If you’re wondering who owns “Big Oil,” chances are good
the answer is “you.” If you have a mutual fund account,
and 59 million U.S. households do, there’s a good chance
it invests in oil and natural gas stocks. If you have an
IRA or personal retirement account, and 46 million U.S.
households do, there’s a good chance it invests in energy
stocks. If you have a pension plan, and 61 million U.S.
households do, odds are it invests in oil and natural gas.
Contrary to popular belief, and what some politicians might
say, America’s oil companies aren’t owned just by a small
group of insiders. Only 2.9 percent of industry shares are
owned by corporate management. The rest is owned by
tens of millions of Americans, many of them middle class.
A strong oil and natural gas industry is a vital part
of the retirement security for millions of Americans.
State pension fund investments in oil and natural gas
companies are providing strong returns for teachers,
firefighters, police officers, and other public pension
retirees, according to a Sonecon study.3 Returns on oil
and natural gas assets in the top two state funds in 17
states, which include more than half of all the people covered
by state and local pension plans in the U.S., averaged $2.30 for each dollar invested compared to $1.68
for other assets in these funds from 2005 through 2013.
The oil and natural gas industry is a major contributor
to the health of these funds, many of which face huge
future payout obligations. While oil and natural gas stocks made up 4 percent of public employee pension plan holdings, they accounted for 8 percent of the returns, outperforming other investment classes by two-to-one. During good economic times, or challenging ones, oil and natural gas investments far outperformed other public pension holdings.
3Robert J. Shapiro and Nam D. Pham, “The Financial Contribution of Oil and Natural Gas Investments to Public Employee Pension Plans in Seventeen States, Fiscal Years
2005-2013,” SONECON, April 2015.