mr. mcnally, mr. brazil, both of you mentioned the imo 2020. in fact, mr. mcnally, you said that you -- tlahat was a whole section of your talking points that you weren't able to get to, due to time constraints. so i'll give you that opportunity now. i also referenced these imo, international merit time organizations, low sulfur standard. these are set to take effect in january of 2020. the standard will reduce sulfur limits and marine fuels. we'll certainly look to the environmental impacts, the positive impacts on health, but i think the concern that is out there is that compliance isn't moving along at the expected rate, which could pose a burden going forward. and since we're talking about where do we go from here, those unknown factors or perhaps those things that are out on the horizon that may have some unintended consequences, i would like an opportunity to talk a little bit about them this morning. can you walk us through the imo 2020 standard, the options for compliance, and what it might mean for the middle distillate markets. and whether you shar

mr. mcnally, anything to add to that? >> yes, madam chairman, i thought about this when i worked in the white house national security council like my colleague, mr. bordoff, under president obama. and working for president bush when we liberated in iraq. we thought very much about this. the problem, the policy problem again is even though it's 100 million barrels and really talking a couple of million barrel disruption, a small disruption can mean a big price spike and a big problem for our economy. so where do you go from here for quick supply because you can't bring on an oilfield really fast. the first place you want to go for something like that, if you suddenly lost 2 1/2 million barrels of oil a day you go to spare production capacity held by mainly saudi arabia. we went there in 1990 and 91, they were a little late in getting there. saudi arabia provided that before we liberated iraq in 2003. that is the first resort, that's what the fire department is for. the problem is there is no fire department today. mr. sadam

mr. mcnally, who literally wrote the book on crude volatility. we have another, mr. boar dawf who has come full circle. we also welcome mr. auers. so counting, we're not quite to 12 yet. so, senator cantwell, why don't i turn to you for opening, and we can get to the business meeting right after that. >> thank you, madam chair. thank you for scheduling what is a very timely hearing on global oil prices, because every family and business across americaing is feeling the burden of higher fuel prices forcing average u.s. households to pay $155 more in fuel costs this summer's driving season as compared to last year's. gasoline and diesel prices are currently around 60 cents more than last year. my constituents are marley aware of the -- marry aware of the prices -- particularly aware of the prices at the pump. i believe even more than in some places than alaska, which i find hard to believe. currently, truck drivers are shelling out $3.41 per gallon. that means that every gas station fill-up costs washington drivers about $8 more than it did last summer. that means ever

mr. mcnally. welcome. >> madam chairman, ranking member members of the committee am honored to be back today. i thought what i would do is focus on first the return to authentic boom and bust cycles on those factors that pushed the month as the chairman alluded to but the real issue preoccupying us in the industry for years and frankly it is remarkable how little notice itt has gotten in washington. that is imo 2020. but step back to note these are not what normal oil prices last 16 years you don't see them tumbling in crude oil without a war but it happens in 2004 through 2008. and they just don't fall 60% in half of the year without a recession or a supply surge. this is on usual. why? now when and then it became the volatility touches for the oil industry but for government and industry and airlines for everyone who depends on oil. to vanquish to stabilize prices governments and the industryun and the folks forget the united states was the king of opec. specifically state of texas. exhibiting h