Mine Owner Quits in Light of Never Ending Regulations

A point well taken, just look at how many mega corp.s keep buying up the smaller ones, it most likely comes down to which ones can spread the most lobby money around.

While people seem to have enjoyed turning this into a global dialogue on regulation - and such a dialogue is important, etc. - I'd like to go back to the original cited article. The guy decided not to open an underground mine in Alabama. So what? Alabama is a very small player in US coal production, accounting for less than 2 percent in 2009. If a couple of bigger Alabama coal users shift to coal from another state, for example, new mining plans could change quickly for the producers in Alabama. The fact that he was developing an underground mine also raises some issues - eastern coal has experienced a lot of competition from cheap surface-mined western coal, and all else price competition hits hardest on the highest cost (i.e., underground) producers.

In the bigger picture, mine safety regulations - most of which have been in place for decades - do not seem to have impeded substantial growth in domestic production, and don't prevent us from exporting tens of millions of tons annually into markets where we have to compete with production from other countries.

My $0.02 is that this guy tried to turn into a sound bite a business decision that had nothing to do with mining regulations. Maybe he hoped that no one would ask why he expected an underground mine in Alabama to be successful when big powerplants in Alabama and surrounding states have been converting to PRB (i.e., Wyoming) coal.

Mike

Well seeing how this state won't let you put up a tool shed without 10 permits, I can only imagine how much money the federal government (who happens to be run by the same party that runs MA ...) charges those who wish to begin a mining operation.

All those issues you mentioned go without saying. It's all this environmental BS - nitpicking - that is driving jobs overseas, or killing them altogether as in this case.

Pacowy wrote: So what? Alabama is a very small player in US coal production, accounting for less than 2 percent in 2009.

Anthracite production would be .2 percent, note the decimal point. All anthracite mining could cease tomorrow, wouldn't even be news worthy as national concern. A Couple thousand people would lose their jobs, everyone here would have to find some other form of heat.

Still going to say so what?

I was at a local meeting about a tires to energy plant that was hosted by the DEP as a informational meeting for residents to ask questions. It is OK as far as the DEP & EPA, it has passed everything as far as permits & such, there were people there bringing up all kind of crap about what if this or that happens. The DEP people kept saying some things couldn't happen & if others did the plant would throttle down & then whatever had to be done would or the plant couldn't go back on line. When I was leaving almost all those arguing got in their BMWs & Lexuses while the locals got in their pick-ups.
The bottom line so far is everything is still on hold.

Richard - my "so what" related to what we're supposed to draw from this guy's decision not to open an underground coal mine in Alabama. I'm not aware - and someone fill me in if I'm wrong - of any significant recent changes in federal underground mining regulations that would have any effect on a plan for an underground mine in Alabama. This guy knew what the reg's were when the plan was developed, and eventually decided not to build. In the anthracite market, an analogy would be if I developed a plan to put an underground mine away from the places where most of the anthracite comes from - say, southeastern MA or RI - and then I figured out that I couldn't really make it work because my mining costs would be high and the local demand wasn't big enough to make it viable. When the problem is in the plan, I don't think it helps anything to claim that it is in regulation.

Smitty - I'm not trying to excuse regulations that don't make sense, or drive jobs overseas; what I'm saying is I don't think coal mining provides a very good example of that, since coal is something we're able to export in volume even when competing with people who don't operate under our mining regulations. Just because this guy said something about regulations doesn't mean it's true. I'll go further and throw out the proposition that a lot of production has gone overseas because domestic management and labor interests didn't take seriously the threat of foreign competition. Poor marketing and design, and restrictive work rules in some cases have contributed to exporting jobs.

Mike

Did the guy say it was specifically federal mining regulations that were his issue? I will have to rewatch to find out.

There are lots of other regulations and regulating bodies out there that business owners, including mining operators, have to deal with. And he may also have been using "regulations" as shorthand for other non-regulatory issues: state and/or local tax laws, health care laws, workers comp and other overhead cost increases, labor relations law, etc.

Pacowy, you seem to be dismissing out of hand what appeared to be a heartfelt and "off the cuff" statement by this guy. True, maybe it was all a show or there was some subterfuge involved, but there isn't any evidence of it beyond speculation as to the likely profitability of an underground mine in Alabama. Maybe the mining operation he had planned was not a big deal in the grand scheme, but it appears to have been a big deal to him and likely would have been a big deal to the people he would have hired and would have been a big deal to the downstream businesses he would have had to interact with for his equipment, supplies, insurance, payroll, etc.

And Richard, good point on the big guys using their lobbying power to get regulations and law on their side to snuff out small scale competition. Indeed there is also this phenomenon in the insurance industry, not as means to snuff out small scale competitors so much as to create greater and greater revenue streams for themselves. They get the reg put in place "for the children" or "because it is for the health of the people" or whatever, and now insurance is "mandated" to cover some greater (or lesser as the case may be) degree of treatment or repair or whatever. They have to jack their rates (but they really don't want to, you know), and simultaneously complain that it is the government mandated coverage minimums that are to blame. Been happening on small state level scale for years. And of course Obamacare was the mack daddy insurance company colluding with government scheme of them all. I'm not sure where the insurance companies ended up. At different times in the process some companies were on board, others were down on it, then it would flip the next week. Have to be thinking they are stoked at this point, at least until they get blamed for runaway costs under the new law and the feds try to nuke their industry with a "government" option, and then a single payer government run system.

pvolcko wrote:Did they guy say it was specifically federal mining regulations that were his issue? I will have to rewatch to find out.

The first post in this thread credited Obama with killing jobs. I don't think Obama has much authority over non-federal regulations, and as far as I know there haven't been any significant changes in federal mining regulations that would affect underground mining in Alabama for almost 20 years. How can an experienced person develop a plan, decide not implement it, and blame something he knew before he developed the plan? I could understand if he didn't like citizens making public statements in opposition to his plan, and on that basis decided to put his efforts elsewhere, but that's not "never ending regulations". That's called a "hearing" and I don't think any of the people who have been railing against regulation really want their own right to be heard to be abridged.

I'm also kind of mystified by the proposition, raised earlier, that the federal government somehow profits from imposition of unreasonable regulations. I'm not an expert, but my understanding is that mining on federal lands generally occurs under leases that are awarded through competitive bidding. Any pointless/inefficient/stupid mining regulation reduces the price a prospective mine operator is willing to pay for the lease, so I don't get even the basics of that conspiracy theory.

I'll second the earlier opinion that it's good to stick to the facts. Here, I don't see how the available facts support the proposition that unreasonable mining regulations prevented this mine from opening.

Mike

We don't even know to what point this guy's "mine" was, he greatly over inflated the pay scales IMO, could be he has over inflated everything to try & erase a bad business move on his part. Either to appease other investors or to try & claim larger write offs, there is a lot more to this story, & as Mike stated it seems like Obama gets blamed right off the start for everything that some deem as bad Gov..

Obama doesn't have authority over many things .... but as we've seen in the past 3 years, he just does things "Chicago style" - does an end-run around the rules & jams them down the public's throat anyway.

Obamacare .... project "Gunrunner" ..... those are just the things we know about.

He said it himself that he was going to bankrupt the coal industry. Not my words.

jpete wrote: Here's what needs to change. Get rid of all the regulations and regulatory agencies.

Then, if a business does something that infringes on my "life, liberty, and pursuit of happiness" then the owner/CEO can be criminally prosecuted.

If they own the mountain, they can turn it into a hole in the ground for all I care.

If the operation poisons the water or air around them, then they are guilty of violating all their neighbors rights.

IF they are bankrupt, how can they rectify the damages? Should they have to start a cash reserve for damage? If so, how much? Who governs that?

mikeandgerry wrote: IF they are bankrupt, how can they rectify the damages? Should they have to start a cash reserve for damage? If so, how much? Who governs that?

I believe the funds for reclamation go into escrow or it's bonded. Whatever the case it's taken care of.

How does any of that help the miners that would IMO lose their lives in larger #s if all regulations are abandoned?

Richard, I think the original issue was damages associated with poisoning "the air and water around them", and not things normally associated with mine reclamation. Absent some type of standard, I think both history and economics have shown that businesses are often ineffective at policing themselves on the external/environmental impacts of their operations. People may idealize it as some type of freedom, but when that "freedom" means somebody's dumping toxic materials or sewage into your water, or the water used to irrigate the farms that grow your food, or the air you breathe, to me the reality isn't quite so simple, or so appealing. And the idea that any external damage will just be cleaned up after the fact, undoubtedly with the help of armies of lawyers, doesn't do much for me either.

Don't get me wrong - I'm not a fan of big government or of regulation that doesn't have a sound basis. But I don't see how the elimination of all regulations is a reasonable objective, either. Maybe if people concerned with regulations could be a little more specific, there could be a better dialogue about whether any given one makes sense.

Mike

I don't think all regulations should be abandoned. Some are good. However, regulations must be of a sound throught process and using real scientific data. No junk science, no emotional knee jerk reactions. We must protect the enviornment, workers and landowners rights within reason.

I put mountain top mining in the same basket as rain forest decimation. Not good in a grand scale.