Potential Lithium Production from Natural Gas in West Virginia

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Lithium (Li) is an element used in cell phones, pharmaceuticals, military technologies, electric vehicles and more, often in the form of rechargeable lithium-ion batteries. The United States Geological Survey (USGS) classifies lithium as a critical mineral. A recent scientific paper published in the journal Nature found that it may be possible to extract significant amounts of lithium (up to 40% of US annual consumption) from Marcellus Shale gas production wastewater in Pennsylvania. These results could also apply to Marcellus wells in West Virginia. The Marcellus Shale is a geological formation beneath parts of Pennsylvania and West Virginia (see figure). This Science and Technology Note considers potential challenges and benefits of pursuing lithium co-production with natural gas in West Virginia. 

West Virginia Challenge and Opportunity

West Virginia has extensive natural gas operations, producing nearly three trillion cubic feet of natural gas in 2023. These operations bring large amounts of water (over fifty million barrels by West Virginia in 2023), called produced water, to the surface. Marcellus Shale produced water contains relatively high concentrations of lithium in the hundreds of milligrams per liter (mg/L) (see figure). At present this water (also called oil field brine) is usually minimally treated and reused for further hydraulic fracturing or transported to saltwater disposal wells where it is injected deep underground for storage.

Lithium concentration map. Source: Mackey et. al., Nature (2024).

Currently lithium is primarily either mined directly from hard rock (spodumene) and processed, or extracted from underground saltwater brines left to purify in large evaporation ponds. To extract lithium from West Virginia produced water would require direct lithium extraction technologies, which are not yet fully mature and may be expensive. However, researchers Mackey et. al. estimate potential lifetime production from a single Marcellus well in SW PA could produce nearly 3 metric tons of lithium over its ten year lifespan. Annual US lithium consumption is roughly 3,000 metric tons (over 10 years). Sustained PW lithium production at these levels would require continuous addition of new Marcellus wells. It is possible these results could apply to Marcellus wells in West Virginia.

Extracting lithium from produced water has the potential to turn an economic and environmental liability into an asset and to help offset the costs of PW management. The valorization of produced water could be an opportunity for West Virginia to create jobs and increase economic development while helping to meet global demand for a critical element. However, technical, economic and environmental hurdles remain.

The feasibility of extracting lithium from produced water from natural gas operations depends upon the location and characteristics of the play, the produced water treatment cost, and the market price of the element. Lithium extraction must ultimately prove more valuable than other potential uses. While global demand for lithium is expected to grow significantly, its market price has been inconsistent, decreasing significantly in recent years. New production of lithium could overtake demand, affecting market prices. However, there are potential economic advantages of co-production with natural gas because the produced water and treatment infrastructure is already largely in place.

Costs of the required processing of produced water will depend on the technologies deployed and required infrastructure, along with the characteristics of the geological formation and the produced water. Lithium concentrations in produced water vary with location (see figure), but other characteristics (well-decline time, permeability of rock, concentration of magnesium) can be of greater importance to the ease of extracting lithium. For example, Mackey et. al. estimate that average lithium production would be higher in SW PA than NE PA due to slower well-production decline, despite lower lithium concentrations. The significant variation of produced water characteristics with location, between individual wells, and over the lifetime of the wells suggest West Virginia specific studies would better inform economic and technical feasibility of lithium-natural gas co-production potential in the state.

Benefits and Potential Drawbacks of Action

Taking actions to incentivize lithium co-production with natural gas could benefit West Virginia natural gas producers and the economy. It could create jobs constructing lithium extraction modules, and developing and maintaining various produced water treatment and separation technologies. It could offset produced water treatment costs, and potentially give new life to depleted West Virginia Marcellus wells. Co-production of lithium and potable water or lithium and other critical materials could be pursued. Extracting lithium from produced water requires less energy and water than hard rock mining of lithium. Potential downsides include increased energy and water demands compared to existing produced water treatment, and required management of new byproducts of treatment (including potentially low-level radioactive material). There are risks of groundwater contamination if these wastes are not managed carefully. The need to expand natural gas operations to maintain lithium production levels and its associated environmental impacts, should be considered.

Existing Commercial Activity

There is currently no large-scale commercial extraction of lithium from oil field brines (produced water) and no lithium/ natural gas co-production. However, several pilot-scale research and commercial projects utilizing direct lithium extraction from oilfield brines are under development. Direct lithium extraction techniques are commercially available and are in commercial use in other industries. A Goldman Sachs report predicts these technologies could be in use in Chile and Argentina, major lithium producing countries, by 2025-2030. Oil giants are investing in direct lithium extraction technologies.

Two pilot scale projects are led by Standard Lithium Ltd. in the Smackover formation in Arkansas: the South West Arkansas Project would use currently exploited oil and gas infrastructure, and is targeting first production in 2027. The Phase 1A project is a brownfield development project that will process brine tailings from an existing bromine facility. Each project plans to produce over 12,000 tons of lithium per year (four times the total US consumption). A Standard Lithium demonstration plant in Arkansas boasts being the only commercial-scale plant in North America and has processed  over 16 million of Smackover brine in its four years of operation. Lithium concentrations in Smackover formation brines are on average over 400 mg/L (several times higher than West Virginia based on existing data, see figure). ExxonMobil also plans to produce lithium from Smackover brines. Another region where companies are pursuing lithium development from oilfield brine is Alberta, Canada, where lithium brine concentration is reportedly below 80 mg/L (lower than in West Virginia based on existing data). E3 Lithium Ltd.’s Clearwater Lithium Project pilot began construction in 2023 and ultimately seeks to produce over 12,000 tons of lithium a year.

Relevant West Virginia and Other State Policies

West Virginia has been a leader in legislative action regarding critical minerals in recent years. In 2023, HB 3012 (PDF) exempted lithium (and other critical minerals) from severance taxes for a period of nine years. As introduced, HB 4971 (2024) (PDF) would have declared it West Virginia state policy to promote critical materials (including lithium) manufacturing in the state and provided property tax relief for critical materials manufacturing equipment. As passed, however, HB 4971 (enrolled) (PDF) provides property tax relief only for silicon and silicon carbide manufacturing equipment. The final version also removed the section promoting critical materials manufacturing.

In 2024, Louisiana passed (SB 268) a one-year sales tax rebate for relevant equipment purchased in Louisiana by companies involved in a qualified lithium recovery project. South Dakota attempted to pass a lithium severance tax in 2023 (HB 1072) but this bill failed. California’s SB 471 (2023) would allow tax credits to those involved primarily in the business of lithium or electric battery manufacturing, but stalled in committee.

Future policy options include attempting to incentivize lithium co-production with natural gas via equipment tax rebates as in Louisiana or income tax credits. Another option is to form a commission to further study the issue as ongoing research and commercial activity develop.