November 3, 2015 / 5:28 PM / 2 years ago

TransCanada's Energy East must pass robust review -Liberal source

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OTTAWA, Nov 3 (Reuters) - While TransCanada Corp has moved to delay the U.S. review of its Keystone XL oil pipeline, its planned Energy East project in Canada could go ahead if it passes a robust environmental review, a senior Liberal Party source said on Tuesday.

Incoming Liberal Prime Minister Justin Trudeau has spoken positively about Energy East, which would ship Alberta and Saskatchewan crude oil to eastern Canada. But he has also said the project, which is opposed by environmental groups, needed community support.

The Liberals, set to take power after defeating the pipeline-friendly Conservatives in last month's Canadian election, had pledged to "restore robust oversight" into the environmental assessment process.

The Liberal source, who spoke on condition of anonymity, said Energy East approval could be delayed while changes are made, but the project would not necessarily be killed.

"Energy East could happen as long as it meets all the criteria and community buy-in and is done in an environmentally sustainable way," the source said. "We're open to Energy East as long as it goes through a very thorough environmental review."

Trudeau representatives had no immediate comment on the various pipelines on Tuesday

On Monday, TransCanada asked the U.S. government to suspend its review of Keystone XL while the company goes through a government review process in Nebraska.

The Liberal source noted the potential delay might lead the oil and gas industry to push harder for Energy East.

Saskatchewan Premier Brad Wall tweeted on Tuesday that "with Keystone now delayed, even more important we approve Energy East."

Trudeau has already said no to Enbridge Inc's Northern Gateway pipeline over the Rockies through wilderness to the Pacific Coast.

Environmental regulators approved Northern Gateway, with more than 200 conditions attached, in December 2013, but it has faced fierce opposition from some communities.

Questions over Energy East caused a furor in the last week of the Oct. 19 election campaign when it emerged that Liberal campaign co-chair Dan Gagnier had in his private capacity advised TransCanada on how to lobby a possible new government on how to win approval for projects like that one.

The campaign at first defended Gagnier, but he later resigned.

U.S. delays in approval had been a major irritant in bilateral relations. When U.S. President Barack Obama called Trudeau on Oct. 20 to congratulate him on his election, Trudeau said they did not discuss Keystone XL. (Editing by Jeffreys Hodgson and Benkoe)

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