The problem with war is that it is---or at least it should be---a temporary state of affairs. It can only be "maintained," and its maintenance is often a series of day-by-day strategic decisions---or lack thereof---that robs its participants of long-term vision. This accounts for Steve's failure to really know what to do with, or about, Shane, once he managed to get her back in his orbit, and why, once the crisis was over, he was forced to manufacture the ongoing threat to keep Shane in D.C. Steve was so busy tending to the lie he didn't have the capacity to envision what his future would look like with Shane in it, or, more importantly, how to even begin pursuing such a path.
First, what room is there for grace in war? We often imagine war as ruthless and unforgiving, it is an absence of love or compassion. "Gracious" means "abounding in grace or mercy; manifesting love; disposed to show kindness or favor." Grace is fundamentally incompatible with war. Remember how Shane pardons Steve, "he's not a bad guy, he's just...competitive." In this moment "grace" shows unmerited mercy to "war." To make peace with what Steve had done, Shane had to exercise grace. From this perspective, it appears grace is the mechanism for transitioning from a state of war to a state of peace. In fact, where grace is incompatible with war, peace requires grace to survive.
Where war relies on upheaval, insecurity, discord, etc., peace is a state of contentment that contains grace, but, when threatened, relies almost solely upon receiving the gift of grace to be saved. We see this in the interaction between Shane and Oliver on her porch just before she leaves for D.C. Being grace herself, Shane offers that gift to Oliver, filtered through Gabe and Hattie:
"Promise me that you'll find Gabe, and that you'll tell him not to be too hard on himself. He didn't have to say it---she knew...that he loved her. She knew."
Of course we know that Oliver didn't completely receive this gift. As time passed his mind forgot what his heart, evidenced later when he produces the napkin from his suit pocket, remembered. If Oliver had only held onto the content of that message for himself, he might have navigated through his season without Shane differently. Notice that when he finally "received" the gift of grace (kissing Shane) his peace is restored.
The clash between Steve and Oliver is rooted in something much deeper than competition, reaching to the very core of who they are, and who Shane is, in the process. Unable to coexist, war and peace are perpetually in conflict, much like Steve and Oliver were constantly at odds in Higher Ground.
Embodying the meaning of his name, Steve's "warlike" mentality, and the fear associated with it, rendered him unable to fully receive---or retain---grace, costing him Shane in the end. As for Oliver, his peace relied heavily on the presence of grace and, in its absence, became lost and even at war with himself and his past. Only when he was fully able to receive grace in light of Shane's return was his peace finally restored, reaffirming the inextricable link between peace and grace for mutual survival.
From The State Of Grace,