Massey CEO Says Regulation on Coal Industry Excessive

Massey Energy Co. Chief Executive Officer Don Blankenship, whose company owns the West Virginia coal mine where 29 people died in April, said U.S. regulation of the industry is excessive.

A U.S. House committee yesterday approved legislation that would make it easier to shut mines with repeated safety violations, a bill sparked by the accident at Massey’s Upper Big Branch operation. The measure would also expand subpoena powers of the Mine Safety and Health Administration.

“The feeling of the industry is that we’re regulated too much and not too little,” Blankenship said in an interview on Bloomberg Television’s “InBusiness.” “Tragedies lead to more regulation.”

Blankenship, 60, said increased scrutiny from MSHA puts miner safety at risk because the coal industry’s engineers are better than the government’s.

“It basically comes down to engineers that work for the company that we believe are more technically competent than those that work for the government,” he said.

Massey rose $1.70, or 6 percent, to $30.12 at 1:19 p.m. in New York Stock Exchange composite trading. The shares have fallen 45 percent since the fatal blast.

“Our inspectors go through rigorous training for almost up to two years,” said Amy Louviere, an MSHA spokeswoman.

Methane Gas

Massey said today that methane gas data and chart information collected from Upper Big Branch on April 5 showed the mine experienced a sudden inundation of unusually high levels of methane gas, enough to fill a 2,000 square foot house with an “explosive atmosphere in under 40 seconds.”

MSHA said the company is referencing data taken several hours after the explosion and that it share the information with Massey “some time ago.”

“We know this company and this mine violated ventilation standards multiple times in the months leading up to the explosion,” the agency said in an e-mailed statement today.

MSHA said it will study the methane levels closely and will determine whether Massey was following the ventilation plan at the time of the blast and if there’s evidence that suggest detectors were tampered with.

The company has said that MSHA forced it to install a complex ventilation system in the so-called longwall area, where the miners were working when the explosion occurred, months before the accident.

MSHA Violations

In a preliminary report to President Barack Obama in April, the Labor Department said it had been watching Massey and Upper Big Branch closely because of violations. The operation received 639 U.S. Mine Safety and Health Administration violations from January 2009 to the accident.

Massey miners are experiencing a “psychological” impact in the aftermath of the accident that’s affecting production, Blankenship said.

“It’s impacting production in that people are trying to make sure they’re in compliance with every rule,” he said in the interview.

Massey said in April that it expects a second-quarter charge of as much as $212 million for the accident, more than twice its 2009 earnings. The company plans to release its quarterly results July 27.

The costs will include $80 million to $150 million for benefits for families of the miners, rescue and recovery efforts, insurance deductibles, legal and other contingencies, the company said in April in its first-quarter earnings statement. The value of the damaged equipment, development and mineral rights is an additional $62 million, the company said.

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