Sept. 29 (Bloomberg) -- Dan Reicher isn't a politician. Far from it. He's the director of climate and energy initiatives at Google.org, the search giant's philanthropic arm.

Yet as he addresses 250 Silicon Valley venture capitalists and entrepreneurs at Denver's Curtis Hotel during the Democratic National Convention, Reicher sounds like a seasoned pol stumping for his cause: fighting global warming and dependence on fossil fuels.

``Washington is not ready for action, it does not have the policies in place to move renewable energy forward,'' says Reicher, who was there on his own behalf and not as a Google Inc. representative. ``So let's get out the vote and let's get Barack Obama elected in November!''

His audience bursts into cheers.

It was Aug. 26, and as partisans in the Pepsi Center a mile away were ripping Republicans, Reicher and clean-energy proponents were rallying supporters at a reception co-hosted by Cleantech & Green Business Leaders for Obama. The Silicon Valley advocacy group has raised more than $600,000 for Barack Obama's presidential campaign.

``We have something to say in this election,'' says Sanjay Wagle, 38, a national co-chairman of Cleantech and a VC with VantagePoint Venture Partners in San Bruno, California.

`Cleantech' Buzzword

Blue-shirted, chino-clad techies aren't famed for agitating at political rallies, let alone sponsoring them. Yet in Obama, West Coast VCs have found an ally who's championing ``cleantech,'' a buzzword for the new solar, biofuel and other carbon-free energy technologies they're betting on.

While Republican Senator John McCain has pledged to fight global warming and enjoys support from such tech titans as former EBay Inc. Chief Executive Officer Meg Whitman, it's Obama who's captivated VCs and entrepreneurs.

As a candidate who wields a BlackBerry and exploited online social networking to organize supporters and raise cash, Obama, 47, strikes many as a kindred spirit, says Steve Westly, managing partner of the Westly Group, a Menlo Park, California-based VC firm.

Obama's embrace of renewable energy has endeared him to an industry that's counting on a green revolution to be the sequel to the 1990s Internet boom.

``Obama wants to stop global warming, and he wants to create economic growth by building up cleantech,'' says Westly, who served as California's controller from 2003 to '07 and has raised more than $500,000 for Obama's bid. ``Obama gets the future, and that's what Silicon Valley is all about.''

`Promising Startup'

Westly and others in the information technology industry contributed almost $4.3 million to the Obama campaign through Sept. 2, according to the Washington-based Center for Responsive Politics. That's quadruple the $1 million for McCain.

``The Valley views this as an investment in a very promising startup,'' says John Roos, CEO of Wilson Sonsini Goodrich & Rosati, the Palo Alto-based law firm that's represented Apple Inc. and Google.

Tech leaders will expect a return on their investment should Obama win on Nov. 4. Support for renewable energy technologies is at the top of their list. In the first half of 2008, venture capital firms plowed more than $2.4 billion into young companies in the U.S. that turn out solar panels printed like newspapers, biofuel distilled from wood chips and software that makes the electricity grid more efficient, among other inventions.

That's a 60 percent jump from a year ago, according to Cleantech Group LLC, a research firm in Brighton, Michigan, which projects investment will hit $4.5 billion for the full year.

$150 Billion Plan

Venture capitalists could use a boost. They're struggling with an investing climate that's the gloomiest since the bust of 2000 and '01. In the first half of 2008, only five venture-backed companies went public in the U.S., the poorest showing in five years, according to the National Venture Capital Association.

``Almost everybody who's been in the Valley for any period of time is pursuing cleantech now,'' says Dixon Doll, the association's chairman and general partner of DCM, a Menlo Park- based VC firm.

That's where VCs see Obama coming in. In his policy proposal, the senator pledged to invest $150 billion over 10 years to develop solar farms in the Sunbelt, plug-in hybrid cars that get 150 miles per gallon (64 kilometers per liter) and clean coal that doesn't spew carbon.

Carbon Auction

The outlay may prime markets for alternative power, biofuels, battery technology and other areas that venture firms are backing, says Josh Green, a partner at Mohr Davidow Ventures in Menlo Park, who donated $2,300 to Obama's campaign.

A key Obama proposal is a national cap-and-trade market that would set mandatory limits on carbon emissions and auction off allowances to polluters, which could trade them as securities in a financial market.

Austan Goolsbee, a University of Chicago economics professor and senior adviser to Obama, says the auction would generate proceeds to finance all of the $150 billion proposal.

The senator says he'll push the U.S. to derive 10 percent of its electricity from solar, wind and other renewable sources by 2012, up from 7 percent in 2007. In December, tax credits for solar, wind and biofuels projects will end as a one-year extension expires. Congress will have to vote to reactivate them.

On Sept. 23, the U.S. Senate voted 93 to 2 to extend federal solar tax credits eight years. Obama and McCain were campaigning and did not vote. The bill now moves to the House of Representatives for consideration

Shift From Petroleum

Obama supports such tax credits and will eventually push for them to become permanent, says Heather Zichal, his energy and environment policy director. McCain has voted nine times against tax incentives for renewable energy projects.

Zichal says the Democratic senator recognizes that fossil fuels will provide power for decades. And he supports limited offshore drilling as a temporary step as the U.S. begins a wholesale shift away from petroleum.

``Now is the time to end our oil addiction and to understand that drilling is a stopgap measure, not a long-term solution,'' Obama said in his acceptance speech on Aug. 28.

On Sept. 24, Congressional Democratic leaders said they were permitting the 26-year ban on offshore drilling to lapse. It may be reinstated after a new Congress and president take office in January.

Not everyone in the Valley is starry-eyed about Obama or agrees that his energy plan is good policy. Cisco Systems Inc. CEO John Chambers; Carly Fiorina, the onetime head of Hewlett- Packard Co.; and Whitman are top economic advisers to McCain.

`Drill Them Now'

``John McCain has a very long track record of supporting the Valley on important issues,'' says Fiorina, who first met the senator in 2000 when McCain opposed a tax on e-commerce transactions.

McCain, 72, says he backs alternative energy and $5,000 tax breaks for consumers who buy cars with zero carbon emissions, once the vehicles become available. He proposes a cap-and-trade market for carbon. Unlike his rival, he wants to allot the allowances to industries for free. Still, offshore oil drilling and the construction of 45 nuclear power plants are linchpins of McCain's policy.

``We'll produce more energy at home,'' he said in his acceptance speech on Sept. 4. ``We'll drill new wells offshore, and we'll drill them now,'' McCain said, as GOP delegates broke into ``Drill, baby, drill!''

Government Gamble

Contributors in the oil and gas industry had given the McCain campaign more than $1.6 million compared with about $458,000 for the Obama campaign as of Sept. 2, according to the Center for Responsive Politics. McCain got most of these donations after he called for an end to a moratorium on offshore drilling on June 16.

Fiorina says Obama's $150 billion plan amounts to a huge government gamble on pie-in-the-sky technologies that may fail to address the soaring costs Americans are coping with today.

``Cleantech is a great business opportunity for the Valley, but you also have to find ways to better exploit current sources of energy,'' she says. ``Barack Obama believes a big government program is the answer, and I find it interesting that the Valley, which has historically believed that you let entrepreneurs and businesses do as much as possible, supports this: that's anathema to how the Valley works.''

Massive Giveaway?

Obama adviser Zichal counters that only Washington has the authority to lead an undertaking as monumental as nudging the U.S. away from fossil fuels. She argues that McCain's plan to allot emissions allowances for free would be a massive giveaway to polluters.

``The government will have to be a partner in defining how we move onto a new path,'' she says. ``The U.S. has 2 percent of the world's oil reserves: We're not going to be able to drill our way out of the problem.''

In the past, Washington has sparked some of technology's giant leaps. A Department of Defense research project helped create the Internet in the 1970s and '80s, ushering in the digital age and setting the stage for the greatest bull market in U.S. history.

Robert Kennedy Jr., a longtime environmentalist and member of the advisory board of VantagePoint Venture Partners, says Obama's energy strategy has the potential to be a game-changing move akin to the Telecommunications Act of 1996.

5 Million New Jobs

That law dissolved the Baby Bells' monopolies on local telephone networks, helping unleash the tech boom by motivating startups to create everything from fiber-optic networks to broadband service to YouTube.

``It precipitated the explosion of the telecommunications industry and entrepreneurship,'' Kennedy says in an interview after a solar industry event at Denver's Coors Field baseball stadium during the Democratic convention.

Obama says the same thing can happen with energy. Weaning the country off petroleum will spawn 5 million new jobs building wind and solar farms, brewing biofuels and making buildings efficient, according to his policy proposal.

Evoking the GI Bill from the 1940s, Obama plans a Green Vet Initiative to offer training to 837,000 soldiers, sailors and airmen returning from Iraq and Afghanistan for jobs in what he calls the renewable energy economy.

``What's needed is an industrial transformation,'' says Nicholas Stern, former chief economist of the World Bank and now vice chairman of IDEAglobal Group, a Singapore-based research firm. In 2006, Stern wrote a report for the British government concluding that if global warming were left unchecked, the world's gross domestic product could contract as much as 20 percent as the globe coped with environmental disasters.

An annual investment of 2 percent of global GDP would go far toward preventing such a cataclysm, he says.

`Low-Carbon Economy'

``A low-carbon economy is the source of growth while inaction, maintaining a high-carbon economy, is anti-growth,'' Stern says.

Google CEO Eric Schmidt, who hasn't endorsed or given money to either candidate, says he became a proponent of Obama's energy plan this summer. He sees it as a long-term public works project that will stimulate economic recovery. And he's sensitive that Google operates many titanic data centers around the world.

In addition to installing solar panels on the company's Mountain View, California, headquarters, Google.org announced last November that it was investing tens of millions of dollars in renewable energy initiatives to produce carbon-free electricity cheaper than coal.

``We are large consumers of energy, and people, especially young people, understand that global warming will impact their lives,'' says Schmidt, who has advised Goolsbee and other Obama aides on technology and renewable energy issues. ``We want to put our money where our mouth is.''

Google Party

At the Democratic convention, Google hosted a party with Vanity Fair magazine that brought together techie types, politicians and celebrities the night of Obama's acceptance speech. Guests gathered at a bar carved out of a block of ice and played Nintendo's Wii video-game console.

Wearing a T-shirt and jeans, Google co-founder Larry Page chatted with Marissa Mayer, the firm's vice president in charge of search products. Steps away, House Speaker Nancy Pelosi visited with guests, and Jon Hamm, star of the TV show Mad Men, posed for photos. Google held a similar party at the GOP convention.

`Sea Change'

Obama needs California to win. It has 55 votes in the Electoral College, more than any other state. Registered Democrats outnumber Republicans 43 to 33 percent, and Obama has led McCain throughout the race.

Along with west Los Angeles, a liberal bastion that encompasses the Hollywood film community, the Valley has been key to Obama's support, and not just for money.

Bay Area volunteers have called undecided voters in battlegrounds like Iowa, New Mexico and Ohio. Many have taken leave from their jobs to go to these states to rally voters.

Barbara O'Connor, director of the Institute for the Study of Politics and Media at California State University, Sacramento, says the Valley's support for Obama could signal a political coming of age for the tech industry.

``There could be a sea change for Silicon Valley if Obama is elected,'' she says.

Technology leaders tend to be anti-regulatory types with little use for Washington, as long as it stays out of their way, she says. When necessary, the Valley gets involved in specific issues, such as perennial lobbying for immigration visas to ensure a steady supply of skilled engineers. Valley companies have never maintained a major presence in the capital like that of Detroit's automakers, Big Pharma or Big Oil.

``There's a lot the government can do for the Valley,'' she says.

Hands Off

T.J. Rodgers, CEO of Cypress Semiconductor Corp. in San Jose, says the Valley should keep its distance from Washington. Rodgers disagrees that Obama's energy program will be the boon the Valley expects. He says VCs and entrepreneurs should put their faith in the marketplace, which has always rewarded them for innovation.

``Cisco changed the Internet faster than the government ever could,'' Rodgers says. ``It's the market that will transition us to renewable energy, not Obama's energy plan or Al Gore's Nobel Prize.''

Long before techland bet on Obama to spark renewable energy, the senator started winning converts -- and campaign cash -- by showing his affinity for the Valley's overachieving culture, supporters say.

`Raw Talent'

One early fan was Eileen Donahoe, a Stanford-trained lawyer with a Ph.D. in ethics and social theory from the University of California, Berkeley.

She first met Obama during a visit he made to the Bay Area in January 2005 to get to know tech leaders. Donahoe, 49, says Obama struck her as a young man in a hurry. Yet she says he was steeped in the intricacies of health care, taxation and the Iraq War.

In his visits, he communicated his positions persuasively. Obama resembled an entrepreneur pitching a hot startup idea and offering an opportunity to invest on the ground floor. She urged him to run for president.

``I made a bet on raw talent,'' says Donahoe, who's married to new EBay CEO John Donahoe.

In November 2006, John Thompson, CEO of software firm Symantec Corp., and his wife, Sandi, hosted a party for Obama during his book tour for ``The Audacity of Hope'' (Crown, 2006). Donahoe attended, along with Nicole Lederer, a trustee of the Natural Resources Defense Council.

`Ready, Willing, Able'

When Donahoe greeted Obama, she handed him her business card; on the back she'd written, ``Ready, willing, able to raise money starting now.''

He laughed, handed the card to a staffer and said he'd be in touch.

On Jan. 16, 2007, Obama called Donahoe and told her he was forming an exploratory committee to run for president. She swung into action.

The next month, she hosted a fundraiser at her home in Portola Valley, an affluent enclave near Stanford University. Serving pan-Asian cuisine, she drew more than 300 guests, including Ken Wilcox, CEO of Silicon Valley Bank. She collected a $4,600 contribution from Laurene Powell Jobs, Apple CEO Steve Jobs's wife.

Since then, Donahoe, chairwoman of the National Women for Obama finance committee, has raised more than $1 million, making her one of the campaign's top six ``bundlers.''

She was invited to a luxury suite at Denver's Invesco Field to watch Obama's acceptance speech with national campaign finance chairwoman Penny Pritzker and talk show host Oprah Winfrey.

Law Review Days

Julius Genachowski, a friend of Obama's going back to their work on the Harvard Law Review, cultivated VCs on the East Coast.

Genachowski was chief counsel to Federal Communications Commission Chairman Reed Hundt from 1994 to '97.

In 2006, he co-founded Rock Creek Ventures, a Washington investment firm, after an eight-year stint as a senior executive at Barry Diller's IAC/InterActiveCorp. As important as the campaign's Web site became in raising cash, Genachowski says reaching out to big donors the old-fashioned way was equally key.

``A lot of first-time fundraisers came through the entrepreneurial community,'' says Genachowski, 46, who's become the senator's top tech adviser. ``That stemmed from Obama's belief that technology is a critical part of the solution to almost every major problem the country faces.''

`Net Neutrality'

In the summer of 2006, Deven Parekh, a VC at New York-based Insight Venture Partners, got a call from Genachowski inviting him to meet the senator.

At a meeting with other technology investors in Washington, Obama covered a range of issues, including ``net neutrality,'' a principle that holds that Web surfers should control the content and applications they use. Obama said the Internet should remain open and unfettered.

``His understanding of this and other issues was at a granular level,'' says Parekh, 39.

After Obama announced his presidential bid, Genachowski asked Parekh if he'd hold a fundraiser.

``I'd never done one before, but I found myself saying yes,'' the VC says.

In February 2007, he co-hosted an event with Genachowski and Jonathan Miller, former CEO of Time Warner Inc.'s AOL unit, at Insight Venture's Fifth Avenue headquarters in New York. Parekh has raised about $250,000 for Obama.

`Coherent Voice'

By the time the primaries were in full swing in early 2008, rank-and-file techies had joined the bundlers in backing Obama. Taking over a closed French bakery in Palo Alto, a group called Silicon Valley for Obama rustled up about 20 aging personal computers and established a digital phone bank.

Roger Hu, an MIT-trained electrical engineer, installed Internet phone service Skype to slash long-distance tolls.

On a hot July Saturday, more than a dozen volunteers don headsets and dial undecided voters in New Mexico, a battleground state, by clicking on numbers compiled by the campaign. Every time someone sways a voter, the caller rings a bell.

By May, the green energy crowd had moved to the fore of Obama's network in the Valley. That month, VCs and some backers in Washington formed Cleantech for Obama. Former Environmental Protection Agency administrator Carol Browner; former Democratic Senator Tom Daschle, a co-chairman of Obama's national campaign; and David Blood, the managing partner of Generation Investment Management LLP, a private equity firm headed by Al Gore, are three honorary co-chairmen.

``Cleantech really didn't have a coherent voice in politics yet, and it was obvious that Obama was the candidate to support,'' says VantagePoint's Wagle, whose firm is investing in Miasole Inc., a Santa Clara, California-based startup developing lost-cost solar panels.

Budding Big Green

As the presidential race heads into the final days, Wagle and his allies are raising cash and working for an Obama victory. McCain and his running mate, Alaska Governor Sarah Palin, continue to champion expanded oil drilling on the Outer Continental Shelf as the No. 1 way to meet America's immediate energy needs.

Throughout the summer, polls of likely voters showed support for offshore drilling running as high as 74 percent.

Anxiety in the Valley was mounting that Obama might not win. While defeat won't end the development of carbon-free technologies, it could dampen the enthusiasm that Obama's $150 billion energy plan is sparking among VCs betting on cleantech breakthroughs.

Without a good friend in the White House, Silicon Valley may find the budding Big Green movement it backs, and its own nascent political clout, relegated to the fringes.

To contact the reporter on this story: Edward Robinson in San Francisco at edrobinson@bloomberg.net

Last Updated: September 29, 2008 00:01 EDT