Peter Reed

Math 1210
Pipeline Project
Fall 2014

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.
a. Cost for materials, labor, and fees for pipeline = $300,000.00/mile
b. Total Mileage = 27 miles
c. () = 300,000
d. (27) = 300,000(27)
e. (27) = 8,100,000
f. Total Cost for this scenario is $8,100,000.00
ii)
One heading east through the mountain and then south to the refinery.
a. Cost for drilling through mountain = $500,000.00
b. Environmental Impact Study = $100,000.00
c. Project Delay = $50,000.00 per months for 3 months = $150,000.00
d. Total Fixed Cost = $750,000.00
e. Cost for materials, labor, and fees for pipeline = $300,000.00 per mile
f. Total Mileage = 25 miles
g. () = 300,000 + 750,000
h. (25) = 300,000(25) + 750,000
i. (25) = 8,250,000
j. Total Cost for this scenario is $8,250,000.00
b) Determine the cost of running the pipeline:
i)
The shortest distance from well to refinery across the private ground
ii)
The shortest path to the refinery from the well site can be calculated as
a. 2 = 2 + 2
iii)
Where :
a. C is a direct path crossing private ground from the well site to the refinery
b. A is the distance from the well site east to a position directly north of the
refinery, which is 20 miles.
c. B is the distance south of the well site to the refinery, which is 5 miles.

iv)

So we find that,
a. 2 = 202 + 52
b. = 20.62

v)

The shortest path across the private ground (directly south), then straight to
the refinery (directly east).
The mileage for this scenario can be calculated as
a. = +
Where:
a. is the total mileage
b. A is the mileage south, which is 5 miles
c. B is the mileage east, which is 20 miles

vi)
vii)

viii)

So, we find that,

a. = 5+20
b. = 25

c) Determine the optimal place to run the pipeline to minimize cost. 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.
a. To find the cheapest route to run the pipe, we have several options
i. BLM Land Only
ii. Private Land only
iii. Combination of BLM land and Private land
iv. BLM and Mountain Drilling
v. Combination of BLM Land, Mountain Drilling, and Private land
b. BLM Land Only
i. If we were to choose a route that only used BLM land, we would take a
route that left the well site headed West 1 miles, South 5 miles, and then 21
miles East to reach the refinery as in the figure below

c
ii. The total miles of pipe would be 27 miles, total cost can be calculated as
1. Cost for materials, labor, and fees for pipeline = $300,000.00/mile
2. Total Mileage = 27 miles
3. () = 300,000
4. (27) = 300,000(27)
5. (27) = 8,100,000
6. Total Cost for this scenario is $8,100,000.00
c. Private Land Only
d. If we were to choose a route that used private land exclusively, we would take a
direct route from the well site to the refinery at a distance of 20.62 miles as
illustrated below

e. The shortest path to the refinery from the well site can be calculated as
i. 2 = 2 + 2
f. Where :
i. C is a direct path crossing private ground from the well site to the refinery
ii. A is the distance from the well site east to a position directly north of the
refinery, which is 20 miles.
iii. B is the distance south of the well site to the refinery, which is 5 miles.
g. So we find that,
i. 2 = 202 + 52
ii. = 20.62
h. Total cost for this scenario would be would be calculated as;
i. Cost for materials, labor, and fees for pipeline = $300,000.00 per mile
ii. Additional cost for right-of-way fees = $200,000.00 per mile
iii. Total cost per mile = $500,000.00
iv. Total Cost for shortest path crossing private land only can be calculated as;
1. C(x) = 500,000x, where x is the number of miles
2. C(20.62) = 500,000(20.62)
3. C(20.62) = 10,310,000
i.

Total Cost for this scenario would be $10,310,000.00

d) Combination of BLM Land and Private Land

a. If we were to choose a route that utilized both BLM and Private Land, avoiding
drilling through the mountain, we would take a route that left the well site going
south across the private land for 5 miles and then turning east to travel 21 miles
across BLM Land to reach the refinery as in the figure below.

b. The total pipeline length would be 26 miles

c. Total cost for this scenario can be calculated as;
i. Cost for pipeline on Private Land from previous calculations is $500,000.00
per mile
ii. Cost for pipeline across BLM land from previous calculations is
$300,000.00 per mile
iii. 500,000A + 300,000B
iv. Where A is mileage across private land and B is mileage across BLM land
v. = 500,000(5) + 300,000(21)
vi. = 8,800,000
d. Total Cost for this scenario is $8,800,000.00

e) BLM Land and Mountain Drilling

a. If we were to choose a path that only used BLM Land and required Mountain
Drilling, we would take a route that left the well site going East through the
mountain for 20 miles and would then turn south and travel for an additional 5
miles to reach the refinery as illustrated below.

b. Total pipeline length would be 25 miles

c. Total cost can be calculated as;
i. Cost for drilling through mountain = $500,000.00
ii. Environmental Impact Study = $100,000.00
iii. Project Delay = $50,000.00 per months for 3 months = $150,000.00
iv. Total Fixed Cost = $750,000.00
v. Cost for materials, labor, and fees for pipeline = $300,000.00 per mile
vi. Total Mileage = 25 miles
vii. () = 300,000 + 750,000
viii. (25) = 300,000(25) + 750,000
ix. (25) = 8,250,000
d. Total Cost for this scenario is $8,250,000.00

f) Combination of BLM Land, Mountain Drilling, and Private Land

a. If we were to choose a least cost route that utilized all three types of land, we
would choose a route where we would head East from the well site for 20-X miles
across BLM Land and through the mountain and then head on a direct line path to
the refinery across private land as indicated below

b. To find the distance we would travel headed east from the well site before we
crossed private land we start with the following formula;
i. = (300,000(20 ) + 750,000) + 500,000( 2 + 25)
ii. Where
1. 300,000(20-X) is the cost of installing pipeline across BLM Land
2. 750,000 is the total cost of drilling through the mountain as
calculated previously
3. 500,000 2 + 25 is the cost of installing pipeline across private land
as calculated earlier
iii. To find the least cost path using this scenario, we calculate as follows;
1. = (300,000(20 ) + 750,000) + 500,000( 2 + 25)
2. = 6000000 300000 + 750000 + 500000 2 + 25
3. = 6750000 300000 + 500000 2 + 25
4. We now take the derivative
5.
6.

6750000 300000 = 300000

500000 2 + 25

a. = 500000 2 + 25

b. = 500000 ( 2 + 25)2
1

c. = 500000 [2 ( 2 + 25) 2 ] 2
d. = 500000 (

1
1

( 2 +25)2

850000

7.

e. = 2

+255

6750000 300000 + 500000 2 + 25

500000

8. = 300000 + 2

+25

9. Now we set this equal to zero to find the value of X that will give us
the least cost path for the pipeline
500000

a. 0 = 300000 + 2
500000

+25

b. 300000 = 2

+25
500000

c. 2 + 25 = 300000
d. 2 + 25 = 1.7
e. 2 + 25 = 2.89
f. X=4.702
10. This gives us the value of X that will provide the least cost path for
the pipeline. We now know that our least cost path will be to travel
15.3 miles east of the well site through the mountain and then to
proceed directly across private land a total distance of 6.86 miles.
11. To determine the cost of this solution, we substitute our value of X
back into the original equation;
a. = (300,000(20 ) + 750,000) + 500,000( 2 + 25)
b. = (300000(20 4.702) + 750000) + 500000(4.702 + 25)
c. C=8771192.68
12. The Total Cost for this scenario is $8,771,192.68
g) Include a sketch of the cost function, C(x), for this pipeline for any configuration

involving crossing some private ground as well as some BLM ground. Make sure
to scale your axes appropriately and to label the minimum point.
h) The function for the cost (in millions of dollars) is () = .75 .3 + .5 2 + 25
i) The graph below shows the cost in millions of dollars on the Y-Axis and the X-axis as the
values of x in miles
j) Domain
a. The domain for this graph is limited to X0
k) Intercepts
a. There is no x intercept for this graph within this domain
b. The y-intercept is 3.25 (in millions of dollars) and can be calculated as follows
i. (0) = .75 .3(0) + .502 + 25
ii. (0) = .75 + 2.5
iii. C(0) = 3.25

l) Asymptotes
a. There are no vertical asymptotes as limx C(x) limx C(x)
b. There are no horizontal Asymptotes as limxa C(x) limxa C(x)
m) Intervals
1. We can take the derivative of our original equation,
= (300,000(20 ) + 750,000) + 500,000( 2 + 25) as follows,

2. = (300,000(20 ) + 750,000) + 500,000( 2 + 25)

3. = 6000000 300000 + 750000 + 500000 2 + 25
4. = 6750000 300000 + 500000 2 + 25
5. We now take the derivative
6.
7.

6750000 300000 = 300000

500000 2 + 25

a. = 500000 2 + 25

b. = 500000 ( 2 + 25)2
1

c. = 500000 [2 ( 2 + 25) 2 ] 2
d. = 500000 (

1
1

( 2 +25)2

850000

8.

e. = 2

+255

6750000 300000 + 500000 2 + 25

500000

9. = 300000 + 2

+25

ii. Now we set this equal to zero to find the intervals

500000

a. 0 = 300000 + 2
500000

+25

b. 300000 = 2

+25
500000

c. 2 + 25 = 300000
d. 2 + 25 = 1.7
e. 2 + 25 = 2.89
f. X=4.702
iii. The function () is negative on the interval (0,4.702) and positive on the
interval (4.702, )
b. Concavity
i. To determine concavity we take the second derivative as follows
500000

1. = 300000 + 2
1

2. = 500000( 2

3. = 500000 (
4. =

500000
3

( 2 +25)2

ii. Now we set = 0

1. 0 =

500000
3

( 2 +25)2

2. = 3.75

+25

+25

2 +55
2
2 +25

iii. Over the interval (0, 3.75) and (3.75,0) C(x) is concave up

Write up a report of your finding to submit to your companys CEO. This report should
include all steps for any math used to make determinations asked for above as well as
statements as to the costs to be incurred by each scenario. Include any appropriate
figures to make each scenario clear. Label the scenarios as they are labeled above.

Vernal, UT Natural Gas Pipeline Project

Pipeline Routing Options
Purpose: This report will explore the natural gas pipeline routing options for the Vernal, UT well site.
Consideration for possible routing options will be given to cost factors such as overall length of pipeline, cost for
right-of-way on private land, and all costs associated with mountain drilling operations.
Findings: It has been found that the least cost choice for pipeline routing is to leave the well site going East
through the Mountains for 15.298 miles and then proceeding on a direct route across private land for 6.86 miles
to the refinery. Cost for this routing solution is approximately $8,771,192.68.00
Known Costs: Known costs for this project are as follows;
a. Total Cost for BLM Land routing
a. Cost for materials, labor, and fees for pipeline = $300,000.00/mile
b. Total Cost for mountain routing
a. Cost for drilling through mountain = $500,000.00
b. Environmental Impact Study = $100,000.00
c. Project Delay = $50,000.00 per months for 3 months = $150,000.00
d. Total Fixed Cost = $750,000.00 in addition to
e. Cost for materials, labor, and fees for pipeline = $300,000.00/mile
f. Total Cost for mountain routing is $750,000.00+$300,000.00/Mile
c. Total Cost for private land routing
a. Cost for materials, labor, and fees for pipeline = $300,000.00/mile
b. Additional cost for right-of-way fees = $200,000.00 per mile
c. Total cost per mile = $500,000.00
Viable Pipeline Routes and Cost: The following have been determined to be viable routes;
1. BLM Land Only
2. Private Land Only
3. Combination of BLM and Private Land
4. BLM Land with Mountain Drilling
5. Combination of BLM Land, Mountain Drilling, and Private Land

BLM Land Only

If we were to choose a route that only used BLM land, we would take a route that left the well site
headed West 1 miles, South 5 miles, and then 21 miles East to reach the refinery as in the figure below

The total miles of pipe would be 27 miles, total cost can be calculated as
Cost for materials, labor, and fees for pipeline = $300,000.00/mile
Total Mileage = 27 miles
() = 300,000
(27) = 300,000(60)
(27) = 8,100,000
Total Cost for this scenario is $8,100,000.00

Private Land Only

If we were to choose a route that used private land exclusively, we would take a direct route from the
well site to the refinery at a distance of 20.62 miles as illustrated below

The shortest path to the refinery from the well site can be calculated as

2 = 2 + 2
Where :
C is a direct path crossing private ground from the well site to the refinery
A is the distance from the well site east to a position directly north of the refinery, which is 20 miles.
B is the distance south of the well site to the refinery, which is 5 miles.
So we find that,

2 = 202 + 52
= 20.62

Total cost for this scenario would be would be calculated as;

Cost for materials, labor, and fees for pipeline = $300,000.00 per mile
Additional cost for right-of-way fees = $200,000.00 per mile
Total cost per mile = $500,000.00
Total Cost for shortest path crossing private land only can be calculated as;
C(x) = 500,000x, where x is the number of miles

C(20.62) = 500,000(20.62)
C(20.62) = 10,310,000
Total Cost for this scenario would be $10,310,000.00

Combination of BLM Land and Private Land

If we were to choose a route that utilized both BLM and Private Land, avoiding drilling through the
mountain, we would take a route that left the well site going south across the private land for 5 miles
and then turning east to travel 21 miles across BLM Land to reach the refinery as in the figure below.

The total pipeline length would be 26 miles

Total cost for this scenario can be calculated as;
Cost for pipeline on Private Land from previous calculations is $500,000.00 per mile
Cost for pipeline across BLM land from previous calculations is $300,000.00 per mile
500,000A + 300,000B
Where A is mileage across private land and B is mileage across BLM land

= 500,000(5) + 300,000(21)
= 8,800,000
Total Cost for this scenario is $8,800,000.00

BLM Land and Mountain Drilling

If we were to choose a path that only used BLM Land and required Mountain Drilling, we would take
a route that left the well site going East through the mountain for 20 miles and would then turn south
and travel for an additional 5 miles to reach the refinery as illustrated below.

Total pipeline length would be 25 miles

Total cost can be calculated as;
Cost for drilling through mountain = $500,000.00
Environmental Impact Study = $100,000.00
Project Delay = $50,000.00 per months for 3 months = $150,000.00
Total Fixed Cost = $750,000.00
Cost for materials, labor, and fees for pipeline = $300,000.00 per mile
Total Mileage = 25 miles

() = 300,000 + 750,000
(25) = 300,000(25) + 750,000
(25) = 8,250,000
Total Cost for this scenario is $8,250,000.00

Combination of BLM Land, Mountain Drilling, and Private Land

If we were to choose a least cost route that utilized all three types of land, we would choose a route
where we would head East from the well site for 20-X miles across BLM Land and through the
mountain and then head on a direct line path to the refinery across private land as indicated below

To find the distance we would travel headed east from the well site before we crossed private land
we start with the following formula;

= (300,000(20 ) + 750,000) + 500,000( 2 + 25)

Where
300,000(20-X) is the cost of installing pipeline across BLM Land
750,000 is the total cost of drilling through the mountain as calculated previously
500,000X 2 + 25 is the cost of installing pipeline across private land as calculated earlier
To find the least cost path using this scenario, we calculate as follows;

= (300,000(20 ) + 750,000) + 500,000( 2 + 25)

= 6000000 300000 + 750000 + 500000 2 + 25
= 6750000 300000 + 500000 2 + 25
We now take the derivative

6750000 300000 = 300000

500000 2 + 25

= 500000
= 500000

2 + 25

1
2
( + 25)2

1
1
= 500000 [ ( 2 + 25) 2 ] 2
2

1
= 500000 (
1)
2
( + 25)2
=

850000
2 + 255

6750000 300000 + 500000 2 + 25

= 300000 +

500000
2 + 25

Now we set this equal to zero to find the value of X that will give us the least cost path for the pipeline

0 = 300000 +
300000 =

500000
2 + 25

500000
2 + 25

2 + 25 =

500000
300000

2 + 25 = 1.7
2 + 25 = 2.89
X=4.702
This gives us the value of X that will provide the least cost path for the pipeline. We now know that
our least cost path will be to travel 15.3 miles east of the well site through the mountain and then to
proceed directly across private land a total distance of 6.86 miles.
To determine the cost of this solution, we substitute our value of X back into the original equation;

= (300,000(20 ) + 750,000) + 500,000( 2 + 25)

= (300000(20 4.702) + 750000) + 500000(4.702 + 25)

C=8771192.68
The Total Cost for this scenario is $8,771,192.68

Comparison

Route
BLM Land Only
Private Land Only
Combination of BLM and Private Land
BLM Land with Mountain Drilling
Combination of BLM Land, Mountain Drilling, and Private Land

Miles of
Pipe
27
20.62
26
25
20

Cost
$8,100,000
$10,310,000
$8,800,000
$8,250,000
$8,771,192.68

Summary: The least cost route for this pipeline is to leave the well site headed West 1 miles, South
5 miles, and then 21 miles East to reach the refinery. Cost for this routing solution is approximately
$8,100,000.00

Reflect on the things you have learned in your calculus class and how they may apply to
the real world. Do you see calculus as a useful tool? What kinds of things have you
learned that can be useful in your areas of interest? Please be specific and give some
examples to back up your statements. Your reflection needs to be typed (not handwritten) and included with the report.
Without the use of calculus, finding the least cost route for this pipeline would have taken much
longer and would have been less precise. Without being able to formulate a function to
represent the cost of the pipeline per mile and taking the derivative in the optimization process
to estimate the least cost, the only way to determine the route would have been to simply guess
at values and compare.