This is not rocket science, boys and girls. The reason oil is going to $150 per barrel is very, very simple—supply.

All commodities prices, but oil in particular, are based on excess capacity. If you're a company buying oil to make gasoline, diesel, naphtha, etc., you need customers to buy your product. You'd be more concerned about getting oil into your refinery, because what comes out is, typically, already bought and paid for.

In the old days, people thought $150 oil going into the refinery meant $8 gasoline at the pumps. Well, that theory has already proved to be a crock. We're seeing $96-$97 oil in early November, and the cost of gasoline averages $3 per gallon at the pump. If you had asked the experts years ago, $60 oil would have meant $5 gasoline.

But, if you're trying to make money from $150 oil, you should steer clear of Exxon Mobil (XOM) and the other big, integrated oil companies—just look at the earnings they reported this quarter.

When crude prices go above $75 or so, the oil companies can't pass the additional oil costs to consumers, because when gasoline hits $3, buyers, particularly in the United States, start to buy less.

We had eight or nine weeks where gasoline consumption was less than we saw one year ago for a couple of reasons.

First, it seems like people are finally starting to get the message and buying smaller cars. Fuel-efficient cars are selling at a 20%-higher clip year-over-year than inefficient SUVs and trucks.

Another thing to consider is how much oil is a part of our economy. In 1980, about 8% of our economy was produced from oil. Today, it's about 3.5%. As we moved toward more of a service economy, the amount of our economy that was produced by oil, gasoline and its derivatives has been cut in more than half.

And today, we are a $14-trillion economy compared to a $7-trillion economy in the 1980s. So, we've doubled the size of the economy and are much more efficient in our energy use.
How far are we from $150 oil? I'd say we're one major event away.

If we bomb Iran (which the generals I run into at Fox News Channel keep telling me is the only option), we've got $150 oil. In fact any bombing, invasion or effective terrorist attack, and we've got $150 oil. Or if a few tankers are blown up in the Straits of Hormuz—where 40% of oil shipped by ocean passes—we've got $150 oil.

But instead of fretting about this, let's make a profit from it.

Don't Worry … Just Profit

Like I said earlier, you need to avoid companies like Exxon. Instead, look at the beneficiaries of the new age of energy, i.e., non-fossil fuel energy companies.

The stock charts of the solar energy companies we're recommending at ChangeWave Investing have done much better than the large, integrated oil companies. Why's that? In addition to the reasons I gave above, by and large, the areas that have the ability to add reserves to the world's oil supply are countries in which two-thirds of the oil companies are nationalized, like Algeria, Iran and Iraq. When oil companies find oil there, they must pay a royalty. This means the amount of oil a company like Exxon gets goes down while the price goes up.

If it costs $20 to find a barrel of oil, and it's sold for $20, in these new formulas, Exxon gets one barrel of oil to sell. But if it costs $20 to find, and oil prices are $80, Exxon only gets a quarter of a barrel of oil from these new contracts. And no one has really started to factor that in.

When we looked at Exxon's earnings this quarter, we saw something odd. Production is down 2% this year. It was down 2% last year and down 3% the year before, even though there is more exploration and drilling.

The oil companies are like hamsters on a wheel—they're spinning the wheel faster, but the faster they go, the less oil they're getting out of these new oil deals, because two-thirds of the oil outside of the United States is owned by nationalized oil companies in countries like Venezuela and Mexico.

So, $150 oil is almost here. And you're not going to make the big money buying Exxon, so you need to be invested in the new Exxons, which are the energy companies that allow you to run your home, business, etc., on something other than fossil fuel—like solar power. Click here to get in on our solar play today.

And solar power is just the beginning. There's also money to be made in nuclear energy and even in the Canadian tar sands. We recommended selling most of our tar sands stocks because the socialist Canadians decided to increase taxes on trusts, but there are other ways to play this that we're investing in, and more recommendations we'll be adding to our list. 

There are many ways to take advantage of $150 oil, but the best way is to invest in alternative energy. $150 oil will mean less gasoline consumption and more hybrid cars. It will mean an increase in the use of energy alternatives. And, ultimately, that is going to beget the next economy, which is the non-oil economy. 

So, we could make some money in some smaller oil companies, but fortunes are going to be built in the non-oil economy. And that's what $150 oil means to you and me.

$150 oil is definitely a scary thought, but it's one we're going to have to get used to. Instead of fretting over it, why not try ChangeWave Investing and start profiting from it? Click here to get your 90-day, risk-free trial. ChangeWave Investing was created to help investors like you build your wealth by capitalizing on the greatest growth stock opportunities that drive our economy. These are the humongous changes that will help build your fortune. For less than a dollar a day, we'll help you capture profits like 120%, 161% and 350%.