In May the Journal-Sun did an article titled “Could Cass County See the Next Big Boon”. The story follows the recent news that Standard Lithium has found quality Lithium in a well in Cass County and area communities, the spot of some of the highest certified lithium-grade brine. Which was taken from a sample of a repurposed oil well outside McLeod. The area sits atop the Smackover Formation, a geological formation that runs underneath an area that begins in far Northeast Texas and runs to the Florida panhandle. Since then, the narrative slowly continues to pick up steam.
This is in part because during the time the story was written brine leases were not regulated in Texas. That changed with the passage of SB 1186, by Senator Bryan Hughes, which passed the Texas Legislature and was signed by Governor Abbott effective May 27, 2023, only days before the final draft of the article was released. With the passage of the bill, the Texas Railroad Commission now has jurisdiction over brine mining including the authority to regulate brine production and brine injection wells. At the time of the original article few (including the publisher of the paper) had heard little about the discovery of lithium brine in the region. That changed as companies began to approach landowners about selling their mineral rights to extract the Lithium. One such property owner who had been involved in researching the topic for some time approached the Journal-Sun about doing a story, to make the area residents aware and to inform property owners to be properly informed about mineral leases.
Since then, stories have begun to pop up on the internet. In part due to the new law. Even with the new law that gives the Texas Railroad Commission the governing right to oversee the regulations for lithium extraction, there is still so much ambiguity and waiting. That waiting, even though this area has been found to be lithium-rich, may cause other countries to gain a foothold in the market.
In a recent Reuters article, the author notes that even though “Global lithium demand is expected to outpace supply by 500,000 metric tons annually by 2030.” It is faced with the dilemma that “unless the United States boosts its own production, the country’s manufacturers will find themselves reliant on China and others for supply as the end of the decade approaches, analysts warn.”
The good news for those wanting to benefit from Lithium extraction, as stated before, “the Texas legislature, last year approved a law - supported by Standard Lithium (SLI.V), and Chevron (CVX.N), that instructed the state’s oilfield regulator to craft regulations for lithium extraction from brines. But the regulator, known as the Railroad Commission of Texas, told Reuters it has no timeline for when it will finish that task.”
“I don’t even know where to start in terms of working with the local authorities to get brine mineral rights in Texas. It’s confusing,” said Brady Murphy, CEO of Tetra Technologies (TTI.N), which aims to produce lithium with partner Exxon Mobil (XOM.N).
According to the Reuters article, “The Railroad Commission of Texas told Reuters it plans to release its rules for public comment once they are formulated, and then the three commissioners will vote on them.”
As the world turns to batteries for powering electric vehicles and storage for renewable energy the search for an essential element needed in production, lithium, is on. The hope of local officials that the Journal- Sun has spoken to is that the County will benefit from the exploration and eventual drilling, but the concern is to make sure that property owners set fair lease rights so that money stays in the County and that there is a plan to deal with the potentially increased wear and tear on area roads.
The deposits come from the Smackover Formation. It is a limestone aquifer that spans across several states including Texas. Formed during the Jurassic period, this geological formation has been tapped for oil and gas, as well as brine (saltwater) for the production of bromine, since the 1950s. Recently, however, several operators have started pilot projects to produce lithium from Smackover brine as well. Liskow – The Energy Blog – May 22, 2023.
Crowson, LLP, a law firm based in Longview, Texas, notes that “until recently, lithium extraction involved one of two methods, either (1) mining from hard rock, which occurs almost exclusively in Nevada or (2) evaporative mining, which involves evaporating brine in massive pools, such as those found in South America, leaving concentrations of lithium behind. Both methods have proven to be time-consuming and also have an adverse impact on the land and environment. Meanwhile, demand for products using lithium batteries continues to rise, while supplies have struggled to keep pace.
“Recently, several companies have begun experimenting with a process known as direct lithium extraction (“DLE”), which promises to be both more efficient and cause fewer, if any, of the adverse effects on the soil and groundwater.
“Lithium brine is a concentrated solution of water and the mineral lithium found in underground deposits. DLE technologies draw lithium out of brine using filters, membranes, ceramic beads, or other equipment. Currently, companies employ three different DLE applications: (1) adsorption; (2) ion exchange, and (3) solvent extraction, while other methods are being tested and developed. The higher the grade of lithium, the more efficient the DLE process. Overall, market analysts anticipate that lithium production from DLE technology globally will increase from 54,000 metric tons currently to 647,500 metric tons by 2032.”
Standard Lithium Ltd., a leading near-commercial lithium company, announced their findings in a press release on March 28, 2023, results from brine test samples from its work in two test wells in the Smackover just north of Mcleod.
According to the release, Standard Lithium has been working for three years to understand the most productive areas to secure the highest quality brine in East Texas. Since then, mineral and land professionals have been securing brine leases in Cass County and surrounding areas.
It was announced recently that Standard Lithium is not the only company joining the party. According to a Wall Street Journal article, “Exxon Mobil, a new player in the hunt for U.S. lithium, is planning to build one of the world’s largest lithium processing facilities not far from Magnolia, with a capacity to produce 75,000 to 100,000metric tons of lithium a year, according to people familiar with the matter. At that scale, it would equate to about 15% of all finished lithium produced globally last year, according to one analyst.
Samuel Shaw a reporter for the Longview News-Journal noted that a new player for Lithium in Franklin County was a company called Black Mountain whose corporate offices are in Fort Worth, Texas. The Journal- Sun is reaching out to the company to see if they plan to do business in Cass County.
“The early development of the lithium extraction process has been focused on Southwest Arkansas near Magnolia. The area has been since the 1950s’ a source of brine taken from the Smackover Formation. Standard Lithium has a pilot extraction plant there and recently Exxon announced it is planning to build one of the world’s largest lithium processing facilities. ‘This Arkansas Town Could Become the Epicenter of a U. S. Lithium Boom,’” Wall Street Journal, July 20, 2023.
Since Magnolia is 80 miles away from Cass County, Texas, it remains unclear once the Texas Railroad Commission begins the regulatory process how that will affect Northeast Texas. Will other players also set up shop and build a multi-million- dollar processing facility? Will current companies begin to move their operations west into Northeast Texas? It is impossible at this point to know.
One reliable source for more information is GoHaynesvilleShale.com. Several local mineral owners have posts dating back to the initial brine leases being sought in February 2022.
One confidential source for the initial article who is a local mineral owner, who has followed Texas brine leasing says, “This is a promising opportunity for Cass County but being in its infancy, it does not hurt to wait until you are fully informed to get a fair deal.”
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