Stringent Federal Aviation Administration (FAA) rules prohibiting the use of unmanned aircraft for commercial use has largely kept American companies from leveraging drone technology to their advantage, but that's rapidly changing in the Arctic, where a series of FAA decisions handed down in the past year are easing restrictions on commercial drone flights. As a result, an evolving suite of technologies heavily dependent on the versatility and efficiency of unmanned aerial systems (UAS) is emerging in one of the world's least hospitable environments, bringing the Arctic's vast energy reserves as well as potentially lucrative shipping lanes within reach.
Last year the FAA granted special certifications to two UAS platforms—ScanEagle, made by Boeing subsidiary Insitu; and Puma AE, manufactured by Monrovia, Calif.-based AeroVironment—to operate commercially in the Arctic. Those certifications, coupled with Alaska's designation as one of six FAA-sanctioned drone test sites in late December, created an environment on Alaska's northern shore, where research institutions, UAS manufacturers and, for the first time, commercial interests can collaborate in pursuit of research and data crucial for unlocking new opportunities in the Arctic.
"It's an area that poses nearly zero risk to the flying public; it's a relatively benign area from an air-traffic standpoint," said Paul McDuffee, Insitu vice president of government relations and strategy. "And the opportunity to deploy an unmanned aircraft can provide some very, very valuable information to a wide variety of interested parties, oil and gas companies being primary."
The U.S. Department of Energy estimates that the Arctic could be home to 22 percent of the world's undiscovered conventional oil and gas reserves—hundreds of billions of barrels of petroleum and natural gas equivalent—making it a tantalizing target for energy companies.
But there's nothing conventional about exploration in the Arctic; scarce daylight for much of the year, a hostile climate and ocean variously covered by solid sea ice and amorphous, moving ice floes, all make surface navigation and even aerial surveying dangerous, inefficient and vastly expensive.
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The next frontier
As such, drones have quietly been making inroads in the Arctic for the past several years, mostly under clearances granted to research institutions like the University of Alaska Fairbanks. UAF has worked extensively with both institutional and commercial partners in Alaska and in recent years, using drones to monitor sea lion populations in the Aleutian Islands, conduct ice flow and environmental surveying missions for NASA and National Oceanic and Atmospheric Administration, inspect pipelines for oil and gas giant BP and assist a Russian tanker during a dangerous late-season fuel delivery to the remote Alaskan outpost of Nome.
Last September, ConocoPhillips conducted the first-ever commercial flight in U.S.-administered airspace under the FAA's new commercial flight certification for InSitu's ScanEagle, launching the 40-pound fixed-wing drone from the deck of a research vessel in the Chukchi Sea off Alaska's northern coast.
But the half-hour flight, while historic for both the oil and gas and the drone industries, served little commercial purpose beyond testing its sensor payload and navigation systems. The FAA certifications were handed down so late in the summer that the window for ideal flying weather closed almost immediately, limiting flights.
"We were successful by virtue of the fact that we got the aircraft into the air," McDuffee said. "What we really did was lay the groundwork for 2014."
This summer will mark the first full flying season for commercial UAS in the Arctic and the first time commercial UAS will take to the skies for any length of time in U.S. airspace. Though they won't specify exactly what companies they are working with, both AeroVironment and Insitu are currently planning summer flight regimens with commercial clients.
Researchers at the University of Alaska Fairbanks—which previously worked alongside BP inspecting pipeline infrastructure using aquadrotor Aeryon Scout UAS—is less coy. "We've got work upcoming that's probably going to involve Conoco and a new aircraft system called Silent Falcon," said Ro Bailey, director of the Pan-Pacific UAS Test Range Complex and deputy director of UAF's Alaska Center for Unmanned Aircraft Systems Integration. "We've worked with ENI Petroleum. We have conversations on and off all the time with Shell."
For both researchers and the oil and gas companies that are increasingly dipping their toes in the Arctic, UAS work where manned aircraft do not—either for reasons of safety or sheer economics. ScanEagle can stay aloft for a full 24 hours relatively inexpensively, providing the kind of real-time imaging and mapping data coveted by climatologists, marine biologists, petroleum engineers and ship navigators that in the past have been largely left in the dark by a dearth of satellite coverage in the Arctic. (The smaller, Puma AE can stay aloft for only three to four hours but is more portable and can be easily launched by hand from just about anywhere.)
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A critical R&D tool
But as traffic in the Arctic increases in the years ahead, UAS will serve a more important function in helping researchers, engineers and commercial interests of all stripes fully characterize the environment there. For oil and gas companies that want to install drilling and pumping infrastructure there, continuous monitoring of conditions above, below and at the surface of the water will be integral, and right now drones are the only feasibly deployable technology that can collect and relay all that data in a cost-effective manner.
"As the oil and gas industry becomes mature there, companies are going to have to have a bunch of sub-sea systems that will have to be monitored," said Dean Richter, a retired navy submarine captain and director of development for maritime transportation systems for New Jersey-based QinetiQ North America. "Drilling and exploration in the Arctic won't be allowed without all this stuff prestaged and operational."
The ability to collect and transmit all this data to where it's needed in real time won't just open up the Arctic to oil and gas drillers, Bailey said. "If you can improve navigation through ice, you can literally save millions of dollars in fuel costs," she said. "Whether you're a bulk shipper or you're coast guard or you're navy, it doesn't matter. If you can take a straighter line than the route that you can see from the bridge, you can save a ton of money, not to mention time."
Cracking an emerging market
This summer companies that want to exploit the increasingly favorable economics offered by UAS will, for the first time, be able to lay the groundwork for expanded operations beneath, above, around and on the Arctic ice. "I can tell you with confidence that we're going to get a significantly higher volume of flights," InSitu's McDuffee said of the upcoming Arctic flying season, which begins around July. "We'll learn a lot about ourselves, the oil companies will learn a lot about themselves, and the FAA truly benefits because they will see firsthand how we can integrate an unmanned system as it exists today safely into the national airspace."
For the drone industry, that final point couldn't be more important. The increased deployment of drones to the Arctic this year doesn't just spell economic opportunity for global shippers of oil and gas companies but also for drone manufacturers. By cultivating relationships with oil and gas companies now, UAS manufacturers like Insitu and Aerovironment are positioning themselves to continue supplying the industry with hardware and operational expertise as exploration activities in the Arctic expand. But more than that, they're making a strong case for increased commercial drone operations in the rest of the national airspace—something the FAA is working toward in the next few years. The Association for Unmanned Vehicle Systems International, the drone industry's largest trade group, estimates that the opening of U.S. skies—all U.S. skies—to commercial UAS would create $82 billion in economic impact in the first decade alone.
"This is really just the beginning," McDuffee said. "We're looking at this primarily as technology demonstrations to really define what the markets ultimately will become. Then we'll take those lessons learned and transfer them to the lower 48."
—By Clay Dillow, Special to CNBC.com