The history books will record 2011 as a year of upheaval - in both political and economic terms and one that was dominated by three key issues: the continuing financial crisis in the eurozone, the political stalemate in the U.S. that resulted in no consensus on budget cuts and the politics of energy.

The politics of disenfranchisement, which manifested itself in the uprisings in the Middle East and North Africa, as well as in the heavily indebted eurozone countries, also had an impact on the global economic sentiment.

As 2011 wore on, the lack of resolution in the eurozone continued to defy logic and yet at times it appeared the U.S. political process was even more dysfunctional. By year's end, it was clear that the squabbling within the European Union had the surprising effect of making the U.S. look good.

The issue in Europe remained a lack of a fiscal construct and the fact countries such as Greece and Italy remained hobbled because they were unable to devalue their own currency in response to changes in economic fortune.

As the year drew to a close, many began to question whether the euro had become today's version of the gold standard of the 1930s. Ultimately, countries such as the United Kingdom were forced to abandon pegging their currency to gold reserves to devalue the pound and regain competitiveness. The same questions began to surface in 2011 over the future of the EU and the euro.

If the lack of resolution in the eurozone weighed on the global economy throughout 2011, so too did the lack of consensus in the U.S. with respect to raising the government's debt ceiling. The result of political intransigence was the U.S. losing its coveted AAA credit rating. The credit rating agency Standard and Poor's said the historic downgrade had as much to do with its lack of confidence the right policies would be put in place to address burgeoning deficits as the current fiscal situation.

This wasn't quite what many expected for 2011.

As the year dawned, many thought energy would dominate the headlines: and to a large extent it did. But the issue at the outset of 2011 was how would high oil prices affect economic growth .

Whether it was continued opposition to oilsands, Libya's oil production abruptly wrenched from the world's supply equation, a ban on hydraulic fracturing for natural gas in France, Canada's provincial energy ministers meeting in Kananaskis or the decision to release 60 million barrels of oil from global U.S. Strategic Petroleum Reserves in June - politics drove the energy agenda.

Nowhere was it more evident than in the surprise announcement by the U.S. State Department that the review of the Keystone XL pipeline will continue until after the 2012 election, not the end of this year, as many had anticipated.

It was a transparent, Machiavellian attempt to appease environmental groups opposing the project and unions expecting to benefit from the 20,000 shovel-ready jobs. When the U.S. State Department's position didn't change - despite TransCanada's saying it would reroute the line to deal with raised concerns - it was clear what was behind the decision.

The part that didn't make sense, and continues to defy logic, was that all this flew in the face of the U.S. goal of increasing energy security and decreasing its dependence on Middle East oil - something that's been on the agenda of every U.S. president since Richard Nixon.

All this thrust Canada into the spotlight: with our oil production exceeding an OPEC member like Libya, it crystallized where we fit into the world supply pecking order.

It also made something else abundantly clear: the need to develop export markets beyond reliance on the U.S. There had been rumblings to this effect in energy circles for the better part of two years, but the U.S. stand on Keystone - as well as growing production from tight oilfields in the U.S. that have the potential to significantly decrease oil imports - galvanized this position. Of course, it won't happen easily or overnight.

Anyone who attended Enbridge's annual meeting in May was only too aware that pipeline politics were alive and well in this country - with the rhetoric only heating up as the year drew to a close.

While the focus remained primarily on oil - whether supply and demand or environmental issues, the politics of natural gas were anything but dead.

The issue for 2011 might have been bans on fracking in France or Quebec or continued opposition to the practice in parts of the U.S., but it's the fallout from Japan's earthquake that's bound to be the catalyst for huge change in global natural gas markets in the near future.

The catastrophe at the Fukushima reactor effectively took nuclear power out of the global energy mix, just as there was a sense it was on the cusp of a renaissance in terms of acceptance by the public. The big winner, as a result, was natural gas - even though North American prices had yet to reflect this.

As the year drew to a close, 2011 was bound to be a year seen as an inflection point in global economic history. The consequences of the eurozone troubles, the instability in the Arab world, the inability of the U.S. to come to come to terms with its fiscal challenges, and Canada's need to become a world energy exporter have set the stage for a global economic agenda that will extend far beyond 2012.

dyedlin@calgaryherald.com