The True Cost of Coal

Coal accounts for more than half of America's electricity because it is so cheap—and it remains cheap because no one pays the very large hidden costs of its mining and burning

Shortly after six o'clock on the of December 7, 1992 James Mullins prepared to fire up an illicit Viceroy Ultra-Light in a mine called Southmountain No 3, in Wise County Virginia, he probably did not realize that he was about to figure in a debate about the true cost of coal to American society. Almost certainly Mullins did not realize that the operators of Southmountain No. 3 would in the future be charged with thirty-three violations of mine-safety rules, or that by the time he lit up, eight of those viola-tions had allowed a dangerous concentration of odorless methane to accumulate in the shaft where he was working, some 1,000 feet under the surface. The spark from his lighter touched off the methane, which in turn touched off the coal dust floating in the air near the mine's machinery. The force of the explosion leveled a building just outside the mine at the end of a mile-long tunnel. And it killed eight miners, including Mullins. One of them had his skull fractured; the others smothered in a cloud of carbon monoxide.

The national media covered the disaster for a few days, until the bodies were recovered and it was clear that there would be no dramatic rescue story from Southmountain No. 3. No one pointed out to viewers or readers the link between the miners' deaths and the television they were watching or the light that illuminated their newspapers. The fact is, though, that today coal provides more than 55 percent of the electricity generated in the United States. In a high--tech society much rests on the shoulders of men like James Mullins, who descend into dark tunnels, crouch under six-foot ceilings, rip coal from the bowels of the earth, and occasionally die.

Twenty years ago few people figured that as the new millennium approached, America would be so dependent on a source of energy that was banned in the city of London in 1273 for being injuri-ous to public health. In 1973 the Federal Power Commission predicted that coal's share of U.S. electricity generation would decline from 46 percent to 30 percent by 1990. Then came the Arab oil embargo and Three Mile Island. Oil became too costly, and too foreign, for extensive use in the generation of electricity. Nuclear power, which had been expected to surpass coal as an electricity generator, was frightening. Coal had the virtue of being widely available inside the United States. And at a cost of less than two cents per kilowatt-hour of power, it was cheap. It was, in fact, so much cheaper than renewable resources like wind and solar energy that it all but eliminated them as commercial sources of electricity.

Or at least coal seemed cheap, until environmentalists, state utility regulators, and some economists began to argue that the market price of coal does not reflect a wide range of "external" costs that society, or some segment of society, will eventually pay. The economists maintain that the coal James Mullins was digging, which cost about $20 a ton at the mouth of Southmountain No. 3, would be much more expensive if these costs were added on, or "internalized."

To begin with, there is the cost of lives lost and health damaged among the miners. The number of deaths tends to decline a bit each year, but that is in part because automation keeps reducing the number of miners. Over the past threeyears one statistic has remained constant: for every five million man-hours worked in the mines, one miner dies. Last year that meant fifty-four deaths.

Society has contrived to place severe limits on the amount of money that miners' widows and children can collect for these casualties. In Virginia, as in most coal-producing states, the law makes it all but impossible to sue mine owners-- even in cases like that of Southmountain No. 3, where federal investigators established that safety violations contributed to the miners' deaths. Instead the survivors get a workmen's-compensation benefit calculated on the basis of the dead man's salary and paid by insurance the mine owner must carry. For the survivors of Southmountain No. 3 victims this tops out at $434 a week for 500 weeks, or a total of $217,000. Were the survivors of the Southmountain No. 3 miners able to sue the mine owners, a jury would no doubt place a much higher value on the lost lives. According to a Pennsylvania group called Jury Verdict Research, which tracks such things, $217,000 is about the going rate for damages for a broken leg in American lawsuits. The average jury in a wrongful-death suit awards $941,700 to the family of a forty-year-old man making $25,000 a year.

Some economists in the external-costs debate would argue that the dead miners were compensated for their deaths by the wages they earned while they were alive, which were higher than wages in less dangerous industries. In Wise County, for instance, workers in furniture factories make an average of about $7.50 an hour; the miners who died in Southmountam No. 3 made $11 or $12. But the argument that miners consciously calculate that an extra three or four dollars an hour is worth risking their lives for assumes careful, long-term thought on the part of men who are prepared to smoke inside a coal mine. It seems more likely that the extra money they earn compensates them for the immediate travail, the darkness and the dirt and the backaches, of work in the mine. The difference between workmen's-compensation benefits and the market value of a wrongful death roughly three quarters of a million dollars per case-should be counted as an external cost that the mining industry and the consumers of coal slough off on the miners' families. So should the disparity between workmen's compensation and the market value of the more than 9,000 serious injuries coal miners suffer each year.

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