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BP merger pushed too hard by governor

Posted: Monday, February 07, 2000

The following editorial appeared in Thursday's Anchorage Daily News:

The Federal Trade Commission voted 3-2 Wednesday to oppose the BP Amoco takeover of Atlantic Richfield Co. The commissioners now are seeking a court injunction to prevent the deal.

The commission is worried about the influence the new corporate giant would have on gas prices on the West Coast. A press release also said that on the North Slope after a merger, BP would control ``a dominant share of exploration and development and lessen competition'' with ``substantial, timely and effective'' entry into Alaska by new firms an unlikely prospect.

In other words, the FTC rejected the potential effectiveness of the development charter the two oil companies signed with Gov. Tony Knowles.

BP certainly has the resources and the will to take on the federal government, yet the future is murky. A court case could take months. The merging companies could decide to go their own ways and put an end to the frustration of fighting the FTC. A new divestiture deal could be worked out between the government and the companies.

The past, however, is clear. The merger was handled badly by Gov. Knowles and the Legislature.

A failure of leadership produced a lost opportunity for Alaskans.

Instead of developing a consensus position on what is best for their state, Alaskans appeared before the FTC fractured and discordant.

Gov. Knowles partnered with the oil industry, and once he had his charter, he shoved it down Alaskans' throats. While the governor obtained significant concessions, if not enough for the FTC, he failed to create an open, informed public process in which Alaskans could explore and debate the merger.

His mantra was ``Hurry up, hurry up.'' The merger had to be completed soon to put Alaskans back to work.

The hollowness of his haste is now apparent to all. As is its divisiveness. The governor had a segment of Alaska behind him, particularly those attached to the oil industry, but he was opposed by many accomplished citizens, including three former governors. Doubt eventually echoed throughout the state.

The Legislature, meanwhile, repeatedly missed opportunities to master the issues and take a stand. The House and Senate failed to respond to the merger during the 1999 session in any constructive way.

Over the interim, the Joint Special Committee on Mergers engaged outstanding consultants to review the issues. These consultants produced reports and offered testimony that gave the lawmakers an informed view of the history of oil in Alaska, the potential impact of a dominant firm on the North Slope, and the future of competition.

But when it came to speaking publicly - to making their collective views known to the world - silence prevailed. Individual lawmakers made their views known to the FTC, but the Legislature as a whole never took a position.

For Alaskans, the FTC's open opposition to the merger means further uncertainty and delay. Many people, especially in the oil industry, have been left to shake their heads, wondering what is next - and wondering what might have been if the state's leaders had given us all a sound public process.



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