Well, well, well — look who’s decided electric cars aren’t such a bad idea after all. Oil giant ExxonMobil is investing in the future by buying drilling rights for lithium in Arkansas, the Wall Street Journal reported Sunday.
There’s a lot of profit to be made in finding and mining new lithium reserves right now. As the world pivots away from Exxon’s main product, experts project that demand for lithium could soar up to 40 times by 2040, thanks to the large-scale shift to electric vehicles. The Biden administration is actively encouraging the development of domestic lithium reserves as carmakers express mounting concerns over a possible shortage. (We may not actually need all that lithium, especially if we choose to prioritise things like public transit and making smaller vehicles rather than mammoth SUVs — but I digress.)
Exxon paid more than $US100 ($139) million for 120,000 acres in Arkansas, which it plans to drill in the upcoming months, according to the Wall Street Journal. That sounds like a lot, but it’s chump change when you consider that last month Exxon posted a record-breaking $US11.43 ($16) billion first-quarter profit. It’s not exactly the mark of a serious pivot to clean energy — especially when Exxon has said it has no plans to cut oil production or invest substantially in renewables. Still, Exxon buying into lithium is a sign of the rapid worldwide shift toward clean energy; insiders familiar with the deal reportedly told the Journal that the company would consider expanding its operations if the region in Arkansas, which could hold enough lithium to juice 50 million EVs, proves profitable.
Exxon’s investment is “a classic hedge against the prospect of eventually declining oil demand,” Pavel Molchanov, an analyst at investment bank Raymond James, told the Journal.
Weirdly, Exxon actually has a historic foothold in the lithium industry. Some of the earliest foundations in lithium research were made at the oil giant, when British chemist Stanley Whittingham made key discoveries in battery technology while working at Exxon. Exxon manufactured an early prototype of the lithium battery to use in vehicles but stopped that effort due to lack of demand. Whittingham and two other scientists won a Nobel Prize in 2019 for their work on the batteries. Exxon, for its part, has continued to make small investments and innovations in lithium ion technology throughout the years.
Even though the modern EV battery was born in an Exxon lab, and even though Exxon has had a foothold in the industry for decades, the company hasn’t always been so keen on seeing lithium batteries succeed — or, at least, replacing its main product. In 2016, documents obtained by Unearthed, Greenpeace’s investigative arm, show how the company lobbied the UK government and governments in the EU against the adoption of electric vehicles. In 2019, CEO Darren Woods told a crowd at an oil and gas industry meeting devoted to climate targets (lol) that he doesn’t understand the point of electric vehicles.
The company has seemingly since changed its tune on EVs: Last year, Woods told CNBC that he thinks electric cars could become the entirety of the new car market by 2040. The CEO was surprisingly rosy about what that might mean for his company, projecting that that major shift would only reduce demand for oil down to 2013-2014 levels — a time when the company was still making a profit.
Like all climate moves Exxon makes, let’s not forget that the company continues to exert substantial pressures behind-the-scenes in Washington to work against climate action. Making a little cash from electric vehicles isn’t going to change decades of ruining the planet.