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Description of the business
Proton Canada is a private company located in Calgary, Alberta, Canada. It is looking to scale-up its patented technology licenses in Canada and the North Sea regions that could revolutionize the clean energy movement. By applying proven oil and gas methods, Proton's process allows for the production of hydrogen from existing oil reservoirs, without emissions. In broad terms, about 70% of oil remains in the ground after production. Proton uses this stranded resource to produce Hydrogen through its patented process license. Since the stranded resource provides the fuel supply for the creation of hydrogen, its technology could have widespread application across the Canadian and North Sea resource landscapes especially, but not limited to, heavy oil formations.
All carbon can remain down in the earth; never coming to the surface. This can be a very big solution for decarbonizing energy and reducing air pollution. Proton's plan takes advantage of existing infrastructure and expertise. Proton plans to be a long-term provider of low cost, carbonless energy.
What is Hydrogen and How is it Produced?
Hydrogen is a clean fuel and an energy carrier that can store, move, and distribute energy. It has the highest energy density by mass, and when used in a fuel cell, produces only pure water and electricity. Hydrogen is produced from water in two main ways which both need a lot of energy; electrocuting water (electrolysis) or high temperature reactions. Most hydrogen today is created using a high temperature reaction process called Steam Methane Reforming (SMR), where natural gas (methane) is burned as part of the reaction. Since hydrogen can be burned in various normal ways such as furnaces, hot water tanks, electric power generators, or used as a transportation fuel that makes no CO2, its increasing use is popular in places like Canada where carbon emissions are taxed.
Proton's Process - How Does it Work?
Proton's process has two steps:
- Heat the reservoir to release hydrogen, and
- Extract only pure hydrogen gas.
These are most easily done by injecting oxygen into an oilfield to release hydrogen and using downhole hydrogen filters that only allow hydrogen to come up to the surface. In this way, CO2 and everything else stays in the ground.
The Market - What can Hydrogen be used for?
Most hydrogen today is used at oil refineries and fertilizer production plants but now that the production cost of hydrogen is lower than hydrocarbon fuels like diesel and gasoline, it is getting popular as a fuel that creates no CO2. Proton believes the energy cost of hydrogen can be even lower than natural gas energy. Every year, trillions of dollars of energy are sold, and the world's appetite for low cost clean energy seems to be increasing. Proton believes big markets for hydrogen include:
- Making electricity - by using hydrogen fuel in turbines, engines, or fuel cells
- Fuel blending - for example into natural gas to reduce overall CO2 emissions
- transportation fuel - in hydrogen powered vehicles
- feedstock for the chemicals industry - fuel upgrading, ammonia, methanol, fertilizer production
The Business Model
Proton hopes to stimulate the economy through vast-scale production of hydrogen from re-purposed oil projects. All these new jobs and investment into the hydrogen patch are expected to be similar to jobs and investment into the oil patch but with significant upside since the process can leverage existing infrastructure such as wells, roads, powerlines, pipelines, skilled workforce and an underutilized well servicing industry. Proton feels poised to produce hydrogen fuel in a potentially carbon-negative way, which could be very popular among investors or governments that have expressed CO2 emissions reduction goals.
Proton plans to iterate through various milestones of increasing scope to gain experience for increasingly larger projects. The next on our list is demonstrating hydrogen production and sales to existing markets from Proton's field site near Kerrobert, Saskatchewan where hydrogen is already being created in modest volumes but requires intermediate infrastructure to get to market.
Proton is currently producing and separating hydrogen at surface in small quantities through its novel patented process of In-Situ Hydrogen Generation (ISHG). ISHG takes the thermal petroleum recovery technology of in-situ oxidation, but with a focus on producing hydrogen instead of hydrocarbons. This project is to demonstrate hydrogen sales through scaled up separation, storage and transportation, constructing larger sized hydrogen separation equipment, and purchase of a tube trailer for storage and transportation.
Project Outcomes / Deliverables
This project plan is to separate hydrogen from a gas stream from an oil well, and put it in a tube trailer. This can demonstrate storage, transportation, and hydrogen sales; a small but important step for showing a scale up path to customers and investors.
Phase 1 - Current Crowd Funding Round - $250,000
Large Scale Demo - Purchase & construction of hydrogen separation equipment based on engineering design $250,000
Phase 2 - Follow up Crowd Funding Round - $250,000
Purchase or rental of hydrogen tube trailer for capturing and storing separated hydrogen and building path-finder truck loading terminal at Proton's site; Transportation of hydrogen on tube trailer to be sold to negotiated party which have entered into sales contract negotiations.
Purchase of tube trailers and construction of loading terminal = $250,000
Total estimated project contribution from crowdfunding rounds = $500,000
Project Success
The success of these projects will be the demonstrated first sales of hydrogen to a negotiated end user from a novel patented hydrogen production process which would be a new revenue stream for Proton. Once demonstrated, we expect increased interest from customers, investors, potential licensees, strategic partnerships, and carbon offset groups.
Management and Founders
Grant has always been interested in the earth. Concepts of philosophy, deep time, science, science fiction, methods of inference, and technological progress eventually brought Grant toward a geology undergrad degree at the University of Calgary. Grant worked within upstream oil and gas sector at companies like ConocoPhillips and Husky Energy before moving into reserves evaluation and banking. His general interest in science and space propulsion systems led him toward a strong technical appreciation of extreme oxidation processes. During his engineering Master's degree Grant took courses from Ian Gates, who years later became a Proton co-founder after many years of friendship since grad school.
Seta Afshordi believes that a new clean energy era is overdue, and that this change should come from inside the oil and gas industry. She worked on a variety of heavy oil projects for Husky, CNRL, Athabasca, and Murphy Oil. Seta has a Master's Degree from Chalmer's University of Technology in Sweden on Environmentally Sustainable Process Technologies, and a Bachelor of Science in Chemical Engineering from prestigious Sharif University in Tehran. She was also a national-team badminton champion for many years and has a poodle named Trusty.
Calvin Johnson, Head of Commercial
Calvin Johnson is President of KE Risk Group. Prior to founding KE Risk, Calvin was deeply involved in TransAlta's trading business, and CIBC's Energy Derivatives business. Calvin has been assisting Proton since late 2018 and believes that Proton will play a critical role in North American hydrogen supply.
Professor Dr. Ian Gates, Co-Founder of Proton and Co-Inventor
Ian joined the Department of Chemical and Petroleum Engineering at the University of Calgary in 2004 after working 7 years in industry. He is a registered professional engineer (P.Eng.) and has consulted for small and large energy companies in Canada and internationally. Ian's current research interests are in heavy oil and oil sands recovery process design and optimization, thermal (SAGD and CSS) and thermal-solvent (ES-SAGD, SA-CSS) oil recovery processes, cold production of heavy oil with sand (CHOPS) and follow-up process design, reservoir engineering and simulation, reservoir process optimization, reactive reservoir processes and simulation, heat and mass transfer, fluid mechanics, biofilm evolution in porous media, and bioreactor design (think of the reservoir as a bioreactor). Ian laughs a lot and enjoys engaging discussions over breakfast or beer.
Dr. Jingyi (Jacky) Wang Co-Founder of Proton and Co-Inventor
Jingyi (Jacky) Wang P. Eng., is a research engineer in the Department of Chemical and Petroleum Engineering at the University of Calgary, specializing in unconventional resource recovery process design and numerical simulation. He holds a BSc degree in chemical engineering from East China University of Science and Technology and M.Eng degree in reservoir engineering from the University of Calgary.
Jacky has 10+ years of chemical and reservoir engineering experience with industry and in research, expertise includes thermal recovery, cold production, VAPEX, CO2 sequestration, hydrate recovery, reactive numerical modeling, EOR, and production optimization. He is a professional member with APEGA and SPE. Jacky also likes beer.
Equity Terms
Securities: Class E common non-voting shares of Proton Technologies Canada Inc.
Fundraising goal: $250,000 CAD (Minimum of $100,000)
Price per share: $187.50 per share, based on pre-money company valuation of $206 million
Minimum investment amount: $375 CAD per investor
Maximum investment amount: $1,500 CAD per investor
Qualification: Accredited and non-accredited investors who live in British Columbia, Alberta, Saskatchewan, Manitoba or Ontario.
Closing Date: September, 2021
Invest today to create Clear Hydrogen and a Clear Conscience!
Making an Investment
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10 comments
After extensive research “The Story” does not yield any logic.
1000tonn/day hydrogen is not supported by any data.
Separation of hydrogen at the depth inside the well is not supported by any data, hydrogen still must be separated from flue gas at the surface making process very expensive.
Existing hydrogen production is very low – 0.1-0.3tonn/day, without any improvements despite several years of trials.
Proton management avoids answering any questions about hydrogen volumes currently produced but promising to generate more moles of hydrogen from less moles of oxygen
And what is the logic in asking for $100,000CAD to show sales of 1 tonn/week of hydrogen when 1000tonn/day rates are absolutely not feasible?
Dear Mr. Shing,
Please tell me about yourself and remind me how we met.
I do not recall meeting a C Shing before, and prior to your comments here have only had one person cast doubt on our claims. He was a disgruntled former employee of a former owner of our demo site, who earned his criminal record when we caught him on camera breaking into our private facility for his monkey-business. We are litigating against that embittered obsessed guy who himself twice tried unsuccessfully to purchase our facility, and was later grumpy that we didn’t hire him – which turned out to be the right move – there’s no room for negative people on our payroll. I like hiring realists and we are all open to skepticism from knowledgeable sources and people, but I have no desire to waste time on negative people.
We are the 5th operator of this facility since 2011 which implies something about the highly uneconomic THAI process; which is not our process. I do not believe THAI will ever be economic and in any case the patents have all expired; he can go build his own THAI project if he wants to see his money disappear.
Our process has taken longer to develop and prove because of limitations on capital. We are now better positioned to demonstrate our process – which involves injection of oxygen.
I have never claimed that we are making 1000 tonnes per day hydrogen already- but I do believe we have enough barrels in the ground (based on the reserves mapping of several competent geologists internally and 3rd party) that we can sustain from our demo site 1000 tonnes per day H2 – but ONLY after we construct significant air separation and oxygen injection capacity!!!
If you genuinely wish to pursue an investment, we can have a video call where I can elaborate on what I see as errors in your math and thinking Mr. Shing. Please contact info@proton.energy to set that up.
Best regards,
Grant
Mr. Grant
I am not sure I correctly understand what you are trying to say but all of it is irrelevant. “The story” does not compute without essential data it is missing. It even raises credibility concerns or simply looks like a fairy tale.
Sincerely,
C.S.
Dear Mr. Strem
I deeply apologize for typos in my previous comment. I adjacently pressed submit before finalizing editing. Also wayblaze won’t let me to replay to your last comment therefore I had to start a new trend.
Regarding my calculations for H2 concentration, this is the logic behind it:
In your comment you are saying – “We expect 10,000-12,000 tonnes per day of O2 injection to produce 1000 tonnes per day H2”.
Oxygen density is 1.429kg/m3 so 10,000 tonnes will be 10,000,000kg / 1.429 = 6,997,900m3
Hydrogen density is 0.08988kg/m3 so 1000 tonnes will be 1000,000kg / 0.08988 = 11,125,945m3
If you injecting 6,997,900m3 per day and producing 11,125,945m3 day your production volume is higher and all of it is H2, hence H2% is more than 100
This is how H2 production is calculated in the paper you refer to, as percentage of produced gas volume which is very close or for this example for simplification assumed to be equal to injected gas volume (note: volume is better to use with gases versus mass as it directly correlates to moles)
Dear Mr. Shing,
We share our site-specific data with those who have specifically paid for the data.
In any case, what has been produced so far at our site is not representative of our process – which will inject oxygen instead of air. So far we have only injected air and steam. If you want a reasonable view into related data, I recommend you download the academic paper about Marguerite Lake from the landing page of our website. This is public domain about the concentrations of hydrogen that were accidentally achieved from a similar oil-focused project. We view it as highly likely that optimizing for hydrogen instead of oil, we can approach or exceed the results that have accidentally been achieved at Marguerite Lake. Anything approaching those results is expected to be highly economic.
If you don’t agree then I encourage you to move on and invest elsewhere. As for me, I see low-cost hydrogen, with below-zero carbon intensity by life cycle analysis, to be a meaningful part of our global energy future and expect the technology will proliferate after our first large-scale demo.
Dear Mr. Strem,
I agree that detailed site-specific data can or in some cases should be distributed for a reasonable fee, however adding existing or planned hydrogen production volumes to your presentation would benefit it greatly, just one or couple numbers should be simple enough for you and I am sure will be much appreciated by all potential investors.
Regarding the paper you referred me to: An average H2 concentration, during production cycles from the Marguerite lake field, was 15-16% (on a nitrogen free basis). During water or steam injection cycles it is close to 0%, meaning in average over the year concentration will be 7.5-8% or slightly higher depending on the cycle duration. There is an attempt to model the process, in the same paper, with H2 concentrations going up to 30-40% (average over a year 12-25%) with an important assumption or trigger in the model about O2 not being mixed with H2 which seems was not proved at the field test. Can you confirm if my interpretation was right, or I am off somewhere? And if these are the concentrations you are aiming for yourself, what would be the expected total gas volumes, and if your submersible membrane will be able to process all gas or only part of it?
Dear Mr. Shing,
Similar to a “Cyclic Steam Stimulation” project, any individual well might not be producing hydrogen at a moment in time, or any gas at all, but similar to CSS, the field-wide production rate can be very stable at high concentration. So your math to blend H2 concentration down won’t apply. We’ll have wells non-productive during their low concentration phases.
We have hired 2 guys who worked on the Marguerite Lake project, and you are correct that nitrogen was not a necessary diluent choice so it is fair to assume a nitrogen-free basis. During certain phases I have heard first-hand that they did inject pure oxygen.
The actual data, not a model, from Marguerite Lake shows consistently high H2 volumes and concentrations.
The main limiting factor on H2 volumes is O2 injection volumes. We expect 10,000-12,000 tonnes per day to produce 1000 tonnes per day H2.
Small projects will have reduced efficiency- edge effects, and dilution, but can still be economic.
The near term volumes we expect are enough to satisfy our first hydrogen customers.
Mr. Grant in The Story section you describe the technology as: “1.Heat the reservoir to release hydrogen, and 2.Exrtract only hydrogen gas… using downhole hydrogen filters that only allow hydrogen to come up to the surface. In this way, CO2 and everything else stays in the ground.” In this case H2 production volume or at least H2 concentration in produced gas on well-by-well basis is a key to estimate cost and investment return. I agree that field-wide the production might be stable but for calculations it is always better to use a single well. Looking at the charts in Marguerite Lake In-Situ Paper the maximum H2 concentration at the field was slightly higher than 20% and probably 15% in average during production cycles as there is no H2 during steam injection cycles it would be fare to average H2 concentration through the whole production and injection cycle this is why I used 7.5-8% in my previous note. You expect 1000 tonnes per day of H2 while injecting 10,000-12,000 tonnes per day of O2, considering O2 and H2 densities you will inject 6,997,900 m3 per day of Oxygen and produce 11,125,900m3 of H2. Then considering produced gas volume is almost equal to injected volume, as per the same “Marguerite Lake In-Situ Paper” in order to keep pressure in the oil reservoir the same H2, concentration of H2 in produced gas is more than 100%, this is obviously a mistake. Did you mean 100 tonnes of H2 per day?
Also can you clarify if you expected these rates from a single field or maybe a several oil fields?
Dear Mister Shin,
This summer demo will be separation at surface with contribution from multiple wells.
Our first large H2 customer also prefers for us to do surface separation.
Please clarify the math on your contention of concentration above 100%, which is obviously not possible.
Very attractive presentation! But essential information about volumes of hydrogen separated at this time or volumes of gas generated using ISHG and concentration of hydrogen in it is missing. This information is necessary for a proper analysis and investment decision, especially for justification of hydrogen tube trailer purchase. Using third party services for transportation of dangerous goods instead of owning or renting specialized trailers seems more reasonable.