Most of the news on oil and gas these days involves either commodity pricing or big deepwater discoveries by the likes of the U.K.'s BP (NYSE: BP) or Brazil's Petrobras (NYSE: PBR). That's fine, but there are plenty of other activities that should have a major impact on the energy industry's future.

Take the steam flooding work being done by Chevron (NYSE: CVX) in its native California and in other places. Indeed, the company is considered the industry expert in the use of steam injection. The process involves flooding the area with steam, so that the oil's viscosity is reduced to allow extraction.

In the Kern River field in California, for instance, the company is developing technology to increase the yield from aging fields. In its more than 100 years, Kern has yielded about 2 billion barrels of oil, but Chevron thinks it contains another 1.5 billion barrels. The company has been using steam flooding in one form or another to increase production in the area for more than 40 years. But new advances allow Chevron to target specific problem areas, halving steam use and cutting costs dramatically.

Earlier this summer, subsidiary Saudi Arabian Chevron announced that it had achieved its first steam injection in a large-scale pilot at the Wafra field in the Partitioned Neutral Zone (PNZ), which is controlled jointly by Saudi Arabia and Kuwait.

Don't be surprised if you catch ExxonMobil (NYSE: XOM), Shell (NYSE: RDS-A), and others applying similar techniques to squeeze more oil from tired fields. Indeed, another California-based company, Occidental (NYSE: OXY), has already done so successfully in Texas, the Middle East, and South America.

And don't walk away with the notion that the Kern County is finished, you should know that just this past summer, Occidental made a discovery there that, at 150 million to 250 million gross barrels of oil equivalent, likely is the largest find in California in the past 35 years.

So what does all this mean? My takeaway is that the Golden State serves as headquarters to a pair of companies that Fools should watch very carefully. Both Chevron and Occidental have repeatedly demonstrated a tendency for innovationin a variety of settings. With energy prices climbing, both companies merit attention.

Chevron and Occidental are both four-star companies, as judged by Motley Fool CAPSplayers. Why not add your assessment on the second-biggestand fourth-biggestU.S. oil companies? 

This article was originally published as A Prescription for Waning Oilfieldson Fool.com

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