Over the last five years, average earnings for the oil and natural gas industry have been below the rest of the U.S. manufacturing industry, averaging about 4 cents for every dollar of sales compared to nearly 9 cents for manufacturing. By the second quarter of 2015, the average for the oil and gas industry fell to minus 21.9 cent on the dollar compared to 7.1 cents on the dollar for all U.S. manufacturing as the price collapse of crude oil took its toll on U.S. oil producers.

Like other industries, the oil and natural gas industry strives to maintain a healthy earnings capability. It does so to remain competitive and to benefit its millions of shareholders, across the country and in all walks of life. Healthy earnings also allow the industry to invest in innovative technologies that improve our environment and increase production to keep America going strong – even as it leads the search for newer technologies, and new sources of energy that will provide a more secure tomorrow.

Significant oil and gas discoveries that are announced today often result from investments begun by companies as far back as a decade or more ago. Since the year 2000, our industry invested over $3 trillion dollars in U.S. capital projects to meet the growing demand for oil and natural gas. The worldwide economic downturn, along with lower oil and natural gas prices and tight credit markets, caused some oil and natural gas producers to cut their capital budget plans in 2009. The Oil & Gas Journal estimates capital spending on U.S. projects will decline again in 2015 as the value of oil has fallen almost in half over the past year leaving many companies with less to invest.

Planning and investment cannot be turned on and off like a spigot, without entailing huge, potentially non-recoverable costs and delaying urgently needed projects. Because the industry must plan and operate under these long lead times, it is hypersensitive to minimizing risk over the course of its investments. It is crucial for an industry that must manage such huge risks that government provide an energy policy and tax framework that encourages investment, rather than discourages it.

Because the oil and natural gas industry is massive and requires huge investments, its earnings contribute greatly to the American economy and way of life. They allow companies to reinvest in the facilities, infrastructure and new technologies that keep America going strong well into the future while generating returns that meet shareholders’ expectations.

The oil and natural gas industry is probably one of the world’s largest industries. Its revenues are large, but so are its costs of providing consumers with the energy they need. Among those are the cost of finding and producing oil and natural gas and the costs of refining, distributing and marketing it.

These costs remain huge, regardless of whether earnings are high or low – as was the case throughout most of the 1990s and during other industry downturns. The return on investment (net income/net investment in place) for the oil and natural gas industry has been lower than the returns for the S&P industrials.

End-Use: America’s oil and natural gas companies are investing in efficiency improvements and alternatives and are advising companies in other industrial sectors how to use energy more efficiently. Through such end-use technologies as combined heat and power – using excess heat from refinery processes to produce additional energy – refiners are becoming more energy efficient, reducing both energy use and emissions.

Between 2000 and 2014 the industry invested $50 billion in end-use technologies, including advanced technology vehicles, efficiency improvements, combined heat and power, gas flare reduction technologies and carbon capture and sequestration. This represents approximately 30 percent of all the investments made in these technologies in North America.

Non-Hydrocarbon: We are a major provider of the green jobs that are in the news today. The oil and natural gas industry accounts for about one out of every six dollars of all the investments made in non-hydrocarbon fuels since 2000. The industry’s top investments are in wind and biofuels. Expenditures were also made in solar, geothermal, and landfill digester gas.

Fuel Substitution: The oil and natural gas industry has spent nearly $25 billion developing substitute and less carbon intensive fuels, such as liquefied natural gas and reducing fugitive gas emissions. This investment in fuel substitution technologies represents 51 percent of the total invested in this technology class.

The oil and natural gas industry is very capital intensive and devotes the largest share of its earnings to add new property, plant and equipment to its upstream and downstream operations.

When companies repurchase stock, they are supporting the equity value of the company. This in turn helps the owners of the companies – retirees, future retirees and millions of Americans who have invested their hard earned savings on the expectation of a reasonable return on their investment.

It is the responsibility of company officials to build value for shareholders; one way to do this is through stock repurchases. Earnings are also used for paying dividends which additionally benefit shareholders.

While the share of stock repurchases in the oil and gas industry has increased in recent years, it has averaged nearly half of that for the S&P industrial group. For the last 15 years, the oil and gas industry spent an average of 28 percent of net income on stock repurchases while the rate for the S&P industrials was 51 percent.

Over the past ten years U.S. oil and natural gas companies have paid considerably more in taxes than the average manufacturing company. From 2011 to 2015 income tax expenses (as a share of net income before income taxes) averaged 37 percent, compared to 25.8 percent for other S&P Industrial companies.

The U.S. oil and natural gas industry also pays the federal government significant rents, royalties and lease payments for production access – totaling more than $119 billion since 2000. In fact, U.S. oil and natural gas companies pay tens of millions of dollars to the federal government in both income taxes and production fees every single day.

U.S.-based oil and gas companies must structure their operations and invest substantial capital where the resource is found rather than where the best tax regime is located. As a result, U.S.-based oil and gas companies’ overseas income is often subject to very high effective tax rates. In addition, operations in the U.S. generate separate state and federal income tax obligations or payments, causing the industry to have an effective tax rate above the federal statutory rate of 35 percent.

Retailers are placed in a similar situation as they must naturally align their locations with customers, which can lead to higher effective tax rates. Other industries, however, may have greater flexibility on where they locate their physical capital or other operations to meet their customer needs. As a result, they may be able to establish activities in locations with lower effective tax rates.