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Pipeline Project
To the CEO, here are the bids for the proposed pipeline scenarios, please read
them carefully.
a) The cost of running the pipeline strictly on BLM ground with two different
cases.
i) Running west, south and then east to the refinery. 8 miles west, 15 miles south, and
32 miles east. for a total of 55 miles. Labor and fees per mile are $300,000, with the
55 miles that comes to $16,500,000
Cost
C = (8 x 300,000)+(15 x 300,000)+(32 x 300,000)=$16,500,000
ii)Running east through the mountain will cost $4,100,000 plus the normal $300,000
per mile. Plus the cost of a environmental impact study of $200,000, and the project
will be delayed by 5 months, costing the company 80,000 per month, coming to
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$400,000 for the five months. So going 24 miles east from the gas well and then
heading south for 15 miles to the refinery will add up to a total of 39 miles leading to a
cost of $11,700,000 for 39 miles of pipeline. Plus the 5 months and the mountain
drilling and the impact study, the grand total will be $16,400,000.
Cost
C =(4,100,000)+(400,000)+(200,000)+(24 x 300,000)+(15 x 300,000)=$16,400,000
b) The cost of running the pipeline across private ground with two different cases.
i) Going the shortest distance from the gas well to the refinery across private lands at
an angle. After turning the whole area into a right triangle side a being 15 miles side
b being 24 miles and side c being the unknown distance, using the pythagorean
theorem side c has a length of 3 x 89^(1/2) or 28.302 miles. Going 28.302 miles the
total cost going through private property will be $10,896,248.21
Cost
C=(3 x 89^(1/2)) x (300,000 + 85,000)=$10,896,248.21
ii) Going strait south across private ground for 15 miles will add $85,000 per mile to the
already $300,000 per mile will be $5,775,000 for the 15 miles across private property
and then going 24 miles east on BLM ground to the refinery will add up to a total cost
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of $12,975,000. That’s including the $7,200,000 for going 24 miles east on BLM ground
to the refinery.
Cost
C=(15 x (300,000 + 85,000)) + (24 x 300,000)=$12,975,000
c) This case uses a function to determine the best angle to use to go across private
ground and then directly east to the refinery to minimize costs most effectively. We do
this by setting up a new equation.
θ
Y
X 24-X
(2)(
1 − 12
) (2x) − 300000
2
c′(x) = 385000 x + 225
385000x
c′(x) = − 300000
x + 225
2
385000x
300000 =
x + 225
2
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385000x
x 2 + 225 =
300000
simplify
77x
x 2 + 225 =
60
square both sides
5929x
x 2 + 225 =
3600
3600x 2 + 810000 = 5929x 2
2329x 2 = 810000
810000
x2 =
2329
810000
x2 =
2329
810000
x=
2329
simplify
900
x=
2329
or
x = 18.65909517
Now to find the angle the pipe needs to be at, going across private land.
900
θ" = tan−1
2329
15
simplify
( 2329 )
60
θ" = tan−1
or
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51.1893 degrees for convenience.Therefore this pipe should be placed at this angle
from the well until it hits BLM ground.
51.19
This second part gets the length of the stretch of pipe that heads directly east until it
900
reaches the refinery. It was labeled as 24-x so we plug it in, 24
" − which equals
2329
5.35 miles, for convenience. Y was the length of the pipeline leaving the refinery at an
2
( 2329 )
900
angle, to find it’s true length we use this equation y
" = + 225
simplified y = 23.933 miles for convenience. But all exact values will be used to evaluate
the total cost.
This last equation gets the price of the angled pipe going across private ground plus the
pipeline going east, with all costs included.
2
( 2329 ) ( 2329 )
900 900
" + 225 + (300000 + 85000) + 24 − ⋅ (300000)
d) This is the minimum cost of the function C(x), in the y coordinate it shows the lowest
it can possibly get. It won’t get any cheaper than $10,819,478.55.
Graph of C(x)
Conclusion
After researching all five cases/scenarios, it is apparent that case c is the pipeline
configuration that our company should do. It will save us the most money and the most
time. I hope this evaluation has been helpful, please contact me if you have any
questions or comments.
Sincerely
Kyle w Bashford
Kyle Bashford