With our process, the hydrocarbon reservoir acts as the reaction vessel dramatically reducing the capital required at surface. It also comes pre-loaded with decades or centuries of fuel (remaining oil in place). The remaining fuel is oxidized, which releases energy which triggers reactions that release H2. Some of this H2 comes from the hydrocarbons, but most comes from non-potable water that is already in the oil field (H2O). Oil fields become an abandonment liability to oil companies when they are no longer economical. Therefore, many old oil fields may be obtained at low cost or free when they have reached their economic limit for oil production.

In contrast to this, steam methane reforming projects must constantly purchase their fuel and build and maintain high temperature reactions within surface facilities and produce significant carbon emissions. Some steam methane reforming projects intend to capture carbon emissions and inject them back into the subsurface. This adds further to their cost burden as it requires hardware and energy to compress these gases. Proton’s process simply never brings the carbon molecules to surface, thereby saving significant further cost.

Finally, the other primary method for producing hydrogen is through electrolysis, electrifying water to release H2 and O2. With this method, the required inputs for production are electricity and fresh water. Electricity from the grid or from a generation unit is currently a costly burden for both dollar value as well as carbon intensity. Unless your site can source clean, cheap energy, the costs are raised substantially. In addition, freshwater inputs create a worrisome long-term issue. Many researchers suggest that desalination is a crucial compliment to electrolysis, adding another dimension to its cost of adoption at scale. While this environment may adapt overtime to better suit green H2 production, Proton’s process can be easily applied to current infrastructure and equipment investments.

The immediate opportunity is to use H2 for on-site power generation utilizing H2 compatible generation, and spot sales into select markets. We plan to use long-term contracts and PPAs to underpin the required financing.

Future markets H2 includes all typical existing pathways to decarbonize the energy sector. This includes power generation, petro-chemicals, methane blending, ammonia production, decarbonization of cement and steel, and in the future, road, and marine transportation. Our commercial strategy is to utilize the existing energy infrastructure including salt cavern storage, re-purposed pipelines (e.g., NGLs, CO2, etc.), power generation and low-pressure methane blending (i.e., gas distribution).

On a transportation consideration, most natural gas pipelines can handle reasonable amounts of H2 (often up to 40% H2), but residential appliances cannot go much above 25 to 30%. Local distribution companies are comfortable in all cases with 5 to 10% H2 in the natural gas stream. H2 blending pilot projects are being runs across Canada and the world. We expect this market to develop in the medium term.

In general, we feel that Alberta Directive 86 includes an appropriate assessment approach. Beyond geological assessment, any wells which penetrate near the reactive zones need to be assessed for cement integrity, and in some cases will require further mitigations, in the same way that old wells need attention prior to initiation of steam injection which is a common enhanced oil recovery scheme.

The CO2 reacts in the reservoir forming carbonic acid and ultimately carbonate rock. Moreover, operating pressure is expected to be less than the original reservoir pressure, so there is limited risk of CO2 breach. Even so, each project should be specifically assessed geo-mechanically, with specific attention to relatively recent geological history (recent removal of overburden or active faults).

Proton expects most of the carbon to solidify within the broader reservoir system. However, if carbonate formation rates are less than hoped for, then bottom water volume for CO2 solubility and miscibility of CO2 into oil become relevant in the near term (perhaps 20 years or more depending on reservoir specifics), and max operating pressure may become important in the longer term (above 7500 kPa CO2 becomes a supercritical fluid and volumetrically approximates toward its liquid state). Quantified analysis and response will be handled accordingly, but all potential outcomes are expected to be robustly economic except for the unproven potential of a large carbon product market.

Proton will never initiate a project where caprock integrity studies are inconclusive or ambiguous. Geo-mechanical uncertainties of the cap rock must be reasonably constrained with at least the modern rigor devoted to thermal enhanced oil recovery projects. Proton follows Alberta Directive 86 to access the quality of reservoirs that would be suitable for our technology. Proton will also follow the existing guidelines for CO2 sequestration.

More than 500 in situ combustion projects across the 100 years have occurred, and all of them created H2. During World War II in California, catastrophic H2 explosions encouraged thoughtful improvements to design standards and metallurgical practices/standards.

Proton demonstrated in 2018 that their palladium alloy could separate H2 from field gas that included H2S and other substances that pure palladium does not readily handle. There was also a lab demo located at the University of Calgary in 2017. Test details and data are available in the technical section of the VDR.

Both technologies used in our processes and patents (oxidization and H2 separation) have a proven largescale industrial heritage. We are simply combining the technologies in a novel manner. Thanks to the purchase of the Superb Air injection field site in Kerrobert, SSK, we’ve ensured the tested development of our process. Enabling our long-term ability to test and prove the path to large-scale commercialization of a clean hydrogen production process.

Our current roadmap includes an estimated 12-month scenario during which we are actively testing, analyzing, and scaling the process to achieve a spotless commercial approach.

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