Is corn-based ethanol really a good way to kick U.S. oil dependency? Study the graph.
To produce one gallon of ethanol takes 3-5 gallons of irrigation water and produces up to 13 gallons of waste water.

Source: "The Ethanol Effect," Mother Jones, November-December 2007, p. 25.

Here is where ethanol plants were as of 2007. Source: http://www.christopherhaase.com.