Standard Lithium and ExxonMobil subsidiary Saltwerx LLC are seeking approval from the Arkansas Oil and Gas Commission (AOGC) to establish lithium brine production units covering over 77,000 acres in Lafayette, Miller, and Columbia counties. The applications, set for review on April 22, mark a critical step toward commercial lithium extraction in the Smackover Formation, which the U.S. Geological Survey estimates holds 5–19 million tons of lithium—enough to meet 2030 global EV battery demand nine times over.
Key Proposals and Opposition
– Saltwerx’s Pine Unit: A 56,245-acre project in Lafayette and Miller counties, projected to produce 165,000 barrels of lithium-rich brine daily. The company forecasts $316 million in annual revenue and $27 million in pre-tax profit.
– Standard Lithium’s Reynolds Unit: A 20,854-acre site in Columbia and Lafayette counties, backed by a $225 million federal grant from the Biden administration’s bipartisan infrastructure bill.
The companies must secure AOGC approval for production units and royalty rates under the Arkansas Brine Conservation Act. Last November, the AOGC rejected a joint royalty application from lithium firms, citing insufficient financial transparency and procedural missteps. Landowners, led by the South Arkansas Minerals Association (SAMA), argued the proposed 1.82% royalty rate was unfairly low compared to Texas (4–6.25%) and Australia (5%).
Challenges and Support
– Opposition: Occidental Petroleum, claiming potential brine rights in the Pine Unit, accuses Saltwerx of monopolizing the area without a detailed development plan. SAMA questions Standard Lithium’s profitability, urging the AOGC to demand clearer financial projections.
– Support: Southern Arkansas University and the Southwest Arkansas Development Alliance endorse the projects, highlighting job creation and educational partnerships. Recent state legislation (SB568) provides tax incentives for lithium investments over $100 million, passed with bipartisan support.
Strategic Implications
Approval would position Arkansas as a key player in the U.S. critical minerals supply chain, reducing reliance on Chinese lithium imports. However, lingering disputes over royalties and transparency underscore the balancing act between economic growth and equitable resource governance.
