Who Owns America’s Oil and Natural Gas Companies? Not the Wealthy Few, Analysis Finds

November 7, 2011 - 6:27 PM
gasoline prices, gas station

Fill 'er up in Philadelphia. (AP File Photo/Matt Rourke)

(CNSNews.com) – Less than three percent of shares in 173 publicly-traded, U.S.-based oil and natural gas companies are owned by corporate management, contrary to the perception that a very small number of wealthy people are the major beneficiaries.

An analysis released last month by the economic advisory firm Sonecon found that corporate management owns 2.8 percent of shares in those companies, while almost half – 48.9 percent – are owned by individuals, either through pension funds (31.2 percent) or Individual Retirement Accounts (17.7 percent).

The remaining shares are owned by asset management companies – mutual funds – which account for 20.6 percent, and by institutional investors (6.6 percent).

Co-authored by Sonecon co-founder and chairman Robert Shapiro, former undersecretary of commerce for economic affairs in the Bill Clinton administration, the analysis is based on data from the Security and Exchange Commission as of October 2011.

“Broad ownership of public corporations, economic researchers find, yields substantial economic and social benefits,” the analysis states, noting as perhaps the greatest benefit the fact that ownership of that type “promotes social progress by enabling large numbers of people to benefit from the strong returns generated in an efficient, productive and growing economy.”

“These dynamics are especially pertinent today, given the growing public perception that most of the benefits produced by the American economy flow to a very small number of people,” it says.

The American Petroleum Institute, the largest trade group for the oil and natural gas industry, commissioned the report and announced its release during a conference call in late October.

“In 2010, the oil and natural gas industry directly contributed over $470 billion to the U.S. economy in spending, wages and dividends,” said API vice president for regulatory and economic policy Kyle Isakower. “The dividends alone totaled about $35 billion and went to stockholders of these publicly-traded companies.”

“The $35 billion in dividends as well as gains in stock prices of oil and gas companies are directly benefiting the tens of millions of Americans who own oil and gas company stock,” Isakower added.

The analysis divided the industry into three segments:  Integrated oil and natural gas companies engaged in exploration, production, refining and transportation; non-integrated oil and natural gas companies engaged in exploration, refining and storage and transportation of refined products; and oil and natural gas services companies engaged in manufacturing drilling rigs and equipment and providing industry services such as drilling, evaluation and completion of wells.

The report shows that corporate management only owns 0.5 percent of the shares of integrated oil and natural gas companies (which include Chevron, Exxon Mobil Corp. and ConocoPhillips); less than six percent of non-integrated oil and natural gas companies; and four percent of natural oil and gas service companies.

The report includes the names of all 173 publicly-traded oil and natural gas companies used in the analysis.