Posted on 09/02/2003 10:24:43 PM PDT by anymouse
[Note: an edited version of this article appeared in the August 15 issue of SpaceEquity.com.]
The history of development of reusable launch vehicles (RLVs) is littered with carcasses like some foreboding desert trail. In the last two decades we have seen NASP, Delta Clipper, X-33, X-34, VentureStar, Roton, and others come and go, leaving behind, at best, bits and pieces of hardware. The only successful RLV ever developed has been the Space Shuttle, and even there the word “successful” must be qualified. Thirty years after the Shuttle started, we have only now, in the wake of the Columbia accident, come to the realization that the Shuttle always was, and almost certainly always will be, an experimental, not an operational, vehicle.
Yet, RLVs continue to be the Holy Grail of the launch industry. Develop an RLV that can reduce the cost of space access to some magic number—sometimes $1000/pound, other times as low as $100/pound—and the world will beat a path to your door, industry pundits and advocates claim. Such a vehicle would open space to wide array of new markets currently shut out by high launch costs, from manufacturing semiconductors and protein crystals in microgravity to orbiting hotels for thousands of tourists.
The assumption here, though, is that not only would such a vehicle be able to dramatically increase launch demand, it will be able to generate enough revenue in the process to make a profit, including providing any investors with an acceptable rate of return. A closer examination of the economics of the launch industry, however, suggests that it is unlikely that a business case for an RLV—at least a full-fledged orbital one—can close now or in the near future.
High costs, small markets The first hurdle RLVs face is the high cost to develop the vehicle. Orbital RLVs that can carry large enough payloads to be commercially useful require significant investments in technology, ranging from engines that can be reused multiple times between overhauls to lightweight composite structures that reduce the mass of the vehicle. NASA has invested in these technologies in fits and starts, notably with the X-33 and the (now sharply downscaled) Space Launch Initiative (SLI). The problems encountered along the way, including the infamous failure of the composite liquid hydrogen tank developed for the X-33, suggest that much more investment is needed before critical technologies are mature enough for use in commercial orbital RLVs.
These technological issues mean that building an orbital RLV will be an expensive prospect. Some reports suggested that the full cost to develop VentureStar would have approached $35 billion. If this figure seems outlandish, keep in mind that current estimates for the Orbital Space Plane—a vehicle that is essentially only a reusable human-rated upper stage for an expendable launcher—range from $10 to $20 billion. Even if VentureStar’s putative price is cut in half, it still requires a sum greater than what it will cost Airbus to develop the A380 ($10.7 billion) or Boeing to develop the 7E7 (between $7 and 10 billion). Unlike the launch industry, the aviation industry is considerably more mature and understood, yet analysts believe that each company is betting its future on these new aircraft. If spending that amount of money (even with some degree of government subsidization) in a mature industry is considered risky, spending an even larger amount on launch vehicles borders on the insane.
Even if an orbital RLV is developed (most likely through heavy government subsidy), it faces the challenge of making a profit. For RLVs to be cost-effective, they must have a high flight rate. An RLV, like an airliner, makes no money sitting in a hangar. The hope in the industry has been that a RLV with low launch costs would generate considerable additional demand for launches. The latest research, though, indicates that this is most likely not the case.
The most quantitative study of the effects of low-cost space access on launch demand is the Analysis of Space Concepts Enabled by New Transportation (ASCENT) study, completed earlier this year by the Futron Corporation under a NASA SLI contract. The report examined how demand for space access would change as a function of launch costs for a wide range of markets, from communications to remote sensing to tourism. The study took a neutral approach to both markets and launch vehicle technology, with no effort to advocate either a certain class of markets or specific launch vehicle technologies.
“The dose of pragmatism produces some sobering outlooks,” notes the report’s executive summary. In the absence of an RLV launch demand remains relatively flat, at about 60 to 80 launches a year through the end of the forecast in 2021. Moreover, reducing launch costs does not stimulate a huge increase in launch demand, as many industry sectors, particularly established ones like communications satellites, have remarkably inelastic demand curves. Introducing a vehicle that reduces the cost of space access by 75% increases launch demand only from about 60 in 2001 to under 140 in 2021. In other words, cutting launch costs by a factor of four increases launch demand by less than a factor of 2.5. It doesn’t take an MBA to realize that such an RLV would generate less revenue than existing expendable vehicles, making it very difficult to pay off the huge investment required to develop such a vehicle.
The suborbital solution In this analysis it becomes clear why there are neither no operational orbital RLVs today nor any in the foreseeable future. Yet, without the introduction of RLVs we are left with expendable vehicles, which, as the ASCENT study shows, have fallen into a stagnant market, not to mention one that currently is proving unprofitable for most, if not all, the major players. Is there a way out of this situation?
The answer may lie with another class of RLVs. This analysis has focused on orbital RLVs, capable of placing sizable payloads into orbit in direct competition with current expendables. However, there has been a surge of interest in the last several years in suborbital RLVs, vehicles that can fly to the edge of space carrying a few passengers or small payloads. The $10-million X Prize has generated much of the initial enthusiasm for suborbital RLVs. That interest is now sustained by recent forecasts, which project that suborbital space tourism could blossom into a half-billion-dollar industry within 20 years.
One advantage that suborbital RLVs have over their orbital cousins is that they fly far less demanding trajectories, climbing to 100 kilometers and about Mach 3. This makes it far easier to develop such vehicles, as they don’t rely on cutting-edge technologies to be successful. When Scaled Composites rolled out SpaceShipOne, its X Prize entry, earlier this year, company president Burt Rutan estimated the total cost of the program at about the same as the going rate for a ticket on a Soyuz flight, or about $20 million. Some other companies are also developing vehicles at similar, or even lower, costs.
The successful development of one or more suborbital RLVs will not only open up the space tourism market, it could serve other markets. A study conducted by the Aerospace Corporation for the US Department of Commerce last year identified a number of promising markets for suborbital RLVs in addition to space tourism, including remote sensing, microgravity testing, and missile defense applications. All of these are either unserved or underserved by existing sounding rockets.
These markets give suborbital RLV developers additional revenue streams that can help provide investors with an acceptable return on their investment. It also provides the basis for investing in a new generation of more capable suborbital RLVs, particularly those with greater crossrange, which could open up additional markets like rapid package delivery. This creates a virtuous loop that enables the incremental development of increasingly capable suborbital RLVs, eventually reaching the point where orbital RLVs become feasible.
The problem with orbital RLVs, and why their business cases never close, is primarily because we are attempting to take too great a technological leap in a bid to serve too small a market. Just as the Wright Brothers did not go from the Wright Flyer directly to a 747, or even a DC-3, we cannot expect to jump from expendable rockets immediately to large orbital RLVs. That should be the enduring lesson from the space shuttle program, not to mention later efforts that became enamored with cutting-edge technology, forsaking operational requirements and the needs of the marketplace. Instead, Wright and other aviation pioneers took a more incremental approach that, over time, led to larger, faster, safer aircraft. A similar approach in RLVs will allow us to go from small suborbital RLVs to larger orbital versions, and in the process make money and build a sustaining industry. It may be the best solution—and perhaps the only solution—to the omnipresent woes of the launch industry.
Jeff Foust (jeff@thespacereview.com) is the editor and publisher of The Space Review. He also operates the Spacetoday.net web site.
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