Archive:Energy extraction statistics - NACE Rev. 1.1
- Data from January 2009. Most recent data: Further Eurostat information, Main tables and Database.
This article belongs to a set of statistical articles analysing the structure, development and characteristics of the various economic activities in the European Union (EU). The present article covers the mining and quarrying sector for energy producing materials, which consist of:
- mining of coal and lignite, corresponding to NACE Division 10;
- extraction of crude petroleum and natural gas, corresponding to NACE Division 11;
- mining of uranium and thorium ores, corresponding to NACE Division 12.
Official statistics for the mining of uranium and thorium ores are scarce as the activity does not exist in the vast majority of Member States and is often subject to statistical confidentiality where it does exist.
Note that this article covers only extractive activities, and not the processing of fuel, the manufacture of non-metallic mineral products, nor the network supply and distribution of electricity, gas and steam.
Main statistical findings
Eurostat’s energy statistics show a decline in the EU-27’s primary production of solid fuels (on average by 3.4 % per year between 1996 and 2006), crude petroleum (-3.6 % per year) and natural gas (-1.6 % per year). During the same period, EU-27 gross inland consumption increased, on average, by 0.7 % per year. This imbalance between supply and demand was resolved through increased primary production of nuclear heat and renewables, and more significantly, through further reliance on imports – in particular, those of natural gas. There has been a gradual switch in the EU-27’s energy mix during the period from 1996 to 2006, with the consumption of solid fuels falling, that of crude petroleum and nuclear heat increasing slightly, while the relative importance of natural gas and renewables grew at the fastest pace.
The mining and quarrying of energy-producing materials (NACE Subsection CA) was the main activity of 2 400 enterprises in the EU-27 in 2006. Together they generated EUR 69.1 billion of value added and employed some 444 600 persons. In relative terms, the mining and quarrying of energy producing materials sector accounted for 1.2 % of the value added in the EU-27’s non-financial business economy, but accounted for just 0.3 % of its workforce; relative to mining and quarrying (NACE Section C) the mining and quarrying of energy producing materials accounted for 78.0 % of value added and 60.6 % of the workforce.
The most important (in value-added terms) subsector was clearly the extraction of crude petroleum and natural gas (NACE Group 11.1), which accounted for 78.7 % of the EU-27 total. None of the remaining NACE groups recorded a share in excess of 10 %, the next highest being a 9.6 % share registered for the mining and agglomeration of hard coal (NACE Group 10.1). In employment terms these figures were reversed, as only 19.0 % of the mining and quarrying of energy-producing materials workforce were employed extracting crude petroleum and natural gas, while almost half (48.2 %) worked in the mining and agglomeration of hard coal.
In relative terms, Romania (2005) and Denmark were the most specialised Member States, as the mining and quarrying of energy producing materials accounted for 7.5 % and 6.5 % of the total value added generated within their respective non-financial business economies. However, almost half (47.0 %) of the EU-27’s value added for mining and quarrying of energy producing materials was generated in the United Kingdom in 2006, while Denmark had the second highest share of EU-27 output (11.0 %); both of these countries were specialised in the extraction of crude petroleum and natural gas. The leading coal and lignite producers within the EU were Poland, Germany and the Czech Republic.
Together, Poland and Romania employed more than half of the EU-27’s mining and quarrying of energy-producing materials workforce (31.9 % and 22.2 % respectively in 2005). The map shows a few, often isolated regions, where this sector accounted for a relatively important share of the non-financial business economy workforce. The concentration of energy reserves within particular regions is such that upwards of 10 % of the non-financial business economy workforce in Eastern Scotland (the United Kingdom), Śląskie (Poland) and Agder og Rogaland (Norway) were employed within the mining and quarrying of energy-producing materials sector in 2006 (compared with an EU-27 average of 0.3 %), while several regions in Romania and the Czech Republic were also particularly specialised in these activities.
EU-27 output from the mining and quarrying of energy producing materials fell on average by 3.2 % per year in the ten years to 2007, while employment fell by 6.8 % per year; this continued a pattern of steadily falling output and steeper reductions in employment. The decline in output was particularly marked for the mining of coal and lignite (4.9 % per year in the ten years to 2007), while the corresponding figure for the extraction of crude petroleum and natural gas was -2.8 % per year.
In contrast, the development of domestic output prices in the EU was less stable, particularly for the extraction of crude petroleum and natural gas for which prices increased strongly in 1999 and 2000, fell slightly for two years, and then increased rapidly through to 2007. Indeed, the increase in the output price for the extraction of crude petroleum and natural gas since 2000 was the second highest recorded among all the NACE divisions within the industrial economy, as prices almost doubled in this seven-year period, rising on average by 10.0 % per year. Output prices for the mining and quarrying of coal and lignite followed a similar path, although changes were less volatile and often occurred a year after those witnessed for crude petroleum and natural gas extraction (possibly reflecting a substitution effect); the average increase was 5.5 % per year between 2000 and 2007.
Focus on crude petroleum prices and reserves
As noted above, one of the most visible characteristics of the energy-producing sector is the volatility in the price of oil, which rose from USD 18.7 in December 2001 to a high of more than USD 130 per barrel (of Brent crude) in July 2008. At the time of writing up this analysis, the price had dropped dramatically to around USD 40 a barrel by December 2008. High oil prices have an impact on the price of substitutes, notably natural gas, and also feed into the price of other products that either use considerable amounts of energy or energy products as raw materials in their manufacturing processes.
The BP Statistical Review of World Energy notes that ‘proved reserves are generally taken to be those quantities that geological and engineering information indicates with reasonable certainty can be recovered in the future from known reservoirs under existing economic and operating conditions’. The ratio of reserves to production provides confirmation of the dwindling stock of oil reserves in the EU and Norway, which – under current conditions – are likely to dry up by approximately 2015. The estimates suggest that by 2050, on a global level, unless there is a dramatic reduction in the rate at which crude petroleum is consumed, there will be little or no oil left, (unless fresh reserves are discovered and exploited).
Expenditure and productivity
The mining and quarrying of energy-producing materials is a particularly capital-intensive activity, accounting for 1.6 % of the EU-27’s non-financial business economy investment in 2006 (compared with its 0.3 % share of the workforce). Personnel costs accounted for a 10.9 % share of total operating expenditure, compared with an average of 16.1 % for the whole of the non-financial business economy.
The mining and quarrying of energy-producing materials sector recorded, by far, the highest level of labour productivity among any of the NACE subsections within the non-financial business economy, as each person employed generated an average of EUR 155 400 of value added. In contrast, average personnel costs were EUR 31 900 per employee, which was only 10.8 % above the non-financial business economy average. The resulting wage-adjusted labour productivity ratio of 486.5 % was also the highest of all industrial NACE subsections – and was more than twice the next highest ratio, recorded for the mining and quarrying of non-energy-producing materials (see Non-energy mining and quarrying statistics). The highly capital-intensive and productive nature of this sector can be wholly attributed to the performance of the extraction of crude petroleum and natural gas subsector, where apparent labour productivity reached EUR 370 000 per person employed in 2005 and the investment rate was 25.1 % in 2006. In contrast, both the apparent labour productivity (EUR 300 000 per person employed) and investment rate (16.7 %) of the mining of coal and lignite subsector were below the non-financial business economy average in 2005.
Almost half (49.7 %) of the EU-27’s investment within the mining and quarrying of energy producing materials sector in 2006 was accounted for by the United Kingdom. In Slovakia, the mining and quarrying of energy-producing materials sector accounted for 6.3 % of all investment made within the non-financial business economy in 2006. This relative share was somewhat higher than in the United Kingdom (5.3 %), while Romania, Denmark and Poland also recorded a particularly high propensity to invest in these activities.
Focus on imports of energy products
With increasing demand on imports from non-member countries, the Russian Federation has gradually become the most important supplier of a range of energy products to the EU. In 2006, the Russian Federation provided 31.9 % of natural gas imports, 30.4 % of crude petroleum imports and 22.2 % of hard coal imports; all figures are in volume terms (as measured by tonnes of oil equivalents). Aside from the Russian Federation, which is endowed with a full range of energy resources, the origin of imports is generally quite diverse. For example, more than one fifth of the coal imported by the Member States originated from South Africa, while large volumes of coal were also imported from as far as Australia, Colombia or Indonesia. Around one fifth of the imports of crude petroleum that are made by the Member States originated from the North Sea reserves that are shared between Norway and the United Kingdom, while a fairly large proportion of EU imports come from OPEC countries (that include Libya, Saudi Arabia and Iran).
Data sources and availability
The main part of the analysis in this article is derived from structural business statistics (SBS), including core, business statistics which are disseminated regularly, as well as information compiled on a multi-yearly basis, and the latest results from development projects.
The global mining and quarrying sector is characterised by a relatively small number of international enterprise groups, that operate across the continents – sometimes with only their head office in the EU or another developed economy. These large scale producers are complemented by a large number of smaller enterprises, typically serving a local market in low-value, widely-available products, often for use in construction. The location of mining and quarrying activity generally reflects the spatial distribution of mineral deposits. However, there can be considerable cost differences between mines, for example, in relation to the depth at which deposits are found, or whether they are on land or at sea. Aside from geographical and geological cost differences, the decision of whether or not to (re-)open a mine may also depend, among others, on global, commodity prices, as well as regulations concerning the environmental impact of mining or the disposal of its waste.
The EU aims to become a low-carbon, energy-efficient economy in the coming years. The integrated energy and climate change policy laid out in December 2008 aims to cut greenhouse gases by 20 %, reduce energy consumption by 20 % through increased energy efficiency and to meet 20 % of the EU's energy needs from renewable sources by 2020 – these goals will have implications on the way extractive activities operate. Another important aspect in relation to this sector concerns the security of supply for downstream activities. Aside from well-publicised geo-political disputes which have threatened the supply of crude petroleum or natural gas to European markets, there are also a large number of non-energy related minerals, which are often essential for downstream manufacturing activities. There is no indigenous supply for many of these, with the extraction of construction materials being one of the few areas where the EU is largely self-sufficient.
The vast majority of hard coal and lignite that is extracted within the EU is consumed as a transformation input, mostly in conventional thermal power stations, or alternatively transformed in coke oven plants. Crude petroleum is also used as a transformation input, principally in power stations or refineries (see the article on fuel processing and chemicals production statistics for more details of fuel processing activities).
The EU’s coal-mining activity has been in decline for over two decades (aside from breaks in series resulting from German reunification or the adhesion of some Member States). The extraction of crude petroleum and natural gas has also seen a downturn in activity since its production peaked in 1999. This pattern of falling production reflects, at least to some degree, the running down of natural reserves and higher costs associated with extracting increasingly scarce supplies. This may have been accelerated through continued competition from cheaper imports and the substitution of fossil fuels within the energy mix by renewables and cleaner technologies that promote reduced emissions. On the other hand, the significant increases in global prices for oil and gas in recent years are likely to have improved the economic viability of existing (and potentially new) gas, oil and coal fields, although prices have since fallen considerably since their peak levels in 2008.
Further Eurostat information
- SBS - industry and construction (sbs_ind_co)
- Annual detailed enterprise statistics - industry and construction (sbs_na_ind)
- Annual detailed enterprise statistics on mining and quarrying (NACE Rev.1.1 C) (sbs_na_2a_mi)
- Annual detailed enterprise statistics - industry and construction (sbs_na_ind)