With deeper federal integration, commercial drone prospects appear unlimited

A freshly approved $11 million legislative appropriation to integrate North Dakota’s unmanned aerial system into Federal Aviation Administration airspace is expected to spur drone development for commercial applications even further in the state.  

Commercial drone uses include agricultural spraying and surveying, power and pipeline monitoring, emergency first response capabilities, and possibly delivery services in rural areas. 

The integration of the Grand Forks-based Northern Plains UAS Test Site’s (NPUASTS) Vantis radar platform with the FAA’s Pathfinder radar program will allow secure data sharing between the two, making the state even more attractive to businesses operating drones beyond the visual line of sight, or BVLOS. 

The range of coverage will also greatly expand from the current 3,000 square miles to 56,000 square miles. 

Most drones currently are operated by line of sight, which means an operator on the ground needs to see where the drone is at all times. 

This might be fine for hobby drone operators, real estate business photography or checking power lines up close, but it limits commercial operations to a relatively small, restricted space at any given time. 

Expanding that space could potentially expand the business opportunities as well. 

North Dakota was the first to receive the test site status and will be the first state to integrate with the FAA’s program.

Frank Matus, director at Thales USA and chairman of the North Dakota UAS Council, said it was the first time the federal government had done something like this, thanks to the maturity of the Vantis system infrastructure and the work of the NPUASTS. 

The program will help “show the FAA what the future looks like in terms of drone integration into the airspace,” Matus said.

Long-term savings, commercial development 

By developing the infrastructure model here, the state can also generate royalties as other states and regions adopt the same system, according to Erin Roesler, deputy executive director for the NPUASTS. 

By integrating before other states, North Dakota also saves money, she said, estimating later integration would cost around $255 million. 

The $11 million appropriation was included in House Bill 1038, approved on Feb. 14 by the Senate and finalized by the House on Feb. 20. 

From a public safety aspect, Roesler said the test site assisted power cooperatives in the western part of the state during ice storms in 2023 to survey power lines and with flood response in eastern North Dakota.

Besides first response and emergency applications already being trialed, delivery of medical products and even commercial delivery for companies like Amazon could come down the line. 

“Infrastructure like this would enable those commercial drone deliveries to actually bring more services to North Dakota, increasing the quality of life,” she said. 

On the agricultural spraying side, Roesler also expects expansion. Around 21 operators are licensed for unmanned aerial applications in the state, but currently those are all line of sight. 

“There are fields that traditional ag sprayers cannot access right now because it's not safe to do so in a larger manned aircraft that they'll be able to do with a UAS as a comparison,” she said. 

“It definitely has those direct returns on investment, but it's the indirect ROIs that I think really are why North Dakota is pursuing this,” Roesler said. 

Matt Dunlevy, founder and CEO of Aethero in Grand Forks, which operates systems using drones to conduct exterior building analysis for large commercial and public institutions, said many of the companies he works with are trending toward developing beyond visual line of sight operations.

“Being able to tap into that feed, and with these new types of permissions and precedent-setting capabilities, would be extremely important for my company as we try to change the economics of drone missions,” Dunlevy said. 

Dunlevy said it is particularly important for the economies of agriculture and oil and gas going forward, directly translating to broader agricultural management and the inspection and maintenance of pipelines and utilities. 

“Beyond (visual) line of sight is what this whole industry is striving for, and that's the holy grail of drone ops,” Dunlevy said. “We've been handed this huge success that we need to do what we can to capitalize on.” 

Looming transition, potential bans

The bill initially included a $15 million appropriation for replacing unmanned aerial vehicles operated by state agencies, colleges and universities, which was denied by the Senate. 

Agencies ranging from the N.D. Department of Transportation to the Bureau of Criminal Investigation primarily use drones developed by the Chinese company Da-Jiang Innovations, also known as DJI.  

Some security experts say the drones could potentially provide backdoors for information and data gathering by China’s state security apparatus. 

DJI states there is no unauthorized data transfer to Chinese authorities and it has passed independent security audits. The company also claims it has never had requests for data from Chinese authorities, though technically under China’s state secrets laws, DJI would be unable to divulge if those requests are made. 

DJI and other drones restricted by the National Defense Authorization Act (NDAA) and the American Security Drone Act of 2023 are not allowed on the state’s Vantis network, and would not be allowed on the system integrated with the FAA. 

Roesler said a likely federal ban on noncompliant drones is looming and a transition is inevitable, so state agencies will eventually need to comply anyway. 

The recent rejection of the replacement appropriation does not impact the integration going forward, she said. 

“These policies will impact North Dakota’s agencies, whether we are prepared for it or not,” she said. “Without a structured replacement program in place, agencies will now face greater financial and operational hurdles in complying with federal law.” 

Rep. Mike Nathe (R-Bismarck) who introduced HB 1038, said he expects the replacement portion of the bill will be revisited during the 2nd half of the current legislative session. 

Russell Gust of Minot, a drone operator who launched a YouTube channel several years ago when his photography passion morphed into a passion for drone education, regulations and business opportunities for small operators, was opposed to the replacement program and testified against HB 1038. 

Gust initially said the amount of money asked for in the appropriation was “egregious” and he didn’t understand the need for approximately $50,000 to replace each drone.

A key problem is the lack of cheap, quality drone options in the market today, outside of easy-to-use and operate DJI drones. 

Gust said he has come to understand why those proposing the replacement want to get ahead of a potential national ban. 

“It that happens, you're going to have every state in the nation looking for replacements for DJI drones,” Gust said. “And there aren't going to be any, and the ones out there, you're going to have to wait a long time before manufacturing can catch up with the demand.” 

U.S. drone development is limited and outpaced by South China-based DJI, where it is heavily supported by the local and provincial government and is blessed with extensive, accessible and deeply entrenched supply chains. 

Gust didn’t think a federal ban would cover existing, already-approved drones operated by everyone from hobbyists to universities to state agencies and federal institutions.

Such a ban would be “catastrophic” and lead to widespread job losses for those operators, he said, with the most likely outcome being a phased-in ban. 

However, Gust is optimistic about the future of the technology in the state and its applications.

“North Dakota is pretty unique, I think, in the opportunities that you have to use UAVs,” Gust said. “Really, the options you have with a drone are only limited by your imagination.” 

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