The Energy Question Episode 31 – Teague Egan, CEO of EnergyX

The Energy Question Episode 31 – Teague Egan, CEO of EnergyX

 

David Blackmon [00:00:00] Hello, welcome to the Energy Question with David Blackman. I’m your host, David Blackman. And my very special guest today is Teague Egan, the dynamic CEO and founder of Energy X, a very innovative lithium extraction company based well, I guess your headquarters is in Puerto Rico, isn’t it? But your research headquarters is in Austin, Texas, correct?

Teague Egan [00:00:34] Yep. Yep, that’s correct.

David Blackmon [00:00:37] Well, how’s. How are you doing, man? Before we get started, I want to just remind everyone that Teague was was our special guest. The very first episode of the energy question last August. This we’ve done 26 episodes now, so we’re half a year in and I thought it’d be a great time to catch up for a quick update and see where things are with Energy X Teague I understand you’re in Houston today.

Teague Egan [00:01:02] Yeah, you know, I’m concerned for Ceraweek. It’s, it’s one of the biggest energy conferences that’s out there used to be a big oil and gas conference now turned into all types of energy and you know out here for different meetings and stuff like that.

David Blackmon [00:01:19] So awesome. I you know, I was actually planning on being there myself this week but had some conflicts come up and couldn’t do it. So I’m kind of jealous. Kind of jealous. I’m sitting here in my in my little studio at my house here and in person.

Teague Egan [00:01:36] Yeah.

David Blackmon [00:01:38] So before we get started on our discussion about lithium and where things are headed with the transition, give everyone a reminder we have a lot, lot more viewers now than we did last August. And just give everyone a quick two minute synopsis of energy X, you know why you created the company where you’re heading with it and the technology you’re working on, which is really the key thing here.

Teague Egan [00:02:06] Yeah, absolutely. Well, first of all, congratulations on. Being 26 episodes there. You know, I think it’s pretty cool that I was the first one to see how far the energy questions come. Congratulations to you on that. Thank you.

David Blackmon [00:02:24] Thank you.

Teague Egan [00:02:25] As far as energy X for the new viewers, they may not have seen the first episode that we did together. Energy X is solving the problem of the lithium supply chain and bottlenecks around lithium production. Lithium being one of the most important materials that goes into rechargeable batteries. So today and for the past decade, lithium production has been really inefficient. And that’s mostly because until the last couple of years, our society has not needed that much lithium. So there is never an importance around improving or innovating the production methods or manufacturing processes to produce lithium. All of a sudden we need way more lithium than the current supply can handle.

Teague Egan [00:03:30] And the solution to increase the supply is not just to multiply the current way that it’s time, but it’s to fundamentally change the way that lithium is produced so that we can produce larger quantities of lithium more efficiently in a more cost effective manner. So Energy X is addressing these problems or trying to figure out solutions to these problems. And the way that we’re doing that is by innovating in a sector that’s called direct lithium extraction. So more efficient ways that we can process brine, which is the form in which lithium is found, is found is salt that’s dissolved into water, other that are called brides separating this lithium out of the brine into a refined battery grade ready material. That is the lithium that is purchased for batteries. So that’s what energy X does. And it’s kind of a high level summary of our offering.

David Blackmon [00:04:41] Yeah. And so, you know, historically, when you’re extracting it from brine, it’s been this very long, arduous process of evaporating, the brine, evaporating the water, separating the salts. That way your technology is more of a membrane kind of technology which really speeds up the process by I can’t remember what the factor is, but some incredible factor, correct?

Teague Egan [00:05:09] Yes. The membranes are actually one of our technologies we’ve developed and an end to end solution for companies. The membranes are a part of that process of do they do a very critical unit operation within the process. But we also use solvent extraction technologies that we’ve developed in-house as well as ion absorption technologies, and all three of those technologies combined together to create this end to end process that can take and extract lithium from from brine and refine it into battery grade lithium.

David Blackmon [00:06:00] Fantastic. So when you know, when we talked last August, lithium prices were quite elevated at the time. We had a big drop in the price around October. The price stayed down for several weeks. Now it’s come back up and, you know, kind of still hovering at a fairly high price. I wonder what is your view on the current state of lithium supply globally? I mean, is the market amply supplied right now recognizing that it’s going to have to grow rapidly into the future?

Teague Egan [00:06:39] The market is you know, price is the variable factor that. Needs to makes the supply and the demand. Right.

David Blackmon [00:06:54] Right.

Teague Egan [00:06:58] All else equal, the demand is way, way higher than the supply. Every single car, there’s a race to sit there with him and write. Every single major auto manufacturer is all of a sudden trying to get lithium at the exact same time. Electric vehicles just cost 10% market share, which is which is pretty incredible. Yeah considering that the global. The global auto manufacturing number. There’s around 80 million cars made per year, and now 10% of that is electric vehicle.

David Blackmon [00:07:51] And just two years ago, it was more like 2%. Right?.

Teague Egan [00:07:55] Yeah, I.

David Blackmon [00:07:55] Think that’s an amazing increase.

Teague Egan [00:07:58] Amazing increase. Yeah. Now that’s done including other types of transportation by fascinated trucks. Sure. Or. Or still there’s still so much larger transportation industry. But for consumer cars and pickup trucks, like the eight other million, it’s happening fast. All of those companies that produce the other 72 million cars, they’re all they’re all trying to transition at the same time. And all of that needs a huge, huge amount of lithium. So just to put things into kind of easy to understand numbers. If. Today, there is about 550,000 tonnes of lithium produced annually. And we’re at 10% of the market. That means the. We need to produce another four and a half million tons working per year to fully transition. All right. Those are round numbers. And a lot of a lot of analysts are saying that we’re going to need to get to.

Teague Egan [00:09:23] That’s 5 million tonnes per annum. Number two, produce. 60 to 70% of the electric vehicles not even got to the €400. When you ask me about is the market supplied right now. I mean, for the for the price that were being raised? Yes. I think the price of lithium will come down a little bit. Probably the $7,000 a tonne is. A very expensive proposition there. And that’s why. We haven’t seen a super affordable. I think 40 45,000 was probably the cheapest. You can look at the Model three is maybe there’s some other companies that are hovering around that price. We haven’t seen or we haven’t seen in $20,000 and we might be able to make a $20,000 movie that has a very short range. But if you are $20,000, that has a comparable range of 300 plus miles per charge, and as battery technology gets better, hopefully that will go up to a 500 plus miles per charge. Then you need the same sized battery. Right. Right.

Teague Egan [00:10:49] And if lithium is not expensive, then. You know, that doesn’t look too favorable for a $20,000 car. So all these things kind of work together. And part of what Energex is working on is everything we’re working on is to improve the processing and the manufacturing methods so that. Lithium is more easily produced. Supplied so that you can kind of control that cost factor a little bit better. Yeah.

David Blackmon [00:11:25] Well, when I when I was there and toured your facility in Austin, you were focused your efforts were really centered on some pilot projects in the lithium triangle in South America. I assume that’s probably still the the focal area for your business.

Teague Egan [00:11:43] Yeah. You know, we. When you came in toward we had just wrapped up a pilot plant in South America in the triangle that was in Bolivia. And that was really what we consider an MVP or minimum viable product, something that we taking a lead from developing in technology in a laboratory that is a super controlled environment to control all the variables and then putting something out into the field in a real world operating environment is it’s it’s. In industry. In our industry, that’s the biggest stop going from the lab into the field. And we crossed that threshold when we put our pilot in and we operated for five months, 24, seven. You know, these things run and it doesn’t matter if it’s day or night right around 24 seven and we hit all of our KPIs or performance indicators over that five month period and we said, okay, now we need to scale this up. So right now and over the past six months, at the end of 2022 into 2023, we’ve been building larger systems that we call demonstration plants that are.

Teague Egan [00:13:12] A factor of 20 or 20 times the capacity production. Actually, even more of the 1330 acts, the scale. Though we can put it into the field. And we’re not only doing one of those, we’re doing five of those. So we’ve got to the point where our whole business is around validating our technology. On Bri’s outreach track, working from the water that it’s dissolved in, and it’s. It’s easy to ship a few hundred liters of water or a solution to our labs in Texas. It’s a little bit more difficult to ship ten cubic meters, which means cubic meters, one ton. A little bit more difficult to ship. Ten tons of brine. It’s it’s impossible to ship a thousand tons of brown rice. So that that is the scale that we’re now going to. Something that can process thousands of tons of brine. So those need to be in the field and they need to be remotely close to the resource where you’re putting that brine wells.

Teague Egan [00:14:42] We basically had too much demand to put a demonstration plan on every single customer’s side who wanted one. So what we ultimately decided was it’s best to create regional testbeds that were more centralized in the proximity of the customer density so that it’s easy to ship or transport one truckload of brine, even a seven hour drive. Or you could do that being right. It’s impossible to save a truckload of brine every day from Argentina to Texas or even in California to Texas, or you can’t do that every day. So we’re we’re building these systems that are 30 times the size. That will put up these demonstration test beds. And we have we’re building one to serve the Argentinean market for building one to serve the Chilean market. And then we’re building a few in the United States as well. So given the the new Inflation Reduction Act.

David Blackmon [00:15:57] Yeah, that’s that was my next question. Yeah.

Teague Egan [00:16:00] Liberal Leader I had a good year in the past given the passing of that, that’s really incentivize companies like us to focus on the US market. So where before. There’s no there’s no question that the resources in South America are better. They have higher lithium concentrations. They have less than 30 or less challenges. But now during the IRA, there’s a ton of incentive for us to focus on the US market. And there’s several good resources that are in the US being in California, the Great Salt Lake area and in-between and Nevada.

David Blackmon [00:16:45] Isn’t there one in Arkansas to some Big Brother formation?

Teague Egan [00:16:49] Yeah. Yup. Yup. So in Arkansas and in Texas, it’s called the smack over formation. Smack over. Right up and up in Pennsylvania, you have the Marcellus formation. These areas have their decent concentration working and they’re prime opportunities for us to validate our technology on these different streams, whether it’s geothermal brine in California or produced water. There’s coming off the byproduct of some process in Arkansas or what have you. You were planning demonstration test beds in those areas as well. And then that’s the last step before commercialization.

David Blackmon [00:17:39] Fantastic. And of course, you know, one of the things other aspects of all of this is the Biden administration’s goal of establishing supply chains with that are free of of China entanglements with countries like Chile and Argentina. I mean, there’s nothing to say if this gets scaled up eventually to a big enough project down in South America. There’s nothing to say that the lithium extracted there can’t be shipped to serve the U.S. market as well, which the U.S. market is going to ultimately if it all goes as planned be. Well, maybe not the biggest on the planet, but one of the two or three biggest on the planet, isn’t it?

Teague Egan [00:18:25] Yeah, it will be, you know. We are. We have huge automaking centers in the US and obviously. Tesla leading the revolution. There’s a big part of that. I don’t think GM and Ford are doing everything they can to catch up and they have different challenges in transitioning their production as opposed to. Tesla is creating new production by. You know. That statement you made about the Biden administration. The Inflation Reduction Act is obviously a great piece of legislation to incentivize companies like us to focus on domestic production, domestic supply chain or supply chain. That is where free trade partners are each other. I think that where the Biden administration is coming up a little bit, score is in those three areas.

Teague Egan [00:19:42] One is the next step up to the IRA is permitting. So you can’t put so you can’t put forth a piece of legislation like. Right. And then permit all of these new. Projects that are existing natural resources, right? Yeah. So so I think that that will come. I’m sure there are a lot of smart people that are working hard on the same. Putting what I just said into reality. Things like that take time. It can’t happen the next week after the IRA is past. But I think there’s a fundamental mindset that needs to be changed there that like if we want to keep these supply chains elastic and not have to rely on China for processing or natural resources that we need to be able to cut through the red tape and more quickly permit and approve in terms of environmental regulation some of these projects. So that’s number one.

Teague Egan [00:20:50] Number two is that even with some of our free trade partners like Chile, I think that there needs to be more support from a governmental standpoint. In improving those relationships like there was the chancellor of Germany. Just made a spread around to Chile and Argentina. And now the president’s on the chancellor being the highest position. It’s what it’s called in Germany ground. And now now Chile is doing all this special legislation specifically for Germany and the German auto industry. So that’s already of benefit. Volkswagen, BMW and Mercedes. As opposed to benefiting our supply chain for GM or Tesla. Right. So that’s there could be more done in terms of. All political activities and relationships for the new president down in China. Right. So. Right. I doubt that he’s ever met any. You know, I don’t know for sure, but I doubt he’s ever met any super high ups and certainly hasn’t bothered me. Probably not area or the secretary of state or Jennifer Granholm or any of these people. I’d actually taken the time to go meet this guy and push forward the relations and things like that.

David Blackmon [00:22:40] On the other hand, he probably has met some officials from China. Right. Because China just did the big deal on Bolivia. Oh, yeah. So anyway, go ahead. Go ahead.

Teague Egan [00:22:49] Yeah, exactly. Well, that leads to my last point where you just said China is too big deal in Bolivia. I mean, Chile is obviously a very important player in terms of the. Metals are the supply chain that goes into batteries or copper or opium. But the next two most important are Bolivia and Argentina. And the United States doesn’t have free trade agreements or any sort of framework structure. With those countries. And that is huge, huge oversight. And China is taking our but in Argentina and Bolivia and these are countries that are literally part of the Americas and the US and have extremely strong relations trade agreements and should be helping them in terms of their economies, inflation and return. We have opening open access and. You know, better exchanges, read the battery materials the what we’re seeking so. It’s just a huge mess.

David Blackmon [00:24:08] It is. And it is such a shame because all of that goes all the way back into the 1950s when the CIA was meddling with the governments in those countries. And everyone should read a biography about John Dulles sometimes, I’m sorry, Allen Dulles, the one of the early directors of the CIA and all the crazy stuff our CIA was doing in those Latin American countries during those years. And we’re still paying a price for it in terms of terrible relationships with with some of those countries. And it probably was, you know, really one of the underlying reasons why China was able to pretty much locked up Bolivia and that lithium resource there. Just last month, actually, I was just in late January, I guess. So anyway, yeah, I agree with you completely. Ah, and this is not the Biden administration. This is this is something that’s bled through 12, 13 different presidential administrations since Eisenhower. So anyway, I’m sorry. Get us off on a tangent there. It’s it’s a real sore spot for me, as you can tell.

Teague Egan [00:25:23] We are not buying small. It’s not like any particular versions. It’s just yeah, it’s it’s the lack of action. It’s like Biden. Biden could change that if we wanted to. Yes. Yes. It’s the lack of. It’s the lack of action.

David Blackmon [00:25:40] No, I completely agree. And it’s something that’s really going to have to be paid attention to if if we’re going to have success in this area ultimately, because as you pointed out here, the demand for lithium is going to I guess, the IEA’s projection, you’re going to have to increase lithium supply by 900% by 2035. And, you know, we’ve never done that with a major mineral before globally. And so that’s a that’s a an amazing goal that is going to be very difficult to achieve. And it’s going to take that kind of diplomatic effort, not just in South America, but a lot of parts of the world to get it done.

Teague Egan [00:26:26] Yeah.

David Blackmon [00:26:28] So we’re running out of time, but I want to give you a chance to talk about what are your next steps? Where do you go from here? Say, in the next year or two to get to that inflection point where you’re ready to to to really scale this effort up?

Teague Egan [00:26:49] Yeah, that’s what we’re focused on every day. We are building these larger systems and our facilities in Texas. Pretty, pretty exciting now. I’ll never build something this size. Building larger systems and getting ready to deploy these EMS testbeds is what our whole team is working on. And it’s we’ve we’ve proven our process at this many pilot scale. Now it’s all about stealing that up, showing what we can do with a quantity or a volume or brand processing. That is about 100 meters per hour, 4000 hours of processing, a thousand cubic meters of brine and maybe more, maybe several thousand to do 24 day. Right. So 1000 hours is 42 days. Maybe maybe you do that for 2000 cubic meters, which is almost maybe you do it for 100 days, which is almost 3000 cubic meters. But this is the. This is the size of processing that all of the large customers that we’re in dialog with have told us is the last step before commercialization. So we’re we’re building new systems and this year we’ll have the testbeds in the field and we’ll work on validating that over the next 12 months. And. Then it’s then it’s too for commercialization, building facilities that can process. And 20,000 tonnes of lithium per annum. So this next step is critical to prove our process on the demonstration scale, which is truly technology aid, which is the last step before zero nine, which is for commercialization. So just about all the scientific risk is behind us. Like we unequivocally prove that our technologies extract, separate and refine what we are now. It’s about the engineering challenges that come with the technology and making sure it works at scale on a demonstration level and then ultimately on a commercial level.

David Blackmon [00:29:37] Well, fantastic, man. I sure do appreciate your time. Thank you again for for doing this with me today. And I’ll be back in touch in the future. Man, for another update and wish you the best of luck.

Teague Egan [00:29:50] Any time. Great seeing you.

David Blackmon [00:29:53] Thank you, sir. And thank you, everyone, for joining us. This is David Blackman, thanking the Sandstone group for hosting our show and our extraordinary producer, Eric Perel. That’s all for this time. And we’ll see you down the road.

Our Sponsors:

Sponsorships are available or get your own corporate brand produced by Sandstone Media.

David Blackmon LinkedIn

DB Energy Questions 

The Crude Truth with Rey Trevino

Rey Trevino LinkedIn

Energy Transition Weekly Conversation

David Blackmon LinkedIn

Irina Slav LinkedIn

Armando Cavanha LinkedIn

ENB Top News

ENB

Energy Dashboard

ENB Podcast

ENB Substack

 

We would like to thank our sponsors and fellow traveling industry thought leaders.