The Search Generation

It will come as no surprise to say that we are in the midst of the graduation season.

Whether or not you have a graduate in the family, the signs are hard to miss: Well-dressed teenagers exiting limos in formal dress, or cheerfully taking pictures on their way to Prom; front page pictures of the President and other notables in cap and gown; uniform white caps flying into the air at the Naval Academy; station wagons driving by with flapping balloons and “Seniors” spray painted on the windshield.

At a certain age one begins to stare at these freshly minted adults and think, “What now?”

Where are they going? Where will they be twenty years from now? Will they still have those exuberant expressions? Or will their brows be furrowed with worry, their teeth clenched with anxiety?

And after a passing memory or two of how painful those high heels must be for the girls in dresses, or how sweltering it is under those gowns, the thoughts will continue: “How does this generation think? How will they act? If faced with the threat of war or economic misery, what will they do?”

Since Tom Brokaw dubbed the generation that fought World War II “The Greatest Generation” it has become fashionable to question whether today’s young people are capable of the same dedication and civic mindedness. It is common to hear people refer to an entire generation – the Millennial generation, or Generation Y, born in the 1980s or early 90s – as selfish, self-absorbed, spoiled and insincere.

Raised in a world of rapid internet communications, it is said that instant gratification is a necessity. Raised in a politically correct world where everybody has an equal opportunity to get the trophy and there “are no losers,” it is claimed that they have no drive, no competitive instinct, no initiative. Everything will come to them eventually, so why sweat it?

In his book A Moveable Feast, Ernest Hemingway recalls a conversation with Gertrude Stein in which she referred to the generation that returned home from the killing fields of northern France in World War I as the “Lost Generation.” Would she have said the same today? Are these a “Lost Generation.”

Recently I watched as a group of young people sat on stage patiently, waiting for their names to be called to receive academic honors. I watched the pride of their teachers as they called their names to present them with the awards they had earned. I watched the students’ poise as they walked to the podium, politely accepted their prizes and returned to their seats.

And then I thought about last year’s graduates. The tens of thousands of young Americans who walked down to the recruiting office – we have no draft, mind you – to enlist in our volunteer armed forces. The 35,000 applicants for positions in Teach for America, the program that sends young college graduates into inner city schools to share their passion for education. The hundreds of thousands of young men and women who have taken jobs, many in family owned businesses, some far from home, beginning responsible lives as citizens, setting down roots, starting families.

These are not a “Lost Generation.” They may not be the ”Greatest Generation,” as Mr. Brokaw dubbed WWII veterans. But don’t tell me they are selfish or self-absorbed. They are their own people: Independent, creative, and motivated. They are smarter by far than their forebears, they have a greater grasp of the world than we ever did and they are acutely aware of the challenges and threats they face.

And if, and when, the day comes that they are put to the test and called upon to defend our freedoms and our way of life, they will rise to the occasion because they appreciate what they have. Look into their eyes. Watch them walk across the stage. Hear their voices. Share their pride.

They may be innocent of what lays ahead, but they are not naïve. They may be inexperienced, but they are not unprepared. They may not know everything, but they know they have the skills to learn. They may not have seen the world, but they are intent on exploring farther into space and deeper into the atom.

They are, if anything, the Search Generation. The generation ceaselessly gathering knowledge, whether through Google, Facebook, Blogs or Twitter. Their goal, as with Tennyson’s Ulysses, is “To strive, to seek, to find and not to yield.” They will find new and non-polluting sources of energy because they must; they will find ways to feed the world’s hungry because they can; they will spread the values of liberty and freedom because they will want to share them.

Undoubtedly, when these graduates are older they will look at their children’s generation with the same quizzical expressions as we do today. And around the same time, those of us lucky enough to be around will take them aside, put our arms on their shoulders, and chastise them for entertaining such foolish doubts about their kids.

As the Search Generation marches to the podium to accept their diplomas I, for one, am standing and applauding.

 

Move Over, Mr. Newton

Isaac Newton is remembered for his brilliant insight while sitting under an apple tree. The blow from the falling fruit must not have been so bad. After all, Newton followed up his discovery of the laws of gravity with his Three Laws of Motion.

I was thinking about Newton’s Three Laws of Motion the other day as I pondered energy prices over the past year. It was then that I had my own flash of inspiration: Newton was wrong!

For one thing, this absurd law of gravity is preposterous. As anybody in the world of energy knows -- as any driver pulling up to a gas station experiences weekly -- what goes down must come up! Anybody remember $.79 cent gas in 2002?

As for Newton’s Three Laws, the ones that scientists say define the universe? The ones that make Newton more influential among scientists than Einstein? Balderdash! Let’s consider them, one by one.

Silly Law No. 1
Every object in a state of uniform motion tends to remain in that state of motion unless an external force is applied to it.

Hello? Has anybody looked at a chart of energy prices lately? They make the Rocky Mountains look like Kansas. Millions of people use energy daily for everything from heating soup to watching television. Their use is constant, persistent, and insatiable. Even Al Gore can’t do without air conditioning. Try to eat a hamburger that hasn’t been cooked. Ugh.

So with all this constant demand for energy, why aren’t prices constant? Because Newton was wrong, of course! Prices bounce around like a Karaoke ball singing the Rolling Stones’ “Satisfaction.”

Energy prices will continue to change whether we like it or not. They will go up or down for no reason. And there ain’t nothing we or any external force can do about it.

Silly Law No. 2
The relationship between an object's mass m, its acceleration a, and the applied force F is F = ma. Acceleration and force are vectors; in this law the direction of the force vector is the same as the direction of the acceleration vector.

Look, I wasn’t born yesterday. Last year when crude oil was trading at $147/barrel and natural gas was over $13 per thousand cubic feet, the vector (i.e., direction) of energy prices was up, up and away! Practically every analyst on Wall Street was predicting $200/barrel crude oil prices (and $5 gasoline) by the end of the year.

Where are we today? Crude oil below $70/barrel (it got as low as $32.40), natural gas to $3.155. Demand was constant, shortages were pervasive, prices were going one way: Up! Today prices are down and the bears are out in full force, predicting the end of the world as we know it.

Of course, Newton’s Second Law is as true as it was before. Not! Prices are going right back where they went before, into the stratosphere (where, incidentally, Newton spent some of his free time contemplating the laws of celestial motion).

Silly Law No. 3
For every action there is an equal and opposite reaction.

This one really takes the cake. This may work on the playground -- push the kid and you get punched -- but in the energy world it’s loony. Ever watch the sparks fly from a sparkler on the Fourth of July?

Actually, a better example would be a two year old after losing a balloon. There’s an action (lost balloon rising into sky) and a reaction (red face, stomping feet, shrieks of uncontrollable frustration and anger). Equal and opposite? Hardly.

Like a toddler, energy prices are highly emotional. Sure they respond to supply and demand factors: Hurricanes in the Gulf of Mexico that threaten offshore production or steamy summers and frigid winters. But they also respond to perceptions and fear: A faltering economy, the prospects of war in the Mideast, weather forecasts and speculative trading binges.

Now that we’ve demolished Newton’s Three Laws of Motion, I present you with the True, Sublime, Incontrovertible Laws of Energy:

1. Energy prices a year from now will be either higher or lower than they are today, but not both at the same time.
2. Energy prices will go up or down when nothing happens.
3. Most people will not turn down their thermostats when it’s cold outside or turn them up when it’s warm.
4. Politicians will continue to talk about energy supply and nothing will be done about it.

There you have it, folks. The universe in a nutshell.

And by the way, be sure to look down or you might get hit by that apple on the ground!

 

Winston Churchill and Me

Sometimes one has an experience that is so novel and extraordinary that you can’t wait to share it with all who will listen. When I experience such a moment, I find myself blurting out: “Now, that’s one for the memoirs!”

Not that I plan to write my memoirs. Don’t get me wrong: I love reading memoirs and biographies. But the idea of writing my own strikes me as just a bit presumptuous and, well, old. Unless one has the kind of dramatic life story that takes you to the White House or perhaps an Academy Award by the age of 20, the memoir thing is likely to be a dry read. Even a Medal of Honor winner like Audie Murphy and a World War I flying ace like Eddie Rickenbacker needed to put a few more notches in their belts – say 44 movies in the former’s case or a racing car career in the latter’s – before the story had enough pizzazz to merit a good beach read.

But that doesn’t mean that I can’t dream. And last week I had one of those “one for the memoirs” moments that I need to share with you.

A good friend invited me to join him to hear one of my heroes speak at a club in Houston. Actually, the speaker was the grandson of one of my heroes, but who’s going to quibble? Winston Churchill left us in 1965 but his grandson Winston S. Churchill is still with us and when the grandson speaks it is with the compelling force of personality that people must have felt listening to his grandfather in 1938 when he warned of imminent storm clouds over Europe.

So I sat in an ornate room of a venerable club, the kind of club where one can retire to the smoking lounge and sip a Gibson and imagine that the rest of the evening will consist of seeing a new double feature starring some hot new stars like Lana Turner or Humphrey Bogart.

Lunch consisted of pheasant and Yorkshire pudding. This was a nice change of pace for the audience, perhaps, although I suspect our speaker would have preferred a hamburger and fries. I’m not sure what was served for dessert; our speaker was so mesmerizing I don’t think I touched it.

Mr. Churchill is a former journalist and Conservative member of Parliament whose most interesting claim to fame in my view was his circumnavigation of the African continent in a single engine plane the year he graduated from Oxford. He recounted that despite his frequent exposure to wartime danger the only time he was ever roughed up was at the 1968 Democratic Party Convention in Chicago. Evidently the police challenged him as he tried to enter the Blackstone hotel on Michigan Avenue. “Who are you?!,” they demanded. “Winston Churchill!” he replied. “A likely story!” they replied and beat him over the head with a nightstick until the abashed hotel desk clerk confirmed that he was, indeed, Mr. Churchill.

Churchill spoke eloquently about his concern for western security, in particular the threat faced by terrorist cells, demographic changes in Europe, and nuclear weapons in Pakistan. He expressed fervent hope that the new administration in Washington would succeed in its foreign policy, but said he did have one serious reservation: That President Obama returned to England the bust of his grandfather that apparently has sat in the Oval office for decades.

Now for the “memoir” moment. At the end of Churchill’s talk I remained standing in a small group listening to him answer some questions. A gentleman walked up to him and reached out his hand.

“Mr. Churchill,” the man said. “I’m Paul Clemenceau, great-grandson of Georges Clemenceau.” Georges Clemenceau was prime minister of France at the end of the First World War and later one of the principle negotiators of the Treaty of Versailles, along with England’s Prime Minister David Lloyd George.

Churchill looked at the man and smiled. “How nice to meet a Clemenceau,” he said. “What a small world.”

Now that’s one for the memoirs!, I said to myself. I was witnessing the grand arc of history. In 1918, as the German army unleashed one of the fiercest attacks of the war, Lloyd George sent Churchill to France to find out what was happening. There Churchill met the French Prime Minister and Clemenceau fearlessly took him to the battle front. Churchill, a tested battlefield veteran, protested that Clemenceau was putting himself in danger. “C’est mon grand plaisir,” Clemenceau responded. “It’s my great pleasure.”

To think: Could Clemenceau have guessed, at that moment, that 90 years hence his own great grandson would meet his companion’s grandson, in a private club halfway around the world?

 

Another Technological Advance

I looked up the other day from my BlackBerry. Or was it the iPhone? I can’t recall which.

I was crossing the street, probably oblivious to oncoming traffic. I was rushing back to my office. There I looked forward to opening up a .pdf file, a document that was sent in a format compatible with my Acrobat Reader program. One of our lawyers was waiting for me to review the document and make comments.

I planned to open the document on my desktop. I was thinking that if it were too long to read I might copy it to my laptop and bring it home to review that night sitting at home on the couch. While my son watched Law & Order I could read the draft carefully. If the comments were too many, I might ask my lawyer to send it to me in a Word format. That way I could mark it up on the screen and return it to him in the morning.

As I crossed the street, I passed a bus shelter on the side of the road. Sitting on the bench was a man waiting for the bus. Something caught my attention. I know how fast these new technological innovations come and go. But I was so struck by this new breakthrough that I wanted to hasten to bring it to your attention.

The man on the bench held in his hands a large object. Maybe a foot and a half across, a couple feet long, it seemed to be made of linen, or cotton, or perhaps a synthetic material. All I could tell was that it did not hold its shape for very long. It seemed to flap in the breeze, even crinkle from time to time like crushed velvet, shadows coming and going across its surface.

I paused on the curb to see what I could learn about this new device. I watched the man stare at it intently, holding the object in front of him and focusing his eyes on it as if he were reading some kind of huge cell phone. After a moment, he reached his hand across and unfurled the object to twice its width, then snapped it backwards so that it was half the size again. He looked at it even more closely and as the bus pulled up to the shelter. Suddenly, I saw him quickly fold it so that its size was the size of an old-fashioned book and tuck it under his arm as he climbed the steps.

How novel, I thought. A new technology, one which I think I have heard about but not yet seen. I believe it is being called a newspaper, an interesting cross between a PDA (personal digital assistant) and a Kindle (Amazon’s new electronic book gizmo). Larger than either of these, the so-called newspaper seems to allow one to scan a number of stories at once. Instead of seeing only one story in a space about the half the size of a pack of cigarettes, the reader can actually scan dozens of stories and pictures as well. Indeed, the pictures are instantaneously accessible and do not require a long time to upload.

As I sit here at my desk in front of my flat screen, I am truly envious of that gentleman on the bench. I’m sure that this new technology must be frightfully expensive, but I look forward to the time when its price may drop to, say, $200 or less so that I might experiment with it.

Who knows if this new technology will survive the onset of competitors. It may be gone in a few months. If so it may go the way of floppy disks and fax machines. Sort of the way Twitter seems to be going. Today’s hot new gadget. Tomorrow’s quaint techy memory.

Or then again, the newspaper may catch on. And my friend on the bench will have been a pioneer. And I will tell my grandchildren about when I spotted the first newspaper, in a bus shelter, while looking up from my BlackBerry.

Or was it the iPhone?

 

A Moment

An email Jeff sent out to the MXenergy team for Memorial Day 2009:

Friends and Colleagues,

I wonder if you would take a moment with me to remember the reason we enjoyed a welcome three day weekend.

It would be enough if we were taking a breather after a long and arduous year. It would be enough if we were commemorating the traditional start of summer, with barbecues and picnics and gatherings with friends and family.

It would be enough if we were simply to be taking time for ourselves, a rare treat in today's Type A culture.

But there is more. 141 years ago President Andrew Johnson declared the last Monday in May as a day of remembrance for those soldiers who fought in the American Civil War to preserve the Union.

Referring to the slain soldiers, the President said: "Let us, then, at the time appointed, gather around their sacred remains, and garland the passionless mounds above them with choices flowers of springtime. Let us raise above them the dear old flag they saved."

The commemoration was later expanded to cover all soldiers in all the country's conflicts. But its origins in the Civil War should not be forgotten. For the Civil War was fought and won over universal principals of deep significance to all nationalities: freedom from slavery and bondage, freedom to work and pursue one's dreams, freedom to enjoy the privileges that are the birthright of all men and women.

When Leo Tolstoy, the great Russian writer, was travelling in the Northern Caucasus in 1908, he was the guest of a local tribal chief. His host asked Tolstoy to tell stories about famous men in history. Tolstoy obliged, talking about Alexander the Great, Julius Caesar, Frederick the Great and Napoleon.

When he finished the chief said to him: "But you have not told us a syllable about the greatest general and greatest ruler of the world.... His name was Lincoln."

As Tolstoy put it, Washington was a typical American and Napoleon a typical Frenchman but Lincoln "was a humanitariam as broad as the world. He was bigger than his country." Lincoln was a symbol and the United States an ideal that all peoples, everywhere, could appreciate.

Today we remember those who, like Lincoln, fought for liberty in every age and in every way.

MXenergy is a remarkable family. We represent many nationalities, political leanings, and feelings about the necessity of war. Nevertheless, I ask us all to pause a moment to honor those nameless dead.

They are mostly young. They have often been forgotten by all but their loved ones. But they are all our heroes: Men and women who lost their lives so that we might enjoy a peaceful weekend.

 

The Day After

Today is April 23. The day after Earth Day. The Day after the speeches. The school assemblies. The neighborhood cleanups. The television specials.

On Earth Day Americans rally around a shared purpose and vision.

But today is the Day after Earth Day. What now?

Toss a plastic water bottle in the trash – or in the recycling bin? Let the faucet run – or turn it off while we’re brushing our teeth? Let the lamp light up an empty room – or flick the light switch as we leave? Count down the remaining 364 days until the next Earth Day, when we renew our devotion to the environment?

Call me cynical, but is that what Earth Day is about? Is it a day designed to ease our guilt after a year of environmental abuse? Is it like drinking five cups of decaf or Diet Cola with a Big Mac? In other words, is it self-deception that makes us feel good but really does nothing?

Perhaps, it’s the word “Day” in Earth Day that does us a disservice. Perhaps, people feel “off the hook” for the remaining days of the year.

So how can we do more than just talk? How can corporations, including energy companies like ours, act responsibly and make a real impact on the environment? How can individuals and companies, alike, make Earth Day a year-round commitment?

I start with the idea that we are all entitled to heat our homes, turn on our computers and commute to work. Realistically we are stuck with carbon-based energy for the time being, and must continue to inflict some damage both our health and the environment.

But, we can try to control our collective addiction and take the right steps to minimize that damage – every day.

Believe it or not, it is more costly for us to supply more energy than less. Just as utilities are at risk when demand increases and they must build bigger and more costly power plants, unlimited consumption puts us at greater risk of finding economic supplies to meet our customers’ needs. Conservation both reduces our customers’ bills and increases our bottom line. It’s a good idea all around.

Companies like ours also help consumers offset the harmful effects of energy consumption -- the carbon dioxide emissions that have affected global warming, and seem to be everyone’s Earth Day target. These carbon offsets help fund reforestation projects that help to absorb carbon dioxide in the earth’s atmosphere.

In fact, we have bought carbon credits to offset our own company’s carbon usage. This is good corporate citizenship. It also makes our team feel like we practice what we preach – every day.

Businesses should also explore ways to bring the benefits of new energy efficient technologies to consumers. These include insulation, Energy Star appliances, rooftop solar, wind and geothermal energy. Probably the easiest and surest way of reducing energy consumption is real-time metering that sends customers price signals of the true cost of energy. Studies have shown that when consumers know what they are using and how much it costs in real time, consumption drops some 20%.

We want our consumers to become conservers – conservers of energy and the environment.

I can hear critics say that these are Band Aids, like a filter at the end of a cigarette. I agree with them. But until we wean ourselves off the stuff, let’s control the addiction. Call it an energy nicotine patch. Until the day some bright young college dropout comes up with cold fusion in his garage, we will do our part to control the addiction.

In the meantime, when you plug Earth Day into your computer calendar, make it a “recurring” event – one that lasts every single day of the year.

 

Conversations with a Customer

I started my day this morning with an email from one of our customers. I enjoy hearing from customers, but this was no love letter.

This customer in Georgia was upset with her energy bill this month. Prices have dropped sharply and she wanted to know why we could not lower her price. She was upset that she had locked into a long term contract last year.

“I called several times asking why my bills were so high and then found that the current rate for new customers with MXenergy was $0.9490 a therm. This is absolutely terrible.”

I can understand her frustration. I have been disappointed with my own heating oil provider since I locked in rates last spring at twice today’s market price. I have also paid thousands more for my fixed rate mortgage in recent years than I would have if I had chosen a variable rate mortgage.

I wrote the following to our customer:

“Energy volatility is, as you may know, the highest in the world, far greater than the stock market or interest rates. Over the past year energy prices have dropped more sharply than the stock market. In prior years, they also climbed more sharply than the stock market, some five-fold between 2002 and 2007!

“For over ten years we have protected customers from higher prices, never walking away from a single customer irrespective of volatility. To do so, we have put our capital on the line, buying energy supplies far into the future and committing our own capital up to three years before we have been paid by our customers. As a result, we are proud of the fact that we have saved numerous customers from energy spikes that could bust their budgets and in the case of small businesses force them to close shop or lay off workers.”

I explained that in recent months energy prices have fallen sharply. Because we have already contracted for energy supply at higher prices we cannot willy-nilly drop our prices. But we do our best. We review customers on a case-by-case basis and sometimes can offer a small price reduction.

I continued:

“I regret that we are unable to control world energy prices. I also regret that once we lock in our forward prices with our suppliers we are unable to walk away and pass the savings on to you. At the same time, I am extremely proud of the price protection we have provided our customers as well as the extremely fair early termination option we offer customers, at a cost far less than we incur when customers leave.

“Sadly, our loyal customers end up paying more to cover these additional costs. But as long as most of our customers appreciate the price protection we provide the added costs are minimized.”

My suggestion to today’s consumer? Take advantage of fixed-rate plans NOW, while prices are still low.

Does that make a current customer, who may be paying higher energy prices today, any happier? Probably not. But, the bottom line is that we are in the customer service business. If customers are still unhappy with our products and services, we offer an option to opt out. We allow our customers to end their contracts if they pay an early termination fee, which is minimal compared to other termination fees such as cell phones contracts.

Later in the morning I received another note from our customer.

“Thank you for your reply. I have to admit I was not quite sure if you (or anyone for that matter) would respond. It is a bit refreshing.

“We will probably have an ‘agree to disagree’ in the end of this dialog but that is OK.”

I would like to do more than disagree. The core mission of MXenergy is -- and has always been -- to help both families and businesses control their energy bills. I am quite satisfied that we are doing the right thing by our customers. We will continue to provide price protection and we will continue to look for better ways to deal with the costs – and frustrations – of energy volatility.