Imperial Oil Backs Lithium Recovery Project in Alberta’s Leduc Oilfield

Imperial Oil Ltd. has signed a deal to help advance a lithium recovery project in Alberta’s historic Leduc oilfield.

The agreement will see Imperial invest C$6.35 million in E3 Lithium, a Calgary-based junior resource company that has developed a technology to extract the naturally occurring lithium—a light metal that is a key component in the batteries used in electric vehicles—from oilfield brines, The Canadian Press reports.

Imperial has also agreed to provide technical and development support for E3’s Clearwater project, which includes drilling lithium evaluation wells and developing a field pilot project before moving on to the commercialization stage.

And the Imperial-E3 project isn’t the only Canadian effort to capture waste materials for clean energy supply chains. Toronto-based BacTech Environmental Corporation is working on a pilot project to extract minerals like nickel and cobalt from massive main tailing sites in Sudbury, Ontario, CBC reported earlier this month.

“The company estimates that over 100 years of mining, $27 billion worth of nickel sits in Greater Sudbury’s large tailings areas,” the national broadcaster wrote. “Until recently, it was not economically viable to extract the valuable material.” But with a new bioleaching technology uses bacteria to separate valuable minerals from mine waste,” BacTech hopes to prove it can be done at a large scale, and make economic sense.”

In Alberta, CP recalls, the Leduc oilfield was the site of Leduc No. 1, the historic gusher struck by Imperial in 1947 that launched Alberta’s oil and gas industry and changed the course of the province’s economy. It has also long been known as the site of one of Canada’s largest lithium resources, though there was little interest in developing a lithium industry in Alberta until the recent growth of electric vehicles and an exponential rise in demand for lithium ion batteries.

Having a giant like Imperial working with his company to explore the redevelopment of Leduc into a world-class source of lithium is an “exciting new chapter,” E3 CEO Chris Doornbos told CP in an interview.

“This is Imperial coming back into this aquifer and looking at it from a lithium perspective. For us, that’s huge, because it demonstrates their belief in this aquifer,” Doornbos said. “They know, probably better than any other company out there, how it can produce as a resource.”

Under the agreement, E3 will remain the operator of the Clearwater project but receive support from Imperial in areas such as water and reservoir management. The agreement also gives E3 access to freehold lands in the area, which are operated by Imperial.

Drilling on the first of three evaluation wells, the first lithium wells ever drilled in Alberta, will begin immediately, Doornbos said. Work will also focus on scaling up E3’s proprietary technology, which brings the brine to the surface where the lithium is removed and concentrated, then returns the liquid underground as part of a closed-loop system.

Canada has identified lithium as a focus of its $3.8-billion, eight-year critical minerals strategy, CP writes. The aim is to increase extraction and production of Canadian lithium, as well as cobalt, copper, titanium, zinc, and other minerals that are used as components in electric vehicles and their batteries.

The goal is to create a domestic supply chain for electric vehicles, and in doing so, boost the economy while tackling greenhouse gas emissions at the same time. Earlier this month, Natural Resources Minister Jonathan Wilkinson added a geopolitical dimension to that goal, telling CP that Russia and China can’t be allowed to dominate the world’s market for critical minerals.

In the federal budget in April, the government announced a new 30% tax credit for exploration projects related to critical minerals such as lithium.

The main body of this report was first published by The Canadian Press on June 23, 2022.