Palin's field of dreams has become a nightmare.

For more than 30 years, a natural-gas pipeline had been the great white whale of Alaskan resource development. Tens of millions of dollars had been spent in the quest for it.

The names of collapsed consortiums and failed legislative initiatives littered the tundra like the bleached horns of long-dead caribou. Then, last summer, Sarah Palin said she had harpooned the whale.

I fought to bring about the largest private-sector infrastructure project in North American history,” Palin said at the Republican convention. “And when that deal was struck, we began a nearly $40 billion natural-gas pipeline to help lead America to energy independence.”During the vice-presidential debate, she said it again: “We’re building a nearly $40 billion natural-gas pipeline, which is North America’s largest and most expensive infrastructure project ever.”And to Katie Couric, she said, “We should have started 10 years ago,  but better late than never.”

To many outside of Alaska, it may therefore come as a surprise to learn that not only does such a pipeline not exist, but—even as Alaska’s deep winter darkness gives way to the first light of spring—the prospect that it will be built within Sarah Palin’s lifetime grows dimmer by the day. ( View a slideshow hitting the highlights of Governor Palin's travels.)

Barack Obama wants the pipeline. It says so right on the White House website, in the section about energy and the environment: prioritize the construction of the alaska natural gas pipeline. But Obama might not realize that one of the biggest obstacles in its path—all Palin’s rhetoric notwithstanding—is the woman who wants to take the presidency from him in 2012, Governor Sarah “Drill, Baby, Drill” Palin.

As Mike Hawker, the Republican co-chairman of Alaska’s House Finance Committee, told me one night in Juneau not long ago, “The only thing standing in the way of an Alaska gas pipeline is the Sarah Palin administration.”And as former Governor Tony Knowles, a Democrat, told me over coffee one morning in Anchorage, “It’s as if getting the gas pipeline built is only her second-highest priority.

Her highest is making sure the oil companies don’t build it.”You see, before she became the woman who John McCain said “knows more about energy than probably anyone else in the United States”—and long before she became the new darling of the newly disenfranchised far right—Sarah Palin had been a bare-knuckle backwoods populist who’d built a career out of puffing up dragons she could then slay.

Her tactic was first to demonize, then to defeat. She’d ridden her luck for 10 years, from the Wasilla city council to the governorship. And when she became governor, in 2006, she found herself eyeball-to-eyeball with Alaska’s most demonizable dragon of all—Big Oil.

Read on.