Cara Ellison Corporation announced Friday that a subsidiary of the company’s development company – Cara Ellison Exploration and Production -has purchased Alberta, Canada. The company has increasingly poured development dollars into the Alberta oilsands. Last year, the company purchased two smaller competitors, and bought majority stakes in over fifteen projects. “The oilsands are a very important part of our strategy going forward,” said president Tom Marks in a conference call with analysts earlier this year.
Still, the purchase of the entirety of mineral, land, and energy rights across a vast swath of Canada has created consternation among competitors and outrage among some Canadians who believe the aggressive strategy is bad for the environment and even worse for Canadian national identity. Numerous officials of the Alberta government spoke on the condition of anonymity because they acknowledge they must have a working relationship with the company for the foreseeable future, and the response was universally critical. “We should… buy America and see how they like it!” sputtered one overwhelmed minister. But the company was quick to address fears in a statement on Friday. “We have no interest in disrupting the normal lives of Canadians,” said Ellison in a conference call with analysts. “They won’t even know we’re there.”
In addition to purchasing Alberta, Cara Ellison Corp. has also been active in attempting to develop the New Albany Shale which spans Illinois, Indiana and Kentucky.
The New Albany Shale holds 160 trillion cubic feet of natural gas, of which 1.9 Tcf-19.2 Tcf is considered technically recoverable. Production from the New Albany shale has been stymied by technical challenges resulting from its low permeability and low reservoir pressure, as well as high drilling and completion costs. But Ellison is excited about the advanced technologies and cost savings realized from horizontal drilling and the proximity of production to points of use. “We believe we’ve discovered a way to overcome geology,” Ellison says. “The response of sealed natural fractures – which is a pathway for natural gas – to hydraulic fracturing has been very positive in at least the Clegg Creek Member. But we’re actually moving away to a deeper basin, where our engineers are testing a new method of simply creating artificial ruptures using small nuclear devices.”
Research shows that in 2003, a group of Ellison’s engineers were granted a patent for a drill that uses small nuclear shocks to bore into the earth. Despite the patent, the company says they’ve never practically tested the device – until recently. The result was a 3.2 earthquake felt in Chicago. The company says it was just a “coincidence of unfortunate timing” and that the device did not “directly cause the quake”, and adds “that’s what testing is for, to see what happens.”
Despite the nonchalance of the executives, the engineers actually using the device are downright excited by its potential application. Bill Harris, the lead production engineer for the project, becomes ebullient at the possibility that not only natural gas might tapped in these resource-rich shales, but that “other energy sources as well.”
Asked if the risks of a nuclear accident outweigh the potential for more natural gas, Harris does not hesitate to point out that if the company can retrieve the trillions of cubic feet of gas in the New Albany Shale, it can more than adequately compensate anyone hurt from a nuclear incident.
Exuberance aside, serious issues have risen. In June, Cara Ellison was photographed by the New York Post dining with several administration officials from the National Nuclear Security Administration as well as the SEC. One of those executives was dismissed after President Obama said it was critical to avoid even the appearance of endorsing Cara Ellison’s strategy. Ellison, who is presently under indictment for 751 counts of bank fraud, securities fraud, conspiracy, insider trading, bribery, and blackmail, flatly denies that there was anything nefarious in the meeting. When asked for particulars, Ms. Ellison referred this reporter to the company’s director of communications, Perry Kanaly, who did not answer repeated phone calls and emails for comment.