Last August, BP, one of the world’s largest oil companies, announced it was leaving Alaska and selling its assets in the state to Hilcorp, Alaska’s largest private operator. In some ways, the announcement was surprising. BP has been one of Alaska’s largest employers for more than 60 years, and its Alaskan energy operations were nearly synonymous with the oil giant. Still, from a pure business perspective, the divestment made sense, as Alaskan oil returns have been diminishing and BP’s stock has declined as oil prices have fallen. Its stock price rose after the announcement.
Aside from being one of Alaska’s largest employers, BP was also one of its largest philanthropists, donating $3–4 million a year for the past few years as well as providing significant employee volunteer support. With the firm’s exit, that support is expected to depart too, and, in a state with a limited corporate presence, Alaska’s nonprofit sector is expecting to need to re-vision itself.
“This could be a quality-of-life moment for us where we need to figure out what it is that we really value and stand for,” says Cassandra Stalzer of the United Way of Anchorage.
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Last week, BP announced it was donating its BP Energy Center, a 12,000-square-foot space that has been used for community gatherings and meetings, to the Alaska Community Foundation. In exchange, the foundation has committed to maintaining the space as a free meeting space for Alaska nonprofits for at least the next 20 years.
The Foundation will bear the continued operating costs of the building, but the building will retain its name as BP Energy Center.
While this is a generous gift from BP, the value of the meeting space will likely be dwarfed by the loss associated with BP’s overall divestment from the state.
Hilcorp spotlights community engagement, with “social responsibility” and “employee giving” as top headlines on its website. Even in an era where for-purpose business is in vogue, that’s still rare. Still, Hilcorp has fewer than 2,000 employees nationwide, while BP has nearly 75,000. Its sheer capacity to invest in Alaska beyond its core business operations will likely be more limited.
Companies aren’t generally expected to weigh their business decisions against the resultant impact on their community investments. In cases like this, where BP’s exit will have such a significant effect on the local economy and nonprofit community, however, more systemic attention needs to be paid to making sure critical community services are maintained and that the nonprofits that deliver them are given an “on ramp” to new resources that make them possible.—Danielle Holly