House lawmakers hashed out new sanctions targeting Russia Saturday that reduce some of the restrictions the U.S. Senate’s version of the proposal foisted upon American energy companies.
Republicans and Democrats forged ahead on a bill preventing U.S. companies from doing business with projects in which Russian individuals have at least a 33 percent interest. Oil companies wanted Congress to peg the threshold at 50 percent.
The final legislation, which is meant to punish Russia for allegedly hacking the presidential election, is a substantial victory for the energy industry, considering the Senate’s version would have permanently barred any U.S. companies from doing business with a project with any Russian dealings.
“There remain concerns with how this legislation could affect U.S. business interests in the future, but the amended bill more appropriately focuses sanctions on the intended target — Russia and its energy firms,” Marty Durbin, an executive vice president with the American Petroleum Institute, told reporters after the House’s announcement.
Analysts had warned lawmakers that the bill could potentially help Russia and hurt U.S. interests.
“Were this legislation to pass with the Directive 4 provision included, it could block U.S. oil and gas firms from participating in some international oil exploration and production projects,” Richard Sawaya, vice president of National Foreign Trade Council, wrote in an editorial earlier this month.
If a sanctioned Russian company develops an oil field anywhere in Europe, then U.S. companies would be denied the means to explore anywhere on the field, according to Sawaya, who also heads USA Engage, an advocacy group for the agricultural industry.
The blowback would have been significant, according to others.
Companies such as GE, Boeing, Proctor & Gamble, John Deere and a subsidiary of Caterpillar, for instance, could get slapped for doing business in Eastern European countries. Popular hotel chains like Marriott, Hilton and Hyatt have important properties in Azerbaijan, where there are significant Russian investments.
The bill also calls for limits on investment in Russian pipeline projects, which is aimed at shuttering the multi-billion-dollar Nord Stream 2 project, a move that could potentially put the U.S. and European allies at loggerheads
German officials pushed back earlier this month against Congress and President Donald Trump’s campaign to kill the Nord Stream 2 pipeline, a natural gas line linking parts of Europe to Russia. It is expected to shuttle an additional 55 billion cubic meters of gas directly from Russia to Germany.
Germany is heavily dependent on Russia for its gas and energy supply, using Russian gas as baseload energy to stabilize the less reliable green energy industry. Some evidence also shows that Germany’s reliance on green energy subsidies has caused damage to the country’s electrical grids.
The Trump administration signaled a willingness to sign the legislation. White House Press Secretary Sarah Huckabee Sanders told reporters that the Trump would sign the package if it reaches his desk.
“We support where the legislation is now, and will continue to work with the House and Senate to put those tough sanctions in place on Russia,” she said. Congress is expected to vote on the final bill on Tuesday.
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