RLV Regulation: Licensing vs. Certification

When Burt Rutan rolled out the SpaceShipOne suborbital spacecraft earlier this month (see “Rutan aims for space: A look at SpaceShipOne”, April 21, 2003), one of the biggest surprises had nothing to do with the vehicle’s unique design or flight profile. Instead, despite the fact that the vehicle seemed ideal to win the X Prize and usher in the era of suborbital space tourism, Rutan made it clear there were no plans to put the vehicle into commercial service. SpaceShipOne would fly under an “experimental research and development glider” license on a series of flights to determine what the operating costs of the vehicle would be.

According to documents provided by Scaled Composites at the rollout, SpaceShipOne will conduct test flights under an experimental license to avoid “the burden of regulatory costs.” In an Aviation Week article, Rutan suggested that the cost to obtain FAA certification for SpaceShipOne and the White Knight carrier aircraft could run between $100-300 million: on the order of ten times as much as the estimated development cost of the vehicles. “How can you amortize that?” Rutan told Aviation Week.

The potentially-high cost of regulation has been a major concern for developers of reusable spacecraft. If forced to certify their vehicles like commercial aircraft, vehicle developers fear that their industry will literally never get off the ground, weighed down by the expense of regulatory paperwork. However, as comments from both officials with the Federal Aviation Administration (FAA) and industry executives show, the regulatory issues, while significant, may not be as big a hurdle as some fear.

In the US, new aircraft designs must go through an intensive inspection and review process by the FAA before being approved, or certified, for commercial use. This can be a very expensive process: some estimate that the cost of certification can be up to an order of magnitude more than the development cost alone. Certification can also take a long time to complete. For example, earlier this year Eclipse Aviation, a startup developing a new low-cost business jet, was forced to switch engines to a new design by Pratt & Whitney Canada. That changed forced Eclipse to push back the expected date of FAA certification—when the company can start delivering aircraft to its customers—from the end of 2003 until the first quarter of 2006.

Developers of reusable launch vehicles, particularly suborbital vehicles that more closely resemble aircraft than conventional launch vehicles, have expressed concern about the costs of certification. “To go from an experimental vehicle to a certified vehicle is typically a ten times increase in price, on the rough order of magnitude,” said X Prize chairman Peter Diamandis during the Space Access ’03 conference last weekend in Scottsdale, Arizona. “And for the unknowns we have here it could be well more than ten times, it could be 20 or 30 times.”

Dan DeLong, chief engineer for XCOR Aerospace, is even more pessimistic, estimating that certification could cost up to 100 times as much as development. “It’s tough raising the money to build the vehicle,” he said, “but if you have to certify it before you’re allowed to make money with it, it will be 100 times harder and it just won’t happen.”

However, certification only applies to the various types of aircraft, as well as manned balloons. Certification is not used for launch vehicles, which are instead licensed by the FAA’s Office of the Associate Administrator for Commercial Space Transportation (AST). “We don’t use the ‘C’ word [certification] at any time in our office,” said Michelle Murray of AST during a panel session on regulatory issues at Space Access. “Everything is licensing; certification is for airplanes.”

Today, AST routinely licenses commercial flights of expendable launch vehicles. It also has the authority, granted under the Commercial Space Act of 1998, to license the launch and reentry of RLVs. AST published the regulations for RLV licensing in 2000, although to date no RLV licenses have been issued.

While licensing is still a detailed process, it is widely considered less onerous than certification. However, what is to keep the FAA from classifying a suborbital RLV, like XCOR’s Xerus—a winged vehicle that takes off and lands on runways—as just a high-altitude aircraft that requires certification? To help make sure suborbital RLVs are considered as launch vehicles and not aircraft, the FAA has developed a pair of definitions for suborbital rockets and suborbital trajectories. Those definitions were announced for the first time at Space Access:

Suborbital rocket: a rocket-propelled vehicle intended for flight on a suborbital trajectory whose thrust is greater than its lift for the majority of the powered portion of its flight.

Suborbital trajectory: the intentional flight path of a launch vehicle, reentry vehicle, or any portion thereof, whose vacuum instantaneous impact point does not leave the surface of the Earth.

Those definitions, Murray said, are designed to be used internally to help the FAA classify vehicles. There are no plans to use them in formal rulemaking documents.

Those definitions were well-received by conference attendees, some of whom cheered and applauded immediately after the definitions were read. “We can live with that,” said XCOR CEO Jeff Greason. “One of the primary purposes of flying the EZ Rocket was to kickstart this process because we couldn’t figure out any other way to get an answer out of the FAA.”

While it may be clear that suborbital RLVs should be licensed and not certified, how they will go about carrying passengers remains uncertain. Current regulations don’t explicitly discuss the requirements for passengers, and while the launch licensing process includes a section for payload review, Murray noted that the FAA does not consider people to be payloads.

“We do not have specific authority to allow passengers on launch vehicles,” said Jay Garvin, manager of AST’s Licensing and Safety Division. “But also, no one has told us we can’t.” Garvin said that his office has felt pressure from companies like XCOR to make a decision one way or the other. He did note that, in just his personal opinion, that it would be possible for licensed vehicles to carry passengers. “It doesn’t say we can’t do it.”

In an effort to reduce the regulatory burden on RLV companies, the X Prize’s Diamandis has introduced a concept known as an “accredited passenger.” The concept is designed to be similar to the “accredited investor” regulations of the Securities and Exchange Commission, which allow people of relative high net worth to invest in startup companies prior to an initial public offering of stock. Under Diamandis’ accredited passenger program, people would be certified on vehicles after having proved that they are aware of the risks and have completed a training program. “There are thousands, if not tens of thousands, of people who would go through the training; in fact, they want that experience,” he said. Such a system, Diamandis believes, it will make it easier for vehicles to build up flight experience and potentially transition into a certification regime like those used for passenger aircraft.

While Diamandis has been pushing the accredited passenger concept for several years, there has been little progress made to date getting such a system into FAA regulations. “We are looking at how to get people onto reusable launch vehicles,” said Garvin. “Will an accredited passenger system make it easier? I can’t answer that. We’re just beginning to talk about it.”

Getting a launch license raises other concerns for RLV companies. Environmental regulations pose a significant obstacle for these companies, particularly those who plan to fly out of locations other than existing licensed spaceports. Issuing a launch license is considered a “major federal action” and thus must comply with the National Environmental Policy Act (NEPA). While Murray notes that no commercial launch license application has ever had a finding of significant impact to the environment, the process of making that determination can slow down the licensing process and force significant changes in launch plans.

“The environment is the biggest hurdle we’ve come across for launch,” said Neil Milburn, the federal liaison for Armadillo Aerospace, another suborbital RLV developer. Those issues, he said, have forced Armadillo to consider a change in launch sites. They had planned to launch from the new Oklahoma spaceport, but found that the spaceport did not have a completed environmental study, a critical requirement to meet the NEPA regulations. While a study is now underway, it may take a year or more for the study to be completed, with no guarantee that it will be a success. “We just can’t take that kind of a gamble,” he said. “If you don’t know where you’re flying from yet, you’re not going to win the X Prize.”

Armadillo has now shifted its plans for suborbital flights to the White Sands Missile Range in New Mexico, which already has several environmental studies that Milburn said the company should be able to use to prove NEPA compliance. He noted that even at a desolate site like White Sands, which appears to be nothing more than hundreds of square kilometers of gypsum sand, there are environmental issues ranging from protecting relatively obscure species of animals to Native American archeological sites.

XCOR’s Greason echoed those concerns. “The environmental stuff is very bad. It could be a serious, serious problem,” he said. XCOR plans to fly out of Mojave Airport in the high desert of southern California; Greason said the airport staff “is doing a huge amount of work” trying to get environmental approval.

Another hurdle to RLV licensing is the requirement that vehicles be insured to cover the “maximum probable loss” (MPL) the FAA determines a vehicle could incur in an accident. “That’s not actually a regulatory problem,” said Greason. “The problem is that they tell you a high number and the insurance is hard to obtain at any reasonable cost.” Greason estimates that the MPL for a small suborbital RLV would be on the order of $10 million, but that the aviation insurance market today can only provide about $1 million in coverage. “Unless you can post a $9 million bond, where you’re going to get the insurance from is not obvious.” The newly-formed Suborbital Institute (see “Suborbital’s ascending trajectory”, April 14, 2003), an industry organization for suborbital RLV companies, has made federal support to fill the gap between required and available insurance one of its key lobbying efforts.

Although one could guess that the various issues and obstacles regarding RLV licensing might create an antagonistic relationship between the companies and the government, the FAA an the industry panelists made it clear that the two sides get along quite well with each other. “The FAA aren’t the bad guys here,” said Milburn. Brian “Rocket Guy” Walker, a solo developer of a suborbital rocket he plans to fly himself, has also been pleased with his dealings with the FAA. He said that when he held a meeting with a number of AST employees “I was treated with respect, with dignity, with interest. They were all extremely helpful.”

There is also the realization that, as difficult as they may be, licensing and regulatory activities are necessary. “I don’t think it’s bad in a free society to have a situation where certain minimum requirements have to be imposed on people before they can launch something with destructive potential that can kill people,” said Greason. “The mere presence of a federal agency requiring you to demonstrate a certain level of public safety is not bad. The details can be quibbled over, but we need something, because if we don’t have something someone is going to go out and kill 100 people with a rocket.”

Jeff Foust (jeff@thespacereview.com) is the editor and publisher of The Space Review. He also operates the Spacetoday.net web site.

There is also the realization that, as difficult as they may be, licensing and regulatory activities are necessary.

Not. They don't license light fixtures. UL tests them and the insurance companies pony up the cash for the risk. A relationship then develops between higher pricing for unquantified risk and the testing and analysis necessary to reduce the unknowns or the probabilities of failure. That's how it works in a free market.

“I don’t think it’s bad in a free society to have a situation where certain minimum requirements have to be imposed on people before they can launch something with destructive potential that can kill people,” said Greason.

A power tool can kill people. A bad building can kill people. A doctor can kill people. Does state licensing and inspection really prevent those events? Not from what I've seen in my experience of industry. I am not arguing against third-party involvement (far from it), but it doesn't have to be the government. In fact it's better if it isn't.

We don't need an armed state monopoly to manage risk. How is the FAA accountable for aircraft safety? What did they pay for having approved cheesy cockpit doors on airplanes? NOTHING. The taxpayer PAID BILLIONS to cover the airline executives who made those lousy decisions. That's socializing risk. It produces a system where the financially powerful can buy favorable treatment from the regulators via their political sponsors. They can use that influence to restrict market access from their competitors or wiegh them down with costs that they can more easily bear. It's done all the time, especially in environmental regulation. Had the airlines faced the cost of risk associated with cheesy cockpit doors their insurers would have made them uneconomic.

“The mere presence of a federal agency requiring you to demonstrate a certain level of public safety is not bad.

Yes it is, because they are not accountable for either failure, efficiency, or equal treatment.

The details can be quibbled over, but we need something, because if we don’t have something someone is going to go out and kill 100 people with a rocket.”

Duh. But it does not have to be the government.

I may have met your associate at the SAS '95 conference. Yes it is usually a worthwhile and affordable conference for getting the inside info. on the commercial launch industry.

I met Henry Vanderbilt in '93 at the WorldCon in San Francisco of all places (my first and last WorldCon even though I met some interesting people there.) I attended many of the SAS confereces until a few years ago. Each conference produced many new contacts as well as new info. on the latest developments in lauch vehicles. I highly recommend it for those interested in the subject.

That gives the government a huge stake in mandating whom, where, when and what can be launched into space.

The power to control is power for sale!

The United States was not empowered by the Constitution to control the use of commons. Why? The power to regulate commons is the power to control the entire economy because commons are factor inputs in the production of all economic goods. It is the ability to destroy all civic respect for unalienable individual property rights. That's why I cited corrpution in environmental regulation. It's too much power.

If only we could go back in time and let saner policy prevail. :(

Well, there's no turning back, but there is a possible future. :-)

Consider Chapter 1 in the context of your comment.

Unfortunately the US government could (probably would) restrict export of the technology/hardware used in this vehicle to a foreign country. (Remember x42 and his buddies selling missle and nuke secrets to China and tech transfer authority moving to State Dept. from Commerce Dept. ?)

Several commercial companies gave up trying to go off shore, as the State Dept. just sat on export permits. Heck multi-billion dollar satellite projects were lost and the Mir Space Station fell to Earth* waiting for export permits.

* A U.S. built teather propulsion system planned to be launched up to cheaply boost the Russian Mir Space Station was kept from export to Russia, meanwhile the commercially funded Mir fell into the Pacific Ocean. MirCorp was set up to operate Mir as a commercially financed orbital tourist and science facility. Millions of investor dollars were lost due to this politically motivated use of denying an export licence for hardware/technology with no overt military value.

Sounds like a reason to do development outside of the US, and use japanese/Chinese/Taiwanese components. The more the US govt frustrates development, the more it will happen outside the govt's reach

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