Mining industry poised to win tax breaks on safety measures

After fatal mining accidents this year, the mining industry is on the verge of winning tax breaks to help pay for new safety technologies as it lobbies against government-imposed safety requirements.

Michael Peelish, a senior vice president for safety and human resources at Foundation Coal Corp., told a Senate panel earlier this month that tax breaks would help companies invest in new equipment and training for enhanced mine safety and rescue capabilities.

There appears to be bipartisan support for the tax breaks, which were included in the Senate tax package now being negotiated with House tax writers, who did not include similar breaks in their budget reconciliation bill. The breaks include a 50 percent tax credit to buy and install communications systems and safety equipment, and a 20 percent credit for the cost of training rescue teams.

What may prove to be a bigger point of contention between the industry and its critics is over the availability of the technology that would improve safety, and whether Congress should require its use.

Mining executives have lobbied against bills introduced by Rep. Nick Rahall in the House and Sen. Robert Byrd in the Senate, both West Virginia Democrats. The measures would direct the Labor Department to adopt new regulations to require each coal mine to maintain at “strategic locations” sufficient supplies of air and self-contained breathing equipment, provide a means of communicating with people on the surface and ensure that each miner has a tracking device to improve the chances that rescuers will be able to find them.

“There are a lot of operators who aren’t going to do this unless they are forced to,” one House Democratic aide involved with drafting the bill said. There are 24 co-sponsors in the House, all Democrats, and 11 in the Senate, all Democrats except Sen. Arlen Specter (R-Pa.).

In response to accidents at the Sago and Alma mines, which left 14 West Virginia miners dead, and the subsequent push in Congress to adopt new regulations, the mining industry has adopted a “set of principles” that it carried to dozens of Capitol Hill offices during two days of lobbying visits two weeks ago. The National Mining Association has also formed a commission of industry experts to review safety technologies and training. It is expected to release a draft report this July.

In the meantime, a dozen industry executives were scheduled to visit nearly 80 offices of members with oversight responsibilities during a March 7-8 fly-in.

They brought with them a set of industry principles that call on Congress to expedite development of “uninterruptible, ground-penetrating, wireless two-way communication,” enhance safety training and rescue capabilities, and improve emergency notification “for response timeliness and coordination.”

The industry wants Congress to provide liability shields for mine rescue teams. It would also like an OK to require drug testing of miners and supports the tax breaks.

The Rahall bill, in contrast, is more “wish fulfillment than a realistic assessment of what is required to make mines safer,” said National Mining Association spokesman Luke Popovich.

Two-way communications that can provide uninterruptible service at all mine depths are not available, Popovich said. And the industry fears the legislation could lead to the requirement that “refuges” where miners could retreat in an emergency to await rescue be constructed. Such refuges are impractical in coal mines with relatively narrow seams, the veins of coal that miners ply, Popovich said.

The bills would require the Labor Department to review the efficacy of refuge chambers but would not require their construction. They would require some sort of two-way communications be installed in the mine. Such systems would make it easier for rescue teams to find trapped miners.

The House source said that at a minimum mine operators should be required to provide their workers with one-way communications links to the surface. A study by the Mine Safety and Health Administration found such systems to be 90 percent effective. Miners could at least be told which way to head to escape a fire, for example, if they had a one-way communications system linking them to the surface, the House source said.

To avoid onerous new regulations, the industry has pointed out that the number of fatalities each year from mining has dropped 90 percent from 1970 even as production has increased 80 percent.

But critics note that the number of miners who have died in the first two months of 2006 is more than half the number of miners who died in all of 2005, a record year in terms of fewest mining deaths.

The industry and the regulatory body in charge of overseeing it have become complacent, the House source said. That’s especially dangerous now that coal use is again rising, the source said, adding, however, that the Rahall bill faces an uphill battle in the House.