Why big oil is wading into lithium

From The Economist

BP and Shell, two British oil giants, have long sunk cash into solar and wind farms. Their rivals elsewhere have mostly stuck to their drilling. Investors have rewarded single-mindedness. ExxonMobil, an American firm unapologetically wedded to the black stuff, is worth $510bn, half as much again as the British duo combined. Its share price is up by 50% in the past five years, compared with a rise of 10% for Shell and a fall of 13% for BP.

But times are a changing…

Big oil’s enthusiasm for lithium makes sense. Demand for the stuff is likely to rise as more of the world’s machines go electric. In contrast to running the unfamiliar businesses of solar and wind power, oil firms already have expertise that is useful in lithium mining. Extracting the white metal involves tapping saltwater brine, often underground. This requires careful mapping of reservoirs and precision drilling—skills oilmen have honed over decades of subsurface crude extraction (in which brine also happens to be a common waste product). Even the necessary permits are more akin to those for oil and gas than the still more tedious paperwork associated with tapping seams of ore. Refining the extracted metal is likewise similar to what oil companies do in their petrochemicals businesses.