What do you think of when you think of oil and natural gas? Energy, of course - energy for America today and tomorrow. But there's more to it than just the fuel to fill our tanks and heat our homes. Oil and gas are securing Americans' retirements as well, filling public pension funds in dramatic fashion according to a new study.

The economic advisory firm Sonecon examined the performance of oil and natural gas investments in the two largest public pension funds in 17 states over five years (2005-2009) and found that those assets out performed other kinds of investments. And not just a little. Lead researcher Robert Shapiro:

"Our analysis found that the public pension funds examined here achieved five-year cumulative returns averaging 42 percent on their oil and natural gas investments, compared to five-year average returns of 6 percent for the same funds' non-oil and natural gas holdings."

You don't have to be an economist to absorb the study's significance: The health of U.S. oil and gas companies - 27 percent of whose shares are held by public pension funds - is translating into the health of Americans' retirements.

Shapiro, a former undersecretary of commerce under President Clinton, and fellow researcher Nam D. Pham studied public pension funds covering 8.9 million current and former workers, representing a majority of all U.S. public state and local employees, including teachers.

The study included large states (California, Florida, New York, Pennsylvania), relatively small states (New Hampshire, Indiana, North Dakota) and those in between (Illinois, Michigan, Ohio and others). Results from four of the states (Michigan, Missouri, Ohio and Pennsylvania) were the basis of a preliminary version of the study released in April. Shapiro:

"We found that over the period from FY 2005 to FY 2009, spanning years of vigorous expansion and deep recession, these funds' oil and natural gas assets accounted for an average of 4.6 percent of their total assets and contributed 15.7 percent of their total returns. Therefore, the share of these funds' combined returns attributable to their oil and natural gas assets was 3.4 times greater than those assets' share of the funds' total assets."

More detail:

The two largest pension funds in the 17 states hold combined assets of $1,115.6 billion, including $51 billion in oil and natural gas company assets (4.6 of the total).

• Oil and natural gas investments outperformed other investments 7 to 1, based on their 42 percent average, five-year return, compared to a 6 percent average return over the same period from other holdings. Expressed another way, for each dollar invested, oil and gas holdings returned an average of $1.42, compared with a return of $1.06 from investments in other assets.

• From state to state, the five-year returns on the plans' oil and natural gas investments ranged from 40 percent to 49 percent, compared to five-year returns of zero to 17 percent for the same funds' non-oil and gas investments.

• Across the 17 states the cumulative gains from oil and natural gas investments by public pension funds totaled $71.6 billion over fiscal years 2005-2008, or 9.5 percent of the funds' total gains of $681.4 billion, despite the fact those assets only account for an average of 3.8 percent of the funds' total assets.

"A healthy oil and natural gas industry is part of a robust, economically strong America," said API's Kyle Isakower, vice president of regulatory and economic policy. "The United States has more oil and natural gas reserves than any other country in the world. We need to encourage investment by our companies to develop more of our own resources here at home. This will enable them to continue to perform well financially, providing solid capital growth and the dividends necessary for retirees and all other Americans who share company ownership to feel secure."