Thank you.
Good afternoon, everyone, and thank you for inviting me to speak to the committee today. My name is David Wagner and I am the president and CEO of Atlantic Hydrogen, which is based in Fredericton, New Brunswick, and is a clean energy technology company that for the last 10 years has been conducting research and development on a technology that we have branded the “CarbonSaver”.
I think the topic of today's meeting, innovation in the energy sector, is what the focus has been for Atlantic Hydrogen since the day the company was created back in 2002. Today, we are a privately held, investor-owned energy company, with 25 full-time staff made up of scientists, engineers, technicians, and a professional management team.
What I'd like to do in the next few minutes is tell you what it's like to develop and build a technology company based on innovating technology for the energy sector. I'm going to start by giving you a bit of background on how the company was created.
It started at McGill in 2002, with a very good idea from a chemist, and an entrepreneur who had money. The whole idea was to apply plasma science to disassociating carbon and hydrogen molecules in natural gas. In other words, they were trying to make hydrogen by removing carbon from natural gas. The project started at McGill and eventually moved to the University of New Brunswick in 2004. Since that time, we have grown to the full complement of 25 people, as I've already mentioned.
Our technology, the CarbonSaver, is a proprietary plasma-based system. The whole idea here is to reduce the carbon footprint by removing carbon, pre-combustion, from natural gas and thereby creating hydrogen, so what we really are is carbon capture for natural gas pre-combustion. The carbon is sequestered in rubber products like tires or in molten metals used and found in the foundry industry.
Our CarbonSaver is addressing worldwide markets and those potential customers who need hydrogen for applications such as fuel cells or industrial applications like refineries or electricity generation. It truly is a very large worldwide market. Our value proposition of the CarbonSaver is to be the lowest-cost producer of hydrogen without producing any CO2 in the process. This is quite unique in the industry.
I mentioned that we have been developing this technology. We are now in the commercialization stage. To date, we have raised in excess of $35 million, about 60% of that via selling shares in Atlantic Hydrogen. We have received about 20% in loans and about 20% in grants.
What I'd like to do is take a few minutes to give you an idea of what that story has been, what the road we've travelled has been like, and, quite frankly, where we are today. The fact is that we would not be here today had it not been for the support from some programs the federal government offers. I do want to make note that for a small company and for a start-up company like Atlantic Hydrogen, these are critical in our growth.
As I mentioned earlier, it starts with a good idea. In our case, it started at McGill and eventually was moved to the University of New Brunswick. The primary reason that the technology of the project was moved to the university is a program called the Atlantic innovation program that was offered back in 2004 by the Atlantic Canada Opportunities Agency. With the support of angels and the AIF program from ACOA, we effectively proved the concepts of disassociating carbon and creating hydrogen in natural gas.
That early success really allowed us to begin trials and leverage that success to raise more money—more angel rounds, and more friends and families. Really, the success in building on the early trials allowed us to create a scale system, which we called our beta system.
Success really does validate the plans, and it also allows us to gain access to federal programs like the ones that are offered by Sustainable Development Technology Canada, or SDTC; IRAP, and ecotrust. I have already mentioned ACOA's AIF program. All of these programs have been critical because we are very high risk at this early stage.
What that also allows is corporate investment, which is also prepared to invest in innovation and new ideas. Atlantic Hydrogen was very successful in attracting some of the largest Canadian energy companies—Encana, Cenovus, and Emera—to invest in our company and to allow us to demonstrate the technology we built.
Where are we today? I'm happy to report that Atlantic Hydrogen, in the fall of 2012, closed a round of capital that is going to be used to construct our first industrial-scale plant. What this will do is demonstrate and validate the use of our technology to produce clean hydrogen and fit-for-use carbon.
AHI has also been able to attract investment from some of the largest energy companies in Canada. Those companies include Emera, Encana, and Cenovus, and we have just recently attracted investment from the largest oil and gas producer in the world, which sees value in our carbon-saver technology.
In summary, I want to tell the committee that Atlantic Hydrogen would not be here today without the financial support of the federal government and programs like the SR and ED program, IRAP, SDTC, and the Atlantic Canada Opportunities Agency's Atlantic innovation fund. We would just not be able to exist without the support of those programs.
Do these programs make us more competitive with other countries? I think the answer is yes. Without them we would not be able to raise enough early stage high-risk capital to do this kind of innovation.
I think the real challenge now is stepping up and making our innovation initiatives, from a country perspective, even stronger than they are today.
I'll end it here and I would like to thank the committee.