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Business Observer Thursday, Jun. 25, 2009 13 years ago

Homegrown FUEL

The government should stop dictating energy policy and let entrepreneurs like Bonne Posma find solutions to our dependence on foreign oil.
by: Jean Gruss Contributing Writer

The government should stop dictating energy policy and let entrepreneurs like Bonne Posma find solutions to our dependence on foreign oil. His company, Saminco, is already a leader in the field of energy efficiency.

Government officials gaga over wind and solar power should chat with Bonne Posma.

Posma knows what makes things go. His company, Fort Myers-based Saminco, has developed control systems for almost any earthbound vehicle, from mining cars to buses, boats, locomotives and trolleys.

Over the years, Saminco engineers have figured out ways to dramatically reduce energy consumption and pollution. For example, by converting a locomotive to alternating diesel and electric power, Saminco can cut fuel consumption by as much as 30%.

Although its specialty is underground mining vehicles, Saminco technology can be found in boats such as the Alcatraz Ferry, the New Orleans streetcars and the Ford Fusion hydrogen fuel-cell test car. A small army of engineers tinker in an industrial park in Fort Myers and the company's revenues grew at a 20% clip last year to $22 million.

Notably, Posma's company has delivered this technology without the threat of government energy mandates or incentives. In fact, Posma says laws and regulations that protect certain industries such as oil drilling or hinder others such as nuclear-power generation only create barriers to entrepreneurs seeking solutions.

Posma is on a quixotic mission to persuade lawmakers to generate liquid diesel fuel from coal, a process that's been successfully implemented in other coal-rich countries such as South Africa. He takes any opportunity he can to promote the idea to lawmakers, but it falls mostly on deaf ears. He doesn't ask for any special favors, just for them to get out of the way.

His solution is simple: “Do away with the laws that keep us from doing this.”

South Africa to Fort Myers
Posma, 70, was born in Java, Indonesia, and was imprisoned with his mother and brother in a Japanese internment camp during the Second World War when he was a little boy. “I saw people beaten to death,” he says recently while munching on sticky rice made by some of his Laotian employees at his Fort Myers headquarters.

Posma's father, who ran coffee and rubber plantations, was accused of being a spy and tortured. But the elder Posma survived the ordeal and moved his family back to their native Holland after the war.

The family lost all their possessions in the war and eventually resettled in Canada in 1951 where they became farm laborers. The young Posma worked his way through college, earning degrees in physics and math in college. He moved to South Africa in 1964 where he later formed a company that made electric-power equipment for mining companies.

It was then that he developed a special expertise in propulsion systems for underground mine cars. In 1976, he moved back to Canada as the political situation was becoming more difficult in South Africa, eventually moving to Buffalo, N.Y.

But New York's high taxes pushed and Florida's weather pulled and Posma eventually settled in Fort Myers in 1987. “We fled Cuomonism,” Posma quips, referring to then New York Gov. Mario Cuomo.

Low taxes and weather drove Posma's decision to make Fort Myers his company's home, but Saminco has offices in mining towns such as Huntington, W. Va., Grand Junction, Colo., and Norris City, Ill. About 70% of Saminco's business is tied to the coal-mining business, providing miners with all sorts of underground vehicles to carry the commodity out of tight spots under difficult conditions deep in the earth.

Posma has retained control of his private company, reinvesting the profits rather than seeking outside funding to grow. “I don't like losing other peoples' money,” he chuckles. Saminco is on track to generate $30 million in revenues this year, an increase of 36% over 2008.

Boats to locomotives
Business surged during the most recent commodities boom, but Posma says his company has succeeded by focusing on the men in the shafts. For example, the controls for an underground mine car can be lifted out with handles and shipped overnight by UPS for repairs without having to bring the entire car to the surface.

“That comes from going underground and working with people,” Posma says. “Listen to the guy who does the work, not the foreman.”

But some of the exuberance in the commodity has deflated in the economic downturn. In addition, President Barack Obama and other Democrats have blackballed coal as a dirty fuel.

Still, Posma believes government efforts to push alternative fuels such as solar, wind and ethanol will ultimately fail because of the technical hurdles that make these more expensive than coal or other carbon fuels. “In the long run, common sense will prevail,” Posma says.

The U.S. has huge reserves of oil, coal and natural gas that can't be tapped because of legislative restrictions. Nuclear energy falls under the same restrictions despite the fact that other developed countries such as France derive a majority of their electric power from nuclear plants.

While the coal business is down, Posma is using the technology he's developed for mine cars to other vehicles, from locomotives to streetcars and buses.

For example, Saminco has developed a control system for the Alcatraz Ferry that combines electric power when the boat is operating inside the harbor and diesel when it's underway in the bay. The diesel engines recharge the electric batteries each time it pulls out of the port, ultimately saving fuel. It also uses “clean” diesel that pollutes less (European carmakers have been leaders in developing such fuel because of its greater efficiency).

“We are feverishly working on these other technologies,” Posma says.

Fill it up with coal

Creating clean diesel fuel from coal is a no-brainer, explains Bonne Posma.

The Fort Myers entrepreneur says his company, Liquid Coal, produced a batch of diesel fuel last year using natural gas to heat the coal and turn it into liquid fuel. It's a process that's been perfected since it was first developed in the 1920s.

But between environmentalists who vilify fossil fuels, starry-eyed government officials smitten by solar and wind power and oil companies that are happy with the status quo, Posma acknowledges that his efforts are quixotic. “This is mainly to stir mischief. I'm not going to make money with this,” he says with a wink.

But this isn't pie-in-the-sky stuff. For example, South Africa produces 6.3 million gallons a day of diesel fuel from coal. The South Africans perfected the technology when apartheid-era sanctions forced them to look for domestic sources of oil.

The challenge of creating diesel from coal is that large amounts of heat are necessary for the process. Using oil or natural gas would make it too costly. Instead, Posma proposes using nuclear power, which would lower the cost to between $50 to $60 a barrel, about where prices for imported oil are today.

But despite the abundance of cheap coal in the U.S. and vast improvements in “clean coal” technology, many legislators still view it as a pollutant. And although diesel cars get 30% better mileage than gasoline cars, politicians still favor ethanol and other fuels.

What's more, politicians are reluctant to bring down barriers to building nuclear power plants, even faced with overwhelming evidence that the technology is safe. France, for example, produces 80% of its electricity with nuclear energy without fatal mishaps in 40 years.

Squabbling within the energy industry doesn't help either. “Oil companies are very happy with the way things are,” Posma says. And the coal industry doesn't want to be affiliated with the nuclear industry. “They all tell lies about each other,” Posma says.

While he doesn't mind the competition, Posma says the government shouldn't favor one industry over another. “The existing political system allows you to bribe people,” he says.

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