Mining and logging employment decreased by 8,000 in December—the industry's 12th consecutive month of employment decline, according to the U.S. Bureau of Labor Statistics.
Mining drives the employment trend in the sector and accounts for essentially all losses over the month and over the year (down 129,000).
The losses were concentrated in support activities for mining, according to the bureau.
The U.S. Energy Information Administration estimates U.S. coal production declined 11 percent in 2015—the largest year-to-year decline ever recorded—mainly due to a decrease in electric power sector consumption.
The slump occurred in all coal-producing regions, with the largest percentage decrease occurring in the Appalachian region.
It predicted U.S. coal production will continue to decline over the next two years, with production projected to slow down 4 percent this year and another 1 percent in 2017.
Coal stockpiles still are relatively high due to the loss in market share to lower-priced natural gas for power generation, according to the EIA, which expects coal consumption in the electric power sector to remain relatively unchanged in 2016. Other energy alternatives, including solar, continue to chip away at “King Coal's” predominance.
Lower mining costs, cheaper transportation costs and favorable exchange rates will continue to provide an advantage to mines in other major coal-exporting countries compared with U.S. producers over the next few years, according to the EIA.
Tim Easter, Yokohama Tire Corp.'s director of OTR sales, said the company's outlook for the mining industry in North America this year is “very soft.” He said coal “is down to levels I haven't seen in my 25 years in this business, mainly due to government regulations on coal-burning power plants.
“As for other ores being mined, such as gold, copper and silver, the price has dropped, causing mining to scale back production.”
U.S. crude oil production has been on the decline in the Lower 48 states, according to the EIA, driven by low oil prices that are partially offset by growing production in the Gulf of Mexico.
Total U.S. production began falling last May and is expected to continue on a downward slide through 2016 and level off in 2017. The expectation of reduced cash flows in 2016 and 2017 has prompted many drilling companies—as well as companies involved in shale oil production—to scale back investment programs, deferring major new undertakings until a sustained price recovery occurs, the EIA said in its Short-Term Energy Outlook report.
Natural gas production in the U.S. is expected to remain flat in 2016, according to the EIA, partly in response to lower prices and declining rig activity, and pick up slightly in 2017.
Increases in industrial sector consumption will drive total consumption growth in 2016 and 2017. The EIA predicts industrial sector consumption of natural gas will increase about 3.5 percent in 2016 and another 2.5 percent in 2017, as new projects in the fertilizer and chemicals sectors come online.
Conversely, the EIA predicts a slight decline in consumption of natural gas for power generation in 2016 and a 1.4 percent decrease in 2017.
Natural gas consumption in the residential and commercial sectors is projected to increase slightly over the next two years.
Total marketed production of natural gas hit a record high last September before declining the following month, according to EIA's survey data. Although demand will level off, production is expected to remain high, thus reducing demand for gas imports from Canada and increasing exports to Mexico.