Energy giant Chevron Corp. (NYSE: CVX) announced Tuesday it has acquired lithium extraction rights across approximately 125,000 acres in Arkansas and Texas, marking the company’s entry into domestic lithium production as demand grows for electric vehicle batteries.
The acquisition comes as the global lithium market faces a tightening supply outlook, with analysts projecting a shift from current oversupply to potential deficits by 2026 despite lithium prices falling to four-year lows in early 2025.
Chevron purchased leasehold positions from TerraVolta Resources and East Texas Natural Resources LLC, targeting the lithium-rich Smackover Formation that spans Northeast Texas and Southwest Arkansas. The company plans to use direct lithium extraction technology to process brines from the underground formation.
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“This acquisition represents a strategic investment to support energy manufacturing and expand US-based critical mineral supplies,” said Jeff Gustavson, president of Chevron New Energies, in the company’s announcement.
The Smackover Formation has emerged as a major potential lithium resource, with US Geological Survey estimates suggesting the Arkansas portion alone contains between 5 and 19 million tons of lithium — enough to meet nine times the projected 2030 global demand for electric vehicle batteries.
The formation’s brines contain some of the highest lithium concentrations in North America, with levels reaching up to 597 milligrams per liter in some areas. Commercial viability typically requires concentrations of at least 80 mg/L.
The move positions Chevron to tap into a growing US lithium market valued at $1.06 billion in 2023 and expected to reach $13.45 billion by 2032. The US currently imports more than 25% of its lithium needs.
Direct lithium extraction offers advantages over traditional evaporation pond methods, including faster processing times, smaller environmental footprint, and the ability to reinject processed brine back into underground formations.
Chevron joins other companies, including Standard Lithium and TerraVolta Resources, in pursuing Smackover Formation projects, with the US Department of Energy recently announcing nearly $500 million in funding for lithium extraction projects in the region.
Chevron said it expects its lithium operations to contribute to building a resilient domestic supply chain for critical minerals needed for the energy transition.
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