INTERVIEW WITH MASSEY ENERGY CEO DONALD BLANKENSHIP THURSDAY, JULY 22, 2010 AIRING TOMORROW "IN BUSINESS WITH MARGARET BRENNAN" ON BLOOMBERG TV (10 - 12 AM ET) PLEASE CREDIT BLOOMBERG TELEVISION MARGARET BRENNAN, BLOOMBERG NEWS: You are speaking at the National Press Club today. We haven't really heard you speak publicly in recent months. Why here in Washington? Why today? DONALD BLANKENSHIP, CEO, MASSEY ENERGY: Well, I think as far as recently we have been pretty busy and I think the invitation is one that we needed to accept. We occasionally get invitations, but this one was one we thought would be helpful. BRENNAN: Well, there is certainly here in Washington is a growing idea. Momentum seems to be building that there should be energy reform right now, if not in the immediate then certainly in the year ahead. Have you had any conversations with congressmen on this front? BLANKENSHIP: Not too much in recent weeks, but we have conversed with them for years and years about it and of course the feeling in the industry is pretty general that we are regulating too much rather than too little. BRENNAN: Regulating too much. Let me ask you, because certainly the public will seems to be there for energy reform broadly speaking in the wake of the BP Deepwater Horizon disaster. It has heightened scrutiny of your industry right now. How has that issue changed how you do business? BLANKENSHIP: Well, I don't know that BP has changed how we do business very much. I think that the main thing we have all got to do is speak the truth about the issues, trying to drill in deepwater when you don't need to in the BP situation, or having so much government interaction that it is dilutive to your efforts and so forth and driving up the cost of coal in order to make renewables more competitive. There is a lot of ulterior motives and so forth that appear to be there that aren't really focused on true environmental improvement or safety. BRENNAN: When you talk about efforts that aren't helpful there, just yesterday a House committee approved a bill that would basically allow your regulator, MSHA, as it is called, to have greater subpoena power and to be able to have more ability to shut down mines that have safety violations. How would that specific proposal affect your business? BLANKENSHIP: Well, first of all I think they are starting to trample on due process which is very dangerous for a government. The people at MSHA are, in our opinion, lesser qualified than the people in the industry, so the assumption that the government, and the people in the government and the inspectors should be more and more empowered is a questionable scenario to begin with. We need to make sure we get the right answers, not empower one side or the other. BRENNAN: Yet, to be frank we are looking at the worst oil spill in U.S. history, right? And two weeks before that there was the disaster at your Upper Big Branch mine, which is known as the biggest coal industry disaster in 40 years. It is going to be a hard sell to the public and to politicians the idea that there shouldn't be greater regulation of energy right now. BLANKENSHIP: Yes, it will be a tough sell. I think tragedies lead to more regulation far too often. They lead to regulation that doesn't help the situation. That is what has happened in a number of tragedies, and hopefully we will have some influence over what type of legislation gets passed and what types of processes are put in place because we truly need to be concerned about the environment and the people and not necessarily about being politically correct. BRENNAN: Now, just this morning Massey released a report saying that on the day of the Upper Big Branch mine disaster on April 5 there was an amount of methane gas in that particular mine three times the normal rate. What happened? BLANKENSHIP: Well, we don't for sure what happened. We do know that there is a crack in the floor near where the mine was operating and that we have seen that seven years or so ago happen. And it releases a tremendous amount of gas at one time, and the defense against that is having a lot of air on the long wall face to dilute it. BRENNAN: So this - a similar incident happened seven years before? BLANKENSHIP: A similar inundation of gas happened, but it did not explode at that time. BRENNAN: Why did it explode on the fifth? Why did 29 miners die as a result of that? BLANKENSHIP: Well, in the simplest terms somewhere you got a spark combined with an explosive atmosphere. When you are mining underground, necessarily releasing gas out of the coal seam. You can release gas from beneath you. The systems are supposed to protect against that, but in this case something failed. BRENNAN: System failure. BLANKENSHIP: I don't know. It could be process failure. You mine a lot of coal. You get gas coming out of the floor. Sometimes you will get surges of gas, not like but it might be pictured as a water aquifer where we get a huge amount of gas. You have to be prepared to deal with that, and it is an example in this case where the company would have had more air on the face instead of less. And it follows into your first question as to what engineers or what expertise is best able to avoid these types of explosions. And it is not necessarily the government. BRENNAN: Well, the government has released a report, or the Associated Press obtained a report from the Labor Department that said that Massey with that particular area had actually redirected air supply, essentially, that there had been the proposal back in January to redirect air from a working area of the mine to one that was producing more coal, the idea that there was a choice made for better business production that perhaps allowed for this safety issue to arise. BLANKENSHIP: I haven't seen the report, but the truth of the matter is that Massey would have had about twice as much air on the face of the long wall as the government had us put on the wall. And their ventilations system, which it is their ventilation plan in our opinion, is not as good a ventilation plan as we would like to use. BRENNAN: So you are saying that - I just want to make sure that I understand that you are saying your ventilation plan for the area where the explosion was, was adequate, that it was up to regulatory standards. BLANKENSHIP: Actually, the one that was running at the time was in excess of regulatory standards. We probably had twice as much air on the face at the moment of the explosion as the law required. We probably would have had four times as much as required were we to have the authority to do that. It basically comes down to engineers that work for the company that we believe are more technically competent than those that work for the government. BRENNAN: Well, there certainly seems to be the idea or consensus building that the regulators need to be more empowered. However, President Obama himself in the wake of that disaster came out and said what happened at the Upper Big Branch mine, that fatal explosion was a result of a failure of management and a failure of law. You are smiling at that. That is a personal accusation there. BLANKENSHIP: In all due respect - BRENNAN: Do you believe that you failed? BLANKENSHIP: No. In all due respect to the President, I doubt that he knows as much about mining as our engineers and as I know with 40 years in the business and having done everything from shovel coal to overseeing more coal production than anyone in the history of Central Appalachia. The problem is not that the inspectors don't have enough power. They have too much power. They are turning off air filter systems, which makes no sense. They are dictating ventilation commands. They are reducing air on the face. They don't understand the physics and the math in it. BRENNAN: The regulators, MSHA in particular, that has faced a fair amount of scrutiny in the wake of this disaster as well, point to safety violations on Massey's point, and this idea of giving them greater subpoena power would allow them to shut down mines more quickly with those safety issues. So given that there was a record of safety violations there, it makes it a legitimate question as to the failure on Massey's part to protect its miners. BLANKENSHIP: I don't know if it does or not. The violations are easy to write. There write a lot of violations. Some of them are meaningful. Some are not. But when you are being required to ventilate a mine the reversal of what it is designed to be ventilated, it is difficult to get it to where it is air. And coal mines are set up to flow in a certain direction from the beginning, say 15 years ago. And when regulations change, or people change, administrations change, physics don't change, so it makes it difficult sometimes. BRENNAN: You are a controversial man. This is a very scrutinized industry, coal in particular, certainly energy more broadly. When you are speaking later today, the AFL-CIO is planning to protest just the fact that you are speaking. They are distributing pamphlets, calling on workers to ask you, would you work for you and specifically referencing what happened at Upper Big Branch? What led to the death of those 29 miners? Why do you think that there is the perception there that because some of your mines are nonunion, most of them are, that they are then less safe? BLANKENSHIP: You may have answered your question in asking it. The mines are nonunion. The President of the AFL-CIO would be Richard Trumka was involved in a very violent strike against one of Massey's subsidiaries that I was president of in '85. We had 91 people hospitalized, three put in the hospital for being shot in the back, one killed - Cecil Roberts, who was then the vice president. Both of them have the ear of the President. It doesn't mean the mines are safe. What it does mean is that it raises the issue of what their real objective is. BRENNAN: You think that you are being treated differently by the President, by regulators, by those criticizing your industry because your mines are nonunion? BLANKENSHIP: Oh, I don't know. You will have call that conclusion for yourself, but I don't - BRENNAN: It sounded like that is what you were saying. BLANKENSHIP: I don't think they are protesting the unions, the mines today or the presidents of the union companies. BRENNAN: How has what happened on April 5 at Upper Big Branch, the death of those 29 miners, changed the operation? How has it changed production at your mines? BLANKENSHIP: Well, it is impacting production in that people are trying to make certain that they are fully in compliance with every rule because of course people are afraid when the government starts to threaten indictments and do investigations and all that. So there is no denying that psychologically it affects engineers. It affects workers. It affects the Board. It affects everybody when you are under this kind of scrutiny. That is just human behavior, but I think that as time goes on we will be exonerated as far as blame for the tragedy and things will return to normal. BRENNAN: Well, since the disaster shares have lost half their value, market value. They seem to have dropped almost 50 percent. How do you reclaim that, if you are talking about a timeline there that, as you suggested, is a long battle ahead? BLANKENSHIP: Everything is where you bench. The stock is probably twice what it was 24 months ago or 18 months ago and half what it was three or four months ago. So a lot of the other coal stocks have come down as well. It has to do with a lot more than the tragedy, but the tragedy certainly a big impact. BRENNAN: Well, specific to the tragedy, when I have spoken to analysts and investors the word that comes up with Massey is risk. There is definitely fear of headline risk, not only because of that disaster, the ongoing investigation, the FBI investigations into these accusations of bribery of federal and state officials. How do you reassure investors that that headline risk should be dismissed? BLANKENSHIP: Oh, I don't think I can reassure them. All I can do is work through all those issues. We have been through issues before. Central Ap mining is a controversial thing in and of itself, as you know. The coal industry itself is under attack, Central Ap more so than that, nonunion Central Ap more so than that, so it is a difficult industry, but it also has a lot of rewards and a lot of value. And it is very important to the country. BRENNAN: Do you think you are representative of the rest of the coal industry, your experience? BLANKENSHIP: Am I representative of the rest of the - I - BRENNAN: You are saying that there is a lot of scrutiny of the industry, of coal, other coal companies as well. BLANKENSHIP: Yes. I think that generally speaking the coal industry is under a lot of scrutiny, but probably the eastern coal industry or Central Ap a little bit more. BRENNAN: Why? BLANKENSHIP: Because there is a lot of people in Central Ap relative to say Wyoming out on the prairie, so there is a lot more interaction with communities and a lot more attention paid to the mining. BRENNAN: You don't think that has been heightened by these safety issues, that - BLANKENSHIP: Certainly they have been heightened by the safety issues, but to single out one issue - we have reduced accidents in my time at Massey by 90 percent. The industry's environmental improvement has been phenomenal in over the last 20 years. All we can do as businesspeople and good citizens is do the best we can. We are not going to be perfect. BRENNAN: So if that is the reality, the perception though seems to be that there is real issues with this level of investigation, this level of Congressional scrutiny as well. How do you get reality and perception to match up here? How do you unlock value for your shareholders? BLANKENSHIP: Well, we have unlocked a lot of value. The value of the company even today is four or five times what it was when it went public 10 years ago. BRENNAN: But your second largest shareholder, Wellington Management, just pulled back from a 5 percent stake to a less than 1 percent stake in the quarter past. There is real movement out of the stock. BLANKENSHIP: Well, there is from time to time. That is what the stock market is about, stock trades in hundreds of millions of shares a day and people are in and out of stocks. BRENNAN: Is that what management told you, that it was simply rebalancing? Did you speak to management at Wellington? BLANKENSHIP: No. I haven't spoken to management at Wellington, but the point is that a tragedy does affect stock. The coal industry is under attack. It is fundamentally critical to the U.S. energy picture and to tens of millions of jobs. Probably 30 million people depend on just surface mining for their electricity in this country, so there are a lot of realities that eventually will come to the front. BRENNAN: Well, let's talk about some of those recent headlines then. BLANKENSHIP: Okay. BRENNAN: There were four foremen who just recently worked as supervisors at a Massey mine. Two men died in a fire at this mine in particular. These four foremen pled guilty to failing to conduct drills, safety drills. They now face jail time. It was viewed as a surprise to the market that they pled guilty. Was that a surprise to you? BLANKENSHIP: No. It is pretty frequent that people plead guilty to misdemeanors to avoid trials. We plead guilty essentially - BRENNAN: They are going to jail, potentially. BLANKENSHIP: Well, I don't know if they will or not. I wouldn't think so. It revolves around not conducting a fire drill in an appropriate manner. I don't know the details of it, but my understanding is they conducted it, but they didn't take the exact route or something. It is typical of what happens in these situations, people trying to grab headlines because of a page missing out of a fire boss' report from a year or two ago. The best - it goes back to what I said earlier. We need to focus on what caused the explosion, what will improve safety and not what will make news. BRENNAN: You are talking with that reference to documents that are missing you are referring to one of the widow's lawyers who has said essentially that blame goes up the chain of command, that management must have known that by inference you must have known about the safety issues at Massey's mines. BLANKENSHIP: I don't think so. I am talking about just small things that we see repetitively brought up in the press and things that are misleading to the public about how these mines are operated. We feel very good about our safety programs and what we have achieved the last 20 years. And sometimes accidents happen. Gas inundations out of the floor are hard to predict and hard to counteract. Mining, like driving a car, can be dangerous and sometimes accidents happen. But we have no fear of anybody in upper management being properly accused of having done anything wrong. BRENNAN: In the wake of the April 5th disaster there were calls for your resignation. There were calls for members of the Board of Directors to also leave. You don't expect any change in management, is that what you are saying? BLANKENSHIP: I don't know. There will always be change in management. I don't expect anyone to be forced to resign. The United Mineworkers and the AFL-CIO would have liked to have seen me resign for 20 years. BRENNAN: When do you plan to retire? BLANKENSHIP: I don't know. I guess - BRENNAN: You have been - when I was talking to you about so, as you say, when you look at Massey Energy, Don Blankenship is Massey Energy. You are known for being very much involved in management, being some have called you a micromanager, 22 years. Do you consider yourself a micromanager? BLANKENSHIP: I have been at times. It is pretty hard to micromanage what we are dealing with today, but if you call micromanagement being aware of what is going on in the mines, being aware of the accounting issues, being aware of the productivity, being aware of the safety, being aware of the accident or being aware of the environmental violations or environmental issues, I am pretty much aware. BRENNAN: But that awareness or that reputation is why you could understand that people would come forward and say blame goes up the chain of command here that there is no way that you didn't know about safety violations at Upper Big Branch with that incident, the incident we just talked about. Or in 2006 there was that wrongful death suit that Massey just settled just last month. BLANKENSHIP: Let's be clear here. I first went in the mine 41 years ago. I worked with coalminers, lived with coalminers, played ball with coalminers, four-wheel ride on surface mines with coalminers. There is no one more concerned about coalminers than I am. I don't think there is anyone better able to protect them or protect the environment than I am. And we do that. I can't help what the press reports or what the union would like to see happen. BRENNAN: What the union would see happen, you are saying that the unions are attacking you here that that is why we are seeing negative press? BLANKENSHIP: Well, anyone that comes out and immediately places blame on an accident before they even know what happened, or someone that causes, says that people need to go to jail before they know what happened are indicating a certain bias, yes. BRENNAN: When will we know the results of the investigation of Upper Big Branch? BLANKENSHIP: I don't know. It is in the control of MSHA. We are not being allowed to do the investigation we would like to do. As we reported, the evidence is in many cases being destroyed. The pictures aren't being taken properly, so it is - you will have to ask them, the safety and health administrators. BRENNAN: You think the regulators are impeding the investigation of that, those fatalities? BLANKENSHIP: Like with ventilation they don't really know how to conduct an investigation. You have the same agency doing the investigation that was involved in the ventilation plans, so you don't have an independent investigation. We are not getting good pictures. We are not being allowed to take pictures. The evidence is being - BRENNAN: Why? BLANKENSHIP: The government - BRENNAN: Why do you think you are being treated that way? BLANKENSHIP: That is just the way the government works. It is something that many businesses experience. The government is not easy to deal with sometimes. BRENNAN: But that sounds quite unusual. Why would the regulators impede the investigation? 29 miners died. BLANKENSHIP: You should ask - BRENNAN: If the intent is to increase safety? BLANKENSHIP: You should ask them that question. We have - we can't get an answer. We don't know why they turned the scrubbers and filters off on half of our continuous miners when another branch of the government says it removes 98 percent of the dust either, so there is a lot that we don't understand. That is what we are trying to figure out. BRENNAN: When you are talking about this with MSHA in particular, the mine regulator, it draws a parallel back to the conversations that are being had about the oil industry and their regulators. President Obama reshuffled and has called for the restructuring of how that industry is regulated. How do you think the coal industry should be regulated? BLANKENSHIP: Well, certainly there should be an independent group that investigates accidents, so - because you are investigating both the behavior of people and the company employee, as well as people at MSHA, so since both entities, company and regulators are involved, excuse me, the regulations that are investigations should be independent. BRENNAN: Independent of? BLANKENSHIP: Of MSHA. BRENNAN: You would want a special body that would investigate safety incidents? BLANKENSHIP: You have that in the airline industry. The FAA doesn't investigate accidents. The National Safety Transportation Board or someone does. And we have a group in the mining industry called NIOSH, which is the National Institute of Occupational Safety and Health that has the technical arm of MSHA since they did away with Bureau of the Mines. But there are a lot of good things that could be done, but it will not be the focus of the legislation in all likelihood. BRENNAN: Do you think that the energy industry is treated differently than other commercial industries? BLANKENSHIP: Yes. BRENNAN: Why? BLANKENSHIP: Because it is large and because people think of it as a polluting industry rather than thinking about the positive parts that everyone enjoys the electricity, and enjoy the cars, and enjoy their computers and they fail to reflect on the fact that all that is made possible by energy. And when you produce energy there are difficulties involved in it that the companies do as well as the - BRENNAN: Coal makes up, what 50 percent of electricity generation in this country - BLANKENSHIP: That's right. BRENNAN: - from what I understand, so given that though misunderstanding of the role, the idea out there that there needs to be a cleaner, more responsible energy policy is for - sort of generally accepted right now. The specifics though are very controversial. Coal generates more greenhouse gases than gas, than oil. It is very much scrutinized as a result. How much regulation, how much carbon regulation would be acceptable to you? BLANKENSHIP: The thing you have understand, when you regulate anything in this country you have increased whatever it is as pollution. You regulate CO2, you increase CO2. You regulate mercury you increase mercury because all that happens is that businesses go to where there is not regulations. As long as you combine the free trade policy with regulation in this country you are going to increase pollution. It is really - BRENNAN: Is there a price of carbon that is acceptable, $10 a ton? What - BLANKENSHIP: Well, if you charge it on the entire world the bigger the number is the more our company would benefit. The Chinese have increased their coal production three times. Most of what you hear in the press about windmill, solar panels, renewables is nonsensical, so you have got to figure out where the low hanging fruit is. What you will me - BRENNAN: What do you mean nonsensical? BLANKENSHIP: Well, people can't afford $0.25 an hour per kilowatt hour for electricity, and if you build a windmill to generate electricity you have either got to put a gas plant or a coal plant beside of it to pick up the slack when the wind doesn't blow. So you have got a real problem with fundamental commonsense relative to a lot of these things. It makes good news. It gives the industry a chance to pick - the government a chance to pick winners and losers and gives subsidies to certain companies, but it is not going to do anything for the American people and it is not going to lower CO2 emissions. BRENNAN: Why? I don't want to debate global warming or green policies with you, but I do want to talk about the realities that are changing for the industry and for the company. The coal industry stands to have the most regulation because it is the greatest greenhouse gas producer out of other energy sources and you would lose the most jobs. Is that how you view this green regulation potentially? BLANKENSHIP: No. About 97 percent of the energy growth in Asia is from coal. And every time we kill American jobs they go to Asia, and Asians will buy the coal. It is a fairly crazy situation because all that happens is the pollution gets transferred and multiplied. So unless you - if you are going to have free trade you have got to have worldwide regulation, but regulations in one area don't decrease pollutants. BRENNAN: Do you see a time when Massey becomes a coal exporter mainly, as a result of that? BLANKENSHIP: Well, we a major exporter now and - BRENNAN: To China? BLANKENSHIP: Well, to Asia, not necessarily China, but we will continue to increase our exports because the Chinese and other Asians are trying to increase the quality of life of people. When 1.2 billion people live on a dollar a day they are not focused on what we are focused on here and they are trying to increase their quality of life. And the Chinese actually have done quite a job of that. BRENNAN: Well, there is high demand for the kind of coal that you produce, the high grade, high margin metallurgical coal. Give me a sense of where demand is right now. As you know there is great concern about a global economic slowdown and questions about where we are in the recovery. What are you seeing? BLANKENSHIP: Well, we see strong demand for export metallurgical coal. The demand for utility coal in the U.S. has been fairly weak because of the economy. The weather will probably affect that temporarily. But you are seeing the demand for energy around the world grow very rapidly. In fact there are some reports out there the Chinese demand for energy now exceeds the United States. BRENNAN: If we see greater regulation in this country that is going to presumably up the cost of doing business for your industry. 50 percent of coal producers out there are small. They are private miners. Does this potentially create an environment with distressed assets that then creates an opportunity for Massey to get bigger? Are there are opportunities here? BLANKENSHIP: Well, the ups and downs of the market has historically provided a lot of acquisition opportunity. That is the reason that we have been able to grow the way we have in a very tough industry and a very tough market. So the answer would be yes. BRENNAN: So there could be an upside to greater energy regulation. BLANKENSHIP: Well, there is an upside in the sense that the more you regulate manufacturing jobs in the U.S., I think they go offshore that more coal gets used in the world use. And the world is up to 7.8 billion tons, so U.S. coal production is getting to be a small fraction of that. BRENNAN: So coal is the cheap energy source, but we are in an environment where natural gas is also getting cheaper here. How is that changing market share? BLANKENSHIP: Coal has dropped from 52 percent of electricity in the U.S. to 48 percent so it is clearly having an impact. Gas companies of course right now are overproduced because of the economy, so it is really hard to read how it will long-term, but coal has been around for a long time and it will be around for a lot longer. BRENNAN: Someone could look at your home state of West Virginia and look at the Appalachia areas and say whatever jobs might be lost by greater regulation of the coal industry might be gained potentially in natural gas now that there is shale mining, shale gas construction happening in Pennsylvania and in the Appalachia areas. Do you see a shift of jobs? BLANKENSHIP: There is always a shift of jobs, but we are comfortable in the coal industry with competing with the gas industry. And gas is more appropriately used for industrial processes in the chemical industry than it is for generating electricity. If you go back to the days of the Iran hostage crisis that was one of Carter's views, and I think that is still the case. BRENNAN: I had heard that you weren't necessarily speaking favorably of the Carter Administration's policy there, so that is kind of a funny reference on your part. But let me ask you about your industry right now. We learned that within the oil industry there has been now this decision that the oil giants need to create this joint venture to come up with an industry response to help contain any kind of disaster along the lines of the Deepwater Horizon spill. Is there a corollary for the coalmining industry there? Do you talk to your contemporaries to talk about how you can come up with an industry solution that is not going to come out of Washington? BLANKENSHIP: Yes. As part of the National Mining Association the companies jointly work on what they think the legislation should be. Far too often, rather than putting forth what we think it ought to be we put forth what we think will be acceptable, which is entirely two different things. There is a tremendous number of safety enhancements that could be made in coal mines that aren't made simply because the politics doesn't work that way. BRENNAN: The politics doesn't work that way meaning within the industry? BLANKENSHIP: Yes. Typically legislation is drafted and you massage that legislation. The focus is not on engineering and physics and so forth that companies use to make their mines safer. BRENNAN: So is there something that you can do as a company, as an industry to make things safer for your miners and avoid that kind of interference, that you are not liking? BLANKENSHIP: Well, we have about 120 Massey laws, so to speak, that exceed federal law on safety. And the government would do well to adopt many of them, but I don't think they will. BRENNAN: How did Massey then have such a high number of safety violations? I know you have said that it is lower than the industry average, but of your contemporaries, of companies your size there is still a good number of safety violations in the year past. BLANKENSHIP: I don't think I said that our violations are less than average. Our accidents are far less than average which we would prefer to have more violations and less accidents than the reverse. But we are going to work very hard to reduce the violations. In the last couple years the standards on violations have changed a lot and there is a lot of uncertainty in the regs and so forth, and a lot of inconsistency between MSHA districts and MSHA inspectors that we are going to set in motion and everything that we can to deal with violations regardless. BRENNAN: Having gone through the Upper Big Branch disaster now you have had a few months to assess what happened there. You had initially said that the cost of the incident was going to be around $200 million or so. Does that still stand as your expectation? BLANKENSHIP: I don't think I can confirm that since our earnings release is in store for next week. I don't believe I am allowed to comment on it. BRENNAN: Well then, let me ask you, with that recent filing back in June, that settlement of an incident back in 2006. There was a $2 million settlement that was paid to the family of a miner who had died at one of your mines. Do you expect a similar amount to go to those survivors, the families who survived the Upper Big Branch disaster? BLANKENSHIP: I think we had offered $3 million to settle those cases and I am not at liberty to say and actually don't know exactly how many have accepted, but we have put all that in our press releases and our public expenses. BRENNAN: How did you come up with that figure versus the $2 million? BLANKENSHIP: It was what was recommended from everyone that was involved. I can't say that it was one person's idea, but we thought it would be in everyone's best interest to not have protracted litigation and put the families through that, so we gave them an opportunity to avoid that. But if they choose not to then it will take its more normal course. BRENNAN: More normal course meaning go to the courts. BLANKENSHIP: Yes. BRENNAN: And what do you expect on that front? I know you said you can't talk about what has happened thus far, but has it been a favorable response from the families? Do they feel fairly compensated generally speaking? BLANKENSHIP: It is hard to say generally speaking. It is very mixed and there is a lot of complicating issues. There are issues of children, and spouses and divorced individuals, so there is a lot of individual issues to be dealt with. BRENNAN: Are you personally involved with that? BLANKENSHIP: Only peripherally. We have people that are doing that. Our Chief Operating Officer who was trained basically by many of the victims when he was a young man has dealt a great deal with that personally. BRENNAN: Let me ask you, having led a company you said you have dealt with these kinds of challenges before. You have been very much involved in crisis management. What do you make of BP's experience right now? What would you advise Tony Hayward? BLANKENSHIP: I don't think I should be giving anyone advice on PR. BRENNAN: Well, if not on PR then how do respond? And why do you say that? BLANKENSHIP: Well, I say that because we are in a tough industry and there is no sense in my trying to figure out what he should do. I will say this that the real problem industry has is that they are not bold enough to speak the truth in the face of the scrutiny, in the face of these type of interview, in the face of the type of presentation, I will make it 12 o'clock, in the fact of the President's comments, the unions protests, the shareholders and so forth. And it is a bad thing. People of knowledge have an obligation to speak out. BRENNAN: Well, be frank here. I know you are a very direct man. Massey is viewed as a - the face of dirty coal production. BP is viewed as the face of what is wrong with big oil. BLANKENSHIP: So be frank about what? I can't - BRENNAN: Set the record straight if that is not the case. BLANKENSHIP: Well, it is not the case. Anything that you look at with Massey, we fund our pension plans. We pay nearly $100 million a year to pay off liabilities the companies that went bankrupt in our industry before, some black lung excise tax and so forth. We are more creative in the area of safety than anybody in history. We have had more steady employment. We have reclaimed a lot of properties that others left un-reclaimed. We do the best job in Central Appalachia. That is the reason that our stock had gone from $8 to $54 and where it is now, $28. And it will go back up as we move through these tragedies. But our size, our unwillingness to conform to union demands and our unwillingness to be politically correct sometimes brings scrutiny, but it also brings safety. It brings energy. It brings jobs. It brings taxes to fund the schools, so that is what we do. BRENNAN: You feel it is personally unfair, the press coverage of you? BLANKENSHIP: I don't know if it is unfair. It is inaccurate. BRENNAN: All right. Thank you for your time, - BLANKENSHIP: Thank you. BRENNAN: - for being generous. Good luck with the speech today.