BLM

Pipeline Proposal
Prepared for: Richard Oremus, CEO
Prepared by: Caitlyn Greenburg, Engineer
April 14, 2016
Proposal number: 123-4567

BLM

EXECUTIVE SUMMARY
Objective
BLM has established an oil refinery and high-producing natural gas well on BLM land. The objective is to gain
access to the natural gas well via pipelines. In order to do so, we may need to lay piping on private land or drill
through the mountain east of the well. The goal is to calculate the most cost effective route in getting the natural
gas to the refinery, with respect to the least amount of production downtime during construction

Project Outline
The following outline shows four different routes we can take and the cost of each route.
Cost of running pipeline 8 miles west, 16 miles south, then 40 miles east to the refinery, all on BLM ground.
Cost of running pipeline 32 miles east through the mountain, then 16 miles south on BLM land.
Cost of running the pipeline directly across private land to the refinery.
Cost of running pipeline 16 miles south across private land, then 32 miles east to the refinery on BLM ground.
Cost of running pipeline at some angle south east through private land, then finishing east on BLM ground.

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BUDGET
Budget outline
Below is the diagram and cost of laying pipe 8 miles west, 16 miles south, then 40 miles east to the refinery. This
scenario only requires the cost of piping set at $480,000 as we will not be laying pipe through private land or the
mountain.

16 miles

8 miles

40 miles

Calculating the cost of piping is simple in this scenario as we are adding 8 miles west to 16 miles south to 40 miles
east, then multiplying that by the cost per mile of laying piping over BLM land. The cost equation looks like so:

Cost=total mileage x cost of piping

Cost
Description
Cost of piping (per mile)
Total

Quantity

Unit Price
64 $

Cost

480,000 $ 30,720,000
$ 30,720,000

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BUDGET
Budget outline
Below is the diagram and cost of laying pipe 32 miles east through the mountain, then 16 miles south on BLM
land. This scenario requires an environmental impact study costing $600,000. The study will delay production for 8
months which will incur a loss of profit of $100,000 per month. There is a flat rate fee to drill through the mountain
set at $4,500,000. Lastly we will add in the cost of piping at $480,000 per mile.
The cost function for this scenario would be the cost of the drilling through the mountain, the cost of the study, the
downtime during the study, and the mileage of piping used. The cost function is outlines below, then filled in with
the values necessary to calculate the cost.

Description

16 miles

32 miles

Quantity

Unit Price

Cost

Drill through mountain

1 $

4,500,000 $

4,500,000

Impact study

1 $

600,000 $

600,000

Delay (per month)

8 $

100,000 $

800,000

Pipeline (per mile)

48 $

Total

480,000 $ 23,040,000
$ 28,940,000

BLM

BUDGET
Budget outline
Below is the cost of laying the pipeline directly across private land to the refinery. Included with the cost of piping is
a right of way fee to be paid to the land owner. This will be charged per mile of piping laid across private land.

32 miles

78

16 miles

35.

mil

es

Here I used Pythagorean's theorem to calculate the distance from the well to the factory. (h) represents the
hypotenuse of the triangle formed with sides of 32 miles and 16 miles.

The distance across private land (h) equals 35.78. I can then plug it into my cost function to find the total cost.

Cost=h(cost of piping + right of way fee)

Cost=35.78($480,000 + $360,000)
Description

Quantity

Unit Price

Cost

Cost of piping (per mile)

36 $

480,000 $ 17,174,400

Right of way fee (per mile)

36 $

360,000 $ 12,880,800

Total

$ 30,055,200

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BUDGET
Budget outline
Below is the diagram and cost of laying pipe 16 miles south across private land, then 32 miles east to the refinery
on BLM land. Running the piping across private land will include a right of way fee per mile, to be paid to the land

16 miles

owner.

32 miles

The cost function for this scenario is very similar to the first scenario where you multiply the total mileage by the
cost of piping, then add it to the multiplication of the total mileage on private land to the right of way fee. The cost
function looks like so:

Cost = total mileage(cost of piping) + private land(Right of Way fee)

Cost = 48($480,000) + 16($360,000)
Description

Quantity

Unit Price

Cost

Cost of piping (per mile)

48 $

480,000 $ 23,040,000

Right of Way fee

16 $

360,000 $

Total

5,760,000

$ 28,800,000

BLM

BUDGET
Budget outline
Below is the diagram and cost of laying piping at some angle south east through private land, then finishing east
on BLM ground. This will include a right of way fee per mile, to be paid to the land owner. After calculating
minimum cost we will find the angle at which we would lay the piping to achieve minimum cost.
In order to calculate the minimum cost of running the pipeline through private land then on BLM ground to the
refinery requires quite a bit of math that is outlined below. We must first draw a diagram in order to understand our
cost function. The red line shows the path we want to take to get from the well to BLM land.

32-b

b
32 miles

If we use the distance formula to find the distance from the well to the beginning of BLM ground we can plug that
into our cost equation later. I used variable (p) to represent private land and (b) to represent BLM land.

Now that we have found (p) using the Pythagoreans Theorem we can manipulate that function to find (b).

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We now have the two lengths for the mileage of pipeline we will need to use.
In order to calculate the actual length we need to formulate a cost function to derive. The cost function is the
mileage of private land (p) times the cost per mile of piping including the right of way fee plus the mileage on BLM
land times the cost per mile of piping. That function looks like so:

Cost
We then plug in one of the values (b) we calculated above as we want to take the derivative of the equation with
respect to (p) in our next step.

Cost
We now take the derivative of the function. The derivative finds the slope of our function at any point, which
translates to rise and decline in cost. We can then set the derivative of our cost function to equal zero, which finds
the minimum and maximum values of our function, thus giving us the minimum cost required to lay piping at some
angle across private land to BLM ground. We will evaluate the angle later.
First, we derive our function with respect to (p).

We then set our derivative to 0 and solve for (p).

Square both sides.

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Distribute and put all variables of (p) on the same side.

Solve for (p).

19.4967 is the mileage of piping to be laid on private land land to acquire the minimum cost required. We can then
plug it into our original equation to solve for (b).

Recall the formula to solve for (b) is

Now we simply plug in our value for (p) into the equation, like so.

We now have the mileage of piping to be laid on both private and BLM land to get the minimum cost.
We can now plug the values into out original cost equation.

Cost
Description

Quantity

Unit Price

Cost

Cost of piping (per mile)

40.3557 $

480,000 $ 19,370,736

Right of Way fee

19.4967 $

360,000 $

Total

7,018,812

$ 26,389,548

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Lastly, we will calculate the angle at which we would start laying pipeline.
To start, below is a diagram that illustrates the angle that we will use to begin our piping.

19.4967
16

11.141

In order to calculate the angle x, we first find the angle within the triangle(y). That angle, plus the outer angle (x) will
equal 90. If we calculate the inner angle we subtract it from 90 to get our outer angle.
To start we will calculate angle (y) using the tangent function.

We then use the inverse tangent function to solve for y.

Lastly we use our (y) degree measure to find our (x) degree of measure.

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CONCLUSION & REFLECTION

In conclusion, if you start at the well and direct your pipeline 55.15 south east for 19.4967 miles, then change
direction straight east for another 20.859 miles, the complete cost including right of way fees and cost of piping
would be $26,389,548 with is the cheapest and most environmentally friendly option. It also ensures less
downtime for the company as there are no impact studies required.

Calculus is present in almost anything we do in the real world. For example, I currently work in computer technical
support. When I am working on the machines over the years the Main Logic Boards have been getting smaller and
smaller. It absolutely amazes me. In order to do this they need to calculate max area for positioning of transistors
and chipsets on the board both on the top and bottom. They must also account for the area of the circuitry that is
to connect each component without touching or crossing paths with another circuit. They must be able to
calculate the max heat allowance before damaging components and allowing room for heat sink and fan modules
to dissipate the heat. Those are just the major components, it becomes calculations on a smaller and smaller level
for every millimeter of the logic board for max performance. They must also engineer tests that push the
components to their limit to test max performance before being sold in mass amounts. Those are just a few
examples of calculus. I can also use calculus to calculate whether a couch will fit around a corner in the hallway of
my house into a room. You can find the Velocity at any given point during the travel of an object. You can use
integrals to calculate Net Area of a function. This can come in handy if you are calculating net profit in a year for a
company. As you can see above calculus can also be used to calculate the cost required to lay piping and
minimize that cost. Every company has engineers and designers that use calculus and I am simply scratching the
surface of possibilities. This class has been tough, but I bet once I am in Calculus 2, Calculus 3, or even Differential
Equations I will look back and think of how much Calculus 1 was a breeze.