mr. burkhard? >> well, the -- on the natural gas side, prices are quite low because of this revolution and shale gas production. but what we're seeing is more companies shift towards liquids or producing oil. and one of the factors that's influencing the pace of investment is the rise in costs, finding the right people, the right equipment. there's not a limitless supply. there's, in fact, a missing generation of folks in the petroleum industry because from about 1986 to earlier this decade, oil prices were low. the industry was consolidating. there weren't many people entering the industry at that time. and as prices have risen, oil prices have risen. and activity has picked up particularly in this country. there's been a great deal of pressure in finding the right people and getting the right equipment to the right places. so that's a significant challenge. >> so the testimony this morning, that's interesting, you all talked about the fact that because there is both wet gas and oil in some of the

mr. burkhard or mr. duwun, if either of you would like to add anything to what's been said. >> fuel economy standards, we already mentioned, those play a tremendous role in oil consumption in the future. and we're seeing higher fuel economy standards, not just in the u.s. but also europe and china, other markets. one more challenging aspect to the efficiency efforts are buildings and structures. cars on the road for maybe 12 years, a building can be around for 100 years. and encouraging, providing incentives for greater building efficiency could go a long ways. >> yes. mr. diwan. let me ask a very quick final question for dr. gruenspecht since you mentioned heating oil in the northeast. i personally am very concerned about pad one, as you pointed out. you talked about the refineries that are down on the east coast. can you talk about the correlation between that, if there is any, and what we're seeing in increased costs for home heating oil in the northeast. >> thank you. i don't think there's really muc

mr. burkhard, go right ahead. >> mr. chairman and senator murkowski and other members of the committee, thank for the opportunity to share some thoughts with you today. mr. chairman, as you mentioned, 2011 was quite turbulent because of the libyan civil war, the eurozone crisis, iran, and the slowing global economy. at the same time in 2011, we saw the highest annual average oil price ever on an annual average basis. but the energy story is not just limited to high prices and geopolitical concerns. that's very important and i'll talk about that in a little bit. but the energy story in the united states is also about creating jobs and economic growth and more domestic supply. one of the most significant stories or developments in the energy markets in recent years is what we call the great revival. the great revival in u.s. oil production. the long decline in u.s. production was never supposed to end, but it has come to an end, and between 2008 and 2011, over that the three-year period, u.s. liquids production, so that's

mr. burkhard and mr. diwan, anything, briefly, that you would add to that? >> very briefly, expectations about the future play a big role in oil price formation, and when you look at the limited amount of spare capacity, we estimate it's around 1.8 to 2.5 million barrels per day, call it 2 for this year, there's a reasonable case to be made that iranian exports could have some degree of disruption this year. which would eat into spare capacity. so it's that limited amount of spare capacity and this fear, concern, about disrupted oil supplies that are keeping prices high. they could even go higher, despite the weak economy . >> mr. diwan? >> i largely agree with ambassador jones. i think that men have been working at 100 to 120 is exactly what we are in. however, we have really two tail end risk going on right now. one the financial crisis in europe. the other one is conflict in the middle east. so these two, in a way, can blow up that range. and that's the risk we're facing in 2012, if neither of which occur, we're very likely to stay. >> thank you. thank yo