KANSAS CITY, Missouri (Reuters) - It’s corn planting time in the U.S. Plains, and that means Kansas corn farmer Merl “Buck” Rexford is worrying about the weather -- and hoping there is enough water.

E85 ethanol fuel is shown being pumped into a vehicle at a gas station selling alternative fuels in the town of Nevada, Iowa in this December 6, 2007 file photo. Proponents say corn ethanol for transportation fuel is far better for the environment, national security and the economy than oil and the first step toward cleaner fuel sources. REUTERS/Jason Reed/Files

Rexford plans to start seeding his 7,000 acres near Meade, Kansas, this week and he is relishing a recent heavy snow storm that dropped several inches of much-needed moisture.

Like corn farmers throughout the United States, Rexford hopes to grow a healthy crop yielding more than 150 bushels an acre this year. Much of his crop will wind up at a nearby ethanol plant.

And that puts the 65-year-old Rexford at the center of a bitter divide over biofuels, particularly corn ethanol.

Critics argue that precious water resources are being bled dry by ethanol when water shortages are growing ever more dire. Federal mandates encouraging more ethanol production don’t help.

Proponents say corn ethanol for transportation fuel is far better for the environment, national security and the economy than oil and the first step toward cleaner fuel sources.

“We really have to ask ourselves, do we want to be driving with renewable fuels or with gasoline made from petroleum resources,” said Brent Erickson, executive vice president at the Biotechnology Industry Organization, which backs ethanol.

Corn ethanol’s future is already muddied by concerns that it requires a substantial amount of energy to produce and that heightened demand makes corn more costly in human food and livestock feed. Now, with climate change concerns mounting and drought becoming more of a problem in many areas, the water-intensive nature of creating ethanol also is a growing concern.

“Biofuels are off the charts in water consumption. We’re definitely looking at something where the cure may be worse than the disease,” said Brooke Barton, a manager of corporate accountability for Ceres, a group backed by institutional investors focused on the financial risks of climate change.

Corn is a particularly thirsty plant, requiring about 20 inches of soil moisture per acre to grow a decent crop, but most corn is grown with rain, not irrigation. Manufacturing plants that convert corn’s starch into fuel are a far bigger draw on water sources.

Water consumption by ethanol plants largely comes from evaporation during cooling and wastewater discharge. A typical plant uses about 4.2 gallons of water to make one gallon of ethanol, according to the Institute for Agriculture and Trade Policy.

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The ethanol industry pegs that at about 3 gallons of water to 1 gallon of fuel.

WASHINGTON PLAN

Washington lawmakers and the White House have been encouraging the use of ethanol as an alternative fuel to help lighten the nation’s costly dependence on foreign oil.

But the moves are meeting opposition from many groups who fear that population growth and climate change are combining in ways that will leave not only the United States, but the world, with too little water. Many ethanol plants are located in agricultural areas -- close to the corn, but also close to other users who need a lot of water to operate, such as hog farmers and cattle ranchers.

“We’re headed in the wrong direction and this problem is not going away,” said Mark Muller, program director at the Institute for Agriculture and Trade Policy. “This water issue is like the financial crisis... and I’m afraid something awful is going to happen.”

The group says much of the Corn Belt stretching through Iowa, Illinois, Nebraska, Minnesota and Indiana has enough water for all, but water availability could challenge the ethanol industry in areas including greater Chicago, western Iowa and Nebraska, and generally west of the Missouri River.

“Water use could be a limiting factor (for ethanol) if we don’t introduce and support more water-saving technologies, ” added the Institute’s Jim Kleinschmit.

“Water is a worry,” agreed Heritage Foundation senior policy analyst for energy and environment Ben Lieberman. “When we expand corn ethanol as we have with these federal mandates,” he said, “we are starting to see corn in more marginal areas that may need more irrigation. We are seeing increased water use not just for the processing plants but also the water in growing the corn.”

Last month, a coalition of environmental, agricultural, business and consumer groups asked the Obama administration not to raise the amount of ethanol blended into gasoline without further study.

Ethanol supporters don’t dispute the water-intensive nature of the industry. But they say much of the corn crop relies on rain from the skies, not pumped out of the ground, and even irrigation systems are improving to reduce water usage by almost half. More water-efficient production plants are also reducing water use. In January 2009, there were 170 ethanol plants operating in the United States and 24 more new or expanding plants.

In 2008, the United States led the world in ethanol production, generating 9 billion gallons, or 52 percent of the world production. That is up from 6.5 billion gallons of U.S. ethanol in 2007, according to the Renewable Fuels Association. The U.S. aims for 15 billion gallons by 2015.

THIRSTY WORLD

Freshwater consumption worldwide is expected to rise 25 percent by 2030 due largely to world population growth from 6.6 billion currently to about 8 billion by 2030 and more than 9 billion by 2050, according to Ceres.

Some believe crop biotechnology could offer at least a partial solution, and several companies are racing to develop corn that is drought-tolerant, including Monsanto Co, which hopes to launch a product in 2012.

DuPont Co.’s Pioneer Hi-Bred unit plans to roll out a low-water conventionally produced corn as early as 2010.

Back in Kansas, farmer Rexford would welcome a more drought-hardy corn seed. Water to irrigate his crop is getting harder and more expensive to come by.

Still, farmers need the premiums selling their corn for ethanol can bring, he said, just as much as the nation needs to break free from dependence on foreign oil.

“If farmers go out of business you’ll have a lot worse crisis than an oil crisis,” he said.