By James Sharpe
The election results are in, and the doomsayers are predicting trouble ahead for the mining industry. While the reaction of some has been extreme, there are clear reasons for concern.
Topping the list of over-the-top prognosticators is Robert E. Murray, the controversial head of Ohio-based Murray Energy Corp. Murray turned cartwheels trying to get Mitt Romney elected, including staging rallies with his miners to support the candidate. A day after President Obama’s victory, he issued a prayer for the country, coupling that with a layoff of 102 of his miners in Utah, a decision he attributed to the President’s “anti-coal” policies.
Certainly coal production has been adversely affected by the Administration’s environmental policies. But we suspect market forces are the main driver. The energy market is awash in cheap natural gas, and the costs of producing coal are rising because what’s left is harder to extract.
Besides, Murray has lost all credibility by insisting (and to my knowledge, never retracting) his wild assertion that the deadly implosion at his Crandall Canyon Mine in 2007 was due to an earthquake. And unlike 33 other member companies of the National Mining Association that have committed to CORESafety, the coal industry’s commitment to safety excellence, Murray Energy remains on the sidelines.
But I digress. Election politics bottled up four rulemakings that were underway at the Mine Safety and Health Administration (MSHA). With that roadblock removed, they will start to move. Look for a final rule within months on revisions to the Part 100 civil penalties regulation. Despite MSHA chief Joe Main’s positive spin about how the new regulation will promote enforcement consistency, our bet is the industry will find more not to like than to like about this measure.
Awhile back, the agency released an abominable pattern of violations (POV) proposal that was roundly pilloried by operators. No matter. Those comments will largely be ignored, and the final rule will closely resemble the proposal.
That may not matter to quarry operations, especially surface operations, since none to my knowledge have ever been considered for pattern status. Lawsuits will fly, leaving the fate of the rule undecided for years. The good news about POV is that it is aimed at bad actors. The entire industry wants MSHA to focus on them, lest another major accident in coal bring on comprehensive legislation that envelops everyone.
Proximity detection is a technological breakthrough that has come, and a regulation is inevitable to mandate it to stem far too many crushing accidents involving machinery in underground coal. MSHA has been coy about saying if it will extend to metal/non-metal. The accident record in that sector does not appear to support it, but such evidence hasn’t stopped MSHA from issuing rules before.
MSHA’s respirable coal dust rule faces the hardest slog. It is near and dear to Joe Main’s heart and to that of his union brethren. Its aim is to stop black lung disease, which is a scourge that costs precious lives, unnecessary hardship and billions in benefit dollars every year. But the proposal goes too far, and the industry has made a convincing case the bulge in cases in Central Appalachia could be due instead to silica.
Coal-friendly members of the House of Representatives have stymied this rulemaking and will continue to do so. OSHA’s silica rulemaking, which could also influence MSHA, faces an equally rough road in Congress, even within the Administration itself, because of the costs.
MSHA has a host of other tricks in its tool bag to expand its power – regulations through policy, injunctions, jurisdictional over-reach, closure orders, to name a few. The number of whistleblower cases will explode. Litigation is another avenue and for that it has help from what is supposed to be a neutral third party, the Federal Mine Safety and Health Review Commission. Operators seeking judicial relief from MSHA’s enforcement actions will not be able to count on the Commission majority for unbiased rulings into the foreseeable future.
The bright spot is that, absent a major accident, Congress is not likely to enact mine reform legislation. It has many more pressing problems. Besides, if lawmakers couldn’t come together on a bill after Upper Big Branch, the worst coal mine disaster in 40 years, it won’t now either.
Operators should not expect to be on Easy Street for the next few years. To protect their interests, they should unite in resisting an activist MSHA agenda. They should also get very cozy with their elected representatives.