Ryan McClain

Pipeline Project

My project is to find the most cost-efficient route to get from the natural gas well
to the drilling company. I will explore several different options and break down
the most practical way for the company to reach its destination.

Basic costs
$320,000 per mile on BLM Land
$320,000 + $90,000 per mile on private ground
1-time fee of $4,400,000 + $200,000 for drill feel and study + $8(85,000) for the
time delay.
 Route 1

Route 1: Going around the private ground. It will avoid the cost of drilling the
mountain, study fee, cost of delay, and the right of way fee. However, route 1 is
the longest way to the refinery total of 49 miles.

49 miles x 320,000 per mile

Total $15,680,000
 ROUTE 2

Route 2: Going east and then south, will require a fee for drilling through the
mountain, a study fee, and will delay the project 8 months, but it is a shorter
distance, total of 37 miles.

Fee $4,400,000
Miles + $320,000(37)
Study + $200,000
Delay + $8(85,000)

Total $ 17,120,000
 ROUTE 3

Route 3: diagonal line straight to the plant, this is the shortest distance but
requires a heavy right of way fee.

Miles = 22^2+15^2=c^2
C= √709 ~26.63 miles

$320,000 + $90,000 per mile = 410,000 per mile

Total $10,917,092
 ROUTE 5

Route 5: straight line south then east to plant. This still requires 15 miles of right
of way fee and 22 miles of normal fee.

Private land = 15 miles 320,000 + $90,000 = 410,000 per mile = $6,150,000

BLM land 22 miles 320,000 per mile = 7,040,000

Total $13,190,000
 ROUTE 6

Route 6: going diagonal south east for 18.75 miles then east to the plant. This is the most
efficient route. See proof below for evidence.
Y^2 = 15^2+x^2

C(x) = 410000y + 320000(22-x)

C(x) = 410000(sqrt(225+x^2) + 7,040,000-320000x

C’(x) = 410000x(225+x^2)^(-1/2)-320000

Set = to 0 and solve

320000 = 410000x/sqrt(225+x^2)

225+x^2=410000^2*x^2/320000^2

225+x^2=1.64x^2

225=.64x^2

Sqrt(225/.64)=x = 18.75

Next plug x into C(x)

410000(sqrt(225+18.75^2) + 320000(22-18.75)

Total = 10,884,803.52
 Graph

11500000 Cost Efficiency

11400000

11300000

11200000

11100000

11000000

10900000

10800000
0 5 10 15 20 25 30 35 40

The Chart above shows that 18.75 is the local minimum and the most
cost-efficient number of miles to lay pipe on private land.