Putting Earnings into Perspective|April 2012Page 1
If you’re wondering who owns “Big Oil,”chances are good the answer is “you.”If you have a mutual fund account, and52 million U.S. households do, there’s agood chance it invests in oil and naturalgas stocks. If you have an IRA or personalretirement account, and 49 million U.S.households do, there’s a good chanceit invests in energy stocks. If you havea pension plan, and 61 million U.S.households do, odds are it invests in oiland natural gas.Contrary to popular belief, and whatsome politicians might say, America’s oilcompanies aren’t owned just by a smallgroup of insiders. Only 2.8 percent ofindustry shares are owned by corporatemanagement. The rest is owned by tensof millions of Americans, many of themmiddle class.A strong oil and natural gas industry is avital part of the retirement security formillions of Americans. State pensionfund investments in oil and natural gas
When politicians talk abouttaxing “Big Oil” or takingtheir “record profits,” theyshould think about whothey really would behurting.
companies are providing strong returns forteachers, firefighters, police officers, andother public pension retirees, according toa Sonecon study.
Returns on oil andnatural gas assets in the top two statefunds in 17 states, which include almosthalf of all the people covered by state andlocal pension plans in the U.S., averaged42 cents for each dollar investedcompared to just 6 cents for other assetsin these funds from 2005 through 2009.The oil and natural gas industry is a majorcontributor to the health of these funds,many of which face huge future payoutobligations. Investments in the industryaccounted for 4.6 percent of the averagefund’s total assets while producing 15.7percent of total returns.
Who Owns America’s Oil and Natural Gas Companies,
SONECON, October 2011.
Who Owns “Big Oil?”
(Holdings of Oil Stocks, 2011)
Asset ManagementCompanies(Including MutualFunds)
Other Institutional Investors
Corporate Management of Oil Companies
1Robert J. Shapiro and Nam D. Pham, “The FinancialContribution of Oil and Natural Gas Company Investmentsto Major Public Pension Plans in Seventeen States, FiscalYears 2005-2009,” SONECON, June 2011.