Legal & Regulatory

The ever-increasing complexity of contractual obligations has magnified the importance of expert assistance with legal issues in the energy arena. Purvin & Gertz provides litigation and arbitration support for our clients, including the presentation of expert testimony covering both commercial and technical issues.

We help clients develop overall litigation strategies, identify discovery documents, assist in depositions, analyze and explain the basis for claims and quantify the damages. With extensive experience in investigating business interruption claims, we will assist clients with settlement of property damage claims resulting from fires, explosions, process design inadequacies or operational negligence.

The range of our litigation support extends across the oil, natural gas, gas liquids, and power sectors. Recent representative examples of our experience are shown below.

Crude Oil

• Retained by attorneys for an energy services company to assist in litigation regarding the value of a crude oil and natural gas production property in the former Soviet Union.
• Provided litigation support and expert testimony in hearings and settlement conferences to one of the parties before the Federal Energy Regulatory Commission (FERC) and Regulatory Commission of Alaska (RCA) in a long-running dispute related to the quality adjustment procedures for the Trans Alaska Pipeline (TAPS Quality Bank). In various settlement discussions and hearings, Purvin & Gertz provided testimony related to the valuation of naphtha and assisted litigation with the valuation of the other cuts on behalf of one of the parties.

Refining and Refined Products

• A Latin American government adopted certain programs to liberalize and privatize the power industry within the country. As part of that process, rules regarding tariffs for petroleum products were modified which a major oil company subsidiary believed violated certain obligations the government had toward the company as a refinery operator. Purvin & Gertz assisted in evaluating the claims made by the complainant in an international arbitration. In a technical and commercial analysis, we quantified the counterclaims and evaluated the claims against the government in a defensible way. The outcome of the proceeding was a negotiated settlement satisfactory to both parties.
• Retained by the defendant's counsel in a product liability case related to MTBE contamination of ground water in the State of California. We provided expert testimony in a jury trial regarding the measures taken by one defendant to replace MTBE with ethanol and the associated marketing and distribution costs in the company's wholesale and retail gasoline distribution channels in California. Litigation support was also provided to the defendant's counsel on technical and economic issues related to the blending of MTBE and ethanol in California gasoline at the refinery level.
• In an aggressive bid to raise property taxes on a Western U.S. refinery, the local tax authority developed certain theories of petroleum product pricing. We were retained by the company's attorneys to evaluate the competitive position of the refinery and to evaluate the product pricing theories adopted by the taxing authority. The case was heard before the local tax board with Purvin & Gertz providing extensive testimony regarding petroleum markets and the value chain from refinery to retail site.

Natural Gas/LNG

• Acted as the expert witness for a prominent U.S. natural gas pipeline transmission company to provide litigation assistance and testimony in a lawsuit against a state government for the recovery of disputed taxes levied against the pipeline company for use of their facilities. This assignment included the analysis of state laws concerning taxes for capital equipment and fuel gas in pipeline operations and comparison of natural gas transmission activities versus electricity generation and transmission.
• Extended litigation support and expert witness services to a group of pipeline companies acting as defendants on commercial gas transportation matters in a disagreement with the claimants, a group of producers. The assignment was undertaken in two phases. The first phase was to form an opinion on the claim made by producers that unassigned transportation rights produced a significant shortfall in revenues. The second phase was to prepare and provide expert witness testimony with regard to the claimants' calculation of damages.
• Provided litigation support to gas producers in dispute with the State of Alaska regarding taxation value of natural gas to an LNG facility. The assignment involved preparation of an expert witness report, written and oral expert witness testimony, and general strategic advice on the international energy industry. Scripted and directed production of a commercially prepared videotape presentation on LNG operations in support of expert witness testimony.
• Served as an expert witness for a major energy company in several lawsuits involving customer gas supply interruption. Litigation support included the preparation of an expert witness report dealing with gas industry practice and adequacy of the supply, transmission and distribution chain as it pertains to gas supply and preventive measures (supply back-up, storage, alternative energy sources, etc.).
• Acted as an expert witness for a major integrated oil and gas company in the U.S. in order to provide litigation assistance in a lawsuit against a state government related to proper operation of the system and relevant costs associated with compressor fuel use. Areas of support included the preparation of expert witness reports and giving deposition testimony.

Gas Liquids

• At the request of legal counsel, Purvin & Gertz performed a review of operational and safety practices at a gas processing plant in Australia that suffered a catastrophic explosion. Purvin & Gertz consultants traveled to the plant to view the damages associated with the event, then compared the company's safety and operator training practices to government and industry practices in other regions of the world. Purvin & Gertz also provided the company with an assessment of the design standards used to construct, operate, and maintain the plant.
• Gave litigation support regarding the contractual costs associated with gas treating services in the San Juan Basin of Northwestern New Mexico. Purvin & Gertz was named as an expert witness regarding the reasonableness of gas treating costs charged by the gas gathering system to the producers in the area.
• Asked by counsel to review the physical damage and business interruption claims associated with a gas turbine used to generate electricity at a chemical production facility. The work included reviewing the accounting treatment of the repair expenses and the opinion of an outside accounting firm.