I'm probably stating the obvious or asking a stupid question, but...

Corn is a solid, is it not? So you ned to add the liquid, do you not? If making ethanol is anything like brewing drinking alcohol, then you need sugar, water, yeast. So wouldn't making ethanol have an impact on the water supply?

I'm sure it takes far more water to grow the corn than to process it, but the issue of contamination from wastewater can't be ignored.