Proposed Rule
Preliminary Regulatory Economic Analysis
and
Initial Regulatory Flexibility Analysis

Health Standards For Diesel Particulate Concerning:
30 CFR Part 57 Underground Metal and Nonmetal Mines

October 1998

I. EXECUTIVE SUMMARY

Introduction
Benefits Summary
Estimated Compliance Costs Summary
Regulatory Flexibility Certification and Analysis

II. INDUSTRY PROFILE

Introduction
Overall Structure of the Mining Industry
Underground M&NM Mines That Use Diesel Powered Equipment
Impacted Mines by Size
Impacted Mines by Commodity
Structure of Underground M&NM Mining Subsectors
Metal Mining
Nonmetal Mining (Excluding Stone, Sand and Gravel)
Stone Mining
Sand and Gravel Mining
Characteristics of Affected Underground M&NM Mines
Economic Characteristics of the M&NM Mining Industry
Overview
Metal Mining
Nonmetal Mining

III. BENEFITS

IV. COMPLIANCE COSTS

Introduction
Methodology
Summary of Estimated Compliance Costs
Proposed § 57.5060 AND 57.5067
Proposed § 57.5060 Costs
Proposed § 57.5067 Costs
Proposed § 57.5060(c)
Proposed § 57.5062
Proposed § 57.5065
Proposed § 57.5066
Proposed § 57.5070
Proposed § 57.5071
Proposed § 57.5075
Compliance for Diesel Engine Manufacturers

V. REGULATORY FLEXIBILITY CERTIFICATION AND
INITIAL REGULATORY FLEXIBILITY ANALYSIS

Introduction
Definition of Small Mine
Cost Overview
Underground M&NM Mines: Initial Regulatory Flexibility Analysis
Overview
Reasons Why Agency Action is Being Considered
Objectives of the Rule; Legal Basis
Number and Description of Small Entities Affected
Proposed Rule Requirements
Impact of Other Federal Rules
Significant Alternatives Considered

VI. UNFUNDED MANDATES REFORM ACT OF 1995
AND OTHER REGULATORY CONSIDERATIONS

Introduction
Background
Analysis
Executive Order 13045
National Environmental Protection Act

VII. PAPERWORK REDUCTION ACT OF 1995

Introduction

I. EXECUTIVE SUMMARY

Introduction

The Mine safety and Health Administration (MSHA) is proposing regulations to decrease miner exposure to diesel particulate matter in underground metal and nonmetal (M&NM) mining operations. Diesel particulate matter is the solid fraction of the exhaust from diesel powered engines. The proposed rule would establish a set of requirements for underground M&NM mines. Although, the Agency considers this rulemaking significant under Executive Order 12866, based upon the preliminary analysis of the compliance costs, MSHA has determined that this proposed rule would not have an annual effect of $100 million or more on the economy.

Based upon the definition of a small mine being those with less than 20 employees, the proposed rule would primarily affect 82 small and 121 large underground M&NM mines that utilize diesel powered equipment. These mines represent approximately 78 percent of all underground M&NM mines. MSHA estimates that approximately 90 percent of employees that work in underground M&NM mines that use diesel powered equipment (or about 17,000 employees) are exposed to various levels of diesel emissions and thus would be affected by this proposed rule. With respect to underground M&NM mine operators, proposed changes to 30 CFR Part 57 would establish a concentration limit on diesel particulate matter. The proposed rule provides that this be accomplished in a phased-in manner. For the first 18 months after promulgation of the rule, MSHA will work with underground M&NM mine operators who use diesel powered equipment, providing them with compliance assistance in establishing controls to reduce diesel particulate exposure. Eighteen months after publication of the rule, but before 5 years after publication date, the proposal requires underground M&NM mine operators to limit the concentration of diesel particulate matter by restricting the average 8 hour full shift equivalent airborne concentration of total carbon to 400 micrograms per cubic meter of air (400_TC µg/m³) in areas where miners normally work or travel. Five years after publication of the rule, the proposal would require underground M&NM mine operators to restrict total carbon to 160 micrograms per cubic meter of air (160_TC µg/m³), in areas where miners normally work or travel. Other proposed provisions require underground M&NM mine operators to control diesel particulate matter through environmental monitoring, miner awareness training and through compliance with certain fleet and work practice rules.

Benefits Summary

The proposed rule would reduce a significant health risk to underground miners, reducing the potential for acute illnesses and premature death, and the attendant costs thereof to their employers, their families, and society. The risks addressed by this proposed rule arise because miners are exposed to significant concentrations of a very small particle, or fine particulate, produced by engines that burn diesel fuel.

MSHA has included a qualitative analysis of the benefits, and a preliminary quantitative analysis and will refine the analysis, as appropriate, as the rulemaking proceeds. MSHA welcomes suggestions for the appropriate approach to use to quantify the benefits likely to be derived from this rulemaking. Please identify scientific studies, models, and/or assumptions suitable for estimating risk at different exposure levels, and data on numbers of miners exposed to different levels of diesel particulate matter.

Underground mines are confined spaces which, despite ventilation requirements, can accumulate significant concentrations of gases and particles -- both those produced by the mine itself (e.g., methane gas and dust) and those produced by equipment used in the mine (e.g., diesel particulate and engine exhaust gases). It is widely recognized that respirable particles can create adverse health effects. While exposure of working miners to certain other respirable dusts is controlled (e.g., mine dust and silica), there are no current restrictions specifically on occupational exposure to diesel particulate.

In evaluating the health risks miners presently face, and the potential benefits of controlling that risk, it is particularly significant to note that workers at some underground mines are exposed to much higher concentrations of diesel particulate matter than those reported for any other occupation. At these exposure levels, miners are at significant risk of material impairment of their health. A more detailed analysis of diesel particulate exposure and the benefits of controlling exposures is contained in part III of this document (Benefits) and in the preamble of the proposed rule.

Estimated Compliance Costs Summary

MSHA estimates that the per year compliance costs (annualized costs plus annual costs) for underground M&NM mine operators are approximately $19.2 million, of which large mine operators would incur $14.6 million and small mine operators (those with less than 20 miners) would incur $4.6 million.

Regulatory Flexibility Certification and Analysis

Pursuant to the Regulatory Flexibility Act of 1980, MSHA has analyzed the impact of these rules upon small businesses. Further, MSHA has made a preliminary determination with respect to whether or not it can certify that this proposal will not have a significant economic impact on a substantial number of small entities. Under the Small Business Regulatory Enforcement Fairness Act (SBREFA) amendments to the RFA, MSHA must include in the proposal a factual basis for this certification. If MSHA cannot certify that this proposed rule does not have a significant economic impact on a substantial number of small entities, then the Agency must develop an initial regulatory flexibility analysis.

The Agency has, as required by law (5 U.S.C. 603), developed an initial regulatory flexibility analysis which is set forth in Part V of this analysis. In addition, to a succinct statement of the objects of the proposed rule and other information required by the Regulatory Flexibility Act, the analysis reviews alternatives considered by the Agency with an eye toward the nature of small business entities.

Introduction

The industry profile provides background information describing the structure and economic characteristics of the underground M&NM mining industry. It also provides information on underground M&NM mines that regularly use diesel powered equipment. This profile provides data on the number of mines, their size, and the number of employees in each segment, as well as selected market characteristics.

Although this particular rulemaking does not apply to the surface M&NM sector, information about surface mines is provided here in order to give context for the discussions on underground mining. In that regard, some subsectors of the mining industry (the sand and gravel sector, for example, and the stone sector) will not be significantly impacted by this proposed rule since they do not involve significant underground mining operations.

Overall Structure of the Mining Industry

MSHA divides the mining industry into two major segments based on commodity: The coal industry and the metal and nonmetal (M&NM) mining industry. These major industry segments are further divided based on type of operations: Underground mines; surface mines; and independent mills, plants, shops, and yards. MSHA maintains its own data on mine type, size, and employment. MSHA also collects data on the number of contractors and contractor employees.

MSHA categorizes mines as to size based on employment. Over the past 20 years, for rulemaking purposes, MSHA has consistently defined small mines to be those having fewer than 20 employees and large mines to be those having at least 20 employees. For this Preliminary Regulatory Economic Analysis and Initial Regulatory Flexibility Analysis, MSHA will continue to use this small mine definition. However, for the purposes of the Small Business Regulatory Enforcement Fairness Act (SBREFA) amendments to the Regulatory Flexibility Act (RFA), MSHA has also included SBA's definition of small (500 or fewer employees) in the evaluation of impacts.

Table II-1 presents the number of small and large M&NM mines and the corresponding number of miners, excluding contractors, by major industry segment and mine type. Table II-1 uses three size classes: Less than 20 employees (MSHA's definition of small), 20 to 500 employees (also small by SBA's definition, but not by MSHA's), and over 500 employees. Table II-2 presents similar MSHA data on the numbers of independent contractors and the corresponding numbers of employees by the size of the operation, based on employment. Table II-3 shows numbers of M&NM mines and workers by class of commodity produced.

Table II-1:
Distribution of Operations and Employment (excluding contractors) by Mine Type and Size

(*) Based on MSHA's traditional definition, large mines include all mines with employees of 20 or greater.

Source: U.S. Department of Labor, Mine Safety and Health Administration, Office of Standards, Regulations, and Variances, based on preliminary 1996 MIS data (quarter 1 - quarter 4, 1996).

Table II-2:
Distribution of Contractors and Contractor Employment by Size of Operation

(*) Based on MSHA's traditional definition, large contractors include contractors with employees of 20 or greater.

Source: U.S. Department of Labor, Mine Safety and Health Administration, Office of Standards, Regulations, and Variances, based on preliminary 1996 MIS data (quarter 1 - quarter 4, 1996).

Table II-3:
Estimated Distribution of Metal and Nonmetal Mines and Miners by Commodity and Size Category

(*) Based on MSHA's traditional definition, large mines include all mines with employees of 20 or greater.

Source: MSHA's Office of Standards, Regulations, and Variances. Employment figures includes office workers.

Underground M&NM Mines That Use Diesel Powered Equipment

Impacted Mines by Size

A January 1998 count of diesel powered equipment performed by MSHA's Metal and Nonmetal inspectors shows that 203 of the 261 underground M&NM mines (about 78 percent) regularly use diesel powered equipment. Table II-4 shows the 203 underground M&NM mines that use diesel powered equipment, by size and subsector.

Based on MSHA's traditional definition of a small mine (fewer than 20 employees), Table II-4 shows that of the 203 underground M&N mines, 82 mines (40 percent) are small mines and 121 mines (60 percent) are large mines. Small mines employ about 4 percent of the workforce (849 employees), while large mines employ about 96 percent of the workforce (18,073 employees).

Based on SBA's definition of a small mine (500 or fewer employees), 196 mines (97 percent) are considered small and 7 mines (3 percent) are large. Under this definition, small mines employ 65 percent of the workforce (12,391 employees), while large mines employ 35 percent of the workforce (6,531 employees).

Impacted Mines by Commodity

The M&NM mining industry consists of about 70 different commodities that can be classified into four commodity categories: Metals, nonmetals, stone, and sand and gravel. Some examples of metals mines are gold, silver, and copper, while some examples of nonmetals mines are potash, salt, and trona. Examples of stone mines are limestone, marble, and granite. Table II-4 also presents the numbers of underground mines operators by these four categories.

Table II-4:
Number of Underground Metal and Nonmetal Mines and Miners that Use Diesel Powered Equipment by Commodity and Size Category

(*) Based on MSHA's traditional definition, large mines include all mines with employees of 20 or greater.

Source: MSHA's Metal and Nonmetal inspectors count of underground Metal and Nonmetal mines that use diesel powered equipment. Includes office workers.

There are no underground mine operators using diesel powered equipment that are classified as sand or gravel. A substantial portion of such small underground mine operators, however, are classified as stone, using either MSHA's definition or SBA's definition of a small mine. Large underground mine operators that use diesel powered equipment are predominantly classified as metal or nonmetal. By MSHA's definition of a large mine (those that employ 20 or more), two thirds (66 percent) of large mines are classified as metal or nonmetal. With respect to SBA's definition of a large mine (those that employ over 500), all large underground mine operators that use diesel powered equipment are classified as either metal or nonmetal.

Structure of Underground M&NM Mining Subsectors

Metal Mining

Metal mining in the U.S. consists of about 25 different commodities. Most metal commodities include only one or two mining operations. As is shown in Table II-3, metal mining operations represent 3 percent of the M&NM mines; employ 24 percent of the M&NM miners; and account for 33 percent of the value of M&NM mineral produced in the U.S.⁽¹⁾ By MSHA's definition, 48 percent of the metal mining operations are small. Among underground M&N mines using diesel powered equipment, Table II-4 shows that metal mining operations represent 31 percent of mines and 39 percent of miners, and (by MSHA's definition) 24 percent are small.

Underground metal mining uses a few basic mining methods, such as stope, room and pillar, and block caving. Larger underground metal mines use more hydraulic drills and track-mounted haulage, whereas smaller underground metal mines use more hand-held pneumatic drills.

Nonmetal Mining (Excluding Stone, Sand and Gravel)

For enforcement and statistical purposes, MSHA separates stone mining and sand and gravel mining from other nonmetal mining. There are about 35 different nonmetal commodities, not including stone or sand and gravel. Overall (Table II-3), nonmetal mining operations represent 7 percent of the M&NM mines; employ 15 percent of the M&NM miners; and account for 35 percent of the value of M&NM mineral produced in the U.S. By MSHA's definition, 70 percent of the nonmetal mining operations are small. Among underground M&N mines using diesel powered equipment, Table II-4 shows that nonmetal mining operations represent 23 percent of mines and 46 percent of miners, and (by MSHA's definition) 32 percent are small.

Nonmetal mining uses a wide variety of underground mining methods. For example, potash mines use continuous miners similar to coal mining; oil shale uses in-situ retorting; and gilsonite uses hand-held pneumatic chippers. Some nonmetal commodities use kilns and dryers in ore processing. Others use crushers and mills similar to metal mining. Underground nonmetal mining operations generally use more block caving, room and pillar, and retreat mining methods; less hand-held equipment; and more electrical equipment than metal mining operations.

Stone Mining

There are basically only 8 different stone commodities, of which 7 are further classified as either dimension stone or crushed and broken stone. Overall, stone mining operations represent 33 percent of all M&NM mines; employ 39 percent of the M&NM miners; and account for 19 percent of the value of M&NM mineral produced in the U.S.⁽²⁾ By MSHA's definition, 75 percent of the stone mining operations are small. Among underground M&N mines using diesel powered equipment, stone mining operations represent 46 percent of mines and 15 percent of miners, and (by MSHA's definition) 56 percent are small.

Sand and Gravel Mining

Although 57 percent of all M&NM mines are sand and gravel operations, these are all surface mines. No sand and gravel mines will be affected by this regulation.

Characteristics of Affected Underground M&NM Mines

Table II-5 summarizes many of the characteristics of the underground M&NM mines that will be affected by the proposed regulation. Table II-5 includes data for different size classes of mines for the number of affected miners; numbers, type, and horsepower of pieces of diesel powered equipment; average ventilation characteristics; and diesel particulate matter (DPM) data.

Table II-5:
Miners, Diesel Equipment, Ventilation and DPM Characteristics in Affected Mines

Based on MSHA's traditional definition, large mines include all mines with employees of 20 or greater.

Economic Characteristics of the M&NM Mining Industry

Overview

The 1996 value of all M&NM mining output was $38 billion.⁽³⁾ Metal mining, which includes metals such as aluminum, copper, gold, and iron, contributed $12.5 billion to this total. Nonmetal mining, which includes commodities such as clay, phosphate rock, salt, and soda ash, was valued at $13.3 million. Stone mining contributed $7.4 billion, and sand and gravel contributed $4.8 billion to this total.

The entire M&NM mining industry is markedly diverse, not only in terms of the breadth of minerals but also in terms of each commodity's usage. For example, metals such as iron and aluminum are used to produce vehicles and other heavy duty equipment, as well as consumer goods such as household equipment and beverage cans. Other metals, such as uranium and titanium, have limited uses. Nonmetals like cement are used in construction, while salt is used in a variety of ways including as a food additive and highway deicing. Soda ash, phosphate rock, and potash also have various commercial uses. Stone and sand and gravel are used in numerous industries including the construction of roads and buildings.

A detailed financial picture of the M&N mining industry is difficult to develop because most mines either are privately held corporations or sole proprietorships or they are subsidiaries of publicly owned companies. Privately held corporations and sole proprietorships do not make their financial data available to the public; parent companies are not required to separate financial data for subsidiaries in their reports to the Securities and Exchange Commission. As a result, financial data are available for only a few M&NM companies, and these data are not representative of the entire industry. Each commodity has a unique market demand structure. The following discussion focuses on market forces on a few specific commodities of the M&NM industry.

Metal Mining

Historically, the value of metals production has exhibited considerable instability. In the early 1980's, excess capacity, large inventories, and weak demand depressed the international market for metals, while the strong dollar placed U.S. producers at a competitive disadvantage with foreign producers. Reacting to this, many metal mining companies reduced work forces, eliminated marginal facilities, sold non-core businesses, and restructured. At the same time, new mining technologies were developed, and wage increases were restrained. As a result, the metal mining firms now operating are more efficient and have lower break-even prices than those that operated in the 1970's.

Variations in the prices for iron and alloying metals, such a nickel, aluminum, molybdenum, vanadium, platinum, and lead, coincide closely with fluctuations in the market for durable goods, such as vehicles and heavy duty equipment. As a result, the market for these metals is cyclical in nature and is impacted directly by changes in aggregate demand and the economy in general. Both nickel and aluminum have experienced strong price fluctuations over the past few years. With the U.S. and world economies improving, however, demand for such alloys is improving, and prices have begun to recover. It must be noted that primary production of aluminum will continue to be impacted by the push to recycle.

The U.S. market for copper and precious metals, such as gold and silver, is uncertain, which makes consistent production growth in such areas difficult. U.S. gold production in 1996 was estimated at slightly above 1995 levels, which maintains the U.S. position as the world's second largest gold producing nation, after South Africa. U.S. silver production in 1996 increased slightly from 1995 levels to equal the highest production since 1992. U.S. copper production in 1996 continued its modest upward trend, rising to 1.9 million metric tons.⁽⁴⁾

Overall, the 1996 production from all metal mining is estimated to decrease by about 10 percent from 1995 levels; 1996 estimates put capacity utilization at 84 percent.⁽⁵⁾ MSHA expects that the net result for the metal mining industry may be reduced demand but sustained prices.

Nonmetal Mining

Major commodities in the nonmetal category include salt, clay, phosphate rock, and soda ash. Market demand for these products tends not to vary greatly with fluctuations in aggregate demand. Stone is the leading revenue generator. The U.S. is the largest producer of soda ash and salt. In 1996, the U.S. produced 10.1 million metric tons of soda ash, valued at $778 million, and 40.1 million metric tons of salt, valued at $930 million.⁽⁶⁾ Soda ash is used in the production of glass, soap, detergents, paper, and food. Salt is used in highway deicing, food production, feedstock, and the chemical industry. Phosphate rock is used primarily to manufacture fertilizer. Approximately 42.5 million metric tons of phosphate rock, valued at $900 million, was produced in the U.S. in 1996.⁽⁷⁾ The remaining nonmetal commodities, which include boron fluorspar, oil shale, and other minerals, are typically produced by a small number of mining operations.

Stone production includes granite, limestone, marble, slate, and other forms of crushed and broken or dimension stone. Sand and gravel products and stone products, including cement, have a cyclical demand structure. As a recession intensifies, demand for these products sharply decreases. Demand for stone, particularly cement, is expected to grow by as much as 3.0 percent, and demand for sand and gravel is expected to grow by as much as 1.2 percent.⁽⁸⁾

Overall, the 1996 production from nonmetal mining was estimated to increase by 4.5 percent from 1995 levels; 1996 estimates put capacity utilization for stone and earth minerals at about 91 percent.⁽⁹⁾ The net result for the nonmetal mining industry may be higher demand for stone and various other commodities, as well as increased prices.

III. BENEFITS

The proposed rule would reduce a significant health risk to underground miners, reducing the potential for illnesses and premature death, and the attendant costs thereof to their employers, their families, and society. MSHA estimates that approximately 17,000 miners who work in either surface or underground areas of underground M&NM mines are exposed to diesel emissions and thus are affected by this proposed rule. Of these 17,000 miners, MSHA estimates that approximately 9,400 work in underground areas and that, among these, approximately 80 percent (or 7,500) work in production or development areas, including haulageways, like those for which MSHA has collected measurements of diesel particulate matter concentration.

MSHA has described how the rule benefits these miners in general terms, beginning with the nature of the health risks the Agency is seeking to reduce with the proposed regulation. In addition, the Agency has performed a preliminary quantitative analysis and will refine the analysis, as appropriate, as the rulemaking proceeds. MSHA welcomes suggestions for refining the quantification of benefits likely to be derived from this rulemaking. Please identify scientific studies, models, and/or assumptions suitable for estimating risk at different exposure levels, and data on numbers of miners exposed to different levels of diesel particulate matter.

The risks being addressed by this rulemaking arise because some miners are exposed to extremely high concentrations of the very small particles produced by engines that burn diesel fuel. As discussed in part II of the preamble accompanying the proposed rule, diesel powered engines are used extensively in underground mining operations because they permit the use of mobile equipment and provide a full range of power for both heavy-duty and light-duty operations (i.e., for production equipment and support equipment, respectively), while avoiding the explosive hazards associated with gasoline. However, underground mines are confined spaces which, despite ventilation requirements, can accumulate significant concentrations of particles and gases -- both those produced by the mine itself (e.g., methane gas and mine dust liberated by mining operations) and those produced by equipment used in the mine (diesel particulate and exhaust gases).

It is widely recognized that respirable particles can create adverse health effects. Environmental regulations in effect for some years already restrict the exposure of the general public to particles less than 10 microns in diameter. Moreover, as discussed in part II of the preamble, evidence collected in recent years indicates that much of the health hazard is due to the smallest particles. Since airborne particles less than 2.5 micrometers in diameter have specifically been identified as posing significant health problems, further environmental restrictions have recently been established to limit public exposure to particles of this size range, which includes diesel particulate. This is in addition to a series of regulations issued over the years by the Environmental Protection Agency to directly limit the particulate output of new diesel powered engines.

Similarly, the need to control worker exposure to respirable dusts has long been recognized and implemented. However, while exposure of working miners to certain other respirable dusts is controlled (e.g., silica), there are no current restrictions specifically on occupational exposure to diesel particulate. Moreover, the rules limiting the particulate output of new diesel powered engines offer little prospect of immediate help since the mining industry has a fleet of engines that largely predate these rules.

In evaluating the health risks miners presently face, and the potential benefits of controlling that risk, it is particularly significant to note that the exposures of the underground mine population constitute a special class. Underground miners appear to be the population in the U.S. that is currently by far the most exposed to diesel particulate. The concentrations of diesel particulates to which some underground miners are currently exposed, are significantly higher than the concentrations reported for other occupational groups. Based upon MSHA field studies discussed in part III of the preamble, and as shown below in Figure III-1, median diesel particulate concentrations observed for underground miners in some mines are up to 200 times as high as average environmental exposures in the most heavily polluted urban areas and up to 10 times as high as median exposures estimated for the most heavily exposed workers in other occupational groups.

Figure III-I.--Range of average dpm exposures observed at various mines for underground and surface miners compared to range of average exposures reported for other occupations and for urban ambient air. Averages are represented by median observed within mines for mine workers, by median as estimated with geometric mean reported for other occupations, and, for ambient air in urban environments, by the monthly mean estimated for different months and locations in Southern California. The range estimated for urban ambient air is roughly I to 10 µg/m³.

As described in detail in MSHA's risk analysis (part III of the preamble), there are three general bodies of scientific information indicating that miners exposed at such levels are at significant excess risk of experiencing three kinds of material impairment to their health. First, even short term exposures can result in sensory irritations and respiratory symptoms. These include eye, nose, and throat irritations; reduced lung function; headaches, nausea, and/or vomiting; and chest tightness and wheeze. Besides being potentially debilitating, such effects can distract miners from their responsibilities in ways that could pose safety hazards for everyone in the mine. Second, there is evidence linking short or long term exposures to an increased risk of death from cardiovascular, cardiopulmonary, or respiratory causes. For each increase of 75 µg/m³ in the concentration of fine particulate matter over an 8 hour shift (roughly corresponding to an increase of 25 µg/m³ in 24 hour ambient concentration), the acute risk of death is estimated to increase by about 2.5 to 5 percent. Third, chronic occupational exposure has been linked to an estimated 30 to 40 percent increase in the risk of lung cancer. Although the scientific community has not established a definitive dose-response relationship for diesel particulate and lung cancer, NIOSH has concluded that miners are at an elevated risk of contracting lung cancer as a result of the very high exposures of this population to diesel particulate.

NIOSH has also reaffirmed its 1988 recommendation that whole diesel exhaust be regarded as a "potential occupational carcinogen," and that reductions in workplace exposure be implemented to reduce cancer risks. In addition, other organizations have recognized the potential harmful health effects of diesel particulate. In 1989, the International Agency for Research on Cancer declared that "diesel engine exhaust is probably carcinogenic to humans..." In 1995, the American Conference of Governmental Industrial Hygienists (ACGIH) added diesel particulate matter to its "Notice of Intended Changes" for 1995-96, recommending a threshold limit value (TLV^R) for a conventional 8 hour work day of 150 micrograms per cubic meter of air (150_dpm µg/m³). Germany already regulates exposure to diesel particulate, and Canada is looking closely at the problem.

Scientific evidence currently available may not be sufficient to generate conclusive dose/response estimates for exposure to diesel particulate matter. However, MSHA believes that evidence of adverse health effects arising from such exposure is strong, and that reducing miners' exposure to diesel particulate matter will reduce the number of sensory irritations and respiratory symptoms, reduce the number of deaths due to cardiovascular, cardiopulmonary, or respiratory causes, and reduce the number of lung cancers.

MSHA has calculated benefits in terms of the annual number of lung cancers avoided if a concentration limit of 200_DPM µg/m³ (or 160_TC µg/m³) is adopted. From Table II of Stayner et al. (1998)⁽¹⁰⁾, the lowest estimate of lung cancer unit risk attributable to diesel particulate matter exposure is 10^-4/µg/m³. This estimate assumes 45 years of occupational exposure, beginning at age 20, and the excess risk of dying from lung cancer is accumulated from age 20 up through age 85 - a span of 65 years. There are approximately 7,500 underground M&NM miners working in underground development or production areas, including haulageways, similar to areas where MSHA made its underground M&NM diesel particulate matter concentration measurements. Assuming that 7,500 affected miners are currently exposed to the mean concentration of 830 µg/m³ observed in MSHA's measurements, this unit risk yields an estimated 9.6 excess lung cancers per year if the rule is not implemented (10^-4 excess lung cancers/µg/m³ x 830 µg/m³ x 7,500 exposed workers ÷ 65 years = 9.6 excess lung cancers per year).

From Table IV of Stayner et al. (op. Cit.), the corresponding estimate for workers occupationally exposed to 200 µg/m³ is 21 excess lung cancers per 1,000 workers. This would amount to about 2.4 excess lung cancers per year for the population of 7,500 exposed miners (i.e., 21 x 7.5 ÷ 65). Thus, under the assumptions described, implementation of the proposed rule would reduce incidents of lung cancer by approximately 7 per year over an initial 65-year period (9.6 under current conditions - 2.4 under proposed rule = 7). [In the long run, the average reduction approaches (9.6-2.4)(65/45) = 10 lung cancers avoided per year as the number of years considered increases beyond 65.] This is because, in the long run, each 45-year timespan includes not only lung cancers experienced by a current generation of working miners, but also lung cancers experienced by previous generations of retired miners. Note that because lung cancer associated with diesel particulate matter typically arises from cumulative exposure and after some latency period, these health benefits -- in terms of the reduced incidence of lung cancer illness and subsequent death -- will not materialize until some years after passage of the proposed rule. The yearly reduction in excess lung cancer deaths due to reduced exposure to diesel particulate matter may occur gradually, depending on the historical cumulative exposure to diesel particulate matter among the veteran workforce. Since the average latency period for lung cancer is 20-years, the full benefit associated with a concentration limit of 200 µg/m³ may not be seen before then.

The nature of the risks other than lung cancer suggests the nature of other benefits to be derived from controlling exposure, even though these cannot so readily be quantified. Acute reactions result in lost production time for the operator and lost pay (and perhaps medical expenses) for the worker. Hospital care for acute breathing crises or cancer treatment can be expensive, result in lost income for the worker, lost income for family members who need to provide care and lost productivity for their employers, and may well involve government payments (e.g., Social Security disability and Medicare). Serious illness and death lead to long term income losses for the families involved, with the potential for costs from both employers (e.g., workers' compensation payouts, pension payouts) and society as a whole (e.g., government assisted aid programs).

Introduction

This chapter contains MSHA's estimates of the compliance costs associated with the proposed rule, based on MSHA's traditional definition that small mine operators are those employing fewer than 20 employees. The baseline for these estimated costs are current industry practices. The proposed rule would impose compliance costs upon underground M&NM mine operators. A small amount of costs would be incurred by diesel powered engine manufacturers. Each provision that has compliance costs associated with it is discussed in this Part IV.

Methodology

MSHA estimated: (1) initial costs; (2) annualized costs (which are initial costs amortized over a specific number of years); and (3) annual costs.

Initial costs consist of: Expenditures for capital equipment that is not purchased annually; and one-time costs. Capital expenditures are defined as equipment purchase costs. One-time costs are costs, other than equipment costs, that are usually incurred once and do not reoccur annually. An example of a one-time cost would be the costs to develop a written procedural program.

Initial costs are amortized over a specific number of years to arrive at what is called annualized costs. All initial costs are annualized in order to recognize that business operations finance the purchase of durable equipment over a certain period of time, or that a plan or program developed in one year will be used for several years. For purposes of this rule, in addition to annualizing initial costs, a net present value factor was applied to those initial costs that mine operators do not have to incur to comply with the rule until some years after the effective date of the rule.

Converting an initial cost to an annualized cost changes that cost from one that does not reoccur annually to one that does reoccur annually. When initial costs are converted to annualized costs, the annualized costs are like annual costs and can be added directly to annual costs in order to get a cost per year of the rule that accounts for all of the costs in that rule.

Annual costs are those that normally reoccur annually. Examples of annual costs are maintenance costs, recordkeeping costs, and labor costs. Costs of non-durable equipment (with a useful life of less than one year) are also annual costs.

In this economic impact analysis, MSHA estimated compliance costs by making assumptions concerning the number of diesel powered machines that need to be retrofitted and the types of controls needed in order to meet the proposed concentration limits. MSHA's cost estimates for the controls are presented below. MSHA used an hourly compensation rate of $23 for a M&NM miner, $36 for a M&NM supervisor, and $17 for a secretary.⁽¹¹⁾ Also a 7 percent discount rate was used to convert initial costs into annualized costs and to compute present values of costs incurred later than the effective date of the rule.

The number of machines used in this analysis to determine compliance costs is based upon the MSHA inspector's January 1998 count of diesel powered equipment regularly used in underground M&NM mines. In addition, other assumptions are based upon information provided by MSHA's technical personnel and from trade journals associated with the mining industry. The Agency requests comments concerning all assumptions and estimates used in this cost analysis.

Summary of Estimated Compliance Costs

The estimated per-year compliance costs (annualized costs plus annual costs) for underground M&NM mine operators are approximately $19.2 million, of which large mine operators would incur approximately $14.6 million and small mine operators would incur approximately $4.6 million.

The largest cost item would involve the costs of bringing diesel particulate concentrations down to the concentration limits stated in proposed § 57.5060(a) and (b). Table IV-5, infra, breaks down that cost by type of equipment that would have to be installed. Under MSHA's assumptions, the largest cost item, in § 57.5060, for large and small mines would be annual costs for the replacement of ceramic filters, and the second largest cost item would be for improving mine ventilation systems.

Table IV-1 provides a breakdown of compliance cost by provision of the proposed rule between large and small underground M&NM mine operators.

TABLE IV-1 COMPLIANCE COSTS FOR UNDERGROUND METAL AND NONMETAL MINE OPERATORS (DOLLARS X 1,000)