At Enverus’s customer conference, EVOLVE 2026, a panel of three senior energy investors sat down to talk about where the smart money is going: upstream consolidation, midstream infrastructure, and the AI-driven power buildout. Three different sectors, three different investment theses. But ask each of them the same underlying question, when does this cycle turn, and you get the same answer in three different accents.
Nobody knows. And none of them are betting on finding out.
When moderator Dane Gregoras pushed Bilal Khan of Blackstone Energy Transition on when the AI data center spending cycle would end, his answer was disarmingly honest:
“If I knew precisely when the music stopped, I probably wouldn’t be sitting here.”
That line could have been the title for the entire conversation. Across upstream oil and gas, midstream pipelines, and power generation, the panel’s most experienced investors weren’t pretending to have cycle-timing figured out. Instead, they’d each built their strategies around a simpler premise: make the timing not matter.
The Contract Is the Hedge
Khan’s approach to the “when does it end” question wasn’t a forecast, it was a structure. Blackstone is signing 15 to 20-year data center leases, 20-year power plant contracts, and in one case, a 40-year transmission agreement carrying low-cost hydropower into New York City.
“We’re trying to cut off any sort of tail risk,” Khan explained. When the moderator pushed further, asking whether that meant Blackstone wasn’t taking on any duration risk at all, Khan didn’t hesitate to agree.
It’s a simple idea executed at massive scale: if you can’t predict how long the AI buildout lasts, sign contracts that outlast the question entirely. Blackstone’s $6 billion energy transition fund — heading toward a next vintage north of $8 billion — isn’t underwriting a four-year AI supercycle. It’s underwriting four decades of contracted cash flow.
Khan has a fallback case even if the AI thesis evaporates entirely. Strip out data center demand altogether, he argues, and U.S. power demand still grows north of 2% annually for the next decade. That growth comes from reshoring, reindustrialization, and a simple fact: semiconductor manufacturing is both a national security priority and an extremely electricity-hungry one. Blackstone’s energy transition strategy posted roughly 30% net returns with zero realized losses from 1997 through 2022, years before AI was part of anyone’s investment thesis. The contract structure isn’t a hedge against the AI cycle ending. It’s a hedge against needing the AI cycle to have happened at all.
The Upside Nobody Underwrote
If Blackstone’s strategy is about removing duration risk, Tailwater Capital’s experience shows what happens when the cycle surprises you in the other direction.
Scott Peters described signing three separate deals with hyperscalers and data center developers for what he called “last mile” natural gas supply, which is building out 20 miles of new pipe and locking in 20-year minimum
volume commitments.
“For these businesses, that was not in the base case underwriting,” Peters said. “To the extent where you’re potentially doubling EBITDA at some of these businesses off a couple of contracts.”
This is the flip side of structuring around uncertainty instead of betting on it. Tailwater wasn’t underwriting a data center boom when it built that pipeline infrastructure. The original investment thesis was about gas demand. The AI buildout showed up as upside on top of an already-sound investment, not as the reason for making it. Betting the fund on hyperscaler demand showing up on schedule is a different kind of risk entirely.
It also illustrates something the panel returned to repeatedly: midstream investment logic has flipped. Peters described the shift as moving from “supply push,” chasing upstream drilling activity, to “demand pull,” where LNG exports, electrification, and onshoring create the investment thesis first, and the infrastructure follows. The hyperscaler contracts weren’t the strategy. They were proof the strategy was already pointed the right direction.
The Capital That Left Is Coming Back Anyway
The clearest evidence that nobody can time these cycles might be the limited partners (LPs) themselves, the institutional investors who commit capital to private equity funds.
Brian Celian of NGP Energy Capital Management described a near-total reversal in institutional sentiment toward traditional energy investing. Rewind to 2020: environmental, social, and governance (ESG) considerations dominated every pitch meeting, commodity prices had briefly gone negative, and the prevailing belief among allocators was that hydrocarbons were approaching obsolescence on an accelerated timeline. Capital fled the sector, disproportionately along political and ideological lines tied to which states’ pension boards would even take the meeting.
Today, Celian says, the picture looks almost entirely different.
“People that are underweight energy are now getting tapped on their shoulder by their CIO saying why,” he said. “We’re getting more reverse inquiry of late than really anytime that I’ve been at NGP.”
The mechanism here matters as much as the sentiment shift itself. These aren’t allocators who correctly called a commodity cycle and are rotating in early. They’re allocators who missed it — who divested or stayed underweight through 2020 to 2025 on a thesis that didn’t hold, and are now reallocating in response to a price run-up they didn’t see coming. Public pensions move in five-to-ten-year allocation increments; university endowments, some of the first institutions to exit dedicated oil and gas exposure, are now among the first coming back. None of this reflects skillful cycle-timing. It reflects the opposite — proof that even sophisticated institutional capital can’t reliably predict these inflection points, which is exactly why the investors who build cycle-agnostic structures end up better positioned than the ones trying to call the turn.
The Common Thread
Put these three stories side by side and a single thesis emerges for how the most experienced energy capital is operating in 2026: nobody is betting the strategy on getting the forecast right.
Blackstone is signing contracts long enough to outlast the question of when AI spending peaks. Tailwater built infrastructure for a thesis that didn’t depend on hyperscalers showing up, and got rewarded when they did anyway. And the LP capital now flowing back into the sector is, by its own admission, reacting to a cycle it failed to predict
the first time.
The investors who look smartest right now aren’t the ones who guessed correctly. They’re the ones who built portfolios where guessing correctly was never the point.
About EVOLVE
EVOLVE is Enverus’s annual customer conference, bringing together energy executives, investors, and industry leaders to share insights on the trends shaping oil and gas, power, and the broader energy transition. Each year’s program features panels, breakout sessions, and fireside chats with senior leaders from across the energy landscape, offering attendees a direct look at how the market’s most experienced operators are thinking about what comes next.
About Enverus Intelligence® | Research, Inc. (EIR)
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies, and capital providers worldwide. See additional disclosures here.
