October 2017, Vol. 244, No. 10
Features
Drones – A Necessary Tool in Pipeline Development & Maintenance
Jennifer Urban is an associate in the Business Law Department at Cozen O’Connor, an international firm with nationally recognized practices in litigation, business law, and government relations. As a member of the Transportation and Trade Group in Washington D.C., her practice concentrates on aviation, drone, and maritime matters. Urban passed the Federal Aviation Administration’s (FAA) initial aeronautical knowledge test and earned a Remote Pilot – Small Unmanned Aircraft Systems Airman Certificate to conduct drone operations for commercial purposes. She earned her LL.M. in Air and Space Law, J.D., M.B.A., and B.A. in Public Policy Leadership and Political Science, all from the University of Mississippi.
P&GJ: How are oil and gas companies using drones, Jennifer?
Urban: The use of drones in the energy exploration and development industry is a relatively new phenomenon, but continues to grow at a rapid pace. In 2014, for example, BP P.L.C., formerly British Petroleum, received the first FAA Certificate of Authorization (COA) to conduct commercial drone operations over land. BP was specifically authorized to operate drones to conduct aerial surveys of the Prudhoe Bay oil field in Alaska.
Drones, also known as unmanned aircraft systems (UAS) or unmanned aerial vehicles (UAV), have been used in most facets of the oil and gas industry, including pipeline inspection, offshore platform monitoring, geological mapping, and determining rights-of-way. Though most pipelines in the U.S. are underground, thermal-imaging cameras on drones enables detection of damaged pipeline and leaks. Drone operations provide more accurate data collection and accessibility to remote areas, which exemplify the many safety, cost-effective, and time-saving benefits this technology provides to the oil and gas industry. It takes a drone a few hours to survey the same amount of pipeline that it has traditionally taken a survey crew a few days to inspect.
P&GJ: What are the average specifications of a drone?
Urban: Although performance specifications can vary significantly from model to model, most drones used for commercial purposes are powered by batteries that provide about 20-30 minutes of operation time. Average commercial drones under 55 pounds can fly up to approximately 3 miles, lift payloads ranging from 5-14 pounds, and cost between $500-5,500, depending on the model’s capabilities and features. There is a wide range of drone accessories, such as geospatial mapping and data collection software, that enhance its capabilities to better meet the needs of specific operations. Drone technology is continually advancing to allow for longer flights and the potential for in-flight recharging, which will be highly beneficial to the oil and gas industry.
P&GJ: What is the predicted growth of the industry and their usage for commercial purposes?
Urban: Sales of drones for commercial operations are predicted to increase from 600,000 in 2016 to approximately 2.7 million by 2020. Within the next ten years, the drone industry will likely create 100,000 jobs and add $82 billion to the U.S. economy. New safety and security technologies, such as geo-fencing (the use of a GPS technology to create a virtual boundary around a geographical area that then triggers an alert when something, such as a drone, enters the area), continue to make drone operations safer. According to Goldman Sachs, the pipeline industry has a $41 million total potential market for drones.
P&GJ: How can drones be used in the development of pipelines?
Urban: The ability to cover longer distances and capture accurate data allows drones to conduct the usually time-consuming land surveys for pipeline route determination in a fraction of the time it would take a traditional surveyor. These operations offer better insight into environmental resources, such as areas of particular environmental sensitivity, wetlands, trees within the rights-of-way, or protected endangered species habitats. Drone operations also minimize the safety risks that surveyors typically face when traversing tough areas of terrain. After the pipeline route has been established, drones can be used to monitor construction sites and provide surveillance.
P&GJ: How do drone pipeline inspections compare to other forms of aerial inspections?
Urban: Drone operations for pipeline inspections are increasing. By using drones rather than helicopter crews or other lightweight aircraft to conduct pipeline operations, energy companies can save thousands of dollars per hour. Drones can better inspect the area more quickly with fewer required personnel which is especially useful in emergency situations. Fast data processing is available as analysts have nearly real-time access to the information collected by drones.
P&GJ: Who has the authority if I want to operate a drone: FAA or state or local government?
Urban: Although drone operations have enormous potential for pipeline companies, there are many legal restrictions on their commercial use. Drone operators must abide by local, state, and federal regulations. On Aug. 29, 2016, the FAA’s Small UAS Rule, known as Part 107, went into effect and changed the game for energy companies that may elect to use drones for daily tasks. Part 107 generally authorizes commercial use of drones that weigh less than 55 pounds and do not fly faster than 100 mph, but subject to significant conditions and restrictions. Drones must:
- remain within 400 feet of the ground
- operate only during daylight
- only operate when there is at least 3 miles of visibility from the control station
- not fly over people who are not directly involved in the drone operations
- not carry hazardous materials
- remain within the visual line of sight of the operator at all times
In some circumstances, an operator may be able to obtain a waiver from the FAA to exceed those limitations. State and local governments also regulate drone activities, for example, with respect to land use, zoning, privacy, and trespass. Tennessee and Texas have legislation that cite drone operations for oil pipeline safety and oil rig/well protection as among the legal uses of a drone. While the federal government has not adopted specific regulations regarding cybersecurity or privacy issues, energy companies engaged in drone operations should exercise caution not to violate others’ privacy rights, such as taking pictures over someone’s house, and to ensure that the drone has proper security measures, such as a password-protected Wi-Fi signal.
P&GJ: Does an oil and gas company need a license from the FAA to operate a drone?
Urban: Generally, oil and gas companies do not need a specific license from the FAA to operate a drone, but the remote pilot must be FAA-certified. Many drone operations by oil and gas companies would not comply with the restrictions of Part 107, such as the need for drones to survey the land or inspect pipeline outside of the operator’s line of sight. In such cases, entities would be required to apply to the FAA for a waiver from Part 107, supported by evidence that the proposed operations would be safe. For example, entities may apply for a waiver that allows operations:
- outside of daylight hours
- beyond the visual line of sight of the drone operator
- over people
- in certain areas where drones are not typically permitted
The FAA has granted over a thousand waivers since January 2016. Any energy company interested in drones should consult an attorney who is knowledgeable about the increasingly complex laws and regulations applicable to drones before initiating operations, particularly if the company seeks a waiver from Part 107 restrictions to maximize the utility of using drones for pipeline operations. Although pipeline entities may be familiar with the regulations that apply to their day-to-day operations, many companies and their in-house counsel may not specialize in (or have much experience with) aviation laws and regulations governing commercial drone use.
P&GJ: Can any employee of the pipeline company conduct drone operations?
Urban: Yes. Any employee may conduct the drone operations if he/she has obtained the proper FAA license. The FAA requires operators of drones for commercial purposes to hold a Remote Pilot Airman Certificate and pass a Transportation Security Administration background check. The Remote Pilot Airman Certificate requires that the applicant pay $150, pass the initial aeronautical knowledge test (a 2-hour, 60-question test) with a minimum score of 70%, and complete the FAA Airman Certificate and/or Rating Application.
P&GJ: Should an energy company conduct its own drone operations or hire an outside contractor?
Urban: This depends on the types of operations the company wants to conduct and a risk/liability assessment. These companies have the option to own or lease their own drones if an employee can obtain a Remote Pilot Airman Certificate, the proper insurance coverage is obtained, and the entity is confident it will be able to conduct drone operations in a compliant manner. By conducting drone operations itself, the energy company eliminates the need to hire a contractor and the time it takes to get contractor operations established; however, the company will remain primarily liable for its drone operations.
Alternatively, pipeline entities can contract outside companies to perform their drone operations, particularly for more complex operations. The benefits of using an outside contractor include the ability to access a range of drones, accessories, and the most up-to-date technology operated by a licensed, insured, and experienced remote pilot and to limit the entity’s liability.
Energy companies may wish to consider the unique, cost-effective benefits that drone operations provide, especially regarding pipeline development and inspections. Increasingly, a consensus view is emerging that the benefits of drones for energy companies exceed the risks and uncertainties surrounding this unique technology.
Comments