction pilot, planned to begin operations in Q3 2023.  

"We are incredibly excited to be field testing ion exchange technology for direct lithium extraction in real-world operating conditions this year," Chris Doornbos, President and CEO of E3 Lithium, said. 

Doornbos, who has worked in the oil industry for years, told Bloomberg this week, "We have to transition away from oil, and that's going to take 20 or 30 years. But I'd rather be on the transition-away side than the more-of-the-same side."    

If one of the start-up innovators unlocks the lithium brine mining from old oil wells, it could create a new supply source for the crucial mineral. Demand for lithium is expected to surge as the energy transition progresses, while the West is looking to diversify supply chains away from China's lithium processing. 

"Direct lithium extraction (DLE) and direct lithium to product (DLP) can be the driving forces behind the industry's ability to respond more swiftly to soaring demand," McKinsey & Company said in a report last year.  

"Although DLE and DLP technologies are still in their infancy and subject to volatility given the industry's "hockey stick" demand growth and lead times, they offer significant promise of increasing supply, reducing the industry's environmental, social, and governance (ESG) foot­print, and lowering costs, with already announced capacity contributing to around 10 percent of the 2030 lithium supply, as well as to other less advanced projects in the pipeline."   

By Tsvetana Paraskova for Oilprice.com

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Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.  More