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Industry Investments

The oil and natural gas industry is one of the world's largest industries. Its revenues are large, as are the costs of providing consumers with the energy they need. Among those costs are finding and producing oil and natural gas, refining, distributing and marketing those refined products. The energy Americans consume today is brought to us by investments made years or even decades ago. Today's oil and natural gas industry earnings are invested in new technology, new production and environment and product quality improvements to meet tomorrow's energy needs. The industry's earnings are very much in line with other industries, and often they are lower. See below for more information.

The Financial Returns from Oil and Natural Gas Company Stocks Held by American College and University Endowments

This December 2012 Sonecon study examines the performance of American college and university endowments. While these endowments vary in size and the public or private status of the institutions, the most important factor affecting their financial performance is their asset allocation. This analysis also revealed one consistent element: Over all three periods, U.S. shares of oil and natural gas companies outperformed both the overall performance of these endowments and every other asset class examined here. We find that for at least the last decade, investments by college and university endowments in U.S. shares of oil and natural gas companies produced the highest returns for those endowments.

Who Owns America's Oil and Natural Gas Companies?

This October 2011 Sonecon report shows that the ownership of the U.S. oil and natural gas industry is broadly distributed, with only very small portions of its shares held by corporate management. Across all U.S.-based oil and natural gas companies, less than 3 percent of outstanding shares are held by the officers and board members of those companies. By contrast, nearly 50 percent of those shares are held by public and private pension plans, including 401(k)s and IRAs. In addition, an additional 20 percent of those shares are owned by individual investors who manage their own holdings (and are not corporate management). The remaining 27 percent of shares are held by financial institutions and asset management companies.

The Financial Contribution of Oil and Natural Gas Company Investments To Major Public Pension Plans in Seventeen States, Fiscal Years 2005 – 2009

This June 2011 Sonecon report examines the financial impact of investments in oil and natural gas companies on the overall performance of the two largest public employee pension funds in each of seventeen states. The data show these investments strongly out-performed the other assets of those funds.

Oil and natural gas companies provide strong support for public pension funds

Oil and natural gas company holdings in state pension funds are providing disproportionately strong returns for retirees, according to a new study by Sonecon, commissioned by API. While oil and natural gas stocks make up an average of 3.9 percent of public pension holdings in four key states, they accounted for an average of 8.6 percent of the returns in these accounts from 2005 to 2008. (April 2011 - Sonecon)

Investment and Other Uses of Cash Flow by the Oil Industry

Today's oil and natural gas industry earnings are invested in new technology, new production and environment and product quality improvements to meet tomorrow's energy needs. This new Ernst & Young study shows the five major oil companies had $765 billion of new investment between 1992 and 2006, compared to net income of $662 billion during the same period. The industry overall, which includes 57 of the largest U.S. oil and natural gas companies, had new investments of $1.25 trillion over the same period, compared to net income of $900 billion and cash flows of $1.77 trillion. Download the complete report below (Published May 2007) .

The Economic Impact of a Windfall Profits Tax On Federal, State and Local Public Employee Pension Funds

This study analyzes in detail the economic impact of the proposed "Windfall Profits Rebate Act of 2005" on federal, state and local public employee pension funds, which hold a relatively large share of their assets in corporate stocks, including shares in domestic oil and gas companies. This makes these pension plans especially vulnerable to the costs of a windfall profits tax.