Ken Silverstein EnergyBiz Insider Editor-in-Chief

America's quest for energy independence along with an abundance of relatively inexpensive coal has prompted developers to plow new ground and re-open some old mines. And with high natural gas prices, coal is hot. But the flip side is that many coal mines use antiquated equipment that may not properly function. While the coal industry has a good safety record when compared to previous decades, 24 miners have been killed nationally in accidents in 2006.

A key question to emerge following the spate of deadly incidents this year is whether the problems will affect coal's dominance as a fuel source for utilities. In short, the answer is "no," largely because accidents are not endemic to the industry and because the country depends on coal to provide 52 percent of its electric generation. If such accidents became routine -- like they are in China -- then a far greater emphasis would be placed on natural gas that is plentiful and more expensive.

Still, the recent accidents have put the spotlight on mining safety and how to better protect miners. In the case of Sago, Randall McCloy, Jr. and two other families of lost miners said that the International Coal Group as well as some mine contractors and supply companies committed safety violations that are required by federal law. Specifically, the suits allege that a tool called "Omega" blocks that direct ventilated air along main tunnels failed to perform.

"Regardless of the ignition source, the explosion ... was possible only because the seal in that area did not in fact 'seal' that area and a deadly combustible mixture of oxygen and methane was present," the suits say. "This deadly mixture of methane gas and oxygen pre-existed the lightning strike of January 2, 2006, at or about 6:26 a.m."

International Coal responded that it had just recently acquired the mine and that it will fight the suits. "We believe that the various company, state and federal investigations will confirm that the company was not at fault and that, indeed, the company's actions, like substantial rockdusting in the mine, actually saved lives," says Roger Nicholson, general counsel. "The outcome of the Sago mine explosion was indeed tragic; however, that tragic outcome does not translate into negligence on the part of the company."

West Virginia has seen the worst of times. In 1907 in the town of Monongah, 362 men died in a mining explosion. That prompted the formation of the Federal Bureau of Mines that studies mining techniques. Then again in 1968 an explosion in Farmington killed 78, which led to the creation of the Federal Mine Safety Health Administration that gave the federal government oversight powers at mines. The mining administration responded by increasing standards and inspections.

Ongoing Investigations

Records show that mining-related deaths numbered about 3,000 in the early part of the 20th century. By 1969, when the mining administration was formed, they were 200 a year. In 1990, 67 peopled died in mining accidents -- a number reduced to about 55 a year in the early 2000 time period. In 2005, 22 died, says the National Mining Association. Beyond closer oversight, fatalities have declined because mines have become increasingly mechanized and therefore need much less manpower than before.

But just how effective is mine oversight? The Sago Mine had 208 citations in 2005. While the mining company says that the violations had all been corrected, the mining regulators say that they are still investigating the disaster and they will determine if any of the citations are to blame in the January explosion.

"The purpose of (our) investigation is to determine what caused the explosion and whether any safety and health standards were violated," said David Dye, acting assistant secretary for mine safety and health. "Then we can take effective action to prevent such tragedies in the future." From 2004 to 2005, the mine administration's on-site inspection hours at Sago Mine increased 84 percent, from 405 to 744 hours while total citations and orders at all coal mines increased by 18 percent, from 58,304 to 68,818 between 2000 and 2005.

Critics contend, however, that safety violations in general at coal mines are not adequately penalized. And furthermore, they say that that oftentimes the fines are not even collected. While many of the violations at Sago may have been minor, there were only two that crested to the highest levels of $27,000 per incident -- a mere slap on the wrist for a company with a $110 million profit.

But deadly explosions are not in the interest of anyone, particularly coal companies that would get intensely scrutinized. Developers have installed air monitoring systems and safer drilling machinery. And when accidents do happen, miners carry "self-rescuers" that pump oxygen through their mask, albeit supplies are limited.

In response to the Sago accident and others, the president signed the Mine Improvement and New Emergency Response Act in April. That represents the first revisions to federal mine safety laws since the Federal Mine Safety and Health Act became law in 1977. Now, each underground coal mine must develop and update emergency response plans and install wireless two-way communications and electronic tracking systems. Meantime, the mine administration is now able to shut down mines if fines are not paid. Maximum fines are also increased to $220,000.

At the same time, West Virginia Governor Joe Manchin signed into a law a requirement to improve underground oxygen supplies and faster emergency responses. To carry this out, miners will carry emergency communication and tracking devices while mine operators will store extra air supplies underground. Workers would be guided to those added supplies through a sophisticated lighting system.

A lot of folks are gunning for the mining industry because of its environmental track record. When high profile safety violations are added to the mix, they have the ammunition they need. While a lot of the criticism may be justified, it is unlikely to dim coal's resurgence in the marketplace.

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