Natural gas and oil players see potential financial and ESG gains from lithium

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More than a new source of revenue, extracting lithium from produced water could enable players in the natural gas and oil industry to meet environmental, social and governance (ESG) goals, said informed sources at NGI.

The level of interest in water produced by lithium mining, i.e. brines, among exploration and production companies, oil service companies and others is “increasing”, said Joseph Triepke, partner of Lium Research.

“Three to five years ago hardly anyone was talking about it seriously,” he said. “Over the past 12-24 months the conversations have gotten more serious and this has been a hot topic at the events we host through the Oilfield Water Connection industry event.”

Although “spiking lithium prices” have sparked interest in extracting lithium directly from produced water, Triepke said ESG factors “and the idea of ​​net zero waste streams, transforming specifically waste by value” also aroused curiosity.

“If the industry can create value from a byproduct of oil and gas, not only will its returns improve, but the industry can also demonstrate its sustainability,” he said.

Additionally, he called lithium mining a “great cover for oil producers for energy transition and the rise” of electric vehicles.

Extracting lithium from concentrated, salty brines would also encourage oil and gas companies to treat produced water rather than store it underground in injection wells, said Patrick Patton, B3’s commercial product manager. Insight.

“By chance, this would strengthen their ESG credentials while creating an additional revenue stream unrelated to oil and gas commodity prices,” he said.

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An evolving “animal”

Kylie Wright, technical product and content manager at B3 Insight, said oil and gas companies will also directly support the energy transition by supplying lithium and other key elements needed for the technologies at the heart of the change.

“Also, it would kind of achieve a ‘use the animal as a whole’ approach to resource development,” she said.

She explained that the companies, which already bring produced water or brine to the surface to produce oil and gas, “could also provide valuable resources from the water in the oil treatment process. ‘water to a cleaner standard’.

Mineral extraction from the water streams produced could also generate revenue “to advance water treatment and recover far more water from the oil and gas field than is used,” said Kelly Bennett, CEO from B3 Insight.

“For example, if it allows the recovery of 50% of the water from the produced water, leaving the remaining 50% in a flow of concentrated produced water for mining, this water can be in able to go to agriculture or other places, for environmental uses,” he said. “It’s a big deal. It’s also helping the oil and gas industry drive an important waste-to-value chain that directly contributes to the energy transition.

Patton said government tax incentives for recycling produced water for beneficial use or mineral extraction could improve project economics, further stimulating industry activity in these areas.

Sources also told NGI that further research and development on the lithium mining front is needed, in part to better understand the effects of the process.

“Advancing science, testing and safety standards for potentially hazardous natural constituents in produced water is essential,” Bennett said. “Without this, there remains an incredible liability that rests solely with oil and gas companies for the downstream use of reclaimed water.”

Wright added that extracting lithium from produced water “probably…only works at scale with a company that is vertically integrated and controls the entire supply chain.”

The question of the supply chain raises a key consideration of ESG reporting: traceability.

Using data collected at various stages, from mine to end user, UK-based software company Circulor tracks emissions, worker safety, waste management and other metrics on its technology platform to “create a shadow of this material”, Jess Green, head of strategy. said NGI.

While Circulor tracks various raw materials, in the case of lithium, the company works with companies such as Vulcan Energy Resources and Rock Tech Lithium to build transparency and support compliance in the lithium battery supply chain.

“You can’t change what you don’t know,” Green said. “You need to know what’s going on in your supply chain.”

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