Chapter 2.pdf

This chapter provides an overview of the contribution of the natural resources and mining sector to the economy and the use of transportation services by the sector.

The natural resources and mining sector consists of two related subsectors: (1) the agriculture, forestry, fishing and hunting subsector, which engages in growing crops, raising animals, harvesting timber, and harvesting fish and other animals from a farm, ranch, or their natural habitats and (2) the mining, quarrying and oil and gas extraction subsector, which extracts naturally occurring mineral solids, such as coal and ores; liquid minerals, such as crude petroleum; and gases, such as natural gas.¹

Table 2-1

The natural resources and mining sector uses less transportation services than any of the other sectors except utilities in absolute dollars, but per dollar of output this sector requires more transportation services than most of the other sectors. The sector relies heavily on truck transportation services, shipping the most tons and largest value of product by truck, and employing the largest number of transportation workers as heavy and tractor-trailer truck drivers (see table 2-1).

In 2015 the natural resources and mining sector contributed $500.9 billion (2.8 percent) to the national economy, as measured by gross domestic product (GDP) (figure 2-1). The sector contributed less than other sectors to the economy but generates the raw materials other sectors need to produce finished products. The manufacturing sector, for example, purchases wheat from the natural resources and mining sector to produce bread.

The largest dollar value of natural resources and mining activity occurred in Texas ($146.3 billion) followed by California ($49.5 billion), and Oklahoma ($23.0 billion)—each of which accounted for 4 percent or more of national activity in the natural resources and mining sector in 2015 (figure 2-2, table 2-2). This is primarily driven by oil extraction in Texas, agriculture in California, and a combination of these activities in Oklahoma.

Computing the percent of natural resources and mining sector activity as a percent of a gross state product (GSP), rather than as a share of GDP, also provides useful insights to U.S. production. Nationally, Texas produced the most natural resources and mining products in 2014. However, natural resources and mining activity accounted for a smaller share of GSP in Texas (9.2 percent) than in Wyoming (24.4 percent), Alaska (18.8 percent), and North Dakota (17.9 percent) —the three states where natural resources and mining activity accounted for one-sixth or more of GSP in 2015. Natural resources and mining activity accounted for a smaller share of GSP in Texas than in Wyoming, Alaska, and North Dakota due to substantial manufacturing activity in Texas. Manufacturing activity accounted for 14.3 percent ($227.5 billion) of GSP in Texas, while it accounted for only 5.7 percent of GSP in Wyoming ($2.2 billion), 3.0 percent of GSP in Alaska ($1.6 billion), and 6.9 percent of GSP in North Dakota ($3.8 billion) in 2015. (see Appendix A)

The natural resources and mining sector was the second smallest user of transportation services in 2014 ($47.4 billion), using 2.5 times more transportation services than the utilities sector (the smallest user of transportation services) in 2014. Looking at air, rail, truck, and water transportation, the natural resources and mining sector used more in-house operations ($20.0 billion) than for-hire ($18.8 billion) services (figure 2-3).

The natural resources and mining sector used $47.4 billion of transportation services in 2014 (figure 2-4). In 2014, the sector used:

• Primarily truck transportation services (e.g., in acquiring seed or moving agricultural output to silos or mining products to the railhead), which accounted for 61.4 percent ($29,112 million) of all transportation services used by the sector.
• More in-house truck transportation operations ($19,494 million) than for-hire truck transportation services ($9,618 million), with in-house truck transportation operations accounting for nearly half (41.1 percent) of all transportation services used ($19,494 million out of $47,429 million). In-house truck transportation consists of the trucking operations carried out by farms with their own trucks, for instance, in moving wheat to the mill.
• Air, rail, and water transportation services (used for instance, to move grain or coal on barges) summed to 20.4 percent ($9,693 million) of all the transportation services used by the sector, a majority of which is for-hire (19.4 percent, or $9,223 million).
• A significant amount of pipeline transportation, which accounted for 14.2 percent ($6,729 million) of the transportation services used by the natural resources and mining sector.
• A smaller amount of for-hire transit and ground passenger transportation (e.g., bus transportation purchased for farm laborers) (0.1 percent, or $63.0 million) than any other transportation mode.

The natural resources and mining sector required more transportation services in producing output than the average sector in 2014, albeit substantially less transportation services than the sector depending the most on transportation services. In 2014, the natural resources and mining sector required 4.2¢ worth of transportation services to produce one dollar of output, while the most dependent sector (wholesale and retail trade) required 9.9¢ worth of transportation services to produce one dollar of output (figure 2-5).

The overall transportation requirement to produce one dollar of output in 2014 for the natural resources and mining sector (4.2¢) was relatively modest compared to other inputs. Transportation services were the fourth most important input. Natural resources and mining products, including support activities (e.g., geophysical surveying and mapping services used in mining), were the most important input, requiring 14.7¢ worth of natural resources and mining products to produce one dollar of output (figure 2-6).

The natural resources and mining sector consists of both agricultural and mining activities. In 2015 the agriculture, forestry, fishing, and hunting industry (agriculture industry) employed 40,910 transportation and material moving workers, accounting for 9.9 percent of its entire work force. The mining, quarrying, and oil and gas extraction industry (mining industry) employed 112,610 transportation and material moving workers, accounting for 13.9 percent of its entire work force (figure 2-7). Transportation workers include motor vehicle operators, ship engineers, aircraft pilots and flight engineers, etc. Material moving workers support transportation activities and include occupations such as cleaners of vehicles and ship loaders.

Transportation and material moving workers in the agriculture, forestry, fishing and hunting industry (agriculture industry) earned a median wage of $26,410 in 2015, while workers of all occupations in the agriculture industry earned a lower median wage ($21,890). Transportation and material moving workers in the mining, quarrying and oil and gas extraction industry (mining industry) earned a median wage of $42,250 in 2015, while workers of all occupations in the mining industry earned a higher median wage ($49,570) (figure 2-8).

The agriculture and mining industries employed the largest number of transportation workers as heavy and tractor-trailer truck drivers. Heavy and tractor-trailer truck drivers accounted for 30.5 percent of all transportation and material moving occupations in the agriculture industry and 37.0 percent of all transportation and material moving occupations in the mining industry. In the agriculture industry, heavy and tractor-trailer truck drivers earned a median wage of $36,070, while workers of all occupations in the agriculture industry earned a lower median wage ($21,890). In the mining industry, heavy and tractor-trailer truck drivers earned a median wage of $40,490, while workers of all occupations in the mining industry earned a higher median wage ($49,570) (figure 2-8).

The 2002 Vehicle Inventory and Use Survey (VIUS) is the most recent survey of vehicle ownership and use by industry. According to the 2002 VIUS, the natural resources and mining sector operated 2.4 million trucks —the second largest number of trucks used by an industry. The other services industry and the wholesale and retail trade industry operated fewer trucks than the natural resources and mining industry but accumulated more miles (figure 2-9).

The 2012 Commodity Flow Survey (CFS) shows that the mining (excluding oil and gas) industry shipped 2.9 billion tons of raw materials and finished goods domestically, valued at $99.8 billion, and accounted for 859.3 billion ton-miles. Trucks carried 60.0 percent of the tonnage shipped by the mining industry and 44.6 percent of the value but accounted for only 8.3 percent of ton-miles. The mining industry, however, tended to use modes other than truck to ship goods long distances. Rail ton-miles exceeded the ton-miles of all other modes and accounted for 79.0 percent of all ton-miles. The average shipment distance was shorter by truck (37 miles per shipment) than by all other modes and longest by air (2,732 miles per shipment) (figure 2-10).

The CFS does not provide shipment characteristics for the natural resources industry.