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Lost in the political fallout from President Barack Obama’s decision to once and for all reject Keystone XL is the fact that there is no longer an economic context for the pipeline. For that matter, the same can be said for any of the other proposed pipelines that would service the planned massive expansion of production from Alberta’s oil sands.

Whether it’s Shell’s decision to scrap its 80,000 barrel a day Carmon Creek project or earlier industry decisions to abandon the Pierre River and Joslyn North mines, the very projects that were going to supply all these new pipelines are being cancelled left and right. At today’s oil prices they no longer make any commercial sense. Western Canadian Select, the price benchmark for the bulk of oil sands production, is trading at $30 (U.S.) a barrel. That gives the oil sands the dubious distinction of being the lowest-priced oil in the world with one of the highest cost structures.

The key reason that Mr. Obama rejected the pipeline is that the U.S. market no longer needs Alberta’s oil sands. Thanks to the shale revolution which has doubled U.S. oil production over the past decade, the security of Canadian oil supply no longer has the same cachet as it once did in the U.S. market. In fact, the explosive growth in U.S. domestic production from fracking shale formations in the Bakken, Eagle Ford and the Permian Basin has spurred the American oil industry to actively lobby the Obama administration to remove the export ban that was imposed after the OPEC oil shocks.