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On Accusations of Bias, NEB Hearings Panel Recuses Itself in TransCanada Energy East Review

TransCanada Corp.’s mammoth Energy East project ground to a halt Friday, when all three members of the National Energy Board (NEB) hearings panel reviewing the plan disqualified themselves.

A legal protest motion and rowdy demonstrators pushed the NEB late last month to suspend hearings indefinitely regarding TransCanada's plan to partially convert its natural gas Mainline to oil service (see Daily GPISept. 1).

NEB Vice Chairmen Lyne Mercier and Jacques Gauthier said they had to recuse themselves from future hearings because they attended private meetings with Quebec luminaries and business leaders, including former provincial premier Jean Charest, which ignited accusations of bias. Panel leader Roland George did not attend the meetings but said he would step aside because he could be perceived as tainted by his work with Mercier and Gauthier.

Chairman Peter Watson, who participated in the private meetings, also withdrew from overseeing the case, including appointing a new panel and establishing a revised hearings schedule. No date or other details were announced for starting the case over again.

Federal Energy Minister Jim Carr said the NEB would decide its next steps. He indicated the government has no intention to stop the Energy East case while conducting a complete and lengthy review of the regulatory system that his Liberal party promised in Canada’s 2015 election. Numerous committees were created to study and report on various aspects of the Canada's energy and environmental regime.

Mercier and Gauthier described the contested meetings as preliminaries to a general public engagement program intended to raise the NEB's profile in Quebec, and not secret talks focused on TransCanada's C$15.7 billion ($12 billion) proposal for partial conversion of its natural gas mainline to oil service. Charest had a consulting contract with TransCanada, but the NEB was not informed about his private business affairs.

The recusals followed a review of formal demands for them by motions from Quebec environmental opponents of the project. The proceeding has been suspended since Aug. 30, when a rowdy demonstration inspired by the motions prevented the panel from starting Montreal hearings and raised security concerns.

TransCanada and other industry participants in the case made no comment on the recusal motions or the behavior of the NEB chairman and members. But the formal protests pointed out that any decision to reject them could have been contested in Canada’s Federal Court of Appeal, where a verdict of bias could scrap the entire proceeding.

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