Try It Again, Folks

If you’re the type who follows aerospace news, you’ve probably already seen the footage of the Space-X “Starship” prototype exploding a few minutes after what had, to that point, been its first successful high-altitude flight and soft landing. If not, you may not have known or cared that the two previous landings ended the same way. After all, other than hardcore space wonks like your humble blogger, who really cares if an eccentric billionaire’s pet project works out or not? Elon Musk clearly has the money to spend on this weird science-geek hobby, and if he wants to spend it on an epic-scale model rocketry kit, what difference does that make?

Well, in addition to being a hardcore space wonk (since 1968!) I’m also a business blogger and former business teacher, and I have to say that dismissing the latest Space-X explosion as merely a novelty (or even worse, a vanity project) would be a mistake for financial, economic, and historical reasons. The financial opportunities presented by the commercial exploitation of space have been enumerated by many authors, and need not delay us here; nor does it require any great understanding of business or finance to grasp the benefit of the jobs provided by Space-X itself, and by the many companies from which it buys materials. But failing to grasp the historical and economic significance of the rise of private spacecraft and launchers is difficult to excuse as anything other than being two generations behind the times…

Fifty years ago, private space exploration lay entirely in the realm of science fiction. Putting a person – or even a good-sized satellite – into orbit was possible only for a national government, and indeed only two of those had managed it. Even more daunting, perhaps, was that both the American and Soviet space programs had suffered humiliating failures by 1970, with a plethora of rockets exploding on the launch pad, or shortly thereafter, and at least one fatal accident each. The idea of a private citizen building a space-worthy rocket was the stuff of children’s books, fantasy stories, and (in 1979) comedic adventure television programs staring Andy Griffith. And yet, even then, there were historical perspectives that should have told us otherwise…

In 1903 the airplane had no practical applications, and the automobile wasn’t much better; neither one was anything a modern audience would call safe, either. And yet, thirty years later the first of the Douglas Commercial airplanes was built, followed two years after that by the DC-3. Air travel became a common feature of life, and dozens of commercially viable firms began offering it. The same period saw the rise of literally dozens of automakers, proliferation of highways, and expansion of companies selling everything from internal combustion engines to tree-shaped air fresheners. Today it would be virtually impossible to imagine the world without those two industries…

Now, I’m not suggesting that anyone standing on the dunes at Kitty Hawk in 1903 could have predicted the use of airpower in either world war, let alone the 747, the A380, or the SR-71. And we can only wonder what Henry Ford would have thought about self-driving cars, hybrid vehicles, or jet-powered ground vehicles (it’s a stretch to call them “cars”) that can break the speed of sound. But anyone who dismissed those technologies, or discounted their commercial possibilities, based on the failure of early applications would feel like an idiot in today’s world – and I’d be willing to be that anyone who dismisses Space-X or any of the other private spacecraft companies that are getting started today is going to feel even dumber in just another generation or two…

One Small Step

I was reading yesterday’s BBC story about the upcoming Israeli space mission with great interest, and not just because I’ve been a huge space geek for as long as I can remember. If their mission is successful, Israel will become only the fourth country to soft-land a probe on the Moon, following the United States, the Soviet Union, and China. Even more remarkably, the Israeli probe will then use the fuel remaining onboard to take off again, soft-land again, and make observations from a second point on the lunar surface – something that none of the other countries have managed to date. Even the Apollo missions were limited to just landing and then using a separate drive system to leave…

The second flight, or “hop,” across the Lunar surface is a requirement of the X-Prize competition that this mission hopes to win, but if the probe functions correctly it will open the way for more advanced deep space surveys using remote technology at a relatively low price. So far the Israelis have spent around $88.5 million, according to the BBC, and the addition of a Falcon 9 launch vehicle will add another $60 million or so, depending on the exact launch specifications. For reference, a single Space Shuttle launch would cost between $500 million and $1.5 billion, depending on the payload and duration, and most of the equivalent unmanned missions launched by NASA ran in the $700 million to $900 million range. But then, that’s kind of the point…

I’ve written before in this space about the need to privatize spaceflight, beyond basic programs like the X-prizes and the Virgin Galactic sight-seeing flights. Well, according to a recent article in the Smithsonian’s Air and Space magazine, that is exactly what has happened now that Space-X and United Launch Alliance (ULA) are competing to offer the best value for the price. Of the two, Space-X is considerably cheaper, offering launch vehicles for one-half to one-third as much as their rival, while ULA (a joint venture of Boeing and Lockheed-Martin) has a longer track record and over 130 consecutive successful launches. Both are a far cry from the days when only a national government – and only two of them, really – could send anything other than weapons into space…

Now, I would be the first to admit that this appears to be pushing the concept of a business blog just a bit, but it really isn’t. The commercial possibilities for space flight and space-based manufacturing have been discussed for decades now, and new ones appear every time the cost-per-pound of lifting things to orbit goes down. We’re still probably a few decades away from having large-scale habitats in space, let alone passenger service to get to them, but when even conservative companies like ULA start talking about building cities in Trans-Lunar space, it’s time to start taking them seriously…

So far, things seem to be limited to Space-X’s low-cost strategy versus ULA’s differentiated strategy – cost versus quality, or a brash start-up company that has suffered a number of setbacks in recent years versus the more established firm that hasn’t had a rocket blow up on them in over a decade, depending on your point of view. But there is reason to believe that the Russian space agency, which has been the prime contractor for human-rated space launches since the end of the Shuttle program, and the European Space Agency, which never liked having to beg NASA for seats on the Shuttle in the first place, may start offering their own commercial services. And while they haven’t done it yet, I can’t see anything that would prevent the Chinese, the Japanese, or the Koreans from developing their own commercial-grade launch systems…

Let me again call the reader’s attention (assuming I have readers) to the early days of aviation, only 115 years ago. As long as airplanes were limited to Wilbur and Orville in the bike shop, or even a bunch of wood-and-canvas military biplanes, there wasn’t really a lot of commercial potential in the technology. It was only after the First World War, when companies like Boeing and Douglas started building the first airliners, when things really started to take off. I’m not sure we can compare the Falcon-9, or the new ULA launch vehicles due out in 2022, to the DC-1 or the Ford Trimotor. But unless my understanding of business, history, and aerospace are all completely out to lunch, we all just got one small step closer…

The Cost of Space

There was an interesting article on the Vox website a week or so ago about the relative costs of exploring and colonizing space relative to the amounts our government spends on other things. It’s no secret that I have been in favor of space exploration for as long as anyone can remember, going back to early childhood when I watched Neil Armstrong step out onto the surface of the Moon for the first time and “helped” (to the extent that a six-year-old can help) my father build a plastic model of the Apollo spacecraft. But over the years since Apollo space travel has lost a lot of its popular support and interest, and increasingly people seem convinced that moving beyond Low Earth Orbit is prohibitively expensive under any conditions short of a full-blown Cold War pissing contest. It turns out that this isn’t exactly the case…

For example, the cost of building and deploying the F-35 Joint Strike Fighter, everybody’s favorite high-tech boondoggle, is running about $29 billion per year (projected) over the course of its 50 year service life. The cost of a manned mission to Mars is estimated at about $5 billion per year over 20 years – about $100 billion compared to $1.5 trillion, if you prefer. Granted that no one has ever built the equipment to go to Mars, the price differential might not be quite as high as it appears; my point here is that a Mars project could run 100% over budget and still leave $19 billion a year over for F-35 units…

If that is too speculative – and I can see how it might be, given the currently unknown issues involved in interplanetary travel – how about something more down to Earth? Ask anyone you like which the US spends more money on, NASA or the Post Office, and see what they say. Most people would tell you that the USPS is supposed to make money, or at least break even; there are years where it loses money, but not that much. According to the USPS and NASA websites, however, our government lost $5.5 billion on the Post Office last year, while NASA’s Planetary Science program (that’s everything they’re working on that relates to the planets, moons and asteroids) received just $1.35 billion. To be fair, the whole of NASA’s budget is bigger than what we lost on the Post Office – it’s about $16 billion according to the agency’s own 2015 projections. But we should also note that this is still only a third of what we lost on Medicare fraud according to the GAO – not what we spent on actually providing Medicare benefits to the people who qualify for them, but what the Federal government lost on overpayments, benefits sent in error, and outright fraud…

If that’s not crazy enough for you, consider that according to the GAO, in 2013 the Federal government’s Office of Personnel Management spent just under $85 million on payments to Federal retirees who were, at that time, already dead. Again, that’s not counting death benefits or payments made to spouses or dependents; that’s the money literally thrown away. By contrast, the New Horizons spacecraft, which is due to reach Pluto later this year, costs about $78 million per year. And that’s not even counting silly things, like the fact that the U.S. Mint loses $105 million per year on pennies and nickels – pennies cost more than 1 cent to make, and nickels cost more than 5 cents to produce…

Why does he tell us this? I hear some of you asking. After all, it’s not as though I can tell you what we stand to make on our investment; I can’t even tell you for certain what the benefits of commercial utilization of space are likely to be. My point here is that the income from things as simple as communications satellites, memory foam, advances in electronics and the so-called “space metals” is already incredible, and all of the commercial space flight thus far is just barely scratching the surface of that potential waiting a few thousand miles overhead. There may be good reasons why we should not go to space; there may be more important or more immediate uses for the necessary resources here on Earth. I’m just saying that whatever those arguments might be, cost isn’t one of them…

Pork in Space!

I saw an article last year that claimed the reason NASA has had so much trouble making any progress – or getting any respect – that that most of its multi-billion dollar budget gets swallowed up by various pork-barrel projects in the home districts of key members of Congress. I was a little dubious about this, both because it’s a given that any spending bill in the United States will be loaded with money that rewards the rich and powerful while simultaneously getting long-serving politicians re-elected, and also because while many of the projects cited do not have anything to do with rockets, space flight, or anything that would match off with the agency’s public image, space science does include things like global changes on Earth, biology in space, long-term empirical research, and so on. The fact is, claims of government waste and inefficiency are as common in the United States as the budget outrages they claim to document, if not more so, because it sells newspapers or television advertising time and is more interesting than watching CSPAN to find out what our government is actually spending its money on…

Then I read this article off of the Quartz site, about Elon Musk of Space-X claiming that his company lost out on a multi-billion dollar contract because they declined to offer the government official awarding that contract a job, but the competition did. The facts of the case are a little murky, but no one is disputing the fact that a contract for 36 satellite launches were awarded to United Launch Alliance (ULA), a joint venture of Lockheed Martin and Boeing, on a no-bid contract, or that the official who approved that contract (Roger S. Correll) was subsequently given an extremely lucrative executive position with ULA immediately after his retirement from government service. And while it seems fantastical to believe that anyone would risk “fixing” a government contract in such a blatantly improper fashion, I’m unable to come up with any other explanation for what is going on here…

As a taxpayer, I find this sort of thing infuriating, but not really surprising. During the previous Administration we saw no-bid contracts for Halliburton (and others) supplying the invasion of Iraq, and if you look you will find similar arrangements in every Federal budget since President Eisenhower warned us about the consequences of a “Military-Industrial Complex” taking control of our government. What I find especially heinous about this particular story is that the United States government stands to gain more from the commercial development of outer space than anyone in this Hemisphere, and possibly in the world, which makes stifling all opportunities in that industry not merely corrupt, but also self-destructive. If the claims made by Space-X are true, and they really can launch satellites for a quarter of the price we are currently paying, then our government is quite literally squandering billions of your tax dollars while borrowing ever-larger amounts on credit…

Now, it must be admitted that at least some of the money being given to ULA will benefit our economy; they will have to at least produce launch vehicles (even at a 400% markup) or risk having the contract rescinded. And this will, in turn, allow the participating companies to hire and pay their employees, and order parts and materials from other companies that will do likewise, thus cycling more money into the economy and improving our present conditions. I just can’t help thinking that on a no-bid contract there is no reason for company executives to include huge bonuses for themselves – and while I have no objection to paying for value received, regardless of the form it takes, I do have a problem with people enriching themselves at the expense of the public while returning nothing of value except electable politicians…

I will leave the comments about the ethics, morality or legality of no-bid contracts to those better qualified, and just close by saying that from a business standpoint they can indeed be categorized as “criminally stupid” – and that there is no way we will ever advance into space if we keep trying to haul this much pork along with us…

Business From On High

In the classic historical account The Right Stuff author Tom Wolfe details the phenomenal rate at which the luster came off the U.S. space program after the Apollo 11Mission landed on the Moon. Although manned space flight remained (and remains) a hot topic in other parts of the world, by the time the ill-fated Apollo 13 Mission launched the only thing that retained the interest of the American public was the malfunction that almost killed the entire flight crew – and the brilliant improvisations that brought them home safely. This continues to lead to some unflattering (and probably deserved) comments on the attention span of the American people, but the unfortunate truth is that by 1971 most people in this country were only paying attention to our space program when something extraordinary happened (e.g. Skylab, the first Space Shuttle launch, and two Shuttle disasters). This seems particularly unfortunate at the moment, considering that one of the most significant developments in the history of manned spaceflight and business is taking place somewhere over our heads this week…

If you missed it on your local news, you can pick up the most recent Forbes article about the Space-X Dragon spacecraft docking at the International Space Station with 5,000 pounds of supplies last week direct from the link. It may not seem that important at first – it is the fourth time the Dragon capsule has docked with the station, after all – but once you consider that price and convenience are the two major factors that have limited the commercial exploitation of space, this even becomes very significant. As exciting as the sound and fury of a rocket launch is, the critical aspect to any transportation system is reliability. A vehicle that can go someone once (or even six times) is at best a curiosity, at least from a business standpoint. A vehicle that can go somewhere whenever you want it to is a business asset. The Dragon has made the flight to the ISS four times already, as opposed to the single-use launch vehicles of the last century, and there is reason to believe it could do so indefinitely – or, at least, dozens of additional times. Assuming that you could find a cost-effective way of launching it…

This is what makes the other part of the linked article so interesting. The successful use of a privately-funded, privately designed launcher means that it is now possible for private companies to launch profit-seeking enterprises into Earth orbit without needing support from NASA or our national government. But even more potentially important is the successful test of the reusable Falcon 9 rocket. In theory, a reusable orbital launch vehicle would enable Space-X to lift payloads into space at a lower cost than any other entity in history – effectively opening up the commercial use of space to a huge range of companies that could never have afforded to place payload on a Space Shuttle or a Russian conventional rocket. A mass-produced reusable launcher would lower the costs still further. And if the company can produce a version of the Dragon – or one of their other designs – that is safe enough to be certified for human use, they could lift people to orbit for a fraction of what the so-called “Space Tourists” have been paying…

Now, even I have to admit that there are still a lot of “ifs” in that description, and a corresponding number of developments that we still have to await. It is possible that another company, or even another launch technology (such as the winged rockets being developed for Virgin Galactic) will become this century’s answer to Pan Am, leading the way into space and on across the cosmos. It is also possible that none of these things will pan out, commercial space travel will remain on hold for another century or two, or that humans will succeed in destroying our planet’s biosphere before we can get off of it and effectively exterminate ourselves. If I had all of the answers I’d be a multi-billionaire financial advisor and philanthropist, not a scruffy blogger nobody ever reads. But all of that said, I can’t help but think that what may be the most important technological development since the wheel may be taking place in the sky over our heads this week…

And, apart from a few space-mad history wonks like yours truly, no one is paying any attention…

Crossing the River

It has often been remarked that Outer Space (spelled always with capital letters) isn’t actually that far away from where you are sitting right now. Low Earth Orbit, where you will find the International Space Station (and where until recently you would have found Space Shuttles) is closer to my house than Los Angeles is; in fact I’m closer to much of it than I am to Chicago. What’s remarkable isn’t the distance so much as the speed – even a low orbit requires getting up to a velocity relative to the surface of the Earth that most people will never experience, which in turn requires an inconveniently large rocket and an equally inconvenient place from which to launch it. When I was a child, the concept of commercial space flight was preposterous nonsense; the stuff of bad science fiction and obviously centuries or millennia away. It took the full authority and resources of the world’s two most powerful nations just to go to space, and even if smaller countries were able to duplicate that feat, there was no way any private citizen could…

Of course, we’ve heard similar statements made about a great many other achievements, including one with which you are probably using to read this blog post (assuming that anyone is reading this blog post). Still, there remains something daunting about commercial space flights. Of course, Sir Richard Branson can launch Virgin Galactic; he’s Sir Richard Branson, after all, and Space Ship One and Space Ship Two are just sight-seeing excursion craft. Sure, Space-X managed to get a commercial cargo ship into orbit, but that’s also a company owned and run by extraordinary people, and it’s still only one company. Sure, Boeing could develop a new private space launcher, but they’re one of the largest defense contractors in the world, and they’re using serious money from NASA to fund the project. And sure, there’s Sierra Nevada Corporation, and its Space Exploration Systems division, as mentioned in a previous post. So, let me ask you, how many private companies have to go to space before we stop making these excuses?

Well, if you said five, your ship appears to have just come in – and it looks like it’s a spaceship. A Google News listing takes us to a story on the International Business News site about the Orbital Sciences Corporation’s Cygnus spacecraft, which able to dock with the International Space Station on Sunday morning. Actually, “dock” may be overstating the case; the Cygnus was launched into orbit where it managed to get close enough to the space station (and match velocities well enough) for the crew to snag it with the robot arm and bring it in. But since that’s the same way every other kind of unmanned ship docks with the station, maybe that isn’t important. And while it’s true that the Cygnus isn’t certified for human transportation yet, which makes it more of a high-speed cargo pod than an actual space ship, the company expects to work out the remaining details and start transporting people to the station by the end of its contract in 2016…

But what is truly amazing about the Cygnus is that it was made by a private company for a contract with NASA to carry about 20,000 kilos (44,093 pounds) of cargo into space on eight different flights over a four-year period – and so far it looks as though the company is actually going to complete its end of the contract. And while $90,000 per kilo – about $41,000 a pound – from the surface of the Earth to the Space Station still isn’t cheap, it’s already much lower than the prices you would have encountered just a few years ago – and still falling. If actual competition were to appear – if every company and every national government interested in transporting cargo into space were to start getting multiple bids on every contract they set up – then fantasy has become fact once again, and within our own lifetimes may actually become commonplace…

In one lifetime my grandparents watched our world go from biplanes made of wood and fabric to the Space Shuttle, our top speed go from 30 or 40 mph to 25,000, and flight itself go from a suicidal curiosity to a routine part of our world. In my lifetime I have already seen us move from vacuum tubes to nanotechnology and from magnetic tape to cloud computing. And in the past five years we have seen the number of private companies going into space rise from zero to three, with at least two more to follow in the next year or two. What will we come to regard as commonplace by the time I am old man? And, even more to the point, what impossible, fantastical, preposterous rubbish will become reality by then?

The Other Guys

Whenever possible I still enjoy reading magazines in hardcopy. I’d never consider giving back my Kindle, of course; it’s still one of my favorite gadgets, and I have no intention of making any long trips without it (or its generational descendants) again, especially by air. But the other day I was reading a newsstand copy of SmithsonianAir and Space when I can across an article about a (relatively) small firm right out of a science fiction novel that is taking on giants like Boeing and Space-X in an effort to develop the first true commercial space plane…

The company is called Sierra Nevada Corporation, and its Space Exploration Systems division isn’t exactly a couple of guys in a garage somewhere – they’ve already received more than $200 million from NASA in support of their orbiter design, which they call Dream Chaser. In fact, they’ve been building components for various NASA projects for years; one of their most recent accomplishments was the very successful “sky-crane” system used to lower the Curiosity probe onto Mars. Altogether, the company claims to have flown over 4,000 different constructs on more than 400 space flights. But the Dream Chaser program is their first venture into manned spacecraft, and they’re definitely not operating on the same scale as Space-X, let alone Boeing – and both of their larger competitors are further along in the design and building cycle. And yet I was immediately drawn to the Dream Chaser story for reasons that had nothing to do with my love for spacecraft or identification with underdogs and trouble-makers…

First off, the Dream Chaser design uses a composite materials hull – much like Boeing’s 787 Dreamliner airliner, but completely unlike anything else ever flown into space by people. This makes the vehicle cheaper to build and maintain than any earlier system, as well as faster and easier to produce. Up until this point the largest fleet of reusable spacecraft ever built, the Space Shuttle program, included a maximum of five flyable units; if Sierra Nevada can gain acceptance of the design they could conceivably mass-produce it, lowering the cost still further. If someone can come up with an equally affordable launcher (and several companies have suggested ideas for that) this modest seven-passenger design could become available to a huge range of private users, effectively opening space to a number of people previously imagined only by science fiction writers…

Now, I could point out that the existence of dozens of stories and novels about commercial space exploration has not had much effect on the development of privately-owned spacecraft to date, but I can’t help thinking that such arguments are actually looking at things backward. What makes the Dream Chaser program so remarkable lies in the early years of the last century. For more than a decade after the first powered flight by the Wright Brothers, airplanes were well beyond the reach of all but the very richest private citizens; at first more curiosities ridden by daredevils and stuntmen (somewhat like the “space tourists” of recent years), or military vehicles operated in defense of their countries by men who were already considered insanely brave by nearly everyone else. It wasn’t until the appearance of standard designs, mass-produced aircraft that could be counted on to behave in more or less predictable ways that the commercial use of air travel became both acceptable and affordable – and changed the world we live in, although not always for the better…

I can’t tell you if the availability of affordable launch vehicles will lower the barriers to commercial space flight the way it did for commercial aviation. But as a business consultant and instructor I can definitely tell you that none of the fanciful civilian uses of space we’ve been talking about and writing about for the last century or so will ever be possible so long as spacecraft are assembled one-by-one, by hand, and take decades to build and months to prepare for launch. Sierra Nevada Corporation may not, in fact, be building the spacecraft equivalent of the DC-3, or the Ford Tri-Motor, or even the Curtis Flying Jenny; they may not ultimately succeed in the Dream Chaser venture at all. But those equivalents are coming, and we may all live long enough to see them…

It makes you wonder what else we might find on a random visit to the newsstand, doesn’t it?