Berkowitz Plan for BP Sale of Alaska AssetsEthan Berkowitz is releasing the following statement concerning reports that BP is considering selling Alaska assets in the wake of the Gulf spill:
“It’s started….that giant sucking sound from Alaska’s economy.
MSNBC.com and the London Times are reporting that BP is in discussions to sell its Alaska assets to cover the costs of its spill in the Gulf of Mexico. Just over a month ago I predicted this was a possibility (see http://www.adn.com/2010/06/10/1317732/plan-puts-energy-future-in-alaskan.html).
At the time I also asked publicly: 'What is Alaska’s plan for a post BP reality?'
It’s been more than a month and we’ve heard nothing from the Parnell Administration on its post BP plan for Alaska. This is puzzling, but not surprising, given Sean Parnell’s reputation for ducking tough issues.
Oil production accounts for 90% of Alaska’s budget dollars. Taxes and royalties from production in and around Prudhoe Bay pay for education, roads, health care, public safety and other essential items across the state. BP is the seventh largest private sector employer in Alaska, not to mention the jobs that are derived and sustained to support the industry, the impact those jobs have on the housing market and the overall impact oil patch jobs have on the Alaska economy.
While it may seem like the sale of BP’s assets would bring new blood to our economy, we need to watch that we aren’t simply shuffling the deck chairs by swapping one company for another. There is no “net” new activity by having BP simply sell its assets to another party. What has Alaska accomplished with that? Certainly not the investment, innovation, competition and job creation we want to see.
And, according to the published reports, there is a chance Exxon and Conoco Philips hold first rights of refusal on the sale of any BP assets. That would be an even bigger disaster. We need more players in the oil patch, not more concentration of power by the biggest players in the state.
All this is met with still more silence from Sean Parnell. Even Mississippi Governor Haley Barbour, a former national RNC Chairman, commented on Fox News’ 'On the Record with Greta Van Susteren' about the problems facing BP in the Gulf and Alaska as a result of the Gulf spill. Governor Barbour noted the challenges BP would have producing in Alaska as its liabilities in the Gulf mounted. In echoing my comments, Gov. Barbour was right while Sean Parnell was silent.
What we need is real leadership -- a change in the tax code to actually encourage 'net' new investment and participation in Alaska and jobs for Alaskans. It also means Alaska must be prepared to go its own way to get a pipeline built. I pledge to take these steps if elected Governor.
And what about that 'pending' BP sale? The last time we saw consolidation in the Alaska oil patch it involved BP buying the Arco assets. We heard lots of promises of new investment, new jobs and new production at that time. But what did Alaska actually get? Fewer jobs in Alaska, less production and more oil spills on the Slope from a lack of…..you guessed it – investment and oversight.
We cannot let another bad merger or acquisition deal go through in Alaska’s oil patch. It will bring only bad news for Alaska down the road.
When I am elected Governor, I pledge to use any power vested in the State government to hold up any sale of a BP asset until I know Alaska’s interests will be protected in the deal. Any such deal would have to mean no consolidation in the oil patch by Conoco Philips or Exxon, and true commitments for increased production and long term jobs for Alaskans by the purchaser of the BP assets, including committing the BP gas towards a new gas pipeline that my Administration will pursue.
Now is the time to plan, leverage and secure the best possible future for Alaska.”
Posted: July 12, 2010
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