Drones in tank storage: opportunity or threat?

Drones are rapidly becoming a key tool in the tank storage sector, offering new ways to improve safety, efficiency, and data insight. In this episode, Jay Cruz, Vice President of Government Affairs at the International Liquid Terminals Association (ILTA), explores how drone technology is reshaping terminal operations.

We consider: 

• Whether we are past the trial phase for drone technology.
• Practical examples of how drones can improve safety and security at terminals.
• Potential security concerns and how they can be addressed.
• The implications of the Federal Aviation Administration’s proposed beyond visual line of sight rule change for industrial drone operations.
• And much more.

This episode of the Hydrocarbon Engineering Podcast is sponsored by Sherwin-Williams Protective & Marine.

 

Sherwin-Williams Protective & Marine delivers world-class industry subject matter expertise, unparalleled technical and specification service, and unmatched regional commercial team support to customers around the globe, including in the energy market. The company’s broad portfolio of high-performance coatings and systems – including protective liquid and powder coatings, as well as fire protection coatings – excel at combating corrosion and help customers achieve smarter, time-tested asset protection. For more information, visit protective.sherwin.com.

Creators and Guests

Host

Callum O'Reilly

Callum leads the editorial teams at Hydrocarbon Engineering, commissioning articles and features, and representing the magazine at industry events.

Guest

Jay Cruz

Vice President of Government Affairs at International Liquid Terminals Association (ILTA).

What is Hydrocarbon Engineering Podcast?

The Hydrocarbon Engineering podcast: a podcast series for professionals in the downstream refining, petrochemical and gas processing industries.

Callum O'Reilly: 00:00

Hello and welcome back to the Hydrocarbon Engineering Podcast. Today's episode is focusing on drones which are rapidly moving from novelty to a key tool in the tank storage sector offering new ways to improve safety, efficiency and data insight. But what does real world adoption look like and where is the technology delivering the most value today? In this episode, we're joined by Jay Cruz, vice president of government affairs at the International Liquid Terminals Association, to explore how drone technology is reshaping terminal operations.

Advert: 00:44

This episode of the Hydrocarbon Engineering Podcast is sponsored by Sherwin Williams Protective and Marine. Sherwin Williams Protective and Marine delivers world class industry subject matter expertise, unparalleled technical and specification service, and unmatched regional commercial team support to customers around the globe, including in the energy market. The company's broad portfolio of high performance coatings and systems, including protected liquid and powder coatings as well as fire protection coatings, excel at combating corrosion and help customers achieve smarter, time tested asset protection. For more information, visit protective.sherwin.com.

Callum O'Reilly: 01:24

Hi, Jay. Welcome back to the Hydrocarbon Engineering Podcast. Can we kick off with some brief introductions? Can you tell us a little bit about ILTA and your role at the association, please?

Jay Cruz: 01:35

Absolutely, my name is Jay Cruz, I'm the Vice President of Government Affairs for ILTA. I've been with the association now for a little over five years, and in that role I lead the association's legislative and regulatory advocacy here in Washington, DC. ILTA is the trade association dedicated to companies that handle and operate terminal facilities, which store bulk liquid products like oil and gas products, chemicals, asphalt, biofuels like ethanol, jet fuel, some food products like molasses and olive oil. And I also oversee ILTA's joint committee, which is a working group, industry wide working group of professionals across the specific focuses of environment, government, health, safety, and security, regulatory actualization within their companies. And within that working group, ILTA develops all forms of regulatory comments and formulates our advocacy strategy.

Jay Cruz: 02:27

We have a very bottom up approach to collaboration and advocacy here in ILTA.

Callum O'Reilly: 02:32

Great, thanks for that Jay. We've got you on the podcast today to talk about drones and their evolving use in terminals and I noticed back in 2024 you highlighted the growing role of drones in terminal operations in a blog that you wrote the ILTA's website. So how would you characterize adoption today? Are we now past the trial phase? Has much changed since your original blog?

Callum O'Reilly: 02:56

I would

Jay Cruz: 02:56

say we are absolutely past the trial phase at this point. There are a number of companies, both within the ILTA membership and out and without, that are using drones in their day to day operations. I mentioned I wrote an article back in 2024. There was another article on, I think it was Yahoo Finance in 2025, on the wider oil and gas industry and its use of drones. Companies are using this new technology to improve their operations, their facility security, bolster their inspection requirements for their facilities.

Jay Cruz: 03:24

We even at our most recent joint committee meeting in Tulsa, Oklahoma, were treated to a demonstration from one of our members, ONEOK, showing off their drone capabilities. They used their they used manned drone systems to go around their facilities, make and highlight areas where personnel would normally be more at risk than they were to walk on the ground up high over their tank farms do inspections on behalf of their staff, saving they're better securing their personnel. There's still, of course, the reality that drones and maintaining a fleet can be expensive, the technology to use them, so that really does put a bit of a financial burden on what would be a smaller terminal company. There are also regulatory requirements that companies need to maintain in order to operate drones at their facilities, all sorts of permits through the FAA, and of course, as I mentioned, the cost to just have systems in place, the IT and OT infrastructure needed to use them long term, but I think over time that's only going to get cheaper and you'll start to see more and more autonomous systems deployed across the country, not just in the terminals industry but across the energy sector.

Callum O'Reilly: 04:28

And has much else changed, I'm thinking specifically about rapid advances in AI since your original piece that you wrote. What would you say has been the significant developments in recent years? I absolutely think that AI is at

Jay Cruz: 04:40

the forefront, is going to continue to be at the forefront of all of this. Rapid advances in in AI have resulted in autonomous drones and other vehicles, not just drones. You have trucks and and other forms of transportation that are looking at becoming autonomous, and that comes down to both the transportation and the storage of hazardous materials that the energy sector normally handles. On the other end of that, seeing AI be used more and more in cybersecurity attacks, digital infiltration of any sort of entity. That is especially concerning for our industry because, again, we handle so many chemicals of interest and hazardous materials that we need to properly secure in order to keep the communities that they operate in safe.

Jay Cruz: 05:19

Working with federal partners, state and local partners to ensure that there's proper communication up and down the local chain of command to the terminal company is incredibly important because again the cyber security requirement for terminals is only going to get higher and higher.

Callum O'Reilly: 05:32

So you also mentioned in your blog that the primary benefit of drones is to improve overall security and safety in facilities. Would you say that's still the case and can you give us some practical examples of how drones can be implemented in this way?

Jay Cruz: 05:47

Yeah sure. I still think security is going to be at the forefront. General monitoring of the facility's perimeter, ensure that we detect any sort of activity detected on cameras or whatever. Companies can quickly deploy drones to provide a bird's eye view of what is happening. You also have leak detection and repair operations, or LDAR for short, emissions monitoring through optical gas imaging cameras.

Jay Cruz: 06:08

You companies are able to take more detailed maps of their facilities monthly, quarterly, however long they want. They can send drones to take high resolution composite images of their facilities that they can use to monitor to make sure that nothing is nothing untoward is happening. There's a new regulation of a big conversation right now happening within the FAA around beyond visual line of sight operations inspections. So deploying drones beyond where you're able to visibly see them, the operators able to visibly see them. If a facility is two miles wide by two miles long, a company can deploy a drone from one corner of a facility to the other without having to be able to see it, which currently requires permits from the FAA to do.

Jay Cruz: 06:49

But again as the technology improves you're going to see that become implemented more and more.

Callum O'Reilly: 06:54

Thanks for that Jay, and I want to come back to what you were just talking about there in terms of the beyond visual line of sight operations a little bit later, but I was also wondering if there are any areas where drones are delivering unexpected value in the tank storage industry.

Jay Cruz: 07:08

Unexpected value, that's a tough one. I think that the biggest benefit in all of this again is removing the terminal operator from having to go up high inward to inspect a tank, preventing any sort of slip from happening, any sort of fall risk, or sending a drone inside of a tank itself to do imaging inside of a tank so that operators don't have to don all the proper PPE, protective equipment, to go in and put themselves where those hazardous materials are stored. There's plenty of benefit to be drawn from drones and other autonomous technologies, but it's just important to make sure that the IT and OT systems in your company are properly prepared to handle the load of maintaining those systems.

Callum O'Reilly: 07:50

And do you see drones becoming part of a fully autonomous inspection ecosystem alongside the likes of robotics and fixed sensors? I do. I don't know when that day will come, but I do

Jay Cruz: 08:02

think it's definitely on the horizon somewhere. Drones certainly have their place in operations at any facility as long as the proper security and cybersecurity measures are in place. We've certainly heard of the upsides, but it'll be important that the decision remains with terminal operators to decide if and how they choose to implement this technology. Training for drone operations and inputting these drones into a company's IT and OT infrastructure are important cost considerations for any sort of organisation to balance.

Callum O'Reilly: 08:30

And of course Jay, the flip side of all of these benefits is that drones do present a threat to facilities which could undermine safety and security. So can you talk us through the potential concerns and some of the steps that terminal operators are making to address this?

Jay Cruz: 08:47

Absolutely. I think that the most immediate example is an outside actor, Anyone, even just a hobbyist to someone who has few ill intentions, can deploy a drone at a facility, disrupting operations or harassing workers or even using drones to attack a facility. There was an example in back in 2020 in Pennsylvania where a drone was used or was going to be used to attack an electrical substation in the state there, which would have disrupted power for the region. We see drones being deployed in combat more and more today. There have been a couple of counter drone actions taking place in El Paso, Texas, both of which caused closures to the El Paso airspace, and one of which involved the numerous air flight cancellations.

Jay Cruz: 09:30

So the potential to harass and disrupt day to day operations at any facility is definitely there. Legally right now, a terminal facility can't themselves shoot down a drone or deploy an active countermeasure to drones. All they can really do is report it up to state and local police, which will eventually make its way up to the Department of Homeland Security and the FAA. That is an area that the federal government and various state governments are looking at right now to give critical infrastructure operators the protections that they need to respond if they want to.

Callum O'Reilly: 10:00

And have terminal operators changed their view on the risk of this Jay in light of the fact that there's been increasing attention on drones in critical infrastructure recently due to the geopolitical tensions and incidents involving drone surveillance?

Jay Cruz: 10:15

I would say that this has reaffirmed our ongoing concern with the increased usage of drones. And not that there would be some large scale attack on American energy infrastructure like we've seen in in in conflict areas, but it certainly displays the potential a single bad actor could have in causing damage to our facilities. It only takes one drone to crash into a substation, again, to cut power to an entire region, right? It only takes one drone to crash into a tank to cause an energy, a material spill at a facility. The potential is definitely there, and I think it's critical for the federal and state governments to work with critical infrastructure operators like ours to ensure that local communities are protected, the nation's energy supply chain is protected, and everyone is on the same page with regard to what options they have to ensure the safety of everyone that lives and works at a facility.

Callum O'Reilly: 11:05

So Jay, I want to turn back now to the big topic that you were talking about earlier in The US where earlier this year the Federal Aviation Administration reopened a comment period for the notice of proposed rule making that would normalize the use of unmanned aircraft systems, so I. Drones, beyond visual light line of sight operations. Now this proposed change would have major implications for the sector, so can you talk us through the proposal? I mean you mentioned it earlier briefly, but maybe you could just put a bit more meat on the bones, tell us about the proposal, the potential implications, and where we're at with it right now.

Jay Cruz: 11:43

If I recall correctly, was part of the Federal Aviation Administration or the FAA's Reauthorization Act back in 2024. As part of that budget reauthorization, a provision was included requiring the publication of a notice of proposed rulemaking, which is essentially opening up a common period for private industry or other public entities to provide direct comment on a rule that an agency is going to put out. That NPRM was focusing on safe beyond visual line of sight drone operations in American airspace. Back in summer of last year, the Trump administration also published an executive order titled the Unleashing American Drone Dominance executive order, which among other things call for the FAA to release a BVLOS beyond visual line of sight rulemaking within thirty days, and a final rule to be published by the, I think, the end of this year. A couple of key changes from the proposed rulemaking.

Jay Cruz: 12:36

The goals were to increase the ability for package delivery. So there are a number of companies like Walmart and Amazon right now that want to send drones out to deliver packages, which sounds convenient, but, of course, in order to do drones have to travel far beyond the area where an individual operating the drone would be deploying it to deliver said package. But of course, for terminals, being able to operate a drone at their facility, across their facility, would help improve their inspection capabilities all the same. With the increase in drone flight, there is concern for the safety of critical infrastructure like bulk liquid terminals. Congress has passed legislation directing the FAA to create flight restricted zones around critical infrastructure, including bulk liquid terminal facilities, back in 2016.

Jay Cruz: 13:19

But unfortunately, the FAA has repeatedly failed to meet its statutory deadlines to publish that pool. At the moment, the original NPRM was opened from early August to October, where FAA took feedback and comment from industry like ours. But we're waiting right now on that FAA rule from 2016 that was mandated, IOTA is planning to be involved with the FAA developing that rule further and making sure that our industry is properly represented when it comes out.

Callum O'Reilly: 13:45

So Jay, what's next? If we're having this conversation again in a couple of years, what would need to happen for you to say that drones have truly transformed terminal operations?

Jay Cruz: 13:55

That's a great question. I think we'll just have to see. The cost and security considerations will be a big weight on any company thinking of implementing this technology into their operations. So as the technology becomes more accessible and companies have a better idea of how to secure it, I think those will be the two biggest factors in whether or not a company is able to actually deploy and implement drones into their operations. Of course, what happens at the federal level with any sort of rulemaking will also impact how a company is able to utilize and protect themselves from drones.

Jay Cruz: 14:26

Right now, we're in a bit of a waiting game. There's even the saying that legislation and regulation are always reactive rather than proactive, and drones are such a new technology that we don't quite know where it's going to go. AI is only getting better, drones are only becoming smaller and more efficient. You know, it's up to our federal partners to sort of lead the charge and allow industry to provide input where we can.

Callum O'Reilly: 14:46

Great. Jay, really appreciate you joining us. It's been fascinating to hear how drones are evolving from a niche tool into something that is much more integrated across terminal operations. Thanks again for your time today, we really appreciate

Jay Cruz: 14:59

your insights. Absolutely, it's a pleasure to be here.

Callum O'Reilly: 15:02

My thanks again to Jay from the ILTA for sharing his insights into how drone technology is maturing across the tank storage sector. As adoption accelerates and frameworks for their use continue to develop, it's clear that drones are set to play an increasingly important role in the future of our terminal operations. Thanks for listening to the Hydrocarbon Engineering Podcast, make sure you subscribe to stay up to date with the latest conversations shaping the downstream sector, and we'll see you again next time.

Advert: 15:38

This episode of the Hydrocarbon Engineering Podcast is sponsored by Sherwin Williams Protective and Marine. Sherwin Williams Protective and Marine delivers world class industry subject matter expertise, unparalleled technical and specification service, and unmatched regional commercial team support to customers around the globe, including in the energy market. The company's broad portfolio of high performance coatings and systems, including protected liquid and powder coatings as well as fire protection coatings, excel at combating corrosion and help customers achieve smarter, time tested asset protection. For more information, visit protective.sherwin.com.