May 25, 2010

Refuge Alternatives for Underground Coal Mines

Proposed Rule
Summary

Score: 28 / 60

Additional details
Agency
Department of Labor
Regulatory Identification Number
1219-AB58
Agency Name
Department of Labor
Rule Publication Date
06/16/2008

RULE SUMMARY

The Mine Safety and Health Administration (MSHA) is proposing requirements for refuge alternatives in
underground coal mines and the training of miners in their use. The proposed rule also includes requirements for testing and approval of refuge alternatives. The proposal would implement section 13 of the Mine Improvement and New Emergency Response (MINER) Act of 2006. Consistent with the MINER Act, it includes MSHA’s response to the National Institute for Occupational Safety and Health Report on Refuge Alternatives.

METHODOLOGY

There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.

Criterion Score

Openness

1. How easily were the RIA , the proposed rule, and any supplementary materials found online?
There appears to be no obvious chain of links from the home page that leads to the RIA. However, a search using the regulation's name and "proposed rule" turns up a link to the proposed rule, which in turn has a link to the RIA on the department's web site. Using this method, the RIS is three clicks from the home page. The proposed rule can also be found on regulations.gov.
4/5
2. How verifiable are the data used in the analysis?
Many data sources are provided, but some data sources are not mentioned. For instance, references throughout the paper are made to a report issued by NIOSH on refuge alternatives. Further, the data on the structure of the underground coal mining industry is from the U.S. Department of Labor, Mine Safety and Health Administration and the Office of Program Evaluation and Information Resources. However, the majority of remaining data (like MSHA's accident and injury data) is not referenced and is just introduced as "most recent MSHA data." The References page describes four main sources but no source is linked.
2/5
3. How verifiable are the models and assumptions used in the analysis?
The range for percent of lives saved looks like a guesstimate. 100% compliance assumed for both cost and benefit estimation. Little is offered in the way of causal explanations.
1/5
4. Was the analysis comprehensible to an informed layperson?
The entire analysis is understandable to a layperson. There is minimal use of technical jargon and charts are well explained.
5/5

Analysis

5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them?
3/5
Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life?
The RIA notes that, in general, the proposed rule would improve mine operators’ preparedness for mine emergencies. More specifically, this proposed rule would require the availability of refuge alternatives in the event that escape is delayed or not possible. MSHA suggests that the proposal would therefore improve mine operators’ preparedness for mine emergencies and increase miners’ safety by requiring refuge alternatives underground to protect and sustain miners trapped when a life-threatening event occurs that prevents escape. The refuge alternatives proposed in the rule may also assist miners in escaping from the mine.
5/5
Does the analysis identify how these outcomes are to be measured?
MSHA measures these outcomes by looking retrospectively at how many lives could have been saved if this proposed rule had been enacted earlier. MSHA evaluates its accident and injury data from 1900 through 2006. During that period, 264 miners who were alive after a mine accident died later during rescue or escape. If refuge alternatives had been available, MSHA estimates that the range of lives saved would be between a low of 55 and a high of 166 lives. This part of the analysis would be improved if MSHA considered the effects on current miner safety and made projections about the amount of lives saved in the future as well.
4/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
The analysis assumes that compliance would have saved 25–75% of lives that would otherwise have been lost. It does not posit a theory to justify this estimate.
1/5
Does the analysis present credible empirical support for the theory?
Two strong points: The analysis ensures that the regulation can't save more lives than were actually lost in coal mines, and it adjusts this figure for lives presumed saved by other regulations.
2/5
Does the analysis adequately assess uncertainty about the outcomes?
The analysis acknowledges big uncertainty in range of estimated lives saved but does not justify the range. The RIA does not assess the likelihood that mining emergencies like explosions, fires, or inundations, will occur in underground coal mines, but the analysis does mention that from 1900–2006, 264 miners who were alive after a mine accident died later during rescue or escape.
2/5
6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve?
1/5
Does the analysis identify a market failure or other systemic problem?
Not specifically. The RIA assumes that the likelihood of a mining emergency occurring is the same for all 613 underground coal mines. Since this is highly unlikely, the RIA could be improved if MSHA assessed the likelihood of an emergency occurring on a more specific or regional basis. Assuming that the problem is systemic is not enough. For instance, the 264 miners who died during rescue or escape could have been from a handful of the 613 underground coal mines, a finding that would undermine the systemic nature underlying the proposed rule.
1/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal?
Extensive data explain the size and scope of coal mining, but none of the data demonstrate why this is an industry-wide problem.
1/5
Does the analysis present credible empirical support for the theory?
The proposed rule cites several examples of underground coal mine accidents in Kentucky, Utah, Pennsylvania and West Virginia within the "Discussion of the Hazard" section of its introduction.
1/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
The analysis does not address this topic.
0/5
7. How well does the analysis assess the effectiveness of alternative approaches?
2/5
Does the analysis enumerate other alternatives to address the problem?
MSHA considered certain breathable air options within the RIA that could be used to meet the requirements of the refuge alternatives proposal: (1) existing boreholes; (2) provisions for 48 hours of breathable air plus borehole pre-arrangements; and (3) compressed air stations.
5/5
Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)?
These three alternatives are adequate in addressing alternatives to breathable air options. However, since other aspects of the proposed rule, such as its requirements for the use, transport, maintenance and inspection of refuge alternatives, are not addressed, the range of options considered is narrow. Further, no alternative action to federal regulation is described.
1/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
The RIA estimates costs of some of the refuge alternatives but does not measure outcomes.
1/5
Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future?
The RIA would be improved if the state of the mining industry in the absence of federal intervention was outlined clearly given the questionable cost effectiveness of the proposed rule and the RIA's narrow treatment of alternatives. Also, though the RIA does contextualize the rule in accordance to section 13 of MINER Act of 2006, a discussion of what miner safety would look like in the absence of this act and/ or any amendments to it would help readers assess the effectiveness of regulations such as the proposed rule. One strong point is that the analysis avoids counting lives that are assumed saved by other regulations.
2/5
8. How well does the analysis assess costs and benefits?
2/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
The analysis identifies additional expenditures to comply with the regulation and considers some costs of alternatives. MSHA has developed a range of costs for these breathable air options. The agency estimates that for most mines, alternative 1 would cost between $100,000 and $500,000. MSHA estimates that the difference in cost between 48 hours worth of provisions and 96 hours worth of provisions is $5,000 for 10-person refuge alternatives and $10,000 for 20-person refuge alternatives for alternative 2. Finally, the cost of one piped compressed-air system (alternative 3) is estimated to be in excess of $120,000.
4/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
In the "Derivation of Proposed Rule Compliance Costs" section, MSHA estimates the unit and component costs for each aspect of refuge alternative, and that information is summarized in different tables. An exhaustive breakdown and description of the expenditures facing manufacturers and mine operators of $43.3 million is given. Approval Costs amount to 2.1 million, requirements for Refuge Alternatives; Purchase, Installation, Transportation, Maintenance and Repair of Refuge Alternatives comes to 21.8 million, Roof Control Plans, Pre-Shift Examinations, Map Revisions, and Emergency Response Plans average $6.6 million and training comes to12.8 million. Table IV-3 also provides a thorough breakdown of the first-year costs of the proposed rule, which amount to $102.6 million.
5/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
While the RIA does give a thorough treatment of the average price of coal in underground mines in 2007 ($40.37 per ton) and the price of other factors that influence sections IV A-D of the proposed rule, there is no analysis of how the proposed rule will affect the prices of goods and services is evident.
0/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
The analysis assumes no change in miner, industry, or consumer behavior.
0/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
The analysis considers the possibility that split between prefab units and prepositioning of supplies to build units will differ from 60/40 to 40/60.
3/5
Does the analysis identify the alternative that maximizes net benefits?
There is no explicit discussion; some more costly alternatives are ruled out. It is not directly apparent that the proposed rule maximizes net benefits. In its "Economic Feasibility" section, MSHA concludes that the proposed rule would be economically feasible for these mines because the total yearly compliance cost ($41.2 million) is below 1% (0.3%) of the estimated annual revenue for all underground coal mines ($14.1 billion). However, the costliness of the proposed rule (total yearly cost of $41.2 million, total amortized value of first-year cost of $102.6 million) does not seem to justify the benefits. Although highly controversial, paying $102.6 for the first year and $41.2 million annually after that to save approximately one-half life per year under the lower estimate or one and one-half lives per year under the higher estimate means that the regulation's cost per statistical life saved exceed most values of a statistical life used by other agencies. Since the benefit estimates were performed retrospectively and the alternatives considered are narrow in scope, the RIA could be improved if MSHA used estimates of the value of a statistical life and broadened its scope of alternatives considered.
2/5
Does the analysis identify the cost-effectiveness of each alternative considered?
Although mine operators may use the three alternatives, MSHA has not included them in the agency’s cost estimates because their costs are more speculative. Nonetheless, MSHA does develop a range of costs for these breathable air options. Cost-effectiveness is not explicitly calculated.
2/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
The analysis includes an extensive discussion of incidence across different types of mines. There is no discussion of passing costs back to workers or forward to customers.
3/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
The analysis pesumes that miners receive benefits, but there is no discussion of whether miners in different types of mines have different risks. MSHA evaluates its accident and injury data from 1900 through 2006. MSHA estimates that 55 lives could have been saved under the lower estimate, and that 166 lives could have been saved under the higher estimate. Even though the information is likely available in its accident and injury data, MSHA does not give any further breakdown describing which mines would have been helped the most.
1/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
A few expensive alternatives were ruled out. There is some evidence in the proposed rule that the RIA affected some decisions, especially in regards to the calculation of compliance costs, but not any major decision.
3/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
There is no discussion of net benefits. A few more expensive alternatives were ruled out, which suggests some sensitivity to net benefit considerations. The agency characterizes this as a "performance" standard because specific technology was not mandated. The RIA addressed costs of the three alternatives chosen. However, the alternatives chosen are too narrow for these calculations to inform any maximizing choice. Also, it is not apparent that the option the agency chose maximizes net benefits.
2/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
There is no discussion, but Labor could have set goals for accidents, fatalities, etc.
1/5
12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so?
Accident data could permit the department to monitor outcomes.
2/5
 
Total 28 / 60