Earlier this month, it was announced that the Advanced Energy Consortium (AEC) would be investing $21 million over the next seven years to develop new nanotechnology applications and thus increase oil and gas production.

The development is significant for two reasons. First, the consortium is made up of some of the largest oil companies in the industry -- including BP America (NYSE: BP), ConocoPhillips (NYSE: COP), Halliburton Energy Services (NYSE: HAL), Marathon Oil (NYSE: MRO), Occidental (NYSE: OXY), and Schlumberger (NYSE: SLB) -- and is another clear sign that nanotechnology is moving out of the lab and into the commercial marketplace. This could be good news for pure-play nano stocks like Harris & Harris (Nasdaq: TINY).

Second, and more significant, are the results the industry could achieve from its modest investment. It is a little-known fact that as much as 60% of oil remains underground in most reservoirs -- even after the industry has employed its most extensive recovery methods. By developing nanosensors that produce more accurate 3-D images of reservoirs -- or by developing new nanoparticles which more effectively remove oil from the many pores and crevices in existing reservoirs -- the industry can substantially increase production.

Even if the net result is only 1% or 2%, with oil hovering around $100 a barrel, it won't take much extra production to justify this modest investment.

Investors who are looking to squeeze some more profits out of their oil-company stocks are encouraged to monitor the status of the AEC's research. Nanosensors and nanoparticles could have a big impact on these companies' future profits.

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Fool contributor Jack Uldrich has written two books on nanotechnology. He owns stock in Harris & Harris. The Fool has a strict disclosure policy.