Preliminary government figures show U.S. coal production has fallen to its lowest level in nearly 30 years as cheaper sources of power and stricter environmental regulations reduce demand.

A report released Friday by the U.S. Energy Information Administration estimates 900 million short tons of coal were produced last year, a drop from about 1 billion short tons in 2014. That's the lowest volume since 1986.

The slump has led to bankruptcies and layoffs at mining companies, but the effects have rippled outward, stressing state budgets and forcing layoffs in other sector such as railroads, which are transporting less coal.

Power plants are increasingly relying on cheaper and cleaner-burning natural gas to provide electricity and comply with regulations aimed at reducing pollution that contributes to climate change.