(Even though the fire hazzard shouldnt be problem, Cypress Mulch and a heating pad is just as flammable as any newspaper or bedding you might use)..but nonethless that really isnt a problem unless ur using a poor heating device
The substrate isn't the issue when it comes to the fire hazard.....its if the heat pad gets too hot and excess heat cannot escape. A small gap between the pad and the cage should always be present so as to allow that excess to ventilate and not over-heat the pad or tank.....trapping that heat can cause a fire hazard for you and your animal. That is why a regulator of some sort is usually needed when dealing with undertank heating methods.