Even a casual observer to the markets knows one thing about 2020: The energy sector is in trouble. Oil stocks are down, bankruptcies are up, and governments around the world are pushing for the equivalent of a low-carbon Green New Deal.

Why then is Warren Buffett, the world’s most successful stock picker and business tycoon, going long on fossil fuels right now?

Buffett broke his dealmaking drought earlier this week when Berkshire Hathaway announced it would acquire Dominion Energy’s pipeline network and storage assets for $4 billion, with the assumption of $5.7 billion in debt—a resounding vote in favor of the financial value of fossil fuels for the foreseeable future.

The timing was odd. Dominion’s chief executive had said the company, based in Richmond, wanted out of the business for both financial and sustainability reasons. Dominion has committed to lowering its emissions to net zero by 2050, a target that will require it to shift to renewables at rapid speed. It’s a strategy favored by some of the world’s largest energy companies, including Shell and BP. (While natural gas has about half the emissions of coal, and is therefore often touted as a more environmentally friendly alternative on the way to lowering emissions, it is still not low-carbon enough to meet the most ambitious emissions goals.)

In buying the assets, Buffett will gain an East Coast shipping terminal, one of only six in the country, for liquid natural gas (LNG), the very infrastructure that allows the U.S.’s shale boom bounty to be conveniently exported to the rest of the world. Unfortunately, the world simply doesn’t need any more natural gas right now: The shale boom has produced years of hefty surpluses, and with COVID-19 hitting demand, prices hit a quarter-decade low in May.

Buffett will also be acquiring some political baggage in the deal. In a Monday call, Dominion CEO Tom Farrell II said that investment in gas transmission and storage had become “increasingly litigious, uncertain, and costly.”

“This trend” of protracted legal battles, Farrell continued, “though deeply concerning for our country’s economic growth and energy security, is the new reality which threatens the pace at which we intended to grow these assets.”

The sale came alongside Dominion’s announcement that it had dropped its Atlantic Coast pipeline project, a joint project with Duke Energy to pump gas from West Virginia to North Carolina, a decision that Farrell said reflected “large-scale uncertainty” around such projects. The same day, a federal judge ordered the Dakota Access pipeline to shut down, ruling it had not properly been granted a key environmental permit.

Buffett has revealed little about his rationale for the deal, though he’s unlikely to be swayed by the environmental pressure. The Oracle of Omaha has played both sides of the energy divide over the years. He’s invested in solar and other renewable forms of energy and has built up a large traditional energy portfolio, making him one of the most carbon-intensive billionaires in the world.

Long-term, there is a decent argument to be made that Buffett’s new assets fit with a vision that energy demand will move in one direction—up—as the American economy recovers from the coronavirus pandemic. And he’d be betting that fossil fuels will meet that demand more readily than renewable energy projects.

Market observers will concede him the first point. The world is facing rising energy demand in the coming decades, buoyed by larger populations, industrialization, and the rising global middle class—alongside a struggle to diversify energy sources. In fact, companies like Exxon Mobil have openly based their investment strategies on the assumption that the world will need more energy in the decades to come, and that much of that demand will still be met by fossil fuels.

And the International Energy Agency has warned that despite the surge in high-profile carbon-cutting pledges, the investment behind those promises is lacking. In February the agency said that just 1% of investment by the world’s largest oil and gas companies is in clean energy, and earlier this month it warned again that the world was simply not on track to meet the demand for renewable energy.

In that shortfall, in other words, sits demand for good old natural gas.

Further, if the world’s economy does start to recover, the COVID-19 pandemic will likely serve to benefit those energy companies—or investors—who were big enough to survive. The U.S. shale sector went into the crisis loaded with debt and surprisingly fragile. By late May, the drop in demand had already claimed casualties including shale pioneer Chesapeake Energy and Whiting Petroleum, while even the sector’s biggest hitters have announced sprawling short-term cuts to production and long-term cuts to investment.

Those could add up to a valuable buy for Buffett if the assets are robust enough to stand up to what could be punishing years for oil and gas.

Meanwhile, since Buffett’s announcement this week, natural-gas prices have risen 8.1%, continuing to recover from the multi-decade low hit in late June, showing some momentum behind his bet. But a payoff is no certainty. As of Wednesday morning, natural gas was down 14.6% year to date.