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OTTAWA/CALGARY, Alberta (Reuters) - A review of TransCanada Corp's proposed Energy East pipeline will start again from the beginning, Canada's National Energy Board (NEB) regulator said on Friday, voiding all decisions from the project's previous examining panel that has been accused of bias.
The new review will be conducted by the NEB in its current form, said the Natural Resources Canada federal agency, despite the ongoing reform of the energy regulator.
Last year, the review stalled amid protests by environmentalists and after the resignation of the examining panel due to revelations that members met privately with a TransCanada consultant.
Cabinet ministers were upset by the incident and the government may eventually curb the NEB's power, sources have said.
The move to restart the review would appear to spare the Liberal government from making a politically charged decision on the pipeline's future before the next federal election in October 2019.
Approving Energy East, which would take crude oil from Alberta to the Atlantic coast, may anger the progressive base that helped Prime Minister Justin Trudeau win power in late 2015, while rejecting it could alienate voters in Canada's energy-rich West.
However, Energy East's importance has diminished for TransCanada. U.S. President Donald Trump this week signed an order reviving the company's Keystone XL pipeline, which would run from Alberta's oil sands to U.S. refineries.
"TransCanada now has to calculate if Keystone goes ahead, does it still want to pursue this project?" said University of Toronto politics professor Nelson Wiseman.
The project was originally to begin in 2017, but construction now cannot start until at least 2019.
Teika Newton of Transition Initiative Kenora, an environmental group that had filed a legal challenge against the pipeline's review process, welcomed the decision.
But she said the NEB should not start a new hearing until Trudeau's government fulfills a promise to update laws on environmental assessments. Liberals say that will not happen until the end of 2018.
The NEB said in a statement the new panel examining the project would decide how to proceed. It will first have to decide whether TransCanada's application was complete.
NEB spokeswoman Sarah Kiley said there was no decision deadline.
Once the panel decides to restart the hearings, it has 21 months to complete the process. After that, the federal government has another six months to decide whether the pipeline can be built.
TransCanada did not specify its next steps for Energy East, saying only it will review the NEB decision.
Editing by Chris Reese and Matthew Lewis