Nevada’s drone industry taking tentative first steps

It has the potential of being Nevada's next gold rush, but the problem is that there doesn't seem to be much rush to it.

And, for that matter, not much gold.

The state's fledgling unmanned aerial vehicle industry is taking baby steps in development, a somewhat surprising turn considering how enthusiastic state leaders were when the Federal Aviation Administration named Nevada one of six test sites for unmanned aerial vehicles — "UAVs" in industry parlance and "drones" to most of the public — in late 2013.

Nevada was eager to get its piece of what the Association for Unmanned Vehicle Systems International forecast as an $82.1 billion industry by 2025. Local experts say the industry could have an $8 billion economic impact on Nevada.

Tens of thousands of high-paying high-tech jobs are expected as the industry grows, and Nevada figured to be one of the leading beneficiaries since it is the acknowledged birthplace of the industry in the United States, thanks to the military's presence in the state.

Nevada has more drone pilots and tech experts per capita than any state in the country.

The FAA's selection of Nevada as a test site was a no-brainer. It was the only applicant with a state sponsor, and state leaders used the state's geographic and climatic diversity as a key piece of its application. There are four designated test sites in the state, with Boulder City Municipal Airport the closest one to the Las Vegas Valley.

The state established the Nevada Institute of Autonomous Systems within the Governor's Office of Economic Development, which lists aerospace and defense as one of the growth sectors the state is best equipped to use to diversify its economy.

The Nevada Institute sought experts to set up the program and hired Bowhead Systems and Technology Group as its contracted program management office.

With the resources of UAV fliers and tech support experts at Creech and Nellis air force bases and Naval Air Station Fallon readily available, Bowhead got out of the gates quickly.

It implemented programs, explored new ideas and worked closely with the FAA toward the ultimate goal of integrating UAVs into the national airspace.

Within a year of being named a test site, Nevada's drone experts were pressing to get things done faster than the FAA could manage.

CATCHING ON WITH PUBLIC

When Congress directed the FAA to integrate drones into the airspace, it did so without giving the agency any additional funding or manpower.

Then, something interesting, but not totally unexpected, happened: The popularity of drones took off with the public.

With industry professionals excitedly talking about the benefits drones could provide, people began realizing how fun — and easy — they were to fly. They also discovered that small drones were affordable.

Suddenly, real estate professionals were contemplating how a drones-eye view of a house made the property more marketable.

Small companies were figuring out how they could inspect systems with drones and the high-resolution cameras they carried.

Entrepreneurs came up with plans to use drones to carry advertising messages, and photographers and videographers found ways to provide images from events that were exciting and new.

Hobbyists, eager to capitalize on the the craze, traded in their radio-controlled airplanes for quad-copters with GPS guidance systems.

Suddenly, the FAA had a new problem — regulating the airspace of neighborhoods and keeping small drones away from manned aircraft.

The number of drone sightings by commercial pilots and near misses with aircraft were on the rise.

In a presentation at InterDrone in Las Vegas this month, billed as the largest gathering of commercial drone enthusiasts in history, Romeo Durscher, director of education for DJI, a Chinese technology company based in Shenzhen, said there were more than 70 sightings of drones from commercial airlines in August.

Durscher said he feared the irresponsible flying of unmanned aircraft near airports could lead to the overregulation of a U.S. industry that already trails the rest of the world.

The FAA opted to draft regulations for small drones, those weighing 55 pounds or less, as a first step. A public comment period on those regulations ended this summer and now the agency will process and respond to more than 4,500 comments before approving and publishing its regulations early next year.

With demand to fly drones increasing, the FAA also implemented a process by which pilots of small drones could get regulatory exemptions that would enable them to pilot commercial drone flights. As part of Section 333 of the FAA Modernization and Reform Act of 2012, the requests are simply referred to as "Section 333 exemptions."

Under such an exemption, a pilot can fly below 200 feet with an aircraft weighing 55 pounds or less during daylight hours and within a visual line of sight. They also are required to stay at least five miles away from an airport or helipad.

Since the program began in March, the FAA has received more than 3,000 exemption requests and granted 1,500 of them.

Where does that leave Nevada?

SMALL DRONES TOP PRIORITY

Local leaders believe the FAA is spending most of its time on small drones and leaving policies for integrating larger aircraft — the type Nevada hopes to test at its sites — on the back burner.

The FAA believes it has good reason for addressing the small drone issue first. Since small drones are so popular and there are more of them, the agency believes it must address their operation first because of its prime mission to keep skies safe.

Despite the slow pace of development, Nevada still has had some major triumphs:

n Programs have been developed at both the University of Nevada, Las Vegas, and the University of Nevada, Reno, to develop technical support and pilots for the budding UAV industry.

n In December 2014, Nevada became the first state — and is still the only state — to have a designated airworthiness representative on staff. That means a company could get a certificate of airworthiness on an aircraft from the state and applicants won't have to wait in the longer FAA line.

n Several drone companies have set up shop in Nevada and are on the cutting edge of the industry. Reno-based Drone America was one of the first and is one of the largest drone manufacturers in the state. ArrowData in Las Vegas uses drone-mounted cameras to enhance entertainment experiences and is working to expand the use of drones for journalism. Several companies are exploring applications to monitor pipelines, collect data for agriculture and assist in search-and-rescue operations.

n More than 3,000 people attended the International Drone Conference and Exhibition, InterDrone, this month. Even more are expected when the show returns to Las Vegas in September 2016 and will set up at a larger venue, Paris Las Vegas.

n The six test site states recently received a broad area operating certificate that enables the state's unmanned aerial system partners to fly large data collection flights under 200 feet high anywhere in the country if it advances a public purpose. That means Nevada partners will be able to fly their aircraft under the new certificate to collect data for projects like agriculture production, wildlife management and for research projects undertaken by UNLV and UNR.

NEW ERA ON TAP

Nevada's drone industry is entering a new era.

Bowhead Systems, the contracted operator of the Nevada Institute of Autonomous Systems, has been interested in making its own mark commercially.

Tom Wilzcek, aerospace and defense specialist with the Governor's Office of Economic Development, said Bowhead and Nevada will part ways to avoid a potential conflict of interest.

"When Bowhead was first retained to operate the test site, it was their only Nevada work," Wilzcek said. "We knew at the time that they had interest in the commercial UAV markets and we agreed that, at some point, if they were successful, it may make sense to separate Bowhead from NIAS to prevent any real or perceived conflicts of interest.

"Over the past nine months, Bowhead has been commercially successful, which is great for Nevada, but their success led to a mutual decision that bringing the management of the test site inside NIAS made sense," he said.

The state has hired its first in-house director, but Wilzcek said he is grateful that Bowhead led the way in the state's effort to enter the UAV industry. The institute recently announced the hiring of Chris Wallace as technical director of the office and Mark Barker, who will start Monday as business development director.

"Without Bowhead's capacity being available, we would have had difficulty getting the effort up and running and we appreciate all they did to move Nevada forward in the UAS industry," Wilzcek said.

Now if only things could move just a little faster.

Contact reporter Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Find @RickVelotta on Twitter.