Pie in the sky

It looks like a robot egg, deep grooves running down two sides of an otherwise smooth rubber sphere. Suddenly, the white pod opens, revealing what resembles a spinning film reel. The disk, 8 feet in diameter with propellers in the holes, ascends from its shell and veers toward downtown. The video blinks out, then cuts to a map. The saucer hovers over Greensboro. Zoom out. Others hang over nearby Guilford County cities and towns. The map shifts to the coast, where a marker blinks red over Virginia Beach, Va. Three saucers float over the city, and more are heading toward it. “You’ve got their pods staggered throughout the state, sitting on police stations, sitting on fire stations,” says Kyle Snyder from behind the podium. “I’m not telling you it’s coming next week, next month, next year, but it’s coming soon.”

This isn’t War of the Worlds. It is a promotional film for Olaeris Inc., which wants to build an emergency-response network in North Carolina using aircraft that have no pilots onboard. They use a combination of GPS and sense-and-avoid technology, similar to what Google Inc. employs on its driverless cars. During, say, a fire, the aircraft would fly to the blaze, streaming video to show what to expect and what equipment will be needed. Olaeris is based in Fort Worth, Texas, but Snyder wants to lure its owner to North Carolina. “He wants to come here,” Snyder tells about 35 attendees of Duke Energy Corp.’s Aviation Safety Summit, where vendors hawk high-tech radars, in-flight displays and even airplane food at the utility’s hangar at Charlotte Douglas International Airport. “[He] wants to build it, put 200, 250 jobs into the state, manufacture it here, make North Carolina the world headquarters.” He’s not the only one, Snyder adds. “Companies are looking at North Carolina saying, ‘Let’s get here, let’s figure it out here. Because you’ve got the workforce, you’ve got the talent, you’ve got the structures in place in the state. You’ve got the people that can make this happen. You’re the first in flight. You’re the future of flight.’” (In July, Olaeris CEO Ted Lindsley sent a letter to Commerce Secretary Sharon Decker, giving the state until Sept. 25 to commit $6 million to the company or face the possibility of it moving elsewhere, according to the Winston-Salem Journal.)

Snyder, 40, doesn’t work for Olaeris. He’s paid about $126,500 a year to lead NextGen Air Transportation program, a part of N.C. State University charged with bringing unmanned aircraft — drones — to North Carolina skies. Though the industry considers “drone” a pejorative — tied too closely to the missile-packing Predators used in military operations — the term refers to any motorized vehicle that flies without a pilot onboard. That $40 remote-control helicopter your kid plays with? A drone — as is the Israeli military’s $35 million, bus-size reconnaissance aircraft, the Heron. Commercially, drones have as many potential uses as iPhones have apps. The film industry has used them for cheaper, more-agile aerial cinematography. Environmental groups surveyed the Dan River with them after the Duke Energy coal-ash spill near Eden. Last November, Amazon.com Inc. CEO Jeff Bezos floated the concept of fulfilling online orders by drone. The Federal Aviation Administration projects 10,000 will be flying U.S. skies by 2017.

The problem is that commercial drone use is illegal, barred by the FAA while it mulls rules for them. Nevertheless, state lawmakers are betting on Snyder and NextGen to turn North Carolina into a hub for the burgeoning aerospace sector. They have given Snyder power to grant flight in the state — meaning any company that wants to lawfully take to the skies needs his permission — and NextGen $2.5 million in the next fiscal year. State Rep. John Torbett says the state could become the Detroit of drone-makers. (Until recently, the Gaston County Republican was an executive at Cape Canaveral, Fla.-based Defense Technologies Inc., a contractor that procures military supplies, including aerospace parts, and has an office in his district.)

In reality, North Carolina hasn’t separated itself from other states. The Association for Unmanned Vehicle Systems International, an Arlington, Va.-based trade group, estimates that drones will generate 1,200 jobs and more than $100 million annually for North Carolina by 2025. That ranks 27th, just behind Iowa and Mississippi. The projection is based on existing aerospace industry, so North Carolina could attract more — or less. Of greater concern is the FAA’s selection of six research sites across the nation. Those chosen will likely attract drone companies that want to work with the FAA so they can fly when the agency lifts its caution flag. Neighboring Virginia was picked. North Carolina was not. “I was surprised they were not,” says Mario Mairena, a lobbyist for the trade group. “He made a great case. I’m still rather surprised North Carolina was not selected.”

As a kid, Snyder watched space shuttle launches from his backyard in Ocoee, Fla. “That planted the seed. We lived an hour, an hour-and-a-half away. You could still hear the sonic booms.” He hopes drones will have the same effect on his five-year-old son. “I’m looking at that now, and how do we inspire young kids today that this is a growing opportunity? That they really have a chance to influence things? I’m really hoping that [unmanned aerial vehicles] become one of the ways to do that.” After graduating from Catawba College in Salisbury with degrees in math and computer science in 1996, he earned a master’s of applied mathematics at University of Tennessee Space Institute in Tullahoma, Tenn. He worked at NASA as a research associate and Lockheed Martin Corp. as an engineer before joining Alpharetta, Ga.-based Applied Systems Intelligence Inc. — now called Veloxiti — where he began developing drones, including a medevac for the Army. In 2011, Middle Tennessee State University in Murfreesboro, Tenn., hired him to create a program for unmanned aircraft. He won nearly $300,000 in research contracts from the Department of Defense, NASA and a private foundation in 14 months there before joining NextGen, part of N.C. State’s Institute for Transportation Research and Education, in May 2012.

Part of his job is to play gatekeeper. BOSH Precision Agriculture LLC, a spinoff of military-drone contractor The BOSH Group LLC that does business as Digital Harvest, operates drones on farms in South America, General Manager Young Kim says. “Unmanned systems offer high resolution, the ability to field them almost at anytime, high revisit rates and to do this at low cost. The combination of those three never existed in agriculture.” Equipped with digital sensors, the aircraft count plants, measure moisture and chemical makeup and detect pest infestations, while thermal infrared detects heat signatures of livestock. They just can’t legally do so in the U.S. So Digital Harvest, though based in Newport News, Va., does research at NextGen’s test site in Hyde County, which includes farm fields and part of the Pamlico Sound. Snyder applies for licensing on its behalf and must oversee the flights. He’s made a good impression.

Digital Harvest plans to move its headquarters from Virginia within two years, and N.C. State is the frontrunner for its new home, Kim says. “It needs to be in physical, close proximity to farms. It needs to have a good agriculture school. It needs to have a good engineering school. I need to have a talent pool where I can hire additional engineers and executives as we grow the organization. Raleigh and [N.C. State] represent all those ingredients.” Precision Hawk USA Inc., which also makes drones for the agriculture industry and performs research at NextGen sites, is based in Noblesville, Ind., but its CEO and two vice presidents work in Raleigh. Bob Young, who co-founded Raleigh-based Red Hat Inc., was the first investor in Precision Hawk, which is looking to concentrate its software operations in the Triangle’s thriving tech sector.

Experts believe drones’ greatest potential lies in the state’s $70 billion agriculture industry. Right now, a farmer has essentially three options for monitoring crops: hire a pilot, view satellite images or walk the fields. Using drones, he could get closer, more-frequent views. But getting players in the agriculture industry such as Stan Winslow to buy into the technology has been tough. Winslow owns Belvidere-based Tidewater Agronomics Inc., a consulting and research company that works with about 100 farmers in northeastern North Carolina and Virginia, advising them on crop health, soil fertility and pest management, among other issues. After seeing one of Snyder’s presentations, Winslow contracted with a drone company but refuses to discuss the name of the business or the cost of the arrangement — the agreement, he says, precludes such disclosure. Over the summer, drones monitored wheat- and cornfields of up to 1,500 acres for three Tidewater clients. They confirmed nitrogen deficiency in a wheat crop and helped determine how much of the field was damaged, but it has routinely taken more than two weeks to process the photos — too long. About two-thirds of the time, clouds interfere with the images. “Some days that are clear enough for me to see are not clear enough to get good pictures. There’s still some things to be worked out,” he says. “I believe there is an opportunity, but I don’t think it is the magic bullet that it is being built up to be.”

Part of the appeal is a low cost of entry. Bob Skillen, a mustachioed former Navy radar intercept officer (“Goose from Top Gun,” he says), started Morganton-based VX Aerospace Corp. in 2006 and won a contract building parts for the Navy’s H-46 transport helicopter. Between 2010 and 2012, the company received $6 million in federal contracts, but that fell to less than $100,000 last year, as the military retires the model. “Being a one-trick pony, you’re in trouble when your pony dies,” Skillen says. “So we’ve been trying to make our own product line.” VX Aerospace’s Kitty Hawk looks like a shiny blue stingray, maybe 4 feet long, with neon yellow fins and a small propeller on the front. It’s a blended-wing aircraft, meaning the wings are built into its body. Skillen hopes it will become his company’s hallmark, worthy of its name.

The Kitty Hawk takes its first test flight at Foothills Regional Airport in Morganton in late April. R.J. Gritter, president of N.C. State’s Aerial Robotics Club and a frequent NextGen assistant, pushes forward on a remote-control throttle. The propeller spins, and the aircraft zips along the runway for more than 100 feet. Suddenly, it’s up, just a few feet, but at a heavy tilt. It veers to the side, falling to earth. There’s 10 seconds of silence before Skillen says, “All right, we’re in the grass. Get the cart.” Later, he will tell Gritter that the controlled crash, which prevented damage to the drone, saved the company $25,000 — the cost of developing the Kitty Hawk.

Hobbyists can fly unmanned aircraft with little restriction. Businesses can’t. That means a farmer can fly a quadcopter for fun but not to scan crops. “If you have unfettered use for commercial purposes, there will be conflicts with populated areas, with private pilots that might be operating within the airspace system,” FAA Administrator Michael Huerta says. Concerns include how to avoid collisions with other aircraft, what certification the aircraft and pilots will need to fly and liability should one fall out of the sky. The agency has been working on rules for a decade and plans to publish guidelines governing aircraft under 55 pounds in November. Most believe it will miss the deadline, as it has several times before. Proponents complain the delay is putting the U.S. behind competitors such as Japan, which has unmanned crop dusters, and Australia, where TV channels use drones to broadcast cricket and rugby. “There’s tremendous interest and a lot of frustration,” says Brendan Schulman, a lawyer with Kramer Levin Naftalis & Frankel LLP in New York who is known as “The Drone Lawyer.” “People have great applications for use of the technology, very safe applications, noncontroversial from a privacy point of view, noncontroversial from an air-safety point of view. And they’ve been held back. They’ve been restricted from obtaining venture-capital funding and selling to customers.”

Schulman contends that the FAA does not have the authority to ban drones because it never created rules regulating them. In March, a federal judge agreed. For a few hours, until the agency appealed, commercial use was legal. Some companies — such as Aerial Captures LLC, a Concord-based company that uses drones for commercial photography — have used the court decision to justify their disregard of the ban. Others, such as Digital Harvest, are using piloted aircraft or staying grounded while they await official rules. All want an end to the uncertainty. “We’re hopeful they give us something to work with, so we’re not in limbo,” says Mike Ouimet, Aerial Captures’ CEO.

While the FAA deliberates, states are passing their own laws, mostly concerning privacy. North Carolina — among 22 states to consider drone legislation this year, the American Civil Liberties Union says — passed a law requiring warrants before police can use drones for spying, while another bill included more extensive rules that criminalized peeking into a home or recording private property without permission. Though the North Carolina chapter of the ACLU supported an earlier version of the law — joining with Olaeris to publish an op-ed in the Raleigh News & Observer — it withdrew its support for the rules that ultimately passed. The organization claims law-enforcement exceptions create loopholes, while restrictions on public recording impede freedom of speech. In anticipation of the FAA legalizing drones, state lawmakers also directed the N.C. Department of Transportation to design tests and certification — creating driver’s licenses for the sky. “I see an alignment between the very top legislators at the state level all the way down,” says Kim, who testified before the committee that wrote the law.

Six weeks after the Kitty Hawk’s first attempt at flight, the VX Aerospace team returns to Foothills Regional Airport. This time, the drone zips over spectators for 4½ minutes, more than 20 times longer than the Wright brothers’ second stab at powered flight. Once the kinks are worked out — the company has no timeline yet — VX Aerospace will scale up its model. The final product could be four times larger and hold a pilot. “It’s a burgeoning market,” Skillen says. “As a manufacturer, I don’t care if it’s manned or unmanned.”

Ben Bradford is a reporter for Charlotte public radio station WFAE.