Environmentalists were still scrambling on Monday to make sense of the State Department’s latest draft environmental review of the controversial Keystone XL pipeline, which was released last minute on Friday, when President Obama announced his nominees for the top seats at the Department of Energy (DOE) and the Environmental Protection Agency (EPA).

Obama’s final Keystone decision is still weeks away, so the nominations quickly sparked mixed reactions from environmentalists, who are eager to see how Obama will attempt to make good on his pledge to address climate change in his second term.

As expected, Obama’s nomination of longtime environmental regulator Gina McCarthy to replace outgoing EPA administrator Lisa Jackson brought a general applause from environmental groups.

“America’s air, water, open spaces and public health will be in good hands with Gina McCarthy,” said Margie Alt, executive director for Environment America, a national federation of environmental groups.

Many greens and climate change activists, however, remain skeptical of MIT nuclear physicist Ernest Moniz, a pro-industry engineer whom Obama wants at the helm of the DOE at a time when domestic oil and gas production is booming and the coal-power industry is fighting to stay relevant and unregulated.

So what do the nominations say about the Obama’s plans to confront climate change? The Obama administration’s approach relies ideally on a firm federal push for regulation and technological innovation, but in reality is measured and prone to political compromise at best.

McCarthy, who is expected to take up Jackson’s struggle to give the EPA some teeth, stands as a symbol of a federal agency’s bitter fight for the right to protect Americans from climate change by regulating greenhouse gas emissions under the Clean Air Act.

Moniz, a researcher and engineer who served as energy undersecretary for President Clinton, reflects the Obama administration’s belief that, with the help of ambitious technological advancements subsidized by the federal government, the future of American energy will be marked by investment in natural gas, “clean coal” technology and renewables. Moniz openly embraces Obama’s “all of the above” energy policy, which fully supports even the most controversial realms of fossil fuel production, such as hydrofracking and offshore oil drilling, while promoting the development of carbon-cutting technology and renewables when the funding is available.

McCarthy’s nomination reflects the president’s plan, as laid out in his State of the Union speech, to address global warming with regulation and executive action if Congress fails to agree on anything useful on its own. In recent years, the EPA’s attempts to set federal pollution limits were met with fierce opposition from industry lobbies and Congressional Republicans, and while McCarthy’s nomination hearings may be no different, her bipartisan track record is a sign that the White House believes the GOP can be convinced that saving the planet can be good for business.

Moniz for Fracking – and Everything Else

Moniz’s nomination for secretary of energy got a mixed reaction from environmentalists.

Frances Beinecke, president of the Natural Resources Defense Council, said Moniz’s nomination is “good news” and that the professor has the “hands-on experience and the expertise needed to help further the climate and energy goals our country urgently needs.”

Others environmentalists, however, were quick to point out that the MIT Energy Initiative, which Moniz chairs, works closely with big polluters such as BP, Chevron, Total and Saudi Aramco.

Alt of Environment America said Moniz has a “history of supporting dirty and dangerous energy sources like gas and nuclear power.”

“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,” Alt said.

Moniz’s critics in the green movement point to a 2011 MIT Energy Initiative report on natural gas production that cast fracking in a favorable light. Eco-groups and activists across the country are waging a fierce grassroots campaign to stop the controversial drilling technique, but like the White House, Moniz embraces fracking and natural gas as a “bridge to a low-carbon future,” as he wrote in the report.

As energy secretary, Moniz would not regulate fracking. That job would be left up to the EPA, which is currently studying the industry’s impacts on water supplies as part of a slow march toward proposing some federal rules.

Moniz could, however, have a hand in amplifying the ongoing fracking boom, which has currently created a domestic gas glut. The DOE could soon approve up to 19 massive natural gas export facilities that would increase demand for cheap American gas worldwide. Environmentalists fear exports will increase demand and result in more rigs in the ground, while some business leaders say increased exports would drive up prices for domestic industries and consumers. In the 2011 MIT report, however, Moniz warned against “barriers to natural gas imports or exports.”

Environmentalists are also concerned about Moniz’s attachment to nuclear power as concerns continue to be raised about the nation’s aging fleet of reactors, but considering the DOE spends more than half of its budget managing the nation’s nuclear weapons stockpile, having a nuclear physicist around doesn’t sound like a terrible idea.

In a recent interview, Moniz admitted to being “very bullish on solar in the long term,” but he expects oil and gas to be the major fixtures in the energy world for some time. Like the Obama administration’s climate policies, Moniz’s research is not all about moving away from fossil fuels; it’s about developing technology to burn fossil fuels in a cleaner way.

Like Obama’s former Energy Secretary Steven Chu, Moniz advocates carbon capture and sequestration, which involves capturing the carbon dioxide produced by coal-burning power plants and pumping it deep underground instead of releasing it into the atmosphere.

Since 2009, the Obama administration has spent more than $2.4 billion on carbon capture research and development. The technology is still in its experimental and development phases, but the Obama administration hopes technologies like carbon capture can soon help the US reduce its climate impact without putting the coal industry out of business.

Here is where the EPA and its proposed regulations come into play.

McCarthy and Federal Climate Regulations

During her term, outgoing EPA Administrator Lisa Jackson remained popular among environmentalists for facing off against the coal industry and Congressional Republicans, who fought EPA regulations at every turn. Jackson’s resilience won her key victories, including cleaner car emissions standards and lifesaving limits on mercury and other toxic emissions from power plants.

McCarthy, who helped push several of Jackson’s key initiatives in her current position as the EPA’s air and radiation administrator, is expected to pick up right where Jackson left off. McCarthy, however, may not be as divisive as Jackson. She has already worked with two Republican governors, including former governor of Massachusetts Mitt Romney, to push greenhouse gas initiatives on the East Coast.

At stake are the first-ever proposed greenhouse gas emissions limits for new power plants and the chance to push the EPA to include existing coal-fired power plants under the new rules.

The new rules would require new power plants to invest in new technologies – such as the carbon capture and sequestration already being pushed by Obama’s DOE – to meet the new emissions standards. The regulation would ensure that the power industry invests in the new technology, making the Obama administration’s massive investment in carbon sequestration and management technologies less of a gamble.

There is, however, a different kind of “sequestration” on everyone’s mind in Washington, and it’s unclear if DOE would have the funding to continue the federal push for research and development in the clean power sector. And with many within the industry’s ranks already calling McCarthy’s nomination part of Obama’s “war” on coal and “affordable energy,” it’s clear that both her nomination and the proposed emissions caps will face considerable roadblocks in the months ahead.

Meanwhile, global temperatures continue to rise. For many climate activists, it all may seem to be too little, too late. But in four years, Obama will at least be able to say that he tried.