Originally authored by Carter Haydu and reposted with permission: https://www.dailyoilbulletin.com/article/2020/10/14/hydrogen-in-situ-avatar-team-looks-at-technology-t/

Optimally, Canadian hydrogen production will leverage existing energy assets, repurposing or reusing orphaned or inactive wells in a way that is both economically and environmentally sound, according to one Avatar Program team’s final presentation: Hydrogen in the New Energy Future.

“These are wells that have been left due to economic reasons,” Mohammad Pour, process engineer-in-training at Stantec Inc., told a panel of industry experts. “In Alberta alone, there are more than 250,000 active and inactive wells.”

Fortunately, noted Kara Edmonson, an engineer at Enbridge Inc., there is a Calgary-based company, Proton Technologies Canada Inc., that can extract hydrogen by its patented technology — Hygenic Earth Energy (HEE).

According to Proton’s website, for most oil wells roughly 70 per cent of oil remains in the ground post-production, as it is inaccessible or uneconomic to recover, while in natural gas reserves about 20 per cent is left behind. For many abandoned or declining wells, HEE becomes a ‘phoenix’ solution, reviving local industry and producing unexpected value from sunk costs. Water-logged reservoirs are especially suitable, as water contributes to hydrogen generation.

In terms of the process, HEE heats the reservoir to create free hydrogen, and then the advanced technology extracts pure hydrogen gas, heat and other valuables. Oxygen-enhanced air is produced at the wellhead, and then injected deep into the reservoir. Gases, coke and heavier hydrocarbons are oxidized in place. Oxidation temperatures (above 500 C) eventually cause nearby hydrocarbons, and any surrounding water molecules, to break apart.

Upon creating free hydrogen, one or more ‘Hygeneration’ wells extracts the elemental hydrogen, using Proton’s patented technology — the ‘Hygenerator’. Edmonson said: “It [uses] a palladium copper alloy membrane, which is only permeable with hydrogen, and therefore only hydrogen is transported from beneath the caprock to the surface.”

Strengths and challenges

The strength for private companies producing hydrogen from abandoned and inactive wells is that it provides an avenue for asset recycling by using non-income-producing wells to develop a new resource through the production of hydrogen, noted Aarash Majoo, who has a background in mechanical engineering and finance. For governments, it is an opportunity to mitigate liability by donating the rights of the wells to third parties willing to take on rehabilitation.

“We’re also able to transition our human expertise from working on natural gas to hydrogen, ensuring continuity of jobs in the region,” he said, adding the technology involved is easily exported globally for application in many regions that must contend with orphaned and inactive wells. “The biggest challenge for this technology is the development for a proof-of-concept that can be tested to produce large amounts of hydrogen.”

Another current challenge is the yield efficiency — the amount of hydrogen extracted per the amount of oxygen injected. According to Majoo, this is a key part of the technology that must be developed. “This will also significantly drive the required improvements in economics to make this technology viable.”

Environment matters

Decarbonizing Canada’s current natural gas grid and adopting fuel cell electric long-haul transportation for lower greenhouse-gas (GHG) emissions are two recommendations the Avatar team sees as benefiting from clean hydrogen.

In striving for ‘green’ hydrogen to help Canada meet GHG-reduction goals, companies could test in-situ hydrogen production to help prove out Proton’s technology, said Edmonson. This presents royalty opportunities from hydrogen on current abandoned wells that are not generating income, although early funding to develop in-situ hydrogen production is required to help strengthen Canada’s hydrogen value chain.

She encourages Canada and its energy sector to keep developing the valuable energy resource, which now includes hydrogen, in a safe, environmental, economic, and socially-responsible way. Edmonson hopes to see industry prove out promising hydrogen production methods such as Proton’s patented HEE technology.

Who owns the well?

As for who owns an old well once it is adapted to produce hydrogen, Majoo said there are a couple of options. For example, if there is an orphan well and the province donates the mineral rights to a firm such as Proton, then the latter would own that liability. However, if Proton partners with a producer, then the producer could pay a royalty to Proton.

“[The producer] would still be making money off this project and would still be able to produce an income, which means they would have money to actually rehabilitate that well.”