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Obama rounds out Cabinet with EPA, Energy nominees

U.S. President Barack Obama speaks about the sequester after a meeting with congressional leaders at the White House in Washington March 1,
U.S. President Barack Obama speaks about the sequester after a meeting with congressional leaders at the White House in Washington March 1,

By Jeff Mason and Roberta Rampton

WASHINGTON (Reuters) - President Barack Obama announced his nominees to lead a new U.S. push to tackle climate change on Monday, choosing an air quality expert to run the Environmental Protection Agency and a nuclear physicist to head the Department of Energy.

In a widely expected move, Obama selected agency veteran Gina McCarthy to replace Lisa Jackson as EPA administrator and scientist Ernest Moniz from the Massachusetts Institute of Technology to take over from Steven Chu as Energy secretary.

Obama also announced his choice to lead the White House budget office - Sylvia Mathews Burwell, president of the Walmart Foundation, a charitable group with ties to giant retailer Wal-Mart Stores Inc.

White House economic adviser Brian Deese is a leading candidate to become Burwell's deputy director, sources familiar with the matter told Reuters.

McCarthy and Moniz round out the team Obama hopes will carry out his second term energy agenda. They join Sally Jewell, nominated last month to run the Interior Department.

The trio will be at the forefront of divisive issues surrounding the extent of U.S. natural gas exports and a possible move into crude oil exports, hydraulic fracturing and climate change.

The president, whose effort to establish a cap-and-trade system for carbon emissions failed in his first term, prominently raised the issue of global warming in his Inaugural and State of the Union addresses earlier this year.

He urged Congress to embrace a market-based mechanism to reduce greenhouse gas emissions or face executive action from his administration to achieve the same goal.

McCarthy, now the assistant administrator for the EPA Office of Air and Radiation, has worked for Democrats and Republicans in the past, including Obama's 2012 presidential opponent, former Massachusetts Governor Mitt Romney.

"Gina has focused on practical, cost-effective ways to keep our air clean and our economy growing," Obama said at the White House, ribbing McCarthy for her Boston accent.

"She's earned a reputation as a straight shooter. She welcomes different points of views."

Environmentalists and congressional Democrats largely welcomed her nomination, but she is likely to face a grilling from Republicans, who have accused her of promoting policies that cost jobs.

Moniz, meanwhile, would become the go-to person for Obama's goal of reducing U.S. dependence on foreign oil and establishing America as a leader in clean energy technology.

A former undersecretary of energy during the Clinton administration, Moniz is now director of the Massachusetts Institute of Technology's Energy Initiative, a research group that gets funding from industry heavyweights including BP, Chevron, and Saudi Aramco for academic work on projects aimed at reducing greenhouse gases.

"Ernie knows that we can produce more energy and grow our economy while still taking care of our air, our water and our climate," Obama said.

Moniz's selection was greeted with less enthusiasm from the environmental community.

"Ernest Moniz ... has a history of supporting dirty and dangerous energy sources like gas and nuclear power with polluting partners including BP, Shell, Chevron and Saudi Aramco," said clean energy advocate Courtney Abrams of Environment America.

"We are concerned about the Department of Energy's priorities given this track record and hope Moniz will focus on clean, renewable ways to get our energy that don't put our families and our environment in harm's way."

NATURAL GAS, NUCLEAR

Elgie Holstein, chief of staff at the Energy Department when Moniz was hired during the Clinton administration, dismissed complaints that he is too supportive of natural gas.

"I think the view that he is some sort of fracking fiend is entirely misplaced. He has a very balanced view of that," said Holstein, who is now with the Environmental Defense Fund.

One of the first decisions Moniz will face at the helm of the Energy Department is whether to allow exports of natural gas to more than the current list of countries.

A 2011 MIT study on the future of natural gas, chaired by Moniz, said the United States should not "erect barriers to natural gas imports or exports."

Many manufacturers and some lawmakers are concerned that more exports will mean higher natural gas prices for consumers and companies. Moniz is likely to be questioned about the issue during his Senate confirmation hearing.

Energy analysts cautioned against placing too much weight on Moniz' involvement in the study advocating against restrictions on exports.

"Moniz may contribute, but we don't think he alone will decisively shift top-level debate within the White House policy ranks," Kevin Book of ClearView Energy Partners said in a research note regarding gas exports.

Moniz may be able to make a bigger imprint on nuclear power. His background as a nuclear physicist and work as a member of the administration's commission on nuclear waste has sparked some hopes that he may be able to bolster support for nuclear power at the department.

"The real question mark is the nuclear side because of his expertise, but I think it's a real opportunity," said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University in Texas.

BUDGET DIRECTOR

The choice of Burwell to become director of the White House budget office had also been widely expected.

All three nominations require confirmation by the Senate.

Obama appears to have delayed some Cabinet appointments, whose names were well known for weeks, until after the March 1 deadline for massive spending cuts known as "sequestration."

Obama and congressional leaders failed to reach an agreement to delay those cuts on Friday, threatening other policy priorities in the president's second term agenda.

Four Cabinet positions remain to be filled: Commerce, Transportation, Labor and the U.S. Trade Representative.

At OMB, Burwell will be instrumental in steering the budget process that will encapsulate Obama's stated goal of reducing the U.S. deficit while investing in areas such as education and clean energy technology that are necessary for U.S. competitiveness.

Raised in West Virginia and educated at Harvard and Oxford, Burwell, 47, returns to an agency where she was once deputy director - one of a number of roles she had in the Clinton administration, including a stint as chief of staff to Treasury Secretary Robert Rubin.

As Burwell's deputy, Deese would draw on his experience coordinating policy on taxes, financial regulation, clean energy and manufacturing.

(Additional reporting by Mark Felsenthal, Ayesha Rascoe and Valerie Volcovici; Editing by Jackie Frank and Christopher Wilson)

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