Explaining the space business to the commander in chief. Photo: NASA.
Posted on 03/30/2014 7:07:43 PM PDT by ckilmer
March 30, 2014 | Comments (2)
Explaining the space business to the commander in chief. Photo: NASA.
"SpaceX was founded to radically improve space transport technology. ... Today, it is one of the leading aerospace companies in the world, with nearly 50 missions contracted ... eight [Falcon 9 rockets launched] with 100% mission success, including four launches for NASA, three to the International Space Station, and sophisticated geostationary spacecraft for the world's leading satellite companies."
So began SpaceX founder Elon Musk when he sat down before the U.S. Senate Appropriations Defense Subcommittee earlier this month. But while all this sounds impressive already, Musk was just getting warmed up -- and his next promise will shock you.
Musk wants to wipe out two-thirds of the cost of launching satellites into space, and break Boeing (NYSE: BA ) and Lockheed Martin's (NYSE: LMT ) monopoly over space launches in the process.
Elon Musk has a plan
As Musk reminded the Senate panel members, the U.S. government pays the United Launch Alliance ("ULA" -- a Boeing-Lockheed Martin joint venture) $1 billion a year to stand ready to send rockets into space. Washington pays even if no launches actually happen. The actual cost when a satellite goes up? On average, $380 million.
Musk says SpaceX can do the same job for just $100 million and would waive the $1 billion annual retainer. By his calculations, if the U.S. had availed itself of SpaceX's services over the last 36 launches that ULA handled, taxpayers would have saved $11.6 billion.
SpaceX's Falcon 9 can go up, up, and away -- for cheap. Photo: SpaceX.
No use crying over spilt rocket fuel
Of course, that's all history. Waterlogged dollar bills under the bridge. But Musk still thinks he can save taxpayers some money on future rocket launches. His purpose in appearing before the Senate, in fact, was to argue that SpaceX should be certified as a contractor to launch military satellites into space under the U.S. Air Force's Evolved Expendable Launch Vehicle, or EELV, project, and that future EELV contracts should be decided on the basis of competitive, fixed-price bidding between SpaceX and ULA.
To date, SpaceX has achieved Air Force "certification" of one EELV mission, and is waiting for its two subsequent launches to be certified. And if they are?
Well, 14 such EELV launches are planned for fiscal 2015. If Musk is right about his company's ability to do the work for less than $100 million apiece -- and $280 million less than what ULA would charge -- then opening this work up for bidding could save taxpayers nearly $4 billion.
Over the next 15 years, the Pentagon plans to spend $70 billion on space launches. If SpaceX could actually cut that cost by 74%, as argued, taxpayers could save more than $50 billion.
Death of a sales-monopoly
That sounds like good news for taxpayers. It would not be good news for Boeing or Lockheed Martin shareholders, who would lose a corresponding $50 billion in revenue. At the same Senate subcommittee hearing at which Musk spoke, ULA CEO Michael Gass argued against introducing price competition into the space launch business. According to Gass, the sector simply "won't work in a competitive environment."
In Gass' view, the high fixed costs of space launch mean that a provider needs a lot of launches to spread the expense around -- otherwise, it risks losing money, especially in a slow year. Duplicating these fixed costs by allowing two providers, Gass warned, risks both companies going broke. This was the same logic Boeing and Lockheed raised back in 2006 in arguing that they be allowed to form ULA, rather than compete against each other.
Musk countered that since Boeing and Lockheed stopped competing against each other in 2006, the cost of space launches has doubled. So apparently, ULA's cost-saving plan isn't working very well.
The Russia factor
Final point. You've all heard about the diplomatic kerfuffle between Washington and Moscow over Russia's annexation of Crimea, right? Well, in a parting shot, Musk pointed out one more wrinkle in these relations as they relate to space launch. Turns out, one of the two rocket families that ULA uses to send U.S. military satellites into space -- Lockheed's Atlas V -- uses a Russian-made engine.
On the one hand, therefore, continuing to favor ULA over SpaceX has the unintended side effect of subsidizing the Russian military-industrial complex. On the other hand, if the diplomatic standoff continues, and Russia decides to embargo sales of its rocket engines to the U.S., that would throw a bit of a monkey wrench into ULA's ability to launch satellites for the Pentagon. Cost savings aside, this point alone seems to argue strongly in favor of bringing SpaceX in as an alternative launch provider and ending the ULA monopoly over military space launch.
ULA's Atlas V is a great way to launch satellites into space... so long as Russia approves. Photo: NASA.
Tesla received handouts from “stimulus”
I see Sir Richard’s greedy little prints here
Private competition without government favoritism would be good
My crony capitalist is better than your crony capitalist.
Sounds hippy-ish to say, but yeah, I agree with him, here.
I think the Boeing contracts have been fat and the traditional launch companies are de-facto extensions of Uncle Sugar.
I don’t approve of the crazy subsidies to Tesla and I don’t believe in the long-term viability of those batteries but what he’s doing here I think is fantastic, and I wish him 100% success.
He’s our only prayer for staying well ahead of China.
“Can Elon Musk suck more taxpayer money from the till? Yes he can!”
Tesla received handouts from “stimulus”
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The loan that he took out actually originated from a Bush administration program. Musk paid the loan back with interest several years ago.
Government has no business giving loans
Musk’s Teslas will be the future, so I commend him for beginning the project....solar powered with vastly improved batteries (lithium iirc)
That’s years away. I hope his space launch contracts provide him with sufficient capital
Musk is South African but came to the US because he saw entrepreneurs succeed here when he was a kid. He invented and sold PayPal to finance Tesla and SpaceX. I wish him well ...he could be the next Ford or Getty, Gates, or Jobs.
We need to end all the subsidies and stuff
Roll that around a bit.
Jim Gass says competition doesn’t work.
And people here call Musk the socialist?
agree.
Musk’s electric cars combined with natural gas powered trucks and buses combined with rising oil/gas production constitute a strategic plan—on par with Reagan’s deal with the Saudis in the early 80’s to raise oil production so as to kill the price of oil and kill Russian export revenue—so the soviet empire would become insolvent.
For more on that read:
The Roots of Russia’s Revanchism — Energy
By William Tucker – 3.21.14
http://spectator.org/articles/58462/roots-russia%E2%80%99s-revanchism-%E2%80%94-energy
I don’t understand the hatred for Elon Musk. I wish I was 1/10 as accomplished as he is.
yeah, I know.
Electric vehicles will never be more than a fringe technology until we find a replacement for batteries.
“Can Elon Musk suck more taxpayer money from the till? Yes he can!”
............
true but he promises to suck much less than lockheed martin and the other space delivery contractors. plus they are getting their space engines from Russia. Whereas Musk’s space engine is home grown.
I have no sympathy or praise for any parasite.
If musk wanted praise, he’d better start risking his own darn money instead of using my darn taxes.
Do that, and he might be less hated.
Capitalists risk their own money or have investors pony up the risk.
This guy has the risk shoved onto us instead via using taxpayer money.
So brave when no self risk is involved and one can walk away clean from a failure.
I see Sir Richard’s greedy little prints here
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Branson doesn’t own any part of spaceX as far as I know. He has his own space business. Its a different set up. Branson has developed a space plane that will drop from a large jet and propel into low suborbital flight. Its designed to give people the chance to go into space for 100,000. That’s down from 20 million. but still expensive.
for those with a historical eye low orbital space flight now is at about the place where the yellowstone park was in 1895. A playground for the super rich of new york and san francisco. It could only be accessed by train and horseback.
In 1906, I believe or there abouts—the first paved road was put into yellowstone so that the (upper) middle class could access the park. and the super rich wandered off to other places.
Electric vehicles will never be more than a fringe technology until we find a replacement for batteries.
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disagree. musk’s batteries go 250 miles. the issue is the cost. musk is now working on building a multibillion dollar battery plant to drive the cost of his electric battery down. So that the price of his cars will fall from 70k to roughly 35k. Musk expects his electric production to move from 22k in 2013 to 500k in 2020. The test will come about 2016-7 when his new battery factory opens. We’ll see.
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