Sky-High Goals, Lower Costs

Ian Alexander (March 2011)

In the December 2010 issue of Scientific American magazine (, David Freedman discusses “Jump-starting the orbital economy” – turning space travel from a costly government-financed research venture into a profitable business.Unmanned geostationary satellites have already made that leap, of course: that strange orbit at 35,800 kilometres up, around the equator, is thickly populated with squat but profitable boxes of communications equipment, doing everything from monitoring the weather to providing television to far-flung islands.Manned space flight is another matter. NASA’s last space shuttle is due to launch next summer: after that, the funding, like the enthusiasm for costly adventures with no sight of a financial return, dries up. President Obama has cancelled NASA’s Constellation launcher, the costly agency-funded replacement for the shuttle. According to Freedman, most of the $9 billion of R&D effort so far spent will be written off.But NASA is not giving up the ghost – or should I say the spirit of adventure – just yet. Instead, the space agency has decided to pass the mantle of invention to private companies. They are expected to come up with innovative ideas; in return, NASA will provide them with seed-corn funding to help them get started – and after that, if their ideas work, NASA will provide them with a guaranteed customer. Just the thing to help you get unit costs down as you ramp up production.

And costs will really have to come down if space travel is ever “to boldly go” anywhere.

According to the NASA website (, a shuttle mission costs about $450 million; Wikipedia estimates the true cost at more like $1.5 billion per flight. The number of crew varies, but for 7 crew and in round numbers that’s an eye-watering $200 million per person.

Could “a small private operation” do better than “armies of engineers, technicians and managers backed by billions in funding and decades-long development cycles”?

From Cost-plus to cost efficiency

In other words, could a leaner, more agile approach possibly work for the costliest, riskiest and highest frontier of them all?

NASA has always relied “on the commercial sector to build spacecraft”. But “what will change under the plan is the way NASA will work with private firms.” Like the Pentagon, “NASA hires contractors on a ‘cost-plus’ basis, which means NASA reimburses them for whatever they spend and then tosses in a guaranteed profit” – not exactly a formula for economy, especially as every change means more profit for the contractor, and a warm cosy feeling of increased safety for the agency.

Under Obama’s plan, budgets are fixed. Over budget, you make a loss; under budget, you make a profit. A penny saved is a penny earned. Sounds familiar? Well, it’s a big change for aerospace contractors.

Even so, more than 10 companies are hoping to launch people into space. The hopefuls include Orbital Science Corporation with its Taurus 2 launcher; SpaceX’s Falcon 9; and a variant Delta rocket built by United Launch Alliance (Boeing and Lockheed Martin); not to mention “joyrides to suborbit” from Xcor, Virgin Galactic, Blue Origin or Armadillo Aerospace.

With older technology, United Launch Alliance already puts payloads into orbit for $100 million, so “the only question is whether [such giant companies] could build them under fixed-price rules and cost-cutting pressures”.

SpaceX hopes to charge a quarter of that, just $25 million per launch. That is comparable to what the very richest adventurers are willing to pay. “Since 2001 Russia has flown seven tourists to the space station – one of them flew twice – via the Soyuz [launcher] at prices ranging between $30 million and $50 million. At significantly lower prices, the number of takers would climb”, observes Freedman.

Lon Levin, president of SkySevenVentures, remarks that “If the price were to head down toward $1 million, might hundreds of people buy a ticket? It’s possible, and that could make it a real business.”

So far, SpaceX’s successful rocket tests are the only concrete “evidence so far that private industry might succeed.” It’s promising, but still more than a bit worrying.

From ‘Exactly How’ to ‘What’

But according to Freedman, “to encourage this type of innovation, NASA has to let go. The agency has always told its contractors exactly how it wants its space vehicles built, yet under [Obama’s] new plan NASA would simply state what it wants a finished system to be able to do, such as safely ferrying a certain amount of weight into orbit.

“We won’t be overly prescriptive in how we expect contractors to meet our requirements, we’ll just list high-level goals and give them maximum flexibility for how to meet those”, says Phil McAlister of NASA, unconscious of any possible pun on the word “high”.

“Then at specific milestones we’ll be verifying that the requirements have been met, and we’ll provide whatever oversight is necessary to make sure.”

Could this hands-off, goal-oriented approach to RE do what fifty years of manned space flight have failed to do? It’s a tall order (sorry). But given people willing to take risks with life and limb – as well as deep pockets – who is to say it isn’t possible. As for whether it’s fair on people and planet for the wealthy to behave like that, well, that’s another matter entirely.

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