Toll on Coal Continues
Federal Prosecutors involved in coal accidents
The toll on coal is continuing. This time it is coming from federal prosecutors who are zeroing in on the executives of the former Massey Energy, which owned the West Virginia mine that exploded and killed 29 people two years ago.
A critical question arising from that accident is the long-term effect it is having on coal production and specifically whether it will force regulators to enact stricter laws. Tougher oversight, of course, would tend to require not just more safety standards but also stronger pollution controls, all of which would add costs.
Utilities would then have to incorporate those new rules into their long-term planning decisions. The indications are that the older coal-fired units are getting retired and are being replaced with modern natural gas combined cycle units. The U.S. Energy Information Administration says that coal will lose some of its current 45 percent market of the electric generation market.
The mining accident along with the federal probe into what happened will not help coal’s cause. The investigation has already yielded criminal charges against three people. The most recent is the mine supervisor who was in charge of the “Upper Big Branch Mine” when it went up in flames after methane gas ignited.
Indications are that the supervisor is cooperating with authorities in an effort to determine if others higher up in the organization had colluded to avoid routine safety measures there. “Individuals involved in the day-to-day decision making at the mine must be held accountable regardless of their title,” says a report by the West Virginia Office of Miners’ Health, Safety and Training. “The mine foreman is the highest ranking official that current state law addresses.”
The report goes on to say that better ventilation is needed along with “barriers” that stop or insulate a blast. The mine explosion occurred in April 2010. Massey Energy, which had owned the mine, has since been bought by Alpha Natural Resources. At the time of the accident, Massey had been assessed penalties of nearly $900,000 and it had only paid about $168,000 of that.
Critics of the energy company say the protocol had been to contest all citations so as to prolong the review process. Indeed, the central crime that has been alleged here is that the supervisor had intentionally misled those whose job it had been to ensure that the mine was safely operating.
Gary May is charged with felony conspiracy and could face up to five years in prison. He allegedly used “code words” to alert those underground when the investigators were on the property. He is also accused of deliberately disconnecting a methane detection system to keep production running, and then re-connecting the unit when inspectors came to look.
If those actions had been caught, 29 miners may be alive today and warnings would have been issued, say the Feds in their legal papers. “Mine safety and health laws were routinely violated at Upper Big Branch, in part because of a belief that following those laws would decrease coal production.”
According to the U.S. Mine Safety and Health Administration, 37 miners died in work-related accidents in 2011. Of those, 21 were coal miners. That compares to 23 deaths in 2010. The agency says that it has increased the number of inspections that it performs, which is on top of the training that mine operators are giving their workers to identify and to eliminate potential hazards.
“Although Alpha was not operator of the mine at the time of the accident, the company supports efforts that will lead to a full understanding of the circumstances that precipitated this tragic event,” says Alpha Natural Resources, which paid $1.5 million to everyone of the 29 families who died in the tragedy.
Tougher safety standards are one issue. New environmental regs are another. A host of new rules are in the works and include those involving mercury, coal ash and greenhouse gas emissions. Utilities, of course, are deciding whether to scrap their older and less efficient coal plants or to fix them up. If they ditch them, the beneficiaries would be not just natural gas but also green energy and even nuclear.
The one-two punch will dizzy the cause of coal. The response should not be more foot dragging but rather, more cooperation with regulators to ensure better health and safety standards.
EnergyBiz Insider is the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has also been named one of the Top Economics Journalists by Wall Street Economists.
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Industry thought leaders will be discussing this topic and more at the upcoming EnergyBiz Leadership Forum, Harnessing Disruption, taking place in Washington D.C., March 19-21, 2012. Review full conference details by visiting www.energybizforum.com