Ukraine (closed; covers till August 2014)

[Dayuhan]

Certainly Russia realises that Germany - being significantly dependent on Russia - will be the last to sign on for any form of sanctions will be able to push the envelope as a result.

The Brits will also be in no hurry to place meaningful sanctions on Russia.

That's the reality of sanctions: if they aren't hurting the sanctioning party, they aren't going to hurt the sanctioned party either. To deprive the Russians of oil and gas revenue, somebody has to go without oil and gas. To deprive the Russians of manufactured goods, somebody has to forego export revenues. In this case both burdens land largely on Germany, and the Germans aren't likely to go along with it... and if they don't, the sanctions don't work.

Unilateral US sanctions would achieve very little beyond allowing US politicians to say they did something.

The US will huff and puff...

What do you want to see the US do?

In the medium (10 years) or long term (>20 years) timeframe the Russian position is not strong when we consider decreasing demand for NG and oil in Europe, the increasing global LNG capacities, lack of Russian LNG capacity, and the structure of the Russian (export) economy. Most of the NG is used in central Europe for heating of buildings. Fortunately, these buildings have an poor insulation level. :-)

The best answer is to build one or two more LNG facilities in the Netherlands, UK and Germany, to ramp-up refitting programs for buildings (KfW) and simply wait. The goal is to compensate for decline of UK and Norwegian NG production with more non-Russian LNG imports, at the same time, efficiency gains will reduce demand for Russian NG.

Very true, and if Germany wants to send a signal to the Soviet Union, one of the clearest signals they could send would be to announce a plan for a major LNG terminal, the capacity of which would (coincidentally, of course) be roughly equal to Germany's gas imports from Russia.

In the short run, of course, the equation is somewhat different. Germany (and the rest of western Europe) certainly can wean themselves from Russian gas, but they can't do it overnight: there's enough LNG available, but the infrastructure would have to be realigned to support it. That process would reduce Russian leverage and force the Russians to find other outlets (probably very long and expensive pipelines to Asia), but it might also be an incentive for the Russians to try to play the gas card while they still have it.

As the economy of Ukraine is a mess - it is even worse than the Russian economy - an occupation of more territory than the Crim does not improve the Russian strategic position IMHO.

Also true, but this may be less about a specific strategic or economic goal than about an emotional goal, the desire to restore former Soviet territory and lay claim to the "make Russia great again". These actions aren't always entirely rational: look at the Falklands for an example!