The Smooth-Talking King of Coal—and Climate Change

In a May 26 speech, President Obama promised that the worst oil spill in U.S. history won't keep him from "fighting to pass comprehensive energy and climate legislation"—including a cap on carbon emissions. The cap faces ferocious opposition in Congress from oil- and coal-state politicians, Democrats and Republicans alike, who fear it will drive electricity rates to unsupportable levels and send jobs overseas. This adaptation from The Climate War, the new book by Bloomberg Businessweek Deputy Editor Eric Pooley, tells the story of one power company boss, Duke Energy CEO James E. Rogers, who is navigating these difficult choices for his shareholders, his customers, and, he says, his grandchildren.

When Jim Rogers introduces himself to an audience—something the president, chairman, and chief executive of Duke Energy (DUK) does many times a month in speeches and panels around the country—he likes to start by explaining how much pollution it takes to generate power for 12 million people in five states. "We're the third-largest emitter of CO2 among corporations in America because we generate 70 percent of our electricity at 20 coal-fired plants," he says. "Of all the companies in the world, we're the 12th-largest emitter of CO2. I share these numbers with you not to brag, but to give you a sense of my special responsibility, the daunting job in front of me. And for you to understand why I have such passion about confronting the climate issue."

Rogers says these things in a disarming Kentucky drawl that quavers slightly, like any good preacher's, as his sermon takes flight. He can talk the down off a duckling, but environmental activists—especially in Charlotte, N.C., where Duke Energy is based—dismiss him as a fraud, a greenwasher, a silver-tongued huckster with world-class PR. As proof, they point to a place 50 miles west of Charlotte, called Cliffside, where Duke Energy is building a new 825-megawatt coal-fired power plant that has no chance to capture or store any of the carbon dioxide it will be sending forth over the next 40 or 50 years. Rogers calls it "the last coal-fired plant I will ever build." But for those acquainted with climate science, which has concluded that emissions reductions are necessary to avoid potentially catastrophic global warming, that isn't good enough. So activists picket Rogers' annual meetings, chain themselves to Cliffside's bulldozers, and fall to their knees at conferences where he appears, begging him not to build the plant and asking how he sleeps at night.

"How I sleep at night," he tells them, "is Lunesta."

Coal-fired power plants like Duke's generate cheap, plentiful electricity. One reason they're cheap is that they spew their CO2 for free. When the industry finally starts to capture and store that CO2 in underground aquifers, in a process known as carbon capture and sequestration (CCS), coal-fired power won't be so cheap anymore. That's why keeping the lights on and the power affordable while cutting emissions is what Rogers calls "the greatest judgment of what I do. I have seven grandchildren. They will judge me someday. When they are my age they will look back and say, 'My granddaddy, he had this ecological crisis....What did he do?'"

What he did, beginning in 2006, was to join nine other Fortune 500 chief executives and the leaders of four national environmental groups to create a lobbying coalition intended to break the American business community's de facto veto power over climate legislation. The U.S. Climate Action Partnership (USCAP), as the coalition called itself, got its start early that year when two green leaders, Fred Krupp of the Environmental Defense Fund and Jonathan Lash of the World Resources Institute, recruited Jeffrey R. Immelt. The General Electric (GE) chief helped bring in the CEOs of nine other corporations (membership later grew to 25), including Alcoa (AA), DuPont (DD), Caterpillar (CAT), and BP America (BP). The companies had compelling business reasons for backing carbon regulation. GE, the biggest wind turbine maker in the U.S., was developing carbon-capture technology. A single wind turbine included 14 products made by DuPont. That made their participation logical—and diluted its impact. The coalition needed someone with plenty at stake, someone whose company spewed huge amounts of CO2. They needed a high-emitting, smooth-talking, coal-fired power boss willing to buck his own industry. They needed Jim Rogers.


In the late 1980s, as the newly minted CEO of PSI Energy—a small, beleaguered Indiana utility that, through of series of mergers and acquisitions, eventually became part of Duke Energy—Rogers got on the wrong side of some of his fellow utility bosses by supporting a mandatory declining cap on the sulfur dioxide pollution that causes acid rain.

His industry was almost universally opposed to this so-called cap-and-trade program, but Rogers saw a way to make money: The free allowances and rate increases that would come with the program gave his cash-strapped utility a capital injection. Rogers, who got his start as an energy lawyer at Akin Gump Strauss Hauer & Feld, also remembered a piece of advice that his former boss, the political fixer Robert Strauss, had given him: "When you see a parade form on an issue in Washington, you have two choices: You can throw your body in front of it and let them walk over you, or you can jump in front of the parade and pretend it's yours."

Up at the head of the acid rain parade Rogers met another young, energetic CEO: Fred Krupp of the Environmental Defense Fund (EDF), the centrist group that helped design the acid rain cap-and-trade program and push it through Congress in 1990. They didn't get to know each other well, but Rogers appreciated that Krupp didn't treat him like a villain. Krupp appreciated that Rogers was just about the only coal-fired utility boss to testify on behalf of the program.

The cap-and-trade program proved enormously successful—cutting acid rain pollution ahead of schedule for a fraction of the projected cost—but utility bosses are a blunt group with little tolerance for flamboyance. Rogers was cast as a slippery self-promoter. "He was talkative and very public, and they resented him for it," says Entergy (ETR) CEO J. Wayne Leonard, who worked for Rogers for 10 years. "They called him the Elmer Gantry of the electric industry, but Jim had a lot more conviction than people gave him credit for."

By 2008, as the Lieberman-Warner Climate Security Act became the first global warming bill to move through committee to the Senate floor, Rogers was at it again, this time with carbon. Some of his peers thought global warming was an Al Gore hoax, and here was Rogers playing the visionary at climate conferences, drawing up plans to decarbonize Duke Energy by 2050 and spouting other radical ideas that could disrupt the industry and put whole companies out of business—maybe even Duke, if he wasn't careful. Rogers saw something most of his counterparts did not. "I've never had a polar bear moment," he says. Rather, he had come to view the climate problem as a business opportunity, just as acid rain had been. "I made money on sulfur," he would tell people, "and I'll make money on carbon."

Rogers wasn't sure whether he was going to be able to support the Lieberman-Warner climate bill, which would have put the U.S. economy on a carbon diet, cutting CO2 emissions by about 50 percent by 2050. He wanted to support the bill, but the numbers had to work for Duke: Congress had to give his company enough free carbon allowances—permits granting Duke the right to emit CO2—to make the transition to clean electricity affordable for his customers. He was the first to admit that he didn't know how it was all going to turn out. "I'm a work in progress, O.K.?" he likes to say. "I make it up as I go along."

One of Rogers charms is that he's so consistently, so gloriously indiscreet—about politicians ("what is she smoking?"), rival energy executives ("he's the ultimate shill"), even his colleagues at Duke ("some of them are way too Republican for me")—that he appears to be winging his way through life. It's a carefully calibrated illusion. "I'm real friendly and open and extroverted, in appearance," says Rogers. "But I'm constitutionally introverted."

Krupp, EDF's leader since 1984, didn't project such a vivid public persona. Yet he was uncommonly driven, intelligent, and shrewd, with an eye for an important idea—environmental economics, or using market mechanisms to drive the green agenda—and the audacity to appoint himself as its champion. Krupp was often attacked by the environmental left because he forged partnerships with industry and pushed for agreements that the left couldn't stand; he had a bias for action. What they called sleeping with the enemy, Krupp called dealing with the world as it is rather than as he wished it to be. Capitalism had gotten us into the climate mess, he believed, and capitalism was the only thing that could get us out of it.

Unless the U.S. embraced a global treaty similar to the one that led to nuclear disarmament—with concrete reduction goals, monitoring, and verification—Krupp didn't see how the world would make any progress on global warming. It was that basic; he had never heard another theory of victory. All the other scenarios amounted to voluntary measures that had been tried and had failed. Even a small carbon tax, which didn't have the votes to pass, wouldn't necessarily reduce emissions. Only a cap could do that, he believed. Only a cap.

The heart of a cap-and-trade program is simple: A mandatory, declining limit on pollution. The controversial and often misunderstood part of the program—the trade—is basically a way to smooth costs by allowing emitters to buy and sell the right to pollute. Trading establishes a price for the commodity and allows innovative companies to profit from going green. Although few outsiders realized it, Krupp had pushed cap-and-trade for sulfur dioxide as a test case, a precursor to the carbon cap he believed would come. Rogers had been an unlikely ally the first time, so naturally Krupp courted him again. Much of Rogers' industry was against him, as were important members of his team at Duke Energy. People throughout the organization were mystified that a utility CEO would make common cause with the greens. Don't get in bed with the enviros, they told him. They'll poison you in your sleep. By November 2006, Krupp could see that the CEO was wavering about committing to USCAP, so he called Rogers and suggested they meet for dinner. At a steak house near Duke's Charlotte headquarters, Rogers made it clear that he needed free allowances and a path forward for coal, or he couldn't stay onboard. He wasn't about to let Krupp know how many allowances he needed. He didn't really know himself.

By the time the plates were cleared, the two were feeling some rapport. Krupp decided Rogers really wanted to do something about Duke's carbon emissions, and that was Krupp's bottom line; either the guy meant it or he didn't. And if he did, Krupp would try to help him get there. If Rogers wanted to be part of a solution, it didn't matter to Krupp that he also wanted to get the best deal for his company. Rogers thought Krupp was smart as hell, and that he had the ability, rare among environmentalists, to see economic problems the way a businessman might. He walked out of the restaurant thinking, I'm really going to do this, if I can cover my ank on a couple of things.

Before long, Rogers had become Corporate America's swing vote on climate. If he supported a bill, he'd bring other power executives and important politicians along with him and it had a fighting chance. If he denounced a bill, that meant it was probably dead. He wanted to fix the climate and make money for his shareholders and keep the lights on for his customers. He wanted it all. Was that even possible? He had no idea.

Throughout 2007 and 2008, while USCAP members were involved in protracted internal negotiations over the fine points of their cap-and-trade blueprint, Rogers was working both sides of the issue: Supporting cap and trade in theory, but doing his best to kill Lieberman-Warner, the cap-and-trade bill that actually did exist. It died, with his help, in June 2008, the same week Barack Obama clinched the Democratic Presidential nomination. After Obama won the election, Rogers could see the climate issue ripening. It was time, he thought, to join the parade.


As Obama prepared to take office during the worst economic crisis in 70 years, the President-elect promised to "mark a new chapter" in the fight against global warming. "That will start with a federal cap-and-trade system," he said in a video beamed to a climate conference hosted by California Governor Arnold Schwarzenegger on Nov. 18, 2008. "Delay is no longer an option. Denial is no longer an acceptable response."

Environmental leaders were thrilled that Obama was making the cap a top priority. But transition aides were soon telling reporters that the speech was not a signpost to governance. "Barack's video was still part of campaign mode," said a top climate and energy adviser. "It was about sending a message, not setting a timetable for legislative action." No decisions had been made about when or how to proceed.

In mid-January 2009, Rogers, Krupp, Immelt, and Frances Beinecke of the National Resources Defense Council met at Obama's D.C. transition office with transition chairman John Podesta, climate and energy adviser Carol Browner, and economic adviser Larry Summers. Walking into the meeting, the USCAP leaders expected the discussion to focus on the stimulus bill, but Summers stunned them with an argument for fast climate action because uncertainty was freezing investment decisions. "If you give executives a yes-or-no answer they can act accordingly," he said, "but when you tell them you don't know the answer, they tend not to act." That was only one reason to move forward now. "For the next two or three years we're going to have to fight the recession, and we're not going to do it by creating another wave of [information technology] spending," he said. Summers noted that the Japanese economy stagnated for an entire decade because it never found another source of demand. He saw the cap as the crucial demand driver. "It's like two blades of a scissors," Summers said. "Stimulus spending is one blade. And a cap-and-trade mechanism will be the other."

With an advocate for climate legislation moving into the White House, the environmental community saw a window of opportunity and quickly began to overreach. Rogers was unnerved when a coalition of 29 environmental groups—including EDF and NRDC, his partners in USCAP—sent a set of policy prescriptions called "Transition to Green" to the new Administration. It endorsed auctioning rather than giving away the pollution allowances in a cap-and-trade system; he was still hoping to get the allowances for free.

When he read the document, Rogers was beside himself. If EDF and NRDC blocked a USCAP plan calling for free allowances, he was going to walk. The problem wasn't so much Transition to Green; the enviros were always coming out with manifestoes. This one mattered because it was endorsed by EDF and NRDC, and he needed to know that Krupp and Beinecke had his back. So his people put out the word: Rogers wasn't going to sign on to the blueprint unless it gave the power sector 40 percent of the allowances. He also had to satisfy himself that EDF and NRDC would stick to the agreement. Which side were Fred and Frances really on? Rogers was going to find out.


On Jan. 15, 2009, the USCAP CEOs came to Capitol Hill to unveil their blueprint for cap-and-trade. The schedule was packed: a breakfast with senators, a press conference, and a hearing before the House Energy & Commerce Committee. The breakfast did not go well. "You all should be ashamed of yourselves," said Tennessee Senator Bob Corker, the first Republican lawmaker to speak to the CEOs. "If I was on your board and you came to me with a plan like this, I would fire you." He called their blueprint "a Rube Goldberg scheme" designed for their self- serving interests. The free allowances, he said, were "the equivalent of cash or marketable securities," windfall profits to be stuffed into the CEOs' pockets.

The room was astonished: A wealthy, conservative Republican was using talking points from the left to eviscerate two dozen of the most powerful executives in America. Rogers responded first, a slight quaver in his voice as he explained why the allocation of free allowances was not the allocation of profit. Allowances weren't like marketable securities—Duke wouldn't be able to sell them; they allowed it to operate its plants.

Jeff Immelt spoke last. "I can't let this stand," he said softly. "Senator Corker, I have great respect for you, we'd love to work with you, but I have to tell you that what you said this morning was way too personal. You basically said we're pigs at the trough, and I can't let that stand. We've worked for two years trying to find a way to move things forward. We made an honest effort, and the tone you have taken is just not right."

Rogers had no reason to believe the rest of the day would go any better. The hearing was the first to be run by Henry Waxman since the liberal from Beverly Hills unseated Detroit's John Dingell as Energy & Commerce chairman. On top of that, Ed Markey, the Massachusetts liberal who chaired Speaker Nancy Pelosi's select committee on global warming, took over as chairman of the environment subcommittee, bumping Rick Boucher, a brainy congressman from southwest Virginia. Cars and coal were out of power, replaced by Beverly Hills and Boston.

Like Rogers, Waxman and Markey were easy to caricature. Their real views were more complex. When Waxman began to reach out to key stakeholders on cap and trade, before the Jan. 15 USCAP rollout, Krupp had come in to see him. They talked about the blueprint and discussed the CO2 reduction targets USCAP would call for: a range of 14 to 20 percent below 2005 levels by 2020. Waxman was dug in at 20 percent but thought USCAP set the oor for what was possible. He was glad important companies were embracing climate action but questioned the wisdom of EDF and NRDC joining them now. Wasn't Krupp losing leverage by cutting a deal so soon? Waxman thought it would be more effective if the environmentalists called for tougher targets than he could deliver.

Krupp explained that other groups would still be out there shouting for more, but that EDF and NRDC had needed to commit to get the USCAP CEOs to yes. He walked Waxman through USCAP's 2 1/2-year negotiation and predicted that industry would be flexible about targets if it could get the free allowances and offsets it needed to defray costs. As they had come up the learning curve together, he said, they had seen that allowances were the key to containing costs, avoiding rate shocks, and making the political deal work.

Waxman and his team were surprised to be hearing this industry argument from an enviro. But Krupp had decided Rogers was right. Free allowances weren't a windfall if you passed their value on to consumers. After consulting with Krupp, Frances Beinecke of NRDC, and other environmentalists who cast their lot with the big corporations in USCAP, Waxman began to see the blueprint as a way to remake the politics of global warming. At the hearing, he praised the CEOs for recognizing that a well-designed bill was "the key to a revitalized economy and our long-term prosperity."

This was the new, improved message: climate legislation not in spite of the economic meltdown, but because of it. "Companies are caught in a dilemma," Waxman said. "They are reluctant to invest in old polluting technologies because they know that tougher regulations are inevitable, but they can't invest in new, cleaner technologies until they know what Congress is going to require." Waxman was using USCAP as a shield against those who said a climate bill would wreck the economy. He would base his bill on the USCAP blueprint and build his coalition from the center—enlisting Republicans if he could.


When Obama's first budget proposal was released on Feb. 26, it hit Rogers like a boot in the belly. It called on Congress to enact a cap-and-trade program with "a 100 percent auction to ensure that the biggest polluters do not enjoy windfall profits," and assumed the auction would raise $650 billion between 2012 and 2019. The government would spend $15 billion a year to develop clean energy, with "the balance of the revenues...returned to the people, especially vulnerable families, communities, and businesses."

About $60 billion a year would be used to pay for a tax cut. Senate Majority Leader Harry Reid was talking about diverting money to help pay for health-care reform. "Haven't these people heard a word we've been saying?" Rogers asked. He had been explaining for two years why a 100 percent auction was a bad idea, and for the past year Obama aides had been whispering that Obama got it, that he would "pivot." But it still hadn't happened. Rogers thought the President's team was still listening to deep-green people like Carl Pope, then the executive director of the Sierra Club; people who wanted to punish the polluters—which only meant they would be punishing ratepayers because this plan would drive rates to the moon. That was what they wanted: a strong price signal at the retail level.

Obama had conceded as much in a January 2008 interview with the San Francisco Chronicle, when he had said that under his plan, "electricity rates would necessarily skyrocket." That would be the effect of a 100 percent auction, so the government would send a check to people to defray those costs. But since coal-dependent states would be paying out more than states that got their electricity from nuclear or hydro, a per-capita rebate would be unfair—it would be a transfer of wealth from the Midwest to the coasts. Rogers didn't think consumers would connect the dots between a government check and higher electric bills. They wouldn't realize the one was supposed to pay for the other. They'd just be pissed off—at Rogers. He got to be the villain, and Obama got to play Santa Claus.

And so the CEO went to war again. Duke set up a climate war room, a rapid-response unit staffed by Rogers's in-house climate PR man, Tom Williams, who knew how to give good quote. As reporters began writing about the budget, Williams sent out an e-mail predicting that it would drive electricity rates up by as much as 40 percent in Indiana and Kentucky. The e-mail's subject line: "COAL STATE STICKUP."

Rogers wasn't the only one reacting badly to the trial balloon. Pennsylvania Congressman Mike Doyle and others charged into Nancy Pelosi's office and told her it would be unacceptable if a penny from cap and trade went to anything other than "solving the energy crisis" (which meant, mostly, shielding their voters and industries from rising costs). Senators from Ron Wyden on the left to John McCain on the right laid into the proposal as well.

Inside EDF, things were getting tense. Krupp defended Rogers' right to put a stake through the Obama plan but challenged him about his tone. "If we want to get a cap," he told him, "you need to be careful not to throw the baby out with the bathwater." Rogers had been calling Obama's plan "cap and tax," which played into the heart of the opposition strategy—persuading America that the cap was nothing more than a "light-switch tax." To Krupp, a cap was different and better than a tax. "We need to keep our eye on the ball," he said. "The legal limit is the thing, not the price on carbon."


On Mar. 3, Rogers came to Capitol Hill to work both the House and Senate—private meetings with Waxman and Reid and a half-dozen others. He began in the Rayburn House Office Building for his first face-to-face with Waxman. Rogers was still heated up over the President's auction proposal and worried something like it would be in Waxman's bill. He tried not to bring a lot of expectations into the room, but he saw Waxman as "a tough guy, a liberal guy who wanted a tougher bill than I thought was economically viable." Instead he encountered a diminutive, engaging man, "very inviting and very nice." Rogers was nice, too, Kentucky nice, so their chat was extremely nice. They were nicing each other half to death. Rogers began to suspect that it might not be artificial sweetener.

Waxman said he wanted to show Rogers a draft bill: "I want to work with you on this." Rogers said he would be honored and mentioned that he had been working on carbon legislation since 2001—a long time, by industry standards. He said the 100 percent auction would force him to raise rates, "so I'm the bad guy, and the government's going to send a check to everyone so you get to be the good guy. Don't make me the bad guy—there's a better way to do this. Free allowances are the way."

"I understand exactly what you're saying," Waxman replied. "Making you the bad guy is not what we're trying to do here." To underscore his point, the chairman added, "I'm really going to listen to Rick Boucher," the Virginia coal-country congressman, which was a way of saying he was going to write a bill that coal-fired utilities could support. Rogers was pleased but still wary—"it felt like we'd met at the 50-yard line and shaken hands," he said later.

After Rogers left Waxman's office, he crossed Capitol Hill to join Krupp for a meeting with Harry Reid. Their goal was to discuss legislative traffic; Waxman had announced that his committee would be producing one big bill—cap and trade and energy provisions all rolled together—but on the Senate side, Jeff Bingaman, chairman of Energy & Natural Resources, was pressuring Reid to move an energy bill only, so it wouldn't be "held hostage" to cap and trade.

Rogers and Krupp went through their points—the importance of acting this year, the importance of allowances—and then Reid broke in. "I used to think we had to do the energy bill first and then cap and trade," he said, "but I've decided we should do the energy bill, cap and trade, and the smart grid all at once as soon as we can." Krupp's jaw dropped—and Reid wasn't finished. Looking directly at Rogers, he said, "I don't think we're going to get a strong bill unless we do this through budget reconciliation"—a maneuver that would allow Reid to pass a bill with 51 votes instead of the 60 needed to defeat a filibuster. "I may try to get it done that way."

Rogers blanched—he saw the 60-vote threshold as his insurance that the bill wouldn't go too far to the left and start punishing polluters. He started talking fast, explaining how the industry had hammered out an allocation formula that factored in the carbon intensity of each utility, why that was important to protect consumers in coal states, and why USCAP had adopted it in its blueprint. Reid's eyes were glazing over. So Krupp put up his left hand: Jim, let me take this.

"Look, Senator Reid," he began, "you may think it is a surprise that EDF, NRDC, and other environmental groups support giving these allocations to the utilities. Let me explain why we're taking this position." He described a grandmother in Indiana, living on a fixed income, whose utility would be paying the cost of building solar and wind facilities as well as retrofitting some coal-fired plants for CCS. "That cost is going to be borne by each homeowner, including the grandmother. And if you do 100 percent auction from the get-go, they would also have to pay the cost of buying all the permits. The grandmother would have to pay twice. We didn't think that was equitable. So the USCAP solution is fairer and also more likely to please Midwestern senators concerned about regional equity."

Reid seemed to get the message at last. After the meeting, staffers congratulated Krupp, and Rogers took him aside and thanked him: "Fred, I owe you one."


When the USCAP leaders went to the Roosevelt Room in the West Wing for a late spring meeting with Chief of Staff Rahm Emanuel, they got the impression that he didn't much care about climate change. What he cared about was winning—acquiring and maintaining Presidential power over an eight-year arc. Climate and energy were agenda items to him, pieces on a legislative chessboard; he was only willing to play them in ways that enhanced Obama's larger objectives. He saw no point in squandering capital on what smelled to him like a lost cause. The White House could claim victory if Congress passed a beefy energy bill without a cap—and never mind that doing so could torpedo the global deal and delay serious greenhouse gas reductions, perhaps for many years. At the USCAP meeting, Emanuel made his views clear: "We want to do this climate bill, but success breeds success," he said. "We need to put points on the board. We only want to do things that are going to be successful. If the climate bill bogs down, we move on. We've got health care."

Soon after, at the other end of Pennsylvania Avenue, one of Rogers' lobbyists was negotiating with a Markey staffer. They were arguing good-naturedly about the fine points of carbon allowances when the staffer put a proposal on the table. If the utilities got 35 percent of the pie, close to the 40 percent Rogers had been asking for, "would that close the deal?"

The lobbyist thought for a minute. "Yes, I think it would," he said.

"I'll get right back to you," Markey's staffer said. He called his boss, then called the lobbyist back. "Ed would like to hear it from Jim. Would Jim say the same thing to Ed that you said to me?" I think so, the lobbyist replied, and called Rogers, who was preparing for a board meeting in Charlotte. Markey and Rogers got on the phone, and Rogers told Markey that he would accept a 17 percent reduction target if he could get all the allowances he needed. It was something he had already told Waxman. Then Markey called Waxman and told him about the deal. Waxman called Boucher, outlining the proposal without saying where it had come from, and asked him to run it by the utilities. All of which explains why Boucher's chief of staff, Laura Vaught, found herself calling Rogers' lobbyist, presenting as if for the first time the same deal that Rogers had already discussed with Waxman and Markey. As Vaught outlined the deal, Boucher got on the phone. "What does Jim think?" he asked. "Is this something he can say yes to?"

Rogers was at the pinnacle. He was basically negotiating with himself.


Rogers' endorsement of the Waxman-Markey bill helped win support from other key power executives and secure Boucher's pivotal vote. After Waxman and Markey cut other deals—with midsize oil refiners and agricultural interests—they had enough votes to bring the bill to the floor, but not quite enough to pass it. Obama began jawboning members, Al Gore worked the phones from Nashville, and Rahm Emanuel put aside his misgivings and mounted an effective whip operation. With an impressive last-minute display by Speaker Nancy Pelosi, the bill passed 219 to 212.

And then it all fell apart. Instead of pushing on in the Senate, the momentum dissolved. The bill's passage unleashed ferocious opposition as conservative commentators whipped up members of the rising Tea Party movement, who condemned "cap and tax" at Fourth of July 2009 rallies around the country and shouted down members who had voted for the bill at congressional Town Hall meetings. Seeing the frenzied response, Senate committee chairmen began slow-walking their version of the bill—and the White House, which had decided to push health-care reform ahead of climate and energy, did not press them. As a result, the U.S. delegation went to the U.N. climate conference in Copenhagen without a binding commitment to emissions reductions—a key reason those talks produced no progress toward a new global deal.

At the same time, a new wave of climate skepticism was rolling across the land, propelled by professional opponents of climate action who missed no chance to sow doubt and confusion. The skepticism gave politicians and business leaders who wanted to duck the issue ample reason to do so, even though the science itself remained implacable: As a new assessment by the U.S. National Academy of Sciences affirms, "climate change is occurring, is caused largely by human activities, and poses significant risks for—and in many cases is already affecting—a broad range of human and natural systems."

It wasn't until May 12, 2010, that a new climate bill with even the remotest chance of success emerged in the Senate. Rogers and Krupp were standing alongside Senators John Kerry and Joe Lieberman when they announced their latest attempt to limit U.S. greenhouse gases and boost clean energy production. The senators had hammered out the compromise measure in nine months of talks with Republican Senator Lindsey Graham, but Graham had bowed out at the last minute after Harry Reid—facing a tough reelection campaign in Nevada—suddenly announced that immigration reform would take precedence over climate change. By the time Reid backed down, Graham was gone—and the catastrophic BP oil spill was making the odds of passing a climate bill even longer. Graham had announced that "cap and trade is dead" and now he said the climate debate should be put on hold, in part because of the oil spill. Passing a bill with greenhouse gas limits "has become impossible in the current environment," he wrote in an e-mail to Bloomberg News.

He was alluding to a basic political problem: Expanded offshore drilling was the chip Obama hoped to use to draw oil- state senators into a grand bargain that would also include subsidies for nuclear power and clean coal technology and, in return, a cap on carbon emissions. And though the oil spill was a wake-up call for getting America off of fossil fuels, it also blew up that grand bargain by taking expanded offshore drilling off the table, at least for now.

"Every time things start moving," says Rogers, "something comes along to knock us back." As oil gushed from the broken well a mile beneath the surface of the Gulf of Mexico, the Duke CEO was among those looking for a plan B—a simpler, narrower first step that might have a chance of passage in 2010, despite the unfolding disaster in the Gulf. The window of opportunity seems to be closing for now, Rogers says, but he hopes it might still be possible to win support for a carbon cap that would apply only to the utility sector, which produces nearly 40 percent of U.S. greenhouse gas emissions. Like many energy executives, he needs a steady price signal for carbon to guide his company's investment decisions. "We're going to be replacing our coal fleet anyway," he says, "and rates are going up no matter what. So we need a policy that forces my industry to do the right thing."

Rogers has gone beyond mere profit motive. He's been bitten by the climate bug. He wants to get this done—to make good on all of those high-minded speeches and win the negotiation in the Senate, just as he had won it in the House. After all, his victory doesn't count until the President signs the bill. Even so, Rogers couldn't help but enjoy it when the chief executive of BP, Tony Hayward, took him aside last winter to complain about Rogers and his allies in the power industry. "You guys got everything you wanted," Hayward said, "and we got nothing."

"Well," Rogers replied, "we had a head start."

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