From the Arkansas Advocate:
The state of play for Arkansas’ young-yet-ambitious lithium industry has changed markedly compared to one year ago, even as questions remain about the impacts of low lithium prices on projects.
Almost exactly a year after prospective producers were dealt a defeat by the Arkansas Oil and Gas Commission over proposed royalty payments, business executives and lawmakers extolled the potential of the state’s lithium industry at the 2025 edition of the Arkansas Lithium Innovation Summit last month. Speakers from Google, Standard Lithium, Chevron, Fastmarkets and more spoke of how Arkansas’ lithium reserves could play into national security objectives, data centers for artificial intelligence and the clean energy transition.
Policymakers like Arkansas Secretary of Commerce Hugh McDonald touted Arkansas’ long history with the oil and gas industry and business-friendly climate to position the state as a future national leader in the “energy storage value chain.”
“When we met in February 2024, we spoke of promise. Now, in October 2025, we speak of progress. Extraordinary progress has been made in Arkansas the last 18 months,” McDonald said during remarks at the start of the summit. “We have a world-class resource in the Smackover Formation. … We aspire to become the most reliable, economic and sustainable domestic lithium resource.”
Extracting Arkansas’ underground lithium could be game changing for the U.S. as a whole as it tries to break its reliance on China and other foreign countries for the critical mineral that powers everything from smartphones to electric vehicles. A U.S. Geological Survey study found last year that Southwest Arkansas alone could produce enough lithium to supply the entirety of the world’s demand for car batteries in 2030 nine times over — though that study didn’t examine whether it was possible to extract all of it.
Lithium is found in the Smackover Formation’s salty brines, thousands of feet below the earth’s surface. Companies like ExxonMobil and Standard Lithium aim to extract it using commercially untested direct lithium extraction technology, which is similar to water softening. The formation stretches from East Texas to the western side of the Florida Panhandle, and the section underlying South Arkansas has long been associated with the Natural State’s oil and gas industry.
The summit came after a year and a half of back-and-forth between the state’s oil and gas regulator and prospective lithium producers over fair and equitable royalties for south Arkansas mineral rights owners. The Oil and Gas Commission approved royalty payment structures for two companies this year, clearing what has been referred to as the final undetermined regulatory hurdle.
The royalties aside, big names in Arkansas’ lithium space said they made strides in 2025. Canada-based Standard Lithium and Equinor, a Norwegian energy company, released a string of positive news about the feasibility of its Smackover Lithium project. The two companies have pointed to $225 million in U.S. Department of Energy funding and its designation as a priority critical mineral project by the Trump administration as evidence of the project’s strengths. Executives with the companies said on multiple occasions that they would make a decision about giving the final go-ahead for the project by early 2026.
Meanwhile, Chevron joined fellow American petroleum giants ExxonMobil and Occidental Petroleum in snapping up mineral rights in the state’s southwest region.
Shane Khoury, secretary of the Arkansas Department of Energy and Environment, told the Advocate in an interview at the summit that figuring out the royalty had been a long process, but that future lithium royalties would be able to rely on its precedent.
“I think [the royalty-setting process] was a little bit longer than we probably all anticipated,” Khoury said, in part because the state “didn’t have anybody to turn to and look at and say, ‘How do we value this process?’”
The state’s existing regulatory framework for brine extraction guided the process, Khoury said. Companies have been extracting bromine from brine in South Arkansas since the 1960s. The structure of the two approved royalties provides both a framework for other Arkansas lithium projects and for lithium projects in other states, he said.
“We kind of had to invent the wheel to start,” Khoury said. “They don’t have to reinvent the wheel.”
Still, much of the optimism at the summit was cautious. While remaining positive overall about the trajectory of the U.S. lithium industry over the few decades, multiple business leaders warned of how lithium prices, down from a massive pandemic-era spike thanks to supply outstripping demand, could negatively affect the U.S. industry’s attempts to get off the ground should they not increase. And closer to home, local community leaders from South Arkansas and executives from utility companies said that the region would be facing growing demands for power, housing and other resources that will likely need to be built out rapidly as the industry grows.
“The lithium industry, much like a lot of the new industries coming to Arkansas, are big power consumers,” Entergy Arkansas Vice President of Business Operations and Strategy Kristen Dalrymple said during a panel on infrastructure.
Arkansas’ transmission capacity is nearing its limits, which likely means there will be a large expansion of power transmission in the state in the coming years, Dalrymple said.
Nonprofit electric grid manager, Little Rock-based Southwest Power Pool, approved an $8.6 billion plan in November to upgrade and expand transmission grid capabilities across 14 states, Arkansas Business reported.
The need for more electricity and expanded transmission lines is especially true in the rural South Arkansas areas where lithium companies are locating, Dalrymple said. Striking a balance between attracting business and maintaining affordability is important, especially at a time where demand for power and grid upgrades is growing nationally as well, which impacts cost and timelines, she said.
“I’ll just say that it is unprecedented levels of growth we were talking about,” Dalrymple said. “So it’s an exciting time, but it’s a challenge in terms of making sure that we’re planning ahead, but also not overcommitting. So we need to strike that right balance.”
For its part, Entergy is seeking regulatory approval to build a $1.6 billion gas-fueled power plant near Redfield to take up some of the energy generating slack when it retires two coal-fired plants, one in 2028 and another in 2030, Arkansas Business reported.
Despite the challenges, policymakers remain optimistic.
“The lithium boom requires everything from skilled engineers to updated power grids and new housing and finally, state and federal policies that enable end-to-end development of the nation’s lithium supply chain,” McDonald said. “We can’t be all things to all sections of the supply chain, so, for now, we want to focus our strategy and lean into our natural advantages in building an industrial ecosystem.”
Republican Sen. Steve Crowell of Magnolia told the Advocate that while hurdles, such as power infrastructure and overcoming skepticism from financial backers beyond Arkansas, remain for the industry, “we’re moving in the right direction.”
Crowell said that 18 months previously there were still lots of unknowns about the lithium extraction projects.
“Now, as you’re seeing, there’s lots of facts, there’s lots of stats, there’s lots of things that are going down,” he said.
Local, state and federal leadership have been aligned in a way he called “an anomaly” to help the lithium industry succeed. Crowell said he would be shocked if there weren’t more large leaps by the industry in 2026.
“So that is a million dollar question: Where are we going to be a year from now?” Crowell said. “As I see it, it’s only a trajectory of up.”
