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When the ‘profits first’ policy fails – disastrously

Submitted by on Thursday, 8 April 2010 No Comment
It's not as if big coal companies ever have been benevolent societies - the song "Sixteen Tons" and its lyrics about owing your soul to the company store stemmed from a miner's reality.

It's not as if the industry has ever cared to learn from its mistakes - witness a 306 million gallon sludge flood in 2000 that came decades after 1972's Buffalo Creek Disaster that killed 125 people and literally wiped out a community.

And it's not as if coal companies have a monopoly on paying executives lavishly while pushing worker bees to return the profits that shareholders demand.

But mining is a more inherently dangerous way for a worker to earn a living than most - according to the Bureau of Labor Statistics, it's the most perilous industry in the country. When dangerous working conditions meet a profit-conscious company with a long history of safety violations, it's setting the stage for disaster.

In the case of Massey Energy "running coal" - increasing production - was the most important mission. CEO Don Blankenship made that clear years ago.

"If any of you have been asked by your group presidents, your supervisors, engineers or anyone else to do anything other than run coal (i.e., build overcasts, do construction jobs, or whatever) you need to ignore them and run coal," Blankenship wrote in a 2005 memo.

They're not running coal in Montcoal, W.Va., this week. The Massey mine has been idled since an explosion Monday killed 25 people. Rescue crews are hoping against hope that four missing miners are alive, but they've been unable to enter the mine. The mix of gases underground, three days later, remains too toxic and explosive.

With Massey's history, it's a safe bet that there will be fines at the least. Following a 2006 fire at another Massey mine in West Virginia, the company pleaded guilty to criminal charges and paid $4.2 million in criminal and civil penalties. At the time of that settlement, a federal prosecutor said he hoped it would send a message to other coal companies that "willful violation of health and safety regulations will be prosecuted in the Southern District of West Virginia to the fullest extent of the law."

It appears that Blankenship missed that memo. The Upper Big Branch mine where Monday's explosion occurred has been ordered closed a whopping 60 times in the past two years. It was cited twice on the day of the explosion.

Massey will, of course, contest the violations and wind up settling for pennies on the dollar. That's what happened two years ago, when Massey paid the Environmental Protection Agency a $20 million fine. It was the largest in EPA history, but a pittance when compared to the $2.4 billion the company had faced. It's probably a wise, albeit immoral, business decision on Massey's part. The fines make a shallower cut in profits than running the company the right way would.

The irony is, Monday's disaster finally is hitting Blankenship where he lives. Massey's stock has fallen, and its credit rating has been put on a watch. Perhaps that will finally get the boards' and the shareholders' attention as well.

If not then perhaps a trip to Montcoal is in order, so they can see first hand the cost of "running coal" at all costs.

Copyright 2010 Debra Legg. All rights reserved.

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