Conclusion
The importance of hydrocarbons to the Russian Federation and the United States cannot be overstated. Petroleum and natural gas exploration and production were critical to the development of the Federation’s economy following the collapse of the Soviet Union, and energy has long held a particular influence over U.S. foreign affairs and thought, namely concerning “energy security.” Historically, Washington and Moscow have been at odds over the other’s energy interest in particular markets, and the United States took the unprecedented step to sanction Moscow’s energy interests in the European market in the 1980s. This action did not yield positive results, since sanctions typically are both ineffective and present an undue burden to domestic industry. Three decades later, the United States again imposed sanctions on the Federation’s energy sector; this represented the deliberate targeting of a geopolitical market rival as both energy producers were vying for the title of the world’s leading petroleum and natural gas producer. The curious nature of this, given the large body of literature that demonstrates the ineffectiveness of sanctions, raised the guiding exploratory questions concerning (a) the rationale for sanctioning the Russian Federation, (b) the rationale for targeting the Russian energy sector, and © the economic benefit for the U.S. energy sector as a result of the sanctions.
The present study relied on the investment theory of party competition and used the theory of the business conflict model to measure the correlative relationship between personal and professional financial interests and constituency stake in the U.S. energy sector, defined as the upstream sector and the LNG industry, and the development of congressional Russian sanctions in the period 2012–2018. Personal financial interests were defined as personal financial holdings in the energy sector (Hypothesis 1), and professional financial interests were defined as receiving political campaign contributions from the energy sector (Hypothesis 2). Constituency stake was defined as those states with employment, firm, and aggregate payroll levels from the energy sector above the national average (Hypothesis 3). It was expected that any correlative relationship would be more pronounced should the congressional representatives be of the same political party as the sitting president due to the president’s role in executing foreign policy.
Due to the time constraints of the present study, the sample set was delimited to the legislation authors and cosponsors and the chairpersons and ranking members of (sub)committees in both congressional chambers most affiliated with the energy industry, as defined as the upstream and LNG sectors. Additionally, one individual congressional representative was included during the data collection as they ensured one piece of legislation passed its chamber through unanimous consent, which was identified as critical to the bill’s inclusion in the sample set. The sanctions explored in the present study were delimited to those passed by both chambers between 2012 and 2018 as executive orders, while encompassing most Russian sanctions in the sample period, have a shorter average implementation period compared to congressional sanctions. The sample period itself was chosen because the first sanction legislation, the Magnitsky Act, represented the first congressional action against the Federation and provided for a diversity of political control of both congressional chambers and the presidency.
The present study was subject to the key limitation of data availability concerning both the personal finances of congressional representatives and the lobby efforts of the energy sector. Data existed only for what was legally mandated, and the lack of substantive requirements rendered this key limitation. The sample set relied on the final voting record from both chambers for the five sanctions as a baseline for person-vote behavior of the sample of 328 person-vote observations. These included the person-vote decision, the congressional chamber, the political party affiliation, the relationship to the political party affiliation of the sitting president, the existence of personal financial interests in the energy sector, the existence of political campaign contributions from the energy sector, and the existence of a constituency stake in the energy sector.
The sample set was modeled using four regressions to quantify the correlative relationship between the person-vote behavior and the holding of personal financial interests in the energy sector (R1), campaign contributions from the energy sector (R2), constituency stake in the energy sector (R3), or having any of the preceding interests (R4). Stata was used to model these regressions as panels, using the person-vote observation as the dependent variable (a) on a spectrum with values +1 (Yay), 0 (Not Voting), and -1 (Nay); (b) weighted against the aggregate Yay and Nay votes in the respective chamber; and © weighted against the aggregate Yay and Nay votes in both chambers.
The regressions were modeled three times to ensure data accuracy. The results suggested that the presence of energy interests of any kind indicated a statistically significant indicator of increased likelihood to (a) engage in person-vote behavior concerning sanctions targeting the Russian Federation, (b) engage in person-vote behavior concerning the energy sector, and © engage in person-vote behavior against energy-specific sanctions legislation. This statistically significant relationship was strongest concerning campaign contributions, which likely affected the aggregate results from R4. While the results did not support the hypotheses of the present study, they did support the qualitative evidence from the literature review that argued that business interests engage in the political process through various means, most notably through campaign contributions. Because of the ineffective nature of sanctions and the negative financial impact that energy-specific legislation would have on the U.S. energy sector, the qualitative evidence suggests that business interests would oppose this legislation by establishing connections to congressional representatives and/or leveraging existing relationships.
Those congressional representatives with energy interests would thereby be more likely to (a) vote concerning energy-specific sanctions legislation and (b) vote against energy-specific sanctions legislation, thus benefitting the business interests. Despite the size of the sample set, the results confirm this argument that those with ties to the energy sector were more likely to engage in person-vote behavior and oppose energy-specific sanctions legislation than those who do not. Moreover, the results demonstrate that those with ties to the energy sector were more likely to engage in person-vote behavior supporting legislation targeting the Russian Federation’s geopolitical position. However, when this legislation would have potentially impacted domestic industry, this support disappeared and those with ties to the energy sector were more likely to engage in person-vote behavior against this legislation.
For a more robust analysis, the sample set would need to be expanded to all congressional representatives and explore how varying levels of energy interest impact person-vote behavior. Moreover, the present study did not include the varying influences that domestically focused and internationally focused business interests have as argued through the business conflict model. Future exploration should expand the exploration parameters to include this diversity of influence to account for potential conflicts, since domestically focused business interests would be more likely to benefit from legislation that negatively impacted the global economy and which would not benefit internationally focused organizations. Finally, expanding the delimitation beyond the five sanctions specifically targeting the Russian Federation would encourage more robustness and the ability to remove any potential and account for any perceived anti-Russian bias.
Should the correlative relationship not be able to be observed beyond Russian-specific legislation, the results would suggest that anti-Russian bias, not necessarily energy interests exclusively, were influencing person-vote behavior. This, in turn, would suggest that geopolitical factors need to be accounted for in modeling when exploring the influence of a specific industry in the context of foreign policy development when applying investment theory and/or the business conflict model. Nevertheless, the premise of the present study represents a new application of the investment theory of party competition and the business conflict model to U.S. sanctions and the energy sector. Given the current lack of literature in this space, the results of the present study, albeit from a small sample size, represent strong potential for additional insights into the relationship between the U.S. energy sector and congressional representatives, with implications for future policy analysis and development.
