If you believe the media, oil has now hit a price point where it is beginning to change our behavior: we drive less, buy smaller cars, car-pool etc. which means less consumption and a return to some semblance of more normal pricing (one hopes). But the general public continues to pour money into oil stock, having lost its confidence in bank stocks. However, below the surface, the mega-rich are already moving to the next great energy play: wind power. As reported recently, Boone Pickens, who made his billions in oil, has ordered over 600 wind turbines to commence his $10 billion wind farm in Texas. What is particularly interesting is that Pickens hasn’t even secured the right-of-ways for the power lines that will deliver electricity to the grid. That is some bet on wind power when you buy before you obtain government approval.  Warren Buffet is also betting on wind power buying up shares of GE (who produce the wind turbines).

The advantages of wind power are pretty obvious. Wind is ubiquitous. Solar power has limitations if there isn’t a lot of sun. Bio-fuel solves one problem but creates another (have you seen the price of bread lately?). Nuclear is very expensive and what do you do with the waste? Wind power from a business perspective allows the capital costs to be amortized over a long period of time.

Wind power is still a relatively new concept in North America. In Europe, there are large wind farms in-land as well as off the coast. Despite this fact, wind power still continues to constitute a small but growing portion of energy output. As an investment, wind power is one of those “invest early in the trend and wait for it to explode” investments; the rich are patient so they are betting early in the game while prices are still low.

Wind power has its challenges: finding large barren tracts of land is difficult, there are obvious regulatory hurdles (in England, it takes approximately 30 months to bring a wind farm on-line), it is expensive to build out power lines to plug into the grid (remember that wind farms are far away from urban regions so you have to run a lot of power lines a long distance) and the industry doesn’t have the same tax breaks as bio-fuel or oil (yet) to encourage further production.

But, you know what? They said the same thing about the Alberta oil sands 15 years ago and now Alberta is awash in cash.

If you want some ideas for investing in wind power, Jim Cramer gives you some wind power stocks to consider (you know the drill, not a recommendation, please do your own due diligence).

Have a great weekend.