Gradient Geothermal and T5 Smackover Partners Forge Strategic Alliance to Advance Integrated Geothermal-Lithium Production in East Texas

The New Energy Frontier: How Gradient Geothermal and T5 Smackover Partners Are Reshaping East Texas

By: Robert Buluma

Introduction: A Convergence of Energy and Minerals

On June 22, 2026, Gradient Geothermal and T5 Smackover Partners announced a collaboration that signals a fundamental shift in how the energy industry thinks about subsurface resources. The agreement, which brings Gradient's patented HXC Geothermal System to T5's phase one integrated geothermal project in East Texas, represents more than just another corporate partnership. It embodies a new model for energy development—one that treats geothermal brines not as a single-resource play but as a multi-stream opportunity capable of delivering baseload electricity, critical minerals, and industrial heat simultaneously.

This analysis examines the collaboration between Gradient Geothermal and T5 Smackover Partners, the technological and geological context that makes it possible, and what this project means for the future of American energy independence, critical mineral supply chains, and the communities of East Texas.

Part I: The Partners

Gradient Geothermal: Modular Innovation from the Ground Up

Gradient Geothermal, headquartered in Denver, Colorado, has carved a distinctive niche in the geothermal energy landscape. While many geothermal companies focus on greenfield development—drilling new wells in untested formations—Gradient has taken a different path. The company specializes in deploying modular, mobile geothermal units into existing oil and gas fields to generate power and provide cooling services.

This approach addresses two of the most persistent barriers to geothermal adoption: high drilling costs and resource discovery risk. By working with produced fluids from existing wells, Gradient eliminates the need for expensive exploration drilling and reduces the geological uncertainty that plagues traditional geothermal projects.

The HXC Geothermal System

At the heart of Gradient's offering is the patented HXC (Heat Exchange) sled—a modular, ruggedized system that combines a heat exchanger, an Organic Rankine Cycle (ORC) unit, and a dry cooler. The system was designed to handle different types of fluid with no pre-treatment requirements, allowing deployment in challenging fluid conditions and even in temperatures that are not exceptionally high.

The technical specifications are notable for their accessibility. While Gradient prefers areas with temperatures over 200°F (93°C) for power generation, the technology can work with temperatures as low as 165°F (74°C). In terms of flowrate, the system requires at least about 2,000 barrels per day—equivalent to 3.2 liters per second—though flow from multiple wells can be aggregated to meet this requirement.

This flexibility is by design. Gradient's technology is not built for a single use case but rather as a platform that can adapt to different subsurface conditions, different fluid chemistries, and different client objectives. Whether the goal is fluid cooling, power generation, or both, the HXC system can be configured to deliver results.

Beyond Power Generation

What sets Gradient apart from many geothermal developers is its willingness to think beyond electricity. The company is exploring cascading use models where residual heat from power generation can be utilized by partners in agribusiness, aquaculture, industrial drying, or other direct-heat applications. This approach maximizes the value extracted from each unit of thermal energy, improving project economics while reducing waste.

Gradient has already demonstrated its technology in the field. The company recently deployed its HXC Geothermal System at the oil and gas assets of Chord Energy in North Dakota. That project validated the technology's ability to generate geothermal power from produced fluids in a real-world operating environment—a critical step before tackling a project of the scale and complexity that T5 Smackover Partners is developing in East Texas.

T5 Smackover Partners: From Reclaimed Land to Energy Hub

T5 Smackover Partners, a subsidiary of Texas-based T5 Holdings LP, represents a different kind of energy company. Founded by Dallas-based technology entrepreneur Bruce Thompson, the company's origin story is as unconventional as its business model.

Thompson purchased a piece of reclaimed land from Luminant—formerly TXU—several years ago with the modest goal of building a family ranch. The property, which had been a coal mine a quarter-century earlier, seemed an unlikely candidate for energy development. But when landmen began approaching Thompson about the mineral rights beneath his property, he embarked on what he describes as an "intense learning journey".

That journey led to the realization that the Smackover Formation beneath his land contained not just oil and gas, but something far more valuable for the energy transition: hot, mineral-rich brine with some of the highest lithium concentrations ever recorded.

A Vertically Integrated Vision

T5 Smackover Partners is developing what it describes as the first commercial-scale enhanced geothermal project to co-produce baseload power and lithium carbonate. The project spans Franklin, Titus, and Hopkins counties in East Texas and proposes a combination of geothermal power generation, lithium and bromine extraction, EV charging infrastructure, and mobile grid-scale energy storage.

This is not a conventional mining project, nor is it a conventional geothermal project. It is something new: a vertically integrated energy platform designed to produce reliable geothermal energy while simultaneously strengthening U.S. critical-mineral supply chains.

The project's scale is ambitious. Based on current development plans, T5 expects its initial Franklin, Titus, and Hopkins County project to produce approximately 35,000 to 50,000 tons of lithium carbonate equivalent (LCE) per year, positioning it among the largest lithium production projects in North America. Phase 1 production, which has already secured a binding offtake agreement with Glencore, is estimated at approximately 5,000 metric tons per year over a five-year term.

Modular Deployment Strategy

Rather than building a massive centralized processing facility, T5 is deploying a modular Direct Lithium Extraction (DLE) strategy combined with a hub-and-spoke model. This approach allows capacity to ramp up in phases, with production beginning materially sooner than would be possible with a large-scale centralized project.

The company expects initial lithium output as early as 2026, with faster scaling into 2027. This rapid timeline is made possible by the modular approach, which allows T5 to bring online incremental capacity as modules are completed, rather than waiting for an entire facility to be built before producing any revenue.

Part II: The Resource

The Smackover Formation: A Geological Treasure

The Smackover Formation is an extensive reservoir of high-salinity brines spanning Arkansas, Texas, Louisiana, Mississippi, and Alabama in the U.S. Gulf Coast. It is already well known in energy circles, having been studied for decades for its oil, gas, and brine resources.

What has drawn new attention to the Smackover in recent years is its lithium potential. The formation's waters contain the richest lithium concentrations in U.S. basins. T5 has identified multiple zones within the Smackover containing lithium concentrations around 800 parts per million—far above the roughly 100 ppm often cited as a global average.

Beyond lithium, the formation also holds commercially meaningful levels of bromine, potassium, and strontium. T5 anticipates world-class bromine deposits across its acreage. This multi-mineral potential makes the Smackover uniquely valuable; a project that can extract lithium, bromine, and other critical minerals while generating geothermal power from the same brine stream achieves economies of scope that single-resource projects cannot match.

Geothermal Potential

The Smackover is not just mineral-rich; it is also hot. T5's initial development, originally permitted as a geothermal well, encountered higher-than-expected temperatures. This opens the door to electricity generation using modular Organic Rankine Cycle turbines—systems designed to convert moderate heat into power and deploy faster than traditional geothermal plants.

The integration of geothermal power with lithium extraction is where the project's real innovation lies. By using the natural heat of the brine to power the DLE process, T5 can significantly reduce the carbon footprint of lithium production. This is a critical advantage over hard-rock lithium mining, which is energy-intensive and environmentally disruptive.

Part III: The Collaboration

What the Agreement Entails

Under the terms of the June 22, 2026 agreement, Gradient Geothermal will provide its patented HXC Geothermal System for T5's phase one integrated geothermal project in East Texas. The system will utilize the thermal energy contained in the project's produced working fluid brine, providing an integrated solution that supports both heat management and geothermal power generation.

In practical terms, this means Gradient's HXC sleds will be deployed at T5's production sites to capture waste heat from the geothermal brine and convert it into electricity. That electricity can be used to power the DLE process, reducing the project's reliance on grid power and lowering its overall carbon footprint.

A New Model for Resource Development

The collaboration represents something more significant than a simple equipment supply agreement. By pairing geothermal power technology with direct lithium extraction, the project creates a new model for producing critical minerals while producing baseload electrons and reducing the development's overall environmental footprint.

Ben Burke, Chief Executive Officer of Gradient Geothermal, emphasized that the project demonstrates what is possible when geothermal energy, geothermal brines, and critical-mineral production are designed as one integrated system. He noted that T5 is developing an innovative energy project, and Gradient is proud that its HXC technology will help convert the Smackover's substantial subsurface heat into a productive baseload energy resource.

Cole Fisher, President and Co-Founder of T5 Smackover Partners, echoed this sentiment. He believes the future of the Smackover is about maximizing the value of the geothermal brine it can produce. By integrating Gradient's modular geothermal technology alongside phase one production, T5 is creating a more efficient project that generates baseload electricity from the same resource. Fisher described this as exactly the type of innovation needed to strengthen domestic supply chains and establish East Texas as a leader in the next generation of geothermal energy.

Part IV: The Broader Context

The Critical Minerals Challenge

The collaboration between Gradient and T5 comes at a moment of acute concern about U.S. critical mineral supply chains. The United States continues to rely on foreign entities for a significant share of processed critical minerals, creating supply chain exposure for both national security and commercial systems.

Lithium is a case in point. The global supply chain for lithium remains fragile due to its heavy dependence on a few producer nations—Australia, Chile, and China account for over 85% of global production. This concentration amplifies geopolitical risks and exposes markets to price volatility.

The stakes are enormous. By 2050, global lithium demand is projected to grow more than ten-fold, driven by its vital role in lithium-ion batteries for electric vehicles and grid-scale energy storage. For EVs and energy storage applications alone, lithium demand is expected to surge by over 4,000% by 2040. Lithium production will need to increase nearly 500% by 2050 to meet future needs.

Policy Response

The U.S. government has responded with a series of policy initiatives aimed at strengthening domestic critical mineral supply chains. The Department of Energy has announced funding opportunities of up to $500 million to expand domestic critical minerals processing and battery materials manufacturing. Topic areas include methods to extract, separate, and process lithium from geothermal brine sources.

These policy efforts reflect a growing recognition that domestic critical mineral production is not just an economic issue but a national security imperative. The collaboration between Gradient and T5 aligns directly with these policy objectives, demonstrating a private-sector pathway to reducing dependence on foreign supply chains.

Texas: The Emerging Geothermal Capital

Texas is quietly becoming a global capital for geothermal energy. The same technical prowess that unlocked the American shale revolution—horizontal drilling, hydraulic fracturing, and advanced subsurface characterization—is now being repurposed to tap into the heat beneath our feet.

This transition is not merely a pivot toward renewables; it is a strategic evolution of the existing oil and gas infrastructure to provide the baseload power required by the next generation of industrial giants. The convergence of high-tech drilling, advanced mineral extraction, and insatiable demand for carbon-free electricity from AI data centers has positioned Texas as the nascent global capital of geothermal innovation.

The T5 Smackover project is at the forefront of this trend. By integrating DLE technology with modular geothermal power units, the project tackles two of the greatest challenges of the energy transition simultaneously: the need for lithium for battery supply chains and the requirement for consistent, clean electricity.

Part V: Technology Deep Dive

Organic Rankine Cycle Technology

The Organic Rankine Cycle is the workhorse of moderate-temperature geothermal power generation. Unlike traditional steam turbines, which require high-temperature heat sources, ORC systems can generate electricity from lower-temperature heat sources—exactly the kind found in geothermal brines.

ORC systems use an organic fluid with a lower boiling point than water, allowing them to extract energy from heat sources that would be too cool for conventional steam turbines. This makes them ideal for applications like the Smackover, where brine temperatures, while substantial, are not at the extremes found in volcanic geothermal systems.

Gradient's HXC system incorporates an ORC unit as one of its three core components, alongside the heat exchanger and dry cooler. This integration allows the system to cool produced fluids while simultaneously generating onsite electricity. The electricity can be used by the operator or sent back to the grid—a flexibility that enhances the system's value proposition.

Direct Lithium Extraction

Direct Lithium Extraction represents a paradigm shift in lithium production. Traditional lithium mining involves either hard-rock mining (energy-intensive and environmentally disruptive) or evaporation ponds (slow, land-intensive, and weather-dependent). DLE, by contrast, uses selective sorbents, membranes, or electrochemical processes to extract lithium directly from brine.

The advantages are significant: DLE requires less land and water than traditional methods, produces higher-purity lithium products, and can be deployed in a modular fashion. Recent advances in DLE technologies have made selective lithium recovery from complex fluids technically feasible.

For the Smackover, DLE is particularly well-suited. The formation's brines are high in lithium concentration but also contain other minerals that must be managed. Advanced DLE technologies can selectively extract lithium while leaving other minerals in the brine for potential recovery later—or for reinjection back into the formation.

T5 is deploying a modular DLE strategy, allowing capacity to ramp up in phases. The company expects to announce its DLE technology partner in the near future. This phased approach reduces capital risk and allows the project to begin generating revenue sooner than would be possible with a traditional large-scale facility.

Part VI: Challenges and Considerations

Technical Complexity

Geothermal-lithium co-development adds layers of technical complexity beyond what either geothermal power or lithium extraction would entail alone. The fluids must be managed carefully to maintain both power generation efficiency and lithium extraction effectiveness. Temperature, pressure, and chemistry all must be optimized simultaneously—a challenging engineering problem.

The integration of Gradient's HXC system with T5's DLE process will require careful coordination. The HXC system extracts heat from the brine for power generation; the DLE process then extracts lithium from the cooled brine. Balancing these two demands to maximize both power output and lithium recovery will be an ongoing operational challenge.

Commercial Scalability

Direct lithium extraction has shown promise in pilot programs, yet many technologies remain early-stage. Costs, long-term reliability, and environmental performance are still being tested across the industry. Scaling from pilot to commercial production is a significant hurdle that many DLE projects have yet to clear.

T5's modular approach mitigates some of this risk by allowing incremental scaling. If Phase 1 performs as expected, additional capacity can be added. If challenges emerge, they can be addressed before larger investments are made. This phased approach is prudent, but it also means that reaching full-scale production will take time.

Permitting and Infrastructure

Modular systems are designed to move faster than traditional mining and geothermal developments, but permitting, infrastructure buildout, and grid interconnections can still stretch timelines. Even with a modular approach, the project must navigate federal, state, and local regulatory requirements—a process that can be unpredictable.

T5 is also proposing significant infrastructure beyond its production facilities, including ultra-fast EV charging along the I-30 corridor and up to 75 to 100 megawatts of mobile, dispatchable power. These additional components add value but also add complexity and regulatory requirements.

Community Impact

For East Texas communities, the project represents both opportunity and uncertainty. New energy investment can bring jobs and infrastructure, but large-scale mineral development also raises environmental and social concerns.

Bruce Thompson, T5's founder, has emphasized the company's commitment to the local community, expressing a desire for neighbors to thrive alongside the project. The company has structured its mineral leases to generate meaningful royalty income for landowners sooner than traditional 10- to 15-year leases would allow.

Part VII: The Path Forward

Near-Term Milestones

The collaboration between Gradient and T5 is just beginning. T5 expects initial lithium output as early as 2026, with faster scaling into 2027. The Glencore offtake agreement provides a clear market for Phase 1 production.

For Gradient, the T5 project represents an opportunity to demonstrate its HXC technology in a new application—integrated geothermal-lithium production. Success in East Texas could open doors to similar projects in other basins, both in the United States and internationally.

Long-Term Implications

If the T5 Smackover project achieves its goals, it could serve as a template for a new kind of energy development—one that treats subsurface resources holistically rather than focusing on a single commodity. The integrated model produces baseload electricity, critical minerals, and potentially industrial heat from the same resource stream.

This model has significant implications for energy policy. By demonstrating that geothermal-lithium co-development can be commercially viable, T5 and Gradient could accelerate the transition to domestic critical mineral production and reduce U.S. dependence on foreign supply chains.

The project also has implications for the broader geothermal industry. If geothermal can be economically justified not just by power sales but by the value of co-produced minerals, it opens up new geographies and new business models. Geothermal could become a more attractive investment, accelerating deployment and driving down costs through learning and scale.

Conclusion: A New Chapter for American Energy

The collaboration between Gradient Geothermal and T5 Smackover Partners represents more than a business agreement. It is a demonstration of a new model for energy development—one that treats subsurface resources not as single commodities but as integrated systems capable of delivering multiple value streams.

The Smackover Formation, long known for its oil and gas, is being reimagined as a dual-stream energy and mineral engine. The hot, hypersaline brines of the region can do more than just produce heat; they can power the extraction of lithium for batteries, generate baseload electricity for the grid, and provide economic opportunity for East Texas communities.

Gradient's HXC Geothermal System provides the thermal management and power generation capabilities that make this integrated model possible. T5's vertically integrated platform provides the vision, the capital, and the community commitment to see it through.

The project is not without challenges. Technical complexity, commercial scalability, and regulatory hurdles all must be navigated. But the potential rewards—a domestic supply of critical minerals, reliable baseload power, and a new model for sustainable resource development—are substantial enough to justify the effort.

In East Texas, that possibility is becoming reality. The integrated geothermal-lithium model pioneered by Gradient and T5 may well set the standard for how we think about energy and minerals for decades to come.

See also : Potsdam and GFZ Join Forces to Unlock Deep Geothermal Potential for the City's Heating Future

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Source: PR Newswire