ExxonMobil Ventures into Lithium Mining with Cautious Steps

US: ExxonMobil, the oil giant, has shifted its focus towards investing in electric cars by purchasing drilling rights for Lithium in Arkansas. With the world moving away from fossil fuels, there is a rising demand for Lithium, which could increase up to 40 times by 2040 due to the widespread adoption of electric vehicles. The purchase of 120,000 acres in Arkansas at a price of over $100 million will enable Exxon to explore and harvest new Lithium reserves in the upcoming months. As carmakers express concerns about a possible shortage, the Biden administration is actively promoting the development of domestic Lithium reserves. Despite the high cost, Exxon's investment seems justified as the company posted a record-breaking $11.43 billion profit in the first quarter of this year.

Exxon's recent investment in Lithium may not be seen as a significant shift towards renewable energy, especially since the company has expressed no plans to reduce oil production or invest substantially in renewables. However, it is still noteworthy as a sign of the global trend towards clean energy. With the deal, Exxon may consider expanding its operations if the Arkansas region's Lithium reserves, which have the potential to power 50 million electric vehicles, prove to be profitable. This move by Exxon can be seen as a classic hedge against the possibility of a future decline in oil demand.

Exxon, the oil giant, has a surprising presence in the Lithium industry's history. The company laid the foundations of Lithium research through the work of British chemist Stanley Whittingham, who made significant discoveries in battery technology during his time at Exxon. In fact, Exxon even produced an initial model of the Lithium battery for automobiles but discontinued the project due to insufficient demand.

In 2019, Whittingham and two other scientists were awarded a Nobel Prize for their ground-breaking work on batteries. Over the years, Exxon has made incremental investments and advancements in Lithium-ion technology. Although the modern electric vehicle (EV) battery was developed in an Exxon laboratory and the company has held a position in the industry for decades, Exxon hasn't always been enthusiastic about the success of Lithium batteries, especially if they replace its primary product.

Exxon's stance on electric vehicles (EVs) appears to have shifted, as last year it predicted that EVs could make up the entire new car market by 2040. The CEO even expressed optimism about the potential impact on the company, anticipating only a reduction in oil demand to levels seen in 2013-2014 when the company was still profitable. However, despite this seeming shift towards climate consciousness, it is important to remember that Exxon continues to use its influence in Washington to impede progress towards climate action. While profiting from EVs may provide some financial gain, it does not erase decades of environmental destruction.