Jacob Porter

11/16/16

Fall 2016
Pipeline Project

Now that the U.S. Interior Secretary has approved of our plan to drill near Vernal, Utah
we can now start to look at our options as to which plan for the pipeline will be the most cost
effective for our company. We have two different options, and each option has two different
variations.
1. Run the pipeline on BLM Ground only
a. One running west, south and then east to the refinery.
Or
b. One heading east through the mountain and then south to the refinery.
2. Run the pipeline through the Private Property
a. The shortest distance across the private ground to the refinery.
Or
b. Straight south across the private ground, then straight east to the refinery.
Cost for materials, labor and fees to run the pipeline across BLM ground is $300,000 per mile.
The cost of drilling through the mountain to the east would be a one-time cost of $4,200,000 on
top of the BLM ground costs ($300,000 per mile) of pipeline. BLM will have to conduct an
Environmental Impact Study if we decide to run the pipeline through the mountain. Cost for the
study is estimated at $150,000 and will delay the project by 5 months costing the company
another $75,000 per month.
For any pipeline run across private ground, our company will have to pay an additional $90,000
per mile cost for right-of-way fees.
I will discuss these options in more detail with the diagrams on the following pages.

Jacob Porter
11/16/16

15 Miles

BML GROUND

BML GROUND

Private Land

BML GOUND 32 Miles

1. This is our first option. Running the pipeline on BLM ground only.
a.) The cost to run the pipeline directly West 8 miles, South 15 miles, and East 32
miles to the refinery. (Green Route as shown in the diagram.)

Action Taken
55 miles of pipeline across
BML Ground.

Cost
$300,000 per mile

Total
$16,500,000
Total Cost: $16,500,000

b.) The cost to run the pipeline directly east through the mountain and then South 15
miles to the refinery. (Red Route as shown in the diagram.)

Action Taken
39 miles of pipeline across
BML Ground.
Laying pipeline through the
mountain.
Environmental Impact Study.
5-month delay of project for
Environmental study.

Cost

Total

$300,000 per mile

$11,700,000

$4,200,000

$4,200,000

$150,000

$150,000

$75,000 per month

$375,000
Total Cost: $16,425,000

Jacob Porter
11/16/16

15 Miles

BML GROUND

BML GROUND
108

Private Land

BML GOUND 32 Miles

1. This is our second option. Running the pipeline through the Private Property.
a. The cost to run the pipeline directly to the refinery through the private land.
(Blue Route as shown in the diagram.)
Using the Pythagorean theorem, we can figure out how far this is.
152 + 242 = 2
2 = 801
= 801 Miles
Action Taken
Miles of pipeline ran.
Miles of right of way
fees.

Cost

Total

$300,000 per mile

$8,490,583.02

$90,000 per mile

$2,547,174.91
Total Cost: $11,037,757.92

b. The cost to run the pipeline directly South through the private land and then
East to the refinery. (Black Route as shown in the diagram.)
Action Taken
39 Miles of pipeline ran.
15 Miles of right of way fees.

Cost
$300,000
$90,000

Total
$11,700,000
$1,350,000
Total Cost: $13,050,000

Jacob Porter
11/16/16

Seeing as how the options to run the pipeline through the Private Property are cheaper, I
have done an optimization of that route to give us the distance and angle at which to run the
pipeline that will cost our company the least amount of money. These calculations are as follows
with a diagram showing the route.

. 39.72 .

15 Miles

BML GROUND

BML GROUND
Private Land

= 50.28
C=

6569
23

23.48

22500
=
18.06
69

22500
69

24

5.94 Miles

BML GOUND 32 Miles

These are the calculations I used to get the distances and angle that optimizes this route.
(Green Route) I made a function of the costs and then found the values that cost the
least. Once I had found those values I plugged them in to get said distances and angle.
Steps
Using Pythagorean Theorem to get and
equation for the length of pipe through the
private land.
Apply that to the cost function. Length of the
Pipe through private land times that price plus
the length through BML land times that price.
Simplify and take the Derivative.

Set to zero and then divide by 10000 to make

the function easier to work with. Then solve.
This allows us to find the critical point which (if
done right) will give the minimum cost.

Calculations
= (15)2 + 2
() = 225 + 2 (390000) + (24 )(300000)

() =

0=

390000
225 + 2
39

225 + 2

300000

30

Jacob Porter
11/16/16

solve for x.

225 + 2 =

Solve for x.

Solve for x.

39
30

225 =

69 2

100

2 =

22500
69

Solve for x.
The negative value is extraneous because we
cannot have a negative distance.

22500
22500
=

69
69

Plugging the usable positive number into the

Pythagorean theorem used above will give the
length of pipe used to cross the private land.

22500
6569
= 225 + (
) =
60
23

10
50.28
13

Use Trigonometry rules to solve for the upper

most angle of the of the triangle.

= sin1

Use this angle to get the angle Southeast that

optimizes the cost.

90 50.28 = 39.72

Now that we have found the length of x that gives us the minimum cost, we can plug that value
into the cost function to give the total cost of this route. (Green Route as shown above)
2

22500
22500
22500
(
) = 225 + (
) (390000) 300000 (
) + 7200000
69
69
69

22500
) = 9155344.127 5417363.389 + 7200000
69

22500
) = 10937980.74
69

Total Cost: $10,937,980.74

Jacob Porter
11/16/16

Pipeline Cost Function Graph

() = 225 + 2 (390000) + (24 )(300000)

So as you can see the optimized route costs the company a considerable amount less than
most of the other options, and as shown in the graph is the lowest cost out of all other options.