Daniel Merrill

Calculus I
Spring 2016
Parshuram Budhathoki
a) Determine the cost of running the pipeline strictly on BLM ground with two
different cases:
i)
One running west, south and then east to the refinery.

65 miles at 500,000 per mile

65 X 500,000 = 32,500,000
Total $32,500,000
ii)

One heading east through the mountain and then south to the refinery.

55 miles at 500,000 per mile

55 X 500,000 = 27,500,000

environmental impact study = 420,000

6 months waiting at 180,000 per month
6 X 180,000 = 1,440,000
One-time mountain drilling cost = 3,500,000
27,500,000 + 420,000 + 1,440,000 + 3,500,000 = 32,860,000
Total $32,860,000
b) Determine the cost of running the pipeline:
i)
The shortest distance across the private ground to the refinery.

15 2 40 2 c 2
225 1600 c 2
1825 c 2
1825 c
42.72 c
Cost per mile 500,000 + cost per mile private ground 350,000
42.72 miles at 850,000 per mile
42.72 X 850,000 = 36,312,000
Total $36,312,000
ii)

Straight across the private ground, then straight to the refinery.

Cost per mile 500,000 + cost per mile private ground 350,000
15 miles at 850,000 per mile
15 X 850,000 = 12,750,000
40 miles at 500,000 per mile
40 X 500,000 = 20,000,000
12,750,000 + 20,000,000 = 32,750,000
Total $32,750,000
c) Determine the optimal way to run the pipeline to minimize cost. Assume that the
pipeline runs across the private ground in straight path between the two paths
from part b) above. Determine the length of pipe that runs across private land
and how far from the refinery it starts running on BLM land. Clearly show all
work including drawing the pipeline on the figure below. Make it very clear how
you use your knowledge of calculus to determine the optimal placement of the
pipeline.
Cost function C(x) =

C(x) =

Miles of pipeline on BLM ground (40 - x)

(40 10.9) = 29.1 miles
Miles of pipeline on Private ground
15 2 (10.9) 2 c 2

343.81 c 2
343.81 c
18.54 c
18.54Miles
Minimal Cost
C (10.9) 850,000 225 (10.9) 2 500,000(40 (10.9))
850,000(18.542114227) 500,000(29.1)

Total $30,310,797.09

d) Include a sketch of the graph of the cost function, C(x), for this pipeline for any

configuration involving crossing some private ground as well as some BLM

ground. Make sure to scale your axes appropriately and to label the minimum
point.

Minimum Point (10.9, 30310797.09)

Write up a report of your finding to submit to your companys CEO. This report should
include all steps for any math used to make determinations asked for above as well as
statements as to the costs to be incurred by each scenario. Include any appropriate
figures to make each scenario clear. Label the scenarios as they are labeled above.

The approved drilling of our natural gas wells near Vernal, UT with come as great
asset to our company. In order to maximizes the benefit of these new wells it is
important that we find the minimum cost for building a new pipeline. There are four
options to building this pipeline.
Option One
We can avoid building on the costly private ground that lays between our refinery
and the site of the new wells. By building 5 miles to the west and then 15 miles south
and finally 45 miles east to the refinery. That would be a 65 total miles of pipeline and
cost estimate of $32,500,000.
Option Two
We can also avoid building on private ground by building the pipeline 40 miles
east through the mountains and then 15 miles south to the refinery for a total of 55
miles. While the miles are less there is additional cost for drilling through the
mountains. Because of this additional cost this estimate would be $32,860,000 and
would take an additional 6 months of build time.
Option Three
We can build a shorter pipeline through the private ground. This would shorten
our pipeline to only 42.72 miles but because of the increased cost for building on private
ground the estimate is $36,312,000.
Option Four
The final option we can use would be to use a combination of both BLM ground
as well as private ground. By building 18.54 miles of pipeline on private ground and the
remaining 29.1 miles on BLM ground this will give us the optimal cost of
$30,310,797.09.

Based on my calculations it is my remediation that we use option four. I was able

to come to this estimate through the use of calculus. By first finding the cost formula
(please see my notes) I was able to take the derivative of that function to find the
absolute minimum value of the cost formula. By doing so I was able to find a way for us
to build the new pipeline and a minimum cost in order to best profit our company.
Before I began this class I was not sure the real world use of calculus. However,
through projects like this and other ones we have done I have learned much and found
new ways to use the things I have learned in my day-to-day life.