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The Sago Mine Disaster:
Deregulation and its Consequences

By Jerry Starr


"With demand and prices up, coal companies have pressured miners for more production; running around the clock shifts, even when potentially dangerous safety violations are discovered."




West Virginia’s Sago coal mine disaster of January 2, 2006 proved to be one of those seminal events in labor history, sparking a significant national debate and the first major legislative act for miner safety and health in almost 30 years. The story told here unfolds over more than six months, starting with the mine explosion and culminating in the Mine Improvement and New Emergency Response Act (MINER), signed by President Bush on June 15, 2006.

While this legislation falls short of standards called for by organized labor and some government officials, the improvements are real and it would not have been possible without the sacrifice and courage of the miners and their families. Their story is dramatic and well worth the telling. In striking ways, the bereaved wives and daughters who took the initiative on this issue remind one of the "9/11" wives or Cindy Sheehan and Military Families against the War. They are victims who reject self pity for activism and, in the process, become heroes.

First, however, it is necessary to put the events in context. More than a billion tons of coal are mined every year, generating more than half of the nation’s domestic electricity. West Virginia is the nation’s second largest producer, accounting for 160 million tons or 13 percent of total production. The top producer is Wyoming (35 percent), but West Virginia coal is cleaner burning overall, has more heat value, and is more in demand.

By 2030, the world’s demand for energy is projected to more than double. There are an estimated one trillion tons of recoverable coal in the world; by far the largest reserve of fossil fuel left on the planet. Coal mining will continue to be a way of life in Appalachia.

At from $40,000 to $60,000 per year, wages in the West Virginia coal industry are about twice those in the low skill service industry, but they have been declining. The average wage of a coal miner in 2004 was 20 percent below what it was in 1985 (adjusted for inflation), despite a tripling of per-shift productivity.

In addition to jobs in the mine, the coal companies also create demand for new infrastructure and spin-off jobs in construction, maintenance and services. And the industry pays a five percent severance tax on every ton of coal mined. In 2005, this was worth $238 million to the state of West Virginia.

But the coal companies give nothing back to the community. Unlike some other corporations, they do not endow schools, libraries, museums or other community institutions. As the writer Jeff Goodell puts it, "they want brawn, not brains." And they use their extensive land claims and political clout to obstruct industrial development, keeping the land cheap and the taxes low. Over the past 150 years, West Virginia miners have dug out more than 13 billion tons of coal, but the state has the lowest median household income and the sixth highest poverty rate (17 percent) in the nation.

For generations, young people have been forced to leave home for work elsewhere. Much of the aging population is dependent on transfer payments—social security, workmen’s compensation, and welfare. The writer, Harry Caudill, has called Appalachia "a colonial appendage" to the industrial Northeast and Midwest.

Over the years, the West Virginia economy has followed the vicissitudes of the coal market. In the 1970s, the market declined. The oil crisis appeared over and nuclear power was being heralded as the energy source of the future.

By the 1980’s many of the smaller mines went out of business. Many of those which remained hired only non-union personnel. Desperate for jobs in the rural communities, more workers were willing to give up union benefits, guaranteed pension plans and management accountability for safety violations in exchange for a job with slightly higher wages. Today, only about a third of all mines are union shops.

More than half the mines in West Virginia were closed by the 1990s. With so little demand, innovation in the industry came to a standstill. By the end of the century, miners were still using much the same equipment and operating under much the same conditions as in the 1970s.

As the Bush Administration took power, several major events combined to change coal mining dramatically. The terrorist attacks of "9/11" made U.S. leaders rethink the nation’s dependence on Middle East oil. The ensuing Iraq War made enormous demands on existing reserves. The Enron collapse threw the oil and gas market into turmoil, sending prices soaring. Finally, Hurricane Katrina severely impacted the Gulf region, producer of nearly 40 percent of the nation’s natural gas and refiner of nearly 30 percent of its oil. Coal became a comparative bargain. Exports were helped further by the weak U.S. dollar.

The increased demand for coal caused the price to double over 2003-2005. Speculators have projected continued growth over the next decade, returning to the high rate of production prior to the 1970s. Seeking to capitalize on this market turn, investors have built 89 more mines (up five percent) and hired 8,000 more miners (up 11 percent). As of 2005, more than 120 new coal burning plants, representing more than $99 billion in new investment, were either planned or under construction in the U.S.

In 2005, the U.S. produced 1.13 billion tons of coal, a new record. By June 2006, coal had skyrocketed to $64 a ton. With demand and prices up, coal companies have pressured miners for more production; running around the clock shifts, even when potentially dangerous safety violations are discovered.

Something else happened under the Bush Administration that laid the groundwork for Sago and other mine disasters: deregulation of the industry. For years, Big Coal made significant investments in the Republican Party, seeking to evade the costs of government enforced health and safety regulations.

Point person for much of this policy change has been Kentucky Senator Mitch McConnell, chairman of the Republican Senatorial Committee and a close ally of the coal industry. In the seven years preceding Bush’s election, the coal industry gave almost $600,000 to McConnell’s committee alone. Fearing that a Gore Administration would limit or tax carbon dioxide emissions from coal burning power plants, the industry backed Bush heavily in the 2000 Presidential election, especially in the swing states, like West Virginia and Pennsylvania.

Over the next five years, Big Coal helped keep Congress in the hands of the Republican Party; contributing $10.7 million to federal campaigns, some 90 percent to Republicans. Some coal barons, like Ohio’s Bob Murray, themselves raised more than half a million dollars for Republican candidates.

Bush rewarded McConnell by appointing his wife, Elaine Chou, to be Secretary of Labor with oversight of the Mine Safety and Health Administration (MSHA). Chou hired several of McConnell’s Senate staffers to work in top positions at the Department of Labor, including her chief of staff Steven Law.

In short time, the MSHA’s staff and board were dominated by former coal company representatives. For the top position, Chou appointed Dave Lauriski, an executive with Energy West Mining, who had spent years lobbying MSHA to loosen the rules against dangerous levels of coal dust in underground mines. All of Lauriski’s top staffers had been in the employ of the major coal companies. One, Steven Griles, had devoted four years to rolling back mine regulations.

The Bush Administration also placed the five member board of the Federal Mine Safety and Health Review Commission—charged with settling disputes involving the Federal Mine Act—under the control of coal industry representatives.

President Bush’s response to the Enron-caused California energy crisis of 2000 signaled the Administration’s theme: "If there’s an environmental regulation that’s preventing California from having 100 percent maximum output at other plants—as I understand there may be—then we need to relax those regulations."

In the first Bush term, almost $5 million in funding cuts caused the MSHA to lay off 170 staffers (about 7 percent). Seventeen proposed MSHA initiatives to protect miners’ safety and health were discarded. The number of mines referred by the MSHA to the Justice Department for criminal prosecution dropped from 38 in 2000 to 12 in 2005.

The Bush Administration then passed a new rule that allowed companies to use the same tunnel to blow in the miners’ air with high velocity fans and to take out the coal by conveyer belt. This meant that miners were more exposed to breathable coal dust and that a beltline fire in the entry could be further spread to working areas. This new rule essentially reversed a law that had stood since the 1969 Coal Mine and Safety Act. However, with Republicans in control of Congress, no hearings were held on mine safety issues.

Beyond policy changes, the Bush Administration changed the culture within the MSHA itself—away from enforcement and toward a more operator friendly "compliance assistance." Six year MSHA official Celest Montfortin left a year after Bush took office because she felt that his appointees were focused on "trying to be a friend and partner to industry instead of protecting workers."

Emboldened by these changes, influential operators, like Bob Murray, were able to get Lauriski to transfer more vigilant MSHA mine inspectors away from their mines, while intimidating others with threats of dismissal.

Lauriski was forced to resign when the CBS program, 60 Minutes, exposed blatant favoritism in his awarding of government contracts. Bush then nominated Richard Stickler, a former executive at West Virginia’s Massey Energy; a company with one of the worst safety records in the industry. At his hearing, Stickler said he believed the nation’s mine safety laws were adequate. West Virginia Senator Robert Byrd put a hold on his nomination.

The most vulnerable point in protecting mine safety process is the inspection itself. To be sure, federal inspections occur at least four times per year and mines are routinely cited for safety violations. In fact, the MSHA’s Ned Merrifield has boasted that his agency issued four percent more violation notices in 2005 than in 2001.

Such figures hide as much as they reveal. The inspections are often superficial, especially in nonunion mines where the workers are afraid to speak up for fear of dismissal. According to the Louisville Courier-Journal, 234 of 255 miners interviewed reported that cheating on federally mandated coal dust testing was widespread. Given warning that inspectors are coming, some miners have admitted to cleaning up the site at the last minute just to protect the owners from citation. Others have testified to being forced to work in unsafe conditions just to keep their jobs.

Even when cited, the fines typically are too small to discourage the violations. Until the June 2006 MINER Act, most violations drew only a $60 penalty, with a maximum fine of $60,000. This often made paying fines less expensive than adhering to the rules. Such tactics can work because federal inspectors often fail to ensure that violations are corrected by deadlines. Worse, they almost never close a mine even when they find repeated instances of life-threatening safety violations.

MSHA records reveal that the median for major fines (over $10,000) declined by 13 percent between 2001 and 2006, from $25,000 to $21,800; much more when adjusted for inflation. The proportion of major fines to all fines dropped from 20 percent to 10 percent just between 2003 and 2004. Further, the companies can contest the fines, a procedure which can be drawn out for years. Sometimes, an MSHA administrative judge sympathetic to the companies may substantially reduce the fines assessed by inspectors.

Worse, the government has failed to collect more than half the three million dollars in fines assessed to coal operators in recent years. Some 84 mines have ignored all fines in excess of $10,000. By the time of Sago, Midgard Mining of Pike County was still operating, despite having owed the government more than $350,000 since 1996.

During the twentieth century, 100,000 miners were killed in accidents and another 200,000 by black lung disease. But the record shows that government regulation can save lives and reduce the health consequences of this dangerous occupation.

The 1969 Federal Coal Mine Health and Safety Act rejected the notion that voluntary compliance by the coal companies was sufficient to ensure miner safety. The Act gave miners the right to request federal inspections. It also provided benefits to miners with black lung disease. At the time, some 225,000 miners were disabled with the disease and 140,000 widows qualified for benefits.

The 1977 Mine Act created the MSHA to extend and reinforce these protections. In the 30 years following the 1969 act, the toll from black lung declined to around 1,500 deaths annually and coal mining deaths fell by 86 percent. Coal mine fatalities fell further to 30 in 2003, 28 in 2004, and 22 in 2005.

By the same token, the current climate of deregulation and lax enforcement top to bottom can cost lives, especially when the demand for production is increased. In 2001, 13 miners were killed in a methane explosion in a Jim Walter Resources mine in Alabama. The mine had openly flouted basic safety regulations, exploiting close ties between the MSHA inspectors and company management. The MSHA fined the operators $400,000 for eight safety violations that "directly contributed" to the accident. However, in 2005 an MSHA administrative judge threw out six of the eight violations and slashed the fines to $3,000.

After the Sago Mine disaster, more fatalities followed, bringing the death toll to 37 miners by mid-August. The rationale for the coal companies is clear. It is cheaper to spend a few million dollars on lobbyists, lawyers and candidate contributions than many more millions to conform to safety and health regulations designed to protect their workers. The question is whom is our government obligated to serve. And, finally, what price can we put on the life of a miner?







Dr. Jerry Starr is Visiting Professor of Communication, University of California at San Diego (winter term), Professor Emeritus of Sociology, West Virginia University and Director, Center for Social Studies Education in Pittsburgh. He has written a play, Buried: The Sago Mine Disaster. Drafts are available to consider for readings or production. Call 412-341-8694 or e-mail at jmstarr@adelphia.net.