© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse. Launching a Drone Program Workshop Houston, TX June 20, 2017 Energy Drone Summit Sean T. Pribyl, Esq. The information contained herein is abridged and summarized from numerous sources, the accuracy and completeness of which cannot be assured. This should not be construed as legal advice or opinion and is not a substitute for the advice of counsel.

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  The information presented here is provided as a courtesy by Blank Rome LLP.  It is not intended a substitute for professional legal advice.  If you have, or suspect that you may have a legal problem, you should consult your lawyer to obtain legal information and recommendations specific to your problem Disclaimer June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Small UAS in the Energy Sector  Small UAS and Part 107  Other Legal Considerations with Small UAS Agenda June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse. Small UAS in the Energy Sector June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Part 107 of Federal Aviation Regulations (14 CFR)  Effective: August 29, 2016  Provided standards for general operation and certification of drones or small unmanned aircraft systems (“sUAS”)  Prior: FAA’s Section 333 Exemption regime  Significantly expanded opportunities commercial sUAS operations  How do you comply? Legal Background June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  14 CFR Subpart A, §107.3  Small unmanned aircraft system (sUAS): small unmanned aircraft and its associated elements, including communication links and the components that control the small unmanned aircraft, that are required for the safe and efficient operation of the small unmanned aircraft in the national airspace system Definitions June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Physical infrastructure in Energy Sector  Requires inspection and/or monitoring for safety and environmental compliance and protection  Examples:  Producing and transporting crude oil  Refined petroleum products  Electricity/Power Lines  Crude oil drilling platforms  Pipeline rights of way  Wind turbines  Solar farms  Offshore energy production What this means to the Energy Sector June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Current inspection/monitoring of energy infrastructure assets is generally manual  Helicopter or Human inspectors physically inspecting  Processes - dangerous and expensive  sUAS can be used for inspection & monitoring  Avoid platform shutdown  Identify leaks  Highly cost-effective and much safer What this means to the Energy Sector June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Offshore and Onshore  Unique considerations in Energy sector:  Long distances in defined corridor  Keep “lights on”  Lawful use v. Security threat with critical infrastructure  Command and Control  Station keeping  Battery life  Integrating into existing airspace What this means to the Energy Sector June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  FAA specifically considered in Part 107  Inspection of objects that extend for miles  Power lines, pipelines, and solar and wind farms  Surveying catastrophic scenes  Safety scouts  Storm restoration What this means to the Energy Sector June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Public acceptance  Refineries/chemical plant – ignition sources  Offshore – more controlled, but weather conditions and long distances from launch/recovery  BVLOS - Pathfinder Challenges June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse. Small UAS and Part 107 June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Commercial =  sUAS service provider  Inspection of facilities or industrial equipment  Surveys  Support commercial enterprise  For compensation or hire? Small Unmanned Aircraft Systems (sUAS) June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Must weigh less than 55 lbs  Daylight hours (or civil twilight w/ lighting)  Fly at or below 100 mph  Pre-flight checklist Key Operational Limitations - Nutshell June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Yield right of way to manned aircraft  Not from a moving vehicle (unless sparely populated)  Visual line of sight (VLOS)  Unaided vision Key Operational Limitations - Nutshell June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Altitude restrictions – Class G Airspace  Class B, C, D, and E require ATC permission  400' above ground level (“AGL”)  Higher if operating within 400' of a structure  Notification and briefing of affected persons Key Operational Limitations June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  No flight over people, but allowed if:  Directly over people “directly participating” in the UAS operation  Under the cover of a protective structure  People covered in a stationary vehicle  Operations can be conducted near all other persons if safe  Take into account the conditions at the time  No specific minimum standoff distance  Best practice - notice to people to limit danger and increase the safety of bystanders Key Operational Limitations - Nutshell June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  “Fair weather flying”  3 miles of visibility  significant clearance from clouds  laterally and horizontally Key Operational Limitations June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  107.45 – Operation in prohibited or restricted areas.  No person may operate a small unmanned aircraft in prohibited or restricted areas unless that person has permission from the using or controlling agency as appropriate. Subpart B – Operating Rules June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Pilot Certification  16 years of age  Hold remote pilot airman certificate with a sUAS rating or be under the direct supervision of someone holding a remote pilot airman certificate  Must pass TSA vetting Key Issues – Registration & Certification June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Remote Pilot in Command (“Remote Pilot”)  Does not need have to be the person manipulating the flight controls (but, may supervise that individual)  Conduct/supervise only one sUAS operation at a time Key Operational Requirements June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Visual observer (“Observer”)  Optional  Assist the Remote Pilot  Communicate via mobile phone or radio  Survey both sUAS and surrounding environment  May be handed off between multiple people  Allows the Observer to be separate location (distant) from the Remote Pilot and flight controller Key Operational Requirements June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Person manipulating the flight controls  Observer (or Remote Pilot), and Flight controller  Determine: sUAS location, attitude, altitude, and direction of flight;  Observe: airspace for other air traffic; and  Determine: sUAS does not endanger the life or property of another Key Operational Limitations June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Practical application:  If Observer can see the sUAS  Remote Pilot and person manipulating the flight controls are only required to keep sUAS within general field of view  Because Observer may exercise the VLOS capability instead of the Remote Pilot and flight controller  Remote Pilot can use First Person Viewer technology during flight to better conduct surveillance Key Operational Limitations June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Remote Pilots must possess a Remote Pilot certificate  Aeronautical knowledge test designed for sUAS operations  Transportation Security Administration assess  possible security risk  Applicant certifies: no physical or medical condition Licensing Requirements June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  14 CFR 107.23 – Hazardous operation  No person may operate a small unmanned aircraft system in a careless or reckless manner so as to endanger the life or property of another. Subpart B – Operating Rules June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Permits sUAS to be operated from a moving vehicle or vessel in a sparsely populated area  FAA has not defined “sparsely populated area”  Case by case basis  Case law provides some examples Key Improvements with Part 107 June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Part 107 applies within 12 nautical miles (NM)  ICAO applies beyond 12NM  Limited sUAS guidance, but under review  Working towards UTM project  Beyond 12NM: may apply for exemption from Part 107  FAA Jurisdictional hook when beyond 12NM:  Registered in United States  U.S. operator  U.S. company  Consider: should you apply for waiver covering offshore and onshore? Offshore June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  But… waivers available  Key: contemplated operations can be conducted safely under the terms of the waiver – Explain to FAA – Otherwise prohibited operation Waivers June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Waivable sections of Part 107:  § 107.25 Operation from a moving vehicle or aircraft.  § 107.29 Daylight operation.  § 107.31 Visual line of sight aircraft operation.  § 107.33 Visual observer.  § 107.35 Operation of multiple small unmanned aircraft systems.  § 107.37(a) Yielding the right of way.  § 107.39 Operation over people.  § 107.41 Authorization to conduct operation in certain airspace.  § 107.51 Operating limitations for small unmanned aircraft. Waivers June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse. 1. Apply via FAA Public Website 2. Received by Application System 3. Assigned to Waiver Team 4. Waiver Analysis Applicant 5. Management Review 6. Send Approval, Disapproval or RFI to applicant 7. Post Results to FAA Public Website Waiver process step-by-step (online) June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Process time for review, analysis, response: +90 d  Valid up to 2 years  Long term recurring operations  Broad access to controlled airspac  Factors affecting time:  Complexity  Completeness  How did you explain how it can be done safely  Each operation different, ensure applicable language Waiver process – key considerations June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  FAA has issued approximately 400 non- airspace Part 107 waivers  Top 5: 1. Night operations 2. Operations over people 3. BVLOS Operations 4. Operations from moving vehicle 5. Visual Observer Waiver process step-by-step June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Review instructions  Review already approved waivers  Narrow request to what is needed  Full description of operations  Explain how you will mitigate  Explain how your operation meets performance based standards for safe operation Key Issues – Best Practices June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Limit supporting documents to only those essential for your request  Evaluate what resources will be needed for more difficult waivers (Over People or BVLOS)  How are you putting your application in best light to receive approval  Consider whether to consult legal counsel – details matter, non-concur or denial costs time and money Key Issues – Best Practices June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Accident Reporting  Stricter than NTSB  Within 10 calendar days any operation involving:  at least a loss of consciousness  serious injury requiring hospitalization  damage to any property other than the sUAS in excess of $500 Reporting June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Flight pre-check requirement  14 C.F.R. §§ 107.15, 107.19, 107.49  Do you have:  Policy  Manual  Checklist  Applies in each operation Best Practices - Operations June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse. …And potential state regulations Federal Regulatory June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Main FAA UAS Portal: www.faa.gov/uas  Waiver portal: https://www.faa.gov/uas/request_waiver/  Waiver instructions: https://www.faa.gov/uas/request_waiver/media/instru ctions.pdf  Performance Based Standards: https://www.faa.gov/uas/request_waiver/media/perfor mance_based_standards.pdf  Approved Waivers: https://www.faa.gov/uas/request_waiver/waivers_gran ted/ Resources for sUAS Waivers June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse. Other Legal Considerations with Small UAS June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Trespass—physical intrusion  Nuisance—interference with use and enjoyment of land  Must be substantial, unreasonable interference  Invasion of privacy – most likely  Reasonable person standard – no photos, recording, monitoring in areas where there is a reasonable expectation of privacy Torts: Possible Causes of Action June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Insure against risk of significant hazards  Personnel health and safety and property damage  Not mandatory per Part 107 – recommended  Manufacturers - products liability  Operators utilizing their owned UAVs – Aircraft Hull and/or liability  For Hire/Contracting of third party UAVs – Non-Owned liability  Third party liability insurance  Professional indemnity  Employers liability  May be state insurance requirements  Consider as part of company Best Practices Insurance June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Physical Damage payload/equipment  War Risks – (hijack/malicious damage)  Invasion of Privacy  Additional coverages (non-owned)  Worldwide  Open pilot language  Any use  sUAS Insurance Provider and Contact information: Richard J. Nocella | Vice President Marsh USA Inc | Aviation 1166 Avenue of the Americas | New York, NY 10036 Phone: 212 345 7034 | Fax: 212 948 5216 E-mail: [email protected] Insurance (cont.) June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Who owns the data and images  Is there a reasonable expectation of privacy  Are you authorized to release?  Part 107 does not specifically address  Public concern – outreach and understanding  “Good neighbor”  NTIA – Safeguarding Privacy, Civil Rights/Liberties  Local and state laws may be implicated  “Peeping Tom” laws  “Critical infrastructure” Privacy June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  FAA does not regulate collection of data (people or property)  Unclear which agency has direct oversight, i.e., FCC or FAA?  Data captured, stored, transmitted, at all times should be:  Secure  Protected from manipulation  Protected from unwanted distribution  Adhere to appropriate:  Data security practices  Standards  Methods  Understand respective industry standard of care and IT standards  Compliance with wiretapping laws? Data Management June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Unresolved as to preemption  Causing confusion as to compliance  FAA offered guidance on those laws traditionally reserved to the states  Best practice – review prior to operations  National Conference of State Legislatures  http://www.ncsl.org/research/transportation/current- unmanned-aircraft-state-law-landscape.aspx State Laws June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  18 U.S.C. § 32: prohibits interference with aircraft in flight  47 CFR § 2.803: prohibits the operation, marketing, or sale of any type of jamming equipment, including devices that interfere with…GPS…wireless networking services  DoD authorities ≠ LE or Civil authority  DOJ has not prosecuted sUAS interference cases or promulgated enforcement posture Counter-UAS April 20, 2017 Jacobs Technology Days 47

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  “FAA must develop a process…prohibit or restrict the operation of an unmanned aircraft in close proximity to a fixed site facility, including critical infrastructure, such in the energy sector, oil refineries, and chemical facilities” Section 2210 of the FAA Extension, Safety and Security Act of 2016 April 20, 2017 Jacobs Technology Days 48

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Compliance with all regulations and laws  Best Practices  Safety Management System  Qualified personnel Standard of Care—sUAS Operations June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Capital investment in fleet  Training and maintenance  Costs and risk assessment  Third party sUAS services  May be more convenient or cost-effective  Indemnification language in contract  Analyze status – contractor or employee  Verify qualifications  Understand applicable operations manual Own the fleet or contract services June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse.  Shifting regulatory landscape  Monitor Part 107 rulemaking  Consult with counsel on legal questions related to seeking Part 107 waivers and compliance with all applicable laws and regulations Final Recommendation June 20, 2017 Energy Drone Summt

© 2017 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reuse. Questions? Sean T. Pribyl Blank Rome LLP 1825 Eye Street NW Washington, D.C. 20006-5403 Phone: 202.772.5852 Email: [email protected] June 20, 2017 Energy Drone Summt