But shipping cost money and energy.

Exactly.  The idea behind building ethanol plants in North Dakota is to put them where the corn is.

Will there be much corn in the future if the region do not have enough water for ethanol plants?
Ethanol needs a lot more water than corn.  
LeAnn,
That depends on where you grow the corn: In the irrigated Sacramento Valley and San Joaquin Valley of California much corn is grown with humongous quantities of highly subsidized water, obscene quantities of fertilizer, and enough pesticides to kill off a medium-size ethnic group. The yields are fantabulous.

By way of contrast, in God's Own Country, i.e. Minnesota, Wisconsin, Iowa, Illinois, parts of Nebraska and some other places we get plenty of rainfall to grow corn without irrigation, though the quantities of artificial fertilizer and pesticides are huge, and the erosion of soil is not a negligible issue.

Like Sweden, Minnesota has abundant water. Indeed, a Swede will feel right at home in Minnesota, except that most of the Swedes I know speak better English than many of us do. Shucks, we even have Finnlander jokes and Norweigian jokes, just like in 'da Old Country. Yah, you bet.

As far as the Great Plains go: I say, give it back to the bison and the Native Americans--and quit draining the Oglalla Aquifer.

"obscene quantities of fertilizer, and enough pesticides to kill off a medium-size ethnic group."
That is the deal killer for ethanol made from corn or just about any crop used to make ethanol. It won't free us from fossil fuel usage, it just hides said usage behind a politically good facade.
I guess with the public, out of sight is out of mind.
That depends on where you grow the corn: In the irrigated Sacramento Valley and San Joaquin Valley of California much corn is grown with humongous quantities of highly subsidized water, obscene quantities of fertilizer, and enough pesticides to kill off a medium-size ethnic group. The yields are fantabulous.
Almost. Much of the corn grown in the central valleys of CA are fertilized courtesy of factory farming operations. Megadairies, hog farms and chicken mills need a certain amount of acreage to spread the dried animal waste on for disposal purposes. Corn is the most common crop to use for that purpose. The problem is these factory farms are still dependent on imported feed from the midwest, which of course uses fuel for transportation. It's quite remarkable to note that both Valley farming and business interests are celebrating the arrival of ethanol plants to the 99 corridor for their economic value. When I was a planner there I thought this was a bone-headed idea because the feedstock was imported (albeit at times augmented from local sources at times) from the midwest consuming fossil fuels, limited water supplies (from a depleting aquifer), electricity and natural gas. The natural gas situation needs additional comment because the valley's supply (south of fresno) has pipeline capacity limitations more constricted than the overall tight national situation. Rapid residential growth has further exasperated the situation. The wet mash was touted as a "perfect fit" for the S. Valley's factory farm operations, without any consideration to the water considerations of those facilities. Corn + Dairies + Ethanol production = considerable water and energy expenditures. This concept is not understood by government regulators and ignored by the private sector interests. More on factory farming and resource consumption: http://unplanning.blogspot.com/2006/02/plans-that-stink-to-hog-heaven.html
The mash, fermentation, separation cycle should allow a fair amount of water recycling.  (FWIW, the old chemist/brewer in me speaks)
And, of course, this doesn't count the NG needed for fertilizer. Of course, in the Dakotas, thanks to our real Fearless Leader, farmers in the Dakotas can get coalbed methane from his home state of Wyoming. Just don't expect any water to be left to flow down the Powder River into the Missouri, and from there into the Dakotas, that's all.