Arkansas Department of Energy and Environment - Oil and Gas Commission: SWA Lithium LLC's Lithium Compensation Structure Approved
May 29, 2025
By:
Walter G. Wright
Category:
Arkansas Environmental, Energy, and Water Law
Arkansas Environmental, Energy, and Water Law
Download PDF
The Arkansas Department of Energy and Environment – Oil and Gas Commission (“Commission”) addressed an application for the establishment of a lithium compensation structure at its May 28th meeting in Magnolia.
The lithium compensation structure application was submitted by SWA Lithium, LLC (“SWA”).
A Department news release states that the application addresses lithium to be produced from the Reynolds Brine Production Unit. This unit is stated to encompass more than 20,000 acres in south Arkansas. The lithium will be extracted brine located in the Smackover Formation.
Bromine and other elements have bene extracted from brine for many years. Lithium extraction is an additional element extracted from the brine. It is regulated under the Arkansas Brine Production Act and in accordance with the Commission’s Arkansas Brine Production Regulatory Program.
SWA’s application requested an approval of an additional lithium payment of 2.5% of the lithium carbonate equivalent in addition to a brine fee already established by law.
Arkansas Department of Energy and Environment Secretary Shane Khoury is quoted in the news release as stating:
...Lithium brine extraction in Arkansas is unique – it enables Arkansas to unleash its energy and critical mineral potential in a way that results in minimal surface impact to the Natural State… The Commission’s approval of SWA’s proposal as fair and equitable compensation signifies a huge step forward for Arkansas’s lithium industry.
A copy of the news release can be downloaded here.
The Between the Lines blog is made available by Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C. and the law firm publisher. The blog site is for educational purposes only, as well as to give general information and a general understanding of the law. This blog is not intended to provide specific legal advice. Use of this blog site does not create an attorney client relationship between you and Mitchell Williams or the blog site publisher. The Between the Lines blog site should not be used as a substitute for legal advice from a licensed professional attorney in your state.