The following story is an updated version, with further developments first posted on The State Journal's energy blog, Grounded.
A little more than six months after Alpha Natural Resources came to a non-prosecution agreement with the U.S. Attorney's Office, the massive coal mining company has provided a report on the progress of improving safety standards beyond state and federal mining laws.
According to a release from the office of Booth Goodwin, U.S. attorney for the Southern District of West Virginia, the company is in full compliance with the December 2011 agreement. The agreement resolved the criminal investigation against Massey Energy, but it did not prevent individual prosecution.
"The progress Alpha reported is a very positive beginning to our agreement," said U.S. Attorney Booth Goodwin. "The company has made great strides in addressing the systemic problems it inherited after the merger."
In the agreement, Alpha agreed to dedicate $80 million over the next two years for safety measures at Alpha mines. The report also required $48 million for a research trust fund, $46.5 million in settlements with family and about $34.8 million in outstanding fines owed to the Mine Safety and Health Administration.
A brief update
The report, by appearances, seems to be a cover letter that accompanied another "attached" report. The version made public is just a few pages long.
Asked about the full report, Goodwin said it was "important to note" that the report was not simply a single document or report handed over to the prosecutor's office.
"They briefed us for a number of hours orally, and we had a number of follow up questions.," Goodwin said. "What we're providing is a summary of the reports that they've made."
He said his office would continue to monitor the matter.
"It's going to be a matter of trusting them to do the right thing but verifying that they have," he said. "Overall, and very critically, it's very apparent that there's been a greater emphasis on running coal mines safely."
According to the report, accidents are down by nearly one-third and injuries are down 25 percent at legacy Massey coal mines.
Meeting goals
The Running Right Leadership Academy, scheduled to open June 2013, is another part of the agreement. The "state-of-the-art" training facility is being built in Julian and is to provide safety training for any operators who want to train in mine conditions outside of real mines.
The release also states that Alpha would have to pay more than $34 million in penalties stemming from Massey operations, a record for resolution of penalties.
"The health and safety research foundation and the innovations in safety equipment under our agreement have the potential to create major improvements in mine safety, not just at Alpha but across the country," Goodwin continued. "And the financial consequences of Massey's behavior are a powerful reminder that cutting corners on safety is bad for business."
‘Pockets of problems'
Massey was the operator at the Upper Big Branch mine in Raleigh County. Investigators have determined that a methane explosion, inadequate air ventilation and other overlooked safety measures caused the explosion that killed 29 coal miners.
"There is still work to be done, as Alpha has acknowledged," Goodwin said. "But a lot's been accomplished over the past six months, and I look forward to another good report in December."
Goodwin confirmed Alpha has provided information sensitive to his own criminal investigation of the Upper Big Branch explosion. Individuals within the Massey/Alpha organization are not exempt from prosecution as a result of the Alpha settlement with the U.S. Attorney's Office.
"We're certainly continuing our criminal investigation, and I think you will continue to hear news about the results of our investigation in the very near future," Goodwin said. "It's not just a matter of commercial secrets. Very clearly, we're most concerned about releasing matters that may ultimately hinder our criminal investigation."
On several occasions during the interview, Goodwin acknowledged obvious "pockets of concern."
"You've got to remember that this is an organization with 11,000 coal miners," Goodwin said. "Turning a culture, a page, is more like turning a Freightliner than it is a go-kart. Obviously you always wish things would happen faster than they end up having to happen."
In the meantime, since the acquisition, a notable number of incidents have occurred at Alpha operations. The Mine Safety and Health Administration recently conducted a record inspection sweep of Alpha mines after revealing problems at one coal mine, and two coal miners have died in accidents at Alpha mines this year.
"This is by no means seeking to excuse that," Goodwin said regarding those and other incidents. "We're continuing to look closely at any matters of that nature. As an organization, they're very clearly more committed to mining coal safely than their predecessor."
Mostly positive report
Overall, Goodwin seemed pleased with the progress of Alpha thus far.
"I had three goals for that agreement, one of which was to address the systemic issues that were apparent at legacy Massey operations," Goodwin said. "I wanted to advance the state of the art of mine safety and health, and I also wanted to do something that would make clear to the rest of the industry that cutting corners on safety was bad for business."
Alpha, he said, is "progressing very nicely in this."
"I'd say we're right on track," Goodwin said. "It's apparent from the head office on down that real changes have been made, and they're positive ones. Again, I can't say that there aren't pockets that need improving, but overall, they're right on track with what we predicted what this agreement would provide."
The release states that Alpha has done remedial safety maintenance at Massey and will install explosibility meters recommended by an independent investigation panel following the Upper Big Branch explosion.
This month, Alpha plans to purchase its first cascading oxygen escape system, which helps miners get out of a mine in an emergency. The company expects to invest at least $10 million to $12 million in these systems.
Other advanced mine safety initiatives Alpha plans to implement includes wireless sensors that continuously monitor methane gas levels in all of Alpha's mines.
In addition to forming a new position overseeing health and safety regulatory requirements, Alpha has implemented its Running Right program at all former Massey mines. A part of the program allows miners to anonymously report safety concerns anonymously.
Goodwin stayed positive on the company, noting the decreased accident and injury rate at legacy Massey coal mines.
"What I'm very encouraged by is the progress they've made over the past six months and I look forward to the continued progress they will make in the next six months," he said.
Additional details provided in Alpha's report via Goodwin's new release include the following:
Injury and Accident Rates
At former Massey mines, the total reportable incident rate, a statistic measuring overall accidents, fell from 5.74 in the quarter just after Alpha assumed control to 3.86 in the quarter after the Agreement, a decline of 32.8 percent. Non-fatal days lost, a measure of injuries, dropped from 3.23 in the quarter just after Alpha assumed control to 2.45 in the quarter after the Agreement, a decrease of 24 percent.
Payments to MSHA
Since last December, Alpha has paid MSHA more than $34 million in penalties incurred by Massey. That total includes a payment of nearly $11 million for citations issued in December 2011 in connection with the UBB explosion. Rather than challenging any of the UBB-related citations, Alpha instead paid them in full less than a week after they were issued. Moreover, because Alpha dropped Massey's challenges to all outstanding citations as a term of the agreement, MSHA's backlog of contested cases was reduced substantially.
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