AHMAD DRILLING COMPANY

Excellence in providing sustainable Quality,

Efficient, and Competitive drilling services.

4600 S. Redwood Road

Taylorsville, Utah 84119
Phone: (801) 957-7522 Fax: (801) 555-5555
E-Mail: ahmaddrills@adslc.com Web: www.ahmaddrilling.com

Vernal Pipeline Proposal

The U.S. Interior Secretary recently approved drilling of natural gas

wells near Vernal, Utah. Our company, Ahmad Drilling Co. has
established a high producing well on BML land. The company is now
researching different avenues to establish a pipeline from the well to the
refinery that is the most economical in cost and has the least
environmental impact. Our team of highly skilled engineers has devised
four alternative routes that would allow us to attain this goal of building
a pipeline. The research of their findings are presented below.
Cost

$300,000 per mile cost for materials, labor and fees to run pipeline
across BLM ground

$200,000 per mile cost to run pipeline across private ground for
right of way fees

$500,000 additional cost for material, labor and fees to drill through
the mountain
o $100,000 cost for environmental impact study
o $50,000 per month cost for project delay (3 month delay)

Routes
The vernal well sits directly northwest of the refinery. The land directly
across from the refinery to the well is privately owned. There also rests
a mountain east of the well. There are four possible routes to the
refinery:
Route 1) Heading east through the mountain and then south to the refinery
Route 2) Running west, south, and then east to the refinery
Route 3) Running the pipeline the shortest distance (straight line across
private land joining well to refinery)
Route 4) Running the pipeline south across private land and then east to
the refinery at an angle

Vernal Pipeline Proposal

5 miles BLM Land

1 mile

BLM Land

Well

Private
Ground

21 miles - BLM Land

Route 1) Heading east through the mountain and then south to the
refinery
Establishing a pipeline through this route requires drilling through
the mountains that lay east of the Vernal well. The cost of drilling is
calculated to be $500,000, in addition to the other acquired costs of the
project. Our company will also conduct an environmental impact study to
determine the negative impacts on the environment that has an estimated
cost of $100,000. This will set the groundbreaking for the project behind
3 months and cost $50,000 per month. The cost function for the analysis
is as follows:
c(x)=x(cost per mile), where x is equal to the distance in miles of
pipeline needed to reach the refinery from the well and c(x) represents
the total cost in dollars.
c(x)=25miles x $300,000 per mile= $7,500,000 cost of running pipeline
Additional costs after running pipeline:
Drilling fee: $500,000+$7,500,000= $8,000,000
Environmental study: $100,000+$8,000,000= $8,100,000
Delay cost: 3($50,000)+$8,100,000= $8,250,000 total cost

Vernal Pipeline Proposal

Well

BLM Land

5 miles BLM Land

1 mile

Private Land

21 miles- BLM Land

This route will take the most time due to the three-month delay.
Route 2) Running west, south, and then east to the refinery
This route avoids the additional costs associated with drilling
through the mountains, which totaled $750,000 dollars. This route also
avoids the right of way fees for using private land ($200,000 per mile).
However, this route is the longest to the refinery from the well. The cost
analysis is as follows:
c(x)=x(cost per mile), where x is equal to the distance in miles of
pipeline needed to reach the refinery from the well.
c(x)=27miles x $300,000 per mile= $8,100,000 total cost

5 miles BLM Land

1 mile

BLM Land

Well

P r i v a t e L a n d

21 miles BLM Land

This route is the longest to the refinery and uses the most pipelines.

Vernal Pipeline Proposal

Route 3) Taking the shortest distance directly from the well to the
refinery
This route directly connects the well to the refinery in a straight
line and will cross over private land, which is the shortest distance.
Ahmad Drilling Co. will be charged an additional $200,000 per mile as
right of way fees to use the private land in conjunction with the $300,000
cost for labor, materials, etc. The total cost of pipeline is $500,000. The
cost analysis is as follows:
c(x)=x(cost per mile), where x is equal to the distance in miles of
pipeline needed to reach the refinery from the well.

BLM Land

1 mile

BLM Land
5 miles

P r i v a t e L a n d

21 miles BLM Land

c(x)= 20.62 miles x $500,000=$10,310,000 total cost

Although this is the most direct route, it is the most expensive.

5 miles

202+52=c2
425=c2
425=c2
20.62c

20 miles

Vernal Pipeline Proposal

Route 4) Running the pipeline south across private land and then east to
the refinery at an angle
This route uses a portion of private land and BLM land to achieve
our goal of building a pipeline that connects the well to the refinery.
Although we would be charged some right of way fees, this route
minimizes costs of building. The data to reinforce this finding is given
below.
Well

5 miles BLM Land

1 mile

BLM Land

20-x

Private Ground

x
21 miles BLM Land

The cost of establishing a pipeline that runs on private land at an angle

and then east onto BLM land can be represented by the cost function:
c(x)=Private(P) +BLM(x), where P represents the distance in miles of
pipeline over private ground to reach BLM land and x represents the
distance in miles of pipeline over BLM land to the refinery
c(x)= (500,000)(P)+ (300,000)(20-x)
In order to find the value of P, we use the Pythagorean theorem:
P2=52+x2
P2=25+x2
P=25+x2=(25+x)1/2
c(x)=(500,000)((25+x)1/2)+(300,000)(20-x)
In order to evaluate the cost function at a point that gives us the minimal
cost, we must first find its critical points by taking the first derivative.
c(x)=(250,000)((25+x2)-1/2)(2x)+(300,000)(-1)

Vernal Pipeline Proposal

c(x)=(500,000x)((25+x2)-1/2)-300,000
We set the first derivative equal to zero to find the critical points of the
function. This is where the rate of change of cost has leveled off.
0=(500,000x)((25+x2)-1/2)-300,000
Algebraic manipulation of the equation gives us:
300,000=(500,000x)/(25+x2)1/2)
(500,000/300,000)x=(25+x2)1/2)
(5/3)x=(25+x2)1/2)
(25/9)x2=(25+x2)
(16/9)x2=25
x2=225/16=15/4
x=3.75 miles
Plugging the value of x back into the Pythagorean theorem to give y:
3.752+25=P2
P=6.25
We will use 6.25 miles of pipeline to cover private land and 16.25 miles
to cover BLM land. The breakdown of cost is as follows:
Right of way fees: $200,000 per mile
Pipeline construction: $300,000 per mile
($500,000)(6.25)=$3,125,000 total cost for private land
($300,000)(16.25)= $4,875,000 total cost for BLM land
c(3.75)=500,000(6.25)+300,000(16.25)= $8,000,000 total cost
The best angle to place the pipeline across private land:
Tan(theta)=x/5= 3.75/5 =0.75
Theta =36.87
Route 4 is the most practical choice for developing the pipeline. It
is economical in cost and has the least environmental impact. This route

Vernal Pipeline Proposal

is more cost effective then route one by $250,000 and route two by
$100,000. Route three is the most costly of them all. A graph of the cost
analysis follows:

Cost Function

12000000
10000000

Cost

8000000
6000000
4000000
2000000
0
0

10

15

20

25

30

Miles on Private land

Reflection
Calculus is definitely a useful tool for various fields of study. It
has numerous applications in healthcare, engineering, etc. I hope to start
a career in pharmacy one day. The applications of calculus that I see in
pharmacy include drug design and discovery and IV preparation (flow
rates). The one application of calculus I see in my pharmacy on a daily
basis has to do with engineering; a robot manufactured for the dispensing
of medications. This class has definitely been challenging, but very
useful. The small various projects we have done over the course of the
semester have exposed me to how calculus is used in real life.