Nicci Davis

Hillary Craig
Oliver Schuster
Jennifer Giles
Spring 2018 pipeline project

Mr. Secretary Zinke,

Our firm has proposed the following routes for the Vernal, UT pipeline. In this document
you will find diagrams and the cost calculations of these proposed routes.

Project Overview
Find the most cost effective route for the proposed Vernal, UT pipeline.

Proposed Routes
Route 1)​ Runs the proposed pipeline through BLM property only. There are two options for a BLM
land only pipeline.
1A) Starting West from well to the refinery for a total of 183 Miles.
1B) Starting East from the well, bore through mountain and then south to the refinery for a
total of 170 miles.

Route 2)​ Runs the pipeline directly through privately owned land. Approximately 121 miles.

Route 3) ​Runs the pipeline directly south from the well then east to the refinery. Approximately
172 miles.

Route 4) ​Runs the pipeline south from the well at an angle through private property then east on
BLM land approximately 116 miles.

Cost Outline
Pipeline hard cost $98,000 per mile*
Right of way fees for private property $32,000 per mile*
Mountain bore cost $4,054,000* (one time fee)
Environmental impact study $88,000.00*(one time fee)
Project Delays $11,000* per month delayed
(*these costs do not reflect changes that may come with supply and labor demands)

Diagram of proposed property

 Route 1A
Running pipeline on BLM owned property without boring through the mountain.

Total Pipeline cost $24,696,000

Total Pipeline mileage 183 miles

In the diagram below the thick blue line is the proposed route, the green arrows show where the
pipeline is proposed to start, and shows the directions the pipeline will run.

Calculations (C=Cost)
C = (west · B LM cost) + (south · B LM cost/mile) + (east · B LM cost/mile)
C = (41mi ×$98, 000) + (76mi ×$98, 000) + (135mi ×$98, 000)

Notes
This route shows the pipeline route through BLM land. This is the path of least resistance. The
problematic issues are that is that this is one of the longest routes of pipeline which has greater
environmental impact. The benefit of this plan is that the pipeline will be ran through BLM land,
and it would be much quicker to get the pipeline under construction and completed.
 Route 1B
Bore through the mountain and pipeline remains on BLM land

Total pipeline cost $20,857,000

Total pipeline mileage 170

In the diagram below the thick blue line is the proposed route, the green arrows show where the
pipeline is proposed to start, and shows the directions the pipeline will run.

Overhead costs related to this path.

Environmental study $88,000
Mountain Bore cost $4.054,000
Time delay of 5 months ($11,000 per month) $55,000

Calculations (C = Cost)
C = mountain + study + delay + (east x BLM ) + (south x BLM )

C = $4, 054, 000 + $88, 000 + $55, 000 + (94mi x $98, 000) + (76mi x $98, 000)

C = $20, 857, 000

Notes
This route is more direct and the pipeline will fully reside on BLM land. There are additional
overhead costs that this route will incur during construction. There will be the environmental
study, the mountain bore, and the estimated delay for the study to be conducted and completed.
This route does cost around $3,839,000 less then route 1A.
 Route 2
Shortest distance which is a Direct path from well to refinery through private property

Total cost $15,714,413.77

Total Pipeline mileage 121

In the diagram below the blue line is the proposed route, the green arrows show where the pipeline
is proposed to start, and shows the directions the pipeline will run.

Additional Costs
Right of Way $32,000 per mile in addition to $98,000 base fee

Calculations (see diagram above, C=cost)

let a = 76 mi, b = 94 mi

Where c is the total distance across the private ground:

Calculate in the form: c2 = a2 + b2

c2 = 762 + 942 →C 2 = 14612→c = √14612 = 120.8801059 miles

Cost C:

C = (private + B LM ) × distance

C = ($32, 000 + $98, 000) × 120.88miles

C = $15, 714, 413.77

Notes ​This is the most direct path from well to refinery. The cost is significantly less than using only
BLM land.
 Route 3
Pipeline straight south through private land then east to the refinery.

Total Cost $19,092,000

Total pipeline mileage 172
In the diagram below the thick blue line is the proposed route, the green arrows show where the
pipeline is proposed to start, and shows the directions the pipeline will run.

Calculations (use diagram for reference C=Cost)

cost per mile : private ($32, 000) + B LM ($98, 000) = $130, 000/mile

C = (south ×$130, 000) + (east ×$98, 000)

C = (76 mi×$130, 000) + (94 mi ×$98, 000)

C = $19, 092, 000

Notes

This pipeline covers 76 miles of private land and 94 miles of public land. This is a route that costs
less than the BLM only route, but is not the most cost effective route.
 Route 4
Cost of the pipeline running through the property at an angle.

Total Cost $15,703,663.57

Total pipeline mileage 115.67

In the diagram below the blue line is the proposed route, the green lines are part of the calculation
for the pipeline direction.

Calculations | Use diagram for reference (C=Cost)

Set the main formulas (angle and distance):

opp
(1) tanθ = adj → 76x

(2) y 2 = x2 + 762 →y = √x2 + 5776

Finding the cost function:

C (x) = 98, 000x + 130, 000y

C (x) = 98, 00(94 − x) + 130, 000(√x2 + 5776)

C (x) = 9, 212, 000 − 98, 000x + 130, 000√x2 + 5776

Derivative of C(x) cost:

130,000x
C ′(x) = − 98, 000 + 1
(x2 +5776) 2
1
C ′(x) = − 98, 000(x2 + 5776) 2 + 130, 000x
Find minimum Value:
130,000x
− 98, 000 + 1 =0
(x2 +5776) 2
1
130, 000x = 98, 000(x2 + 5776) 2

130, 0002 x2 = 980002 x2 + 5776 * 980002

5776*980002
x2 = 7296000000

√x2 = √ 45619
6
49√114
→x = 6 = 87.19614 miles

Find angle:
49√114
(1) tanθ = 6
76 →tanθ = 1.1473

θ = tan−1 (1.75)≈48.924°

Find Distance:

(2) y = √( 49√114 2
6 ) + 5776

y ≈115.67miles
49√114
d = 94 − 6 ≈6.80 miles

Find minimum cost:

C = $130, 000(115.6683 miles) + $98, 000(6.8038609 miles)

M inimum Cost = $15, 703, 663.57

Notes

This is the shortest distance, therefore more cost effective. The only foreseeable issue is obtaining
the private property easement.
Cost Function graph C (x) = 9, 212, 000 − 98, 000x + 130, 000√x2 + 5776

Recommendation

Given the above information our recommendation is R ​ oute 4​ ​would be the most cost effective route
for this pipeline. There is minimal BLM land impact, there would be no requirement of an
environmental impact study, and there is no foreseeable construction delays, and construction
could start quickly on the BLM land while we work out easements through the private property.

Reflection

I keep hearing that, “Calculus Is Not For Everyone” and I use subscribe to this idea, due to the level
of difficulty and the complexity of calculus. After completing the homework and this project I
would comfortably argue against this statement, as I discovered that calculus and the concepts
related are a faster and more effecticiant way to obtain a solutions within real life situations.
There are many situations where this is true, for example individuals who work in the field of
chemistry and physics. Chemist use calculus to predict functions such as reaction rates and
radioactive decay, while physicist apply calculus to motion, electricity, heat, acoustics as well as in
astronomy.
I found myself thinking about things inversely while connecting with the concepts and theorems
presented in calculus, such as “cost function” and “optimization calculations”. I see a strong
relevance economically and from a business standpoint that calculs helps with. Being a business
owner, I found that applying functions like “cost function” and using “optimization calculations”
help me to effectively find my products price point and ensured that I was able to find the marginal
cost, allowing me to maximize my profit.
In summary, calculus is a difficult and complex subject, but at the heart of it, calculus helps to make
life easier. Helping to figure out real world problems and evaluate the fastest and most appropriate
solution.