As the oil and gas industry scans the known universe for ways to diversify its portfolio with alternative forms of energy, it might want to look under its own feet, too.
For inside every oil reservoir, there may be a hydrogen reservoir just waiting to get out.
The concept comes courtesy of Calgary-based Proton Technologies. Founded in 2015, the young firm is the operator of an aging heavy oil field in Saskatchewan.
There, on a small patch of flat farm-land, Proton has been producing oil to pay the bills. At the same time, it has been experimenting with injecting oxygen into its reservoir in a bid to produce exclusively hydrogen.
Proton says its process is built on a technical foundation that includes years of research and works at the demonstration scale. Soon, the firm hopes to prove it is also profitable.
While it produces its own hydrogen, Proton is licensing out the technology to others. In January, fellow Canadian operator Whitecap Resources secured a hydrogen production license of up to 500 metric tons/day from Proton. Whitecap produces about 48,000 B/D, and thanks to carbon sequestration, the operator has claimed a net negative emissions status since 2018.
Proton says it has struck similar licensing deals with other Canadian operators but that these companies have not yet made public announcements. Where these projects go from here may end up representing the ultimate test for Proton’s innovative twist on the in-situ combustion process known so well to the heavy-oil sector.
“In-situ combustion has been used in more than 500 projects worldwide over the last century. And, they have all produced hydrogen,” said Grant Strem, a cofounder and the CEO of Proton.
Strem is a petroleum geologist by back-ground who spent the majority of his career working on heavy-oil projects for Canadian producers and research analysis with the banks that fund the upstream sector. While his new venture remains registered as an oil company, the self-described explorationist has come to look at oil fields very differently than he used to.
“In an oil field, you have oil—hydrocarbons, which are made of hydrogen and carbon. The other fluid down there is H2O. So, an oil field is really a giant hydrogen-rich, energy-dense system that’s all conveniently accessible by wells,” Strem explained.
But, in those past examples, the hundreds of other in-situ combustion projects, hydrogen production was merely a byproduct, an associated gas of sorts. It was the result of several reactions generated by air injections that producers use an oxidizer to heat up the heavy oil and get it flowing.
What Proton wants to do is to super-charge the hydrogen-generating reactions by using the oil as fuel while leaving the carbon where it is.
That ambition includes doing so at a price point that is roughly five times below that of Canadian natural gas prices and an even smaller fraction of what other hydrogen-generation methods cost.