Home Commercial trading Natural gas and petroleum brines could help supply tight lithium market

Natural gas and petroleum brines could help supply tight lithium market

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Lithium is one of many components of the salt brine, or produced water, that accompanies the production of natural gas and oil. It is also a key element in the production of batteries for electric vehicles (EVs), the storage of the electricity grid and many other manifestations of the energy transition.

Recovering commercial volumes of lithium from the oil and gas byproduct would bolster the United States’ domestic supply of the valuable mineral, but it won’t be easy.

“Lithium is the target of the day,” Nick Pingitore, a geochemistry professor at the University of Texas at El Paso (UTEP), told NGI. “Sexy, so to speak, because of the critical need for batteries. Decision makers are therefore focusing on it.

In February, the US Geological Survey (USGS) included lithium on its list of mineral feedstocks it considers “critical” to national and economic security and susceptible to supply chain disruptions.

According to the USGS, domestic lithium production in the United States includes a single “Nevada brine operation.” Additionally, the agency said that last year the country relied on imports for more than a quarter of lithium consumption.

There is no shortage of lithium in the world, but there is a shortage of the metal in the global market and “its price has fluctuated considerably in recent years,” the University of Houston (UH) reported last month. ).

From early 2020 to early 2022, the major Chinese supplier’s lithium price rose from $6,000/tonne to $40,000/tonne, UH noted. In mid-May, the university said lithium in spot markets was trading at $70,000/tonne.

UH said the lithium shortage stems from several factors: supply chain bottlenecks, growing corporate demand and government reluctance to approve new lithium mines.

B3 Insight’s Kylie Wright, technical product and content manager at the Colorado-based water data company, told NGI that lithium “can be found in certain produced waters or oilfield brines at relatively low concentrations. high…”

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More commonly, however, lithium is found “in fairly low concentrations,” she said. Therefore, the recovery of lithium “from brines containing many other constituents” tends to be a “complicated” task.

Pingitore of UTEP said a small number of companies extract lithium from underground brine deposits, a process also being explored in Canada, but not from produced water.

“I don’t think anyone makes a lot of money out of it,” he said. “It’s only a beginning.”

Other important minerals in produced water include strontium, europium and cerium, but lithium represents the best candidate for recovery in commercial volumes, sources at the University of Louisiana at Lafayette (UL) said. ) to NGI.

“Lithium extraction requires highly selective recovery technology, extracting only lithium from produced water,” said UL’s Daniel Gang, director of the Center for Environmental Protection and Engineering. “The technology is still at benchtop lab scale or pilot scale.”

Like conventional mining, entropy is prominent in the first part of the supply and value chain for extracting lithium from produced water, Pingitore said.

“The target is dilute,” he said, referring to the need to separate low concentrations of lithium from high concentrations of “competing elements” by treating “absolutely huge amounts of produced water” to recover the lithium at commercial volumes.

The recovered lithium must then reach a purity level of 90 to 95 percent, he added.

With applications such as lithium batteries, he said the purity must exceed 99% and have an “extremely low content” of certain “poisonous” elements.

“It’s a tough game,” he said.

table of lithium users

Hard but potentially beautiful

Oil and gas producers who overcome the many hurdles to economically producing lithium could benefit greatly, Dallas-based Lium Research partner Joseph Triepke told NGI.

“Today the world has only a fraction of the online lithium generation capacity it needs to meet some of the widely accepted electric vehicle predictions out to 2030,” he said. “The total opportunity around lithium is in the tens of billions of dollars over the next 5-10 years, and so this could be a very significant alternative revenue stream for shale players who are in possession of streams. water products rich in minerals.”

Observers of the burgeoning subsector of the oil and gas industry believe that not all well sites would be good locations to economically extract lithium from produced water.

“It depends on the pool, as the presence and concentrations of minerals in produced water can vary widely from game to game, and even within pools themselves, depending on the geology,” said Triepke.

When asked how the constituents of crude oil, ranging from sweet to sour and heavy to light, and natural gas, ranging from varying degrees of wet to dry, influence lithium extractability, Pingitore replied with “good question”.

“The crude itself contains various metals – vanadium is well known, some nickel, etc.,” he said. “How much, if any, of that is transferred to produced waters is probably an open question.”

Adding to the complexity of finding the right candidates for the extraction of lithium from produced waters, the feasibility depends on a high concentration of the target element – lithium – and a low concentration of competing elements “of which you don’t need,” Pingitore said.

Additionally, he stated that the overall water chemistry should avoid fouling or damage to the extraction system and that the target element should not be “chemically complexed in a form that will prevent separation”.

While technologies exist to extract lithium from produced water, many are in development at the case study and pilot stage, said Patrick Patton, commercial product manager for B3 Insight.

Market considerations

Triepke noted that the drivers and end markets are “completely different” for lithium mining and oil and gas production.

“The lithium price equilibrium is defined by the demand for battery materials,” used in electric vehicles as well as grid-scale storage facilities, as well as by the capacity to extract lithium, a he declared. “The fundamentals of oil and gas are more related to transportation and power generation.”

Gang and two UL colleagues, associate professor of petroleum engineering Mehdi Moktari and director of the Office of Innovation Management Alan Cohen, gave NGI a glimpse of what the business of UL might look like. extraction of lithium from produced water in the oil and gas industry.

Gang, Moktari and Cohen said the produced water miner would likely be an oil and gas company or a joint venture of players such as an oil and gas company, resource recovery company and/or service company.

On the demand side, lithium customers could include electric vehicle battery companies and others, they said.

Patton told NGI that higher brine disposal fees, along with “very limited” availability of produced water injection sites, would improve the commercial viability of lithium recovery.

Extraction is expected to be implemented on a large scale, “combining waste from many oil and gas producers in a centralized facility where processing takes place to concentrate a brine with high enough concentrations of elements to make the economically feasible extraction,” he said.

Commodity prices are currently high for lithium and other metals needed by the tech industry, which could encourage new developments, Wright said.

“But the high prices should be stable to encourage the development of these projects,” she added. “It should certainly take place on a large scale, so centralized water treatment facilities will be a key part of the opportunity.”

B3 Insight CEO Kelly Bennett highlighted the link between scale and commercial viability.

“That’s the key,” he said. “People often forget that capital recovery can take years, which means the market will have to trust that investments will come through, and that depends on price expectations.”