As prepared for delivery
Press briefing teleconference on Sonecon study
John Felmy, API senior economist
January 23, 2013
Opening statement:
Good morning everyone. Every quarter we talk to reporters and others about our industry’s earnings – how they’re in line (or lower) than other manufacturers, how they’re large as a total dollar figure because these are large multinational companies that compete on a global stage with foreign nationally-owned oil and natural gas companies, and how these earnings represent good news for millions of Americans.
They’re good news for America because Americans are the true owners of our oil and natural gas companies. They own 97 percent of company stock, much in IRAs and 401ks, as a Sonecon study completed for us in 2011 has detailed. The principal takeaway of this 2011 study is this: When oil and natural gas companies do well, so do millions of their owners all across America.
A second 2011 study by Sonecon delved further into the ownership issue and what oil and natural gas company stock contributes to the nation. It showed that state pension funds also were among the owners of oil and natural gas companies. Moreover, it found that in the five largest public employee pension funds in 17 states industry stocks provided seven times the returns per-dollar-invested as the other fund investments.
And late last year, a third Sonecon study explored college and university ownership of oil and natural gas company stock. It found that for more than a decade America’s colleges and universities have enjoyed strong returns from their investments in America’s oil and natural gas companies.
Indeed, university and college investments in oil and gas firms outperformed the endowments as a whole and outperformed every other asset class examined in their endowments.
The study also found that while 2.1 percent of endowments in fiscal year 2010-2011 were oil and gas stock, that 2.1 percent generated 5.7 percent of all endowment gains.
In fact, according to the study, during that period oil and natural gas stocks achieved returns of almost 53 percent, far better than the endowments’ performance as a whole and the performance of the S&P 500.
The three Sonecon studies tell just part of the story of the industry’s important role in the U.S. economy and how it contributes to the financial wellbeing of the American people.
In 2011, for example, while our industry continued to support more than 9 million jobs, it also directly provided $545 billion to the economy, according to a report by PriceWaterhouseCoopers.
That included $224 billion in wages, $292 billion in capital investment, and $29 billion in cash dividends to stockholders of publicly traded oil and natural gas companies.
Thanks. Now, Dr. Shapiro will talk for a few minutes about Sonecon’s analysis of college and university holdings of oil and natural gas company stock. Then, we’ll both be happy to answer your questions about any of the Sonecon studies. Carlton can also send you any of the studies you may not have.