Amidst Coal Downturn, MSHA Wants More Money

Mine closures and worker layoffs in the coal sector are rampant, leading to the common sense conclusion that the Mine Safety and Health Administration should need less money to regulate a shrinking business, but more millions, not fewer, are what the agency wants in the coming year.

MSHA seeks $397.4 million and six new hires to manage its mine safety and health affairs in fiscal 2017, which begins on Oct. 1, 2016. The lion’s share ‒ 43.2% ‒ of its request to Congress is $171.8 million for its Coal Mine Safety & Health inspectorate. The dollar figure is a sizeable boost over the $164.3 million for Coal enforcement in this year’s budget.¹ Why MSHA needs the increase is mystifying when you look at the number of active Coal mines, employment, MSHA’s proposed enforcement actions and other indicators.

For instance, over the past five years, the number of surface and underground coal mines has dropped faster than an unplanned roof fall. In 2011, the count of active mines was 970 surface operations and 450 underground. Currently, the figures stand at about 395 and 186, respectively.² The number of coal miners has declined from 143,437 in 2011 to 102,804 last year.³ Even that latter figure may be inflated. Bob Murray, CEO of Murray Energy Corp., a major coal producer, told a media outlet in mid-July that the number of coal miners currently stood at 60,000. In terms of anticipated enforcement actions, the agency proposed 4,130 mandated inspections in Coal in 2016, but has proposed only 3,700 in fiscal 2017. It is projecting 120 impact inspections in the sector this year,⁴ only 110 in fiscal 2017.

The Coal group is operating with one less field office this year than a year ago. In a suggestion the Coal inspectorate has been cash-flush, the agency said it transferred just under $3.6 million and 24 full-time equivalent employees from its Coal unit to other internal units in fiscal 2016, including to its Metal/Non-Metal (M/NM) inspectorate. In fiscal 2015, MSHA said 15 FTE were transferred to M/NM from Coal plus another eight employees who offered assistance to M/NM temporarily. Clearly, there is less for MSHA’s Coal people to do, yet the agency seeks more money to do it.

 ^{___________________________________________________}

¹Source: page 24 of MSHA’s proposed 2017 fiscal budget (https://www.dol.gov/sites/default/files/documents/general/budget/CBJ-2017-V2-13.pdf).

²The roughly 581 currently active coal mines is a far cry from the figure of about 1,500 mines mentioned in MSHA’s 2017 budget, but we assume the agency is counting idle and nonproducing operations as well.

³Interestingly, as the number of Coal miners has declined, MSHA's cost per Coal miner has increased. In fiscal 2012, the cost was $1,195 per miner; in 2015, $1,633. The figures were derived by dividing the total number of Coal miners in those years into the Coal inspectorate’s budget for that year. In contrast, the cost per M/NM miner rose from $356 in 2012 to $383 in 2015.

⁴Through May 2016, 92 impact inspections have been completed in Coal, for an average of 11.5 per month. At that rate, MSHA will complete 138 such inspections in the sector by the end of this fiscal year.

In its budget justification statement, MSHA said it needs $2.1 million more to implement and enforce the new coal dust rule. Another $650,000 would be earmarked to pay for coal mine inspections during odd hours. The biggest chunk, though, $2.3 million, would go toward inflationary cost increases related to compensation, benefits, and rent that were dropped from MSHA’s FY 2016 appropriation for Coal. In fact, the inflation factor is a major driver for why MSHA wants more money for each of its eight operating units.

It should also be noted that the agency wants to add six new hires to work for the renamed Office of Assessments and Special Enforcement, formerly OASSEI.  According to MSHA, the new people are needed “to continue to improve the timeliness of special assessments and improve special investigations and accountability audits.” If approved, the new employees would bring MSHA’s total workforce to 2,277 employees.

Given Coal’s decline, we are unconvinced that MSHA’s wish list for fiscal 2017 cannot be funded for less money. We are not alone. Congress isn’t sold on the agency’s proposal either. The Senate has offered $376 million while stingier representatives in the House have said $350.5 million is enough. Personally, we like the House figure. Ronald Reagan once opined that no government ever voluntarily reduces itself in size. We’re seeing that with MSHA today. MSHA’s budget should be cut.

Copyright 2016, James Sharpe, CIH. All Rights Reserved.