As the world attempts to shift to more sustainable sources of energy, lithium has become a very important commodity and it has rocketed to the forefront as the metal of choice in high capacity rechargeable batteries.
One Alberta company is looking to position itself as a market leader in the production of the lithium on a global scale. E3 Metals Corp. (TSXV: ETMC) recently went public, giving investors access to this unique business opportunity. The company hopes to advance their projects with the aim to be producing commercial grade lithium extracted from the Leduc reservoir formation water (henceforth known as petro-brine).
In Alberta, lithium-enriched formation water, greater than 50 mg/L, has been historically documented by government and industry to occur within several hydrocarbon-bearing Devonian formations. The vast hydrocarbon reserves and production within Alberta’s Devonian strata are attributed to the abundance of excellent to good quality reservoir attributes which is also ideal for potential lithium production.
By nature, saline brine coexists with oil/gas in these porous and permeable reservoirs, many of which share a common aquifer. As such, lithium-enriched petro-brine is accessible via oil and gas wells that have produced petro-brine (along with hydrocarbons) from Devonian reservoirs and aquifers situated at depths of between approximately 1,500 m to 3,500 m below the earth’s surface. Petro-brine is essentially the waste-water associated with hydrocarbon production from the reservoir.
Currently, the extracted water is treated to separate and remove petroleum products and then is re-injected back into subsurface formations. It is conceivable that existing water processing procedures could be modified to extract lithium and other elements from the Devonian aquifer systems. While researching extraction technologies with the University of Alberta, the company is focussed on developing a mineral resource for the project over the coming year.
As a plus, part of E3 Metals’ strategy is to work alongside the province’s upstream oil and gas industry when looking to produce Alberta’s lithium resources.
“Our strategy includes working parallel to the upstream sector by accessing the lithium brine from the Devonian “waste-water” currently being managed on surface by most operators producing from these formations. There is also the potential opportunity of re-entering pre-existing abandoned and marginally economic wells that are slated for abandonment. “Doing so may enable oil and gas companies to reduce their LMR ratio, while enabling our company to save capital in not having to drill and complete new wells,” said E3 Metals’ Chief Executive Chris Doornbos.
It is one the largest hurdles facing Alberta’s oil and gas industry: he estimated $20B liability associated with inactive wells, how to clean them up, and who is going to pay for it.
Many industry observers have called on the support of both the provincial and federal governments to help alleviate the liabilities that many oil and gas producers are saddled with. However, federal support to date has amounted to only less than 2% of the total estimated liability.
“There is a real opportunity here for developing a new type of energy play in Alberta. It uses the same equipment, expertise and knowledge as the oil and gas industry to get the lithium brine to surface,” said Mr. Doornbos. “Once there, we simply add an additional extraction step before replacing the water back into the reservoir. This entire system, save for the lithium extraction, is currently in place.” Mr. Doornbos adds, “there are many ways we can develop our project and none of them hinder the production of oil and gas from the same reservoir; in fact there is even potential to improve the production of our industry partners.”
Significant infrastructure is already in place in Alberta that will assist in the production of lithium enriched water from the reservoirs E3 Metals is targeting. There is also reams of publically available data from the historic oil drilling including the reservoir properties, historic and current production, drill cores, and completion information which presents E3 Metals with the opportunity to advance the exploration and development of the company’s properties in a timely fashion.
E3 Metals’ goal is to generate a mineral resource over one of the company’s project areas within the next 12 months. Most of the data required to complete this exists and has been collected by the oil and gas companies exploring over the past 70 years in this area. In parallel, E3 Metals will conduct a significant sampling program across all of its permit areas from currently available producing oil wells to identify and verify the concentrations of lithium across the reservoirs.
All told, Mr. Doornbos and his team look forward to forming strategic partnerships with oil and gas operators all the while building significant value for E3 Metals investors.