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Pipeline Project - Allen Doong

The document presents a pipeline project scenario where a company needs to build a pipeline from a natural gas well to their refinery. There are four potential route options that involve either going through BLM land, private land, or drilling through a mountain. The student is asked to calculate the costs for each route option and determine the optimal placement of the pipeline to minimize costs using calculus. They are also asked to write a report of their findings and reflect on how calculus applies to real world problems and scenarios.

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62 views

Pipeline Project - Allen Doong

The document presents a pipeline project scenario where a company needs to build a pipeline from a natural gas well to their refinery. There are four potential route options that involve either going through BLM land, private land, or drilling through a mountain. The student is asked to calculate the costs for each route option and determine the optimal placement of the pipeline to minimize costs using calculus. They are also asked to write a report of their findings and reflect on how calculus applies to real world problems and scenarios.

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api-291904784
Copyright
© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
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Allen Doong

Pipeline Problem

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-ofway 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 1 mile directly west and then 5 miles south and finally 21 miles
east to the refinery (see figure below). Cost for materials, labor and fees to run the
pipeline across BLM ground is $300,000 per mile. For any pipeline run across private
ground, your company incurs an additional $200,000 per mile cost for right-of-way fees.
Cost of drilling through the existing mountain would be $500,000 on top of the normal
costs of the material, labor and fees for 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 $100,000 and will delay the project by 3 months costing the
company another $50,000 per month. Your company has asked you to do the following:
a) Determine the cost of running the pipeline strictly on BLM ground with two different
scenarios:
1. heading east through the mountain and then south to the refinery = Blue
20miles east + 5 miles south = 25 miles total
25miles @ $300,000 + $500,000 drilling costs + $100,000 study costs + 3
months delay @ $50,000 per month = $8,250,000
2. running west, south and then east to the refinery = Red
1 mile west + 5 miles south + 21 miles east = 27 miles total
27 miles @ $300,000 = $8,100,000

b) Determine the cost of running the pipeline the shortest distance (straight line joining
well to refinery across the private ground) = Purple

Allen Doong
Pipeline Problem

z^2 = x^2 + y^2 , y = 5, x = 20


z^2 = 20^2 + 5^2 = 400+25 = 425
z = (425)^(1/2) = 5(17)^(1/2)
$500,000z = $500,000(5(17)^(1/2)) = $10,307,764.06

c) Determine the cost function for this 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 determine the
optimal place to run the pipeline to minimize cost. Clearly show all work including
sketching the placement of the optimal pipeline. Make it very clear how you use your
knowledge of calculus to determine the optimal placement of the pipeline. Draw a graph
of this cost function and label the point of minimum cost.
x^2 + y^2 = z ^2 , y = 5, z = (x^2 + y^2 )^(1/2) , 0 x 20
Distance from well through the private land cost is C1 = 500,000(z)
Distance from end of private land to refinery is C2 = 300,000(20-x)
Ct = C1 + C2 => $500,000 (x^2 +25 )^(1/2) + $300,000(20-x)
Ct = 500000x/(x^2+25)^(1/2) 300000 = 0, x = 15/4 = 3.75 miles

Allen Doong
Pipeline Problem

Cost to Pipeline start area

Allen Doong
Pipeline Problem

Write up a report of your findings to submit to your companys CEO. This report should
include solutions to parts a-c showing all math steps and clearly labeled. Summarize the
costs to be incurred by each scenario. Include any appropriate figures to make each
scenario clear.
Write a paragraph reflecting 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.

Allen Doong
Pipeline Problem

Cost Analysis of Building a Pipeline From the Well to the Refinery


Scenario One:
If we were to go through the mountain it would cost the company:
1. 25 miles @ $300,000 per mile
2. $500,000 additional labor, material, and other fees
3. $100,000 for an environmental study on the impact of drilling through the
mountain
4. The study will take about 3 months and will cost us about $50,000 per month

25(300000) + 500000 + 100000 + 3(50000) = $8,250,000


In total the cost for the company to build through the mountain on BLM land only
is $8,250,000.
Scenario Two:
If we were to go around the private land from the west it would cost the company:
1. 27 miles total @ $300,000 per mile

27(300000) = $8,100,000
In total the cost for the company to build the around the private land on BLM land
only is $8,100,000

Allen Doong
Pipeline Problem

Scenario Three:
If we build directly through the private land it would cost the company:
1. a^2 + b^2 = c^2; a = 5, b = 20, c = 5(sqrt(17)) miles @ $500,000 per mile

5(sqrt(17))(500000) = $10,307,764.06
The total cost for the company to go through the shortest route through the
private ground will be $10,307,764.06
Scenario Four:
In this scenario we will build some through the private ground and then the rest
through the BLM lands, this will cost the company:
1. x^2 + y^2 = z ^2 , y = 5, z = (x^2 + y^2 )^(1/2) , 0 x 20
2. Distance from well through the private land cost is C1 = 500,000(z)
3. Distance from end of private land to refinery is C2 = 300,000(20-x)
4. Ct = C1 + C2 => $500,000 (x^2 +25 )^(1/2) + $300,000(20-x)
5. Ct = 500000x/(x^2+25)^(1/2) 300000 = 0, x = 15/4 = 3.75 miles

Ct = 500000(3.75^2+25)^(1/2) + 300000(20-3.75) = $8,000,000


The total cost for the company to use the private lands and BLM lands would be
$8,000,000
In conclusion, after analyzing all the scenarios, it would benefit the company to
proceed with scenario four which would only cost the company $8,000,000.

Allen Doong
Pipeline Problem

With this calculus class, I have learned that there are many things in real life
scenarios that we can use calculus to solve. I have learned that we can calculate
the distance away from the stage to safely listen to a concert or even find the
perfect viewing spot in a movie theater to view a movie. I have also learned that
we can use calculus to maximize or minimize building areas when trying to plan
for an activity, building, or even laying down pipes.

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