**GAO-09-186**                      Published: Dec 29, 2008. Publicly Released: Jan 08, 2009.                  

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## Highlights

Although competitive oil and natural gas markets generally provide incentives for companies to invest in research and development (R&D), some industry experts believe these companies may underinvest in certain areas. A recent GAO report noted important criteria for the Department of Energy (DOE) to consider in evaluating its oil and natural gas R&D efforts--including the likelihood that industry would perform the research without federal funding. The Office of Management and Budget has raised similar concerns. In this context, GAO was asked to review (1) how much U.S. industry has invested in oil and natural gas R&D over the last 10 years, and the current focus of these activities; (2) how DOE's oil and natural gas R&D funding and activities compare with industry's; and (3) to what extent DOE ensures that its oil and natural gas R&D would not occur without federal funding. GAO reviewed DOE and U.S. industry data for oil and natural gas R&D spending, and interviewed DOE officials and representatives from various segments of the industry.

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## Topics

Energy

ConservationCrude oilEnergy developmentEnergy industryEnergy researchEvaluation criteriaFederal fundsFuel researchGas resourcesIndependent research and developmentNatural gasOil drillingOil resourcesPetroleum industryProgram evaluationProgram managementResearch and developmentResearch and development costsResearch programsTechnologyCost estimatesPolicies and procedures