Pensions profit from oil companies' surge

Seal of OhioImage via Wikipedia
Houston Chronicle:

With several major oil companies poised to report big first-quarter profits this week, the oil industry's largest trade group on Monday rolled out a study revealing that those gains translate to big benefits for teachers, firefighters and other state pensioners.

According to the report commissioned by the American Petroleum Institute, oil and gas stocks were less than 4 percent of the holdings in public pension funds in Michigan, Missouri, Ohio and Pennsylvania, but generated 8.6 percent of the funds' returns from 2005 to 2008.

The report is an interim version of a study of pension funds in 17 states set to be issued later this year. The economic advisory firm that conducted the analysis, Sonecon, said it used those four initial states to develop the methodology for the broader review.

The report concluded that for the two biggest pension funds in each state - for school employees and state government workers - returns on investments in oil and natural gas from 2005 to 2009 averaged 46.5 percent, compared to 13 percent for all other assets.

That means that each dollar invested by the funds in oil and natural gas stocks in 2005 was worth almost $1.47 on average by 2009, while every dollar invested in the rest of the portfolio grew to just $1.13.

...
Just think what the US government could be hauling in if the Obama administration would get out of the way of energy development and let the industry drill offshore of all three coasts and Alaska as well as government owned shale deposits out west.

The royalty revenue alone would help significantly reduce the deficit.

While the study makes sense for fighting off the demagoguery of the anti energy left, it also make sense from the perspective of states and other political subdivisions struggling to meet pension obligations.
Related articles
Enhanced by Zemanta

Comments

Post a Comment

Popular posts from this blog

Should Republicans go ahead and add Supreme Court Justices to head off Democrats

Washington Post: Some Democrats eye adding more justices to the Supreme Court to change its ideological bent The once-remote idea has gained the attention of liberals angered by the GOP push to remake the federal courts. Probably the easy way to defeat this court-packing scheme is for Trump to propose doing the same thing now.  It would lead to Democrat denunciations and claims that it would be wrong, thereby blowing up any attempt by them in the unfortunate event of Democrats winning a presidential election.
Read more

29 % of companies say they are unlikely to keep insurance after Obamacare

Conn Carroll: A new survey of 368 midsize to large companies found that 29% of them are considering terminating their active employee health care plans when Obamacare is full implemented in 2014. Only 71% of employers surveyed said they did not expect to drop their health coverage, while 20% said they did not know and 9% said they were planning to exit. The latest survey, conducted by Towers Watson, echoes an ealier survey by McKinsey & Co. finding that 30% of private-sector employers were planning to drop their employee health insurance coverage by 2014. When the Congressional Budget Office crunched Obamacare's spending numbers, they estimated that only 7% of employees currently covered by employer-sponsored plans would lose their plans. ... This means the cost of the health care fiasco will be hundreds of billions more than estimated by the CBO and Congressional Democrat. It is also clear that Obama's pledge that you could keep your health care plan if you wanted t...
Read more

Is the F-35 obsolete?

Headline USA: Pentagon Fires Back after Musk Calls Its Most Expensive Project ‘Obsolete’ 'Yeah, as I'm sure you can appreciate, Mr. Musk is, currently, a private citizen, I'm not going to make any comments about what a private citizen may have to say about the F-35....'   ... ... Drones appear to be replacing jets for many operations.  The Russia-Ukraine war is an example of that.  Drones are often hard to detect and can be used for intelligence operations as well as for attacking enemy targets.  It would not surprise me to see drones engaging other drones in combat.  They also cost much less than manned fighters.  
Read more