US Mining and Energy Extraction Sector

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 22,472 mining and energy extraction establishments in the US remove natural occurring minerals, metals, crude petroleum and natural gas from the earth. Establishments also provide support activities such as surveying and mapping, site preparation, drilling and blasting, well casing and mine wall shoring, inspection, maintenance and cleaning, demolition and waste removal, and land reclamation.

Opposition to Development

Companies may face resistance from area residents and lawmakers regarding the proposal to start a new mining or extraction project.

Environmental Compliance

The mining and energy extraction sector is directly impacted by a wide range of environmental regulations that affect production site permitting, operation, and reclamation.

Industry size & Structure

The mining and energy extraction sector comprises 22,472 establishments that employ 565,000 workers and generate about $597 billion in annual revenue, according to government sources.

    • The mining and energy extraction sector represents 1.9% of the nation's Gross Domestic Product (GDP) and employs less than 1% of the country's workers.
    • The sector is concentrated: the 20 largest mining and energy extraction firms represent 34% of revenue. The 50 largest firms represent 50% of revenue.
    • In addition to employer establishments, the mining and energy extraction sector has 67,750 owner-operated establishments with no employees. The majority of nonemployer establishments are in the subsectors of oil and gas extraction (65%) and support services for mining (27%). The owners of nonemployer establishments typically perform the work or subcontract labor for large or complex jobs.
    • The mining and energy extraction sector shed 12,000 establishments in 2021, which equals about 39% of existing establishments, according to the Bureau of Labor Statistics. However, the sector added about 12,000 new establishments, which is equivalent to 39% of existing establishments. As a result, the sector had a growth rate of 0%.
    • The mining and energy extraction sector is forecast to grow its employment base by 12.3% overall in 2021-2031, which is much higher than the national average of 5.3% for all jobs, according to the Bureau of Labor Statistics.
                                    Industry Forecast
                                    US Mining and Energy Extraction Sector Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    May 14, 2024 - Job Growth Flat Amid Rising Wages
                                    • Employment by mining, quarrying, and oil and gas extraction firms was relatively unchanged (up less than 1%) in April compared to a year ago, according to the latest US Bureau of Labor Statistics data. Average wages for nonsupervisory employees of mining, quarrying, and oil and gas extraction firms increased nearly 7% in March year over year to $36.62 per hour after peaking at above $37 per hour in February, BLS data show. Mining was among the service sectors that experienced growth in April as measured by the Institute for Supply Management’s Services PMI, a monthly gauge of activity based on data compiled monthly from purchasing and supply executives. Crude oil production and natural gas extraction both declined in February versus the previous month.
                                    • Oil and gas extraction companies are expanding offshore drilling operations in the Gulf of Mexico in part because doing so releases fewer greenhouse gases than drilling on land, The New York Times reported in May. Industry executives are betting on sustained demand for oil and gas for years to come and argue that offshore drilling is better for the climate than drilling on land because offshore operations emit far less of the greenhouse gases than producing the same amount of oil and gas on land, according to NYT. The greenhouse gas emissions associated with extracting a barrel of oil from the Gulf of Mexico are as much as a third lower than emissions from producing a barrel of oil from fields on US soil, according to a report published last year by the National Ocean Industries Association, an industry group for offshore oil, gas, and wind businesses, cited by NYT.
                                    • A federal appellate court in February delivered a victory for the mining sector when it vacated a lower court ruling that froze new coal leases on public lands, Politico reports. In an unsigned decision, the 9th US Circuit Court of Appeals vacated a lower court judge’s decision in 2022 that reinstated an Obama-era moratorium on reviewing most new coal leasing applications, according to Politico. The National Mining Association (NMA) applauded the ruling stating the court agreed with the NMA, as well as the states of Wyoming and Montana, that the case should have ended once the challenged Department of Interior Secretarial Order was rescinded in 2021. Rich Nolan, NMA president and CEO, said the lower court’s earlier decision “manufactured a nationwide injunction against federal coal leasing unless and until the Bureau of Land Management completed an unnecessary programmatic environmental impact statement.”
                                    • The shortage of mining engineers in the US could be lethal for domestic mining and the economy, Real Clear Energy warns. Data from the Society for Mining and Metallurgy shows enrollment in mining engineering programs has fallen 45% since 2015, along with the number of US schools with mining programs – from a high of 25 in 1982 to 14 in 2023, with only six offering metallurgical mining. Just 327 degrees were awarded in 2020 in mining and mineral engineering at US schools, a 39% net drop in the number of graduates since 2016. By contrast, China today has 44 mining schools graduating more than 5,000 students annually. Moreover, over half of the domestic mining workforce -- engineers and miners --- will retire and must be replaced by 2029. Failure to train more mining engineers creates a skills deficit at the mines needed to produce critically important minerals and metals.
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