The delay is just the latest twist in the ongoing battle over the pipeline, which would transport oil across the Canadian border to refineries in Texas.
Hofmeister, now founder and CEO of Citizens for Affordable Energy, says the Obama administration is stuck in the middle of the political battle and is "darned if they do, darned if they don't."
Opponents argue the pipeline will damage the environment, but supporters say it is a crucial part of the North American oil boom.
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Simply put, "oil is good for us. The economy depends upon oil," Hofmeister said.
Pipelines also can reduce the safety hazards that come from shipping crude by barge or by rail, he added. Steel rails are particularly vulnerable during seasonal changes, expanding in the summer and contracting in the winter.
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Although pipelines will wear out and need to be replaced as they age, "by in large, having sat in the seat I sat in, I'd go with pipelines every opportunity I could because it's more efficient, more effective and lower risk in a business that is full of risk."
-Reuters contributed to this report
-By CNBC's Michelle Fox