Energy Bill's Proponents Prepare Counterattack

Even as the health-care fight dominates the headlines, another Washington battle is heating up over climate and energy. In late June, the House of Representatives passed a landmark bill putting caps on the emissions that cause global warming, and the Senate is expected to take up the measure in late September or October—if it first manages to deal with health care. In anticipation, opponents such as the National Association of Manufacturers, the American Petroleum Institute, and the U.S. Chamber of Commerce have mounted an expensive campaign of ads and rallies to try to win over key senators.

The lineup of powerful opponents—along with the partisan divide that has developed over health care—has fueled speculation that the climate legislation is dying. The opponents "clearly have the jump on us," acknowledges Betsy Moler, lobbyist for Chicago-based utility Exelon (EXC), a strong supporter of the bill. But proponents are plotting a strong counterattack, and they believe they have at least a fighting chance of succeeding, in part because regulators are poised to act if Congress doesn't. "There is reason for guarded optimism," says Steven Corneli, senior vice-president for market and climate policy at NRG Energy (NRG), a Princeton (N.J.)-based utility pushing hard for carbon caps.

Exelon and NRG are among the leaders of a coalition of companies gearing up to get out the message that a big chunk of Corporate America, from Alcoa (AA) and GE (GE) to the utility industry, believe that caps on carbon emissions and policies to boost cleaner energy are crucial. They are planning op-ed articles, media campaigns, and a procession of CEOs, such as Exelon's John W. Rowe, a Republican, to plead their case in the Senate.

Meanwhile, environmental groups have been running ads praising representatives who voted for the House bill as heroes, going door to door and calling thousands of people in key states, and organizing a tour through the heartland, featuring steelworkers-turned-windmill makers and other clean energy workers.

On Sept. 8, supporters stepped up their efforts. A group of 64 environmental organizations, labor unions, business groups, activists, sportsmen, and religious organizations launched a coordinated multimillion-dollar campaign, dubbed Clean Energy Works, to push for legislation. "All of us are coming together and pooling our resources," explains Maggie L. Fox, CEO of the Alliance for Climate Protection, a group founded by Al Gore. The members include American Hunters & Shooters, Business Forward, Catholics United, the Natural Resources Defense Council, VoteVets, and the United Steelworkers.

Legislation Hinges on Swing Votes The battle will be fought with ads, meetings, and calls all across the country. But ultimately the fight is "really about the hearts and minds of about 20 people," explains Exelon's Moler—the swing votes in the Senate. On the list: more than a dozen moderate Democrats, such as Arkansas' Blanche Lincoln, Claire McCaskill of Missouri, Byron Dorgan and Kent Conrad of North Dakota, and Mark Warner and Jim Webb of Virginia, as well as a handful of Republicans—Susan Collins and Olympia Snowe of Maine, Lindsey Graham of South Carolina, Lamar Alexander of Tennessee, and John McCain of Arizona.

Winning over moderate Democrats will be tough enough. Getting any Republicans on board will be even harder, given the apparent GOP strategy of voting against every initiative of President Obama. Plus, manufacturers, oil companies, and the Chamber of Commerce are spending many millions of dollars on ads, rallies, and grassroots efforts to quash the bill. "Our message to senators is that the [House] bill is an anti-jobs, anti-energy piece of legislation," says Jay Timmons, executive vice-president of the National Association of Manufacturers. "It will shrink our nation's economy, make us less competitive with foreign countries, raise energy costs for consumers and businesses, take away disposable income for Americans, and cause significant job loss."

On Sept. 2, for instance, the industry-funded American Energy Alliance bus tour stopped by a Columbus Clippers baseball game to get fans to agree that a cap on "energy," as Alliance staff describe it, in the U.S. would be like imposing a devastating salary cap on a handful of baseball teams. In fact, the legislation wouldn't cap energy but rather emissions of carbon dioxide (and other greenhouse gases); it would require companies to get a permit or allowance for every ton of carbon they emit, which could be bought or sold on a market.

But proponents insist they have a good hand to play—assuming they can get the message across. For one thing, they expect their opponents' aggressive tactics, which include forging letters purportedly from grassroots groups, may backfire. "It's not the way to do business in this town anymore," says Exelon's Moler. "I believe most senators recognize a lavish campaign funded by oil companies for what it is."

In addition, polls show that Americans favor what emissions curbs would accomplish, a shift to cleaner, greener energy. That's in contrast with health care, where the fear of change is huge. It also explains why supporters of the climate bill are planning to hammer home the message that legislation would bring more green jobs, a cleaner environment, and less dependence on foreign energy sources, rather than trying to scare people with dire predictions of the consequences of global warming. "Even those who deny climate change are supporting clean energy and energy independence," says Fox. "Our job is to put a face and voice on the clean energy economy."

If Congress Fails: Tougher EPA Rules Those voices will compete with the opposition's chants of "massive tax" and "job-killer" to try to win converts across the U.S. But once the Senate begins to take up climate legislation seriously, proponents will use a more potent argument directly with lawmakers. If Congress doesn't impose reasonable climate curbs in legislation, the Environmental Protection Agency will step in with potentially more draconian rules that will be worse for business. In fact, the EPA has already drafted proposed justifications and rules for regulating greenhouse gases, as ordered by a 2007 Supreme Court case.

"I'm surprised by how many people think the choice is between legislation or nothing," says Keith Belton, director of government affairs at Dow Chemical (DOW). Lobbyists for companies supporting legislation plan to ask senators who oppose a bill if that means they favor the EPA's regulatory approach. "I haven't heard good answers to that," says Belton.

The battle ahead will be contentious and messy. Opponents of climate legislation are stoking the same "big government" fears that have made health care so divisive. Complicating matters, some environmental activists are opposing the current House bill for being too weak, while groups that want even more than they got in the House legislation, such as the farm lobby, are lining up for special treatment in a Senate bill.

"At the end of the day, the Senate bill will be very different," predicts Michael Morris, CEO of American Electric Power (AEP), a Columbus (Ohio)-based utility—one of the country's biggest users of coal—that supports the bill. But getting any legislation through the Senate would be a victory—and proponents aren't giving up yet. "It's still possible to achieve broader consensus in the Senate than in the House," says Dow's Belton.

Before it's here, it's on the Bloomberg Terminal.