On Tuesday, Buffett’s Berkshire Hathaway Energy and Occidental Petroleum (OXY) established a lithium extraction joint venture from geothermal electricity production. OXY fell early Tuesday.
Occidental Petroleum and Berkshire Hathaway Energy Renewables will test geothermal brine lithium extraction technologies. Geothermal brine—hot, salty water piped to the surface—generates electricity.
TerraLithium, Occidental’s fully owned subsidiary, is testing its technology at BHE Renewables’ Imperial Valley geothermal project under the joint venture. In an “environmentally safe manner,” testing will determine its lithium production.
In California’s Imperial Valley, BHE Renewables’ 10 geothermal power facilities generate 345 megawatts of sustainable energy. The business claims these facilities process 50,000 gallons of “lithium-rich brine” every minute.
Buffett’s BHE Renewables wants to develop commercial lithium production facilities in California’s Imperial Valley if the test passes, the company said Tuesday. The Occidental-BHE Renewables joint venture wants to expand outside the Imperial Valley.
“We are excited to be working with Occidental on this incredible opportunity to make the Imperial Valley a global leader in lithium production,” BHE Renewables CEO Alicia Knapp said Tuesday.
In a 2021 report, the DOE suggested extracting lithium from geothermal brine to get “domestic lithium onto the market while producing electricity simultaneously, all with a minimal environmental footprint.”
The Salton Sea in southern California’s Imperial Valley has considerable lithium resources, according to the DOE.
On Tuesday, Occidental Petroleum stock dipped 1.4% to 59.78 as Buffett discussed lithium and geothermal energy. The stock fell 3% to 60.57 on Monday. After peaking at 71.19 on April 12, shares are down 15%. MarketSurge charts show OXY below its 200-day moving average.
Oil stocks fell Monday and Tuesday as West Texas Intermediate oil prices fell to a four-month low below $73 a barrel.
OXY is one of Warren Buffett’s top holdings after Berkshire Hathaway (BRKB) significantly boosted its position in the worldwide oil market last year. FactSet says Berkshire Hathaway owns 28% of Houston-based Occidental Petroleum.
As Exxon Mobil (XOM) announced its intentions to produce lithium by 2027 in late 2023, Buffett’s Berkshire Hathaway Energy and Occidental Petroleum partnered on lithium production.
By 2030, Exxon Mobil wants to be the top lithium supplier for electric cars. Production of lithium is needed to make over 1 million EVs each year.
Exxon began lithium production in 2027. The company is in talks with electric vehicle and battery makers in November 2023.
The composite rating for Occidental stock is 30/99. Warren Buffett stock has 39 relative strengths and 11 EPS.
Source : Investors Business Daily
