Trump Administration to Overhaul Drone Rules, Fast-Track Nuclear Reactor Deployment on the Moon

The Trump administration has proposed new drone regulations that will eliminate case-by-case approval processes for beyond visual line of sight (BVLOS) operations, while Acting NASA Administrator Sean Duffy confirmed accelerated plans to deploy a nuclear reactor on the moon by 2030.

The Federal Aviation Administration (FAA), Department of Transportation (DOT), Transportation Security Administration (TSA), and Department of Homeland Security unveiled the notice of proposed rulemaking (NOPR) on Aug. 5, which creates an entirely new regulatory framework under Part 108 of federal aviation regulations. The Trump administration suggests that the rule is necessary to support the integration of unmanned aircraft systems (UAS) into the national airspace system (NAS). The announcement represents the most significant shift in unmanned aircraft policy since commercial drone operations began, with officials explicitly noting that China currently controls 90% of the consumer drone market. Transportation Secretary Sean Duffy declared that “will happen no longer.”

The proposed regulatory overhaul applies broadly to commercial drone operators across multiple sectors, including agriculture, delivery, surveying, civic interest, public safety, and recreational uses. For the power sector, it could allow the operation of drones weighing up to 1,320 pounds to conduct transmission line inspections and infrastructure monitoring without the need for individual federal waivers. The new framework seeks to eliminate what industry leaders describe as a “labyrinth of ill-suited regulations” that previously demanded cumbersome case-by-case approvals. This “artificial ceiling on innovation” has particularly hampered power sector operations, according to Commercial Drone Alliance CEO Lisa Elman, who, during a press briefing on Wednesday, said these changes will help “line workers safely inspect infrastructure” and unlock greater efficiency and safety for energy production and delivery.

So far, the energy industry has been operating under a complex patchwork of FAA regulations and exemptions to enable drone inspections and other utility applications. Most utility companies currently rely on 14 CFR Part 107 waivers, particularly Section 107.31 (Visual Line of Sight Aircraft Operations) and Section 107.33 (Visual Observer requirements), to conduct BVLOS operations for critical infrastructure inspections. The waivers allow operators to deviate from specific Part 107 regulations by demonstrating they can maintain safety through alternative methods but still require individual case-by-case approval from the FAA.

For larger operations involving drones over 55 pounds, utility companies must pursue Section 44807 exemptions (formerly Section 333 exemptions) under Part 91 regulations. In February 2025, Southern Co. became the first U.S. utility to secure a Part 91 exemption, which allows the company to operate SwissDrones’ 191-pound unmanned helicopters for infrastructure monitoring and storm damage assessment. “The Part 91 exemption represents a significant leap forward in drone operations, allowing Southern Company to operate SwissDrones advanced vertical takeoff and landing platforms without requiring a pilot or visual observer to maintain a direct line of sight,” the company noted. Still, the milestone required extensive safety documentation and partnership with specialized aviation companies like Phoenix Air Unmanned to navigate the complex regulatory process.

Part 108–A New Pathway

Under Part 108, operators must obtain either an FAA permit for lower-risk activities (infrastructure inspection, survey, training, and demonstration), or an FAA operating certificate for higher-risk, higher-complexity missions (involving larger or faster drones, larger fleets, or operations over denser populations). Powerline inspection, substation and pipeline monitoring, and wide-area damage assessment are explicitly cited as eligible activities for both authorization tiers.

The rule allows operation of drones weighing up to 1,320lbs—including payload—provided they meet consensus-based industry standards for airworthiness, replacing traditional type certification and thereby expediting approval for industrial platforms. Key safety features mandate use of collision-avoidance technology (such as ADS-B) and integration with Automated Data Service Providers (ADSPs) to ensure deconflicted flight near other aircraft, especially as utilities ramp up deployments across the grid.

The proposed regulatory framework also introduces “shielded” BVLOS operations, which could allow special exemptions for inspections within 50 feet of power lines, substations, and pipelines (provided operators have the asset owner’s consent), potentially exempting these missions from specific detect-and-avoid requirements.

Individual pilot licensing , meanwhile, will be replaced by a “corporate responsibility” model: each operation must have a designated operations supervisor for safety and regulatory oversight, and at least one trained flight coordinator, but broad remote pilot-in-command licensing is no longer required. Operators must report flight data, security events, and failures, and maintain robust records for FAA oversight; TSA will require security threat assessments for supervisors and key personnel.

Duffy Unveils Lunar Nuclear Reactor Plans as Part of Space Infrastructure Push

Speaking at a drone regulation announcement on Wednesday, Sean Duffy, who is currently the acting NASA administrator, also revealed that NASA is moving beyond feasibility studies to actual deployment of nuclear fission technology for lunar power generation.

On July 31, Duffy issued a comprehensive “Directive on Fission Surface Power (FSP) Development” that mandates strict timelines: designating a Fission Surface Power Program Executive within 30 days, issuing industry RFPs within 60 days, and awarding contracts to two providers within six months, with a target launch in late 2029.

The program calls for a minimum 100-kW reactor using closed Brayton cycle technology and heavy-class landers capable of transporting up to 15 metric tons. The directive suggests $350 million is allocated for FY2026 for a new Mars Technology program and will ramp up to $500 million annually starting FY2027. The directive also streamlines NASA’s management structure to just 15 full-time engineer equivalents and grants maximum authority to the FSP Program head for rapid decision-making.

Duffy’s remarks on Wednesday, while part of a response to a reporter’s unrelated question during his briefing on the drone regulatory overhaul, suggest NASA’s multi-year federal initiative to explore and develop lunar nuclear power is still in play. “We are now going to move beyond studying … we’ve given direction to go let’s start to deploy our technology to move to actually make this a reality,” Duffy said.

NASA’s lunar nuclear reactor program has been developing since at least 2016 through partnerships with the Department of Energy (DOE). It has gained significant momentum since 2022, when NASA awarded three $5 million contracts to Lockheed Martin (in partnership with BWXT and Creare), Westinghouse (partnering with Aerojet Rocketdyne), and IX, a joint venture between X-energy and Intuitive Machines (which will partner with Maxar and Boeing). The agency’s Fission Surface Power project initially focused on developing a 40-kW system weighing under 6,000 kilograms that could operate for at least 10 years on the lunar surface.

NASA has said those specifications will meet the 6 metric tons weight launch limit while ensuring enough power for demonstration purposes and additional power available for running lunar habitats, rovers, backup grids, or science experiments.

NASA last year said it would extend the three Phase 1 contracts to gather more information ahead of Phase 2, during which industry would be solicited to design the final reactor for demonstration on the Moon. Phase 2 solicitation is planned for 2025. Phase 2 solicitation is planned for 2025. “After Phase 2, the target date for delivering a reactor to the launch pad is in the early 2030s. On the Moon, the reactor will complete a one-year demonstration followed by nine operational years. If all goes well, the reactor design may be updated for potential use on Mars.”

However, Duffy’s recent directive significantly escalates both the timeline and power requirements. The call for a 100-kW reactor to be ready for launch by late 2029 or early 2030 stems partly from geopolitical competition, given that China and Russia earlier this year announced joint plans for their own lunar nuclear reactor by the mid-2030s. The race for space is underscored by prospects that the first nation to deploy such technology may potentially declare “keep-out zones” around its installations under space safety protocols.

Still, the project’s feasibility within Duffy’s accelerated timeline remains uncertain, particularly given NASA’s recent budget constraints and workforce reductions. Approximately 20% of the agency’s staff are departing under the Trump administration’s deferred resignation initiative.

—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).