Review process for Energy East pipeline faces legal challenge

TransCanada President and CEO Russ Girling (2nd L) announces the new Energy East Pipeline during a news conference in Calgary, Alberta, August 1, 2013. REUTERS/Todd Korol/File Photo

CALGARY, Alberta (Reuters) - A Canadian environmental group on Tuesday filed a legal challenge against the regulatory review of TransCanada Corp’s Energy East pipeline, seeking to restart what it calls a process tainted by bias.

Transition Initiative Kenora’s motion to be filed to the National Energy Board quasi-judicial body comes one day after the board formally assigned three replacement members for Energy East’s review.

The review was thrown into chaos last year after revelations that panel members met privately with a company consultant, prompting the entire panel to step down in September.

The government has not said whether the review will begin where it was suspended or restart from the beginning. Transition Initiative Kenora said it should restart as the meeting with the consultant calls into question any previous decision by the panel.

The legal challenge represented another hurdle for Energy East, which is designed to carry 1.1 million barrels of crude per day from Alberta’s oil sands to Canada’s east coast, where it can be sold on to more lucrative international markets.

Environmentalists have opposed the pipeline fearing the project would spur development of Canada’s carbon-intensive oil sands.

When asked about the legal challenge, TransCanada said it looks forward to the “resumption of the Energy East regulatory process and showing why this project is in the national interest.”

The Natural Resources Canada federal agency and the NEB did not immediately respond to requests for comment.

Reporting by Ethan Lou in Calgary, Alberta; Editing by Lisa Von Ahn and Alan Crosby