Energy & Economy
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People tell me the oil and natural gas industry’s job projections are misleading. How do they arrive at those numbers?
Answer:
The oil and natural gas industry currently supports 5.3 percent of total U.S. employment. To put this in perspective, the number of jobs supported by the upstream oil and natural gas industry segment alone in 2010—2.2 million—is larger than the populations of 15 states. The Wood Mackenzie energy consulting firm reported in September 2011 that, with the right set of pro-energy development policies in place, the oil and natural gas industry could create 1 million new U.S. jobs by 2018. This estimate represents direct industry jobs, as well as indirect and induced ones. It’s the “indirect and induced” calculation that critics say is misleading. In reality, “induced” jobs are hardly a seldom-used category. Virtually every employment study uses induced jobs to estimate employment impacts.
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How much do oil companies pay to shareholders and who are these shareholders?
Answer:
Analysis of public data, independent research and corporate annual reports found that the oil and natural gas industry paid out approximately $35 billion in dividends distributed to American shareholders in 2010 alone.
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Why do oil companies repurchase stocks?
Answer:
The oil and natural gas industry is a capital intensive industry and devotes the largest share of its earnings to adding new property and equipment to its upstream and downstream operations. It also repurchases stock as a means of further adding value for its shareholders. As with many other industries and companies, it is the responsibility of company officials to build value for shareholders through stock repurchases and paying dividends.
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How much does the oil and natural gas industry contribute to our gross domestic product (GDP)?
Answer:
The oil and natural gas industry’s impact on the U.S. economy is significant, supporting nearly 9.2 million American jobs and providing $1.1 trillion in U.S. economic activity—or 7.7 percent of America’s total gross domestic product (GDP) through spending and investments supporting U.S. manufacturing, transportation, technology and accounting services, among others. The shale revolution alone contributed more than $76 billion to U.S. GDP in 2010, and research shows this could triple to $231 billion in 2035.
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How would expanding access to domestic energy development help our struggling economy?
Answer:
Given the critical role of oil and natural gas in driving economic growth and improving the standard of living here at home and around the world, we need policies that encourage expanded domestic oil and natural gas production. More domestic production would raise government revenues, boost the economy, strengthen U.S. energy security and create much-needed jobs at a time when 13 million Americans are unemployed.
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How much do oil and natural gas companies spend on low- or zero-carbon technologies, and how does that compare to the rest of private industry and the federal government?
Answer:
Since 2000, the U.S. oil and natural gas industry has invested more than $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives and renewables—an amount more than two and a half times the 2009 federal stimulus package, or roughly $6,400 for each American citizen.
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How can oil companies claim that increased gas prices are only the result of higher crude oil prices and government taxes when they continue to have record profits year after year?
Answer:
While gas prices have fluctuated, oil and natural gas earnings have remained in line with the average of other major U.S. manufacturing industries. This fact is not well understood, however, in part because reports usually focus on only half the story – the profits that are earned. Profits reflect the size of an industry, but they’re not necessarily a good reflection of financial performance. Profit margins, or earnings per dollar of sales (measured as net income divided by sales), provide one useful way to compare financial performance among industries of all sizes. The latest published data for the fourth quarter of 2011 shows the oil and natural gas industry earned 6.2 cents for every dollar of sales in comparison with all manufacturing, which earned 8.3 cents for every dollar of sales.
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What research and development is the oil industry doing into renewable energies and what is their plan to cut carbon emissions?
Answer:
To start, oil and natural gas companies are closely managing their own energy use. One strategy involves heat and power technology that turns waste heat into energy, reducing energy consumption and emissions. The most recent data from the U.S. Energy Information Administration show that CO2 greenhouse emissions from U.S. industry, including oil and natural gas companies, have declined and were actually below 1990 levels.
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