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# Ian Clark

## Salt Lake CC, Math 1210

Pipeline Project

The U.S. Interior Secretary recently approved drilling of natural gas wells near Vernal, Utah.
Your company has begun drilling and established a high-producing well on BLM ground. They
now need to build a pipeline to get the natural gas to their refinery.

While running the line directly to the refinery will be the least amount of pipe and shortest
distance, it would require running the line across private ground and paying a right-of-way fee.
There is a mountain directly east of the well that must be drilled through in order to run the
pipeline due east. Your company can build the pipeline around the private ground by going 8
miles directly west and then 15 miles south and finally 32 miles east to the refinery (see figure
below). Cost for materials, labor and fees to run the pipeline across BLM ground is \$350,000
per mile.

Cost of drilling through the existing mountain would be a one-time cost of \$4,500,000 on top of
the normal costs (\$350,000 per mile) of the pipeline itself. Also the BLM will require an
environmental impact study before allowing you to drill through the mountain. Cost for the study
is estimated to be \$180,000 and will delay the project by 5 months costing the company another
\$75,000 per month.

For any pipeline run across private ground, your company incurs an additional \$90,000 per mile
cost for right-of-way fees.

Constants:

## BLM Ground Fee: \$350,000.00 per mile

Private Land Fee: \$90,000.00 + \$4350,000.00 (BLM) = \$440,000.00 per mile thru private land.

## Environmental impact study for tunneling thru mountains: \$555,000.00

a) Determine the cost of running the pipeline strictly on BLM ground with two different
cases:
i) One running west, south and then east to the refinery.

BLM Ground
8 mile

Private Ground

## 32 miles- BLM Ground

8 miles west, 15 miles south, and 35 miles east = 55 miles
The cost of traveling thru around the private land on BLM ground for 55 miles is
as follows:

## (\$350,000.00)(55 miles)= \$19,250,000.00

ii) One heading east through the mountain and then south to the refinery.

BLM Ground
8 mile

Private Ground

## 32miles- BLM Ground

24 miles east, thru the mountain, and 15 miles south (BLM land)= 39 miles
The cost of tunneling thru the mountain, the environmental impact study and BLM
ground is as follows:

## (\$4,500,000.00)+(\$555,000.00)+(\$350,000.00)(39 miles)= \$18,705,000.00

b) Determine the cost of running the pipeline:
i) The shortest distance across the private ground to the refinery.

BLM Ground
8 mile

Private Ground

## 32miles- BLM Ground

The shortest distance across private land can be calculated using the
Pythagorean identity a+b= c:

## (\$440,000 BLM Land)( 801) =\$12,452,855.00

ii) Straight south across the private ground, then straight east to the refinery.

8 mile BLM Ground

Private Ground

## 32 miles - BLM Ground

The cost of traveling 15 miles south thru private land, and 24 miles east on BLM
land is as follows:

## (\$440,000 private land)(15 miles) + (\$350,000 BLM land)(24 miles)=

= \$15,000,000.00
c) Determine the cost function for the pipeline for the configuration involving running from
the well across the private ground at some angle and intersecting the BLM ground to the
south and then running east to the refinery. Use this function to find the optimal way to
run the pipeline to minimize cost. Determine the length of pipe that runs across private
land and how far from the refinery it starts running on BLM land. Determine the angle at
which your optimal path leaves the well. Clearly show all work including drawing the
pipeline on the figure below. Make it very clear how you use your knowledge of calculus
to determine the optimal placement of the pipeline.

BLM Ground
8 mile

S
Private Ground

(x) (32-x)

## 32 miles - BLM Ground

Using the Pythagorean Identity again I found the distance (s) across the private
land in terms of x.

s = 15 + x
s= 225 + \$

I then used this information to formulate the cost function for this equation that is
the optimal distance to cross private land and intersect with BLM land and
continue to the refinery.

## = (\$440,000.00 private land)( 225 + \$ )+(\$350,000.00 BLM land)(24-x)

At this point in my research I began to use some calculus techniques to find the
minimal cost for this project. That minimal cost was found when I found the
derivative of the cost function and set it equal to zero and proceeded to isolate my
distance (x) and used it to find my optimal distances.
Cost function C = (\$440,000.00( 225 + \$ )+\$350,000.00(24-x))
/
- .
C =(\$440,000 225 + \$ 0 (2)) - \$350,000.00
\$

## By way of sum, product and chain rules.

334,444(\$6)
/ 350,000 = 0
\$ \$\$786 0 0

/
334,4446 334444
/ = 350,000 = 225 + \$ 0
;74444
\$\$786 0 0

/ \$ / \$
33 33
= 225 + \$ 0 = 225 + \$ 0
;7 ;7

## \$ = 357.658 = 357.658 = 19.689

BLM Ground
8 mile
= 52.698

Distance= 24.75

19.689 miles 4.311 miles

## 32 miles - BLM Ground

Using the cost function I was then able to use this information to achieve the optimal minimum
cost for this project.

= \$12,412,050.00

## Optimal cost function graphical analysis:

(19.689 miles, \$12.4 million) minimum point

## Dear Mr. CEO,

I have completed the report for the cost analysis proposal you have asked for, and
included is all the options to be considered per your request. All math is included in the report
and can be referred to, and is clearly labeled in the steps in the previous pages of the report.
Option 1: In the first case of running the pipeline strictly on BLM ground, that is, running
directly west for 8 miles, then south for 15 miles, and finally 32 miles east to the refinery. The
cost for this pipeline route could simply be found by adding all of the miles and multiplying them
by the amount that BLM charges per mile. The overall cost for this option was \$19,250,000.00.
Option 2: The second option, running strictly on BLM land in the opposite direction, 24
miles east, and 15 miles south had some extra costs to be factored in. On top of the 39 miles
traveled on BLM land there was also a tunneling fee of \$4.5 million, and an environmental
impact study that costs \$555,000.00. The cost of the study fee, tunnel fee, and 39 miles on BLM
land, the overall cost for this option was \$18,705,000.00
Option 3: This option would be running the pipeline at its shortest distance directly from
the well to the refinery, across private land. I found this distance by use of the Pythagorean
identity because the distances south and west were know and given on the diagram. I found
this distance to be roughly 28.3 miles and I used the exact number that was 801 to get a
better approximate cost for this option. The cost of traveling on private land plus BLM pipeline
fee times the distance across private land made the cost for this option \$12,452,588.00
Option 4: This option was straight south for 15 miles across private land, and then
directly east 24 miles to the refinery on BLM land. The private land fee times 15 miles, and BLM
land fee times 24 miles made the cost for this option \$15,000,000.00
At this point I was asked by you to find the optimal point at which the lowest possible cost
could this pipeline be run thru private land to some point on BLM land. In my report I based my
calculations on algebra, trigonometry, and calculus techniques. First, I needed to find the
optimal distance that the pipeline should cross the private land and intersect with BLM property.
By dividing the BLM land in terms of X, into 2 parts, I could then create a cost function that I
used to find the lowest possible cost for this project, my cost function is as follows, and can be
seen in a graph earlier in my report.

## = \$440,000.00 225 + \$ + \$350,000.00(24 )

I then was able to use this cost function to find the minimal cost, and the optimal
intersection point on BLM land, by use of calculus techniques. The intersection point on BLM
land can be found by finding the derivative of the cost function and setting it equal to zero. The
steps of this process are outlined in my report above and I then found that the optimal
intersection point on BLM land was 19.689 miles. By knowing this intersection point I was able
to find the angle at which the pipeline should start going south-east towards BLM land. I found
that angle to be 52.698. Using all of this information the optimal distance of the pipeline across
private land was found to be 24.75 miles. So the cost of the private land fee times 24.75 miles
and the BLM land fee times 4.311 miles (the remaining distance from the intersection point)
would cost our company \$12,412,050.00 and this is the most cost effective option for our
company to build this pipeline.

Reflection:
Many of the things I have learned in Calculus class can have real-world applications,
such as the steps involved in this pipeline project. Some other examples I found to be used
quite often would be in the shipping and canning industry. These companies would want to use
the least amount of material in packaging their products to reduce the cost as much as possible,
in turn making them more money. I was not too excited about calculus before taking this class
and finding that it would apply to my field of study more so that I thought it might have. I am
planning to go into an engineering career mainly in the field of surface and ground water
technology, and many of the techniques I have learned and will continue to learn will be applied
in much of my everyday work as an engineer. One example I have thought about is the amount
of water running through a water treatment facility, and what the optimal rate of flow needs to be
at different times so that families would have the right amount of water pressure, and not too
much or too little. But since the water facility doesnt just serve one family, but entire cities at a
time, more and more calculus techniques need to be applied, and more that I need to learn to
facilitate these types of problems in everyday life.