Coal may be the dirty man of the energy world, but it isn’t the only fossil fuel trying to clean up its act. A Canadian startup says that it has developed a way to strip carbon out of methane, resulting in hydrogen-enriched natural gas that burns cleaner and more efficiently.

Atlantic Hydrogen, based in the Canadian province of New Brunswick, is betting that its “greener” natural gas will appeal to utilities and industrial customers looking to reduce greenhouse-gas emissions under an impending cap-and-trade regime. But an added financial benefit would come from the powdery carbon black that’s extracted from the gas stream. “If we can get a value for the carbon that’s even in the thousands of dollars per ton range, then we have a very compelling economic model,” says David Wagner, president of the seven-year-old company.

Carbon black is used as a pigment in inks and plastics and to reinforce rubber products, such as tires and industrial-strength hoses. It’s typically made by partially combusting heavy oil over a high flame and filtering out the carbon particles in the resulting black smoke. This process, on average, emits an estimated 2.4 tons of carbon dioxide per ton of carbon black.

Atlantic Hydrogen says that it can produce high-purity carbon black with a fraction of the emissions, and at the same time partially reduce the carbon content of natural gas. The approach, which the company is calling “carbon capture and utilization,” uses less energy than is typically associated with carbon capture and storage technologies.

The heart of its approach is a plasma reactor system that the company calls CarbonSaver; it operates at between 1,500 and 2,500 °C and can be positioned at various points along a pipeline: at compressor stations, at underground storage sites, at the city gateways that bring gas to homes and businesses, and at power plants and industrial sites that receive natural gas.

Inside the reactor, a proprietary plasma torch pulses a charge as the natural gas flows through, separating hydrogen from the methane and turning the carbon into a solid that’s similar to photocopier toner. The hydrogen then rejoins and bonds with the methane stream, resulting in the enriched natural gas. The process can be tuned to blend a 10 to 20 percent mix of hydrogen–any more, and the natural gas is at risk of causing pipelines and equipment to become brittle and unstable.

A three-year, $5.7 million pilot project completed in March supplied 75 kilowatts of power, showing promising results.The system produced about 25 cubic meters of natural gas per hour with a 10 percent blend of hydrogen. Tests found that the engine used operated 5 percent more efficiently and that CO₂ emissions fell 7 percent. The increased hydrogen content in the natural gas led to a more complete burn, reducing nitrogen oxides. Atlantic Hydrogen sees the potential to reduce nitrogen oxides by more than 50 percent.

Atlantic Hydrogen is now working with Canada’s largest natural-gas producer, Calgary-based EnCana Corp, on a scaled-up system that can operate at higher pressures. It has already demonstrated that the system can operate at 150 pounds per square inch with potential to go much higher. EnCana has already committed $3 million to the project. “They’ve had great success in getting up to the operating pressures we would need in our field applications,” says Larry Weiers, EnCana’s vice president of energy technology and research. “Our expectation is that this hydrogen-enriched natural gas will be a premium product, kind of like premium gasoline.”

Some aren’t convinced that the process has legs, though. Carbon-capture expert David Keith, a professor of chemical and petroleum engineering at the University of Calgary, says that the hydrogen-enriched natural gas will be less energy dense because of the precapture of the carbon. “You are throwing half the energy away in the carbon, so I don’t think it will ever have wide application,” he says.

But Weiers claims that the reduction in energy density is partially offset by efficiency gains during combustion–that is, the hydrogen enables a more complete burn of the gas. And while operation of CarbonSaver does require electricity, improvements to the plasma torch have made the process competitive with the energy required for steam methane reforming, which produces about 95 percent of the hydrogen used today in the United States and releases about eight tons of CO₂ for every ton of hydrogen produced.

“The difference with us is we don’t release CO₂ from our process,” says Wagner, adding that the benefits of the process are clear when looking at life-cycle emissions.

Felipe Chibante, director of the applied nanotechnology lab at the University of New Brunswick, has been contracted to analyze the physical properties of the carbon black that comes out of the plasma reactor. He says that the production and end use of the carbon black is what makes Atlantic Hydrogen’s process most compelling when compared with other carbon mitigation approaches. “Your choice is to pay somebody to remove the CO₂ and bury it and lose that value, or take that carbon to make a product. What you’re doing is displacing the [conventionally produced]carbon-black product that does create CO₂.”

Chibante and his research team are working with carbon-black maker Columbian Chemicals to identify a market for Atlantic Hydrogen’s carbon, which has “very interesting carbon nanostructures that we just don’t see from industrial production,” he says. An early study shows that the material has a high surface area and thin chicken-wire structures called graphene stacks, making it potentially ideal in the production of high-performance batteries and ultracapacitors and for structurally reinforced products.