Agri News brings up this issue with ethanol production:
The concerns about water use and carbon dioxide emissions because of the use of fossil fuels to make ethanol were presented during Farming Our Fuel: Growing a Sustainable Ethanol Industry, and event hosted by the Minnesota Environmental Initiative at Gustavus Adolphus College. "Sometimes we end up trading one problem for another," said Janette Brimmer, legal director of the Minnesota Center for Environmental Advocacy. She stressed that making fuel from corn to reduce dependence on foreign oil doesn’t work if it diminishes air and water quality. Laurel Reeves of the Minnesota Department of Natural Resources said water is a big concern related to ethanol because the industry puts stress on aquifers continuously.
The Muncie Free Press goes into a little more explaination of how much water is needed:
In Minnesota, ethanol plants have improved the efficiency of their water use from an average of 5.8 gallons of water per gallon of ethanol produced in 1998 to 4.2:1 in 2005. Assuming Minnesota’s data is typical of other ethanol plants around the country, the paper speculated that water use associated with ethanol plants could increase by 254 percent from 1998 to 2008.
Then there’s this from The Chief Engineer:
A red flag went up when city officials in Champaign and Urbana (Illinois) heard that an ethanol plant proposed nearby would use about 2 million gallons of water per day, most likely from the aquifer that also supplies both cities. The proposal for a 100 million gallon-per-year ethanol plant is just one of many that have popped up in the past several months across Illinois, which already has seven operating plants and is the nation’s No. 2 ethanol producer. It takes about three gallons of water to produce each gallon of ethanol, according to the Renewable Fuels Association. So a plant that produces 100 million gallons of ethanol each year will go through 300 million gallons of water for processing the product and cooling equipment.
Many industries use more than a million gallons of water each day, so ethanol production is by no means unique in its needs. And while 2 million gallons per day is a big number, it pales in comparison to the 23 million gallons per day used by the cities of Champaign and Urbana or the 500 million gallons per day that the city of Chicago pumps from Lake Michigan.