The Upper Big Branch Mine Disaster

The Upper Big Branch Mine Disaster

Colleen Hoover Brook MartinKristi Meier Kylie Thomas

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Introduction April 5, 2010, just before 3:00 pm, miners at

Massey Energy Corporation’s Upper Big Branch were in the process of a routine shift change.

Workers on evening shift climb aboard “mantrips.” Day shift workers were packing up and getting

ready to leave. At one of the “longwalls,” a team of four

experienced miners were operating a shearer. The shearer was shut down for part of the day due

to mechanical difficulties.

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Disaster Struck A spark was thrown off the shearer’s blades when it cut

into sandstone. This ignited a small pocket of flammable methane gas. Seconds later, the flame reached a larger pocket of

methane, creating a small fireball. The four miners began to run toward the exit opposite

the fire. They had gotten no more than 400 feet when coal dust

on the ground and in the air ignited violently, setting off powerful explosions.

Three minutes later, 29 miners were dead and 2 were seriously injured.

It was the worst mining disaster in the United States in almost forty years.

“That was no roof fall…the place blew up.”

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Massey Energy Corporation The owner and operator of the Upper Big Branch

mine, was one of the leading coal producers in the United States.

Specialized in high-grade metallurgical coal. Massey extracted 37 million tons of coal a year. Ranking sixth among U.S. producers in tonnage. In 2009, Massey earned $227 million on revenue of

$2.7 billion.

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Massey Energy Corporation (Continued) The company and its subsidiaries employed 5,800

people. Forty-two underground mines, fourteen surface

mines and several coal processing facilities in West Virginia, Kentucky, and Virginia.

Provided fuel for about half of the electricity generated in the United States.

Lessens the country’s reliance on imported oils.

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Massey Energy Corporation (Continued) They provided thousands of relatively well-paying

jobs. The company donated to scholarship programs,

partnered with local schools, and provided emergency support during natural disasters.

In 2009, Massey declared to his shareholders, “We recognize that it takes healthy and viable communities for our company to continue to grow and succeed.”

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The Dark Side of Massey Critics saw a darker side of Massey. Company used explosives to blast away the tops of

mountains to expose valuable seams of coal. The resulting waste was frequently dumped into

adjacent valleys, polluting streams, harming wildlife, and contaminating drinking water.

In 2008, Massey paid $20 million to resolve violations of the Clean Water Act.

It was the largest settlement under that law.

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The Dark Side of Massey (Continued) Toxic mine sludge spilled from an impoundment

operated by the company in Martin County, Kentucky.

It contaminated hundreds of miles of the Big Sandy and Ohio rivers, necessitating a $50 million cleanup.

Workers safety was also a concern. An independent study found that Massey had the

worst fatality rate of any coal company in the United States.

In the decade leading up to the Upper Big Branch disaster, Peabody Coal had 1 fatality for every 296 million tons of coal mined; Massey’s rate was 1 fatality per 18 million tons.

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Donald L. Blankenship Descendant of McCoy family known as the famous

Hatfield and McCoy. Raised by single mother.

Supported by working 6 days a week, 16 hours a day running a convenience store and gas station.

Graduated from Marshall University, Huntington West Virginia with a degree in accounting.

As a college student he worked in a coal mine to earn money for tuition.

At age 32 he returned to the coal fields to work for Massey energy and became an office manager.

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Blankenship Success Blankenship quickly moved up through the

management ranks. In 1990, only 8 years after he joined the company

he became president and chief operating officer for Massey Coal Company.

In 1992 he was promoted to CEO and Chairman. He became a successful CEO and increased

revenue in the first full year from $1.2 billion to $2.7 billion.

Increased employment from 3,700 to 5,800 employees.

More than doubled the company’s coal reserves.

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Blankenship’s Character Developed a reputation as a hands on and detail

oriented manager. Ran the company out of a double wide in Belfry,

Kentucky. Signed off on all hires. Maintained a laser focus on productivity. “People talk about character being what you do

when no one is looking. But the truth of the matter is character is doing that which is unpopular if it’s right, even if it causes you to be vilified.”

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Executive Compensation Upper big branch compensation program made of

two parts: Salary. Performance based incentive system, (which

was established by Massey’s board of directors). Philosophy of compensation:

“We compensate our named executive officers in a manner that is meant to attract and retain highly qualified and gifted individuals and to appropriately incentivize and motivate the named executive officers to achieve continuous improvements in company-wide performance for the benefit of our stock holders.”

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Blankenship’s Earnings Base salary in all 3 years was around $1 million

each year. Bonus of $300,000 each year. 2007 $9 million. 2008 $11 million. 2009 $18 million. Estimated total in 10 years around $129 million.

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Government Regulation of Mining Coal mining is a hazardous occupation:

Methane gas. Coal dust. Collapsing tunnels. Dangerous machinery.

Established in 1910 following an explosion in the Monograph mine in West Virginia: 362 men died. Conducted research on the safety and health of

miners.

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The Federal Coal Mine Health and Safety Act Known as the Coal Act. Passed in 1962 after death of 78 miners at the Consol

Number 9 mine in West Virginia: Greatly increased federal enforcement powers. Established fines for violations and criminal

penalties. Provided compensation for miners disabled by black

lung disease. The Mine Act was established in 1977:

Established the Mine Safety and Health Administration MSHA.

Required at least four full inspections underground annually.

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Mine Improvement and New Emergency Response Act Established in 2006 due to mine tragedies. Known as the MINER Act. Created new rules to help miners survive

underground explosions and accidents. At the turn of the 20th century an average of 300-

400 miners died every year. Due to regulations and inspections mining safety

has improved. Deaths:

18 deaths in 2014. (http://www.msha.gov/stats/charts/coalbystates.pdf)

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The Upper Big Branch Mine Massey bought the mine in 1993 from Peabody

Coal. It was valuable property because its thick coal

seam produced the high-grade metallurgic coal favored by utilities and the steel industry.

Two hundred employees worked there on three, round-the-clock shifts.

In 2009, Upper Big Branch produced 1.2 million tons of coal, about 3% of Massey’s total.

The mine was nonunion.

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Records Reveal Widespread Safety Violations “Don’t worry, we’ll litigate it away.” – Massey’s

Vice President for Safety (Exhibit C). “If you can’t go up there and run coal, just bring

your lunch outside and go home.” – Manager. “If you’re going to be that scared of your job here,

you need to rethink your career.” – Supervisor. “If you got hurt, you were told not to fill out the

lost-time accident paperwork. The company would just pay guys to sit in the bathhouse or to stay at home if they got hurt.” – Former Massey Miner.

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Safety and Health Citations, Upper Big Branch Mine, Assessed

E x h i b i t C penalties and Amount Paid,2000-2009

Year Number of Citations Assessed Penalty ($) Amount Paid ($) 2000 240 55,325 55,325 2001 398 48,761 48,761 2002 221 64,726 64,726 2003 175 41,934 41,405 2004 238 48,371 48,371 2005 143 32,577 32,576 2006 173 191,249 84,411 2007 271 253,984 61,745 2008 197 239,566 105,965 2009 515 897,325 292,953

S o u r c e : M S H A d a t a , r e p o r t e d i n t h e a p p e n d i c e s o f Industrial Homicide: Report on the Upper Big Branch Mine Disaster.

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A Surviving Miner Testified: “Nobody shuts one of Don Blankenship’s mine

down. It has never happened. Everyone knows when mine inspectors are coming, you clean things up for a few minutes, make it look good, then you go back to the business of running coal. That’s how things work at Massey. When inspectors write a violation, the company lawyers challenge it in court. It’s just all a game. Don Blankenship does what he wants.”

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Causes of the Disaster Rock Dust – Failed to meet government standards

for the application of rock dust. Result – Explosive coal dust had built up on

surfaces and in the air throughout the mine. Ventilation – Upper Big Branch mine did not have

sufficient ventilation to provide the miners with fresh, breathable air, and to remove coal dust as well as methane and other dangerous gases. Result – 71% of autopsied victims showed sings

of black lung disease. Equipment Maintenance – Water sprays on the

longwall shearer were not functioning properly. Result – Miners were unable to extinguish the

initial spark.

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Industrial Homicide Several of the cutting teeth on the rotating blades or

“bits” had worn flat and lost their carbide tips, which likely caused sparks.

Clogged and missing nozzles prevented water from cooling down the bits and extinguishes sparks.

Inadequate water pressure kept the surface from becoming wet and cooled.Result – Any small sparks thrown off could not be extinguished.

The United Mine Workers called the disaster “industrial homicide” and called for the criminal prosecution of Massey’s managers.

Massey claims that is was an Act of God, and they had not contributed in anyway to the accident.

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Discussion Question #1 What were the costs and benefits to the

stakeholders of the actions taken by Massey Energy and its managers? Blasting away tops of mountains for coal. Toxic mine sludge. Massey was concerned with workers safety. However, Don Blankenship defeated the union for his

workers by 99% leaving only 1% being union members.

Blankenship also implemented a memo for his workers that was S-1 and P-2 (safety first, production second), repairing the concern for Massey’s workers safety.

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Discussion Question #1 (Continued)

A widespread pattern of safety violations appeared at the mine and an increasingly contentious relationship between the managers and government regulators seemed to happen.

The year before the big disaster there was a sharp spike in violations at the mine.

Management also had begun to contest regulatory penalties rather than pay them.

Blankenship made lots of benefits to the company in the beginning of his career but made the company lose so much in the end.

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Discussion Question #2 Applying the four methods of ethical reasoning

(utilitarianism, rights, justice, and virtue), do you believe Massy Energy behaved in an ethical manner? Why or why not? The men employed at Massey had no rights, justice or

virtue in their positions as coal minors. When the miners complained about the conditions

that they worked in they got scolded. Most of the time Massey didn’t even take care of the

violations.

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Discussion Question #3 Who or what caused the Upper Big Branch mine

disaster, and why do you think so? If the right actions would have happened like taking

action to the violations that the company received and taking action to prevent any harm to their employee’s the disaster would not have happened.

Everyone was affected from the crisis. A successful company starts with caring about their

employees and that is what Massey lacked.

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Discussion Question #4 What steps could be taken now to reduce the

chances of a similar tragedy occurring in the future? In your answer, please address the appropriate roles of mining companies (and their directors and managers), government regulators and policymakers, and the workers and their union in assuring mine safety. Getting better managers and hierarchy in the

company to take care of the employees they have. Have the new management be very aware of

violations that they have and take the appropriate actions and precautions to fix them and not let them occur ever again.

Government regulators and policymakers would need to come to the mine regularly.

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References Lawrence, A., Weber, J., (2014). Business and

Society Fourteenth Edition. Pages 448-457.