‘A huge opportunity’: Alberta oilfields could give rise to lithium industry fuelled by electric cars
Calgary-based E3 Metals wouldn’t exist if it weren’t for the work of Elon Musk.
The natural resources company, which was founded in 2016, has developed a patented ion-exchange extraction technology that produces purified lithium concentrate from the light metal that occurs naturally within the province’s oilfield brines. The company’s goal is to produce battery-grade lithium hydroxide that can be used in the manufacturing of lithium-ion batteries — the same type of batteries that power the electric cars made by Musk’s company, Tesla Inc.
“It wasn’t because of Tesla, but it was because of what Tesla did,” E3’s president and CEO Chris Doornbos said, on the inspiration for his company’s technology. “They took a concept, which was an electric vehicle, and turned it into something that could be a mainstream vehicle . . . and therein lies an opportunity.”
It’s long been known that Alberta’s historic oil and gas-producing Leduc Reservoir is rich in lithium deposits, but the exponential growth in worldwide demand for the light metal is a recent phenomenon. That growth is driven in part by cellphone batteries, but it’s the rise of the electric vehicle that’s really driving renewed interest in Alberta’s as-yet-untapped lithium potential.
While electric cars are still relatively rare in Alberta, they have already made major inroads in Europe, California and China — and the growth is only expected to accelerate as battery capabilities improve, EVs get cheaper and concerns over climate change increase. According to Bloomberg New Energy Finance, EV sales worldwide are expected to surpass sales of internal combustion engine vehicles by 2039. The demand for lithium is forecast to overtake supply as early as 2025.
“Everyone who’s following this space believes that’s going to be the tipping point,” said Doornbos. “If Alberta really wants to be smart about looking to the future, and not just doing what we’ve always done, we need to start building this industry up.”
Most of the world’s lithium is currently produced in Australia, South America and China using traditional processes such as hard-rock mining or massive evaporation ponds. Neither method is suited to Alberta’s climate or geography and both methods have negative environmental implications. Proponents of a homegrown Alberta lithium industry believe that — with the development of the right technology — the province could be a global provider of greener, more economical lithium produced via repurposed oil and gas infrastructure.
An Alberta lithium industry could also provide employment for laid-off oil-and-gas workers. E3 — which has secured the lithium and other mineral rights to more than 1.3 million acres in the Leduc Reservoir region — hopes to ultimately construct a commercial extraction and processing facility within the province, something that Doornbos said could create 300 to 500 full-time jobs. The company hopes to be in production by 2023, producing 20,000 tonnes of lithium carbonate equivalent per year with the ability to scale up.
“There’s a huge opportunity to do it here in Alberta, because what you need is land and a professional skill set,” Doornbos said. “And we have all of those pieces here.”
The possibility for Canada to become the supplier of choice for a low-carbon, ethically produced lithium is real, said Jason Switzer, executive director of the Alberta Clean Technology Industry Alliance.
“Lithium is one of those plays that speaks to Alberta’s strengths. We’re already pumping a lot of lithium up, we’re just basically putting it back down the hole right now,” Switzer said. “But we shouldn’t kid ourselves, it’s a bit of a race to be first. It’s a bit like LNG — whoever gets there first is going to lock in a market. If you’re second or third, you may miss that opportunity.”
Another Alberta company working in the lithium space is Summit Nanotech. The Calgary-based company was founded last year and is currently testing its own environmentally friendly extraction process that uses nanotechnology principles to get lithium out of brine water. CEO Amanda Hall said the company’s target market is the South American lithium industry, though Alberta could be a secondary market if it gets its own lithium sector off the ground.
“We have a lot of benefits in Alberta because the wells we would use to get the lithium out of the ground are already drilled, and the disposal wells to get rid of the byproducts are already here,” Hall said. “However, the operation costs and the capital needed to build the actual refinery for these lithium extraction processes is going to be something we struggle with. We need as much support as we can get from the oil and gas industry, and the provincial and federal governments as well.”
Hall added in addition to extracting and refining, proponents of Alberta lithium dream of the province eventually being home to battery manufacturing facilities as well, so that the sector does more than just ship out raw product. But before that can happen, someone is going to have to prove they have the winning technology that can get the lithium out of the ground responsibly, sustainably and cheaply.
“That’s the hurdle we all have to overcome,” Hall said. “It’s going to be a challenge, but it’s like fracking. Shale gas was not economical at one time either, it just took all that ingenuity to find a way to get at it.”