Who’s doubling down on America? Companies in the U.S. oil and natural gas industry, which owned five of the top 11 spots on the Progressive Policy Institute’s list of the top 25 nonfinancial U.S.-based companies, ranked by their 2011 capital spending inside this country:
Kudos to PPI for compiling this interesting list. ExxonMobil ranked No. 3 with $11.7 billion in U.S. capital expenditures and was joined on the list by No. 6 Occidental Petroleum ($6.2 billion), No. 7 ConocoPhillips ($5.6 billion), No. 9 Chevron ($4.8 billion) and No. 11 Hess ($4.4 billion).
It’s more than a novelty or a talking point. The $136.2 billion in capital spending by these companies was a direct input into the U.S. economy. PPI:
"Domestic business investment generates growth, raises productivity, increases wages and creates jobs for Americans. It can span the gamut from new office buildings to improved production lines to faster communications equipment to deeper natural gas wells."
Indeed. America’s oil and natural gas companies support 9.2 million jobs and contributed $476 billion to the economy in 2010. PPI calls the top 25 companies “Investment Heroes” for plowing dollars into growth and job creation. PPI’s overarching point is that more capital investment is needed to get the economy rolling again. The key is unlocking those private dollars.
Though it has invested a lot already, the oil and natural gas industry is willing to do much more. With greater access to U.S. natural resources, onshore and offshore, the industry could create 1.4 million jobs and generate $800 billion in revenue for governments. This will require policy changes – including a commonsense regulatory structure and a positive, proactive approach to developing America’s energy assets. As PPI notes:
"Multiple layers of regulation, even if well-intentioned, have the impact of discouraging capital investment and innovation."
Former Shell president John Hofmeister talked about that very point at an energy forum this week hosted by the New America Foundation. Hofmeister said government must decide whether it will be an “enabler of prosperity” or a “disabler of markets”:
“I think if I’m heading an American oil company looking at use of capital in America, I would be very careful, I would be selective. And I think that’s what we’re seeing.”
The good news is that despite the current investment climate, America’s oil and natural gas companies are investing in America – and can be an engine that drives the entire economy.