Who Owns ‘Big Oil'? Not Who You Think

By Penny Starr | May 26, 2011 | 5:43pm EDT

John Felmy, chief economist with the American Petroleum Institute, spoke to economists on May 26, 2011 in Washington, D.C. about the oil and natural gas industry. (CNSNews.com/Penny Starr)

(CNSNews.com) -- Armed with a Power Point presentation to illustrate the state of American energy, John Felmy, chief economist at the American Petroleum Institute (API), said the majority of “big oil” and natural gas ownership is in good hands – the hands of the American people.

According to a report published in 2007 by Sonecon, an economic advisory firm that analyses U.S. markets and public policy, corporate management owns only 1.5 percent of the U.S. oil and natural gas industry.

The rest is owned by tens of millions of Americans through retirement accounts (14 percent) and pension funds (26 percent).  Mutual funds or other firms account for 29.5 percent ownership and individual investors own 23 percent of oil stock holdings.

Institutional investors hold the remaining 5 percent.

Felmy spoke on Thursday to the National Economists Club in Washington, D.C., about the range of conditions that affect the cost of gasoline at the pump. Some of those include decisions by the Organization of the Petroleum Exporting Countries, or OPEC, geo-political conditions, speculation, inventories, exchange rates and inflation and even the weather.

As for the profits made by U.S. oil and natural gas companies that have been cited by congressional Democrats as reason to end tax incentives for the industry, Felmy put those earnings in perspective when it comes to high gasoline prices.

“If you took 100 percent of the earnings of the oil industry, you’d save 30 cents on the gallon,” Felmy said.

(AP photo)

Moreover, compared to other American industries, the oil and natural gas industry’s profit margin are mid-range compared to other industries – 5.7 percent for each dollar, according to 2010 U.S. Census Bureau data.

Those industries making much higher net income/sales percentages on the dollar include beverage and tobacco products (21.7 percent), pharmaceuticals (19.4 percent), computer and peripheral equipment (17.3 percent) and chemicals (14.7 percent).

Felmy’s Power Point presentation included an image of a one dollar bill showing what American consumers are paying for with that dollar at the pump: 68 percent for crude oil and 18 percent on refining and retailing.

Fourteen percent of each dollar Americans spend at the pump goes to the federal government in the form of excise taxes.

CNSNews Reader,

The media are hard at work weaving a web of confusion, misinformation, and conspiracy surrounding the COVID-19 pandemic.

CNSNews covers the stories that the liberal media are afraid to touch. It drives the national debate through real, honest journalism—not by misrepresenting or ignoring the facts.

CNSNews has emerged as the conservative media’s lynchpin for original reporting, investigative reporting, and breaking news. We are part of the only organization purely dedicated to this critical mission and we need your help to fuel this fight.

Donate today to help CNSNews continue to report on topics that the liberal media refuse to touch. $25 a month goes a long way in the fight for a free and fair media.

And now, thanks to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, you can make up to a $300 gift to the 501(c)(3) non-profit organization of your choice and use it as a tax deduction on your 2020 taxes, even if you take the standard deduction on your returns.

— The CNSNews Team

DONATE

Connect

Sign up for our CNSNews Daily Newsletter to receive the latest news.