Randy Zook | It’s time to seize Arkansas’ greatest opportunity for growth in a generation

It’s time to seize Arkansas’ greatest opportunity for growth in a generation

By Randy Zook

This article was originally published in Talk Business & Politics on Nov. 1, 2024.

When you think of lithium, what comes to mind? Perhaps you think of the element from your high school science class or the critical component of modern batteries that power everything from your TV remote to your car. While both of those are certainly true, here in Arkansas, lithium is starting to mean something else entirely. For us, lithium means jobs, investments, and a bright new future for our state – if we get certain steps right.

Arkansas stands on the verge of a new economic future fueled by the transformational investments promised by the lithium industry. The discovery of massive lithium deposits in brines far under our state’s surface, in the Smackover Formation in southern Arkansas, could help redefine the region.

Southern Arkansas, which is in desperate need of a rejuvenating new spark of growth, could see the entry of billions of dollars investments as well as thousands of new jobs in the lithium mining and production industry, as well as other related sectors, like battery production, take hold. These investments will revitalize communities across Southern Arkansas while generating new high-quality career opportunities for Arkansans in a rapidly growing sector.

Yet, the entry of industry leaders as committed, long-term community partners in our state means far more than just investments and jobs. As they seek to improve the infrastructure surrounding the project sites, these partnerships will help to improve things like roads and bridges in communities like Lafayette, Union, and Miller counties. Additionally, to cultivate the talent pipeline for the industry, industry leaders are already collaborating with local colleges and universities, like Southern Arkansas University, providing students with hands-on experiences and direct pathways into the industry. These partnerships have the potential to elevate Arkansas as a global leader in the lithium trade in a moment in which the mineral’s value is skyrocketing due to the rising demand for electric vehicle production worldwide.

However, this future is not guaranteed, and our state finds itself in an essential moment in securing its certainty. In the coming days, the Arkansas Oil and Gas Commission will convene to consider a fair and balanced regulatory framework for royalties that is educated not just by the realities and difficulties of lithium production but also by the precedent set by other states. With these factors in mind, it proposes a competitive rate that would make Arkansas the most attractive option for domestic and international investment.

While a royalty rate may seem like a minor detail, getting it right is essential. A balanced approach to royalties ensures that Arkansas landowners will be fairly and reasonably compensated while maintaining global competitiveness as emerging lithium markets spring up around the world. As companies debate investment in Arkansas over the other states that share the Smackover Formation, like Texas, Louisiana, and Mississippi, establishing a competitive rate could be one of the most important factors in their decision.

As someone who recognizes how close we are to this once-in-a-generation growth opportunity, I encourage the Arkansas Oil and Gas Commission to consider the importance of making the right decision in this upcoming hearing to help secure the growth Arkansas needs for a prosperous future.