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Open Collection of Student Writing (OCSW)

Pipeline Cost as Determined by Land Access Fees

Attached is the recommendation for pipeline routing and the cost analysis for various routing options.  There are three primary geological features, with their own specific costs, that need to be considered with planning the pipeline route.  These are land controlled by the Bureau of Land Management, a parcel of privately owned land and a mountain range.

To stay completely off the private land we have two options, both outlined in Appendix A.  First would be to route around the private land and avoid the mountain which would cost $24.3M.  The alternative option would be to drill through the mountain, which would dramatically decrease the amount of pipe needed but there are other costs to consider.  To r­­­­oute through the mountain there is a one-time drilling cost of $4.286.000 and an environmental impact study with a cost of $250,000 that is estimated to delay the project by 5 months costing the company approximately $50,000 more.  The total to accomplish the mountain route would be $18.9M.

Options that include passing through the private land are outlined in Appendix B-D.  To see how the tradeoff between higher per-mile cost of routing through private land and the ability to lay less pipe we started by pricing the shortest path to the refinery and the shortest path across the private land.  Going directly to the refinery across the private land would cost $14.4M while routing directly south from the pump to minimize the amount of pipe on private land would cost $16.9M.

Our two most efficient options come from routing through the private land so we will pursue a variation on those routes to minimize our cost.  The final pipeline cost is determined by how much pipe is run on BLM land so we created a cost function that reflects that cost (see Appendix C).  To find the point at which the cost is minimized we take the derivative of that cost function, set the function equal to zero, and solve for the variable, which represents the length of pipe on BLM land.  With that value, we can calculate the total cost of the pipeline, the total length of pipe needed and at what angle the pipe leaves the pump.

The optimized plan will cost $14.3M, will require 43.25mi of pipe and the pipe will leave the pump heading towards the refinery at 45.45°.


Calculations are not included.  Will be uploaded in September 2017. 






























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