An Election and Political Overview

1. An Election and Political Overview Rhod Shaw President Alpine Group February 5, 2009

2. It’s all about me • Its all about energy, right? • Last year: Oil prices, natural gas prices, electricity rates, home heating • “Energy independence” • “Green jobs” • Wind and solar power • Hybrids • Ethanol • Iraq and the Middle East • So the new focus is on us, right? • Biggest internal fight over energy and environmental policy: Dingell v Waxman • Stimulus bill: SmartGrid, battery R&D, renewable energy bonds, credit for carbon sequestration

3. While I’d like it to be about me…it’s not • New Administration’s Task: The Economy • Top issues for voters: • 84% said economy + health care • 10% said Iraq • <3% said climate change

4. Candidate Obama’s Campaign Pledges • Iraq/Afghanistan • Remove all combat troops from Iraq w/in 16 months & close Guantanamo • Economy (tax proposals reduce revenue by $2.9 trillion over 10 yrs) • Cut taxes for middle class < $200k • Energy • Cap Carbon emissions to curb global warming by 80% by 2050 • Infrastructure($93b in new spending in first term) • Create Natl. Infrastructure Reinvestment Bank to invest $60b over 10 yrs. • Health Care • Pledged to sign a universal health care plan in first term ($65b per yr.)

5. So what are the priorities? • Stimulus package • Approve Cabinet – other key appointments • TARP reform, Financial Services, mortgage • Distressed industries – autos, others? • Votes on Iraq and Afghanistan – war supplemental • Guantanamo • 2008 appropriations bills – CR expires 3/09 • State Children’s Health care expires 3/31/09 • Health Care Reform • Energy Bill • Transportation bill expires 9/30/09 • Climate Change (Conference in Copenhagen 12/09) • Individual tax cuts expire 12/31/10 • Labor agenda: card check, pay equity • Immigration • Stem Cell research

6. The Obama Administration • Obama has studied his history: • Will try to avoid Clinton’s first year mistakes (guns, God, etc.) • Cabinet, Chief of Staff, and key slots staffed by Washington veterans • Disciplined team (strict adherence to structure, no leaks) • History has proven Administrations get to address 3-4 priorities: “energy/envir” may be 5th out of the list • One of the Top 3-4 is unanticipated • But mistakes are being made • Nominees • Lack of control over the stimulus

7. House of Representatives • 257 Democrats / 178 Republicans (435 total) • Old ratio 236 Dems/ 199 GOPs (Democratic gain of 21 seats) • Of the 435 House members, 112 will be in their 1st or 2ndterm • Leadership Driven • Speaker and Leaders “Top Down Control” • Top down management of key issues • Lessens role of the Committees • Balancing Factions: • Blue Dogs, New Dems, Black Caucus & Progressives • Will they stick with Leadership or will they splinter? • Vocal and empowered Moderates “almost extinct”

8. Senate • 58 Democrats / 41 Republicans (MN race?) • Old ratio 49 Dems/49 GOP with 2 Independents • “New Blood” • 31/32 Senators serving in their “first” term • Turnover happens: 8 new Senators + 1 Pending race + Kennedy, Byrd, & Johnson + replacing Obama, Biden, Clinton, Salazar, Gregg = ~13-17% change in one year • Democrats are close, but fall short of 60 vote filibuster proof majority

9. Senate • “Players” - Senate moderates • Democrats: Lincoln (AR), Pryor (AR), Landrieu (LA), Nelson (NE), Carper (DE), Casey (PA), Tester (MT), Hagan (NC) and Begich (AK) • Republicans: Specter (PA), Collins (ME), Snowe (ME), Lugar (IN), McCain (AZ), and Murkowski (AK) • Conservative GOP has the ability to slow things down, IF they hold together (If McConnell can hold his votes, he can shape the timing and substance of the Senate’s debates)

10. Energy & EnvironmentHouse Key Players/Dynamics • Pelosi (Team Miller, Markey) • Waxman Regime • Ran on a platform of ‘getting things done’ • Deals at the end rather than upfront • Energy bill, with RPS as its foundation, likely to be the first significant bill post-Stimulus • Climate Change by Memorial Day • Has Markey to help • Staff briefings begin this Friday • Ways & Means could have a major role re: financing, but they have been distracted and quiet on the matter • Will they tackle the ‘tough’ issues that haven’t been worked? • Transmission & generation siting

11. Energy & EnvironmentSenate Key Players/Dynamics • New Climate Change approach in the Senate? • Boxer now sharing the lead with Baucus (Finance), Bingaman (ENR), and maybe Rockefeller (Commerce) • Can Boxer use the Highway bill as a way to get support for Climate? • Gang of 10? 16? 20? coming back? • Conservative D’s: economy might be a convenient reason to ‘go slow’, point to a new RPS as a reason to not do more • Conservatives D’s are still key to everything • Energy bill, again, will they tackle the ‘tough’ issues? • Transmission and generation siting • And there are surprises: Sherrod Brown (D-OH) • Constituents matter • Reverse engineer your argument

12. Senate: EPW • Boxer’s Principles for Climate Change legislation Reduce emissions to levels guided by science to avoid dangerous global warming. Set short and long term emissions targets that are certain and enforceable, with review of the climate science and adjustments to targets and policies as necessary to meet emissions reduction targets. Ensure that state and local entities continue pioneering efforts to address global warming. Establish a transparent and accountable market-based system that efficiently reduces carbon emissions. Use revenues from the carbon market to: invest in clean energy tech, to pay affected consumers, etc.

13. What you might not hear on the Sunday talk shows • Can he look like a moderate? Congress leaning left gives Obama the opportunity to pull them to the center • Unease with rank and file Members over lack of process and opportunity to impact proposals • Committee Ratios (Ds to Rs) increased. • May dilute the power of key voting blocks like the Blue Dogs, CBC • Democrats were worried about getting to 60 • 60 doesn’t really mean 60 • Moderates will still be the swing margin • Congress is likely to stay “D” for a while • No House D seat (that is D+0 or higher) has flipped from D to R since 2002 • Senate slate for 2010 has numerous open R seats and more R’s up • Lobbying: What’s next? • If there are further reforms, it can help the “little guy” vs. the Goliaths

14. Dating on the Internet: now where does this go for Obama? • Obama Campaign and Presidency may be making another kind of history • What does he do with that network of millions now that he is in power? • Does it matter? • Emailed them during the Inauguration to tell supporters on the Mall what to do • Will these groups will now provide grassroots support/mobilization to support Obama’s agenda? • He will not need to rely strictly on the national media to speak directly to his base • Do you have the ability to mobilize your universe? • What happens when they start to disagree?

15. Closing thoughts • This is a year of “Change” but navigating it requires many of the same tools: • Must know the few key people making the decisions • Must be prepared to help policy makers solve “their” problems, not just “yours” • Grassroots • Ethics reform has increased the reliance upon campaign support

16. Closing thoughts • But some strategies require tweaks: • Leaders matter more than ever • Subcommittee process is more limited in shaping proposals • Must sell your views via the positive economic impact: Does your position create jobs? Cost jobs? Help the economy? Save money? • Must consider policy decisions with a keen eye to how they affect “consumers” • Better have some open lines of communication with NGO’s (local or national)…treat them like another Member. They are being asked for analysis of all ideas…