slides: How Oregon’s Drone Industry Will Have A National and Global Impact

Tuesday, June 09, 2015
Rebecca Randall, GoLocalPDX Contributor

Last month, the Federal Aviation Administration accelerated approval procedures for commercial drone operators—a move that will propel Oregon’s progress in an industry projected to have an in-state value of $486 million by 2025. 

Though the industry still faces an incomplete regulatory system and public concerns about the technology—especially due to military use of drones and concerns over privacy—in some ways the regulatory agencies are playing catch up to an industry that’s already crossed the starting line. 

“(The drone industry) is already out of the gate,” said Brian Whiteside, who is president of Corvallis-based drone company VDOS Global. “It’s active, up and running, and I think it’s outpaced everyone’s expectation across the spectrum—how many people were going to use it, how many people were going to be involved, and then just the potential of growth.” 

See Slideshow Below: 9 Ways Drones Can be Used

Since the Federal Aviation Administration Modernization Act passed in 2012, regulators have been slowly working out regulations that would govern how drones will be allowed to operate. Their directive was to complete this task by 2015. Simultaneously, Oregon’s industry and research capabilities are developing to be top notch in the nation.

Oregon is home to everything for the drone industry from the foundation up—from data computing to engineering and manufacturing; it’s all done in Oregon. Some major players include Intel who is developing computer chips for drones, while Flir designs developed infrared imaging technology. Insitu near Hood River engineers drones, and Northwest UAV in McMinnville produces engines.

“We’re one of the largest providers of unmanned systems,” said Whiteside, who is also president of the Cascade chapter of the Association for Unmanned Vehicle Systems International. “We have a pretty good cluster of technology.”

The Cascade chapter of AUVSI includes about 84 companies in Oregon, Washington, Idaho and Alaska.

Ultimately, the American industry could see economic impact of $82 billion by 2025, according to the AUVSI’s 2014 report, and it anticipates more than 104,000 jobs will be created in the U.S.

Meanwhile, another part of the FAA’s directive in the 2012 act was to create and support a research structure that will test the technology. The result is a Center for Excellence for UAS, including Oregon State University and 15 other universities whose research will help integrate drones safely into national airspace. While academic research of drones has been around for years, the FAA investment will invest $5 million a year for five years. 

Michael Wing, director of the Aerial Information Systems Lab at OSU, said that the university actually had very little UAS expertise when it was approached by other universities in the research group. Its specialty is in remote sensing—something OSU researchers had already applied to natural resources, which is a key application of drone technology.

To make research approvals easier, the FAA also recently streamlined rules at the nations’ six test sites—three of which are in Oregon. The three FAA approved sites in Oregon span different landscapes and environments in Pendleton, Warm Springs and Tillamook. 

But amid all the excitement are still concerns over how the technology can be used safely without infringing on anyone’s privacy. Without a complete regulatory regime in place and with public wariness over military use of drones and concern over privacy, the industry has some hurdles to overcome. 

“There are grave concerns about privacy and safety. There have been abuses in both of these areas,” said Wing. “There is a strong element in society that fears this technology.”

As the industry develops, an important aspect is addressing safety and privacy concerns, said Wing. That’s why the FAA’s Center of Excellence will address those issues through research. “Our team is hopefully going to be adding some clarity for people,” he said. 

In the last few years, the FAA has focused its efforts on providing clear rules rather than trying to enforce under existing rules, but that’s meant fewer resources for enforcement. 

In lieu of strong federal regulations, various attempts have been made to pass state laws in Oregon that limit the use of drones. 

Two bills which both go into effect in January 2016 have set perimeters for use of UAS in a couple of ways. Most recently, on May 12, Governor Kate Brown signed a bill forbidding the use of drones in hunting or fishing. 

Additionally, the 2013 House Bill 2710, sets limits on drones operated by public agencies and law enforcement officers to protect privacy. A smaller subsection of the bill allows a property owner to bring an action against a drone operator if the drone is being flown over his property at lower than 400 feet. 

However the FAA recommends for hobbyists to stick to heights below 400 feet, and many drones sold to private individuals won’t go above 400 feet anyway.

Technically, the FAA doesn’t have rules (only recommendations) for hobbyists, although, of course, anyone could be fined for operating inside of airport space. 

In Wing’s perspective, the lack of clear regulations and poor enforcement has allowed some people to fly illegally. “If we were really to learn about how many companies have been doing this illegally, it would probably be shocking,” he said. 

In February, the FAA released proposed rules for UAS weighing less than 55 pounds, and final adoption of rules is expected later this year. 

This should open up the drone industry quite a bit, as individuals who were less confident in the regulatory structure, such as farmers, begin to feel more comfortable purchasing drones.

“Currently, from our perspective its legal for a grower to do this over their own field,” said John Saus, chief operating officer and vice president of sales at HoneyComb, which sells small unmanned aircraft systems. But some farmers are waiting for the FAA regulations to come out before they feel at ease operating them. 

HoneyComb drones can be operated by a farmer without any pilot experience, which makes it an attractive, cost efficient way to gather data. 

“Once the FAA regulations are in place there will be a wider adoption rate than we’re seeing,” said Saus. 

Of AUVSI’s economic projections, the majority of the growth in drones is expected to be in agriculture. “I do see that one day this will be a multi-billion dollar a year industry,” said Saus. And for now, HoneyComb only has a handful of competitors. 

As the market grows, Saus said they’ll keep manufacturing in Oregon, sourcing as much as they can from local companies, but aim to grow internationally.

One of the first segments of the drone market to change, commercial operators outlined the approval process last year, though changes announced in April has expedited the process and boosted the number of companies who are now registered to fly drones. 

VDOS Global, the global UAS company led by Whiteside, was one of the first companies in the nation to get legal authority to operate drones and the only one that can operate them off shore. VDOS Global provides drone services to energy companies, such as Shell Oil and Exxon.

There are some restrictions and some approvals are still coming, said Brian Whiteside, president of VDOS Global, but legally the company is allowed to fly anywhere in the U.S.

Until recently, the company was in the research and development phase, but now business is really poised to take off. “It’s an amazing future that we have ahead of us,” said Whiteside. “We’re the pioneers… it’s never been done before. Everything we do we have to figure out the safety, the technology, the operation… there’s a lot of opportunity but also a lot of challenges.”