By Steve Brawner, © 2025 by Steve Brawner Communications, Inc.
Ordinarily, a couple of Arkansas Oil and Gas Commission meetings probably would not merit a comment in this news outlet. But years from now, these two meetings might be part of history.
The latest occurred June 23 at Southern Arkansas University in Magnolia. The commission agreed with a request by Saltwerx to pay Lafayette and Miller County landowners a 2.5% royalty for the sale of lithium extracted from the Smackover Formation.
The decision follows one in May when the commission agreed to the same royalty rate for Standard Lithium and Equinor to pay landowners in Columbia and Lafayette counties. Not everybody is happy, but the commission has made it clear that 2.5% is the rate.
I should tell you that I have invested a pitiful little amount in Standard Lithium in my individual retirement account.
If you haven’t been following what’s happening with the Smackover Formation, you might want to start. It could be a very big deal. Lithium is the most important component of the batteries that power computers, cell phones, and the electric cars that may or may not be coming to the state’s highways. They’re definitely in many hybrid cars that are already here.
South Arkansas has a lot of lithium in its part of the Smackover Formation, a porous, limestone aquifer stretching from east Texas into the Florida panhandle. The formation is full of brine, from which lithium can be extracted. Arkansas not only has the natural resource but also has an extensive history in the industry and a developed regulatory structure.
For all of those reasons, companies are investing hundreds of millions of dollars in south Arkansas. Standard Lithium and Equinor received a $225 million federal grant from the U.S. Department of Energy. ExxonMobil in 2023 acquired the rights to 120,000 gross acres. It hopes to start production in 2027. The two royalty decisions are another big step in making all of this a reality.
It might not happen, of course. You might recall the boom and bust that occurred a few years ago with the Fayetteville Shale natural gas deposits when an oversupply caused prices to plummet. Somebody this time might find even more accessible lithium deposits elsewhere, or perhaps a different mineral will prove to be better at powering cell phones and electric cars.
But if it works out, south Arkansas could see a lithium boom that would be reminiscent of oil booms that have occurred elsewhere and to a lesser extent occurred in that part of the state in the 1920s. Active oil rigs still operate there.
It’s an exciting time to be in Arkansas, and it’s not just lithium. And it’s not just the southern part of the state.
In Fort Smith, the federal government is spending $1.2 billion to outfit Ebbing Air National Guard Base to train foreign military pilots to fly F-35 fighter jets.
Meanwhile, Mississippi County in the state’s northeast corner has become the nation’s steel production leader thanks in part to its interstate access and location on the Mississippi River. It has major plants owned by Nucor and U.S. Steel, the latter of which Japan-based Nippon Steel recently purchased in a deal approved by the Trump administration. Those are huge plants that pay workers very well.
There have been challenges in getting workers to live in Mississippi County rather than commute back and forth. To address that issue, the county has invested in its “Work Here. Live Here.” campaign providing housing incentives.
No one, of course, is having to encourage people to move to northwest Arkansas, which continues to outperform the state. Among the latest news is that Walmart began opening its new 350-acre home office in phases earlier this year.
The aforementioned regional successes – along with central Arkansas, Jonesboro and a few other areas – mean parts of the state are doing well or at least have the potential to do so. Meanwhile, many parts continue to struggle.
Certainly, good fortune has blessed some of these areas with heretofore unknown natural resources, advantageous geographic placement, and business geniuses like Sam Walton settling there. At the same time, these areas are playing to their strengths and advantages.
What part of the state will be the next to boom? We’ll see. For now, keep your eyes on south Arkansas. History might be being made.
Steve Brawner’s column is syndicated to 19 outlets in Arkansas. Email him at brawnersteve@mac.com.