Calculus 1210 Pipeline Project

MEMO
To: Jim Shady, CEO of Enviromess, Inc.
From: Joseph S. Golden-Dolan, Hapless Number Cruncher
RE: Vernal Natural Gas Pipeline
Date: April 14, 2015

CEO Shady,
I have been charged with finding the most economical route of laying a pipeline from the
company's newly drilled natural gas well near Vernal, Utah to the refinery. I was asked to
consider the costs of a number of different scenarios and, being the good and underpaid servant
that I am, have provided a detailed account of each of them in the body of this memo below.
A. The first two scenarios I was requested to evaluate entail only laying pipe on BLM land and
thereby avoiding having to deal with the annoyance of paying those pesky owners of the private
lands which inconveniently lie between our well and refinery.
i. With a bothersome mountain residing to the east of the well, the simplest approach was to
circle back around the private land. The total distance of this circumnavigation was 65 miles.
The cost per mile to lay our pipe is $500,000. So,
C(x) = 500,000(x) = $32,500,000 (see attached fig. Ai)
ii. The next scenario, while shorter in overall distance, requires that we drill through the
aforementioned bothersome mountain. Ha, mountains, am I right? Anyways, then we could take
a shorter, more direct BLM land route while still circumventing those private land owners for a
total of 55 miles. Drilling through the mountain would only tack on another $3,500,000 on to the
total. Unfortunately drilling through that mountain would require the company to finance an
environmental impact study for a low, one-time fee of $420,000. To compound matters, this
would delay the project by six months costing us another $180,000 per month, thus adding
another $1,080,000 to the bill.
C(x) = 500,000(x) + 3,500,000 + 420,000 + 1,080,000 = $32,500,000 (see attached fig. Aii)
So, Mr. Shady, as you can see its sixes between these two options.
B. This being the case, I also investigated the possibility of crossing the privately owned land in
the next two scenarios.

i. They say the shortest distance between two points is a straight line, while this may be true they
never said it would be the most cost effective. Nevertheless, this scenario examines just that;
running the pipeline directly from the well to the refinery. While no mountains were harmed
during this scenario, the pipeline would be entirely confined to private land adding an additional
$350,000 in right of way fees for each mile of pipe. Through some simple trigonometry, (d =
(40^2+15^2)^1/2), I was able to discover the length of the pipeline was 42.72 miles. So:
C(x) = 350,000(x) + 500,000(x) = $36,312,000 (see attached fig. Bi)
As you can plainly see, Mr. Shady, this would add $3.8 million onto the previous quotes.
Probably not our best option.
ii. The above scenario proved to be a wash, so I also examined minimizing the distance across
the privately owned land by heading due south from the well and then running the rest due east
across the more economical BLM land to the refinery. This required a 15 mile jaunt across
private land and another 40 miles across BLM land. The results are:
C(x) = 350,000(15) + 500,000(55) = $32,750,000 (see attached fig. Bii)
While this is less expensive than the previous example, it still adds an additional $250,000 onto
the first two scenarios.
C. Well, Mr. Shady, I must admit I was at a loss. It seemed as if we were doomed to shell out
$32,500,000 for this project. But then a thought occurred to me: why not try calculus? Yes,
calculus. It seemed a risky gamble to me, as well, Sir, but I thought, what did we have to lose?
The good news is I believe the gamble has paid off. Using calculus I was able to minimize the
costs of laying the pipeline across both private and BLM lands. Please allow me to explain. Now
this gets a little tricky, Sir, so I advise using the attached fig. C as a reference.
Basically the pipeline would still cross private land, but would take an angle somewhere between
the previously mentioned scenarios of due south and directly to the pipeline. Using trigonometry
once again, I found this distance to be (d = (225+x^2)^1/2). From there the pipeline would take
a short jog across BLM land to the refinery. I labeled this distance (40-x). So the cost function
associated with this crazy little venture looks something like this:
C(x) = 500,000(40-x) +850,000(x^2+225)^1/2
Further simplification yielded this:
C(x) = 20,000,000 - 500,000(x) + 850,000(x^2+225)^1/2
The next step was to find the derivative:
C'(x) = -500,000 + 850,000(x)(x^2+225)^-1/2
After finding the derivative, I set it equal to zero to find the critical number(s):
-500,000 + 850,000(x)(x^2+225)^-1/2 = 0
+500,000

+500,000

so: 850,000(x)(x^2+225)^-1/2 = 500,000

then: (x^2+225)^-1/2 = 500,000/850,000(x)
and then: (x^2+225)^1/2 = 17x/10
and then: [(x^2+225)^1/2]^2 = (17x/10)^2

and then: x^2+225 = 289 x ^2/100

and then: 225 = 289 x^2/100 - 100 x^2/100

and then: 100(225) = (189 x^2/100)100

and then: 22,500/189 = 189 x^2/189

and then: (119.05)^1/2 = (x^2)^1/2

and finally: we get x = 10.91 miles

So what does this all mean, Mr. Shady? Do you remember when I told you I originally labeled
the distance across private land as (225+x^2)^1/2 and the distance across BLM land as (40-x)?
Well lets plug x into that cost formula and see what we get.
C(10.91) = 500,000(40-10.91) + 850,000(225+10.91^2)^1/2 = $30,310,795.33
Voila! That beats our previous best estimate by $2,189,205 (I'll even kick in the 33 cents). That's
about as good as it gets Mr. Shady. Oh and in case you were wondering the final plan would
require us to lay the pipeline 36 degrees east of due south from the well for roughly 18.55 miles
until we hit BLM land and then continue on for another 29.09 miles due east to reach the
refinery.
Now if you need me, I will be taking a long overdue vacation. Maybe now is a good time to start
thinking of how much of a raise you wanted to offer me.
Regards,
Joseph S. Golden-Dolan

P.S.
In reflection, let me just say it was an honor to be included in this project. The feeling of being
able to apply the calculus I learned in college to a real-world situation in order to maximize
profits and minimize cost was indescribable. I can still remember sitting in my calculus class and
asking myself, when am I ever going to use this stuff? Well there you go. I can see now that
calculus has very important and lucrative applications to the real world and I look forward to
being able to use these skills in other, equally important moments in my career and my life.