Congress should punish Russia for election interference, not US

U.S. intelligence officials warn that Russia’s attempts to interfere in American elections remain a threat, and Congress is rightly taking action. Lawmakers have introduced multiple pieces of bipartisan legislation aimed at protecting our electoral process by imposing punitive sanctions on Russia. 

One such effort is the Defending Elections from Threats by Establishing Redlines (DETER) Act, introduced by Sens. Rubio (R-Fla.) and Van Hollen (D-Md.). With the DETER Act, the lawmakers promise to impose “severe consequences” if the director of National Intelligence (DNI) detects Kremlin interference, taking aim not just at any implicated “senior Russian political figure or oligarch” but at entire business sectors including “finance, energy, defense, and metals and mining.”

{mosads}It’s a wide-ranging approach crafted to defend against a serious, wide-ranging threat. But a closer look reveals that some of the provisions are so broadly drawn that U.S. companies – including natural gas and oil companies – could get caught in the crossfire and sustain unintended damage.

For instance, the DETER Act could extend the current ban on U.S. companies’ involvement in energy projects located in Russia to projects worldwide, prohibiting U.S. participation in projects that are even tangentially connected to Russian companies. Under the legislation, U.S. energy companies could be prohibited from working on ventures in neighboring countries that utilize pipelines or railways that cross Russian territory to ship equipment, petroleum products and byproducts. Further, while previous sanctions target future activity, DETER proposes restrictions on existing projects, which could force U.S. companies to withdraw and leave Russia and other foreign competitors to reap the benefits of U.S. investment.

The restrictions even apply to offshore exploration. Since foreign governments often require companies to cooperate when exploring for offshore energy in the same area, the law could bar U.S. companies from certain projects anywhere in the world where Russian entities are also active, including promising areas abroad in the Arctic and Pacific.

No one appreciates these unintended consequences more than Russia, and the Kremlin will likely be delighted to exploit the inadvertent windfall. If these overly broad restrictions are implemented, there will be nothing to stop Russian firms from keeping a hand in projects solely to keep U.S. companies on the sidelines. As Richard Sawaya, vice president of the National Foreign Trade Council, has stated, Russia could “strategically bid to get even a small piece of every oil field and thereby block their greatest competitors — U.S. firms — from participating.”

Simply put, provisions like those included in the DETER Act could actually sanction U.S. companies and undermine one of the best geopolitical tools we have to curb Russian mischief. U.S. dominance in energy markets serves as its own kind of sanctions against Russia and other nations whose economies are based disproportionately on energy revenue.

The United States already leads the world in combined natural gas and oil production, and projections show we’re on track to surpass Russia and Saudi Arabia as the world’s leading crude oil producer in five years. The more market share U.S. energy claims, the less funding the Kremlin has to interfere with democracies here and around the world. The wrong move could give Russia relief just when we had them on the ropes. Not to mention, the escalating trade war with China and European competitors supplies enough obstacles to U.S. energy leadership; we really don’t need more.

Congress has alternatives – including applying more precisely targeted sanctions approved last year but never fully implemented. Preventing Russian interference in U.S. elections is a vital priority, and tough sanctions are an effective tool. Let’s make sure the sanctions are directed at the perpetrators in Russia, not at U.S. competitiveness.

Kyle Isakower is Vice President for Regulatory & Economic Policy, American Petroleum Institute.