Obama Urged to Take Lead on Climate After Graham Defection Threatens Bill

Photographer: Alex Wong/Getty Images

Senator Joseph Lieberman of Connecticut, center, speaks as Senators John Kerry of Massachusetts, right, and Lindsey Graham of South Carolina, listen during a news conference in Washington, Dec. 10, 2009. Close

Senator Joseph Lieberman of Connecticut, center, speaks as Senators John Kerry of... Read More

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Photographer: Alex Wong/Getty Images

Senator Joseph Lieberman of Connecticut, center, speaks as Senators John Kerry of Massachusetts, right, and Lindsey Graham of South Carolina, listen during a news conference in Washington, Dec. 10, 2009.

President Barack Obama vowed to make legislation on climate change one of his top goals. Now, with a compromise bill in danger of falling apart, business leaders and environmentalists are pressing him to deliver.

Royal Dutch Shell Plc and Exelon Corp. executives were set to appear alongside three senators in Washington yesterday to rally support for their version of climate legislation. Instead, administration officials and lawmakers worked to salvage Obama’s signature environmental initiative.

“Strong White House engagement is really critical on a major piece of legislation like this,” Peter Molinaro, head of government affairs for Dow Chemical Co. said in an interview. Midland, Michigan-based Dow is among companies calling for climate-change legislation.

The measure crafted by Senators Lindsey Graham, John Kerry and Joseph Lieberman was ready to go until Graham, a South Carolina Republican, withdrew support on April 24 to protest that Obama and Senate leaders may act first to overhaul immigration laws. Obama’s involvement is needed to move the climate measure forward, environmentalists said.

“It’s not enough to make progress on the smaller issues and leave the big one undone,” Fred Krupp, president of the New York-based Environmental Defense Fund, said in an interview. “He’s got to make this a personal priority the way he has done with other issues.”

Emanuel, Browner

Obama, speaking today at a Siemens AG wind-turbine plant in Fort Madison, Iowa, touted his vision of a new U.S. energy economy and said he’s confident about the prospects for new policy.

“I believe that we can come together around this issue and pass comprehensive energy and climate legislation that will ignite new industries, spark new jobs in towns like this and make America more energy independent,” Obama said.

White House Chief of Staff Rahm Emanuel and Carol Browner, Obama’s senior energy adviser, discussed strategy with company executives and environmentalists after Graham pulled out of the climate-change bill’s announcement, according to an administration official who asked not to be identified describing the private discussions.

General Electric Co. Chief Executive Officer Jeffrey Immelt and Exelon CEO John Rowe were among business leaders who pledged to back the legislation and offered to help the president rally support, the official said.

‘Faith Broken’

While Obama and his aides had signaled that energy and climate-change legislation would move in the Senate after an overhaul of financial regulation is completed, the president and Senate Majority Leader Harry Reid, a Nevada Democrat, began calling last week for action to revamp immigration laws.

“What in the hell is this?” billionaire energy hedge-fund manager Boone Pickens said yesterday at the Milken Institute Global Conference in Beverly Hills, California, describing his response upon hearing that immigration may move ahead of legislation to reduce greenhouse-gas emissions and encourage new energy sources. “Immigration? It has not been mentioned in any meeting I’ve ever been in that immigration was coming up.”

Graham stayed firm in his opposition after a meeting with Kerry and Lieberman yesterday.

“The faith was broken when immigration was interjected at the 11th hour,” Graham told reporters in Washington. “I’m not going to roll out anything on energy and climate in an environment where it’s dead before it starts.”

‘Slim’ Chances

Reid today said he told Graham last week that he’s ready to move forward with a climate-change bill before taking up immigration. “The energy bill is ready,” Reid told reporters today. “I don’t have an immigration bill.”

Reid said he’s committed to taking up both issues in the current session of Congress.

Graham said he wants Reid to go further and drop immigration this year. “It’s impossible for me to do energy and climate with immigration on the table,” Graham said today.

Graham’s opposition has reduced the already “slim” chances that Congress will succeed in putting a price on carbon- dioxide emissions from utilities and manufacturers, K. Whitney Stanco, a Washington-based analyst for Concept Capital, said in a research note yesterday.

As a candidate and as president, Obama said that passing legislation to remake the U.S. energy economy was among his top goals, along with the economy, health care and education.

The House passed “cap-and-trade” legislation last year to limit carbon dioxide emissions and set up a market in trading pollution allowances. After action stalled in the Senate, Graham worked with Kerry, a Massachusetts Democrat, and Lieberman, a Connecticut independent, to produce a scaled-back alternative.

‘Singles and Doubles’

The dispute that broke out over the weekend concerns how many divisive issues the White House and Congress are able or willing to tackle in coming months, as focus turns to the November elections. Obama spent most of his first year as president preoccupied with an overhaul of the health-care system, and is focused now on financial regulation.

Lawrence Summers, the chief White House economic adviser, said April 25 that both immigration and climate change should be acted on.

Some environmental advocates who backed Obama’s election and praise many of his administration’s initiatives, such as the Environmental Protection Agency’s effort to regulate greenhouse- gas emissions, say the president has fallen short in pushing for action on a climate bill.

“Obama has delivered some impressive singles and doubles,” Carter Roberts, president of the World Wildlife Fund in Washington, said in an interview earlier this month. “But he should be playing a stronger role in engaging Congress on climate legislation.”

Drilling, Nuclear Power

Sierra Club Chairman Carl Pope said Obama “has a very strong record as a chief executive and a mixed record as a political leader.”

Obama gave away too much too soon by backing expanded offshore oil and gas drilling and increased loan guarantees for nuclear power before the Senate took up climate legislation, according to Pope, whose organization is based in San Francisco.

“I was surprised that he did them almost as loss leaders instead of doing them as closers,” Pope said.

It wasn’t a “good negotiation strategy,” said Robert F. Kennedy Jr., who serves on the board of VantagePoint Venture Partners, a clean-energy venture capital firm based in San Bruno, California. “He used it as an olive branch to the ideological right, but I don’t think they are going to give him anything in return.”

To contact the reporters on this story: Kim Chipman in Washington at kchipman@bloomberg.net; Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net.

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