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Regulatory Review of TransCanada’s Energy East Going Back to Zero

Regulatory proceedings will start over from scratch on TransCanada Corp.’s hotly contested Energy East proposal for partial conversion of its natural gas Mainline to oil service.

The reconstituted three-member project review panel of the National Energy Board (NEB), in its first action, ruled Friday that in Canada: “According to case law, once a reasonable apprehension of bias has been established, the outcome of the proceeding, or the proceeding to date, is void.”

The lengthy procedural notice discarded as “void” all decisions by the first Energy East tribunal, which resigned last September over accusations of bias that were ignited by private meetings between NEB members and project supporters.

But the new panel also said all applications and materials submitted by TransCanada, its opponents and other interveners remain valid because the offending meetings only tainted the work of the NEB personnel who attended.

To restart the case the new tribunal pledged to make fresh decisions on essential issues, including the key ruling on whether to accept as complete TransCanada’s encyclopedia-sized project application.

The C$15.7 billion (US$12 billion) Energy East plan calls for converting disused legs in TransCanada’s 58-year-old natural gas Mainline into a springboard for creating 1.1 million b/d of oil delivery service from Alberta to the Atlantic Coast. The package includes replacing gas transportation capacity -- currently in heavy use for imports of shale production from the United States -- that would be lost in central Canada.

As a conduit for oilsands output to enter global tanker traffic the project inflamed environmental, community and aboriginal resistance along much of the 4,050-kilometer (2,700-mile) route across Alberta, Saskatchewan, Ontario, Quebec and New Brunswick.

Once made, the critical completeness ruling on TransCanada’s application will set a limit on the debate by starting the clock running on a legislated 21-month requirement for a regulatory approval decision including conditions. The NEB’s new Energy East tribunal set no date for the completeness ruling but immediately started work on procedural steps towards restarting the interrupted case.

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