Key comment from the piece...

"Obama and other drilling critics are correct that even aggressive new domestic drilling won't bring down gasoline prices any time soon, and perhaps not ever, given the global dynamics driving oil prices today."

Ironic that Mr. Hayward admits this little dirty secret, all while continuing to bash domestically-produced ethanol that is being used right now to replace gasoline and could be used in even greater quantities if the federal government only allowed it.

IN BEFORE THE: ethanol raises food prices, ethanol kills people in poor countries, big oil deserves more tax breaks, drill baby drill myths.

Good point on Hayward's time lag admission JT, but the rest is bull. Ethanol does not have the same energy content as gasoline, so it certainly isn't a perfect substitute. Currently with Gasoline trading at 2.95 a gallon and ethanol going for 2.60 a gallon it would make sense not to "cut" gasoline with ethanol, on an energy cost basis at least.

But then you have the 45 cent blenders tax credit!

I am pretty sure that some Ohio gas stations are over cutting gasoline with Ethanol.

ORC Ann. 1345.021 states: (A) As used in this section, "retail dealer" means a person who owns, operates, controls, or supervises an establishment at which gasoline is sold or offered for sale to t...he public.

(B) When ethanol is blended or mixed into gasoline that is sold or offered for sale to the public, it is not an unfair or deceptive act or practice in connection with a consumer transaction for a retail dealer to fail to disclose either of the following:

(1) The fact that the gasoline contains ethanol;

(2) The percentage of ethanol that is contained in the gasoline."

Also domestic ethanol isn't quite as efficient as Brazilian ethanol.

Ethanol itself becomes a sort of international macro-economic question, involving Brazil-US relations.

Brazillian Ethanol is ammazing...

Also JT what are you talking about in terms of the federal government holding back Ethanol?

Ricardo would say we use our corn for corn syrup, and the brazilians use sugar cane for ethanol. Less corn ethanol, more corn syrup, less sugar cane sugar, more ethanol...but again these aren't perfect substitutes.

Brazil is willing to chop its tarrif, if we chop ours, but we aren't going to chop the tarrif and keep the refiners credit, and due to energy content and current market prices on the CME forward contracts, it is safe to say that if credits were eliminated we would use less ethanol than we currently do, except for state laws like Ohio's which potentially could allow gas stations to run really high ethanol regular blends.

Actually ethanol probably does do a lot to make prices at the pump cheaper. I can't contest that.

But Petrobras which is basically the corporatist arm of Brazilian policy makers needs more ethanol...and it is somewhat ridiculous that Brazil will be importing US ethanol...

Someone does need to think about ethanol...but not all ethanol is created equal.

The fix for oil prices is pretty simple - either up the ante required to trade in futures (the current pittance needed encourages massive speculation) or restrict trading to only companies with direct interests in procuring oil (gas companies and utilities, mostly). Exactly how many billions of dollars are investment banks currently making on oil per annum?

And as much as I am in favor of drilling and domestic production, the current market for oil is not driven by supply or demand. It's a problem with the market itself, and market that has systematically raped middle-class America.