Kyle Isakower's remarks at press conference call on Sonecon study "Who Owns Big Oil"
Press Conference Call on Sonecon “Who Owns Big Oil”
Kyle Isakower
API Vice President, Regulatory and Economic Policy
Tuesday, October 21, 2014
Opening statement, as prepared for delivery:
Good morning everyone.
As the oil and natural gas industry reports its earnings next week, we are releasing a new API‐commissioned study from the consulting firm Sonecon. The study tells us who owns America's oil and natural gas companies – and thus who benefits from company earnings.
The principal takeaway of this study is this: When oil and natural gas companies do well, so do millions of their owners all across America. It concludes that a large proportion of the benefits of oil and gas company stock ownership goes to middle class Americans.
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.
The study finds that in 2014, public and private pension and retirement plans, including 401(k)s and IRAs, hold 46.8 percent of all the shares of U.S. oil and natural gas companies. Individual investors own 18.7 percent, and asset management companies including mutual funds hold 24.7 percent of shares. Institutional investors like banks, insurance companies, foundations and endowments hold 6.9 percent of shares.
Together, these groups hold 97 percent of oil and gas industry stock. By comparison, the officers and board members of U.S. oil and gas companies own less than 3 percent of total shares.
A previous study by Sonecon found strong returns for teachers, firefighters, police officers and other public pension retirees. According to the study, oil and natural gas stocks comprised an average 4.6 percent of state pension fund assets, yet provided 15.7 percent of the returns—a ratio of 3.4 to 1.
For college and university endowments, a 2012 Sonecon study found that 2.1 percent of endowments in fiscal year 2010-2011 were oil and gas stock, which generated 5.7 percent of all endowment gains.
The U.S. oil and natural gas industry is a major part of our nation's economy. It supports 9.8 million jobs and pays more taxes than any other industry and at higher effective rates.
As this new Sonecon study shows, it also benefits millions of Americans who are its true owners.
And in large part, the owners of America's oil and natural gas companies are retirees or middle class Americans saving for retirement.
Rob Shapiro will now talk to you further about how the study was conducted, then we'll both be available to answer your questions.