The energy sector is attracting renewed attention from professional investors and advisors. This is due to a recent fundamental transformation in how energy companies operate, plus an unprecedented surge in demand for power.
The majority of the global economy is dependent on energy. Oil and natural gas are the foundation of modern life, powering everything from basic consumer products to complex industrial systems and advanced technologies. Furthermore, as of the most recent quarter-end, while energy is just 3.7% of the make-up of the S&P 500 Index, it makes up 14.7% of the earnings of the Index1.
What’s Fueling the Energy Transformation
Energy is powering some of the most important trends shaping the global economy: technological advancement, the transition to a more electrified world, and national security. The world is racing to build out artificial intelligence (AI) infrastructure, electrify transportation, expand liquified natural gas (LNG) exports, and reshore manufacturing. These all require a massive, reliable energy supply. Global energy demand has increased in 38 of the past 40 years, according to the Energy Institute Statistical Review of World Energy2.
The main drivers of energy growth are:
- AI
- Data centers
- Reshoring of manufacturing and infrastructure
- Global population and economic growth
This isn’t a temporary spike. It’s a fundamental shift in how much power the economy requires to function and grow.
Let’s break this demand down.
AI requires computing power and electrical power. Training a single large language model can require as much electricity as a small town uses in a year. Data centers housing AI workloads operate 24/7, with no downtime and minimal tolerance for disruption.
Data centers require massive amounts of electricity and are now among the largest and fastest-growing sources of electricity consumption in the United States. Some projections suggest they could account for more than 10% of total U.S. power demand within the next decade.
As manufacturing returns to the United States, it brings energy-intensive production with it. Factories— and the logistics networks that support them—need power.
Electric vehicles represent another layer of growing demand. As EV adoption accelerates, the grid will need to support millions of consumer and commercial vehicles charging simultaneously, particularly during peak hours.
With the U.S. as the world’s largest exporter of natural gas, natural gas liquefaction facilities require enormous amounts of energy to cool and compress gas for shipment overseas. As U.S. LNG exports expand, domestic electricity and gas demand rise in tandem.
The New Energy Reality: Why You Should Care
Across the globe, energy powers everything, from the lights in our homes to the data centers processing AI workloads that are reshaping entire industries. Investing in the energy sector delivers several key benefits:
- Potential strong dividends
- Attractive valuations
- Potential hedge against inflation and global geopolitical risks
- Exposure to structural growth trends
Energy is now a major player in determining what’s possible, and the investment implications are profound. AI’s growth is directly tied to the availability of energy infrastructure. Natural gas is emerging as the most viable source for meeting this demand, offering the reliability that intermittent renewables like solar and wind cannot consistently provide. Nuclear power also has a role. Both large nuclear plants that provide long-term baseload capacity and emerging small modular reactors can offer 24/7 power generation.
“They (energy infrastructure companies) are more disciplined. They’re focused on generating free cash flow, they’re focused on returning that free cash flow to investors.”
— Robert Thummel, Senior Portfolio Manager, Tortoise Capital
“We think natural gas and nuclear will be those future supply sources.”
— Robert Thummel, Senior Portfolio Manager, Tortoise Capital
What Investing in Energy Means
Global energy demand is rising. U.S. natural gas is in high demand. And electricity consumption is accelerating at an unprecedented pace.
The energy sector is no longer defined by oil alone. It’s an expanding energy system that requires all available sources to satisfy accelerating demand. This system spans natural gas, electrification, modern infrastructure, and next-generation technologies. The companies building pipelines, power plants, and transmission networks are supporting legacy demand and the future.
At Tortoise Capital, our approach to energy investing reflects a focus on evolving market dynamics. We help investors navigate a rapidly changing world.
Our investment strategies span the entire energy value chain system and are built for what’s next: resilient infrastructure, smarter grids, and global demand that isn’t slowing down.
Energy Theme Comparison
| Category | What it Includes | Why Now | Role in Portfolio | Portfolio Characteristics |
|---|---|---|---|---|
| Broad Energy See products | Production, transportation, and consumption of all energies in North America. |
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| Energy Infrastructure See products | Physical assets, storage, and transportation networks that enable the flow of energy. |
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| Electrification Infrastructure See products | Generation, transmission, and distribution of electricity, natural gas, and a range of utilities. |
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| Energy Adjacent See products | Opportunities where energy has a critical role in adding to the value chain and success of the sector |
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*Source: Tortoise Capital
There is no guarantee that a particular investment strategy will be successful. Diversification does not assure a profit or protect against loss in a declining market.
Invest in Energy, Fuel Your Future
AI is driving a new industrial revolution, which is fueled by electricity. Electricity is the new oil™ and energy companies are benefiting from an unfolding future. Energy is a growth story grounded in the reality of what powers today’s world, and what will be required to power it tomorrow.
If you’re looking for ways to grow, earn steady income, or protect your portfolio from things like inflation or global uncertainty, adding more exposure to energy investments could be worth considering.
1 Bloomberg as of March 31, 2026
2 Energy Institute Statistical Review of World Energy 73rd Edition, June 2024.
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