"The BP Amoco acquisition of ARCO in its present form creates competitive concerns that, left unaddressed, would violate both federal and state antitrust law," Knowles said in an Oct. 31 letter to Robert Pitofsky, chairman of the FTC. "I urge the Federal Trade Commission to seek to enjoin the acquisition unless BP Amoco lifts the deadline they have instigated. Only with the lifting of the deadline can meaningful negotiations proceed."

The state of Alaska initiated negotiations with BP Amoco in September to determine whether an agreement on creating a competitive environment is possible. BP-Amoco filed papers with the FTC Nov. 1 that trigger a provision in the federal antitrust laws that forces the commission to make a decision on the proposed acquisition within 20 days. Once this provision has been triggered, the FTC, as a matter of practice, will not engage in substantive negotiations with the companies.

"I regard this action by the companies to preclude negotiation with federal authorities at this stage to be inconsistent with both the spirit and content of the negotiations between Alaska and BP Amoco. Therefore, I have instructed the attorney general to suspend negotiations with them," Knowles said. "BP Amoco can resolve this with a simple letter to the FTC requesting that it halt the federal timetable so the company can resume negotiations with the state. Otherwise, the state has no option but to seek to block the merger."