Green Earth Investment Club Farms, Rising oil prices, energy security considerations, and concerns over global warming are all contributing to the current hype surrounding biofuels. With fuel demand expected to increase dramatically in the coming decades and oil prices on the rise, biofuels are being promoted as the way to curb greenhouse gas emissions and develop homegrown energy sources that reduce our dependency on foreign oil.As a result, farmers and investors alike are barreling into a new gold rush:Ethanol production is experiencing record growth and reached nearly five billion gallons in 2006, an increase of 25 percent from the previous year.Dozens of new ethanol refineries are currently under construction nationwide and production capacity is expected to more than double current levels as soon as 2008.Twenty percent of all corn grown in 2006 was dedicated to ethanol production, raising concerns over the impact on crop prices and competition with food uses of corn.In this context, corn ethanol has emerged as a leading contender to reduce dependency on gasoline. At first glance, ethanol produced from corn seems simple, even patriotic. The ethanol industry and other proponents of biofuels claim that these new fuels will result in lower tailpipe emissions. They say that this boom will revitalize farm economies and promote energy independence. However, upon careful examination of these claims, it becomes clear that biofuels are not the silver bullet solution that some say they will be.Ethanol production requires a significant amount of water. With new ethanol refineries often located near other water-intensive uses (e.g., urban areas, industry, crop irrigation, concentrated animal feeding operations), additional stress is added to already strained water resources. The increased demand, especially in areas already having difficulty meeting water needs, is causing significant conflict between existing and new users. During the past decade the number of ethanol factories in the United States has more than tripled. In this context, even the more water-efficient biofuel refineries will threaten water resources, especially in arid environments.Over 80% of the U.S. ethanol production is based on dry grind or dry milling processes. During production the corn is ground and then added to water to create a mush. Enzymes are added and the mixture is cooked, fermented, distilled and dehydrated to produce ethanol. A significant amount of water is required for the boiling and cooling stages of production. This water use is consumptive, meaning that it is not returned to the source from which it was taken; instead it is lost to steam during the drying process and also lost through cooling towers.According to the Minnesota Department of Natural Resources, ethanol plants in the state use approximately 3.5 to 6.0 gallons of water to produce one gallon of ethanol using current technology. This averages about 4 gallons of water per gallon of ethanol. Consumptive water use in petroleum refining is about 1.5 gallons of water for each gallon of petroleum.