Because of the controversy about ethanol in Kosciusko County, Dr. Otto Doering said Monday he was almost afraid to broach the topic, but Purdue's agriculture economic specialist talked about this kind of bio-energy anyway.

Doering was the guest speaker during the annual Purdue University Extension meeting, held in the Shrine Building on the fairgrounds.
"We're not short of energy," the economic specialist said, "we're short of liquid fuel. We're importing 60 percent of oil now, compared to 30 percent during the oil embargo. The wells are running flat-out, and that's dangerous."

Doering went on to say no one has a silver bullet that will solve energy shortages in the U.S. He advised everyone to look at Sen. Dick Lugar's Web site to understand the international implications of fuel politics.

"Who has the largest natural gas reserves?" he asked. "The Russians. Who is the largest oil producer, behind Saudia Arabia? The Russians. They also have the third largest financial reserves behind China and Japan. And we don't even seem to be very concerned."

Doering said that as of two years go the North American continent - Canada, U.S. and Mexico - is no longer self sufficient in producing natural gas. The costs to import natural gas, at temperatures lower than minus 200-degrees, in pressurized tanks, is expensive. The U.S. only has a handful of ports to handle the product.

"One explosion would be the size of a number of Hiroshimas," Doering said. "And currently 60 percent of our nitrogen used in fertilizer, is imported. Who has the greatest supply? Russia."

He added there is a difference in per ton rate for the friends of Russia versus people who trade with the Saudis.

Using a chart, Doering said Texas crude oil was the cheapest fuel to produce, followed by tar sands and coal liquefaction. Ethanol topped the chart as the most expensive fuel.

Tar sands and coal liquefaction processing plants are extremely expensive. Extraction of these two fuel sources is damaging to the environment.

"What makes ethanol economically feasible now is the 51-cent per gallon government subsidy and its marketability as a fuel additive."

With the subsidy and additive values taken into consideration, ethanol producers can pay as high as $5.44 per bushel for corn before they start to loose money.

"And that means consumers will pay more at the meat counter," Doering said of the high price of corn.

The subsidy is due to end in 2010. And oil producers can expand current fields and begin pumping from new ones which could drive down the cost of oil per barrel.

Doering's guess is the value of ethanol will go down, some plants will go belly up and some planned facilities won't be built.

"Around the time of Katrina, ethanol plants were paid off in a year when corn was at $2 a bushel. That's why there has been an explosion in new plant plans."

Doering said ethanol's oxygenate value will drop to current octane values. He said the cost of construction has increased because only a couple of companies build the facilities.

The audience had questions about other forms of energy.

Doering said cellulose (corn stalks or switch grass) conversion hasn't proved to be profitable. If it gets wet, it rots. Because of its low weight, haulage costs are greater than the worth of the product.

Answering a question about the auto industry's push to develop a hydrogen car, Doering said hydrogen is made from natural gas, a product we're importing now ... from the Russians. He said the federal government is pushing for hydrogen development.

While the Japanese developed hybrid cars, General Motors spent billions on electric car research.

Doering said the ideal vehicle would be a light weight hybrid.

"Our automotive companies have been whipsawed into their design decisions, while the Japanese have produced hybrids."

The Purdue expert said wind "farms" will help with electrical costs.

"The problem with wind and solar energy is the wind doesn't blow and the sun doesn't shine all the time.

"There's no free lunch. We have to have coal or natural gas generator back-up."

Holland has wind power plants and dependable North Sea breezes, Doering said.

"Here the towers have to be 70 to 100 meters high sitting on a block of concrete 20 feet square and base that's 50 feet deep. The good winds are way up there.

"General Electric has developed the technology. You put down your money and they'll build and maintain the "farm." It's a turn-key operation with 1,000 megawatt turbines," Doering said. "You couldn't do that five years ago."

Regarding hydroelectric energy, Doering said, "We've dammed all the dams we can dam. We don't want to dam the Colorado River because we don't want to fill the Grand Canyon with water. And, in New England, they're ripping the dams out because they ruined fish breeding areas."

Kelly Easterday, Ag Educator, named Dennis Polk as the 2007 Friend of Extension.

During the meeting Nancy Adams and Max Grady were elected to a three-year term on the Extension board. Jane Greene, Louise Powell and Doug Shock were elected to a second term.

Dennis Darr and Steve Johnson left the board.

Other Extension board members include Pam Brumbaugh, Craig Hurley, Jon Roberts, Edith Rohrer, Pat VanDeWater, Sonja Hesser, Lissa Krull, Fred Lechlitner, Bret Wolf and Carolyn Zimmerman.

Written annual reports by Extension director Joan Younce, Agriculture and Natural Resources Educator Kelly Easterday and 4-H Youth Educator Sarah Duhamell were included in the program.