U.S. Energy Department directs $30 million to small oil, gas projects

FILE PHOTO: A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie, Oklahoma, U.S., September 15, 2015. REUTERS/Nick Oxford/File Photo

WASHINGTON (Reuters) - Six small U.S. oil and natural gas drilling projects will receive about $30 million in federal funding for research and development to help achieve President Donald Trump’s policy of boosting output of fossil fuels, the Energy Department (DOE) said on Wednesday.

The projects, selected by the DOE under the direction of Congress, are in what is known as unconventional shale development. They currently produce less than 50,000 barrels per day each.

Unconventional oil and gas production uses advanced techniques such as hydraulic fracturing, or fracking, and horizontal drilling to reach pockets of resources that are trapped by rock and sand formations.

The selected projects are at sites including the Tuscaloosa Marine Shale in Louisiana and Mississippi that has been estimated to contain 7 billion recoverable barrels of light, sweet crude oil and the Huron Shale in Appalachia, which is rich in natural gas.

Funding the projects “will help us master oil and gas development in these types of rising shales,” and bolster the DOE’s efforts to strengthen U.S. energy dominance, the department said in a release.

The projects will increase understanding of the behavior of oil and gas reservoirs, advance the completion of wells, and improve drilling technologies at offshore operations, the DOE said.

The project receiving the most DOE money is a study of reservoirs by Texas A&M’s Engineering Experiment Station. The research will enable operators of thousands of existing horizontal wells that have undergone fracking to determine which of them can be fracked again, the DOE said. It will receive $8 million.

The field lab at Virginia Polytech Institute and State University will receive nearly $8 million for investigating the potential for reservoirs in the Nora Gas Field.

Among the other projects is C-Crete Technologies LLC in Stafford, Texas which will receive $1.5 million to develop well cement to prevent offshore oil spills and leaks under high temperatures, high pressure and corrosive conditions.

Reporting by Timothy Gardner; Editing by Frances Kerry