High demand and diversification.

Demand: The energy sector is essential and not discretionary. The production and distribution of power impacts all aspects of daily life. Affordable and reliable energy is crucial for humanity to thrive and demand will only rise as the global economy becomes more digitized and interconnected through the utilization of Artificial Intelligence.

For beginners and passive investors: The traditional and highly liquid investments are ETFs, stocks, bonds and mutual funds. For accredited investors: Oil and Gas Working Interests, Royalties or Private Equity Funds.

It is important to do your own research and consult professionals that have a fiduciary responsibility.

Thereafter, the easiest way to invest in the energy sector is by purchasing ETFs, mutual funds or individual stocks and bonds. These traditional methods benefit from appreciation and income via dividends.

Accredited investors can further diversify by purchasing oil and gas working interests, mineral rights or investing in private equity funds that manage capital on your behalf in return for fees and a split of the profits.

Consult a tax professional to verify you meet the federally mandated requirements.

Net worth of over $1 million (excluding primary residence) or an annual income of at least $200,000 ($300,000 for couples) for the last two years, among other qualifications.

A third-party verification may be required to attest to your credentials.

Pros: Professionally managed investments.

Potential for higher returns via appreciation and income.

Active and passive Tax Deductions.

Cons: Illiquid. Higher risk.

Accredited Investors can participate in private placements, hedge funds, venture capital, and other investment opportunities that are not available to the general public.

These investments have a higher risk and reward profile and are typically managed by industry professionals that have insider knowledge of a particular sector.

Investors in certain energy funds can benefit from active income tax deductions, meaning a portion of your investment can be used to defer a portion of your W2 income.

Potential income, appreciation and tax deductions.

Funds or individuals that invest directly in the drilling and exploration of oil and gas wells are eligible to benefit from Intangible and Tangible Drilling Costs. These costs can be deducted from your active income, thereby lowering your tax liability.

Oil and gas exploration investments are considered higher risk, so please consult a financial professional before making any investments.

Potential income, appreciation and zero future funding obligations.

Mineral rights may be the purest form of passive investing. Investors who own mineral rights have zero liability. Exploration companies, like Exxon or Chevron, effectively lease the land from you. These companies bear 100% of the risk and cost of drilling for oil, gas and other minerals. Instead of fixed rent, mineral right owners receive a portion of the oil and gas proceeds in perpetuity.