July 18, 2007 — After Sago

Eighteen months after 12 coal miners lost their lives in West Virginia, the impact of new safety regulations is still being felt
By Charles Gerena

Tragedy is often a catalyst for change. Following the deaths of 12 coal workers at the Sago mine in West Virginia in January 2006 and a string of fatal mining accidents later that year, a flurry of new safety regulations were enacted. Some of the new technologies being implemented as part of the regulatory overhaul haven't been used in underground mines in the United States, so it's unclear how the benefits to workers will compare with the cost to companies.

The new costs of regulatory compliance may make underground mining even more expensive than alternative methods of obtaining coal. This could push West Virginia even further toward mountaintop mining — which has environmental drawbacks — and accelerate the industry's shift to surface mine production in Western states like Montana and Wyoming.

Passed in 2006, the federal MINER Act and state laws such as West Virginia's Senate Bill 247 have addressed shortcomings in emergency preparedness and response that factored into the Sago accident. For example, future safety plans at underground mines must incorporate the use of two-way communications and tracking devices, and the installation of additional oxygen supplies. Other new requirements include quicker reporting of accidents to government officials and stricter standards for sealing off abandoned mines.

Fatalities in the coal mining industry had declined to an all-time low of 22 in 2005 before spiking to 47 in 2006, with 23 deaths occurring in West Virginia that year. Luke Popovich, vice president for external communications at the National Mining Association, says it is in the self-interest of mine operators to improve safety.

"If new technology is commercially available that has a real prospect for improving safety, and safety enhances productivity, it's a perfect circle," Popovich explains. "Everybody is better off."

Companies have various financial incentives to minimize risks and protect their workers from injury or death. Besides their human toll, workplaces that experience a lot of accidents suffer from lost production, higher rates for workers' compensation insurance, and higher labor costs, because workers may demand better pay to compensate for risking their lives. In addition, technological advances have reduced the number of manual laborers working in hazardous workplaces like coal mines.

Yet these economic forces alone don't always prevail. Multiple oversights in safety procedures at a mine near Logan, W.Va., contributed to the deaths of two workers after a fire in January 2006.

Operators don't always perform a thorough risk assessment of each mine as one might expect of a company in such a dangerous industry. "They have simply tried to comply with the law, irrespective of seeing how their efforts might be tailored to specific conditions," Popovich notes.

Thomas Novak, who heads the mining and minerals engineering department at Virginia Tech, says companies would love to have better communications systems to contact underground miners, not only in the event of an accident but to facilitate day-to-day operations. The problem is that the technology to send wireless signals through miles of tunnels and rock isn't commercially available.

"You can't modify the rules of physics. You have to go with what you have," says Novak, who served on a safety commission formed by the National Mining Association. In addition, large safety equipment manufacturers "aren't going to jump into that market because it's too small for the amount of investment that would have to go into it."

Government mandates for new safety devices have helped spur interest in meeting this demand. At the same time, however, there are potential conflicts between federal and state regulations.

"Many of the provisions are very similar, but there are some very important differences," notes Chris Hamilton, senior vice president of the West Virginia Coal Association. "There are also differences in the implementation schedules." These conflicts "change the economics," since one product won't meet regulatory requirements in all cases. "Also, from a predictability and consistency standpoint, it has its challenges as well."

Just how the current crop of regulations will affect the coal mining industry in the long run remains to be seen. Even without the new costs, industry participants see a tough business climate. Mine productivity has been flattening and wages have been rising due to tighter labor conditions. Meanwhile, coal prices have dropped in 2007 after peaking in 2006.

"Mining costs are generally on the increase," Hamilton adds. This is especially true for producers in West Virginia and other parts of Appalachia who are facing tougher geological conditions. "We've mined all of the easy stuff. The [coal] seams are becoming thinner and deeper."