The U.S. Department of Energy (DOE) has announced up to $65.5 million in federal funding for cost-shared research, development, and deployment projects intended to strengthen domestic oil and natural gas production, according to a DOE announcement. The United States is currently the world's largest producer of both oil and natural gas, and the initiative targets maintaining and extending that position through applied technology development.

The department said the funding will support work to improve the efficiency and reliability of critical energy infrastructure, while also helping convert underutilized resources into higher-value products. The program is also designed to back technologies that maximize the productivity of existing infrastructure, expand the capacity and performance of energy delivery systems, and improve the resilience of America's oil and natural gas supply chain.

According to the DOE, the funding opportunity supports President Trump's Executive Order, "Unleashing American Energy," which is aimed at ensuring Americans have access to affordable, reliable, and secure energy through the responsible development of the nation's abundant oil and natural gas supplies.

"The Energy Department is making strategic investments to strengthen America's oil and natural gas industry and reinforce the critical infrastructure that powers our economy," DOE Under Secretary of Energy Kyle Haustveit said in a news release.

"This funding opportunity will help American producers eliminate waste, improve efficiency, and deliver the affordable, reliable, and secure energy that powers our economy and strengthens our national security."

The DOE has issued a Notice of Funding Opportunity (NOFO) seeking innovative proposals across three main areas. As cost-shared programs, selected projects require industry partners to contribute a portion of total project costs, a standard mechanism the department uses to ensure commercial relevance and accelerate technology transfer.

Stranded and underutilized resources

The department is seeking projects to develop and validate technologies that can transform oil, natural gas, and associated product streams, including streams that would otherwise be stranded, flared, or constrained by contaminants, into high-value products that can be readily transported. Funded projects are expected to move from laboratory-scale validation of new catalysts, reactor systems, and separation processes to field testing of modular, decentralized gas conversion systems and sour gas processing facilities in active production basins.

Supply chain durability and infrastructure reliability

The DOE is also seeking proposals to develop, validate, and field-test advanced materials, innovative equipment, and new infrastructure components intended to prevent product losses and strengthen domestic chemical supply chains. The work includes improvements to facility-level equipment and transport infrastructure, such as compressors, valves, piping, storage tanks, coatings, and alloys, with the goal of maximizing safe and efficient energy delivery.

Digitalization and smart test sites

A third focus area is the accelerated adoption of digital technologies, smart facility concepts, and advanced analytics to improve operational efficiency, safety, and reliability in the upstream and midstream oil and natural gas sector. Projects will use full-scale, field-based validation platforms and test sites to deploy continuous monitoring systems, artificial intelligence-supported digital twins, and infrastructure optimization systems. The DOE said these systems are intended to increase saleable hydrocarbons, reduce operating costs, and track the technical maturity of emerging technologies.

The announcement follows a recent $150 million DOE funding opportunity focused on improving recovery efficiency from unconventional oil and gas reservoirs, advancing hydraulic fracture characterization technologies, and developing new approaches for produced water management. Together, the two funding rounds represent a continued federal emphasis on technology-driven solutions for the domestic oil and gas sector.