SPACE THE FREE-MARKET FRONTIER
EDITED BY EDWARD L. HUDGINS
SPACE THE FREE-MARKET FRONTIER
SPACE THE FREE-MARKET FRONTIER
EDITED BY EDWARD L. HUDGINS
Washington, D.C.
Copyright © 2002 by Cato Institute. All rights reserved. Library of Congress Cataloging-in-Publication Data Space : the free-market frontier / edited by Edward L. Hudgins. p. cm. Includes bibliographical references and index. ISBN 1-930865-18-X (cloth : alk paper)—ISBN 1-930865-19-8 (pbk : alk paper) 1. Space industrialization—United States. 2. Free trade—United States. 3. Space industrialization—Law and legislation—United States. 4. Space industrialization—Law and legislation. 5. Space industrialization—International cooperation. 6. Free trade. I. Hudgins, Edward Lee, 1952. II. Cato Institute. HD9711.75.U62 S695 2002 338.0919—dc21 2002025652 Cover design by Amanda Elliott. Cover photography © AFP/CORBIS. Printed in the United States of America. CATO INSTITUTE 1000 Massachusetts Ave., N.W. Washington, D.C. 20001
Acknowledgments The papers in this volume are from a Cato Institute conference on ‘‘Space: The Free-Market Frontier,’’ which was held on March 15, 2001. I wish to acknowledge the generous support for the conference from the Foundation for the International Non-Governmental Development of Space and from Mr. Eric Tilenius. I’d also like to thank ProSpace and its president Marc Schlather, James A. M. Muncy of PoliSpace, and our friends at the Space Frontier Foundation for helping to organize the event. I also wish to acknowledge and thank those who chaired panels at the conference. Eric Stallmer at the time was president of the Space Transportation Association and now is vice president for government relations at Analytical Graphics. Frank Sietzen was the director of communications at the National Space Society and editor of Ad Astra. He now has Eric’s old job at STA but still edits Ad Astra. James Muncy, acknowledged above, also chaired a panel. While their conference talks do not appear in this volume, I would like to thank James Bennett of Internet Transactions Transnational Inc. and Fred Abatemarco, the editor and chief of Space.com, for speaking at the conference. I would like to thank David Lampo, Cato’s publications director, who marshaled the book through the production process, and Cato’s Pat Bullock and Corinne Schillings for turning the edited conference papers into publishable materials. I’d also like to thank Amy Mitchell for promoting this book.
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Contents INTRODUCTION: THE COMING COMMERCIAL FRONTIER IN SPACE Edward L. Hudgins, Objectivist Center
ix
PART ONE: THE HISTORY OF SPACE FLIGHT AND NASA 1. 2.
3.
The Future of Space Policy Former Rep. Bob Walker, The Wexler Group
3
When Will We See a Golden Age of Space Flight? Gregg Maryniak, X PRIZE Foundation
11
The Arrival of Tomorrow: NASA in the 21st Century Liam P. Sarsfield, RAND Corp.
29
PART TWO: BARRIERS TO SPACE ENTERPRISE 4. 5.
6.
7.
Is This Any Way to Run Space Transportation? Robert W. Poole Jr., Reason Foundation
53
Barriers to Space Enterprise David M. Livingston, Livingston Business Solutions
67
The Legal Regime for Private Activities in Outer Space Wayne White, University of Mississippi
83
Proposal for a Multilateral Treaty Regarding Jurisdiction and Real Property Rights in Outer Space Wayne White, University of Mississippi
113 vii
PART THREE: PRIVATE SPACE EFFORTS 8.
9. 10.
11. 12.
Structure of the Space Market: Public and Private Space Efforts Tidal W. McCoy, Space Transportation Association/Thiokol Propulsion
127
Private Possibilities in Space John Higginbotham, SpaceVest
145
Space Commerce: An Entrepreneur’s Angle Doris Hamill, Philip Mongan, and Michael Kearney, SpaceHab
151
Expanding the Dream of Human Space Flight Dennis A. Tito, Wilshire Associates
167
Changing the Space Paradigm: Space Tourism and the Future of Space Travel Buzz Aldrin, ShareSpace, Apollo 11 Astronaut Ron Jones, ShareSpace
177
PART FOUR: PRIVATIZING SPACE 13.
14. 15.
16.
The Legislative Challenge in Space Transportation Financing Marc Schlather, ProSpace
195
Zero Gravity, Zero Tax Rep. Dana Rohrabacher
213
International Space Station Alpha: A Building in Space James Muncy, PoliSpace Rick N. Tumlinson, Space Frontier Foundation Bob Werb, International Space Station Congress
215
Toward a Unified Theory of Space Property Rights: Sometimes the Best Way to Predict the Weather Is to Look Outside James E. Dunstan, LunaCorp, Garvey, Schubert & Barer
223
CONTRIBUTORS
243
INDEX
247
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Introduction: The Coming Commercial Frontier in Space Edward L. Hudgins On July 20, 1969, Neil Armstrong and Buzz Aldrin became the first humans to land and walk on the Moon. At that time most Americans found it difficult to imagine that the vision presented in the movie 2001: A Space Odyssey, of regularly scheduled commercial flights to Hilton hotels in orbit, would not be in our future. But in 2001 no such flights or hotels existed. Fewer than 500 human beings have ever ventured into space. And the International Space Station currently under construction in orbit is billions of dollars over budget and radically scaled back from its initial design. It will hold only three full-time inhabitants, too few to facilitate much useful science. What has happened in the past three decades to delay humankind’s full exploitation of space, and what can be done to change the situation? The cause of the problems and source of the answers are found in public policy and private markets. There has been too much of the former and too little of the latter. Civilian space efforts have been dominated by the National Aeronautics and Space Administration (NASA), a government agency that for all its good intentions has retarded as much as facilitated activities in space. By contrast, during that same period entrepreneurs in the commercial market gave birth to the computer, telecommunications, and Internet revolutions. In fact, it is free markets that have commercialized and offered to all people everything from cars to televisions to affordable air travel and virtually every product and service imaginable. The year 2001 did see important changes at NASA. Long-time administrator Daniel Goldin departed. His replacement was Sean O’Keefe, the Bush administration’s deputy director of the Office of Management and Budget. O’Keefe’s tenure at OMB makes him sensitive to the need for running NASA within the confines of its budget and to keep costs down through innovative arrangements. ix
SPACE The year 2001 also saw American businessman Dennis Tito become the first private paying passenger to travel in space; that milestone held out the prospect that some day people may vacation in space the way they now vacation overseas. To move from the current situation of limited access to space and to truly make space a place for humans to work and play and live, it is useful to consider how we arrived at the current situation, what signs hold the promise of a commercial market future, and what policy changes might make space the next commercial market frontier. Prelude to Space Many of the problems with the space sector today can be traced to the different paths taken by civil aviation and space flight. When the Wright brothers made the first flight in a heavier-than-air craft on December 17, 1903, they acted as private individuals, pursuing their own vision and using their own money. In the early decades of the Age of Aviation most planes were paid for, developed, and flown by private individuals. When Charles Lindbergh became the first person to fly across the Atlantic in 1927 he was trying to win the privately offered $25,000 Orteig Prize. The federal government, of course, was interested in aircraft for defense purposes. But often it simply offered a prize to whatever private provider could make a wing or fuselage to best meet its needs. World War II and the Cold War saw government pump billions of dollars into military aircraft. But civil aviation remained in private hands. After World War II the commercial passenger airline industry grew, even though routes and rates were regulated from Washington, airports were owned for the most part by municipal governments, and the Air Traffic Control system was operated by a federal agency. Since airline deregulation in 1978, the average cost of flying has dropped over 30 percent and the number of Americans taking to the skies has jumped from 275 million to about 650 million per year currently. The major cause of air travel congestion, aside from bad weather, is the overtaxed ATC system that is too slow to adjust to growing customer demands. Further, airports have added very little new runway space in the past two decades. The saga of space flight started much as civil aviation did. Dr. Robert Goddard launched the first liquid-fuel rocket in March 16, x
The Coming Commercial Frontier in Space 1926. His funding in the 1930s came principally from the private Guggenheim Foundation, which provided about $100,000. Board member Charles Lindbergh was a major supporter of rocket development. After World War II, the Pentagon brought Wernher von Braun and a team of scientists from Germany to the United States to develop more advanced designs of their V-2 rockets. From Moon Landings to Freight Hauling The U.S. space program was driven by the Cold War. The October 4, 1957, launch of Sputnik by the USSR raised both security and prestige concerns for America. Ultimately the Pentagon handled the security concerns, developing intercontinental ballistic missiles and surveillance satellites. The National Aeronautics and Space Administration was created to manage America’s civil space efforts. At that time policymakers might have argued that they did not know which capacities with no immediate and direct defense applications—a manned presence in space, the ability of men to work in space— might be needed for defense in the future, so government funding of civilian space activities for this reason might have been justified. Further, at that time many people and policymakers saw government as the only institution that could afford such expensive and risky space activities. The decision in the early 1960s to go to the Moon was as much a matter of national prestige—to beat the Soviets there—as it was of science.1 But after the initial Moon landings policymakers lost interest in that expensive program. As an institution NASA at that time might have begun to back out of civilian space efforts, contracting out for services from the private sector. Instead it looked to other big government projects with which to occupy itself. The Shuttle Story A vehicle that could transport humans and cargo to orbit and return to Earth to be used again seemed to be a next logical step in the development of space. Such a vehicle, it was argued, would take off and land again and again like an airplane and thus would be far less costly than the Saturn 5 expendable launch vehicles that took men to the Moon. Thus was born the Space Transportation System, better know as the ‘‘Shuttle.’’ xi
SPACE But to gain political support for the Shuttle, NASA had to design it to meet nonscience needs, for example, selling it to Congress as a potential duel-use commercial-military vehicle. The military wanted the Shuttle to be able to maneuver rather than to simply glide in for a landing. But this ‘‘cross range’’ capacity came at a high price. The Shuttle required 34,000 special heat-resistant tiles. Each tile required many inspections and in the early years regularly fell off and had to be replaced. Worse still, all those tiles weighed 25,000 pounds, which cut the Shuttle’s payload capacity almost in half.2 Although good figures are hard to come by, one estimate suggested that in the early 1990s the cost of putting a pound of cargo in orbit on the Shuttle was about $6,000 in real dollars, compared with only $3,600 on a Saturn 5.3 Duke University professor Alex Roland maintained that the cost was as high as $35,000 per pound.4 Today most observers put the cost of putting a pound in space at about $10,000. Further, in the 1970s, private companies asked NASA and other government agencies to purchase services from them. For example, in 1982 Space Sciences Inc. launched the first privately funded American rocket, named the Conestoga, since the pioneering days of Dr. Robert Goddard. NASA might have contracted with that company for services. But until the Challenger disaster, all government agencies, not just NASA, were required to send their payloads into orbit on government rockets. Thus, for example, if the National Oceanic and Atmospheric Administration, the Environmental Protection Agency, or the Interior Department wanted to put up weather or remote-sensing satellites, they had to go to NASA rather than to a private launch provider. Station in Space As it became apparent in the early 1980s that the Shuttle would cost far more than anticipated, NASA needed a mission to justify its continued existence. Regardless of any commercial or scientific benefits, an orbiting space station seemed to serve that purpose. But the estimated cost of the station, which was supposed to be up and running in the early 1990s, went from a promised $8 billion in 1984 to nearly $40 billion before a 1993 stripped-down $30 billion redesign. The station for a while was named ‘‘Freedom’’ and was a kind of challenge to the Soviet’s Mir station. But after the fall of xii
The Coming Commercial Frontier in Space the Soviet Union the United States invited Russia, the European Union, Canada, and Japan to be its partners on the now-named International Space Station (ISS), to supply various parts of the station. Like the Shuttle, the station has not lived up to NASA’s projections. One General Accounting Office report found that, through June 2002, the actual cost of designing, building, and launching the station would be $48.2 billion. (The GAO included the sunk costs of the various discarded designs.) The cost of operating the station after its assembly through 2012 will add another $45.7 billion to the price tag, for a total bill of $93.9 billion.5 Congress has capped the station’s budget at about $25 billion, excluding many costs. Even so NASA has found that it will cost about $30 billion to complete the station in its current design. Worse, the station went from a projected capacity for 12 full-time occupants down to three. But it takes the time of two-and-a-half astronauts to maintain the station. That leaves very little time for science and research, an original justification for the station. As station costs soared, NASA ignored the private sector. For example, Space Industries of Houston in the 1980s offered to launch for $750 million a mini-station that could take government and other payloads a decade before the planned NASA station. The government would not contract with that private supplier. The Entrepreneurial Vision In the past ‘‘big science’’ projects were handled by the private sector. For example, the Carnegie Institution spent $2.29 million between 1920 and 1929 on the Mt. Wilson Observatory ($20.4 million in 1996 dollars), $2.38 million from 1930 to 1939 ($26.37 million in current dollars), and $2.15 million between 1940 and 1949 ($18 million in current dollars). The Rockefeller Foundation, starting in 1929, paid out $6 million to build the Mount Palomar Observatory, which saw first light in 1948. That’s about $60 million in 1996 dollars. Lower costs for access to space, and more space infrastructure and services, would benefit those wanting to use space for scientific investigations. The obvious way to bring down the high costs of space activities is to involve the private sector. After all, it is the private sector that generates and commercializes new goods and xiii
SPACE services from cars to computers, brings down costs, and makes them available to all consumers. The communications and information revolution produced a high demand for satellites, giving a boost to the private space sector. The Satellite Industry Association estimated that worldwide satellite industry revenues would be $92 billion in 2001, up from $83 billion in 2000 and $69 billion in 1999,6 with the American portion currently valued at $37.5 billion. SIA estimates that there were 253,600 jobs in that industry worldwide in 2001, up from 205,400 in 1999, with 136,500 Americans employed. The Space Transportation Association chairman, Tidal McCoy, puts the number of employees in spacerelated industries at 497,000.7 The International Space Business Council puts current industry revenues even higher, at $96 billion in 2000. A Department of Commerce report projects that in 2002 revenues from satellite communications, space transportation, the global positioning system, and remote sensing will be $105 billion.8 Telecommunications, GPS services, and even satellite radio have been the major areas of interest to the private sector. Currently NASA fights with policymakers to maintain its budgets and is always under pressure to cut projects and missions. A marketbased growth strategy would benefit any party that could benefit from low-cost access to space. Wouldn’t it be great if a privatized Kennedy Space Center were as busy with launches as nearby Orlando International Airport is with take-offs and landings? It will certainly be a while before we see that level of private space operations. But that is the vision that we should have as we consider policy reforms. Pointing to such a future, we see that entrepreneurs are providing many services or are attempting to develop innovative marketable services and missions. The Space Sail Some imaginative missions have nothing to do with NASA’s Shuttle or the ISS. For example, the Planetary Society9 and Cosmos Studios are planning to launch a 30-meter-diameter space sail configured in eight triangular blades and deployed by inflatable tubes from a central spacecraft at the hub. Named Cosmos I, it is like a ship’s sail but rather than being pushed by the winds in Earth’s atmosphere, it will be pushed by the solar wind by the same kinds xiv
The Coming Commercial Frontier in Space of particles that blow dust off comets and create their beautiful tails. Cosmos I will literally sail out of the solar system. It will contain commercial logos and is being paid for by the private sector. Cameras in space will broadcast the spectacular deployment of the sail. RadioShack Rover Space holds many advertising opportunities. For example, RadioShack has contracted with LunaCorp, a Virginia-based company, to develop and place a rover on the Moon. Such a rover will be the ultimate advertisement. LunaCorp plans to deliver a high-bandwidth exploration robot to one of the lunar poles. An icebreaker will search for water in the craters at the pole that never sees sunlight. The public will be able to follow the adventure via the Web, on television, and using LunaCorp’s telepresence portals to ride along with the robot in real time.10 LunaCorp also arranged on April 30, 2001, for Russian cosmonauts resupplying the ISS to deliver surprise Father’s Day gifts for American astronaut James Voss and Russian cosmonaut Yuri Usachev. RadioShack supplied them talking picture frames with photos and 10-second voice messages from their daughters and shot the first TV commercial on the space station of that delivery. Further, with RadioShack support, LunaCorp arranged for Lance Bass, a member of the pop group ‘N Sync, to travel to Moscow for initial medical screening as a prelude to a potential trip to the ISS. The X PRIZE One example of a private entity helping to open space is the X PRIZE Foundation of St. Louis. It is raising $10 million to award to the first entrepreneur who sends a craft capable of carrying three persons at least 62 miles into space and returns it to Earth twice in a two-week period.11 This prize is modeled after the Orteig Prize that Charles Lindbergh won for flying across the Atlantic. The first contender to test a vehicle that could go for the gold was Burt Rutan. He designed the Voyager, first plane to fly around the world nonstop without refueling, in 1986. SpaceDev Private companies provide science and maintenance services as well. For example, SpaceDev has one contract for the Cosmic Hot Interstellar Plasma Spectrometer microsatellite for the University of xv
SPACE California, Berkeley, and a hybrid propulsion development program with the National Reconnaissance Office. It also sells microsatellites and micropropulsion products to provide integrated on-orbit data delivery systems and solutions (e.g., communications, science, images) for government and commercial small payload customers.12 SpaceHab One of the most successful companies supplying services for companies wanting to exploit space is SpaceHab.13 When a company or research organization wishes to utilize space, it cannot simply throw an experiment into the cargo bay of the Shuttle or place it in a container atop an expendable launch vehicle. Payloads must be carefully packaged. They must be cushioned from the high-g forces of launch. They must be hooked up to power supplies. Many unique conditions must be met for each payload. And in the case of payloads on the Shuttle, crews must be trained to perform certain functions on those payloads. SpaceHab developed modules for payloads that can be carried in the Shuttle’s cargo bay and that can hold a variety of experiments. That company carries payloads for both government entities and the private sector. SpaceHab also has facilities to prepare payloads for expendable launch vehicles. Further, SpaceHab has contracted with the Russians to place a private module on the Russian side of the ISS for commercial use. Tanks in Orbit One idea that has been suggested for years by private space experts concerns the Shuttle’s 150-foot-tall external fuel tanks. Each Shuttle flies 98 percent of the way to orbit with its tank. Once the nontoxic liquid oxygen and hydrogen from those tanks burn off, the tank is dropped into the ocean. If those tanks were placed in orbit, with about 100 Shuttle flights to date, there would be 100 platforms— with nearly 30 acres of interior space, about the size of the Pentagon—waiting to be sealed and ‘‘homesteaded’’ by private owners for scientific experiments, space hotels, honeymoon suites, or any other activity of which an entrepreneur could conceive. This would not be the first time such a concept was used. In the 1970s NASA used a tank stage of a Saturn V for the Skylab. Space Island Group is a company that has worked out designs for stations based on external fuel tanks. That company also wants xvi
The Coming Commercial Frontier in Space to work with Lockheed Martin, which makes the tanks, and Boeing, which built the Shuttles, to develop a Shuttle II. Company executives maintain that a short-duration Shuttle II flight would carry principally tanks and passenger or cargo modules in its cargo bay. After all, once there are orbiting destinations the Shuttle will not need to have the capacity to remain in space for several weeks. Therefore the Shuttle II might be produced for as little as $500 million, compared with the $5 billion to $6 billion price tag to replace one of the current Shuttles. Private Launchers A number of companies offer or plan to offer private launch services. Lockheed Martin in the past decade has successfully commercialized its Atlas rocket launch services. It used to sell nearly all of its services to the government; now more than half its customers are private parties. It has held costs down and has had a backlog for launches. Further, Boeing also builds and launches the Delta rockets and is also competing for cargo and providing private-sector services. Private companies such as Kelley Aerospace and Technology14 and Kistler Aerospace Corporation15 also are developing other vehicles to place payloads in orbit. Of particular interest are the development plans for a totally reusable rocket developed by former astronaut Buzz Aldrin, who was on the first Moon landing mission. Aldrin also is an engineer and through his company has developed an innovative approach to phasing in the next generation of rockets for human flight. Bigelow Aerospace One of the most exciting private space plans comes from Las Vegas–based Bigelow Aerospace.16 Entrepreneur Robert Bigelow is devoting $500 million to manufacture and orbit a private space station. It will be an inflatable structure made of lightweight but rugged materials. A material like Kevlar weighs a fraction of the amount of metal being used in the ISS but is strong enough to take a bullet or a micrometeor. Thus the cost for such modules should be much lower than for the ISS. Bigelow hopes to orbit in three launches the same amount of interior space that it will take 30 to 40 Shuttle launches to put up with the ISS. xvii
SPACE Space-Based Solar Energy Another promising space market is space-based solar energy. Available technology would allow large solar energy collectors to be placed in orbit that could beam energy to Earth via laser or microwave. Such a system could radically reduce American dependence on imported fuel. Further, such a system could sell energy to the International Space Station or to private space stations. Indeed, access to such a system might make it easier to maintain satellites and space stations in orbit and to provide expanded services and activities on stations. The reason is that with an established electrical grid in orbit, stations will need only minimal or backup power generating capacities of their own. Thus they will be less costly to launch. But the current cost of putting a pound of payload in orbit is as much as $10,000. Making such a space-based energy system economical could require costs as much as two magnitudes lower, around $100 per pound. Technology that would allow energy to be generated in one country, say from natural gas, bounced off an orbiting device via laser or microwave, and received somewhere else on the planet could be made commercially viable at launch costs of perhaps $1,000 per pound. Although no company has made a commitment to develop such a system in the near future, many organizations have studied the technology. Lower launch costs could lead to the development of such a system. Mars Direct Some NASA defenders argue that only governments can sponsor scientific space ventures that promise no profit for decades, if ever. But an excellent illustration of the way private entrepreneurs who do not put NASA’s institutional interests first could cut costs is seen in proposals for manned missions to Mars. In 1991 President George H. W. Bush announced the goal of placing humans on the Red Planet by 2019. Such a mission would bring unparalleled scientific returns. But NASA’s ‘‘90 Day Report’’ put the mission’s price at a staggering $450 billion, a cost that effectively killed the idea. Sensing that a less costly mission was possible, engineer Robert Zubrin, then with Martin Marietta, and other scientists devised what xviii
The Coming Commercial Frontier in Space they called a Mars Direct approach that would use existing technology and dispense with the space stations, Moon bases, and NASA’s other expensive infrastructure.17 For example, one of the most costly parts of a Mars mission is carrying the fuel for the return trip. Zubrin saw that rather than carrying return fuel to Mars, an unmanned ship could land first with a simple chemical laboratory to manufacture methane and oxygen (i.e., rocket fuel) out of Mars’s carbon dioxide atmosphere. NASA accounting put the cost of Zubrin’s approach at between $20 billion and $30 billion, some 95 percent less than the government approach. NASA could mount two or three manned Mars missions for the cost of the space station. The Almost Private Station The efforts of entrepreneurs are also seen in the battle to save Russia’s Mir space station. Mir went into operation in 1986. When the Soviet Union collapsed in 1991, President Bush decided that a good peace gesture would be an astronaut-cosmonaut exchange program with Americans living on Mir. During the 1990s, with Americans onboard, Mir acquired the reputation of an accidentprone orbiting antique. There were indeed problems with the station, in part because Russia was out of money and trying to dig out of the ruins of socialism. The Russians had decided to scuttle Mir and to accept NASA’s invitation to become a partner in the International Space Station (ISS). But then private parties came to the rescue in the form of MirCorp, a company 40 percent owned by private Western investors and 60 percent owned by Energia, the Russian rocket and hardware manufacturer, which is over two-thirds privately owned. It planned to make Mir financially self-supporting. As MirCorp CEO Jeffrey Manber said, ‘‘There is nothing wrong with Mir that a little money can’t fix.’’ Mir would be a platform for commercial activities such as in-orbit advertising, satellite construction and repair, recreation, and telecommunications services. MirCorp footed the bill for the first privately funded manned space flight—a resupply mission in 2000 to Mir. American Dennis Tito planned to pay MirCorp a reported $20 million so he could be the first private passenger in orbit. Mark Burnett, producer of the hit television program Survivor, had an agreement with MirCorp to xix
SPACE allow contestants to train and compete at Russia’s Star City. The winner would go on a 10-day mission to Mir. But behind the scenes top NASA officials pressured Energia to abandon Mir, threatening to cut Energia out of the ISS contract. Those officials claimed that if Energia continued to provide services to Mir, the Russian company would not have enough resources to meet commitments to the ISS. This was not true. Several Russian ‘‘Progress’’ supply rockets were sitting unused. MirCorp wanted to purchase them to support Mir. The money would have been used to build more rockets. But under a treaty with the Russian government NASA had the final say on the rockets, and it said ‘‘No.’’ MirCorp also wanted to import from the United States a tether that would have provided power to Mir, thus reducing the need for resupply rockets and saving the space station. But the U.S. State Department, reportedly under pressure from NASA, delayed the export license for 10 months, until after Russia decided to bring down the Mir. In the end, Mir was de-orbited. It burned up in the atmosphere in March 2001. MirCorp struggled heroically to convert a moneylosing relic into a private, moneymaking success. Its tragic failure was due in part to NASA officials who seemed more comfortable with a Soviet space model than a free market one. But MirCorp now plans to place in orbit a module for human occupation at a cost of about $150 million. Tito and Tourism Out of the fight to save Mir came what could be the new market that will do the most to commercialize space. Dennis Tito, the American businessman who was scheduled to travel to the Mir space station, did not take its fiery death as the end to his dream. With the help of MirCorp and the Virginia-based company Space Adventures, he simply cut a deal with the Russians to travel to the ISS. After all, Russia is a partner with NASA on the ISS and has supplied the modules that constitute the core of that station. So the Russians figured, ‘‘Anything to make money!’’ Tito’s April 28, 2001, launch was historic—a customer paid to spend a week in space. Although called a ‘‘tourist,’’ Tito underwent six months of training at the Russian space facility. xx
The Coming Commercial Frontier in Space Tito’s trip opened the eyes of much of the public to the possibility that everyone some day might be able to travel to space. South African Internet entrepreneur Mark Shuttleworth also booked a flight in 2002 to ISS. Polish businessman Leszek Czarnecki may follow his lead. And as mentioned, LunaCorp and RadioShack have helped Lance Bass, a member of the pop group ‘N Sync, to travel to Moscow for initial medical screening in hope of a flight as well. Space tourism indeed seems to be a potential ‘‘killer application’’ that will offer opportunities and incentives to the private sector to develop low-cost access to space and places in orbit for private adventurers to go. But space tourism does not have to start with a $20 million price tag. Space Adventures offers an array of spacerelated activities, including tours of space facilities or sites on Earth, stargazing, and even flights on training planes like those used by astronauts to simulate weightlessness.18 Space Adventures now has teamed up with US Airways to offer a truly innovative frequent flyer perk. Ten million passenger miles— the equivalent of circling the Earth 250 times—entitles the passenger to a free half-hour suborbital flight into space aboard a reusable rocket expected to be ready by 2005. The retail price of this space adventure is $98,000. Intermediate prizes are offered as well. A traveler with 30,000 miles can pay an extra $650 and take a trip to the Kennedy Space Center to see a Shuttle launch and get admission to the Kennedy Space Center Visitor Complex. For 250,000 frequent flyer miles and a $2,000 fee, the traveler will get a trip to Russia to fly on a Soviet-era cargo plane to experience several 30-second periods of weightlessness. Market studies suggest that space tourism is a potential multibillion-dollar market. As prices drop, more people would be willing to pay to travel to the final frontier. Privatize the Shuttle The obvious way to open space to all is for NASA to back out of civilian space activities and let the private sector do what it does so well in other areas of the economy: reduce costs and develop new, innovative products and services. Already NASA is taking advantage of market incentives. For example, one way it has kept costs down during the past decade is to contract out the maintenance and refurbishing of each Shuttle xxi
SPACE between flights to the United Space Alliance (USA), a joint Boeing– Lockheed Martin enterprise, at a set fee of about $400 million per Shuttle plus bonuses for safety and timeliness. This fee approach gives USA an incentive to operate efficiently and safely. If processing costs go well over $400 million, USA cannot simply bill NASA. Rather, USA and its stockholders lose money. One way discussed in the past to make further commercial use of the Shuttles would be to allow USA to rent them from NASA when they are not in use. As there are four Shuttles in the fleet and only five or six total Shuttle flights per year, no doubt there would be opportunities for such flights. But now that NASA faces such serious budget problems, it is time to privatize the Shuttle fleet. The George W. Bush administration has indicated an interest in exploring just such a move. Because the Shuttle loses money, the sale price might be very low. But NASA would do better to give away the Shuttles rather than to continue to operate them itself. USA would be the most obvious purchaser. And because NASA will likely complete the construction of the ISS, USA would have a guaranteed anchor customer for some years to come. Commercialize the ISS It is questionable whether construction of the ISS should have been undertaken in the first place. A special presidential advisory commission, chaired by then Martin Marietta Corporation CEO Norman Augustine, in 1991 stated, ‘‘We do not believe that the space station . . . can be justified solely on the basis of the (nonbiological) science it can perform, much of which can be conducted on Earth or by unmanned robots.’’ Building a $50 billion station to handle scientific experiments valued in only hundreds of millions of dollars is like insisting on a chauffeur-driven limousine to go to the corner store for milk. But construction is well under way and the station now is occupied full time. A second-best option would be to sell or even give away the station to private purchasers upon completion. The station will have to be sold at a loss, but at least taxpayers will not continue to lose money on its operation. Under nonsubsidized private management, a real market will develop for use of the station based on the actual costs for private launchers to transport payloads and technicians to xxii
The Coming Commercial Frontier in Space the station. The prices for use of the station will change with real costs. Thus, for example, the price for space on the station may start low, but as launch costs come down, greater demand for space will cause its value and price to rise. Most important, station policy will not be determined by politics or bureaucratic power. But the station now has international partners, so privatization might be very difficult. Thus a third option would be to create a station authority, similar to an airport or marine port authority in the United States. Such an authority would be chartered among the station’s owners, that is, the governments that are participating. NASA would not be the U.S. government representative on the authority, though it could be a customer or tenant on the station. That authority initially would provide infrastructure, safety, utilities, and a regime that would allow private parties to run commercial operations on the station. The private sector could take over even those functions at some point. The authority would not be allowed to finance any station business operations, to expand into unrelated businesses, or to own any stock in station contractors. Those restrictions also would apply to NASA itself. In addition to commercial activities, the private sector would provide and pay for all future travel to and from the station, station operations, maintenance, and expansion. Companies like Bigelow Aerospace and SpaceHab might not only provide modules for station expansion but, in the long run, take over the functions performed by the station authority and enable complete privatization. Deregulate Space Private companies still labor under regulatory burdens that hamper their efforts. In the 1980s the creation of the Office of Commercial Space Transportation (OCST) in the Department of Transportation was supposed to avoid the jurisdictional confusion. In 1995 the OCST was transferred to the Federal Aviation Administration as the AST (office of the Associate Administrator for Space Transportation). Securing permission to launch still involves safety requirements, reentry licensing, financial responsibility requirements, site operations licensing, and various environmental impact requirements. If this sort of regime had been in place in the early part of the 20th century, the civil aviation industry probably would still be a dream waiting for a deregulated future to be realized. xxiii
SPACE Because of this regulatory regime, Kistler Aerospace, which is developing a reusable launch vehicle, was required to meet with local interest groups and Indian tribes and to draft an extensive environmental impact statement as part of its effort to secure permission to launch from a federal test facility in Nevada. J.P. Aerospace of California was competing for the private Cheap Access to Space (CATS) prize of $250,000 for placing a payload 124 miles above the Earth by November 8, 2000. It began the effort to secure permission to launch from the Black Rock Desert in northern Nevada in May 2000. The company was informed in late September by the government that it would take another two months to process the license. J.P. Aerospace missed the deadline. Other companies too have lost business because of the licensing process. Potential customers generally want two-month lead times for launches. Because it often takes launchers six or more months to secure a license, it is obvious how private providers are hindered. Thus, deregulation is a key to unleashing the private sector in space. Open to Exports Another extremely serious hindrance to private space activities in general is the export control regime. In 1998 Congress passed the Strom Thurmond National Defense Authorization Act. That law transferred jurisdiction over exports from the Commerce Department to the State Department, which has been much stricter and slower in approving exports. Already the American satellite industry is being seriously harmed. The law is harming the private space sector in general and certainly will hinder the emergence of private space travel. Private Property Rights At the basis of all economic prosperity on Earth is the right to private property, that is, the exclusive freedom of individuals to utilize material and intellectual assets as they see fit, without the need to seek approval from political authorities. Freedom to trade with others is simply an extension of one’s freedom to use one’s property. The regime that has worked so well with farms and factories on Earth must be extended to space. xxiv
The Coming Commercial Frontier in Space Already slots in orbit used for satellites have evolved into quasiproperty that can be exchanged between users. As space becomes more crowded with commercial activities, the property rights regime will need to be refined. As entrepreneurs seek to exploit resources on asteroids or other planets, they will need to be secure in their ownership of those resources. The Human Frontier It is important to understand that the focus on space by governments, businesses, educational institutions, and private individuals is motivated not only by economic, defense, and public policy concerns. Aristotle opens his Metaphysics with the observation that ‘‘all men by nature desire to know.’’ Man’s rational capacity is his basic means of survival. That capacity also accounts for what gives man at his best the deepest sense of satisfaction and fulfillment—understanding the world around him. The first humans gazed out of caves or across the savannas at the Moon and stars and wandering lights in the sky and wondered what they were. Most myths were attempts to explain the world.19 Human beings are pioneers. They want to know what’s over the next mountain or on the next continent or planet. In the past we had to content ourselves to explore other planets with telescopes. Now we visit them in spaceships. Asked if they would like to travel to space someday, most children and adults alike who answer ‘‘Yes’’ do not think first of establishing a business in orbit. They seek the sheer adventure and wonder of venturing off our planet and into the universe. But humans, rather than being prisoners of their environment, change their environment to meet their needs. We farm fields, build houses, and discover medicines. And no doubt we will colonize the solar system. No doubt we will terriform Mars, giving it an atmosphere and making it another habitat for humanity. In the past patriots fought to establish political and economic conditions of free exchange and private property rights. These conditions opened commercial frontiers on Earth and allowed us to create material wealth and technical capacities never dreamed of. By establishing these conditions throughout the solar system, we will open boundless new commercial frontiers. xxv
SPACE The human enterprise is as vast and endless as the universe itself. To be human is to challenge the best within us. And to the extent that men realize this challenge, they will make space the next freemarket and human frontier. Notes 1. For a good overview of the background for many of America’s decisions about space policy during the Cold War, see Walter A. McDougall, . . . the Heavens and the Earth: A Political History of the Space Age (New York: Basic Books, Inc., 1985). 2. David P. Gump, Space Enterprise: Beyond NASA (New York: Praeger Publishers, 1990), pp. 17–18. 3. Ibid., p. 16. 4. Hudgins conversation with Alex Roland, November 1, 2001. Based on a cost per Shuttle flight of between $500 million (NASA’s number) and $1.5 billion, including all costs, divided by a maximum Shuttle payload of 50,000 pounds. 5. Space Station: Estimated Total U.S. Funding Requirements (Washington: General Accounting Office, June 1995, GAO/NSIAD-95-163), p. 4. 6. Clayton Mowry, The Global Satellite Industry, Satellite Industry Association, April 5, 2001, www.sia.org/survey.PPT. 7. Tidal W. McCoy, ‘‘Structure of the Space Market: Public and Private Space Efforts,’’ in Space: The Free-Market Frontier, ed. by Edward Hudgins (Washington: Cato Institute, 2002). 8. Trends in Space Commerce, a report prepared for the Office of Space Commercialization, U.S. Department of Commerce, by Futron Corporation, 2001, pp. 1–3. 9. Planetary Society, www.planetary.org/solarsail. 10. LunaCorp, www.lunacorp.com/sponsorship.html. 11. X PRIZE Foundation, www.xprize.com. 12. SpaceDev, www.spacedev.com. 13. SpaceHab, www.spacehab.com. 14. Kelley Aerospace, www.kelleyspace.com. 15. Kistler, www.kistleraerospace.com. 16. Bigelow Aerospace, www.bigelowaerospace.com. 17. Robert Zubrin, with Richard Wagner, The Case for Mars (New York: Torchstone, 1997). 18. Space Adventures, www.spaceadventures.com. 19. For an excellent discussion of the ethical and value implications of space exploration, see Ayn Rand, ‘‘Apollo 11,’’ The Objectivist, September 1969. For an overview of the need for entrepreneurs in the development of space, see Edward Hudgins, ‘‘The New Free Market: Let Entrepreneurs, Not Bureaucrats, Run Space Exploration,’’ in Forbes, April 29, 2002, p. 48.
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PART ONE:
THE HISTORY OF SPACE FLIGHT AND NASA
1. The Future of Space Policy Bob Walker It is worthwhile focusing for a minute on the movie 2001: A Space Odyssey. It seems to me that what people expected when that movie was made, based upon where we were in the space program in 1968, were realistic expectations that have not been fulfilled. In fact, the real space odyssey has been a kind of walk in the wilderness. In part this is because following the Apollo Moon landings this nation lost its focus. Much of space development depended on a Cold War regime. As soon as that regime ended that focus went away and we found ourselves with a lot of government participation, a lot of government involvement in space activities, but programs that literally became a series of policy stovepipes seeking their next trounce of annual appropriations. Thus we tailored the programs to meet whatever those appropriations expectations were rather than what the loftier expectations of people might have been. Saturn or Reusable Shuttle A look at the manned space program in the United States, without casting aspersions or blame on anyone, shows a series of tough decisions after the Apollo era. The National Aeronautics and Space Administration (NASA) was first asked, essentially, to choose between the huge Saturn expendable launch vehicles that had put men on the Moon and a reusable shuttle system. Its choice of the next generation shuttle system may have been the right one at that point. But NASA was also asked by the Nixon administration to make another Hobson’s choice at that same time, between building a shuttle or building a space station. NASA chose to go with the next generation system, with the idea that later on it would be able to build a station. But the fact was that during the time NASA was building the shuttle it was faced with the problem of justifying a vehicle that had no particular destination. So NASA came up with a series of ways to justify the shuttle. 3
SPACE By the time I arrived in Congress in the mid-1970s the shuttle was going to be a military vehicle, it was going to be a transportation vehicle, it was going to be a variety of things and every interested party added on to the mission and added weight to the vehicle, and effectively reduced its cargo capacity. NASA ended up with a very capable flying machine, but it lacked focus. The mission schedule that NASA originally envisioned never materialized. We in the Congress were told in the first years I was there that NASA was going to be flying 50 missions a year with the space shuttle. Of course, there were a lot of questions at the time about that schedule. That schedule was used by NASA to argue that the costs per flight would be held down, and in this way NASA justified the program to Congress. Skylab and ISS During that same period the United States abandoned Skylab, the orbiting lab made from a stage of a Saturn V rocket. One wonders today what would have happened if we had offered Skylab on the commercial market. I do not know whether anyone was willing at that point to purchase it or not. In retrospect we now know that Skylab was a very capable space station, a very large volume space station, and we decided to de-orbit it. Therefore, we lost a capability early on that we now have spent years trying to put back in place. When we finally got to what would become the International Space Station (ISS), we ran into a series of problems. Many of them were not created by NASA—many of them were created on Capitol Hill. I remember going through many fights on Capitol Hill about the station that had been most recently rescoped by the members of the Appropriations Committee staff, who had decided to redesign the station yet another time, as NASA was seeking its station appropriations from Congress. Costs kept escalating as the station was redesigned and the construction timetable pushed further into the future. The space station got hung up in a whole series of political and international goals that had little to do with science and technology. Those conflicting goals reduced some of the capabilities that we had hoped the station would have. Government Sponsorship vs. Commercial Development I reflect on these facts not to cast aspersions or blame, but simply to observe that one always runs into these kinds of problems with 4
The Future of Space Policy government programs. When agencies are competing for limited resources, this is the sort of exercise the project must go through. To have the kinds of space activities that I think the people of this nation want, we must move beyond this process and find resources beyond those of government. Those new resources have to come from the free market. There’s no doubt that the communications revolution that has been spawned by space-based assets has been a financial success and one that everybody points to proudly. That revolution has been a model for many who would like to see similar progress in other space sectors. Communications has some unique attributes that have made further and faster progress more possible than in some other arenas. But the model does serve to show that space is a place where business can be done. Thus while other space business models may not be the same, they certainly may have the final outcomes we want. Commercial Power in Space Let me give a couple of commercial concepts that might and might not prove promising. When I was on Capitol Hill, there was a lot of talk about using space as an energy resource with solar power satellites that would beam energy to earth. To me that is not one of the most promising projects. In large part I believe the reason is that the maze of regulations one would need to navigate to beam power back to Earth would cause hangups that would cause investors to stay away. But I think the concept of capturing power in space and then using it for commercial ends is probably a very good idea. We should look at the idea that we might be able to use the power in space itself. My experience was that everyone is looking for power. When we send satellites up for military or commercial missions, many times the real frustration is that we simply do not have enough power aboard the satellites to be able to do everything that we would like to do. If we could put satellites in orbit that generated power to be beamed to Earth, why not beam it to locations in space that could use additional power, including the space station itself? One of the real frustrations on the station is that as we have rescoped it and rescoped it, we have cut back on the power. This means that the number of manufacturing and scientific opportunities on board are 5
SPACE limited, not by space aboard the station but by the amount of power that is available. What if we could create a space utility that beamed power to the space station, other free-flyers, or perhaps even to vehicles that are being transferred in orbit? What if, instead of putting engines aboard the vehicles, we could simply launch a vehicle with an antenna on it that would capture power and use electrical power to be transferred into orbit? And what if the people who were providing that power on orbit charged for it as a utility would charge on Earth? Is there a commercial potential here? Yes! Does the technology exist so that we can consider such an enterprise? Yes! The question is whether or not it can be utilized through a viable business plan. I am suggesting that over the years we have walked away from opportunities that may well provide opportunities in the future. Commercial Vehicles in Space Another concept that NASA engineers have talked about for years is the commercially developed space facility (CDSF). Essentially it would be a module to be carried aboard the shuttle that could be used as a manufacturing facility. That idea got caught up in politics at the time it was suggested; some saw it as a challenge to the space station. Some station supporters believed that if such a facility were developed, there would be no need to build a space station. But perhaps we should take another look at such a facility. In light of American businessman Dennis Tito’s paid tourist trip to the space station, we might want to take a look at the station as a tourist facility. Perhaps we could put a facility in orbit that was not aimed at keeping people aboard it for long periods of time. It might be a human-tended facility that is available for a only few hours at a time. And what if that facility had not much more on it than large portholes for the visitor to sit by to watch the Earth roll by below? What if in the first instance the people who go to the facility are simply those people who could afford the initial high price? So what if we flew the CDSF as an exclusive private club only for those who helped pay for it? The creation of a destination for a lot of millionaires and billionaires would create incentives for entrepreneurs to create ways to get to that destination. Turning to transportation, the experience of the past few years suggests that single-stage-to-orbit is going to be difficult to achieve 6
The Future of Space Policy without government assistance. We have found that the X33 vehicle was too expensive for NASA ever to complete. We have seen the DCX vehicle abandoned along the way. Those may be concepts we can build on in the future, but without some government money it appears as though even the big companies are not willing to continue to put their assets into such projects. It is unfortunate that technologies like the aerospike engine are not going to fly any time soon. The first tests on those engines at the Stennis Space Center in Mississippi were remarkable. Those nextgeneration engines have great potential, but they must be integrated with an air frame. Perhaps rather than being warehoused, that technology can be blended into a dual-stage-to-orbit vehicle that could be done with commercially available money. Funds for the Enterprise A challenge for the future, if we are to create a commercial market in space, is for private entrepreneurs to attract investment. Another challenge is for companies to develop real commercial programs that have real commercial potential, that do not rely in the end upon government contracts. Over the years, too many business plans have aimed in the end at obtaining a contract from NASA. Further, businesses often find that government contracts are not manna from heaven. Once they obtain the contract, businesses often find that the government wants to impose its specifications on them rather than allow those businesses to build to their own specs, which is what they do best. Government specifications add costs, so the hardware or service provided by the businesses is not commercially viable even with the government help. In the future, government must be a sideline for businesses, not the reason for businesses to exist. If the federal government needs transportation, let it buy that which is available rather than mandate what will fly. That’s a very different approach than the previous one. I was amused when a space publication interviewed an executive of a company who thought he had a real commercial space model. He described a plan that was better than anything the government could produce. Within a couple of days, the executive received a call from someone at a government agency who asked, ‘‘Do you really mean what was said in that article?’’ The executive replied, ‘‘Yes, we think we can do all 7
SPACE of that.’’ The government representative informed him that his agency saw the private initiative as a threat to NASA. In all honesty, the government ought to be threatened in that way. If there are people who can do it cheaper, better, and faster, they ought to be given their chance to participate in the market. If the government does not think that the private business will give the quality needed, fine. The private company’s business plan should not require the government contract. But if the government in the end sees that it can get a lot more if it buys private services, that’s fine, too, because it enhances the business’s ability to realize its plan. In my view, that’s what is going to drive investors in the right direction. Another way to get investors to look beyond where they have typically done in the space arena is to create a better investment climate. Tax incentives can do this. Rep. Dana Rohrabacher (R-Calif.) is to be praised for pushing the policy of zero gravity, zero tax, to make Earth orbit a tax-free zone for many commercial activities. Everyone who wants to see commercial markets develop in space should look for ways to stop the government from mandating and regulating, and instead look for ways to create a climate that encourages investments. That can be done with appropriate tax incentives. But tax-related incentives or tax credits do not do much good for companies that aren’t making money. For investors who see that a company is going to lose money for the next 10 years, tax incentives offer little incentive. Space: A Tax-Free Zone We thus might look at other incentives, like tax-free bonds. Why not create space infrastructure the same way that we now create infrastructure on Earth with such bonds? It seems to me there’s a market for such a bond, and the bond is most likely to be purchased by an investor who has long-term rather than short-term interests in infrastructure. Such a bond would create an appropriate climate for investment. We should also look at tax holiday concepts. What if, instead of depending on the federal government to go back to the Moon, we created a way for businesses to see a great opportunity in traveling to the Moon. The opportunity is that if they get there and if they establish a permanent station on the Moon, the government will 8
The Future of Space Policy give them 25 or 30 years of tax-free treatment, not just for the facility on the Moon but for the entire corporation. Now, all of a sudden, at Microsoft, General Motors, or some company that pays substantial taxes, people will be sitting in the boardroom asking, ‘‘How do we get there and get there cheap?’’ One of the reasons this is an attractive incentive is that it costs the government nothing. Such a tax holiday ties the incentive to actual success, and thus in the early years it costs the government absolutely nothing. The tax break comes after the success. All the government has done is create the incentive. Even the long-term tax revenue reduction would be more than paid for by the economic activity generated in getting to the Moon in the first place. There’s very little downside for government and, as an old budgeteer, I can take this fact to Capitol Hill. I can say, ‘‘Guys, it’s free!‘‘ A final fact that bodes well for commercial operations is that most of NASA’s budget is going to be absorbed by the ISS and the Space Shuttle in the years just ahead. There will be some money for science but, to get the data and missions that it needs, NASA will have to look beyond its own ability to do things and toward a commercial marketplace. This fact offers opportunities for private providers that can be built upon in the years ahead. Conclusion To sum up, in my view, the nonmilitary space odyssey ahead depends upon reducing the federal government’s presence in policy decisionmaking. Instead, the government needs to rely on the judgment of those who are willing to look for commercial market opportunities rather than annual appropriations.
9
2. When Will We See a Golden Age of Space Flight? Gregg Maryniak
The period between the world wars is often referred to within the flying community as the Golden Age of Aviation. During that period, aviation changed from a largely experimental activity to a widely accepted means of transportation. Public attitudes toward flying also changed dramatically. The development and deployment of aircraft such as the DC-3 took place toward the end of that period. The foundations of the present air traffic control system also were created then. In short, aviation began to be a commercially sustainable industry. Human space flight marked its 40th anniversary in 2001. Yuri Gagarin of the USSR orbited the Earth on April 4, 1961, and Alan Shepard, USA, succeeded in a suborbital flight on May 5 of that year. It is clear that space flight in general and human space flight in particular have not yet achieved the same large-scale commercial advances in their first 40 years as were seen in aviation. This paper considers the contrasts and parallels between aviation and space flight and explores whether some of the same factors that advanced aviation might lead to a Golden Age of Space flight in the near future. Parallels between Aviation and Space A customary lament among space advocates is that commercial space flight has failed to develop at the pace experienced by aviation. Parallels between space developments and aviation history often are wildly inappropriate. One example is the description of the Space Transportation System (that is, America’s Space Shuttle) as ‘‘the DC3 of space,’’ a reference to the first commercially viable plane. Yet clearly there are parallels between space flight and aviation. Both undertakings were considered unattainable. Both contained 11
SPACE
Table 2-1 AVIATION VS. SPACE FLIGHT Early Aviation Private experimentation Many experimenters Many small incremental steps Many customers Private risk-taking Little or no regulation
Early Space flight Government experimentation Few experimenters Rapid escalation of technical goals Two customers (U.S. and USSR) Government-assumed risks Some regulation
inherent risk. Both were greatly accelerated as the result of governmental requirements due to war. Both also were dramatically accelerated by competition (though in different ways, as we shall see). Yet aviation’s growth occurred at a much faster pace than space flight. The degree of technical difficulty alone is insufficient to account for the different pace of advancement. As we mark the 40th anniversary of Yuri Gagarin’s flight into space, fewer than 500 men and women have experienced space flight. Two nations, the United States and Russia, have demonstrated the ability to fly people into space. The Chinese have made several test flights of a vehicle capable of piloted space flight that is reportedly a derivative of Russia’s Soyuz technology. They are expected to orbit a human in the near future. Counting the new Chinese system, three different piloted space vehicles are now in use. Historically the United States has developed five manned spacecraft systems: the X-15, which flew to the edge of space; the Mercury, Gemini, and Apollo systems that resulted in the Moon landing, and the Space Shuttle. The USSR demonstrated two manned vehicle systems, the Vostock/Voshkod and Soyuz vehicles. In 1988 the Soviets flew a Buran spaceplane in an unpiloted automatic test. All of the systems were developed directly by government agencies or under government contracts. By contrast, almost 200 makes of aircraft were available worldwide by 1912, nine years after the Wright brothers’ (Orville and Wilbur) first flight and the year the U.S. government first appropriated money for military aviation.1 Between 1908 and 1910 approximately 1,000 new pilots were trained worldwide.2 By 1910 there were 70 different power plants available to aircraft designers.3 Key differences between early aviation and early space flight are summarized in Table 2-1. The former was characterized by many 12
When Will We See a Golden Age of Space Flight? private experimenters taking risks and making many small steps with little regulation to serve many customers. The latter was characterized by government experimenters trying to take huge steps and assuming the risks of those activities. Public Expectations Hypotheses An examination of the early history of flight and space flight suggests that the most important difference between the two has to do with the public expectations formed during the early years of both activities. Because the first well-known and dramatic forays into space were accomplished directly by government projects, the public expectation was established that space flight was the sole province of governments. The era in which the first space flights were accomplished—the 1940s for missiles and the 1960s for human suborbital and orbital flight—was characterized by the first ultralarge U.S. government research and development projects. The most notable examples were the Manhattan Project and the Apollo program itself. The National Aeronautics and Space Administration’s (NASA) own spectacular successes, and those of its various Soviet counterparts, and NASA’s unique role in space exploration led the public to expect that government space agencies would forever be in charge of space flight. Ironically, this expectation born of early success now impedes new commercial space markets. By contrast, the first experiments in flight were largely the result of private experimenters working with very modest budgets. By the time governments began to support aviation on a large scale, there was a global tradition of private experimentation in aviation. Although there are examples of initial private experimentation in rocketry in the United States, Europe, and, to a limited extent, in the former Soviet Union, in each case the leading experimenters sought and ultimately received government support. Although Dr. Robert Goddard in the United States did not survive to see the fruits of his initial research, the projects of his Russian and German counterparts were completely adopted by their (and other) governments due to the exigencies of World War II and the Cold War. A related factor contributing to the differences between aviation and space development was the superpower competition that accelerated space flight and quickly led to competitive targets that were 13
SPACE well beyond the technical and financial reach of individuals or private companies. For example, the launch of Sputnik by the Soviet Union on October 4, 1957, established low Earth orbit as the competitive goal. The Soviets quickly selected the Moon as a target and succeeded in obtaining photos of the lunar far side. President John F. Kennedy’s famous pre–Apollo decision memo sought a space goal that the United States could attain before the Soviets. Indeed, manned lunar activity proved to be such a daunting challenge that only one nation has accomplished it to date. In opting to race the Russians in human space flight, the United States made a conscious decision to concentrate on the use of ballistic space capsules launched on intercontinental ballistic missiles rather than on a more incremental approach that might have built upon aircraft technology.4 There was an unforeseen consequence of the decision to use missile technology—and to aim for orbital instead of suborbital activity—rather than to develop aircraft technology incrementally. Space flight was channeled in such a way as to make satellite communications the only reasonable commercial application of rockets and space technology. By contrast, aviation’s most common commercial payloads in its early years were human passengers interested either in experiencing air flight for fun and adventure or, in later years, in traveling rapidly from one point on the Earth to another. Expectations Regarding Space Flight The public expectation that space flight is the province of governments is nearly universal and tends to frame the discussion of the future of space activities. Surprisingly, this is true even within the pro–space development community. Although we have seen dramatic proof that markets have replaced governments as the principal engines of technological change, space advocates remain amazingly fixed on finding policy solutions to what are essentially market issues. Every day millions of people fly in aircraft that contain technical improvements such as airfoils, avionics, and control systems developed originally by NASA or other government agencies. None of these people expect to see NASA operate as an air carrier. Yet almost daily reporters in the United States and around the world ask about the advent of public space flight with the question, ‘‘When will NASA sell tickets?’’ 14
When Will We See a Golden Age of Space Flight? The so-called issue of ‘‘civilians in space’’ is another result of this widespread public expectation that governments are the sole legitimate spacefarers. The artificial dichotomy between people who are directly paid by governments and all other citizens has been most pronounced lately in discussions of the propriety of permitting Dennis Tito, a private citizen who paid the Russians a reported $20 million, to visit the International Space Station.5 Another result of this public expectation is the notion that the rest of the universe should be treated as Antarctica, in stark contrast to all of human history that treated frontiers as an analog of the New World. The Antarctic Treaty treats that frozen continent as a preserve that is off-limits to commercial exploitation by the private sector. The ‘‘flags and footprints’’ model of space exploration remains ascendant in space agencies though some have expressed hope for a change in this regard.6 An interesting corollary to the public expectation that space flight is the sole province of governments was observed by William Haynes of the research firm Scientific Applications International Cooperation (SAIC) in the 1980s. In an article entitled ‘‘The Issue Is Cost,’’7 Haynes considered the fundamental reasons for the high cost of space hardware development. Haynes’ observations resulted from his attendance at a NASA headquarters meeting convened to consider the development of an initial version of a space pod, after the fashion of the ones depicted in the movie 2001: A Space Odyssey, for orbital construction. The consensus was that development of such a system would cost in excess of $1 billion. Haynes, however, had, just before the conference, spent some time with the developers of the ocean submersible work vehicle Deep Rover. Deep Rover had been developed and tested for about $1 million. As he contemplated the reason for the factor of 1,000 increase in the cost of space hardware vs. terrestrial hardware, he attempted to fit all the traditional arguments to the problem. He discovered that the harsh environment of space was less harsh than that imposed by the ocean on the submersible. The argument that space equipment requires greater reliability than terrestrial equipment fell apart in light of the fact that the designers of the privately funded Deep Rover were also its pilots and thus were especially interested in safety and reliability. Haynes finally concluded that there is a widespread expectation that space is exotic and difficult and thus that the development costs 15
SPACE for space hardware will be much greater than for terrestrial systems and that this expectation itself causes costs to remain high. My own experience in working with young engineers trained in the international aerospace industry over the past dozen years is that they are almost unique among engineers in their concentration on performance rather than cost.8 I believe that this is the result of the early history of space hardware development during the Cold War when government cost-plus contracts dominated the field. An additional expectation shared by space agencies and advocates alike is that technology improvements will have a dramatic impact on costs. But in other areas of human endeavor it is market demand and the engineering and operations innovations that take place in response to demand that most affect costs. As Freeman Dyson observed in 1979, we do not need new technology for space as much as we need a new [operational] style of space flight.9 To summarize, there is a widespread belief that only governments have the capacity to operate in space. A related notion is that space is intrinsically expensive and difficult. A more subtle but equally prevalent idea is that inasmuch as governments (and a handful of large companies) operate systems in orbit, commercial markets in space are only for orbital products and systems. Opportunities and Limitations Ultimately our species will open up the frontier of space. Whether this happens in the near or far future is the question of interest to us today. In the long term, the sheer abundance in space of environmentally benign solar energy and lunar and asteroid materials is likely to prove essential to our economy. This is particularly true if we hope to raise living standards in an equitable manner without damaging the Earth’s biosphere. The history of human expansion shows that the desire for personal freedom has been an even more powerful force for exploration than the quest for physical resources. However, the visions of Russian space pioneer Konstantin Tsiolkovsky and American Gerard O’Neill of the expansion of the human species into the cosmos are greatly hampered by the present high cost of space flight.10, 11 No viable business plans for space power or habitation exist at present launch costs. 16
When Will We See a Golden Age of Space Flight? Those costs will remain high unless the demand for space flight increases significantly. But it is becoming obvious that the traditional commercial space market—communications satellites—will not require much more than the present launch rate to service world demand for telecommunications in the predictable future.12 One promising new market could drive launch demand and lower costs by an order of magnitude. That market is public space flight or, as it is more commonly known today, space tourism. Research conducted by the Japan Rocket Society and the National Aerospace Laboratory of Japan showed that in that nation, 80 percent of the people under the age of 40 would like to take a trip into space.13 Further research in the United States, Canada, and Europe indicates that in the developed world, at least 6 out of every 10 people have a personal interest in taking a flight into space. It is easy, especially for those of us who have been engaged in such serious pursuits as traditional satellite telecommunications or defense applications, to dismiss the notion of joyrides into space as trivial. But an examination of aviation’s history indicates that to do so would be a serious mistake. After the enormous upsurge in aviation caused by the development of military aircraft and military pilot training in World War I, there was an almost immediate slump in postwar activity. One activity that served as an essential commercial steppingstone to air mail and later scheduled commercial passenger routes was the provision of airplane rides and exhibitions to members of the general public by itinerant flyers known as barnstormers. The most famous example of a flyer who learned his craft and earned a living by barnstorming was none other than Charles A. Lindbergh. Lindbergh dropped out of college at the University of Wisconsin to take flying lessons at a commercial school, the Nebraska Aircraft Corporation. Unlike many other barnstormers, Lindbergh was not trained by the Army. He made his first flight on April 9, 1922, at the age of 20.14 He had only eight hours of flight instruction and had never soloed, due to his inability to provide insurance for the school aircraft, when he purchased his first airplane, a surplus Curtis Jenny. After some free training from a pilot who took pity on his first attempts to operate his new plane, he began his commercial flying career by providing airplane rides in the South. Giving the public a chance to experience flight directly served several essential functions. Foremost, it provided a living for much 17
SPACE of the pilot population and allowed new pilots to learn the art of flying. Many of those pilots were later to matriculate to air mail service, general aviation, and scheduled passenger work. Further, the opportunity for anyone to fly introduced much of the general population to airplanes and flying. If even a few percent of the population of the developed world desired to experience space flight personally, the market for space transportation would be increased exponentially beyond the approximate 30 commercial launches per year required by the satellite industry. Such passenger flights would require reusable vehicles to be economical. Although the public is most familiar with orbital flight, initial results indicate that there is a market for suborbital space flight as well. In fact, the airplane rides offered by early barnstormers are more analogous to suborbital flights than to orbital activities. An orbital space flight requires about 25 times more energy than a suborbital trip to space altitude. By providing a technically achievable and commercially viable human market, suborbital barnstorming could lead to fast point-to-point carriage of high-value cargo and rapid long-distance passenger travel. Either of these markets for large-scale suborbital activities could dwarf present demand for orbital space transportation and could serve as a commercial bridge to later, more challenging, forms of orbital space commercialization. A realistic view of the current situation requires us to acknowledge that there are at least two major barriers to commercial personal space flight. First, unlike the post–World War I period, when there were many surplus planes, there is no family of World War III surplus space vehicles to meet the latent demand. Second, there is the aforementioned pervasive public expectation that space flight is solely for governments. The good news is that there is a lesson to be learned by the space community from the history of aviation. A tool exists that may serve both to change public expectations and to provide an incentive for the development of the vehicles needed for commercial human space flight. That tool, absent until recently from the space arena, is the concept of prizes. The Vital Missing Piece of the Historical Mix A key factor in the development of aviation before World War I was the creation of an array of prizes, primarily in Europe, that 18
When Will We See a Golden Age of Space Flight? provided the incentive for many of the aviation advancements of that era. Looking back from the vantage of the 21st century when we take for granted the utility of aviation, it is not easy to appreciate how difficult and improbable were the feats accomplished in pursuit of the prize. Until recently prizes were completely missing from the space arena. Table 2-2 summarizes aviation prizes before the start of World War I.15 For a more anecdotal description of many of the early aviation prizes, the reader is encouraged to visit the History of Prizes section of the X PRIZE Foundation’s Web site at www.xprize.org. The sheer audacity of many of these prizes is not evident today. The aerial feats required of the winners were often considered to be (or were in fact) impossible at the time that the prizes were offered. For example, H. S. Villard reports: Nobody had believed, two years earlier in 1908, that the biggest prize of all, the Daily Mail’s dazzling offer of £10,000 for a flight from London to Manchester within 24 hours— would ever be won. It was in fact openly mocked by the rival Star: ‘‘Our own offer of £10,000,000 to the flying machine of any description whatsoever that flies five miles from London and back to the point of departure still holds good. One offer is as safe as the other.’’ The magazine Punch joined in the laughter with an offer of £10,000 to the first ‘‘aeronaut to fly to Mars and back within a week.16
The amount of prize money was significant as well. It was estimated that more than $1 million in prize money was earned by aviators during the 1911 flying season.17 Villard observed that prizes were a vital spur to European innovation. He noted: In the United States where meets were fewer and prizes less attractive, aviation continued to expand during 1911—but at a much slower pace than in Europe.18 By the beginning of 1912, all the important records were held by the French . . . there were relatively few cash incentives in the United States, and certainly much less patriotic initiative than in France, to encourage research or competition.19
The progress of European aviation due to prizes and competitions became troubling to American observers. Dr. Albert F. Zahm, head of the revived Smithsonian aeronautical laboratory originally 19
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Table 2-2 SUMMARY OF EARLY AVIATION PRIZES Year Task
Offered by
Won by
Amount
1901 Airship flight around Eiffel Tower
Deutsch de la Meurthe
Alberto SantosDumont
100,000 FF ($309,583)*
1904 Various tasks for airships Louisiana Purchase Exhibition
Mostly unclaimed $150,000 ($2,927,777)
1906 25 meter flight
Archdeacon
Alberto SantosDumont
1908 1 kilometer public flight
Scientific American (USA)
1908 220 meter flight
Ae´ro Club de France
Alberto SantosDumont
1,500 FF ($4,032)
1908 1 kilometer closed course
Archdeacon–de la Meurthe
Henri Farman
50,000 FF ($154,786)
1908 15 minute sustained flight
Jules Armengaud
Henri Farman
10,000 FF ($30,957)
1909 Duration (2.3 hrs)
Michelin
Wilbur Wright
$3,000 ($58,555)
1909 Altitude (100 meters)
Ae´ro Club de la Sarthe
Wilbur Wright
1,000 FF ($3,096)
1909 Crossing of English Channel
Daily Mail (London)
Louis Ble´riot
£1,000 ($87,616)
1909 41 km course to Orle´ans with 1 stop
Ae´ro Club de France Prix Louis Ble´riot du Voyage
Unstated
1909 Speed (2 km in 2 min. 29 seconds)
Mathieu
Louis Ble´riot
Unstated
1909 24 times around closed course in 50 minutes at height of 40 meters
Madame Ernest Louis Ble´riot Archdeacon (wife of 1908 offerer)
Unstated
1909 Coupe International d’Aviation for speed records
James Gordon Bennett, editor of Paris Herald
25,000 FF ($77,393)
1909 Rheims Grand Semaine d’Aviation at Rheims
French champagne industry
3,000 FF ($10,061) Trophy
Various winners
200,000 FF ($619,145)
1909 Frankfurt am Main
Pierre de Caters of Belgium
$10,000 ($195,185)
1910 Los Angeles
Louis Paulhan
$10,000 ($190,571)
1910 Heliopolis, Egypt
Various
Ⳮ$35,000 ($666,995)
1910 Nice, France
Various
Ⳮ$30,000 ($571,710)
1910 London–Manchester (offered in 1908)
Daily Mail
Claude GrahameWhite
£10,000 ($934,559)
1910 New York City–Albany
New York World
Glenn Curtis
$10,000 ($190,571)
(table continues next page)
20
When Will We See a Golden Age of Space Flight? Year Task
Offered by
Won by
Amount
1910 Greatest number of flights in a 12-month period
Daily Mail
Louis Paulhan
£5,000 ($467,279)
1910 Unstated
Ruinart champagne firm and Daily Mail
Jacques de Lesseps
£600 ($56,074)
1910 Ten-day aerial tour of Paris
Le Matin
Various
20,000 FF main prize ($61,914)
1910 Crossing of the Alps
Milan Committee
Georges Chavez of Peru
160,000 lire
1910 Various including Boston Harvard Aeronautical Globe prize of $10,000 for Society a 33 mile race around the Boston Light
Various
$100,000 in total ($1,905,710)
1910 Three-nation air tournament in New York at Belmont Park
Various
$72,000 total ($1,372,104)
1910 Flight across La Plata River from Argentina to Uruguay and back
Cattaneo of Italy
$20,000 ($381,140)
1910 Transcontinental U.S. flight
William Randolph Hearst Prize was not $50,000 won—but ($952,850) Calbraith Rodgers accomplished the trip (outside of the time limit)
1910 Flugwoche (Flying Week) Near Berlin contests
Various
159,000 DM
1911 Paris to Puy-de-Doˆme
Euge`ne Renaux
100,000 FF ($268,305)
1911 Distance award
Quentin-Bauchart
Euge`ne Renaux
30,000 FF ($80,941)
1911 Paris to Madrid flight
Le Petit Parisien
Jules Ve´drines
150,000 FF ($402,458)
1911 Paris to Rome flight
Petit Journal
300,000 FF ($804,916) for first place with additional 200,000 FF ($536,611) in prizes
1911 Circuit of Europe
Journal
⬃500,000 FF ($1,341,526)
1911 Circuit of Britain
Daily Mail
⬃500,000 FF ($1,341,526)
1911 Longest flight in a British Baron de Forest machine
Tom Sopwith
£4000 ($378,874)
(table continues next page)
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Table 2-2 SUMMARY OF EARLY AVIATION PRIZES (continued) Won by
Amount
1911 Munich–Berlin Kathreiner prize
Year Task
Offered by
Various
⬃$12,500 ($238,212)
1911 Flugwoche (Flying Week) Near Berlin contests
Various
70,800 DM
1912 Chicago International Meet
Glenn Curtis won $4,854 in prizes
1912 Circuit of Anjou 157 km triangular course race
Rene´ and Pierre Gasnier
Roland Garros took first place
1912 Collier Trophy first presented
Aero Club of America
Glenn Curtis
120,000 FF ($321,966)
1912 Flugwoche (Flying Week) Near Berlin contests
Various
82,000 DM
1912 Berlin–Vienna Race
Various
77,000 DM
1912 Circuit of Berlin
Various
60,000 DM
1912 Monaco Hydroplane Meet
International Sporting Club of Monaco
1912 Russian Military Competition 1913 Schneider Trophy
Jules Fischer Igor Sikorsky took top prize of 30,000 rubles
Jacques Schneider
1913 Pommeroy Cup for greatest distance flown between sunrise and sunset
Maurice Pre´vost Marcel Brindejon des Moulinais for a 1450 km flight from Paris to Warsaw
1913 Manhattan Aerial Derby of the Aeronautical Society of New York
New York Times
Various
$2250 total ($40,454)
1913 First Transatlantic offer Crossing
Lord Northcliffe of the Daily Mail
Alcock and Brown in 1919
£10,000 ($910,283)
*Amounts converted to current dollars, using purchasing power parity for nondollar currencies.
founded by Samuel Pierpoint Langley, was dispatched to Europe along with Dr. Jerome C. Hunsaker of the Massachusetts Institute of Technology to study the situation there. Zahm’s report, issued in 1914, emphasized the disparity between European progress and American inertia20 and led to the creation of the Advisory Committee for Aeronautics (later known as the National Advisory Committee for Aeronautics or NACA), the predecessor of NASA. It is also interesting to note that the amount of prize money offered to accomplish ‘‘the impossible’’ stayed more or less constant despite 22
When Will We See a Golden Age of Space Flight? the absolute magnitude of the distances involved. For example, the Daily Mail’s London to Manchester prize was the same £10,000 later offered for the first transatlantic crossing. The Golden Age of Aviation Although World War I led to a dramatic increase in the worldwide population of pilots and aircraft, the post-war period was initially more leaden than golden. For example, in 1921 the U.S. Air Service numbered about 3,000 planes, half of which were JN-4 (Curtis Jenny) trainers. By 1924 the number of planes had dwindled to 754 commissioned aircraft.21 By the mid-1920s serious air mail operations were beginning to take root, particularly in America and France. Air mail proved to be a dangerous business. By 1925 only 9 of the original 40 pilots hired to fly U.S. air mail had survived the experience.22 However, flying was still generally perceived to be a stunt or adventure rather than a viable form of transportation or the foundation for a profitable business. A single aviation prize was about to ignite the world’s imagination and lead to the widespread acceptance of flight. In May 1919 President Alan Hawley of the Aero Club of America in New York City received the following letter from the Hotel Lafayette:23 Gentlemen, As a stimulus to courageous aviators, I desire to offer, through the auspices of the Aero Club of America, a prize of $25,000 to be awarded to the first aviator of any Allied country crossing the Atlantic in one flight, from Paris to New York or New York to Paris, all other details in your care. Sincerely, Raymond Orteig
Raymond Orteig had emigrated to New York from France in 1912. He worked as a busboy and cafe´ manager and eventually acquired two New York hotels that were popular with French airmen assigned to duty in the United States during World War I. Orteig’s prize was to prove the most influential prize in the history of aviation. The Orteig prize was the incentive for the 1927 New York to Paris flight of the Spirit of St. Louis by Charles A. Lindbergh. Lindbergh was one of nine competitors who in aggregate spent 16 times the $25,000 prize purse. 23
SPACE Interestingly, Lindbergh and Clarence Chamberlin, the two Orteig Prize competitors who actually performed the flight, or in the case of Chamberlin its equivalent, were the two competitors who planned to complete the undertaking for less than the prize purse amount. The Lindbergh Boom It is difficult today to fully appreciate the impact of Lindbergh’s flight on aviation. The following facts indicate the way that that single prize changed American and world perceptions of aviation.24 ● The Spirit of St. Louis, Lindbergh’s airplane, was personally viewed by a quarter of all Americans within a year of Lindbergh’s 1927 flight. ● The number of American airline passengers flown went from 5,782 in 1926 to 173,405 in 1929. ● American air cargo flown went from 45,859 lbs. in 1927 to 257,000 lbs. in 1929. ● U.S. air mail increased from 97,000 lbs. in April to 146,000 lbs. in September of 1927. ● There was a 300 percent increase in applications for pilot’s licenses in the United States in 1927. ● There was an increase of more than 400 percent in the number of licensed aircraft in America in 1927. ● The number of airports in the United States doubled within three years of Lindbergh’s feat. Overall there was an Internet-like boom in the aviation business. Companies were known to change their names to include the words ‘‘airplane’’ or ‘‘aviation’’ in their corporate names much as in the rush to establish the early dot.coms. Unlike the first Internet boom, aviation has continued to grow in the nearly 75 years since the Spirit of St. Louis flight. In short, this happened because the Spirit of St. Louis flight caused people to believe that aviation was relevant to them. They knew that if they wanted to, they could fly. Flying was no longer something done by someone else. The result was increased demand, lower prices, and greater performance. The personal computer boom of recent decades offers another example of ways a rapid change in public expectation causes a large commercial impact. In 1975 ‘‘everyone knew’’ that computers were only for governments, banks, and other large institutions. Thanks 24
When Will We See a Golden Age of Space Flight? to Steve Jobs, Steve Wozniak, and the other pioneers of the personal computer revolution, within a decade the cost per computing cycle plummeted, performance leaped, and a new global industry was born. Note that in the cases of both Lindbergh and the Apple computer, the breakthrough was largely sociological rather then technical. Both the Spirit of St. Louis and the Apple II employed the current state of the art—but neither exceeded it. The sea change was the result of a change in expectation. Can Prizes Still Work Today? Lest one think that the ability of prizes to motivate people to accomplish the near-impossible has diminished, consider the Henry Kremer prize for human-powered flight. Motivated by that prize, the Monrovia, California-based AeroVironment team led by Dr. Paul MacCready accomplished the age-old dream of human-powered flight in 1977. A second Kremer Prize was also won by the same team for the much more difficult human-powered flight across the English Channel only two years later.25 The power of prizes to redefine the word ‘‘impossible’’ is not limited to aviation. Nor are prizes off-limits to governments. The development of a means for determining longitude through accurate timekeeping was once considered as impossible as perpetual motion.26 The absence of such a method resulted in countless maritime tragedies. The Longitude Act, passed by the British Parliament in 1714, created a series of large cash prizes for a means of determining time with the precision required for ocean navigation. English clockmaker John Harrison submitted the first working marine chronometer in 1735.27 Although he ultimately was granted the prize he so justly deserved for his feat, it took decades and royal intervention before he gained his reward. A prize of 100,000 francs was offered by the French Academy during the 18th century for the production of soda from seawater. Nicholas Leblanc’s resulting process became the basis of the modern chemical industry and is considered one of the key chemical engineering inventions of all time.28 A Prize for Human Space Flight In 1995, Dr. Peter H. Diamandis, inspired by the Spirit of St. Louis saga, began an investigation of the history of aviation prizes and 25
SPACE their economic impact. In 1996, he announced the formation of the X PRIZE, a $10 million prize for the first private team to fly a reusable three-person spacecraft to 100 km altitude and repeat the feat within two weeks. To date, over half of the prize purse has been raised through commercial sponsors and the St. Louis community. Before the X PRIZE no organizations were known to be developing vehicles suitable for the space equivalent of barnstorming. As of this writing 21 teams in the United States, the United Kingdom, Canada, Argentina, and Russia have registered to compete. Prizes continue to have a marked impact on human behavior. Conclusions The fundamental difference between early aviation and early space flight is that the public acquired the expectation that space was the sole province of governments. Ironically, the same Cold War competition that accelerated the early development of space flight fostered this belief that now impedes sustainable commercial space development. The belief that government should be the lead player in space remains all-pervasive and continues to frame the discussion of commercial space even among space development advocates. In aviation, by contrast, thousands of private experimenters and pilots had experienced flight prior to the first large-scale infusion of government support in the World War I era. Aviation prizes played a significant role both in advancing the technology of flight and in generating widespread excitement about the new technology among the general public. The golden age of aviation required both technology and acceptance of that technology to create a market for flight. A commercially viable market for the most numerous foreseeable space payloads— namely, humans—requires a breakthrough in public expectations more than technological advancement. Although governments are perhaps less relevant to the fundamental market problems facing commercial space than the public believes, governments can play an important role in changing the perception created by their historical involvement in space flight. In addition to offering prizes of their own, they can remove obstacles to commercial efforts. Examples include creating experimental space flight operating areas similar to existing military operating areas to provide safe testing opportunities. Permitting informed individuals 26
When Will We See a Golden Age of Space Flight? to make their own risk decisions would also remove the specter of litigation and perhaps certification from early commercial operators. Proposals for creating the space passenger equivalent of accredited investors should be examined.29 Governments should welcome early personal space flight adopters such as Dennis Tito to test the viability of this potentially vast market. Commercial space has not yet entered its equivalent of the golden age of aviation because people have not experienced the kind of direct personal involvement promised by Lindbergh and other pioneers and later delivered by aviation advances. When the public understands that they have a real opportunity to personally experience spaceflight the result will be our own golden age. Notes 1. H. S. Villard, Contact! The Story of the Early Birds (New York: Thomas Crowell), 1968, p. 157. 2. Ibid., p. 240. 3. Ibid., p. 125. 4. Personal communication with Dr. Paul Cszysz, Parks College of St. Louis University, February 2001. 5. ‘‘Europe’s Space Station Chief Blasts Tourist Trips,’’ Space News, Feb. 5, 2001, p.1. 6. G. E. Maryniak and R. Boudreault, ‘‘Resources of Free Space vs. Flags and Footprints on Mars, An Examination of the Competing Paradigms for Human Space Exploration and Development,’’ Space Policy, May 1996. 7. William Haynes, The Issue Is Cost (Princeton, N.J.: Space Studies Institute). 8. Indeed it is often said that engineers are people ‘‘who can do for a dollar, what any dang fool can do for ten dollars.’’ 9. Freeman J. Dyson, Video interview at the May 1979 Princeton Conference on Space Manufacturing produced by the Chicago Society for Space Studies, 1980. 10. Dyson observed that the cost per family of the Mayflower expedition was of the order of $1 million per family—far lower than what would be possible with present launch systems. See Freeman J. Dyson, Disturbing the Universe (New York: Basic Books, 1979). 11. For example, O’Neill predicated many of his projections on space industrialization on NASA’s launch cost estimates of $100 per pound. G. K. O’Neill et al., ‘‘New Routes to Manufacturing,’’ in Space Aeronautics and Astronautics, 1980. 12. For a discussion, see C. Christensen, ‘‘Demand-Based Forecasting of the Space Industry,’’ in Global Satellite Industry Survey Research Seminar, Satellite Industries Association et al., 1999. 13. P. Collins, R. Stockmans, and M. Maita, ‘‘Demand for Space Tourism in America and Japan, and Its Implications for Future Space Activities,’’ www.spacefuture.com/ archive/demandforspacetourisminamericaandjapan.shtml. For a comprehensive review of international survey research, see the following site maintained by Dr. Patrick Collins and his associates: www.spacefuture.com.
27
SPACE 14. Charles A. Lindbergh, The Spirit of St. Louis (New York: Charles Scribner’s Sons, 1954). 15. This table is based on Villard, Contact!, The Story of the Early Birds (New York: Thomas Crowell, 1968). 16. Ibid., p. 92. 17. Ibid., p. 127. 18. Ibid., p. 135. 19. Ibid., p. 141. 20. Roger E. Bilstein, Orders of Magnitude: A History of the NACA and NASA, 1915–1990, NASA SP-4406, National Aeronautics and Space Administration, Washington, 1989. 21. Roger E. Bilstein, Flight in America (Baltimore: Johns Hopkins University Press, 1984). 22. Ibid., p. 52. 23. David Nevin, The Pathfinders (Alexandria, Va.: Time-Life Books, 1980). 24. A. Scott Berg, Lindbergh (New York: G.P. Putnam’s Sons, 1998). 25. James D. Burke, The Gossamer Condor and Albatross: A Case Study in Aircraft Design, AIAA Professional Study Series (Pasadena, Calif.: AeroVironment, Inc., 1980). 26. Dava Sobel, Longitude (New York: Walker and Co., 1995). In Gulliver’s Travels (Jonathan Swift, 1762), Captain Gulliver, contemplating the benefits of immortality, anticipates seeing the return of various comets and witnessing ‘‘the discovery of the longitude, the perpetual motion, the universal medicine and other great inventions.’’ 27. Nathaniel Bowditch, American Practical Navigator (Washington: Government Printing Office 1966). 28. Joel Mokyr, The Lever of Riches: Technological Creativity and Economic Progress (New York: Oxford University Press, 1990). Thanks to Dr. Molly K. Macauley for bringing this prize and Mokyr’s book to our attention. 29. P. Diamandis and P. Collins, Creation of an ‘‘Accredited Passenger’’ Regulatory Category for Space Tourism Services (Shirlington, Va.: Space Transportation Association, 1999).
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3. The Arrival of Tomorrow: NASA in the 21st Century Liam P. Sarsfield
As written by Arthur C. Clarke in 2001: A Space Odyssey, 2001 was to be an epochal date for the space program. Commercial airline operations to orbit and bases on the Moon formed the backdrop for a hope-filled portrait of human evolution. It was a date to look forward to. Tomorrow has arrived and America‘s space program has entered the new millennium with a thud instead of a bang. No federal agency has done a better job than the National Aeronautics and Space Administration (NASA) in public outreach. Yet Hollywood‘s fiction of humans struggling on Mars is more compelling than NASA‘s reality of astronauts piloting an aging space shuttle. Engrossed in ‘‘reality programming,’’ the public is showing only passing interest in the construction of a space station that bears little resemblance to the one promised by Sir Arthur. Even when the space station is finished, Americans are not likely to become engrossed in the esotericism of life and microgravity science research. Has NASA become a visionless middle-aged bureaucracy no longer in touch with the hearts and minds of the American public? This paper examines some of the institutional issues facing NASA and the many difficult choices that lie ahead. Though NASA certainly exhibits many of the ailments of a middle-aged bureaucracy, the agency‘s fundamental frequency remains decidedly visionary. It is a vision that has shaped the programmatic options advocated by agency officials. Maximizing returns from our national investment in the space program and expanding free market options hinge on a critical examination of this vision in light of evolving civil, military, and commercial space goals. 29
SPACE NASA: Calcified Bureaucracy or Agent of Vision? There are many ways to explain the choices that have been made over the course of NASA‘s history. The first is a chronological examination of the forces that shaped the space program. From this perspective, the exigencies of national security and the preservation of national prestige figure prominently in explanations of the way the space program was originally configured. Much has been written about the early days of the space program and the need for government investment in rocket technology. NASA was charged with countering Soviet space spectaculars and reversing our often-embarrassing attempts at rocket flight. Progress was fast and furious in both the military and civil space sectors and projects were completed on timetables we would be hard-pressed to repeat. The first Thor missile, for example, was launched a mere 13 months after the contract was awarded.1 Chroniclers draw parallels between the government‘s involvement in space and the creation of NASA and the creation of its predecessor, the National Advisory Council for Aeronautics (NACA). Few individuals within the government saw the potential of the airplane for war or commerce after the Wright brothers‘ 1903 flight. Commercial interest was only slightly less vapid. Those who were interested faced lengthy patent and contract disputes with the Wrights.2 Interest in Europe, where aviation had a long history and where industrialization was on a firmer footing, quickly exploited the Wright brothers‘ innovation. By the outbreak of World War I, France and Britain had a combined strength of 1,800 aircraft, opposing a German force of 1,000 aircraft; the U.S. Army Signal Corps, Navy Aviation, and the Marine Corps had a combined strength of 100 aircraft, mostly of inferior technology. The American government saw the creation of NACA as a necessary step in closing the technological gap. When NACA‘s Langley Memorial Aeronautical Laboratory (now the NASA Langley Research Center) opened in 1920, rapid progress was made in aerodynamics, high-speed airfoils (mostly to support the design of advanced propellers), propulsion reliability, and flight safety. That research provided the foundation of the renaissance in U.S. civil and commercial aviation that occurred during the 1930s. As a chronology, the first half of the 20th century could be termed the ‘‘Age of Aviation’’ and the later half the ‘‘Space Age.’’ NACA accomplished 30
The Arrival of Tomorrow: NASA in the 21st Century a great deal in helping to establish a vibrant American aviation industry, but its effectiveness diminished over time. NASA helped spur what has become a nearly $100 billion space industry, and it too has become less relevant over time. NASA‘s history can also be studied and explained from the perspective of technological determinism. Within the context of determinism, what happened to NASA is less about choice and more about human inability to resist the mystique and power of our technologies. We went into space because we could. Matters of government policy and organization, economics, and national security are so arranged as to permit the next great technological undertaking. And each new step brings with it the potential to reverse the errors or unpleasant byproducts of the previous one. Each new program is sold as a solution. The space shuttle would reverse the unnecessary waste of disposable rockets and dramatically reduce the cost of putting materials in orbit. The space station would unveil an era of space processing and factories in space. Economic benefits would flow and the cost of the programs would be invisible because all of the money is spent on Earth. Another way to understand the space program is to view our choices as political. From this viewpoint NASA is very much about industrial base protectionism and the pork-barreling associated with any government program of appreciable size. When technological potential and political will are in alignment, big programs are born. Space projects have characteristically meant large budgets spread over long periods, along with a reasonable assurance of cost recovery—good news for companies supplying equipment to the government. Certainly NASA‘s expenditures, though by no means dominant, have been an important component of the investment needed to sustain and stabilize the space industrial base. When it became clear that NASA would not receive another Apollo-type mandate, which would have extended budget protection, its officials changed tactics. NASA deftly exploited its buyer power within an increasingly hungry space industry and distributed program spending so as to protect its fair share of the pork in the discretionary barrel. Today, concern over the health of the American space industry is growing in the wake of excess capacity and increasing foreign competition. The government, no longer dominant in the space sector, is in less and less of a position to help. Defense budget authority 31
SPACE has decreased by 40 percent in constant dollars since the mid-1980s. The emergence of longer-lived spacecraft also reduces government demand for replenishments. Officials fear a lack of responsiveness on the part of the space industry in meeting civil and military spacecraft requirements in the long term. Large NASA programs remain an important factor in the institutional base equation. Protection of national security interests, technological determinism, and plain old pork-barreling are all proper explanations for many aspects of our current civil space policy. There are, however, some significant flaws. There are many ways to spend taxpayer money that could better suit national security interests. The space station, for example, generates little support within the defense and intelligence communities. NASA‘s larger projects also tend to quickly become technological white elephants. And alternative programs could be conceived with commensurate pork potential to those proposed by NASA. This suggests that another perspective is needed to explain NASA‘s institutional position. The added dimension I propose illuminates NASA in the light of social philosophy. Evaluating NASA‘s institutional decisionmaking, as well as understanding the agency‘s reaction to commercial space exploration, requires a closer examination of the understated vision of the space program. In contrast to a bureaucratic model, NASA can be understood as an aggregate of program elements surrounding a visionary core, as shown in the model of Figure 3-1. This vision has survived the beginning and the end of the Cold War and remains vital. The core vision of NASA is one of human expansion into the cosmos, best stated in Russian rocket pioneer Konstantin Tsiolkovsky‘s view of space research as an expression of manifest destiny: ‘‘The Earth is the cradle of reason, but one cannot live in the cradle forever.’’ As Tsiolkovsky pointed out, fantasy precedes science. The dream of a flight to the heavens began with Lucian in 160 A.D. with his ‘‘True History,’’ a satirical journey to the Moon and the Sun.3 Works of fiction with a space theme are many, but with Cyrano de Bergerac they become more scientific. In ‘‘L’Autre Monde’’ (Other Worlds), published posthumously in 1658, de Bergerac describes propulsive methods. Most early rocket pioneers were avid science fiction readers and writers. As the space age dawned, Tsiolkovsky wrote elegant stories 32
The Arrival of Tomorrow: NASA in the 21st Century
Figure 3-1 AN ALTERNATIVE MODEL OF NASA
Remote Agents
Technology
VISION
Aeronautics
Science
Space
Human Exploration with detailed descriptions of space architecture.4 German rocketeers Hermann Oberth and Wernher von Braun also penned science fiction stories. In keeping with much of the German science fiction of the time, their works, like Tsiolkovsky‘s, were distinctly utopian in nature.5 New worlds provided lebensraum for future human generations. Some writers went further, viewing space exploration as a matter of survival; as science fiction writer Larry Niven reminds us: ‘‘Dinosaurs went extinct because they had no space program.’’ 33
SPACE NASA was molded from multiple, often conflicting, elements. Many of these are shown in Figure 3-1. Aeronautical research coexists, with considerable discomfort, with space research. Remote space science missions vie for funds against human exploration projects. And science and technology projects lie at opposite ends of the programmatic spectrum. These elements are all, however, bound to the visionary core. NASA managers can argue, but challenging the central vision can be distinctly unhealthy. To survive and thrive at NASA one must have the right stuff, a mixture of bravado, technical skill, and a belief in a common vision. When NASA says ‘‘the dream is alive,’’ it means it. When it proclaims a program to be ‘‘the next logical step,’’ there is a destination in mind. For the most part NASA has preferred to understate its vision. The visionary core was quick to surface, however, when President George Bush in the late 1980s announced his tacit support for a renewed human exploration program that included a potential Mars mission. What quickly followed was a bewildering array of plans for exotic missions with a half-trillion-dollar price tag. It was a dreamy miscalculation that forced NASA to return to the sobering job of trying to keep escalating space station costs under control. Today, there is a two-fold reason for bringing NASA‘s core vision into sharper focus. First, a model that views NASA as simply a bureaucracy of gray metal desks that has calcified as it has aged cannot fully account for, or predict, agency behavior. Accounting for NASA‘s core vision increases the accuracy of public policy research. Second, several near-term choices must be made that will establish a vector for the U.S. space program well into the future. The arrival of tomorrow seems like an ideal time to review the existing vision openly and ponder whether it continues to serve the national interest. The remainder of this paper will review some key programs and the challenges facing policymakers when considering future directions for NASA. NASA‘s core vision will be a recurring theme. Space: The Human Frontier? NASA‘s human exploration initiative is, of course, the central expression of the agency‘s core vision. Human programs have long been viewed as the best way to protect the institutional base. Indeed the bond between contractors and NASA has always been especially strong in the area of human programs that are 20-plus-year endeavors. 34
The Arrival of Tomorrow: NASA in the 21st Century The human exploration initiative has also been NASA‘s main connection to the public. Sending astronauts into space attempts to engage the public in the human drama of spaceflight. The public does not, however, seem terribly interested in the vicarious adventure NASA is offering. The notion that human space flight can restore a sense of mystery to a generation suffering mystical sclerosis—a hardening of the psyche caused by excessive exposure to unending SUV commercials—is highly suspect. Astronaut derring-do, the nominal variety, has become a 10-second CNN news item. Interestingly, one of the greatest positive public relations events for NASA was the 1998 landing of the Mars Pathfinder and the deployment of the Sojourner rover. The spotlight shifted from the Kennedy and Johnson Space Centers to a group of wildly enthusiastic, golf-shirt-clad engineers at the Jet Propulsion Laboratory. Sojourner toys became hot items and the public became entranced with images of a rock named Yogi. The Mars Pathfinder experience suggests that the ‘‘no Buck Rogers, no bucks’’ theorem bears reexamination. If space exploration is to inspire, it must produce new images and information that truly challenge normal thought patterns. It must also outperform Hollywood, a daunting task in the digital age. It is not clear that NASA‘s human exploration initiative can produce this effect. Space is not friendly to humans, with or without space suits. Sending humans into space contains little of the bravado and risk popularly associated with exploration. Human space exploration is more about carefully scripted exercises where risk is a foul word. To approach it any other way is to court disaster. NASA is keenly aware that it cannot permit loss of crew, and astronauts are not allowed to break the very expensive hardware. In prioritizing human space flight systems, a choice driven by a vision of expanding human presence in space, NASA has forced a pattern of infrastructure development that is proving very difficult to sustain in a budget-limited environment. NASA‘s vision also short-circuits the normal pace of commercial development that has historically attended the exploitation of a new frontier. Now NASA, ostensibly an agent of exploration, is called upon to perform functions it does poorly: provide services and operate facilities. In many cases these functions clearly interfere with avenues of commerce that offer greater efficiency as well as opportunities for competitive 35
SPACE advantage in world markets. In short, NASA‘s core vision inhibits the long-term strategic thinking needed to balance and optimize our civil, military, and commercial objectives in space. Three major institutional areas within the domain of human space flight programs are the focus of near-term attention: space transportation, most notably the Space Launch Initiative (SLI); the International Space Station; and future human planetary exploration. The Transportation Dilemma Access to space is a vital element of our national space policy. Some recent glitches notwithstanding, domestic commercial launch providers have provided reliable access to space for government and private customers, but launch cost remains a topic of great concern. All customers for launch services would prefer to reduce their cost and gain access to highly reliable vehicles to reduce insurance fees. As profit maximizers, launch service providers naturally set prices based on competition, available margins, and current and projected demand. Commercial demand is not expected to grow as predicted. Demand from low and medium Earth-orbiting mobile communication satellites has failed to materialize. And large geostationary communication satellites are living longer, softening the requirements for replenishment. Without a sudden shift in market forces, the price of launch services is not likely to change in the near term. Government programs have attempted repeatedly to drive launch prices down below points established by the market. The Air Force‘s current Evolved Expendable Launch Vehicle (EELV) program is expressly designed to subsidize technology development and modernization activities to lower costs with a goal of 50 percent and a requirement of 25 percent. Technology spinoffs from the EELV program are projected to improve the technical and cost performance of launch service providers. This will likely allow domestic providers to capture more market share, an outcome that does not automatically lead to lower prices. NASA, too, is investing in launch systems. The principal aim of the agency‘s Space Launch Initiative is to pave the way for the construction of a second-generation reusable launch vehicle (RLV), with development to begin in 2005 and initial operations to begin in 2012. The new RLV would replace the existing space shuttle. 36
The Arrival of Tomorrow: NASA in the 21st Century NASA promises that the second-generation system will achieve the long-awaited ‘‘order of magnitude’’ cost reduction.6 SLI includes a plan to upgrade the current space shuttle to reduce the potential for a loss of the vehicle and to continue operations until a new vehicle is flight proven. Key to the analysis of future space access options is resolving the requirements levied by NASA as well as other government agencies. The United States already has a vibrant commercial launch services infrastructure, to be augmented by the Air Force‘s technology investment via the EELV program. It makes sense, therefore, to insist that government cargo and satellite deployments be directed to commercial launch providers. This leaves the more challenging requirement of moving people. Until space tourism or commercial space production of some sort becomes fully viable, human space flight will remain a strictly government domain. Within that domain only NASA has a definitive requirement, though the military is making an increasingly strong case for a space force that includes a human element in space. For NASA, the only immediate destination for people is the space station. It should be noted that NASA’s plan for the development of a secondgeneration RLV would require an investment in excess of $30 billion, an unlikely outcome unless a DoD/NASA joint venture can be formed. There are options for meeting the human transportation requirement other than developing a second-generation RLV. One notion would be to continue to fly the space shuttle and skip the development of the second-generation vehicle entirely. That option would require extensive upgrades to continue space shuttle operations safely up to the point that space station operations cease. Another notion, shown in Figure 3-2, is to compress human transportation requirements as much as possible and to make the transition as quickly as possible to a smaller, more reliable, and less costly to operate vehicle for a crew transfer vehicle (CTV). The development of a CTV would require far less new technology than would a second-generation RLV. And, if reliability could be dramatically improved, it might be possible to deploy such a vehicle using improved commercial EELV systems. NASA’s current plan for a second-generation vehicle is to have a launch reliability of 99.9 percent, a performance point that has yet to be achieved for a space 37
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Figure 3-2 CONSTRAINING THE REQUIREMENTS FOR HUMAN TRANSPORTATION
Space Shuttle Upgrades & Flyoff
NASA
Ultra-reliable EELV technolgy program CTV Development
Requirements Compression DoD
IOC
New CTV Design 2002
2003
2004
2005
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launcher.7 If it could be achieved as NASA’s plans indicate, the result would be an ultrareliable launch vehicle. That achievement would be a distinct market advantage for domestic commercial launch providers as customer’s prize reliabilty almost as much as low cost. National security payloads would also benefit from unltrareliable launch systems. The government has a role to play in developing advanced technology for launch systems, but the private sector is best suited to providing launch services. A strategy that minimizes governmentunique launch requirements to the smallest set possible will help ensure that commercial solutions can be found to the challenge of transporting humans to space. Such a strategy should help control costs. Large ‘‘great leap forward’’ programs, such as the space shuttle and the National Aerospace Plane, have proven to be far more costly than originally anticipated. Many within NASA oppose the plan to develop a vehicle like the CTV since it is perceived as having less capability than the existing space shuttle. These are valid concerns. However, the current high cost of the combined space shuttle and space station programs are choking NASA research and development (R&D) initiatives. If the development of a CTV can be proven to significantly reduce operational costs, such an option should not be ignored. This strategy would free NASA’s talented engineers and scientists to focus on the challenging hypersonic technologies needed 38
The Arrival of Tomorrow: NASA in the 21st Century for third-generation launch systems. With NASA focusing on R&D, the decision to build future RLV systems can be trusted to commercial launch vehicle manufacturers on the basis of prevailing market conditions and risk. In the long run, an opportunity to compress government requirements in the manner described ultimately depends on the future we envision for human exploration and human presence in space. The International Space Station—NASA‘s Eleventh Research Center America recently learned of another round of space station cost overruns. It should surprise no one that a facility as complex and expansive as the space station was and will continue to be an extraordinarily expensive undertaking. For better or for worse, we have decided to build what is essentially another NASA research laboratory, albeit one that is hard to get to. The decision has fundamentally reshaped NASA and significantly determined the course of the civil space program in the near and mid-term. Fueling NASA‘s dogged pursuit of the space station was the core vision. The actual arrangement of modules and nodes was far less important than the goal of having an outpost. This ‘‘next logical step’’ is a foundation stone for NASA—a permanent American presence off the surface of the Earth. It is important to note that a permanent presence in NASA parlance means 24 hours a day, 7 days a week. This is unlike a private residence where declaring a permanent address does not require one to remain at home 24/7. The decision to leave astronauts in space was a central theme in NASA‘s vision, not a practical requirement for the conduct of research or for the maintenance of the facility. Scientists were often coopted by space station advocates to bolster arguments for scientific utility. Some of the proposals had a comical aspect. At one point, for example, the space station design included astronomical observatories, a ludicrous combination of fine-pointed telescopes swaying at the end of flexing towers. When they could, scientists wrestled free of the space station embrace. Only life and microgravity scientists remained. Fluid dynamics experiments, including materials processing experiments with gas/liquid interfaces, are sensitive to slight accelerations. Extremely slight gravity levels of 10ⳮ6 g are preferred for such experiments, a level that is notoriously difficult to achieve in the presence of crew. Many life 39
SPACE science experiments—not all, just many—require a crew. A facility could have been designed (and many such alternatives were proposed) that would be visited by humans to conduct research and fix this or that. Such notions were considered heretical to NASA and its goal of a permanent human presence in space. Today the space station is proposed as an opportunity for commercialization. A thin fog of commercialization has surrounded the long history of the space station. The production of wonder materials of unprecedented value was much promised in the 1980s with wild predictions of multi–billion-dollar space processing facilities. The good news is that if NASA can get around to actually building experiments for the space station, we might learn a great deal. Much of our knowledge of physical and chemical processes is empirical. Research on the space station can help change that. We should not, however, expect overnight success. We have studied fundamental processes in Earth gravity for thousand of years; our experience in low gravity totals a few months. Though some intriguing ideas have been considered, commercial firms have not proposed bold plans to buy out the U.S. government’s share of the international space station. The best alternative available is an interim step proposed by NASA to place utilization of the station in the hands of a nongovernmental organization (NGO). At this stage, the NGO option makes sense. NASA promised a research facility, and we should demand that we get just that. The Case against Mars Mars figures prominently on today‘s space policy agenda. It seems we have nearly discovered water and nearly discovered life there. This is exciting news for the science community, news that could have a profound impact on human thinking. NASA is at its best when it is studying such potentials. Should that fact translate into a human plan for exploration? Mars-mania is predominantly powered by hopes for a human expedition. Plans for bargain-priced human forays to Mars start at $20 billion, estimates that are certain to be ludicrously low. None of the scenarios proposed to date are especially heartwarming in survivability. And it is by no means clear that NASA has the management or engineering skill to succeed in such an endeavor. A sense of desperation has set in regarding Mars. NASA‘s science program has been under enormous pressure to expedite the pace 40
The Arrival of Tomorrow: NASA in the 21st Century of discovery. Many of the recent missions that NASA sent to Mars were rushed. Mars Pathfinder was a great success, due mainly to the skill of the project team and the Herculean efforts of the Jet Propulsion Laboratory. The Mars Surveyor 1998 mission was not so lucky and the loss of the orbiter and lander was a national embarrassment. Many Mars scientists would prefer slowing down a bit and sending larger, more capable spacecraft tied to a level of investment established by the budget. Even scientists devoted to Martian research are concerned that a fixation with researching the Red Planet risks unbalancing NASA‘s space science program.8 We can afford to slow down. Unlike in the case of military and national security missions, NASA has the advantage of having the time to conduct measured research, the kind of methodical study that yields great scientific discoveries. Mars is an old planet and shows no signs of evaporating into the ether any time soon. The only pressure we are under to invade Mars with a disproportionate share of too-tiny robots comes, once again, from NASA‘s core vision. We could opt for a strategy that rejects a human mission to Mars unless we have a compelling scientific or military reason to go there. That would not restrict commercial ventures from sending robots or people to Mars. Commercial ventures would most likely occur at a nexus: when a discovery is made suggesting commercial viability; when space infrastructure matures to reduce expedition cost and risk, including technology for rapid transit; and when legal boundaries do not prevent exploitation. Space Science and Technology NASA‘s effort to explore the space environment could be considered an adjunct to NASA‘s core vision. It provides information about our local planetary neighborhood and it generally stimulates continuing political interest in the space program. Fortunately, the space science program is much more. NASA‘s investment in space science and technology has provided breathtaking glimpses of our universe and helped broaden the awareness that we are a cosmic species. NASA‘s efforts represent government investment in research and development at its best. NASA‘s space science and technology programs are not, however, enjoying particular health at the moment. Cost cutting and bad 41
SPACE management decisions have left the programs on shaky ground. ‘‘Faster, better, cheaper’’ (FBC) strategies have driven projects far into the red and destabilized government and industry organizations alike. There are also structural problems within the NASA institution that set the objectives of science and technology in opposition. And overly aggressive budget constraints have led to an imbalance that has diminished the content of NASA science and technology programs and raised risks to unacceptable levels. Faster, Better, Cheaper‘s Report Card For a decade NASA has pursued its FBC strategy. At the time when it was first announced, endorsing more cost-effective projects was politically necessary. The military too embraced a new round of acquisition reforms. The results on both sides have been mixed. My view of FBC‘s report card is shown in Figure 3-3. Because FBC was coincident with imperatives to cut costs, for the space science program the term became associated with smaller spacecraft. This was not discordant with wishes of scientists who had been pressing for smaller, faster projects since the mid-1980s. Smaller spacecraft are naturally cheaper than larger ones, but in a relative sense (per pound) they are actually more expensive to build. The same goes for the time it takes to build them. This is largely the result of the fact that the spacecraft that NASA builds remain complex. Has FBC resulted in better missions? More missions are being flown and this increase is a welcome change. Large facility-class science instruments were taking a decade or more to build, with commensurately huge budgets. Responsiveness is better and more teams are involved in building highly innovative and capable spacecraft. A proliferation of spacecraft also helps distribute risk, which is another positive development. In program content, most of the big science still comes from big spacecraft. NASA‘s FBC strategy has sharply diminished the content of the science program by driving trades that frequently curtailed scientific utility. Technology holds the key to increasingly powerful small spacecraft and is, therefore, the subject of much planning. Unfortunately, the goals of technology developers and scientists are often in opposition. The biggest problem with FBC is a reversal in the trend of increasing reliability. In its exuberance to cut costs, NASA cut deep into 42
The Arrival of Tomorrow: NASA in the 21st Century
Figure 3-3 A REPORT CARD FOR FASTER, BETTER, CHEAPER
FBC REPORT CARD FASTER Absolute
PASS
FAIL
Relative CHEAPER Absolute Relative BETTER Performance Flight Rate Risk Distribution Reliability
muscle instead of fat. Managers ignored the fact that project teams were increasing risk to stay within imprudent cost and schedule targets. Policymakers who applauded NASA‘s willingness to trim another notch off the bottom line share in the blame. The occasional loss of a science mission is not necessarily a major concern inasmuch as no one expects exploration to be conducted without failures. Acceptable failures occur when technology is being pressed to the limits, or when a spacecraft encounters some unknown and unpredictable environment. Unfortunately, more often failures have been traced to bad management, errors in design, or poor 43
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Figure 3-4 CREATING A BALANCED PORTFOLIO OF SCIENCE MISSIONS
Evolutionary Improvement
Common Stock
- Radical science - Radical technology - Skunk Works atmosphere - Rapid prototype w/hi reserves - Example: Deep Space 2 - Acceptable success rate: 66%
Classic Missions Corp. Bonds
- Precursor/targeted science - Evolutionary technology - Best practices - Tailored development - Example: Mars Pathfinder - Acceptable success rate: 90%
Traditional Missions
T Bills
Revolutionary Improvement
Trailblazer Missions
- Fundamental science - Only required technology - Proven practices w/ full RMA - Waterfall development - Example: Cassini - Acceptable success rate: 98%
craftsmanship. Then, too, ‘‘cheaper’’ too often relied on false economics with teams working long, uncompensated hours. And cheaper meant limiting the use of more expensive senior personnel, the kind of people who know how to avoid mistakes. When losses are considered, it is not clear that FBC saved much money at all. Reversing the negative aspects of FBC will not be easy. The solution lies in a more balanced approach to planning space science missions. Toward a Balanced Space Science Program Restoring balance to the space science program means focusing on value. Size, complexity, cost, performance, and risk are all independent variables that must be resolved in such a way as to yield the greatest scientific return for the government‘s investment. Figure 3-4 is a notional portrayal of a balanced portfolio, operating in much the same way as a stock portfolio is balanced. It contains a variety of missions with different complexions: ● Trailblazer missions are high-risk, high-reward missions. Trailblazer missions would involve novel exploration, revolutionary 44
The Arrival of Tomorrow: NASA in the 21st Century management and engineering practices, and the application of radical technologies. NASA‘s Deep Space 2 mission was a good example of a trailblazer. ● Classic missions are moderate-risk initiatives. These are missions that serve as precursors, demonstrate new techniques, or perform focused scientific or application objectives. Mars Pathfinder is a good example of a classic mission—it was designed to achieve a 90 percent probability of success. ● Traditional missions are missions supporting fundamental science. Extremely expensive missions would almost certainly be included in this class. Flight-proven technologies would dominate the design, and they would be subjected to full mission assurance to help achieve a successful outcome. The Cassini spacecraft is a good example of this kind of mission. NASA‘s FBC strategy has resulted in 1 in 3 space science spacecraft failing. Clearly NASA must return to a more balanced portfolio. A managed portfolio is nothing more than a tool for communicating a well-balanced plan. It includes an explanation of how investment funds are exposed to risk. This will help ensure that policymakers, agency officials, program managers, and project leaders have similar expectations for mission outcomes. Figure 3-4 illustrates other important aspects of a balanced portfolio. Trailblazer missions are the third stage of the rocket. Many of NASA‘s FBC missions would be classified as trailblazers, and they have borrowed extensively from the technology and personnel provided by larger programs. Larger programs provide the foundation necessary for innovation. If we can restore a sense of balance to NASA‘s science program, we can expect a continuous flow of new discoveries with fewer missteps. We should also expect that space scientists will be joined by entrepreneurs with a flair for exploration. Space Commercialization Revisited March 16, 2001, was the 75th anniversary of Robert Goddard‘s first launch of a liquid rocket. Goddard was an individual American innovating without benefit of large research laboratories, study contracts, or review boards. His success reminds us that to retain leadership we must remain open to innovation, wherever it occurs. As the space industry matures, new types of commercial firms will naturally appear. They will attempt to make money, and many of them 45
SPACE will have new ideas that support advances in science and technology. NASA should welcome them on both counts. Whether the agency can embrace new forms of commercial space ventures remains to be seen. NASA‘s core vision does not contain much room for commercial enterprise. Commercial activities are more a deflection of the agency‘s vision than a magnifier. Vitalizing commercial space will require a reformulation of the vision, rather than a set of adjunct policies designed to coerce NASA into paying attention to mercantile interests. Buying Science and Technology NASA is an R&D agency charged with maintaining U.S. leadership in space science and technology. Pursuit of these goals is a sound investment of taxpayer monies and NASA has done a superb job in both areas. The technologies that NASA develops run the gamut from evolutionary designs that can be readily used by commercial spacecraft manufacturers to revolutionary designs that will influence future space systems. NASA‘s science and technology goals and those of the commercial space industry can intersect in complex ways. The Earth Science Enterprise (ESE) is a case in point. The technology component of ESE, in concert with other government imaging programs, helped give birth to a commercial remote sensing industry. One market for the emergent industry was ESE itself. NASA is now forced to resolve its requirements for remote sensing data into a set that can be purchased from commercial sources and a set that demands unique NASA spacecraft. This is a complex affair requiring that the government understand a diverse set of private sector offerings and make purchases that best meet the needs of the science community. It must accomplish this at the same time it continues to transfer technology to the private sector. The result is an unprecedented dynamic relationship between NASA and the space industry. Several commercial firms propose to sell NASA a range of data products. For the government, there could be several advantages in purchasing data from the private sector, most notably transferring risk and saving money. Such a change requires that some rules of engagement be observed. A firm offering a data product should not rely on the government as the primary customer. The price of a data product should be less than the government would pay to acquire 46
The Arrival of Tomorrow: NASA in the 21st Century it through traditional means. In agreeing to purchase commercial data, government funds should not be exposed to risk. Finally, the product being offered should match a verified NASA science requirement. To encourage commercial data offerings, NASA should accept a flexible posture and place high value on the success of commercial space exploration attempts. Using a Prize to Launch the Small Stuff The government and large commercial firms are mainly concerned about launching large objects into space. As spacecraft become smaller, however, the need for an affordable small launcher will become greater. For microsats (100–200 kg class spacecraft), it is often difficult to obtain inexpensive launch opportunities. The cost of launch can match or, in some cases, exceed the cost of the spacecraft. Getting into orbit often means hitching a ride, typically as a secondary payload on a communication satellite launch. The European Ariane launcher is currently the preferred launch system; it uses an adapter ring that can deploy multiple small spacecraft. For those programs that can afford the ride, piggybacking with another payload on a Pegasus air-launched vehicle or flying solo on a Russian Dnepr is a high-end option. Economies of scale dictate that the price per kg to orbit is higher for smaller payloads. Space analysts generally agree that reducing the cost of launching a microsat from the current $24,000 per kg to $8,000 per kg would stimulate significant growth in this sector of the market. This is essentially a Scout-class launch vehicle operating at one-tenth the cost. NASA had pursued the development of a new Bantam launcher for this class of payload. The program was canceled, mainly because NASA‘s requirement for microsat payloads was not strong. Several authors have pointed out that the development of a microsat launcher provides a good opportunity for a prize designed to simultaneously accomplish performance, reliability, and cost objectives. Though NASA‘s requirements are not firm in this area, NASA could agree to manage a prize competition for the broader benefit of the space community. A prize would open the door for free market competition and would reward innovation and speed. The performance objective of the vehicle can be clearly identified, and the reliability goal can be met by requiring two successes in three 47
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Figure 3-5 FUTURE COMMERCIAL MISSIONS INTERSECT THE NASA MISSION
sequential launch attempts. The value of the prize should consist of two parts: a cash reward for meeting the performance goals, and a guarantee to purchase a set number of launches at a fixed price equal to the marginal cost objective for the vehicle. The purchase guarantee would help competitors raise capital. It would also eliminate the need for a government audit of the winner‘s ability to ensure low prices. Entrepreneurs as Allies Some space entrepreneurs are proposing missions that press the limit in technology and scope. They are daring ventures and within them NASA could find co-conspirators in the business of space exploration and exploitation. A case in point is the Encounter 2001 Probe mission, shown in Figure 3-5. It is an example of an entrepreneurial venture designed to proceed without NASA participation. The mission intends to deploy a functional 70-meter (on a side) solar sail, the first use of a sail for primary mission propulsion.9 The 48
The Arrival of Tomorrow: NASA in the 21st Century venture involves technologies of great interest to the government. The solar sail technology will establish the state of the art in terms of materials, packaging, and deployment mechanisms. The sail design also makes use of deployable, self-rigidizing beams, a technology useful in the deployment of large space structures. Missions like the Encounter 2001 Probe provide opportunities for unique forms of government–industry space partnership. They combine a high level of innovation with the potential to engage the public in an exciting space experiment. Alliances with such entrepreneurial ventures could help NASA accelerate space technology projects. Conclusion NASA remains an agency with a powerful vision. In pursuit of its vision, NASA is now stuck with a transportation infrastructure that is not cost-effective, a space station program that emphasizes operations instead of exploration, and a science program that has become unbalanced and laden with risk. The agency has little maneuvering room to support the expansion of the free market frontier in space. At this pivotal point in the history of the space program we need to ponder who is setting NASA‘s vision and whether it can serve the national interest into the next century. There are many crucial near-term choices to make—opportunities to reshape the space program. We should forgo making those choices until the validity of NASA‘s vision is either confirmed or modified through open debate. That debate must include nonadvocates of the space program, and it must include an ability to assess the cost and risk of program options free from a reliance on NASA resources. A federal agency must have a vision to implement its mission effectively, but the vision is best established through the broadest possible study of options and interests. Notes 1. Simon Worden, ‘‘Management on the Fast Track,’’ Aerospace America, November 1994. 2. Tom Crouch, The Bishop‘s Boys: A Life of Wilbur and Orville Wright (New York: Norton, 1989). 3. Paul Turner, True History and Lucius, or the Ass (Bloomington, Ind.: University Press, 1974).
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SPACE 4. Adam Starchild, The Science Fiction of Konstantin Tsiolkovsky (Seattle, Wash.: University Press of the Pacific, 1979). 5. William B. Fischer, The Empire Strikes Out: Kurd Lasswitz, Hans Dominik and the Development of German Science Fiction (Bowling Green, Ohio: Popular Press, 1984). Also see Peter S. Fisher, Fantasy and Politics: Visions of the Future in the Weimar Republic (Madison, Wis.: University of Wisconsin Press, 1991). 6. Dennis Smith and Steve Cook, Integrated Space Transportation Plan, NASA Marshall Space Flight Center, Huntsville, Ala., 1999. 7. Ibid. 8. Leonard David, ‘‘Bush’s Budget Plan Bolsters Mars Exploration,’’ Space.com, March 5, 2001. 9. Details of the Encounter 2001 Probe mission are at: www.encounter2001.com.
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PART TWO:
BARRIERS TO SPACE ENTERPRISE
4. Is This Any Way to Run Space Transportation? Robert W. Poole Jr. Government and Transportation: A Brief Historical Overview Government has been involved with transportation infrastructure from the early days of our existence as a nation. That involvement was limited in the 18th and early 19th centuries. Indeed, most of the projects of the turnpike era were privately financed, developed, and operated, receiving at most a franchise of some sort from the state, sometimes in exchange for the exemption of politically favored groups from the requirement to pay tolls. But for the most part, the early infrastructure was neither subsidized nor regulated by government to any significant degree. That situation changed dramatically when the era of canal building began. Because of their greater capacity for carrying cargo, canals were attractive to politicians as tools for economic development and increased trade in the heady days of developing the young country’s interior. Hence, while government assisted private canal companies with subsidies, it also moved significantly into canal building itself. So rapidly did canals proliferate that many of the formerly viable turnpikes could no longer attract sufficient paying traffic to cover the debt service on their bonds; most ended up in bankruptcy and became free roads.1 Ironically, several decades later the pattern repeated itself with the emergence of railroads. Here again, politicians eagerly embraced the new technology as far superior to canals for both expanding settlement and increasing trade. They invested state funds, both in subsidizing the creation of new private-sector railroads and in getting heavily into the railroad business itself. The short-term consequence was the bankruptcy and abandonment of most of the canals. But the longer-term result was a massive overbuilding of railroads after the Civil War, which led to extensive bankruptcies. To restore their creditworthiness after these debacles, many state governments 53
SPACE enacted constitutional amendments prohibiting them from ever again investing in business enterprises. The emergence of affordable automobiles and motor trucks in the early 20th century led to government involvement in the highway business. The Good Roads movement lobbied successfully for government to pave what were then mostly dirt or gravel roads, and for the creation of a system of intercity highways. The fuel tax was invented as a relatively painless way of financing the government’s new road-building program; use of the fuel tax repudiated the previous century’s relatively successful experience with tolls. The development of paved intercity highways led to the emergence of a truck freight industry in competition with the railroads. Late in the 19th century, shipper unhappiness with railroad freight rates had produced allegations of monopoly exploitation; that led to the creation of the Interstate Commerce Commission with a mandate to regulate rail rates and service, largely on the grounds that shippers were being exploited and had no competitive alternative. Yet when government itself facilitated the creation of a competitive alternative—highway trucking—the ICC response was to regulate the competing mode rather than close up shop now that competition had emerged. Government likewise failed to adjust to another consequence of its heavy involvement in the road business. Electric rail transit developed in many cities in the late 19th century and helped to shape patterns of urban development—for example, streetcar suburbs, an early example of ‘‘urban sprawl.’’ But affordable automobiles and paved roads led to intense competition for the streetcars from modified autos, called jitneys, during the teens and twenties of the 20th century. The streetcar interests had sufficient political clout to have these competitors banned in nearly every American city; the streetcar operators thereby maintained their hold on urban transport well into the 1940s and early 1950s. But when auto ownership became ubiquitous and urban areas much more decentralized after World War II, city governments took over the now-failing streetcar and bus companies, insisting on maintaining that mode of transportation despite rising costs and declining ridership. During the last 35 years of the 20th century, governments spent more tax money subsidizing mass transit than they did in the cost of building the entire interstate 54
Is This Any Way to Run Space Transportation? highway system.2 Similarly, when air travel and the Interstate highway system made long-distance rail travel uncompetitive, government stepped in to create Amtrak to perpetuate the obsolete form. By the end of the century, Amtrak had consumed over $20 billion in taxpayers’ money—and was nowhere near to being financially self-sufficient.3 What this all-too-brief history illustrates is several persistent patterns. First, government has had a strong tendency to become enamored of new transportation technology—canals, railroads, autos, and trucks. Instead of being content to create a framework in which private entrepreneurs and the capital markets develop and perfect the new modes, government instead rushes in with subsidies and/ or government ownership and operation. In so doing, it invariably distorts what would have been the ‘‘normal’’ evolution of the mode, in competition with existing modes. Second, government then attempts to deal with the consequences of its irrational exuberance by introducing economic regulation, typically of prices and conditions of service. Third, when new transportation technologies come along, government tends to protect the old ones from competition. Underlying this pattern of action is an implicit or explicit belief in central planning. At any given stage of transportation technology, there is assumed to be one best way in which it should develop and be used. Government, in its wisdom, should divine this best way and then use its powers of spending, ownership, and regulation to make it happen. As we will see, this philosophy and many of the same patterns of action are illustrated once more in the field of space transportation. Government and Space Transportation America’s first space transportation was provided by the military services during the 1950s in support of their early satellite-launching missions, using launch vehicles developed as intermediate- and long-range ballistic missiles. When the Soviet Union shocked the world by launching Sputnik in October 1957, the Eisenhower administration decided that a ‘‘peaceful’’ civilian satellite-launching agency was required. Hence, the former National Advisory Committee for Aeronautics (NACA) was given a new name and a broader charter as the National Aeronautics and Space Administration (NASA). The military would continue to procure launchers for its 55
SPACE own purposes, but all nonmilitary launches would be done by NASA. Thus, from the outset, NASA was conceived as a government entity that would be in the transportation business by providing space-launch services itself. Like the military services, it would develop requirements, write specifications, and procure and operate the hardware. The next fateful decision took place in 1961, the first year of the Kennedy administration. A high-level commission debated two approaches for the civilian space program. The first was an evolutionary approach, using upgrades of existing (mostly military) launchers to develop a manned space station, from which the capability to send a spacecraft to the Moon and back would be developed. The other was a crash program to develop a gigantic booster that could loft a complete Moon mission in a single launch. Although the committee recommended the first approach, Kennedy chose the second, which led to the Saturn-Apollo program.4 That program, in turn, led to NASA’s becoming a large and well-funded agency with a de facto monopoly on all nonmilitary space launching. And while the brute force approach of the Saturn program did achieve Kennedy’s goal of a Moon landing by the end of the decade, once a modest number of landings had been accomplished, that very costly Saturn launch system was junked. Thus, the Nixon administration faced the challenge of what to do with NASA in the post-Saturn era. Facing the prospect of massive downsizing, the agency proposed the development of both a manned space station and a winged, reusable shuttle to service it. When the cost of doing both at once was judged to be politically unrealistic, NASA opted for the Shuttle. But in order to build sufficient political backing to ensure its funding, the agency had to enlist Air Force support by redesigning the Shuttle to meet that agency’s launch requirements—which meant larger capacity and ‘‘cross-range’’ capability, which led to much greater weight, large delta wings, and a risky thermal tile system.5 To offset the much greater development and operating costs thus entailed, NASA needed to assume a large fleet, rapid turnaround, and an enormous level of flight activity (60 launches per year). NASA was therefore given permission to make the Shuttle ‘‘the’’ U.S. launch vehicle for all government and private missions—an inherently risky approach. As it turned out, development took much longer than projected, both development costs and 56
Is This Any Way to Run Space Transportation? operating costs were far higher than projected, and NASA never came close to the 60 projected launches per year. NASA’s one-size-fits-all approach virtually precluded the emergence of a launch-vehicle industry. Although dismay over the shuttle’s slow development and rising costs led to a number of spacelaunch start-up firms in the early 1980s, NASA actively discouraged such attempts, seeing a threat to its monopoly and the assumed economics of the shuttle. Although some support for the fledgling private industry emerged in Congress and the Department of Transportation, the White House reached a decision in 1985, during the Reagan administration, to subsidize shuttle launches to the tune of $70–$150 million per flight, thereby sending a strongly negative message to launch-industry investors. It was only the Challenger disaster in early 1986 that broke the shuttle monopoly, permitted the military to resume launching its own satellites, and no longer required commercial operators to launch their birds on the Shuttle. Yet 15 years of potential private-sector launch-industry development had been precluded by that point. Even with its official monopoly cut back, NASA has continued to follow the centralized, one-best-way approach. Deciding that the best future vehicle would be a fully reusable cargo and people carrier, it selected Lockheed-Martin’s proposal for the X-33, precursor to a projected VentureStar shuttle-type vehicle. Despite grandiose promises of speedy development and greatly reduced launch costs, the X-33 was several years behind schedule and greatly over budget when NASA finally pulled the plug in March 2001. Meanwhile, a new generation of private start-up launch-vehicle companies struggles to amass millions of dollars in venture capital in an uncertain market, in the shadow of some $1.3 billion of taxpayers’ money lavished on Lockheed-Martin. In this brief history of space transportation, we see repeated many of the same patterns observable in government involvement in Earthbound transportation over the past two centuries. Here again is overexuberant political enthusiasm for a new transportation technology, with the result of pouring tax dollars into chosen projects that prove economically unviable. In fact, despite NASA’s expenditure of more than $20 billion in development costs before the Shuttle’s orbital flight, that vehicle failed to lower the cost per pound of launching payloads into orbit. Measured by that critical yardstick, 57
SPACE continued evolution of the Saturn family of expendable launch vehicles might well have led to significantly lower costs-to-orbit than are now being achieved via the Shuttle. Moreover, the decision to subsidize shuttle launches helped to undermine the fledgling commercial space-launch market. Writ large in the NASA model is the central planning approach: the assumption that engineers and government planners can devise the one best way to launch payloads into space (Apollo, Shuttle, VentureStar, and so on), and that it is simply a question of pouring enough funding into the chosen model for long enough to make it succeed. Left unused by NASA is the alternative approach of creating the conditions that foster multiple, competing approaches. In the space-launch field, is reusability actually the most cost-effective approach? For large cargo payloads, might much-less-costly ‘‘industrial’’-type launch vehicles be more cost-effective than even today’s highly reliable (but hence very costly) reusable? The best way to answer these questions is not planning studies but trial and error in the marketplace. But it is precisely that kind of competitive trial and error that the NASA central-planning approach precludes. Yet another parallel with some aspects of Earthbound transportation is the creation of a self-perpetuating bureaucracy, in this case NASA. Federal subsidies for passenger rail and urban transit have created similar bureaucracies in those fields. In NASA’s case, once its initial goal of putting a man on the Moon had been achieved, it became a bureaucracy in search of a rationale. To be sure, it could have returned to the respectable research role of its predecessor, NACA. But that would have required massive cutbacks in the staff of NASA’s numerous centers, conveniently spread across many states and congressional districts. Thus, when NASA finally won support for its space station program during the Reagan administration (initial price tag: $8 billion), that ‘‘huge’’ price tag could be justified only by NASA’s aim of inventing anew virtually every aspect of the proposed station, to keep all of its centers fully occupied for the next decade. In fact, NASA had already built and operated a successful space station: Apollo Skylab, in orbit from 1973 to 1979. And well before NASA received the go-ahead for its ambitious new station (now estimated to cost over $100 billion), McDonnell Douglas had proposed a low-cost Skylab successor called Manned Orbital Systems Concept. Though slightly smaller than NASA’s $8 billion 58
Is This Any Way to Run Space Transportation? design, it would have cost only $2.5 billion in comparable-year dollars—and that was for a pair of stations, one in conventional nearEarth orbit and the other in polar orbit. The difference was that McDonnell Douglas planned to evolve then-existing technology rather than invent everything from scratch.6 A Smarter Model: NACA and the Aviation Industry Purposely omitted from the brief U.S. transportation history earlier was commercial aviation. Although this field was not exempt from some of the problems noted earlier—subsidy and regulation, in particular—the development of air transportation presents a contrast to that of space transportation. As James Bennett and Phillip Salin have pointed out, the evolution of commercial aircraft illustrates precisely the trial-and-error model that contrasts so sharply with the one-best-way model. In the course of this evolution, they write: Virtually every technological strategy usable in air transportation has been tried: fixed wing, rotary wing, gas bags; metal body, wood body, fabric body; wheels, boat hulls, floats, skis; pure turbines, turboprops, internal combustion. Many approaches have been tried for lowering the costs of each technology. Some have failed, but most strategies have found some niche in which they survived and prospered. Most importantly, this winnowing of approaches has permitted the emergence of very cost-effective transportation machines which, in turn, has enabled the expansion of the market to fund the next generation of machines.7
One of Bennett and Salin’s findings in their review of this design evolution is that huge departures from the trend, in aircraft size or performance, were seldom commercially successful. To be sure, a few major breakthroughs did occur (aluminum fuselages, turbojet power). But even in those cases, the firms having the greatest success in implementing the breakthrough technologies were usually those with previous track records of satisfying customer needs, though not necessarily the dominant firm at the time. Yet this evolutionary approach is the precise opposite of the NASA approach to launch vehicles, in which three times it has attempted all-out breakthroughs, at massive cost, only to fail spectacularly at laying the basis for an economically viable launch industry. 59
SPACE One of the greatest failings of the NASA approach has been in its inattention to cost as a key criterion for launch vehicles. Given that launching payloads into space is a technically challenging task, NASA, like the Defense Department, has always focused primarily on requiring contractors to meet demanding performance and reliability goals, with cost far down the list of priorities. When that technical focus has led to huge cost escalation, the typical response has been to stretch out the schedule so that annual spending limits are not exceeded—rather than rethink the technical requirements. This explains the perennial problem of programs not only costing far more than originally projected but also taking many years longer than expected. A commercial transportation business, by contrast, is driven by costs in relation to revenues. Technical requirements are therefore traded off against both development costs and operating costs, in an effort to find a balance that will produce a reasonable return on the capital invested. This approach is totally foreign to NASA. It is also largely absent from the philosophy of the major aerospace firms that are NASA’s principal contractors. The commercial aircraft industry represents a stark contrast to the NASA-driven space transportation ‘‘industry’’ thus far. Its history illustrates the benefits of competition, leading, via the trial-and-error process, to the ongoing evolution of significant improvements in performance. As in many other industries sparked by new technology, aviation has seen the birth and death of numerous companies producing aircraft, engines, and components. Companies dominant in one era sometimes transitioned successfully to a new technology but sometimes fell by the wayside. In the piston-engine era the two leading firms were Curtis-Wright and Pratt & Whitney; the former failed to make the transition to jet engines, and its place was taken by General Electric as P&W’s principal American rival. Likewise, whereas Boeing had been a distant third (to Douglas and Lockheed) in commercial transport aircraft in the piston era, it grew to dominate the jet era, which Lockheed entered late and exited early. Today’s booming ‘‘regional jet’’ market is dominated by two firms that were not even in the jet transport market 20 years ago, Canada’s Bombardier and Brazil’s Embraer. They evolved from making small piston and turboprop commuter planes to providing business jets and now regional jets of up to 90-passenger capacity. The competition to seek out and serve customer markets leads to continual pressures for innovation and produces relatively steady, 60
Is This Any Way to Run Space Transportation? incremental improvements in performance in relation to cost. As Bennett and Salin point out, No single organization or development effort comes up with all the important cost-reducing innovations. No organization can generate all the right answers at one point in time. Without intense competition, major cost-lowering strategies can go undiscovered for years. With competition, not only are valuable innovations discovered more quickly, but they also spread more quickly.8
Had the federal government implemented a NASA-type approach to the development of air transportation, this vitally important competitive process would have been fatally undermined. Instead of the steady evolution from Wright Flyer to Ford Trimotor to Douglas DC-3 to Lockheed Constellation to Boeing 707 to Douglas DC-10 to Boeing 777 we might instead have had a succession of massive National Air Transportation System vehicles, each attempting to be ‘‘the’’ all-purpose aircraft that would carry passengers and cargo, drop paratroops, perform reconnaissance, and set speed records. The likely result would be what we see today in space transportation: a series of technically impressive but hugely expensive government vehicles that do none of their tasks especially well. And, as an unfortunate side effect, there would be a tiny, poorly funded industry of small-plane start-up companies, desperately struggling to raise venture capital for innovative aircraft ideas. What government aviation policy did, instead, was far more benign. NASA’s predecessor, NACA, was a modest aviation research agency. It built and operated research labs for aerodynamics and propulsion, doing the basic and applied research on all aspects of flight, and making those results widely available for industry to use. To the extent that such efforts constitute basic scientific research, a case can be made for a government role, on the grounds that the benefits of such new knowledge cannot be captured by a corporate research funder.9 Once the focus of research becomes highly industry-specific, however, there is a much stronger case for it to be paid for by the industry in question—in this case, the aerospace industry.10 Be that as it may, the NACA model had the great virtue of fostering the emergence of a competitive aviation industry, by providing a growing base of useful knowledge to all would-be participants. At no point did NACA ever seek to dictate or even influence commercial 61
SPACE decisions; nor did it seek to engage in the business of air transportation. Toward a 21st-Century Space Transportation Policy Policies for Commercial Space Transportation What the United States needs is a policy toward space that is consistent with free markets and limited government. That policy would focus on fostering development of space as a place to do business, to do research, to defend the country, and eventually a place to live and work. Transportation to and from space would be provided by a diversity of launch vehicles, developed competitively by a growing space-launch industry. Under this scenario, NASA would be recast in the model of its predecessor, NACA. Its job would be limited to research on aeronautics and astronautics, with the more industry-specific applied research activities paid for by the industries that derive direct benefit from that research.11 Besides recasting NASA’s overall role, the new space policy would draw on two key policies from the world of aviation. The first is the government’s use of air mail contracts. In the fledgling years of commercial aviation, following World War I, the federal government attempted to jump-start a commercial airline industry by creating and operating its own air mail service. A series of crashes put an end to that endeavor, which was replaced with the wiser policy of offering air mail contracts, at a set amount per pound of mail, to any qualified operator. By providing a guaranteed source of revenue, the air mail contract program permitted entrepreneurs to obtain financing to start up small airlines. Whereas many failed, others grew from those humble beginnings into America’s first real airlines, expanding to carry passengers and cargo other than mail. Inasmuch as the contracts were offered on the same basis to all, the government was not in the business of picking winners and losers. This kind of policy fostered precisely the kind of competition that led various entrepreneurs to try out various types of planes, routes, and business models. In many respects, the air mail contracting program laid the basis for the emergence of both the airlines and the commercial aircraft business. Adapting this idea to space transportation would call for the government (NASA, USAF, and any other agencies needing launch services) to purchase such services from the private launch-services 62
Is This Any Way to Run Space Transportation? industry. In other words, instead of defining in great detail the specifications of a new launch vehicle (e.g., the Evolved Expendable Launch Vehicle—EELV), these government agencies would simply announce their willingness to pay $X per pound for payloads delivered to, say, low Earth orbit (LEO). In other words, instead of the typical government contracting model, which has failed to change the cost-plus corporate culture of aerospace/defense contractors, NASA and the other government agencies with space transportation needs would purchase launch services, just as the Post Office in the 1920s purchased mail delivery services rather than bought and operated its own air-mail planes. What about specialized military needs: for example, for launching highly classified intelligence-gathering satellites? Since those satellites themselves are developed by private contractors, there is no good reason why they could not be launched by private spacelaunch firms, subject to the same levels of security clearance as the companies building the satellites. Intelligence payloads tend to be large and to require launch vehicles at the upper end of the payload scale (such as the Titan IV). It might be argued that the market for payloads in that size range is too small to be viable for a commercial launch company; hence, USAF might just as well purchase those vehicles itself. But there are some potential commercial uses for these large-payload boosters, and the USAF might encourage that market by adopting a policy similar to what it uses for a portion of its air transport needs. Instead of owning and operating a large fleet of general-purpose passenger and cargo ‘‘airlift’’ planes, the Air Force contracts with a number of airlines on an ongoing basis under the Civil Reserve Airlift Fleet program. In exchange for an annual payment for each participating plane, the airline agrees to a set of design modifications that permit rapid conversion from civilian to military configuration, and to the military’s right to ‘‘call up’’ the plane on short notice for military use in the event of war or other national emergency. Until reusable launch vehicles become economical, the analogy between launch vehicles and commercial aircraft is not perfect; for the foreseeable future these large-payload boosters will be expendables. But the Air Force could still adapt the Civilian Reserve Airlift Fleet idea to a launch vehicle company’s expendable booster line by offering a premium rate per pound for launches on that vehicle, if it were configurable to meet the special requirements of the military payloads. 63
SPACE Firm, governmentwide policies for purchasing launch services rather than specifying and procuring launch vehicles would go a long way toward fostering a competitive space launch industry. Replacing the Shuttle Having scrapped the X-33 program, NASA is now left without a successor to the Shuttle. The first question to be asked is whether such a successor is needed. Although it is a great technological achievement, the Shuttle serves a principal mission of hauling into low Earth orbit the pieces needed to assemble the space station, and then of keeping it supplied with crews and supplies. The combined cost of the station and the Shuttle missions needed to build and service it will be well in excess of $100 billion (of which more than $20 billion has already been spent). Yet the scientific community, outside of NASA, can find little scientific justification for the station. The $20 billion already spent is a sunk cost; there is no reason to throw good money after bad. The sensible thing for the Bush administration to do would be to scrap the fledgling station as part of the major rethinking of U.S. space policy outlined above. The Shuttle fleet could be quietly retired, with no government-developed ‘‘replacement.’’ Although that scenario is a logical one, it is unlikely to be what occurs. Strong political pressures are likely to mandate the continued development and operation of the space station, given that its initial modules are already in orbit and functioning. The Shuttle fleet can probably be kept in operation for another 10 to 15 years without major upgrades. But assuming that the station is kept going indefinitely, there will be an ongoing need for transportation to and from its orbital location. How should this need be met as the Shuttle reaches the end of its useful life? NASA’s preference, predictably, is yet another massive NASAled program to develop a next-generation reusable launch vehicle. In 2000, the Clinton administration proposed a $4.5 billion Space Launch Initiative (SLI) to develop a second-generation reusable launch vehicle to be in operation by 2010. Initially voted down by the House, the SLI will be back in some form, absent a complete change in leadership and philosophy at NASA. On the basis of the discussion above, there is no reason to expect yet another ‘‘one-bestway’’ program to produce either a dramatic reduction in launch costs or a commercially viable launch vehicle. 64
Is This Any Way to Run Space Transportation? In fact, there is no good reason to combine in one vehicle the many functions that were combined in the Shuttle: passenger transport, cargo carrier, and orbiting lab. The Russian space program, which operated the Mir space station for more than a decade, did not use anything like the Shuttle to supply it. Mir crews were transported to and from orbit by a small passenger module atop a Soyuz booster, whereas supplies were sent to the station via unmanned Progress supply ships. Because it is man-rated, the entire Shuttle must be designed with the kind of redundancy and reliability needed for that kind of mission—far in excess of what is needed for cargo. Indeed, one analyst has pointed out that the Shuttle’s overall payload capacity is 230,000 lbs.—that’s what has to be boosted into orbit on every flight. But the actual cargo capacity is only 65,000 lbs.; the rest of the mass is the Shuttle orbiter, at 165,000 lbs. a very expensive payload shroud! The space station could easily be serviced by a combination of lower-cost commercial vehicles: one or more man-rated crew transport vehicles and a variety of much-lower-cost, unmanned cargo vehicles. NASA could offer to purchase such services in the new launch-services market proposed previously. Dividing the total payload now planned to be lofted by an entire shuttle into a number of smaller packages—of people and cargo, respectively—would double or triple the number of launches, creating a larger market for launches. Although the crew launches would continue to be expensive, being both man-rated and low-launch-rated, until some other market developed for manned space flight—the cargo launches could be expected to trend steadily downward in price, as the commercial launch vehicle market moved down the learning curve of experience and developed several launchers that could achieve volume production. What about the much-discussed space tourism market? Although speculative projections abound, so far investors have been reluctant to commit. My prediction is that space tourism will emerge as a business, but only after a commercial launch industry has developed viable business models with less demanding, initially unmanned, cargo services. One plausible precurser is suborbital package delivery. As proposed by Robert Zubrin of Pioneer Rocketplane, a market may well exist for same-day intercontinental package delivery. That market—say, Los Angeles to Hong Kong—could be served by a 65
SPACE suborbital flight of less than an hour, offering a whole new upper tier to the kinds of services now provided by FedEx, UPS, TNT, and DHL. A follow-on service, using a scaled-up, man-rated vehicle, could offer passenger service far superior to anything a secondgeneration SST (supersonic transport) could offer. And once years of experience were gained with suborbital passenger flights, a further evolutionary step would be the development of passenger trips into orbit. That model mirrors the step-by-step, trial-and-error evolution of commercial aviation. Wise government space policy will permit and encourage entrepreneurs to develop such services in hopes of earning profits thereby. But continuation of NASA’s one-best-way model will continue to keep space expensive, remote, and the domain of government. Notes 1. Daniel B. Klein and Gordon J. Fielding, ‘‘Private Toll Roads: Learning from the Nineteenth Century,’’ Transportation Quarterly 46 (1992): 321–41. 2. Wendell Cox, Urban Transport Fact Book: Transport Facts USA, The Public Purpose (www.publicpurpose.com), no date (but circa 1996). 3. Joseph Vranich, Replacing Amtrak: A Blueprint for Sustainable Passenger Rail Service, Reason Public Policy Institute, Policy Study no. 235, October 1997. 4. James Bennett and Phillip Salin, Privatizing Space Transportation, Reason Public Policy Institute Policy Study no. 102, March 1987. 5. Ibid. 6. Tom A. Brosz, ‘‘Space Station Costs—Sky Is the Limit?’’ Commercial Space Report 8:2 (February 1984). 7. Bennett and Salin, op. cit. 8. Bennett and Salin, p. 16. 9. See, for example, Joseph P. Martino, Science Funding: Politics and Pork Barrel (New Brunswick, N.J.: Transaction Publications, 1992); and Terence Kealey, The Economic Laws of Scientific Research (New York: St. Martin’s Press, 1996). 10. Joseph P. Martino, Privatizing Federal R&D Laboratories, Reason Public Policy Institute, Policy Study no. 219, November 1996. 11. Ibid.
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5. Barriers to Space Enterprise David M. Livingston Introduction Barriers to space commerce limit the private space venture’s profit potential by creating uncertainty and added risks in related financial markets. These barriers can also force the would-be space venture to withstand a costly and time-consuming bureaucratic process and often result in launch delays or other problems. Any one of these effects may damage or destroy the space venture’s chances for success. Despite the existence of space commerce barriers, private space enterprise has a successful track record of nearly four decades, dating back to the 1964 launch of Early Bird, the first commercial satellite. Since then, commercial space ventures have grown and profited to an impressive degree, leaving little doubt that space businesses can be profitable. Although the success of the commercial space industry is well established, its continued success is threatened because of the existence of significant barriers to space enterprise. Many of the barriers can be traced to U.S. government policy, laws, and regulations and the departments and agencies that implement them. Those barriers result in many of the delays encountered by commercial space companies seeking approval for launches, delays that often drive away potential customers. The Strom Thurmond National Defense Act of 1998 creates significant barriers to space commerce, especially with the satellite industry, by restricting exports of payloads that could be launched on rockets from other countries. U.S. government agencies and Congress also create barriers to space enterprise. Jurisdictional as well as intra- and interbureaucratic conflicts often result from agency and congressional action concerning space matters. Such action fosters confusion and often causes delays or even the termination of a commercial space project. 67
SPACE Financial and market uncertainties as well as misperceptions about commercial space ventures also hinder the private uses of space. Further, if the public believes that there is an absence of an ethical commercial space industry, a new space commerce barrier may arise in the form of restrictive or excessive government regulation regarding the public’s concerns. Perhaps the best way to avoid future barriers is to continue to point out the success of the commercial space industry as well as the ways in which the industry has benefited people around the world. Success, along with the recognition of the benefits people enjoy from space commerce, makes the best case for continued commercial space development unfettered by barriers. Space Enterprise Has a Successful Track Record Confirming the success of the commercial space industry to date is important for it demonstrates that space commerce can be and already is a profitable industry with a huge potential for future growth. Several esteemed publications independently have confirmed the success and potential of this industry. It is important to see this industry continue its growth and profitability, not only for the benefits that space development has brought to people, but also for its employment and economic contributions. KPMG Peat Marwick, in its report 1997 Outlook: State of the Space Industry, put global operating revenues for the satellite industry at $62.2 billion for 1996 and forecasted global operating revenues of $106.6 billion for the year 2000.1 Merrill Lynch, in its Global Satellite Marketplace 99, projected the industry to increase from an estimated $36 billion in 1998 to $171 billion by the year 2008.2 In addition, C. E. Unterberg, Towbin, in its quarterly publication The Satellite Book, stated in the second quarter 1999 issue that the commercial satellite industry was estimated to grow from a $54.8 billion industry in 1998 to an estimated $116.3 billion in the year 2003.3 The commercial space industry can continue to grow and prosper, especially if barriers do not hinder its future. However, barriers have hindered space commerce in the past and will adversely affect it in the future. Government Policy as a Barrier to Space Enterprise U.S. government space policy can play a significant role in space commercialization. Several documents and policy statements articulate 68
Barriers to Space Enterprise this nation’s space policy and have been signed into law. In this section, barriers arising from three important formal space policies are examined. The National Space Transportation Policy (NSTP) was signed into law by President Clinton on August 5, 1994. The NSTP was largely based on the Access to Space report by NASA and the Space Launch Modernization Plan of the Department of Defense (DOD). Thus, from the outset, the NSTP was ‘‘steeped in intra- and interbureaucratic bargaining and self-assessment.’’4 Relationships within government organizations and agencies, such as those upon which the NSTP was designed, can often lead to confusing policy, especially for commercial space matters. For example, the NSTP provides that the Departments of Transportation (DOT) and Commerce (DOC) should promote creative arrangements between the public and private sectors. There is also an interagency working group representing the DOD, the DOC, the DOT, NASA, and the intelligence community that is to make certain that a commercial voice is heard throughout the process of designing a new launch vehicle. Unfortunately, barriers to space enterprise often result from the actions of these agencies as they are not always in harmony with one another regarding space policy. This situation has been documented by Joan Johnson-Freese and Roger Handberg in their book Space: The Dormant Frontier. In this book, the authors state that the NSTP often fails to obtain cooperation or coordination between the DOD, NASA, and the other agencies, for they cooperate only superficially. In addition to the NSTP, the United States has another formal, documented national space policy requiring approval by the President. The National Space Policy of 1996 does not even mention private investment in outer space in any of its stated goals.5 Although the actual text of the National Space Policy does contain a reference to space commercialization, that minor reference appears halfway through the document. 6 The low priority that space commerce receives in this important space policy document has the potential to be a barrier to space enterprise. Businessmen and-women want to know that the nature of the investments they are making is important and when official government policy downplays the importance of such investments, the investment can be discouraged or even halted. 69
SPACE NASA’s Strategic Plan of 1998 has only a minor reference to the commercialization of space. In the section entitled ‘‘Administrator’s Strategic Outlook,’’ the NASA administrator references six areas of interest as NASA priorities. Commercial space ventures are briefly mentioned at the end of the last area of interest.7 Barriers to space enterprise result from the way these important space policies treat space commerce. One can readily conclude that commercializing space is not a high priority for the United States government. Such a conclusion can lead the business community and ordinary citizens to devalue private enterprise in space. Laws and Regulations as Barriers to Space Enterprise Laws and regulations often conflict with one another in their attempt to regulate space commerce. These same laws and regulations more often than not require a business to go through a cumbersome process when applying for permits, licenses, and approvals for a launch or space venture. Sorting out these potential conflicts can be both costly and time-consuming, and can ultimately deter space commercialization. Initially, the Federal Aviation Act of 1958, which created the Federal Aviation Administration (FAA), imposed limits on the authority of the states to regulate commercial air travel. At that time, commercial space travel, including commercial rocket launches, was not envisioned. By the time the Commercial Space Launch Act of 1984 (CSLA) was passed into law, the commercial space industry, principally in communications satellites, was already a financially successful and growing industry. The CSLA further defined the federal licensing mechanism for space businesses, but this act also allowed states to regulate space launch activities within or affecting their jurisdictions.8 This authority seemed to conflict with the authority of the FAA in regulating launches. Also in 1984, President Reagan created the Office of Commercial Space Transportation (OCST) within the DOT largely because of the confusion that came about after the first private launch of the Conestoga I in 1982.9 At that time, Space Services, Inc., had sought permission to launch a privately built booster rocket for a suborbital test flight. The company had to obtain approval from five different federal agencies through a process that took six months and cost in excess of $250,000 in legal fees. 70
Barriers to Space Enterprise When it was initially created, the OCST identified at least a dozen federal bureaus, as well as states and other districts, that could have some jurisdiction in regulating space activities.10 By 1986 the OCST was issuing regulations to govern launches by private companies, but it was not until after the Challenger accident of that year that the office became a key agency for both space policy and space commercialization.11 The FAA, which is also part of the DOT, was already involved in regulating public and private launches because all of the launches were, and still are, subject to FAA regulations in American airspace. Eventually government policy gave the OCST the clear mandate to be the primary agency for regulating and supervising private launches. Even with the mandate given the OCST, various federal bureaus and states still retained regulatory authority over aspects of space activities, thus giving rise to many of the problems affecting space enterprise today. The Commercial Space Act of 1998 resolved much of the confusion that may have resulted from either the authority or regulations of the FAA, the CSLA, and the OCST. The act clearly granted authority to the FAA for the licensing of the launches and landings of space vehicles. In fact, prior to the passage of that act, companies could not legally land a launched vehicle in the United States. This fact contributed to the decision made by Kistler Aerospace to develop additional launch facilities in Australia, where such regulations did not exist. The Commercial Space Act of 1998 is an important law as it permits reusable launch vehicles (RLVs), when they are developed, to both launch and land within the United States.12 The AST In November 1995 the OCST became the Office of the Associate Administrator for Commercial Space Transportation (AST) and was transferred to the FAA. The AST, now the only space-related office within the FAA, became the regulatory agency in charge of commercial launches. In its role of regulating the commercial launch industry, the AST has developed numerous regulations to govern commercial launches. Listed below are some of the AST regulatory requirements for conducting a commercial launch in the United States: ● Licensing and safety requirements for operation of a launch site ● Commercial space transportation reusable launch vehicle and reentry licensing regulations 71
SPACE ● Financial responsibility requirements for licensed reentry activities ● Commercial space transportation licensing regulations ● Commercial space transportation financial responsibility requirements for licensed launch activities ● Reusable launch and reentry vehicle system safety process guidelines ● Expected casualty calculations for commercial space launch and reentry missions ● Site operators license applicant information ● Supplemental application guidance for unguided suborbital launch vehicles ● Agreement for Waiver of Claims and Assumption of Responsibility ● Environmental licensing requirements to comply with the National Environmental Policy Act ● Required environmental documentation, including environmental impact studies13 Environmental Policy and the AST The environmental issues pertaining to a launch can be significant. As such, the AST assists the launch industry in complying with federal environmental laws and regulations. Inasmuch as the AST is supportive of commercial space activities, despite the problems associated with it and its regulatory process, commercial space companies would rather deal with the AST on environmental issues than with another arm of the federal government such as the Environmental Protection Agency (EPA). Still, problems exist. A case in point concerns Kistler Aerospace, developer of the K-1 reusable launch vehicle (RLV). Kistler proposed to launch its K-1 RLV from the Nevada Test Site, which is a federal launch facility in the Nevada desert. The AST required meetings with local interested parties, including Indian tribes, to discuss whatever issues they may have regarding the K-1 launch. An environmental assessment was prepared and was under review by the FAA.14 Complying with this environmental process can mean delays and increasing costs for the launch companies. Not all commercial space companies would be able to cope with these requirements. The AST and Launch Approval Delays The slowness of getting a launch approval from the DOT’s AST can be costly to businesses. Space businesses can become impaired 72
Barriers to Space Enterprise by the AST’s bureaucratic restrictions, resulting in a loss of business as well as opportunity. Furthermore, if the launch is going to require the use of federal launch or tracking facilities, there could be significant red tape. For example, J. P. Aerospace (JPA) of Rancho Cordova, California, a would-be satellite company, was planning to enter the recent Cheap Access to Space (CATS) contest. This contest offered a $250,000 prize for the first team to launch a 2-kilogram payload to 200 kilometers (124 miles) above the Earth on or before November 8, 2000. JPA intended to launch its entry from Nevada’s Black Rock Desert. The other two contestants, Danish Space Challenge of Højbjerg, Denmark, and High-Altitude Research Corporation of Huntsville, Alabama, planned to launch their entries from Greenland and the Gulf of Mexico, respectively. JPA was required to furnish details of the rocket and motor design, along with an analysis of what the vehicle would do in flight and what the likely outcomes would be if it failed. JPA was also required to work with FAA regional flight centers to make sure that the air-traffic controllers were aware of the launch. JPA had submitted its application for the necessary licenses, permits, and approvals to the AST in May 2000, but the AST informed JPA in late September 2000 ‘‘that it considered the application incomplete.’’15 The AST told JPA that it would take up to two months to further study and act on a revised application. JPA also requested a waiver from obtaining a launch license for the CATS prize. The AST can grant a waiver for the launch of an unguided suborbital launch vehicle if the launch takes place from a private site and involves a rocket that meets three specific conditions: motors with a total impulse of less than 200,000 pound-seconds; motors that have less than 15 seconds of operating time; and a ballistic coefficient of less than 12 pounds per square inch.16 The AST denied JPA’s waiver request. As it turned out, High-Altitude Research Corporation’s entry, which was launched from the Gulf of Mexico, outside U.S. regulated territory, failed to reach the stated orbit. Danish Space Challenge ran out of money and was unable to secure additional financing for its launch vehicle; thus, it never made it to the contest. Had it not been for the delaying actions of the AST, JPA might have won the CATS Prize. The administrator of the CATS Prize, David Anderman, 73
SPACE was unwilling to extend the deadline for the contest past November 8, 2000, because a primary purpose in offering the prize was to encourage the launch teams to successfully negotiate and overcome obstacles in the bureaucratic process.17 JPA was unsuccessful in overcoming the AST’s obstacles. The Strom Thurmond National Defense Authorization Act New barriers to space enterprise have arisen as a result of the Strom Thurmond National Defense Authorization Act of Fiscal Year 1999, passed by the 105th Congress and signed into law on October 17, 1998. This law established new policies for export controls on missile technology and commercial satellites, especially with respect to China.18 In essence, this act transferred the authority over export controls on commercial satellites from the DOC to the Department of State (DOS), effective March 15, 1999. Some commercial satellites had previously been designated as dual-use technology, requiring that the license application be coordinated with the DOS to ensure that military technology would be protected. It is also important to note that years ago export control over commercial satellites was under the auspices of the State Department, but because of numerous complaints about the slow and lengthy approval process, satellite export control was moved to the DOC. Three years after this law took effect, new problems with the DOS have emerged that either prohibit or seriously delay export approvals. Problems have even arisen that concern the ability of an American company to communicate and share company information with its offices in a foreign country. Because of these problems and the deleterious effect this law is having on U.S. satellite and space businesses, Reps. Howard Berman (D-Calif.) and Dana Rohrabacher (R-Calif.) introduced HR 1707 (Satellite Trade and Security Act). This bill would transfer jurisdiction for commercial satellites back to Commerce from State. It was referred jointly to the Armed Services Committee and the International Relations Committee in May, but no further action has occurred. As currently written, the legislation would not apply to scientific and experimental satellites. Although action on the bill is uncertain, both Berman’s staff and the International Relations Committee staff were asked about the possibility of adding scientific and experimental satellites to the legislation, along with a new section that would exempt them from regulation under the fundamental science exclusion (see 15 CFR 734.8 and Supplement 1). 74
Barriers to Space Enterprise Berman’s office expressed concern about objections from conservative members about the possibility of sensitive material slipping into enemy hands.19 The Strom Thurmond Act gave significant new responsibilities to the Defense Threat Reduction Agency. These responsibilities involve overseeing the license application, all international meetings, and foreign subcontractor communications pertaining to satellite export matters. In addition, this act contains an unusual provision requiring those commercial space companies wishing to export their products to pay all the related agency expenses, travel, and overhead. The Dniepr Example Another barrier resulting from the Strom Thurmond National Defense Authorization Act concerns the Treaty on the Further Reduction and Limitation of Strategic Offensive Arms (START II). This particular barrier discourages the use of a low-cost alternative launcher for small payload scientific, educational, and commercial missions. According to the terms of this treaty, Russia must either dismantle and scrap several hundred of its SS-18 ballistic missiles, or convert and sell them for use in launching scientific, educational, and commercial missions. With a converted SS-18, known as ‘‘the Dniepr,’’ the cost for launching a satellite to low Earth orbit (LEO) is approximately $12 million to $25 million, compared to $50 million to $75 million using a similar commercial launch vehicle, but the launch must take place within Russia. These more affordable launch costs and the small payload capacity make the Dniepr a desirable vehicle for satellite programs sponsored by universities across the United States. Already the Dniepr has been used for several such launches of university satellites in various countries, and the worldwide demand for the Dniepr is growing. Russia is also profiting from Dniepr launches, given that its START II obligation would otherwise compel it to scrap the rockets if they were not being sold for these small payload launches. Unfortunately, in the United States, use of the Dniepr is a more complex issue than in other countries. The Strom Thurmond Act applies to the launching of university satellites using a Dniepr because the satellite must be exported to the Russian launch site for the Dniepr launch. American universities have to overcome significant bureaucratic hurdles to secure a Dniepr launch, while their 75
SPACE counterparts in other parts of the world have no such obstacles. In addition, most satellite technologies that university satellite projects use are often derived from basic textbooks, yet their use still falls under the jurisdiction of the satellite export and technology control laws. Universities cannot always afford to engage in the regulatory and approval process required to be able to use a Dniepr. The difficulties faced by an American university using a Dniepr create an additional barrier to space enterprise to the degree that the education of American students interested in outer-space commerce and satellite development is hindered by not having access to an affordable launch vehicle for student satellite projects. The Start II Treaty also permits the Dniepr to be used for commercial projects. Again, however, because of the limitations imposed by U.S. law, a small commercial satellite or launch company would most likely find using a Dniepr too difficult. If the company could not afford to use another commercial launch vehicle at a substantially higher cost, it would simply be unable to move forward with its venture. This Dniepr example points out the extent to which American businesses and future space industry leaders are hindered by U.S. laws, regulations, and policies. The long reach of these barriers can extend to college students, even to advanced high school students, as well as to commercial space companies. U.S. Government Agencies and Congress The role of government agencies in regulating commercial space businesses is different from that of Congress. There are potential jurisdictional conflicts between agencies and even between departments within these various agencies. The conflicts can increase the costs for businesses operating in space. Examples of the jurisdictional problems abound. For instance, with the Department of Defense, businesses may have to deal with several different offices representing all the military services and often they are not in agreement with one another. Within the Department of Commerce, there are organizations that have legal jurisdiction over certain issues and projects, all of which can affect the commercial space businesses. Two examples of agencies within Commerce that can have this impact are the National Oceanic and 76
Barriers to Space Enterprise Atmospheric Administration (NOAA) and the National Telecommunications and Information Agency (NTIA). As stated by Dr. Phillip R. Harris, a noted space psychologist and author, ‘‘Instead of coordinating space regulations for business, the opening of space offices in various federal agencies has only complicated bureaucratic actions.’’20 Financial and Market Uncertainties of Commercial Space Ventures The obvious lack of both strong public- and private-sector financing in commercial space ventures is a problem. Having access to key financial markets is important for any business, but especially important for commercial space ventures. Whereas financing for satellite telecommunications projects is now commonplace, space ventures that differ from the telecommunications model often scare off investors. The recent financial problems of Globalstar and the collapse of Iridium and ICO have led to higher financing costs for space ventures. These problems have also reinforced the belief that space must be extraordinarily expensive. Further, public-sector programs in the form of tax incentives and credits, as well as loan guarantees, are not yet available. Such assistance programs, if properly structured, could help private space companies to acquire funds for qualified projects while providing a positive return to the government if the venture is successful. In the absence of such programs, financing issues can be a powerful barrier to space enterprise. Another barrier to expanding space commercialization is the uncertainty associated with the probable markets for national space initiatives (NSIs). The inability to accurately determine the extent to which a market for space tourism exists, for example, is a barrier to financing such ventures. Most of the investment community considers the research on space tourism and other NSIs to be suggestive of ‘‘wild guesses and backed by surprisingly little research.’’21 Space tourism would be better served by more practical market research that would earn the respect of the investment community. Working with credible, practical market research is important as it helps to eliminate both market uncertainties and associated risks that can be barriers to space commerce. Misperceptions about Commercial Space Ventures Misperceptions about space commerce also create barriers to space enterprise. The barriers caused by misperceptions especially limit 77
SPACE the progress of space commercialization. Misperceptions are the most insidious barriers because they often influence the preliminary thoughts about a project. A good example of this is the perception that space has to be expensive. Most in the private sector believe that our current space program and NASA projects are costly because space is and always will be costly. Seldom does one understand that these projects are costly because of the specifics of the program. The perception that all space has to be expensive is difficult to change because businesses and investors look to the federal government, NASA, and the aerospace industry for almost everything to do with space. In addition, the public is constantly reminded by the government and the media of just how expensive and risky space is, especially with failed NASA missions to Mars, Shuttle difficulties, and International Space Station (ISS) cost overruns. In fact, many people simply accept that the price for sending people to space on a typical Space Shuttle flight costs between $500 million and $750 million. What people do not know and what they are not told is just how out of date and inefficient the Space Shuttle is, and just how cost-effective a new-generation RLV could be if one were developed. Most people are also unaware that commercial projects in LEO are less costly than a NASA Space Shuttle mission. Another example of a barrier resulting from a misperception concerned Russia’s sending Dennis Tito to their module on the ISS as a space tourist on April 28, 2001. The European Space Agency, the U.S. government, and NASA believed that it is too risky and too costly to send a space tourist to the ISS. These organizations also believed that inasmuch as the ISS is publicly funded, the public needs to have its investment protected from civilian space travelers. When such announcements are made by those venerable agencies and governments, the vast majority of the public, including businesspeople, solidify their perception that space is too expensive, too risky, and only for the government and its approved astronauts. This is a barrier that requires significant education to overcome. It would also help if a different attitude existed in the government and within national space agencies about space commerce and who can actually be an astronaut. Yet another misperception arises from the public statements made by leading aerospace company executives regarding well-known commercial projects. A good example of a misperception caused by 78
Barriers to Space Enterprise a public statement concerns Lockheed Martin’s VentureStar RLV based on the X-33 design that won the July 1996 NASA competition. By 2001, NASA planned to have funded about $1 billion for 15 X-33 test flights. Lockheed Martin was supposed to then use the technology developed from the X-33 project to build its full-size, privately owned version of the RLV, the VentureStar. Both Lockheed and NASA promoted the VentureStar as the next-generation RLV, but both also disclosed the existence of difficulties in continuing the project. On May 21, 1999, Peter B. Teets, president and chief operating officer for Lockheed Martin, told the U.S. Senate Commerce and Science Committee that the project was unsuccessful in attracting Wall Street investors ‘‘and would need some form of added government funding or loan backing.’’22 It was the first time the company admitted that the VentureStar could not be developed and made operational using only Lockheed’s financial resources.23 Teets went on to say, ‘‘Wall Street has spoken. They have picked the status quo—they will finance systems with existing technology. They will not finance VentureStar.’’24 These are powerful statements for the chief executive officer of one of the leading aerospace companies to make, but they tell only a portion of the story. Such statements have the potential to negatively influence the perceptions of key people in the financial industry and government, affecting more than just VentureStar. This is even more so now that NASA has officially terminated the X-33 and Lockheed its VentureStar project. The problem lies in what is not being told to Wall Street investors, Congress, and the public. In reality, many experts doubted that VentureStar could be built or made to perform as specified. VentureStar critics were quick to point out that the design and engineering problems were specific to VentureStar, not to RLVs in general. In fact, Dr. Bruce B. Lusignan, director of Stanford University’s Communication Satellite Planning Center, has been working on an RLV design that, according to his analysis, will be both highly economical to operate and have superb performance characteristics.25 Many entrepreneurial RLV companies make similar positive statements about their RLV designs. It is important, therefore, to separate the RLV industry from VentureStar and its problems. Unfortunately, this does not usually happen when a well-known aerospace executive makes statements that have the potential to hinder the entire RLV industry. 79
SPACE Ethical and Behavioral Considerations for Commercial Space Ventures As we start this new century, we note that many of our successful businesses seem to be concerned only with the bottom line, often to the exclusion of basic human needs and a reasonable distribution of resources. Although they usually operate within the law, these businesses do not always value their moral and ethical responsibilities to the consumers, let alone the public in general. In the not-toodistant future, expanding our economy to LEO, the asteroids, and the Moon will begin a new era of industrialization in space. Many questions remain as to what this LEO-and-beyond economy will look like, especially the settlements that are sure to follow. One of the most important concerns that we can resolve before this era of space industrialization is in full swing involves the standards that our LEO and spaced-based businesses will project. The business standards for ethics that we export to outer space will be with us for many years to come as our new space economy develops, expands, and eventually seeks independence from its source here on Earth. To have a say in the moral component of the new space economy and to help avoid unwanted regulatory barriers to space commerce, we need to be addressing these issues now, and even more important, we need to get the business community involved. The failure to consider the ethical standards for our businesses operating in space carries with it the potential of a new era of space regulation. As we begin this new century, there is no shortage of pressure on terrestrial businesses regarding their ethical standards and behavior. There is no reason to believe the same will not be true for commercial space businesses. If the commercial space industry falls short in policing itself with regard to these issues, then there is a risk of more space industry regulation. To assure that space commerce does not become subject to restrictive or excessive regulation regarding ethical issues, the space industry should implement its own ethical standards lest the industry find the government doing it for them. Conclusion It is important for government regulators and interested parties to realize the economic potential as well as the benefits that can result when space commerce is not damaged by barriers. This is 80
Barriers to Space Enterprise an important first step in furthering space enterprise. For space commerce to prosper, the barriers must be minimized, simplified, or eliminated. As much as possible, barriers to space enterprise must not become part of new laws and regulations affecting space commerce. By understanding the consequences of these barriers and the way they handicap business opportunities in space, we can effectively work to ensure that such barriers become a thing of the past. Space is usually viewed by governments and militaries as their domain. As such, these public organizations do not want to relinquish their control over who and what goes into space. Applying constructive pressure to government officials and elected representatives is helpful. Vigilance, however, will be required at every step along the way as the regulatory forces are strong and many nations with diverse interests and priorities want to be part of the space economy. Successful commercial space ventures make powerful statements and strongly support the case for eliminating or reducing the space commerce barriers. As we move forward into a new era of space expansion and commercialization, eliminating bureaucratic, legal, and financial barriers should be a priority. In addition, the commercial space industry must understand that its actions and behavior need to reflect an acceptable ethical business standard. Otherwise, the industry runs the risk of bringing on an era of unprecedented regulation regarding its commercial space development activities. Notes 1. KPMG Peat Marwick, 1997 Outlook: State of the Space Industry (KPMG Peat Marwick, SpaceVest, Space Publications, and Center for Wireless Telecommunications, 1997), p. 9. 2. Thomas W. Watts and William W. Pitkin Jr., Global Satellite Marketplace 99 (New York: Merrill Lynch, Pierce, Fenner & Smith, Inc., 1999), p. 15. 3. J. Armand Mussey, William B. F. Kidd, and Patrick Fuhrmann, The Satellite Book, vol. 1, no. 2 (New York: C.E. Unterberg, Towbin, 1999), p. 7. 4. Joan Johnson-Freese and Roger Handberg, Space, the Dormant Frontier: Changing the Paradigm for the 21st Century (Westport, Conn.: Praeger, 1997), p. 154. 5. ‘‘Fact Sheet, National Space Policy,’’ September 19, 1996, American Institute of Aeronautics and Astronautics, www.aiaa.org/policy/nat-space-policy.html (February 28, 1999). 6. Ibid. 7. Daniel Goldin, ‘‘Administrator’s Strategic Outlook,’’ October 30, 1997, hq.nasa.gov/office.nsp/outlook.htm (February 28, 1999).
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SPACE 8. Nathan C. Goldman, American Space Law: International and Domestic, 2d ed. (San Diego, Calif.: Univelt, Incorporated, 1996), p. 195. 9. Ibid., p. 193. 10. Ibid., p. 194. 11. W. D. Kay, Can Democracies Fly in Space? The Challenge of Revitalizing the U.S. Space Program (Westport, Conn.: Praeger Publishers, 1995), p. 162. 12. Jeff Foust, ‘‘Senate Approves Commercial Space Act,’’ SpaceViews, the Online Publication of Space Exploration,
[email protected] (August 3, 1998). Also available as an archival issue on SpaceViews’ Web site, www.spaceviews.com/1998/08/ 03a.html (as of August 3, 1998). 13. Office of Associate Administrator for Commercial Space Transportation, ast.faa.gov (March 3, 2001). 14. ‘‘Environmental Program,’’ Office of Associate Administrator for Commercial Space Transportation, ast.faa.gov/licensing/envir prog/intro.html (March 3, 2001), pp. 3–4. 15. Dan Brekke, ‘‘Lost in Space before the Race,’’ Wired News, October 7, 2000, wired.com/news/print/0,1294,38831,00.html (October 8, 2000), p. 1. 16. ‘‘About the Licensing Process,’’ Office of Associate Administrator for Commercial Space Transportation, ast.faa.gov/licensing/intro.html (March 3, 2001), p. 1. 17. Brekke, ‘‘Lost in Space before the Race.’’ 18. U.S. Congress, Strom Thurmond National Defense Authorization Act for Fiscal Year 1999, Title XV—Matters Relating to Arms Control, Export Controls, and Counterproliferation; Subtitle B—Satellite Export Controls. This document was requested and received from Senator Dianne Feinstein’s San Francisco office. The document bears the Web site address www.congress.gov/cgi-lis/qu. . .c105:17:/temp/-c10581YRBt:e45481 (accessed May 11, 1999). 19. Stew Magnuson, ‘‘Proposed Bill Would Revise Satellite Export Laws,’’ Space News This Week, February 19, 2001, p. 3. 20. Phillip R. Harris, ‘‘Legal Space Frontier Challenges,’’ Space Governance 4, no. 1 (January 1997): p. 50. 21. Jeff Foust, ‘‘Barriers to Space Tourism,’’ SpaceViews, July 1, 1999, www.spaceviews.com/1999/07/, p. 13. 22. Frank Sietzen Jr., ‘‘Wall Street Rejects Venture Star,’’ SpaceDaily, May 21, 1999, www.space.com/spacecast/news/rlv-99g.html (June 7, 1999). 23. Ibid. 24. Ibid. 25. Bruce Lusignan and Shivan Sivalingam, ‘‘Single Step to Orbit: A First Step in a Cooperative Space Exploration Initiative.’’ Presented at the Second International Mars Society Conference, Boulder, Colo., August 12–15, 1999.
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6. The Legal Regime for Private Activities in Outer Space Wayne White Introduction Existing national and international laws provide a rudimentary framework for commercial activities and settlement in outer space and on celestial bodies. Although we have limited experience with activities outside of space vehicles or enclosed facilities, it is possible to analyze how existing laws will be applied to activities such as mining, manufacturing, and construction. One can also conclude that private settlement in outer space or on celestial bodies is legal under existing law. Nonetheless, the paucity or outright absence of law regarding certain key subjects such as property rights, mining, salvage, liability, and dispute resolution is a disincentive to private space activities. Individuals, companies, and investors are unsure of their rights and have no assurance that their efforts and investments will be legally protected. National governments can do much to encourage private space activities through new international agreements and national legislation. The Existing Regime Several threshold questions present themselves in consideration of private activities in outer space: 1. What laws govern the activities and who has jurisdiction to regulate them? 2. What authority do entities have with respect to personnel in their facilities, around their facilities, and in areas of frequent activity? 3. What is the physical extent of private entities’ authority? 4. Are activities protected from outside interference? 5. What laws govern liability for personal injury and property damage? 6. What are the procedures for dispute resolution and enforcement of criminal law? To answer these questions, one must look first to international treaty law and then to implementation of national statutes. At the 83
SPACE national level in the United States, the National Aeronautics and Space Act (42 U.S.C. secs. 2451 et eq.), 18 U.S.C. secs. 7(6) and 7(7), 25 U.S.C. sec. 863(d), 35 U.S.C. sec. 105, 14 C.F.R. sec. 1214.702, and 14 C.F.R. sec. 1217.106 are relevant statutes and regulations. At the international level, two multilateral treaties are relevant: the 1967 Outer Space Treaty and the 1972 Liability Convention. Sovereignty, Jurisdiction and Resource Appropriation The ‘‘Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space Including the Moon and Other Celestial Bodies,’’ commonly known as the ‘‘Outer Space Treaty,’’1 was the first international space treaty. It provides the framework for all other space treaties. Its most important provisions, taken together, delineate the international regime of sovereignty, jurisdiction, and resource appropriation. Article II of the treaty states that ‘‘outer space, including the moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.’’ I have concluded in a more lengthy analysis published elsewhere that Article II prohibits only national and not private appropriation of territory. However, in common law countries such as the United States, legal theory dictates that the government must have sovereignty over territory before it can confer title on its citizens. Consequently, traditional real property rights are inconsistent with this theory. Nonetheless, nations retain considerable authority under the Outer Space Treaty. Article VIII of the treaty says in part that ‘‘[a] state party to the Treaty on whose registry an object launched into outer space is carried shall retain jurisdiction and control over such object, and over any personnel thereof, while in outer space or on a celestial body.’’ Because Article IX of the treaty and other broadly applied international laws also prohibit interference with activities, jurisdictional authority under the Outer Space Treaty provides most of the protections traditionally associated with property rights, with a few relatively insignificant limitations. It has hence been labeled as ‘‘quasi-territorial’’ jurisdiction. Taken together, Articles II, VIII, and IX provide the following regime for private activities at the international level: 1. space objects occupy locations on a first-come, first-served basis; 2. nations have jurisdiction over space facilities and all personnel in or near the 84
The Legal Regime for Private Activities in Outer Space facility, irrespective of nationality; 3. personnel have the right to conduct their activities without the harmful interference of other states; 4. although entities may not claim ownership of mineral resource ‘‘in place,’’ once they have been removed (i.e., mined), then they are subject to ownership; and 5. jurisdiction, and any rights with respect to a given area, cease when a facility is returned to Earth, destroyed or abandoned, or when activity is halted outside a facility. The Outer Space Treaty does not specify what rights entities have with respect to areas around facilities or in areas of ongoing activities, such as mining sites. Many authors, both American and Russian, say that facility operators have a right to a ‘‘safety zone’’ in the vicinity of facilities. Certainly states have a right to prevent damage to or destruction of a facility by exerting a measure of control over activities within a reasonable distance around the facility. The Outer Space Treaty and principles of general international law prohibit interference with activities, so exercises of jurisdiction in mining areas would also be justified to the extent necessary to prevent interference and ensure safety. The physical extent of these safety zones is unclear, but if the analogous regime for drilling platforms on the continental shelf is any indication (safety zones of 500 meters), then one could predict that the extent of these zones will be strictly limited. Administration of safety zones will be most difficult in areas of mining activity. Take, for instance, the situation where a second entity commences mining operations just beyond an original mining entity’s safety zone. If the second entity’s activities occur in the path of the first entity’s planned development, would this violate the Article IX prohibition against harmful interference? The attendant circumstances would probably determine the outcome. If other sites of equivalent value were readily available, then the second entity’s rights would probably be subordinate to the original entity’s primary rights, even though they are technically beyond the limits of its safety zone jurisdiction. Liability and Dispute Resolution The 1972 ‘‘Convention on International Liability for Damage Caused by Space Objects,’’ commonly known as the ‘‘Liability Convention,’’2 sets forth the rules for personal injury and property damage and for resolution of those issues at the international level. 85
SPACE Articles I and II of the agreement provide that a nation that launches or procures the launching of a space object, or from whose territory a space object is launched, shall be absolutely liable for damage caused by its space object on the surface of the Earth or to aircraft in flight. With respect to damage caused elsewhere than on the surface of the Earth (i.e., in outer space or on celestial bodies), states are not absolutely liable but rather are liable on the basis of fault (Article III). Claims on behalf of corporations or individuals may be asserted by their governments. Claims must be presented through diplomatic channels within one year of the date on which the damage occurred. If the parties do not reach a settlement within one year from the date on which a claim is received by the launching state, then the concerned parties must establish a Claims Commission chosen jointly by both parties. The Claims Commission shall then decide the merits of the case and the amount of compensation, if any, on the basis of majority vote, within one year. The Outer Space Treaty does not have a dispute-resolution provision that would apply to issues other than personal injury and property damage. However, Article III says that parties to the treaty shall carry on activities ‘‘in accordance with international law, including the Charter of the United Nations. . . .’’ Article 33 of the UN Charter3 says that parties shall first ‘‘seek a solution by negotiation, enquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies or arrangements, or other peaceful means of their own choice.’’ In the event that such means fail to achieve a resolution of the issue, Article 36(3) indicates that ‘‘legal disputes should as a general rule be referred by the parties to the International Court of Justice. . . .’’ If the dispute cannot be resolved by the methods set forth in Article 33 and the dispute endangers the maintenance of international peace and security, then Article 37 requires the parties to refer the matter to the Security Council. Space Debris and Contamination Article VI of the Outer Space Treaty says that parties to the treaty ‘‘bear international responsibility for national activities in outer space whether . . . such activities are carried on by governmental agencies or by nongovernmental entities. . . .’’ States shall ensure that national activities ‘‘avoid . . . harmful contamination [of outer 86
The Legal Regime for Private Activities in Outer Space space and celestial bodies] and also adverse changes in the environment of the Earth resulting from the introduction of extraterrestrial matter’’ (Article IX). In his book Space Debris: Legal and Policy Implications, Howard Baker divides space debris into four classes: inactive payloads, operational debris, fragmentation debris, and microparticulate matter.4 These categories are very helpful in determining the law’s treatment of debris. However, Baker’s and other authors’5 use of the term ‘‘inactive payloads’’ is misleading. Because satellites are frequently deactivated for periods of time and then later reactivated,6 and because debris may include objects manufactured in outer space and not just payloads, the term ‘‘inoperative objects’’ is more accurate when referring to objects that entities can no longer control (the usage apparently intended by these authors). Using Baker’s categories as so modified, that is, using the term ‘‘inoperative objects,’’ we can further define the legal status of debris. The first issue is whether debris can be classified as ‘‘contamination.’’ If debris is classified as contamination, then Article IX of the Outer Space Treaty would require nations to avoid contaminating outer space with debris. The legislative history of Article IX, however, indicates that treaty negotiators intended to prevent only biological and possibly chemical or radioactive contamination. Thus, Baker concludes that the term ‘‘contamination’’ does not include debris.7 The next issue is whether operational, fragmentation, and microparticulate debris constitutes ‘‘component parts’’ and is hence included in the definition of ‘‘space object.’’ The term ‘‘space object’’ appears in several treaties but is not specifically defined. Article I(d) of the Liability Convention states that the term ‘‘space object’’ includes a space object, the launch vehicle, and the component parts of both. Article VIII of the Outer Space Treaty refers to ‘‘objects launched into outer space, including objects landed or constructed on a celestial body, and . . . their component parts.’’ On the basis of these provisions, one can conclude that the term ‘‘space object’’ includes launch payloads, launch vehicles, component parts of both, and vehicles or facilities constructed in outer space or on celestial bodies. If a space object causes damage, the Liability Convention holds the ‘‘launching State’’ (an inadequately defined term) absolutely liable for damage on the surface of the Earth or to aircraft in flight 87
SPACE (Article II) and liable on the basis of fault for damage in outer space or on celestial bodies (Article III). Baker looks to the Cosmos 954 incident for evidence of states’ practice. In that 1978 incident, a Soviet satellite containing a nuclear power source spread radioactive debris over a large area of northern Canada upon reentry. Baker finds the evidence inconclusive, because the USSR never admitted liability and the settlement procedures of the Liability Convention were never invoked.8 Cargill Hall distinguishes between identifiable and unidentifiable objects. He notes that under international maritime law any nation can destroy unidentifiable flotsam and jetsam. In contrast, derelict vessels that still carry indicia of national origin can be destroyed only after permission is secured from the owner and its insurance company.9 This distinction should also be applied in outer space. If the origin of operational, fragmentation, or microparticulate debris can be determined, then the debris should be classified as a component part of a space object—subject to national jurisdiction and all other rights and responsibilities conferred by the various space treaties.10 Such responsibilities would include liability for damage caused by identifiable debris such as that created by Cosmos 954’s reentry. Unidentifiable debris, on the other hand, should be considered abandoned and subject to the law of finds. Thus, one could either appropriate or destroy unidentifiable debris at will. National Legislation Article VIII jurisdiction permits the state of registry to subject its space objects and personnel to any national laws that are not in conflict with international law.11 During treaty negotiations, the then Soviet Union initially argued that space activities should ‘‘be carried out solely and exclusively by states,’’12 but the United States refused to accept that provision.13 As a compromise, the United States proposed,14 and the Soviet Union accepted,15 the clause in Article VI that says that ‘‘[s]tates . . . shall bear international responsibility for national activities . . . whether such activities are carried on by governmental . . . or . . . non-governmental entities.’’16 Article VI goes on to state that ‘‘[t]he activities of non-governmental entities in outer space including the Moon and other celestial bodies, shall require authorization and continuing supervision by [parties to the treaty].’’ 88
The Legal Regime for Private Activities in Outer Space Accordingly, states may legislate with respect to a broad range of both public and private activities; and, in most circumstances, they exercise as much authority within the vicinity of their space facilities as they would within their territory on Earth. The United States has taken the lead among nations in enacting legislation implementing the jurisdiction conferred by the Outer Space Treaty. The law, 18 U.S.C. sec. 7(6), extends U.S. maritime and territorial jurisdiction to ‘‘any vehicle used or designed for flight or navigation in space on the registry of the U.S. while that vehicle is in flight. . . .’’ Section 7(7) of the statute extends the same jurisdiction to ‘‘[a]ny place outside the jurisdiction of any nation with respect to an offense by or against a national of the United States.’’ Neither of these statute sections specifically provides for jurisdiction over space objects that are not ‘‘vehicles.’’ The Space Station Agreement does provide for U.S. jurisdiction, though, and the International Space Station is at present the only space object with a relatively fixed location that the United States has made a commitment to construct and occupy. The National Aeronautics and Space Act gives NASA jurisdiction to regulate civilian space activities. 14 C.F.R. sec. 1214.702 gives the NASA commander of the Space Shuttle the authority to ensure the safety and efficiency of the vehicle. Analogous delegations of authority can be expected with respect to permanently located facilities in outer space. Other legislation worthy of note includes 25 U.S.C. sec. 863(d) [Internal Revenue Code] that provides that ‘‘any income derived from a space or ocean activity—(A) if derived by a United States person, shall be sourced in the United States.’’ 35 U.S.C. sec. 105 provides that ‘‘(a) Any invention made, used or sold in outer space on a space object or component thereof under the jurisdiction or control of the United States shall be considered to be made, used or sold within the United States [unless the space object is carried on the registry of a foreign state or otherwise provided in an international agreement]. (b) Any invention made, used or sold in outer space on a space object or component thereof that is carried on the registry of a foreign state . . . shall be considered to be made, used or sold with the United States . . . if specifically so agreed in an international agreement between the United States and the state of registry.’’ Also, 14 C.F.R. sec. 1217.106 provides that ‘‘articles brought 89
SPACE into the customs territory of the United States by NASA from space shall not be considered an importation, and no certification or entry of such materials through U.S. Customs shall be required. This provision is applicable . . . whether or not the articles were launched into space aboard a NASA vehicle.’’ The Space Station Agreement In the mid-1980s the United States government began planning construction of a space station. But costs escalated and delays increased, leading to several redesigns with corresponding reductions in the size of the station. The station’s current incarnation is being built and operated by a consortium of governments, including post–Cold War Russia, now a partner rather than a rival. This consortium of governments negotiated an international agreement to govern their relationships during the course of station construction and operations. Jurisdiction The 1998 ‘‘Agreement Among the Government of Canada, Governments of the Member States of the European Space Agency, the Government of Japan, the Government of the Russian Federation, and the Government of the United States of America Concerning Cooperation on the Civil International Space Station,’’ commonly known as the ‘‘Space Station Agreement,’’17 requires each partner to register as space objects the elements of the station that it provides. Each partner then retains jurisdiction and control over the elements that it registers, and over personnel in or on the station who are its nationals (Article 5). Partners must also designate a lead agency to administer their portion of the project and to coordinate efforts with other partners. ‘‘The United States, acting through NASA, shall . . . be responsible for overall program coordination and direction of the Space Station . . . , [and] for overall planning for and direction of the day-to-day operation of the [station]’’ (Article 7(1). Liability Article 16 of the Agreement establishes a cross-waiver of liability for station partners, their contractors, subcontractors at all tiers, and all employees and suppliers of those entities. The waiver applies to all launch vehicle activities, Space Station activities, payload activities in transit, and payload activities on Earth, including further 90
The Legal Regime for Private Activities in Outer Space development of payload products or processes in implementation of the Space Station Agreement. Partners are required to extend the waiver through contract provisions (or other means) to contractors and, presumably through flow-down provisions, to subcontractors. Intellectual property, wrongful-death and related claims, and claims for damage caused by willful misconduct are specifically excluded from the cross-waiver of liability. Provisions for protection of intellectual property are included elsewhere in the Agreement. Criminal Jurisdiction Article 22 provides for criminal jurisdiction. Partners have criminal jurisdiction over their nationals on any flight element per Article 22(1). Article 22(2) provides that: In a case involving misconduct on orbit that: (a) affects the life or safety of a national of another Partner state or (b) occurs in or on or causes damage to the flight element of another Partner state, the Partner whose national is the alleged perpetrator shall, at the request of any affected Partner state consult with such state concerning their respective prosecutorial interests. An affected Partner state may, following such consultation, exercise criminal jurisdiction over the alleged perpetrator provided that, within 90 days of the date of such consultation or within such other period as may be mutually agreed, the Partner state whose national is the alleged perpetrator either: (1) concurs in such exercise of criminal jurisdiction, or (2) fails to provide assurances that it will submit the case to its competent authorities for the purpose of prosecution.
Article 22(3) of the Agreement says that the Agreement shall provide a legal basis for extradition of alleged perpetrators if the partners involved do not have an extradition treaty. Trends in International Law Several multilateral agreements directly address issues of resource appropriation and real property rights in areas not subject to territorial sovereignty. These agreements include the Moon Treaty, the Law of the Sea Treaty, and the Protocol on Environmental Protection to the Antarctic Treaty. The terms of these agreements and their degree of acceptance in the international community provide insight into other nations’ developing views on resource appropriation and 91
SPACE property rights. They also provide lessons concerning the treatment of these issues as they relate to outer space. In 1979 UN representatives completed the ‘‘Agreement Governing the Activities of States on the Moon and Other Celestial Bodies,’’ commonly known as the Moon Treaty.18 This treaty declares space resources ‘‘the Common Heritage of Mankind’’ and specifically prohibits any form of property rights with respect to such resources. Vague terms in the agreement also require ‘‘equitable sharing of benefits’’ with non-spacefaring nations; other provisions would establish a significant bureaucracy to control development. The treaty met with opposition from pro-space activists and mining interests and was never signed by key nations including the United States and the USSR. It was subsequently ratified by nine countries, and entered into force with respect to those nations on July 11, 1984. The contemporaneously negotiated Convention on the Law of the Sea, commonly known as the Law of the Sea Treaty,19 contained provisions similar to the Moon Treaty, and it received virtually the same reception in the international arena. Initially, the United States, the USSR, France, Japan, and the Federal Republic of Germany did not sign the treaty and each enacted national legislation allowing their corporations to mine the seabed. As Professor Barry Hart Dubner explains: In the late eighties as it became evident that the Convention as written would likely enter into force without the participation of many important states, the [United Nations] Secretary General convened an informal working group to attempt to resolve the issues of concern to the United States and others. That effort resulted in the adoption on July 28, 1994 of the Agreement Relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea of December 10, 1982, which effectively modified the [Sea Treaty] with respect to its seabed mining provisions. The United States then signed the Agreement and the 1982 treaty. . . . The treaty entered into force in November 1994 and has since been ratified by 130 states including . . . most of the significant users of the sea except for the United States. [The United States Senate has never ratified the treaty.]20
The Moon Treaty and the Sea Treaty pitted the developed nations against the undeveloped nations. The undeveloped nations wanted to share in the benefits of resource appropriation even though they 92
The Legal Regime for Private Activities in Outer Space did not have the wherewithal to make the necessary financial investment. The developed nations wanted to appropriate resources without excessive bureaucracy and taxes that were perceived to be unfair. Interests opposing the treaties were also concerned that the treaties would establish undesirable precedents in international law with respect to wealth transfer, technology transfer, and property rights, among other things. In contrast, the more recent Protocol on Environmental Protection to the Antarctic Treaty, an international agreement ratified by 26 countries, resulted from a confrontation between environmental and development interests. An earlier antarctic resources regime would have allowed mineral and oil exploitation, subject to strict control requiring unanimous case-by-case approval from the 20 nations that hold voting rights under the original 1959 treaty. However, as a result of intense lobbying efforts by Greenpeace and other environmental groups, Australia and France decided to sign the agreement. Subsequently, nations drafted the Protocol on Environmental Protection, which prohibits any activity relating to mineral resources, such as mining or oil drilling, other than for scientific research, for a period of at least 50 years. The Protocol entered into force on January 14, 2000.21 Despite the unfavorable attitudes toward private enterprise that are evidenced by these treaties, the collapse of the Soviet Union, globalization of business, widespread dissemination of information via the Internet, and other factors have led to a significant change in attitudes, particularly during the past five years. Increased respect for market incentives and commercialization is definitely the trend in international law. This trend seems to be most pronounced with respect to outer space, as a result of the relative absence of environmental issues, rapid technological change, and the increasing profitability of space activities, led by the satellite communications industry. Commercialization and real property rights are now, arguably, the most popular topics in international space law, with member states other than the United States even calling for discussion of the issues in the UN Committee on the Peaceful Uses of Outer Space, the same body that facilitated negotiation and drafting of the Moon Treaty. Regardless of international attitudes, the Law of the Sea Treaty and the Protocol on Environmental Protection to the Antarctic Treaty 93
SPACE should not provide precedents for outer space. Although deep sea mining is feasible at present only in very limited areas, space resources are virtually limitless, and there is no justification for controls, international administration, or benefit sharing. Even if it takes undeveloped countries decades longer to reach the point where they can appropriate space resources, those resources will still be plentiful and readily available. Furthermore, several compelling reasons exist for promoting private space activities that do not apply to the seas and Antarctica. First, the unique environment of outer space provides opportunities that do not exist on Earth: unlimited and uninterrupted solar energy, a near vacuum, microgravity, and temperature extremes offer unique prospects for economically efficient chemical and manufacturing processes. Second, moving industry off the planet will reduce pollution on Earth, while the solar wind will sweep away any pollution that occurs beyond low Earth orbit. Third, development and settlement of outer space will provide a much-needed outlet for those creative, adventurous individuals and companies that are not happy unless they are pushing the boundaries of new frontiers. Finally, establishing self-sufficient communities beyond Earth will help ensure that terrestrial species will survive in the event of global catastrophe. The Moon Treaty, because of its lack of acceptance, clearly provides at least one precedent—that prohibition of property rights and onerous control and taxation of resource appropriation are unacceptable to most nations with respect to outer space. The Outer Space Treaty: Amend, Withdraw, or Leave It Alone? Many nonlawyers have said, ‘‘Why bother with the limitations of the Outer Space Treaty? The United States should just withdraw from the treaty.’’ This threshold issue should be addressed. Any state party to the Outer Space Treaty may unilaterally withdraw from the treaty with one year’s written notice, pursuant to Article XVI. However, the weight of international legal opinion indicates that at least some of the treaty’s provisions have become customary international law. This means that those provisions have been so widely adopted, have been so widely accepted by nonsignatories, and have been accepted for such a long time that they have become 94
The Legal Regime for Private Activities in Outer Space principles of international law that bind even those countries that are not party to the treaty. Article II of the treaty, which prohibits territorial sovereignty, is the provision that has most likely become customary international law. That provision also appeared in the 1963 ‘‘Declaration of Legal Principles Governing the Activities of States in the Exploration and Use of Outer Space,’’ which was adopted unanimously by the UN General Assembly.22 Moreover, in the nearly 35 years since the Outer Space Treaty entered into force, all of the spacefaring nations have refrained from asserting territorial claims. On the other hand, one could make a plausible argument that nations did not make territorial claims because they did not have the economic and technological resources necessary to perfect a territorial claim under international law (generally defined as ‘‘the continuous and peaceful display of state authority,’’23 which as a practical matter means establishing and maintaining military control). Regardless of whether the prohibition of territorial sovereignty has actually become customary international law, the widespread opinion that it has means that withdrawal from the treaty would lead to an international outcry, particularly if withdrawal were followed by territorial claims, which seems to be the primary reason why some space activists and entrepreneurs think that we should withdraw. In and of themselves, unfavorable international opinion and political pressure do not provide sufficient justification for remaining party to a treaty that is allegedly unfavorable to national interests. However, other factors argue against U.S. withdrawal from the Outer Space Treaty: 1. History shows that competition for territorial claims leads to armed conflicts. Militarization of outer space would direct scarce resources away from private development; 2. It would be difficult to delineate boundaries in outer space; 3. Private claims would exercise control over only areas that are actually used, whereas national territorial claims would remove large areas from development; 4. Prohibiting territorial sovereignty makes the transition to self-governance far easier for settlers once they become selfsufficient; 5. Having properties that are subject to different national laws in close proximity to each other would lead to cross-fertilization of legal systems. Competition between national legal systems will in most cases lead to better laws; 6. The treaty has no provisions for expensive governing bodies; 7. There is little in the treaty that is 95
SPACE really objectionable. For the most part the treaty lets nations govern their own activities, subject to general principles that the United States already subscribes to. If one concludes that the United States should not withdraw from the Outer Space Treaty, should we amend it? The simple answer is ‘‘No.’’ It makes more sense to address the few ambiguities and shortcomings in the treaty in ancillary treaties that expand upon the existing provisions of the Outer Space Treaty. The ‘‘Convention on International Liability for Damage Caused by Space Objects’’ and the ‘‘Convention on Registration of Objects Launched into Outer Space’’ have already expanded on provisions in the Outer Space Treaty. We are going to need ancillary treaties on jurisdiction, real property, mining, and salvage anyway, so why amend a treaty that has already achieved widespread acceptance in the international community? Real Property Rights Common law countries that are parties to the Outer Space Treaty, including the United States, cannot confer traditional property rights on private entities because such rights derive from territorial sovereignty, which is prohibited by Article II. Civil law countries follow the natural law theory of property rights, and can therefore recognize property rights independent of territorial sovereignty. Despite this dichotomy, it is possible to develop a regime of real property rights that is consistent with the terms of the Outer Space Treaty. Those property rights would derive from the jurisdiction conferred by Article VIII, and could be conferred and recognized by any country in the absence of territorial sovereignty. The rights conferred include the following: 1. the right to exclude others from space facilities and safety zones, 2. the right to be free of interference from others, 3. the right to control the activities of all natural persons and legal entities within the owner’s space facility and safety zone(s), 4. the right to direct the activities of space vehicles and persons inside those vehicles while the vehicle is in the space facility and safety zone(s), 5. the exclusive right to appropriate resources within the space facility and its related safety zone, and 6. the right to sell property rights. In accordance with the terms of the Outer Space Treaty, the property rights are subject to the following limitations: 1. If the owner 96
The Legal Regime for Private Activities in Outer Space of the space facility or safety zone(s) stops using his property for peaceful purposes, the rights shall immediately terminate; 2. if the owner of the space facility or safety zone(s) abandons the property for a period of two years or more, the rights shall terminate; 3. if the owner of an orbital facility deviates from the registered orbital parameters by more than [a percentage to be defined when the treaty is negotiated], for a period of one month or more, the rights shall immediately terminate; 4. owners may not establish property rights that would prevent others from having free access to outer space and celestial bodies; 5. owners shall have the right to direct the activities of space vehicles on the registry of other states, and the persons inside those vehicles, only to the extent necessary to protect the safety of other space objects and persons within the owner’s space facility and safety zone(s); and 6. owners shall not have the right to exclude persons who come to inspect the owner’s space facility, on the basis of reciprocity, pursuant to Article XII of the Outer Space Treaty. Treaty on Jurisdiction and Real Property Rights in Outer Space At the International Institute of Space Law annual Colloquium in Rio de Janeiro in October 2000, I presented a draft ‘‘Treaty on Jurisdiction and Real Property Rights in Outer Space’’ that expands upon Articles II and VIII of the Outer Space Treaty. This treaty implements my proposal for real property rights in outer space and my recommendations for further specifying the extent of Article VIII jurisdiction. The United States and other like-minded states can sign and ratify this treaty and then open it for signature by any nation that wants to be a party. In the interim, the United States and other nations can open registries to perfect the procedures for establishing and recording claims. Mining Law As stated above, the Outer Space Treaty permits natural persons and companies to remove and appropriate resources in outer space or on celestial bodies, but does not permit them to own resources ‘‘in place.’’ At present, there is no regulation of extraterrestrial mining activities, except for nations that have ratified the Moon Treaty. Nonetheless, pursuant to Article VIII of the Outer Space Treaty, nations can enact laws to govern the mining activities of their citizens 97
SPACE and mining activities within space facilities and safety zones on their registry. In the United States, the principal law that governs terrestrial mining activity is the General Mining Law of 1872.24 That law promotes resource appropriation by allowing prospecting and mining virtually free of charge on America’s public lands. Miners’ prospecting activities are protected by the case-law doctrine of pedis possessio (discussed below), and after a valuable mineral deposit has been discovered, by the General Mining Law that grants a ‘‘patent’’ or fee title to the land encompassing the deposit. Miners do not need a federal license or other grant of permission to prospect and mine under this system. To obtain a patent to the land in which minerals are located, the miner must discover a valuable mineral deposit, locate the claim, record the claim, do at least $100 of annual assessment work or other improvements, file annual affidavits of assessment work with the Bureau of Land Management, and apply for the patent. United States courts have further defined certain terms of art in the General Mining Law. For example, the courts have subjected the requirement of ‘‘discovery’’ to a ‘‘prudent man standard’’ and a ‘‘marketability test’’; that is, the discovery must be such that only a prudent person would expend further efforts on extraction, and the minerals discovered must offer some possibility of generating a profit. The term ‘‘valuable mineral’’ has been scrutinized to determine what substances qualify; in the context of this article, it is important to note that water is not considered a ‘‘valuable mineral.’’ Finally, ‘‘locate’’ is the process of marking and describing the boundaries of the claim. The General Mining Law specifically limits the size of claims that may be located. Pedis Possessio While prospecting, and before discovery, miners are protected in their occupation of the land by the doctrine of pedis possessio. The doctrine says that a prospector occupying an area and diligently searching for minerals is treated as a licensee or a tenant at will; no one else can acquire rights in the area through a forcible, fraudulent, or clandestine intrusion. If, however, the prospector does not act to exclude others or does not search diligently for minerals, and another prospector enters the area peaceably, without fraud or subterfuge, 98
The Legal Regime for Private Activities in Outer Space and discovers minerals and locates a claim, the location is valid and the original miner must respect it.25 This doctrine provides miners with only limited protection. Some minerals cannot be discovered without substantial amounts of capital, specialized equipment, and engineering, technical, and organizational expertise. In those instances, miners face the risk of losing their entire investment if another party makes a peaceable discovery without their knowledge. Courts have addressed this issue with respect to uranium, which is difficult to discover because deposits are often deep beneath the surface of the earth. To more adequately protect their investments, uranium prospectors have adopted the practice of locating and recording their claims before actual discoveries are made. Although federal and state statutes require miners to discover a valuable mineral before locating a claim, courts and regulatory agencies have allowed miners to validate claims with subsequent discoveries, so long as other miners have not established intervening rights. In several cases, state supreme courts have expanded the pedis possessio doctrine in connection with uranium prospecting. In one such case, the Utah Supreme Court held in 1958 that miners could base a valid discovery on radiometric detection and geological analysis, particularly when miners had physically discovered deposits nearby.26 In a second similar case, Colorado validated a discovery based on radiometric detection, assaying, and the type of rock present at the site.27 Finally, in a third case, the U.S. Geological Survey made an initial discovery while preparing anomaly maps from airborne surveys. The Nevada Supreme Court validated the claim of the first on-the-ground locator using a geiger counter (radiometric detection).28 These cases may find application in the law of outer space because extraterrestrial miners face circumstances that mirror those faced by uranium prospectors: they cannot discover minerals without substantial amounts of capital, specialized equipment, and engineering, technical, and organizational expertise. One author has gone a step further and suggested that courts need to provide protection to miners who do no more than locate claims and demonstrate a feasible plan for their exploration.29 In light of the risks faced by extraterrestrial miners, that would seem to be a valid recommendation for the field of space law. 99
SPACE Mineral Leasing The Mining and Minerals Policy Act says that it is United States policy to ‘‘foster and encourage private enterprise in [mining activities].’’30 However, in recent years public land law has been partly superseded as the government has sought to prevent or diminish mining’s adverse effects on other resources and amenities.31 The General Mining Law provides that valuable mineral deposits ‘‘shall be free and open to exploration and purchase . . . under regulations prescribed by law . . . so far as the same are applicable and not inconsistent with the laws of the United States.’’32 This statutory language has resulted in regulations of mining activities that encompass a broad range of public policy issues including pollution control and environmental impact, zoning, land use planning, reclamation, administration of the public trust, competing recreational and preservational values, and wildlife protection.33 The impact of these regulations has been minimal, however, when compared to the effect of laws that have withdrawn various lands and minerals from the coverage of the General Mining Law. There are three principal reasons that the United States has enacted such laws: 1. some minerals, such as coal, are so abundant that there is no need to encourage development; 2. the government has an ongoing need for fuel for government vessels and vehicles and it makes no sense to give fuel away and then buy it back; and 3. if valuable minerals are not given away, they can become a source of revenue. To implement these policies, the United States has enacted a leasing system for certain minerals and in certain areas of the public domain, as an alternative to the General Mining Law’s location system. Minerals subject to leasing include the fossil fuel minerals (oil, gas, oil shale, coal, asphalt, bituminous rock, and solid and semi-solid bitumen); fertilizer and chemical minerals (phosphate, potash, sodium), and geothermal resources.34 All minerals on acquired lands, which amount to about 8 percent of all federal lands, are subject to leasing rather than location,35 as are minerals on the outer continental shelf (principally oil and gas).36 Leasing differs from the General Mining Law’s location system in the following respects: 1. miners must obtain permission from the federal government before prospecting or mining; 2. miners must pay royalties, rents, and bonus payments; 3. miners may obtain leases through competitive bidding only in areas where minerals 100
The Legal Regime for Private Activities in Outer Space are known to exist; 4. miners do not obtain fee title; leases have specified time limits that may be extended if minerals are being produced in commercial quantities; 5. the United States may require ‘‘due diligence’’; and 6. the United States may require protection of competing resources and the environment.37 As one can see, the mineral leasing system imposes greater regulatory burdens and expense upon miners than the General Mining Law’s location system. The S.S. Central America Case In June of 1986 the Columbus-America Discovery Group located the wreck of the S.S. Central America, which sank in 1857. The ship carried gold that is now worth approximately one billion dollars.38 Using computer analysis, advanced sonar, and a remote-controlled robotic probe, the group found the wreck approximately 160 miles off the South Carolina coast, nearly 11⁄2 miles beneath the surface.39 Unfortunately, Columbus-America had to go to court to quiet conflicting claims to the treasure. Shortly after the group made its discovery, a second expedition began searching for the Central America in the immediate vicinity of Columbus-America’s activities. When the second ship refused to leave the area, Columbus-America sought relief in federal district court. To prove their discovery and to permit the court to assert jurisdiction, Columbus-America used a telerobotic vehicle to retrieve a piece of coal from the wreck. The coal was delivered to the court, which acknowledged the discovery, asserted its jurisdiction, and issued a temporary restraining order prohibiting other ships from entering the area.40 In subsequent actions the court issued preliminary and permanent injunctions, ultimately enjoining other ships from entering a 20-square-mile area surrounding the treasure site.41 The court established two important precedents in this case: (1) it protected the rights of individuals to exclude others from a specified area in international waters, and (2) it recognized telepresence as a valid method of discovery. Admiralty law previously protected only the rights of nations;42 this is the first time that a court has granted rights to private individuals.43 And telepresence now offers an alternative to the human presence which admiralty law has traditionally required to establish possession.44 Legal experts have already recognized that these precedents may be applied directly to extraterrestrial mining and salvage operations.45 101
SPACE Recommendations Extraterrestrial miners will face a situation similar to that faced by both uranium miners and the Columbus-America Group: first, they will have to invest a substantial amount of money and effort before they begin their projects; second, they will have to use remote sensing and robotic probes to locate minerals; and finally, they face substantial risk should others dispute their claims. In light of these circumstances, the United States and other countries should enact mining laws that protect miners’ rights and encourage investment to the maximum extent possible. Mining laws for outer space should follow the precedent of the General Mining Law. The laws should establish a mineral location system similar to that set forth in the General Mining Law. The law should, however, be modified to reflect the need for greater protection of miners’ rights prior to discovery, and to recognize the role of remote sensing and telerobotics in the process of discovery. United States and foreign legislators should also change the definition of ‘‘valuable mineral’’ to reflect the fact that some minerals (like water) that are not particularly valuable on Earth may be of much greater value in outer space. Salvage Law The word ‘‘salvage’’ has been defined as ‘‘the act of saving or rescuing a ship or its cargo’’ and as ‘‘something extracted [from refuse] as valuable or useful.’’46 When so defined, salvage is an attractive prospect for extraterrestrial operations. Salvage is desirable for many reasons: (1) rescuing ships reduces the incidence of death and property loss; (2) reusing hardware that is already in space saves the expense of building and launching new hardware; (3) extracting raw materials from inoperative space objects and space debris could provide critical materials, pending the advent of mining and materials processing; and (4) recovery of space debris reduces hazards to the Earth and to spacecraft, satellites, and orbiting facilities. The need for salvage services is already apparent. The increasing debris population in Earth orbit poses hazards for spacecraft, satellites, and especially long-duration facilities such as space stations. Space debris can also threaten the Earth. In recent years several large space objects have survived reentry through the atmosphere. These 102
The Legal Regime for Private Activities in Outer Space include the U.S.S.R.’s Cosmos 954 in 1978 and the United States’ Skylab in 1979. Although fragments of Skylab did fall on land, no damage was incurred. The Cosmos 954 satellite contained a nuclear power source, however, and upon reentry, spread radioactive debris over a large area of northern Canada. Although no lives were lost, cleanup costs totaled $14 million.47 The risks posed by space debris provide considerable incentive for its removal, but the cost of such operations may be prohibitive. Such costs might be offset, however, if the entity removing the debris received some or all of the economic benefit derived from that debris. Thus, while scientists and engineers continue to discuss technical solutions, several legal commentators have suggested that salvage laws could provide economic incentive for debris removal.48 Salvage law could also promote economic use of inoperative space objects. In 1992 the U.S. Space Command reported that approximately 73 percent of the satellites in Earth orbit were inoperative.49 Salvage of inoperative satellites has already been demonstrated. In 1984 the space shuttle Discovery recovered two disabled communication satellites, Palapa B-2 and Weststar VI. The satellites were returned to Earth for refurbishment and reuse. Before the satellites could be recovered, however, the owners of the satellites, their insurers, and the NASA legal staff spent considerable time negotiating and drafting agreements. Those agreements transferred title to the satellites to the insurers and clarified the rights and responsibilities of the parties.50 Undoubtedly, well-written salvage laws would provide greater legal certainty in the process of contracting for salvage services. More important, salvage laws could ensure that entities receive equitable compensation when circumstances preclude a contract. For the reasons set forth above, salvage laws are desirable as a matter of public policy. Maritime and Admiralty Law United States admiralty law defines salvage as ‘‘the compensation allowed to persons by whose assistance a ship or her cargo has been saved, in whole or in part, from impending peril on the sea or in recovering said property from actual loss as in cases of shipwreck, derelict or recapture.’’51 More recent laws permit salvors who save lives to share in the compensation granted to salvors of the ship and cargo.52 103
SPACE The following elements are necessary for a valid salvage claim: ‘‘(1) there must be a marine peril to the property to be rescued; (2) there must be a voluntary service not owed to the property as a matter of duty; and (3) there must have been success in saving the property or some portion of it from impending peril.’’53 Generally, salvage awards are not granted where the property owner has expressly refused the salvor’s services.54 In the absence of a contract for salvage services, or if a salvor claims that a contract was signed under duress or is otherwise inequitable, the salvor may seek compensation through the courts. The amount of compensation granted to a salvor is determined at the court’s discretion based on the circumstances of the case. Factors considered by the courts include: ‘‘(1) the labor expended by the salvors; (2) the promptitude, skill and energy displayed in saving the property; (3) the value of the property employed by the salvors . . . ; (4) the risk incurred by the salvors in securing the property from the impending peril; (5) the value of the property saved; and (6) the degree of danger from which the property was rescued.’’55 Compensation is limited to the value of the property saved, although the award can be far in excess of actual expenses.56 The salvage award is paid by the vessel owner, vessel operator, and cargo owners who benefited from the salvage operation.57 The salvor does not become the owner of the salved property, he merely has a lien against the ship and cargo, which can be sold to pay the award if necessary.58 The only instance in which the salvor would become the owner of the property would be in those cases where the court finds that the property has been abandoned. In those instances the property is deemed to have returned to a state of nature, and the first person to find it and reduce it to actual or constructive possession becomes its owner. This is known as the law of finds.59 In the absence of express abandonment by the property’s owner, United States courts have found abandonment only when adjudicating salvage of longlost wrecks.60 Historically, the international law principle of sovereign immunity has precluded application of salvage laws to ships owned and operated by foreign governments.61 Some nations, including the United States, have made an exception to the rule of sovereign immunity specifically for the purposes of salvage.62 Pursuant to the Public 104
The Legal Regime for Private Activities in Outer Space Vessels Act, the United States permits salvage awards to U.S. nationals and to foreign nationals on the basis of reciprocity, for services rendered to government ships. In recognition of this practice, the Brussels Convention was amended in 1967 by a protocol that extends the treaty’s application to public vessels.63 Maritime salvage law provides the best precedent for space salvage laws. The basic elements of maritime salvage law can and should be adapted to outer space. Thus, those who rescue space objects and their cargoes from peril and return them to their owners should be entitled to equitable compensation calculated on the basis of criteria similar to those used by maritime courts. If salvage services are provided pursuant to an existing duty, compensation should not be granted. And life salvors should share in compensation granted to property salvors. Space salvage should be predicated on similar notions of jurisdiction. Only identifiable objects can be the subject of national jurisdiction. Unidentifiable debris should be considered abandoned, returned to a state of nature, and subject to appropriation or destruction by the first to find it. As in recent maritime cases, inoperative space objects should be classified as abandoned only after a very long period of time has elapsed, and only if the original owner no longer displays any intent to retain ownership. Treatment of government-owned or ‘‘public’’ space objects should be similar to that found in maritime law. Any treaty that is enacted should contain a clause similar to that found in the 1989 Salvage Convention, that is, it should prohibit salvage of public objects except when a nation provides otherwise. Because nations may wish to allow salvage of some public objects while retaining absolute jurisdiction over others (e.g., defense satellites), I recommend that such countries periodically publish a list of objects available for salvage; other public objects would be off-limits and any approach to such objects would be considered a violation of national sovereignty. Dispute Resolution As noted above, the Outer Space Treaty does not provide a dispute resolution procedure other than consultation between the parties. The UN Charter, incorporated by reference in the Outer Space Treaty, permits parties to submit to the jurisdiction of the International Court of Justice, and then to have disputes decided in that 105
SPACE venue. The United States declared its acceptance of the court’s jurisdiction under this provision in 1946. However, the United States withdrew the declaration in 1985, in response to the court’s disposition of the case Nicaragua v. United States. In its formal explanation, the United States offered the following reasons for its withdrawal: (1) the majority of other nations had never accepted the court’s compulsory jurisdiction; (2) the court had been misused for political reasons; (3) continued acceptance of the court’s jurisdiction was contrary to the United States’ commitment to the principle of equal application of the law; and (4) continued acceptance of the court’s jurisdiction would endanger the United States’ vital national interests.64 Other nations share similar views, and very few states have declared themselves subject to the court’s compulsory jurisdiction.65 In fact, ‘‘[n]ot a single State with remarkable space activities has recognized the jurisdiction of the International court of Justice according to the optional clause. . . .’’66 It is therefore not surprising that states have not utilized the court to the extent that parties anticipated when the United Nations Charter was drafted. As set forth above, the Liability Convention provides dispute resolution procedures (Articles VIII–XIX). In a Comment in the Journal of Air Law and Commerce, Stanton Eigenbrodt compared the remedies offered by the Liability Convention to litigation in national (‘‘municipal’’) courts. With respect to the Liability Convention, he observed that: (1) governments may not assert claims because of political considerations, to the detriment of private parties; (2) the Claims Commission may define damages narrowly, resulting in smaller awards than one could expect in some municipal courts; and (3) diplomatic negotiations may proceed indefinitely because the Claims Commission is formed only if one of the parties so requests. Eigenbrodt contrasted these aspects of the Liability Convention with the familiar uncertainties and complexities of international litigation, which include jurisdictional questions, sovereign immunity, the doctrine of forum non conveniens, and choice of law. He concluded that municipal litigation is subject to less uncertainty than the Liability Convention procedures, and therefore ‘‘provides the most beneficial avenue for recovery for private claims.’’67 In the absence of an agreement establishing binding procedures for the field of space law, it is likely that most national governments will continue to resolve their disputes through diplomacy. It is 106
The Legal Regime for Private Activities in Outer Space unlikely, however, that private parties will rely on state governments to resolve their disputes. Private parties that have already had disputes have resorted to other venues. Many have filed claims in United States courts,68 while at least one dispute has been submitted to international arbitration.69 In the broader field of international disputes, most private parties prefer arbitration over litigation. There are many reasons for this preference. Arbitration is confidential. It allows parties to select an arbitrator that they view as impartial, who has expertise in the subject matter of the dispute. Arbitration also avoids much of the complexity and uncertainty inherent in international litigation. Typically, jurisdiction, choice of forum, and choice of law are not at issue in international arbitration, because parties have already resolved those issues, either by contract before the dispute arises or by agreement after the dispute arises.70 Finally, arbitration tends to be quicker and less expensive. International arbitration does have its drawbacks, however, particularly as a forum for space law disputes. The first problem has to do with institutions’ competence to hear space law disputes. All of the institutions listed above define the types of disputes that they will administer. In most cases arbitral organizations interpret those definitions liberally. The Interstate Commerce Commission, for example, accepts only ‘‘commercial’’ disputes, but as a practical matter, accepts virtually any dispute that is submitted for arbitration. Nonetheless, some parties may not choose to arbitrate space law issues because they do not believe that a given dispute falls within the categories of disputes eligible for arbitration. A second weakness in the current scheme is the disputants’ and arbitral forums’ unfamiliarity with the field of space law. Although many disputes arising in outer space will involve questions of contract interpretation or other issues that do not differ from terrestrial disputes, some will present questions that are unique to the field of space law. In those cases, parties to the dispute, and even the arbitral institution, may not know which arbitrators are best suited to resolve the dispute. The final problem is that arbitration does not establish the precedents that court rulings provide.71 Arbitral decisions are not published, and in some cases the arbitrator is not required to give the parties a written rationale for its decision. Consequently, even the 107
SPACE parties to the dispute may not understand how to govern their conduct in the future, to avoid further disputes. This is unfortunate, because space law is a relatively new field with many unsettled questions, where legal opinions would be especially valuable. These drawbacks can be remedied only through the voluntary action of the arbitral institutions. But the remedies are simple, and would seem to be in the institutions’ best interest, because the most accommodating organizations will receive the most business. Institutions could begin by specifically defining space law disputes as a category of claims that they will accept for arbitration. They could also develop a list of arbitrators with expertise in space law, to assist parties in selecting arbitrators. Finally, these institutions could establish a procedure for the publication of legal findings that would preserve the privacy and anonymity of the parties, while still providing nonbinding precedents for the aerospace community. Finally, to facilitate dispute resolution and put space law on a firmer footing, the United States should amend the Federal Arbitration Act of 197072 to specify that the Act applies to disputes arising in outer space. Conclusion There is much that the United States can do to encourage private activities in outer space. A treaty that further defines the extent of national jurisdiction in outer space is a predicate to any other treaties and national legislation in the field of space law. The next highest priority should be a treaty on real property rights, followed by a mining treaty and a salvage treaty, in decreasing order of importance. All of the treaties will require implementing national legislation. The real property legislation can be modeled after the Homestead Act of 1862. The mining legislation can be modeled after the General Mining Law of 1872. Salvage legislation will probably have to compile and distill the various statutes and case law precedents that have accrued over many years. In addition, the United States should update the jurisdiction provisions in 18 U.S.C. sec. 7(6) and 7(7), and exclude from taxation all profits derived from activities in outer space. Notes 1. ‘‘Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space Including the Moon and Other Celectial Bodies’’ (done January
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The Legal Regime for Private Activities in Outer Space 27), 1967, 18 U.S.T. 2410, T.I.A.S. No. 6347, 610 U.N.T.S. 205 (entered into force October 10, 1967). 2. ‘‘Convention on International Liability for Damage Caused by Space Objects’’ (done March 29, 1972), 24 U.S.T. 2389, T.I.A.S. No. 7762 (entered into force October 9, 1973). 3. ‘‘Charter of the United Nations and Statute of the International Court of Justice’’ (done June 26, 1945, entered into force October 24, 1945). 4. H. Baker, Space Debris: Legal and Policy Implications (Zoetermeer, The Netherlands: Martinus Nijhoff, 1989) pp. 61–71. 5. See, for example, Hall, ‘‘Comments on Salvage and Removal of Man-Made Objects from Outer Space,’’ in Proceedings of the Ninth Colloquium on the Law of Outer Space 135 (1967); Schwetje, ‘‘Space Law: Consideration for Space Planners,’’ 12 Rutgers Computer & Technology Law Journal 245 (1987). 6. U.S. Space Command, telephone conversation with Public Affairs Office, February 20, 1992. Notes on file with author. 7. H. Baker, supra note 4. 8. H. Baker, supra note 4. 9. Hall, supra note 5. 10. See H. Baker, supra note 4. 11. Cepelka and Gilmore, ‘‘Application of General International Law in Outer Space,’’ 36 Journal of Air Law and Commerce 58 (1970). 12. ‘‘Draft Declaration of the Basic Principles Governing the Activities of States Pertaining to the Exploration and Use of Outer Space,’’ U.N. Doc. A/AC. 105/L.2 (1962); UN Doc. A/.5182, Annex 3 (1962). 13. Office of Technology Assessment, U.S. Congress, Civilian Space Policy and Applications 349, 350 (1982). 14. ‘‘U.S. Draft Declaration of Principles Relating to the Exploration and Use of Outer Space,’’ UN Document A/C.1/881 at 23, art. 6 (1962). 15. Christol, ‘‘The Common Heritage of Mankind Provision in the 1979 Agreement Governing the Activities of States on the Moon and Other Celestial Bodies,’’ 14 International Lawyer 429 (1980). 16. Office of Technology Assessment, supra, note 13. 17. Reprinted in IV United States Space Law: National & International Regulation § II.A.22(f) (S. Gorove,ed.). 18. ‘‘Agreement Governing the Activities of States on the Moon and Other Celestial Bodies,’’ UN Document A/AC.105-L.113/Add.4 (1979). 19. ‘‘Convention on the Law of the Sea,’’ UN Document A/Conf. 62/122 (1982). 20. Dubner, ‘‘Recent Developments in the Law of the Sea,’’ 33 International Lawyer 627 (1999): 628–29. 21. ‘‘Antarctica’s Environmental Protocol,’’ 1998 Colorado Journal of Environmental Law and Policy 119 (1998). 22. Goldman, ‘‘Settlement and Sovereignty in Outer Space,’’ 22 University of Western Ontario Law Review 156 (1984): 166. 23. Judgment in the Case Concerning the Legal Status of Eastern Greenland (Den. v. Nor.), 1933 P.C.I.J., Ser. A/B, No. 53, at 45–46 [hereinafter cited as Eastern Greenland Case]. 24. 30 U.S.C. secs. 21–24, 26–30, 33–35, 37, 39–42, 47. 25. Cole v. Ralph, 252 U.S. 286 (1920). 26. Rummell v. Bailey, 7 Utah 2d 137, 320 P.2d 653 (1958). 27. Dallas v. Fitzsimmons, 137 Colo. 196, 323 P.2d 274 (1958).
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SPACE 28. Berto v. Wilson, 74 Nev. 128, 324 P.2d 843 (1958). 29. Fiske, ‘‘Pedis Possessio: Modern Use of an Old Concept,’’ 15 Rocky Mountains Mineral Institute 181 (1969): 215–16. 30. 30 U.S.C. sec. 21(a). 31. G. C. Coggins and C. F. Wilkinson, Federal Public Land and Resources Law 344, 335 (1981). 32. 30 U.S.C.A. sec. 22 (emphasis added). 33. See, for example, 36 C.F.R. Part 228 (Forest Service regulations); 43 C.F.R. Groups 3000–3800 (Bureau of Land Management regulations); 43 U.S.C.A. secs. 270–312, 315b, 315i, 661, 664–65, 687b–2, 869, 869–1, 931c, 934–39, 942–1 through 942–9, 943–44, 946–59, 961–70, 1701–02, 1711, 1722, 1731–48, 1753, 1761–71, 1781–82 (Federal Land Policy and Management Act of 1976); 30 U.S.C.A. secs. 601, 603, 611–15 (Surface Resources Act of 1955); 30 U.S.C.A. secs. 521–31 (Multiple Mineral Development Act); 30 U.S.C.A. secs. 1201, 1202, 1211, 1221–29, 1231–43, 1251–79, 1281, 1291–1309, 1311–16, 1321–28 (Surface Mining Control and Reclamation Act of 1977). 34. 30 U.S.C.A. secs. 530, 1001–25 (Geothermal Steam Act of 1970). 35. Coggins and Wilkinson, supra, note 31. 36. 30 U.S.C.A. secs. 351–59. 37. Coggins and Wilkinson, supra note 31, at 397–400. 38. Seanor, ‘‘$1 Billion Ruling,’’ American Bar Association Journal (October 1990) 22. 39. Seanor, ‘‘The Case with the Midas Touch,’’ American Bar Association Journal (May 1990) 51. 40. Columbus-America Discovery Group, Inc., v. The Unidentified, Wrecked and Abandoned Sailing Vessel, S.S. Central America, In Rem, 1989 AMC 1955, 1956 (1989); ibid. at 53–54. 41. Columbus-America Discovery Group, Inc. v. The Unidentified, Wrecked and Abandoned Sailing Vessel, In Rem, 742 F. Supp. 1327, 1332 (E.D.Va. 1990); Frantz, ‘‘Salvage of Steamer’s Gold Hits Rough Seas,’’ Los Angeles Times (April 3, 1990): A1. 42. Seanor, supra, note 38, at 23. 43. Frantz, ‘‘Salvage of Steamer’s Gold Hits Rough Seas,’’ Los Angeles Times (April 3, 1990): A1. 44. Ibid., at A16. 45. Frantz, supra note 43, at A16, Col. 1–A17, col. 1; Seanor, supra, note 38, at 23. 46. Merriam-Webster’s Ninth New Collegiate Dictionary (Springfield, Mass.: MerriamWebster, Inc., 1988). 47. Baker, supra, note 4; DeSaussure, ‘‘An International Right to Reorbit Earth Threatening Satellites,’’ II Annuals of Air & Space Law (1978): 383. 48. DeSaussure, for example, ‘‘The Application of Maritime Salvage to the Law of Outer Space,’’ in Proceedings of the Twenty-Eighth Colloquium on the Law of Outer Space (1986): 127; note, ‘‘Space Salvage: A Proposed Treaty Amendment to the Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Space,’’ 26 Virginia Journal of International Law (1986): 965; Wanland, ‘‘Hazards to Navigation in Outer Space: Legal Remedies and Salvage Law,’’ 1 Journal of AstroLaw (1985): 1. 49. U.S. Space Command, supra, note 6. 50. Smith and Lopatkiewicz, ‘‘Satellite Recovery: A Lawyer’s Perspective,’’ 2(3) Air & Space Law (1985): 1. 51. The Blackwall, 77 U.S. 1 (1868), quoted in Wanland, supra note 48.
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The Legal Regime for Private Activities in Outer Space 52. M. Norris, 3A Benedict on Admiralty, 24, 157–58 (7th ed. 1991), citing 46 U.S.C. sec. 729; see also ‘‘Convention for the Unification of Certain Rules with Respect to Assistance and Salvage at Sea,’’ done Sep. 23, 1910, 37 Stat. 1658 (1913), T.S. 576, 212 C.T.S. 187, 1 Bevans 780; ‘‘International Convention on Salvage,’’ done April 28, 1989, reprinted in M. Norris at Appendix B-20. 53. The Clarita and the Clara, 90 U.S. 1 (1874). 54. See, for example, ‘‘Convention for the Unification of Certain Rules with Respect to Assistance and Salvage at Sea,’’ supra, note 52. 55. The Blackwall, supra, note 51. 56. DeSaussure, ‘‘Maritime and Space Law, Comparisons and Contrasts (An Oceanic View of Space Transport),’’ 9 Journal of Space Law (1981): 93. 57. R. Bender, Unpublished class notes, Southwestern School of Law, Los Angeles, Calif., pp. 601–610 (1990, copy on file with the author). 58. M. Norris, supra, note 52. 59. M. Norris, supra, note 52. 60. See, for example, Treasure Salvors, Inc. v. Unidentified, Wrecked and Abandoned Sailing Vessel, 408 F.Supp. 907, 1976 A.M.C. 703 (S.D. Fla. 1976); aff’d 569 F.2d 330, 1978 A.M.C. 1404 (5th Cir. 1978). 61. Schwetje, ‘‘Space Law: Considerations for Space Planners,’’ 12 Rutgers Computer & Technology Law Journal (1987): 245; see also, for example, Foreign Sovereign Immunities Act of 1976, 90 Stat. 281 (1976), 28 U.S.C. sec. 1330 et seq. (1988). 62. Hall, ‘‘Comments on Salvage and Removal of Man-Made Objects from Outer Space,’’ in Proceedings of the Ninth Colloquium on the Law of Outer Space (1967): 135. 63. Schwetje, supra, note 61. 64. Lutz, ‘‘Perspectives on the World Court, the United States, and International Dispute Resolution in a Changing World,’’ 25 International Law (1991): 675, 678, and citations therein. 65. H. L. Van Traa-Engelman, Commercial Utilization of Outer Space—Legal Aspect (1989): 253. 66. Mangoldt, ‘‘Methods of Dispute Settlement in Public International Law,’’ in Settlement of Space Law Disputes: The Present State of the Law and Perspective of Further Development (1980): 15, 17 (K. H. Bockstiegel, ed.), cited in idem. 67. S. Eigenbrodt, ‘‘Out to Launch: Private Remedies for Outer Space Claims,’’ 55 Journal of Air Law and Commerce (1989): 185, 219–21. 68. See II United States Space Law: National and International Regulation sec. 1.A.5 (S. Gorove, Ed.). 69. K. H. Bockstiegel, ‘‘Developing a System of Dispute Settlement Regarding Space Activities,’’ Proceedings of the 35th Colloquium on the Law of Outer Space (1992). 70. De Ly, ‘‘The Place of Arbitration in the Conflict of Laws of International Commercial Arbitration: An Exercise in Arbitration Planning,’’ 12 Northwestern Journal of International Law and Business (1991): 48, 55, 80. 71. Rutherford, ‘‘Back to the Future,’’ 140 New Law Journal 1601 (1990): 1600. 72. 9 U.S.C. sec. 201–208 (1988), enacted July 31, 1970 (84 Stat. 692).
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7. Proposal for a Multilateral Treaty Regarding Jurisdiction and Real Property Rights in Outer Space Wayne White Introduction At the Turin Colloquium on the Law of Outer Space in 1997, this author presented a paper entitled ‘‘Real Property Rights in Outer Space.’’1 That paper proposed that interested states establish a form of property rights predicated upon jurisdiction rather than territorial sovereignty, which would be consistent with the terms of the 1967 Outer Space Treaty. At the Amsterdam Colloquium in 1999, the author presented a paper entitled ‘‘Implications of a Proposal for Real Property Rights in Outer Space,’’2 which further explained the author’s ideas. This paper will set forth the text of a treaty that would implement the author’s proposal. The proposed treaty would also further define the jurisdiction conferred under Article VIII of the Outer Space Treaty, with the objective of facilitating the peaceful settlement and development of outer space. Interested states and space law commentators should consider the following draft treaty as a beginning point for discussion and further understanding of the author’s proposal for real property rights in outer space. Convention on Jurisdiction and Real Property Rights in Outer Space: Preamble Recognizing the common interest of all mankind in furthering the exploration, settlement, and economic development of outer space for peaceful purposes, Noting the great importance of the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies, which is commonly known as the Outer Space Treaty, and which 113
SPACE Provides that outer space, including the Moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means, and which Provides that a State Party to the Treaty on whose registry an object launched into Outer Space is carried shall retain jurisdiction and control over such Object, and over any personnel thereof, while in outer space or on a celestial body, Recognizing that the Outer Space Treaty permits exploitation and private appropriation of resources, Desiring to further define the extent of States’ jurisdiction with respect to outer space and celestial bodies, and Have agreed on the following: Definitions 1. For the purposes of this Convention (a) the term ‘‘celestial bodies’’ means all natural bodies in the Universe other than the planet Earth; (b) the term ‘‘outer space’’ means all areas other than celestial bodies which are kilometers or more above sea-level on the planet Earth; (c) the term ‘‘space facility’’ means a physical structure or device located in outer space or on a celestial body which remains in one location and is used for any peaceful purpose. A structure or device which is located in outer space and orbits around a celestial body or a point in space shall be considered as ‘‘remaining in one location’’ so long as it remains within certain orbital parameters, as set forth below; (d) the term ‘‘residential space facility’’ means a structure located in outer space or on a celestial body whose primary purpose is to provide shelter, life support, and living space for natural persons; (e) the term ‘‘scientific space facility’’ means a structure located in outer space or on a celestial body whose primary purpose is to further the purposes of scientific investigation and/or exploration of the Universe; (f) the term ‘‘commercial space facility’’ means a structure located in outer space or on a celestial body whose primary purpose is the sale of goods or services to other entities; 114
Proposal for a Multilateral Treaty (g)
the term ‘‘industrial space facility’’ means a structure located in outer space or on a celestial body whose primary purpose is the production of products for use or consumption by other entities; (h) the term ‘‘mining space facility’’ means a structure located in outer space or on a celestial body whose primary purpose is to facilitate the removal and processing of material resources; (i) the term ‘‘space vehicle’’ means a device which is designed to transport people and material: (i) from celestial bodies to outer space, (ii) through outer space, (iii) from one point to another on the surface of a celestial body, (iv) from outer space to the surface of a celestial body, or any combination thereof; (j) the term ‘‘space object’’ means any device or structure which does not remain in one location, or a space facility or a space vehicle, as defined above; (k) the term ‘‘State of registry’’ means a State on whose registry a space object is carried; (l) the term ‘‘Owner’’ means the legal owner(s) as defined and determined by any treaties, laws, and regulations of the State of registry; (m) the term ‘‘foreign national’’ means a citizen of a State other than the State of registry; (n) the term ‘‘abandonment’’ means (i) cessation of regular or periodical use of a structure, or (ii) cessation of operation and/or loss of control of a device without taking prompt, overt action to reestablish operation and/or control over said device, or (iii) an Owner’s express public declaration that the Owner has abandoned a structure or device; (o) the term ‘‘Geosynchronous Orbit’’ means the orbit described by the following parameters: period 1436.1 minutes, inclination 0°, apogee ⳱ perogee ⳱ 35,786 kilometers. Jurisdiction 2. A State Party to this Treaty shall retain jurisdiction and control over: (i) the space objects on its registry; (ii) safety zones of 500 meters around the residential or scientific space facilities on its registry; (iii) safety zones of 1000 meters around commercial, 115
SPACE
3.
4.
5.
6.
7.
116
industrial, and mining facilities on its registry; (iv) safety zones centered upon and surrounding areas of ongoing, significant activities which are not conducted in the vicinity of space facilities, with a circumference of 1000 meters for commercial, industrial, and mining activities, and a circumference of 500 meters for residential and scientific activities; and (v) any natural persons within said space objects and safety zones. A State party to this Treaty shall exercise jurisdiction and control over space objects on other States’ registries which are within its safety zones, and the natural persons within said objects, only to the extent necessary to protect the safety of space objects and natural persons. States may enact and enforce laws and regulations which govern their citizens while they are in outer space, and space objects on their registry, so long as said laws and regulations do not violate any treaties or other agreements to which the State is a party, or any principles of customary or general international law. Entities may occupy and use locations in outer space on a firstcome, first-served basis, so long as said occupation and use will not interfere with other entities’ activities. The Owner of a newly constructed space object shall promptly register said space object with an appropriate State in accordance with any treaties, laws, and regulations which govern the Owner. Owners of space objects may transfer ownership of their space objects at any time, so long as they comply with any applicable treaties, laws, and regulations of the State of registry. Any Owner who or which transfers ownership of a space object shall promptly notify the State of registry that ownership of the space object has been transferred, and shall provide said State with the information necessary to identify and contact the purchaser. The purchaser of a space object shall promptly register said object with an appropriate State in accordance with any treaties, laws, and regulations which govern the purchaser. In the event that the purchaser registers the space object with a State which is different from the State of registry of the seller of the space object, the purchaser shall promptly notify the seller’s State of registry that registration of the object has been transferred, and the identity of the State on whose registry the space object will be carried in the future.
Proposal for a Multilateral Treaty 8. The State of registry shall retain jurisdiction and control over a space object after the Owner of a space object abandons said space object, and until such time as an entity either purchases or otherwise legally assumes control and/or occupation of the space object and registers said object with another State. 9. Abandonment of a space object by its Owner shall not negate or affect any international liability to which the State of registry may be subject, pursuant to the terms of the Outer Space Treaty, the Convention on International Liability for Damage Caused by Space Objects,3 general principles of international law, customary international law, or any other applicable treaties, laws, or regulations. 10. In the event that a natural person allegedly commits an act in a space object or in a safety zone which constitutes a crime under the laws of the State of registry, and said natural person is a foreign national, the State of registry shall consult with the foreign national’s government. If the foreign national’s government does not provide assurances that it will prosecute the natural person on charges commensurate to those which are justified under the laws and regulations of the State of registry, then the State of registry may prosecute the natural person in its court(s) pursuant to its own laws and procedures. Real Property Rights 11. Private, nongovernmental Owners who or which inhabit, maintain, and/or operate a space facility and/or engage in ongoing, significant activities in a given area for a period of at least one year shall be entitled to formal recognition and registration of the following rights, which shall be designated ‘‘real property rights’’: (a) the right to exclude natural persons and legal entities from the space facility and any safety zone(s); (b) the right to be free of interference from others; (c) the right to control the activities of all natural persons and legal entities within the space facility and any safety zone(s); (d) the right to direct the activities of space vehicles and the natural persons inside such vehicles within the space facility and any safety zone(s); 117
SPACE (e) the exclusive right to appropriate resources within the space facility and any safety zone(s); (f) the right to sell real property rights to other natural persons or legal entities. 12. The real property rights which States confer upon Owners shall be subject to the following limitations: (a) If the Owner of a space facility or safety zone which is not in the vicinity of a space facility stops using the space facility or safety zone for peaceful purposes, the Owner’s real property rights shall immediately terminate. (b) If the Owner of a space facility abandons the space facility for a period of two years or more, the Owner’s real property rights shall immediately terminate. (c) If the Owner of a space facility which is in orbit around a celestial body or point in space allows the space facility to deviate, for a period of one month or more, more than % from any of the orbital parameters of period, inclination, apogee, and perogee which are listed in the real property rights registry, the real property rights shall immediately terminate. (d) Owners may not establish property rights over an area which would prevent other natural persons or legal entities from having free access to outer space and celestial bodies. (e) The Owner of a space facility shall have only the right to direct the activities of space vehicles which are carried on the registry of a State other than the State of registry of the space facility, and the natural persons inside such vehicles, to the extent necessary to protect the safety of other space objects and natural persons within the space facility and its related safety zone. (f) Owners shall not have the right to exclude from the space facility and its related safety zone natural persons who come to inspect the space facility, on the basis of reciprocity, pursuant to Article XII of the Outer Space Treaty. (g) Any State Party to this Treaty may terminate the property rights of an Owner whose space facility is carried on said State’s registry, provided said State terminates the property rights pursuant to duly enacted laws or regulations, or duly ratified treaties, and the Owner has received due process of law including the right to be heard. 118
Proposal for a Multilateral Treaty 13. Each State Party to this Treaty shall establish a registry of real property rights, and shall enact laws and, if deemed necessary, regulations which set forth the procedures which Owners of space facilities must follow in order to establish, register, and obtain documentation of real property rights. States shall require Owners of space facilities which orbit around celestial bodies or points in space to provide the registry with the orbital parameters of the space facility, including period, inclination, apogee, and perogee. States’ registries of real property rights shall be openly and easily available to other States and to the general public, free of charge. 14. States Party to this Treaty shall not confer real property rights upon an Owner which would prevent other natural persons or legal entities from having free access to outer space or celestial bodies. 15. Real property rights which States confer pursuant to this Treaty shall not provide the basis for any claims of territorial sovereignty. States are prohibited from exercising territorial sovereignty in outer space and on celestial bodies. 16. States Party to this Treaty are prohibited from conferring property rights upon Owners of space facilities which are located in the Geosynchronous Orbit. Resolution of Legal Issues 17. In order to provide Owners with greater certainty and less risk when legal issues arise, and to permit Owners to avoid legal disputes whenever possible, States Party to this Treaty are encouraged to resolve legal issues which arise in outer space or on celestial bodies by first considering analogous terrestrial treaties, laws, regulations, and case law precedents before enacting new national laws. For example, (a) resolve legal issues regarding real property rights by first looking to terrestrial real property law; (b) resolve legal issues regarding space vehicles which travel in outer space by first looking to terrestrial maritime law; (c) resolve legal issues regarding space vehicles which travel only on the surface of celestial bodies by first looking to the law governing terrestrial ground transportation; 119
SPACE (d) resolve legal issues regarding overflight of space facilities by first looking to terrestrial air law; (e) resolve legal issues regarding safety zones by first looking to terrestrial law which governs safety zones around facilities on continental shelves; (f) resolve legal issues regarding criminal jurisdiction by first looking to terrestrial laws which govern international criminal jurisdiction, extradition, and conflict of laws; (g) resolve legal issues regarding personal injury and damage to space objects by first looking to terrestrial laws which govern those issues. Consultation 18. States Party to the Treaty shall confer five years from the date this Convention enters into force, and every five years thereafter, to determine whether the following quantitative provisions of this Treaty need to be revised pursuant to Treaty amendment: (a) the physical extent of safety zones for residential and scientific, and commercial, industrial, and mining space facilities; (b) the period of inhabitation, operation, or maintenance of a space facility which is necessary to establish and register real property rights; (c) the period of abandonment of a space facility necessary to terminate real property rights; (d) the percentage of deviation from orbital parameters necessary to terminate real property rights. 19. The Parties may consult via a secure form of electronic communication. 20. In the event that a simple majority agree that one or more of the quantitative provisions need to be revised, the Parties shall convene a meeting to determine the revised quantitative figures. Each State Party to the Treaty shall be permitted to send one voting representative to such a meeting. After full and complete discussion of relevant facts and issues, the States’ voting representatives shall determine the revised quantitative figures by simple majority vote. Each State shall bear the cost of sending their representative(s) to such a meeting. The States participating in the meeting shall equally share the cost of the meeting, regardless of which State hosts the meeting, unless the host State voluntarily agrees to bear such costs. 120
Proposal for a Multilateral Treaty 21. In the event that States’ representatives vote to change one or more quantitative provisions of this Treaty, such changes shall take effect one year from the date of the vote, or at such later time as the parties may agree. Any changes in the quantitative provisions may serve to increase the rights of entities that already have property rights which have been conferred in accordance with this Treaty, but such changes shall not under any circumstances diminish or abrogate the rights of entities that own property rights on the date when States’ representatives vote to change the quantitative provisions. Dispute Resolution 22. In the event of a dispute between two or more Owners of space facilities who have registered real property rights with different States pursuant to this Treaty, the Owners are first encouraged to seek resolution of their disputes through alternative dispute resolution methods such as international conciliation, mediation, or arbitration. If such Owners are unwilling to or cannot resolve their disputes through private dispute resolution, the Owners may ask their respective States of registry to convene an arbitration panel to resolve the dispute. Each State of registry shall select one arbitrator. Those arbitrators shall then select one or two additional arbitrators by simple majority vote, such that the total number of arbitrators constitutes an uneven number. The arbitration panel shall then hear the facts and issues presented by the Owners and their legal counsel and shall decide the outcome of the dispute within a reasonable time. General Provisions 23. This Treaty shall not provide the basis for the formation of any organization, either temporary or permanent, which would administer the terms of the Treaty and/or determine the quantitative figures set forth in the Treaty. It is the intention of States Party to this Treaty that the costs of administering the real property regime shall always remain minimal, so that no State will be prevented from becoming a party to the Treaty because of prohibitive costs. 24. This Treaty shall be open to all States for signature. Any State which does not sign this Treaty before its entry into force in 121
SPACE accordance with article 23 of this Convention may accede to it at any time. 25. This Treaty shall be subject to ratification by signatory States. 26. This Treaty shall enter into force upon the deposit of instruments of ratification by two States. Discussion and Comment Preamble, paragraph 5: Space law commentators seem to agree that private entities can appropriate materials removed from celestial bodies and outer space.4 Preamble, paragraph 7: Space law must acknowledge and accommodate the increasing role of private entities in space activities. Paragraph 1(b): A treaty on jurisdiction is an appropriate place to finally resolve the issue of delimitation of outer space. Paragraph 1(c): The Lagrangian points which are located between the Earth and the Moon are examples of equilibrium points in space around which humans may someday orbit space objects. Paragraph 1(l): The term ‘‘Owner’’ would include natural persons, sole proprietorships, partnerships, limited liability companies, corporations, nonprofit and not-for-profit organizations, and governmental entities. Paragraph 11: The terms of this Treaty in the section entitled Jurisdiction apply to all Owners, including governmental entities; the terms of this Treaty in the section entitled Real Property Rights apply only to private, nongovernmental entities. Pursuant to Article VIII of the Outer Space Treaty, governmental entities will still have all of the same rights as private Owners, but in a less formal sense. States are prohibited by Article II of the Outer Space Treaty from appropriating areas of outer space and celestial bodies, and therefore, in the 122
Proposal for a Multilateral Treaty author’s opinion, cannot confer real property rights on governmental entities. Paragraph 11(e): Although entities may not claim ownership of mineral resources ‘‘in place,’’ once they have been removed (i.e., mined) then they are subject to ownership.5 Paragraph 12(a): See Article IV of the Outer Space Treaty, which says, among other things: ‘‘The moon and other celestial bodies shall be used by all States Party to the Treaty exclusively for peaceful purposes.’’ Paragraph 12(d): See Article I of the Outer Space Treaty, which says, among other things: ‘‘Outer Space, including the moon and other celestial bodies, shall be free for exploration and use by all States without discrimination of any kind, on the basis of equality and in accordance with international law, and there shall be free access to all areas of celestial bodies.’’ Paragraph 12(g): The term ‘‘due process of law’’ has a very well-defined meaning under United States law. The author assumes that most other nations’ laws have a similar concept, although the term ‘‘due process of law’’ may not be the language which will be clearly understood by the majority of States. The author is therefore open to suggestions regarding better terminology. Paragraph 16: The geosynchronous orbit has become crowded with communications satellites in certain areas, and presents unique technical problems with respect to satellite spacing and radio frequency interference. The International Telecommunications Union addresses these issues by allocating orbital positions and frequencies. Therefore real property rights are inappropriate in this orbit. Conclusion States must do everything they can to encourage space development and settlement. One way they can do that is by protecting the interests of those who risk their lives and investments in outer space. 123
SPACE Continuing private investment in space development will ultimately allow us to move some polluting industries off the planet, and to develop unique products, thereby improving our quality of life. And settlement of outer space will ensure the survival of our species in the event of a global catastrophe. This draft treaty encourages development and settlement, while balancing the interests of large States and small States, developed and undeveloped States, and governmental and private interests. The author hopes that States will agree, and enter into a treaty substantially in the form of this draft treaty. Notes Copyright © 2000 by Wayne N. White, Jr. Published by American Institute of Aeronautics and Astronautics, Inc. with permission. Released to AIAA in all forms. Presented at the Forty-Third Colloquium on the Law of Outer Space, International Astronautical Congress, Rio de Janeiro, Brazil, October 4, 2000. 1. Wayne N. White, Jr. ‘‘Real Property Rights in Outer Space,’’ Proceedings, Fortieth Colloquium on the Law of Outer Space (IISL, 1998): 370. 2. ‘‘Implications of a Proposal for Real Property Rights in Outer Space,’’ Proceedings, Forty-Second Colloquium on the Law of Outer Space (IISL, 2000). 3. ‘‘Convention on International Liability for Damage Caused by Space Objects,’’ done March 29, 1972, 24 U.S.T. 2389, T.I.A.S. 7762, 961 U.N.T.S. 187 (entered into force October 9, 1973). 4. For example, Christol, ‘‘The Common Heritage of Mankind Provision in the 1979 Agreement Governing the Activities of States on the Moon and Other Celestial Bodies,’’ International Lawyer 14 (1980): 429, 471. 5. Cepelka and Gilmore, ‘‘Application of General International Law in Outer Space,’’ Journal of Air Law Commerce 36 (1970): 30, 38–39; Christol, supra note 4.
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PART THREE:
PRIVATE SPACE EFFORTS
8. Structure of the Space Market: Public and Private Space Efforts Tidal W. McCoy Our new century is shaping up to be a time of challenge and change in space transportation. Decisions that will be made by industry, as well as government, over the next few years, will decide whether the future holds modest increases in launch performance or whether it will lead to a revolution in the launch industry. Can new legislation lead to a variety of commercially designed and developed vehicles that will open low Earth orbit (LEO) to new business opportunities as well as continue to support the growing geosynchronous Earth orbit (GEO) markets? What will the commercial businesses of the future be and how do we achieve growth in the space industry? Overview of the American and International Space Launch Market In the year 2001, 15 commercial launches took place worldwide. Of these, five were from United States launchers, licensed by the Federal Aviation Administration (FAA) office of Commercial Space Transportation. A total of 59 orbital launches were flown internationally during the year, down from 86 in 2000 and 78 in 1999. Unfortunately, the United States portion of this global launch market is declining at a more alarming rate. In 2001 the United States had about one-third of the total commercial launches flown. This represents a significant drop since 2000 and 1999, when the United States had 35 and 38 percent, respectively. In 1998 that portion was 54 percent, more than half. There are several reasons for this decline. Partly, the situation is a result of the difficult and competitive business environment experienced by the medium lift market that the United States traditionally dominated. Certainly not helping was the cancellation and failure of many of the nongeosynchronous or LEO systems, such as 127
SPACE ICO Global Communications Ltd and Iridium LLC, which were setting up satellite-based global communications systems that proved too costly, and the hand receivers too large, to compete with the emerging cell phone industry. Five Iridium and seven ICO launches intended for American launch providers were canceled in 2000. In 2001 the market did not recover, and the economic recession in the United States served to cool growth in telecommunications services. The economic downturn was further exacerbated by the events of September 11th. A drop in medium lift launches was coupled with a growing tendency to launch heavier payloads on larger vehicles to higher orbits. Most recently the heavier GEO market has been served by the Russian Proton and the European Ariane family of vehicles— both having good strings of launch successes, although an Ariane 5 launch failed in the summer of 2001. Though the number of launches was disappointing, the year 2001 showed an increase in U.S. commercial launch contracts to GEO. Of 23 commercial GEO satellite launch contracts issued during 2001, American firms won 15. Boeing and International Launch Services (ILS) signed more contracts in 2001 than in the previous two years. ILS won 10 contracts. Sea Launch won 4, Boeing won one, and Arianespace won 10. The entry of the new Delta IV and Atlas V launch vehicle families gave launch customers more flexibility in their choices, according to analysts. The two largest American launch companies, Boeing and Lockheed Martin, had perfect launch records in 2001. Orbital Sciences flew one failed Pegasus and one failed Taurus. In 2000, a Sea Launch Zenit failed to orbit an ICO communications satellite. The anomaly was a result of a software failure. ILS, a joint Lockheed Martin/Russian venture, is scheduled to launch the first Atlas V rocket in June 2002, and Boeing’s Delta IV is also set to make a maiden flight. Additional Atlas V and Delta IV launches are planned during the year, both vehicles from modern launching complexes at both Vandenberg Airbase in California and Cape Canaveral Air Station in Florida. With the dawn of this new era of launchers, the older Titan IV and Delta III are headed to phaseouts, beginning in 2002 and ending the next year. The last Titan IV vehicle was completed in 2001 and is now in storage as a backup, should the new launchers fail or be delayed. Although the United States lagged in the commercial launch sector, it did post high numbers in the noncommercial launch (NCL) 128
Structure of the Space Market: Public and Private Space Efforts category in 2001, for the Department of Defense and the National Aeronautics and Space Administration (NASA) Shuttle missions. The United States launched six Shuttle missions in 2001, and flew seven Delta II missions, five for NASA and one for the Air Force. A NASA Pegasus launch failed in 2001. In all, there have been some 55 U.S. launches for NASA and the military over a four-year period, averaging about 13 per year. A positive sign for the worldwide launch industry was putting the first tourist into space. Other launches included deployments of satellites that will provide direct radio broadcasting services in the United States. Using special receivers in their cars, subscribers to Sirius Satellite Radio will be able to receive direct satellite radio broadcast. XM Satellite Radio, Sirius’ main competition, launched the second of two satellites in the middle of 2001; the satellites are appropriately named Rock and Roll. In the commercial world market, the Europeans have continued to dominate in launch revenue. The highly successful Ariane launch family yielded $1.4 billion of the $2.7 billion global revenues in 2000, the last year for which figures were available. The Russian Proton and Soyuz vehicles netted $671 million and the American commercial launch revenues were $370 million in 2000. A total of 117 spacecraft were launched on 85 vehicles in the year 2000. Of these, 41 percent were for commercial purposes and 58 percent were for governmental or scientific purposes.1 The Economic Impact of the Space Transportation Industry In February 2001 the FAA Office of Commercial Space Transportation released a study stating that the total economic activity of commercial space transportation was $61.3 billion (Figure 8-1). The figure included $30.9 billion generated by the manufacture of satellites and ground equipment. The report went on to say that satellite services generated $25.8 billion in economic activity.2 That ‘‘impact’’ figure went a step further to show the financial transactions that ripple throughout the economy, to include what distribution industries such as truck and air transportation add to the economic activity. Distribution industries were responsible for economic activity of $874 million because of commercial space transportation and other enabled industries. 129
SPACE
Figure 8-1 TOTAL IMPACTS ON THE U.S. ECONOMY GENERATED BY COMMERCIAL SPACE TRANSPORTATION AND ENABLED INDUSTRIES, 1999 Industry
Economic Activity ($000)
Earnings ($000)
Employment (Jobs)
Launch vehicle manufacturing Satellite & ground equipment manufacturing Satellite services Remote sensing Distribution industries
$
3,515,978 30,869,469 25,818,414 235,879 873,971
$
1,071,722 8,858,293 6,150,105 85,292 265,780
28,617 270,448 186,954 2,820 8,506
Total Impact
$
61,313,711
$
16,431,192
497,346
SOURCE: Associate Administrator for Commercial Space Transportation (AST), The Economic Impact of Commercial Space Transportation on the U.S. Economy, February 2001, p. 6.
The report concluded that the amount of the total economic impact for all of those activities was more than four times NASA’s 2001 budget of $14.8 billion. The amount generated by satellite services alone was more than twice the amount of the Department of Defense’s 1999 nonclassified space budget of $12.6 billion. The result of economic activity in the commercial space transportation and enabled industries was new jobs. Employees in all industry groups earned a total of $16.4 billion in salaries and wages. Commercial space transportation and enabled industries produced over 497,000 total jobs throughout the economy. The largest single customer for launch vehicles remains the U.S. government, which was expected to purchase about $5.5 billion of vehicles, technologies, and related services in 2001. Like much of the American aerospace industry, the American launch sector has consolidated considerably during the past 10 years. In 1990, a number of American companies had active space launch programs, with additional start-ups also pursuing vehicle development projects. Today, there are only three American launch companies—Boeing, Lockheed, and Orbital—with operational systems, with another three or four domestic start-ups trying to break into the market. Industry analyst David Thompson observes that the three remaining American rocket suppliers have carried out about ‘‘50% of the 130
Structure of the Space Market: Public and Private Space Efforts 375 launches conducted worldwide in the last 31⁄2 years. During this time, the American launch industry achieved superior reliability to Russian, Ukrainian, Japanese, and Chinese suppliers, but recently has produced a somewhat weaker record than the Europeans.’’3 There are now more than 16 types of expendable launch vehicles (ELVs) that supply the worldwide launch market and at least 12 new ELVs will enter the commercial market within the next four years. Also, two new reusable launch vehicles (RLVs) probably will be introduced into the commercial and government market in the near future. Civil Space and Decreasing Program Funds The major presence, by far, in the civil space area is NASA. Its present annual budget appropriation is about $14.8 billion, of which all but about $1 billion is used to acquire space infrastructure and to conduct space activities. Like any other large active organization NASA has its organizational, program, and personnel difficulties. But, in a few respects, NASA’s difficulties are unusual. In spite of much of the general public’s clear and continuing interest in civil space in general, NASA’s purchasing power has been allowed to decrease in each of the last half-dozen years, by a total of some 20 percent adjusted with inflation. This slow, corrosive decrease, which continued throughout the 1990s, may have turned the corner with the new administration. President Bush’s current NASA budget for 2002 is $14.8 billion. The 2003 numbers were expected to be only slightly larger, not much above the inflation index. To some extent the past reduction is traceable to the public’s interest in seeing a smaller federal establishment, and to concerns over large continuing federal deficits. But federal research and development (R&D) activities in general have continued to be reasonably well supported by public funds. Yet, adjusted for inflation, NASA has been doing poorly relative to other such federal R&D agencies. For instance, during the past three years appropriations made in support of the National Institutes of Health (NIH), which conducts an R&D program roughly comparable in size to that of the NASA space program, have increased, effectively, by 10 percent, while NASA’s have decreased by 7 percent. If the public had supported 131
SPACE NASA as well as it did the NIH over the recent interval, NASA’s purchasing power would be greater by more than $2 billion.4 The conclusion reached by many of our civil space leaders regarding this clearly negative absolute and relative trend is that the electorate is insufficiently and/or inaccurately informed about the space program’s activities and value. Perhaps this is the case to some extent. A more persuasive case can by made for a different reason, when a funding decrease occurs in a federal program over a long time, especially when the media and the public are basically interested and the program is well enough known to enough people. That reason is that people judge the program’s value relative to other programs that also depend on federal discretionary funding. It appears that the space program is simply not perceived to be as valuable to much of the general public as it once was and as other fiscally competitive federal activities have become. NASA officials have observed the large and rapidly growing private sector presence in space-related information business activities. They have noted the scientific advances being made in the human health and medical areas. Both areas are widely and highly regarded for their economic and social value. As a result NASA officials have given more attention to incorporating such health- and medicalrelated ventures in the civil space program. But they find doing so to be difficult, and the magnitude of those efforts has been small. The Politically Vulnerable ISS For NASA and many in the civil space community in the 1980s, once the program to acquire the Space Transportation System, the Shuttle, was well under way, the ‘‘next logical step’’ into space became that of a permanent space station program. A complex would be created in LEO in which astronauts would reside and work— together they would become a ‘‘permanent presence in space’’ for the United States just as the Mir had already become for the then–Soviet Union. In time ‘‘our’’ space station became an International Space Station (ISS), involving Russia and many other nations. It was expected to be in full operation by the year 2005, though huge budget overruns now threaten its capacity. 132
Structure of the Space Market: Public and Private Space Efforts Obtaining initial federal authorization for the U.S. portion of the ISS proved to be difficult. Retaining that authorization and continuing to receive the appropriations required for the NASA station design continue to be difficult. The acquisition cost for the American portion alone is now expected to be nearly $36 billion over its planned decade of use; its total public cost (inclusive of acquisition, operations, and maintenance costs but exclusive of the cost of funds) could approach $100 billion.5 Under these objective circumstances, many of those who favor ISS see political considerations rather than research or other directly space-related needs as supporting the program’s continuance. Specifically, the ISS program provides a great many public-sector and related private-sector jobs; cooperation with the Russian space community is seen to be an important national security benefit; and the ISS’s support program should provide a vital market for the beginnings of commercialization activities in the human space flight area. But any program as large, novel, and complex as that of the ISS can be expected to experience serious difficulties. As the difficulties become publicized outside of the space community, pressure against continuing the program will increase from those who see better uses for discretionary federal funds. There is the clear possibility that the jobs and Russian foreign policy justifications for continuing the station will prove to be inadequate. It has been suggested that the American portion of the ISS and the NASA program that will support its operation and maintenance offer a fine opportunity for the United States to learn how to privatize human space activities as a necessary prelude to the early conduct of true profit-seeking commercial activities there. If this could be brought about, it would help justify continuing the station program at today’s level and pace. Broadly speaking, America’s civil space program should address the political, economic, and social interests of the United States and its space commerce goals. Many in the civil space community would say that over the longer term, America’s and the world’s civil spacerelated interests would be well served by seeing astronauts explore the solar system and establish human settlements established on its bodies—starting with the ISS and perhaps moving beyond to the Moon and Mars. 133
SPACE The general public can well express interest in the performance of most deep space probes and the Hubble space telescope, and yet ask NASA, America’s aerospace industry, and its space-interested universities, ‘‘What have you done for me lately in the human space flight area to warrant its being given such a great public sum?’’ A fundamental reason for initial public support for NASA’s requests beyond the Apollo program was the clear and important success of this national security activity at a time of unusual American public uncertainty during the Cold War. But that was decades ago. Thus, both President George W. Bush and NASA have their work cut out for them as they seek rationales and justifications for current and future high-ticket programs. The strains on the federal budget caused by the war on terrorism will further complicate planning the nation’s future space investments. Growth and Trends in the Private Space Sector Over the past five years the most noteworthy trend was the increase and then sharp decrease in commercial launches to LEO. Although the actual launches and deployments of the large Iridium and Globalstar constellations were huge successes, the failure of the business models and markets financially supporting those systems resulted in a near abandonment of future LEO constellations, through no fault of the launch industry. Within three decades space information—satellite communications, navigation, position fixing, and remote sensing—has become a business area that generates American revenues of some $10 billion per year. In recent years this growth has been accelerating. The Department of Commerce noted that, over the 1987–1997 interval, the U.S. space commerce business sector grew faster than any other service area: in current dollars, at an average annual rate of well over 40 percent! Fortunately for the launch industry, a strong continuing demand for GEO communication satellites has buoyed the commercial market revenues. The growth of the new industry—including commercial remote sensing systems, satellite radio, direct broadcast television, telemedicine, microgravity hardware and services, and the realization of space tourism—will continue to expand the space launch industry. 134
Structure of the Space Market: Public and Private Space Efforts Future Growth Areas A number of areas, including public, private, and partnerships between the two, offer ventures that offer future growth potential. Reusable Launch Vehicles RLVs have long been an attractive alternative for reducing the costs of access to space. Currently the only reusable transportation vehicles are NASA’s fleet of four Shuttles. The goal of NASA’s RLV program is to deliver technology that in turn could deliver current payloads to LEO at a cost substantially lower than the current estimated $10,000 per pound for cargo on the Shuttle. The next step in launch capability is a crucial element of the country’s National Space Transportation Policy for commercial as well as government payloads. Background and History When individuals think of space they may think of exotic spaceships as depicted in Hollywood science fiction thrillers. The fact is that these types of vehicles do not exist, at least not yet. What the United States does have is technology that dates back to the late 1950s to deliver to space payloads that we find to be so useful here on Earth. What many do not understand is that no vehicles exist today that can carry commercial payloads into space and then return to Earth to be launched another day. The question arises, Isn’t the Space Shuttle reused for each flight? The answer to that question is yes and no. The Shuttle is a partially reusable vehicle that returns after every trip. However, the Space Shuttle is not a commercial vehicle and is not supposed to carry commercial payloads. The observation that the Shuttle is reusable also needs to be clarified. When the Shuttle goes into space it carries a large external fuel tank and two solid rocket boosters that are affixed to the side of the EFT. About 120 seconds after takeoff, when the Shuttle has reached a certain altitude, the boosters are dropped and parachute down into the Atlantic Ocean where the contractor recovers them. They are shipped to Utah, refurbished, and used for another flight. The external fuel tank is released just before the Shuttle enters orbit; it burns up in the atmosphere. 135
SPACE Therefore, the problems with the Shuttle are twofold. Although it serves a distinct and vital role in national space endeavors, the shuttle comes with a high cost, literally. The first problem is the enormous cost of maintaining the Shuttle, not to mention the cost of launch alone, which is close to $500 million every time. That is roughly $10,000–12,000 per pound of cargo per launch. The second problem is that the Shuttle is banned from commercial missions. Expendable Launch Vehicles That brings us to the next type of space transportation system, the expendable launch vehicle or ELV. These are exactly as it sounds— expendable. These are throwaway rockets that are built to put all types and sizes of payloads into space and then fall back to the atmosphere and disintegrate. They can carry several payloads into orbit depending on the size and can vary in price from $20 million to $100 million, again depending on the type of vehicle, the size of payload, and the destination. The destination can range from LEO, 100 to 300 miles up, to GEO, which is up to 30,000 miles in a fixed position above a desired place on the Earth’s surface. For instance, the ISS orbits Earth in LEO about 250 miles above the surface, whereas an Air Force or a CIA spy satellite orbits in GEO about 22,000 miles above Earth. A reusable launch vehicle would bring commercial payloads and perhaps even humans into orbit for a fraction of the cost of ELVs or the Shuttle. The Space Launch Initiative (SLI) NASA currently is conducting a Space Launch Initiative (SLI) program to develop new space launch vehicles. Why the SLI? Three reasons stand out: 1) Space transportation systems are expensive and therefore limit civil space efforts in both science and exploration. 2) The U.S. Shuttle fleet, although capable, is based on decadesold technology and will soon need to be replaced. 3) A fiercely competitive overseas commercial market has developed, with the introduction of many new vehicles. The SLI directly targets these three problems. The five-year, $4.5 billion effort funds second-generation risk-reduction activities ($592 million in FY 2002, ramping up to $1.3 billion per year in FY 2004 and FY 2005). The investments will enable a focused program for 136
Structure of the Space Market: Public and Private Space Efforts second-generation RLV risk reduction and efforts to make possible commercial launch services to the ISS. NASA’s SLI ideally will develop technology and systems that will enable NASA to pursue safer, more cost-effective space missions and make it possible for the private sector to justify independent investment in future launch systems. Improvements in the safety, reliability, and affordability of current and future space transportation systems must be achieved if NASA is to perform its mission and if the U.S. space industry is to reach its commercial potential.6 Riding on the SLI are NASA’s hopes to foster a new second generation of RLVs. NASA intends to select a design by the end of 2005 for full-scale development with an operational vehicle family available in 2010. Congress decided to fund SLI in NASA’s 2001 budget and allocated an initial $290 million. The money is to begin an effort that NASA believes will result in government funding of one or two human-rated subsidized launch systems within five years. President Bush’s fiscal 2003 budget proposed a 64 percent increase over the previous year’s funding. The proposed amount would meet NASA’s human and robotic space flight needs as well as commercial interests. Space Tourism Several companies are pursuing the goal of taking civilians to and through space; among the companies are MirCorp, Kelly Space & Technology, Pioneer RocketPlane, and Space Adventures, to name a few. A plethora of companies also are competing for the X Prize (see below). The companies mentioned could be from a few years to a decade from achieving their goals. The technologies are all different and all feasible; cost is the overriding barrier. Overcoming the barrier may be as simple as finding an Internet billionaire to be the ‘‘venture capital angel’’ who invests in one of the companies—though that may be difficult in today’s constrained market. Financial floodgates may open with the success, in some way, of just one of these companies. Perhaps the funds will come with an indication from the public that a large market is willing to spend huge amounts of money on space tourism. We can see the day approaching when private enterprise will act in cooperation with the federal government to begin to make space travel and tourism services publicly available. 137
SPACE Why is this the right time to start creating a space tourism industry? Many may see space tourism as simply an extrapolation of the terrestrial tourism business. The creation of a thriving space tourism business is justified because it: ● would be the most appropriate and prestigious thing that the greatest democracy could do in space— something that would be understood and appreciated by our citizens and those in other countries throughout the world; ● would result in a new business sector with the potential to generate a many-billions-of-dollars-per-year revenue stream; ● could lead to the conceptualization of new space activities; ● would go far toward recapturing the American public as a large constituent group supporting the federal civil space program— a group whose support is languishing because of that program’s concentration upon activities of perceived value to relatively few; ● would be of direct and important value to the private financing of a post-Shuttle generation of surface-LEO passenger-carrying vehicles and of post-ISS in-orbit residential spaces; and ● would require that the safety and reliability of space infrastructure be increased sharply and its unit costs lowered sharply to be a large and profitable business, which would benefit the entire space world: defense, civil, and commercial. Although many things need to be thought out and many issues resolved, the most important matter to be appreciated is that many of our goals in space cannot be attained until we have one or many new passenger-carrying vehicles. The new vehicles’ feasibility and operating efficiency must exceed that of today’s Shuttle fleet by orders of magnitude; their acquisition and operations costs must be lower, also by orders of magnitude.7 A few years ago both NASA and the Space Transportation Association engaged in a cooperative study.8 That study asked, ‘‘What should the United States do to see a potentially large space tourism business created?’’ In the study barriers and obstacles to be removed or overcome to allow space tourism were identified and found not to be intractable if a private–public effort is mounted. It was also during the course of this study that the principals met and discussed plans to form the first space tour company, Space 138
Structure of the Space Market: Public and Private Space Efforts Adventures, which already allows people to enjoy several space tourism–related trips and services.9 The trips include rides in highperformance military aircraft, experiences of weightlessness in a large transport flying a parabolic profile to simulate weightlessness, and attendance at the Russian Cosmonaut training school.10 That study took place several years ago and some of the recommendations have been noted. However, we still lack the most fundamental need: an operational vehicle. Several other issues need to be resolved before a true space tourism business takes off. Currently, however, the lack of consistent financial backing is the paramount issue, even more than technology, that will prevent the industry from getting off the ground. Dennis Tito, the First Space Tourist In 2001 we saw a trip into orbit by what can be called the first genuine space tourist. NASA resisted but finally allowed American millionaire Dennis Tito to make a controversial flight to the ISS. Tito had originally contracted with MirCorp to fly to the Russian Mir space station. Unfortunately for the Russians and Tito, the Mir station was de-orbited. Tito, a wealthy investment manager from California, signed a contract in January 2001 with the Russian Aviation and Space Agency, also known as Rosaviacosmos, to make a 10-day round trip to the ISS aboard a Soyuz flight, which launched on April 28, 2001. Tito agreed to pay Rosaviacosmos and other Russian aerospace entities an estimated $12 million to $20 million for the flight. NASA officials and their Russian counterparts had to meet to develop a wide-ranging set of criteria for vetting civilians intent on paying for round-trip excursions to the space outpost. A bilateral panel took up the topic and discussed the types of preflight training and medical tests a prospective civilian flyer should successfully complete before launching to the station. The panel recommendations were then passed along to project managers on the U.S. and Russian sides. Ultimately, all ISS partners—including the European Space Agency, which voiced strong opposition to a Tito flight to the station—provided recommendations for the screening criteria. With the criteria established, space tourism might become easier. We see, for example, that the Russians are planning to take a second paying tourist into space, Mark Shuttleworth, a South African businessman. 139
SPACE X PRIZE The X PRIZE was founded on May 18, 1996, in St. Louis for the specific purpose of stimulating the creation of a new generation of launch vehicles to carry passengers into suborbital space. The assumption behind the X PRIZE is that the problem is not the lack of financial resources among today’s adventure tourists, nor the demand in the marketplace, but specifically the lack of licensed, lower-cost, reliable vehicles. The X PRIZE takes a lesson from the history books. It is modeled after the early aviation prizes. From 1905 through 1935, hundreds of aviation prizes stimulated the creation of very different aircraft designs, each of which explored different regions of flight and different mechanisms for optimizing speed, safety, and low-cost travel.11 It was this same type of prize that inspired Charles Lindbergh to become the first to fly across the Atlantic Ocean, in 1927. The X PRIZE will be awarded to the first company that uses a privately built vehicle that can fly three people to make consecutive round-trip flights to 100 kilometers altitude within a two-week period. The winner will receive $10 million—and a passenger list a mile long! Since the prize’s inception six years ago more than 19 teams have registered from five countries for the competition. More than $5 million has been raised toward the $10 million prize. Most recently the Space Transportation Association (STA) created the Bigelow Prize for significant advancement in the commercialization of space. Currently it is a $10,000 prize for the first year; it is expected to grow over the next couple of years. The first prize was awarded in June 2001 at the annual conference of the Space Travel & Tourism Division of the STA. Space Solar Power Space solar power (SSP) is a technology whose time is coming. It holds the key to increased, efficient, and pollution-free power generation. SSP involves placing large solar energy collectors in orbit. The energy can be transmitted to Earth by microwaves or lasers or used by other orbiting space vehicles. SSP is the best of all worlds for a policymaker. It is a positive environmental program that would lead to less American dependence on energy imports. In addition, it would help American industry compete in what will be the single largest emerging market in 140
Structure of the Space Market: Public and Private Space Efforts the world. There are no technological, political, regulatory, or cost risks. It is a climate-friendly alternative energy source that does not require reducing the American standard of living. SSP will be imperative for many of our national security interests as well as for eliminating the need to risk American lives to protect foreign fuel sources. The military services, which view space as the ‘‘ultimate high ground,’’ have developed numerous plans and concepts concerning ways U.S. space-based assets will be protected and ways space forces can be used to support terrestrial combat.12 The operation of these systems will require significant amounts of power. With numerous defense budgetary needs and the expense of developing programs, the military services will depend on privatesector partnership to provide energy for space-based systems. We must establish an American lead in harnessing space solar energy for use in space and on Earth. The federal government must take the first steps to fund what will ultimately become a candidate for commercial exploitation of a trillion-dollar market. What needs to be done to see this realized? ● Initial research and development on space solar power using the ISS would give economic justification to the station and alleviate the station’s shortage of electrical power. ● The U.S. Department of Energy and NASA need to recognize the importance of beginning serious SSP work now by line item funding for a focused R&D program. ● Congressional support and funding approval for SSP line item authorization and appropriation must continue. ● National educational efforts to advocate the merits of SSP and alleviate unfounded concerns are essential. For both commercial and military uses, the tremendous potential impact of SSP is undeniable. Recent studies have indicated that the collection and transmission of solar power from space could become a reality within a decade.13 Advanced Propulsion Technology One might be inclined to wonder why advanced propulsion is necessary. Current propulsion systems seem to be adequate, safe, and relatively reliable. But what of the future? Advanced propulsion is becoming a necessity, for both economic reasons and mission requirements. 141
SPACE Advances in propulsion systems ultimately will reduce the cost of launching payloads into orbit. They will also reduce the propulsion system mass for satellite orbit maintenance and attitude control, will be easier to maintain for extended periods of time, and will reduce the cost of LEO to GEO orbit transfers. Advanced propulsion will extend our ability to explore the solar system and ultimately will enable interstellar missions. NASA has initiated two activities aimed at identifying technologies and systems capable of producing dramatic reductions in launch costs. The Highly Reusable Space Transportation Systems study goal is $200–$400/kg to low Earth orbit (a factor of 50 reduction from current systems); and the Affordable In-Space Transportation study goal is $2,000–$4,000/kg to geosynchronous Earth orbit (a factor of 30 reduction). And the SLI program is funding a third-generation reusable vehicle using highly advanced rocket engines not yet in development or testing. Conclusion Now more then ever private space companies are becoming more attractive, in many areas. The next decade holds the potential for tremendous breakthroughs in areas including in-orbit satellite repair, commercially operated spaceports, asteroid mining, and space manufacturing. Many more opportunities have not even been imagined, but they are out there, needing only a new American dream—or dreamer. An unimaginable, unlimited future of opportunities lies ahead of us. However, to achieve these opportunities we must continue to enable, encourage, and facilitate space research for commercial purposes. The future of the American economy—and of democracy itself— depends on it. Notes 1. ‘‘Government Launches Prop Up U.S. Industry in 2001,’’ Space News, January 14, 2002, p. 4. 2. Associate Administrator for Commercial Space Transportation (AST), The Economic Impact of Commercial Space Transportation on the U.S. Economy, February 2001, p. 6. 3. David Thompson, ‘‘Possible Futures for the American Space Launch Industry.’’ Presented to the Space Transportation Association, June 15, 2000. 4. Thomas F. Rogers, ‘‘Space Tourism—Its Importance, Its History and a Recent Extraordinary Development,’’ remarks given at the ‘‘Humans in Space’’ banquet of
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Structure of the Space Market: Public and Private Space Efforts the 13th International Academy of Astronautics (IAA) meeting, Santorini, Greece, May 24, 2000. 5. Ibid. 6. ‘‘NASA’s Space Launch Initiative Program Description,’’ public document, April 2000, p. 11. 7. Thomas F. Rogers, ‘‘Space Tourism—Why?’’ Op-ed piece, Space News, February 8, 1999, p. 18. 8. NASA-STA Cooperative ‘‘General Public Space Travel and Tourism’’ Study, Volume 1, 1999, www.spacetransportation.org/page8.htm. 9. See www.spaceadventures.com. 10. Robert Haltermann, ‘‘Space Tourism Now,’’ remarks to the FAA Commercial Space Transportation Forecast Conference, February 6, 2001. 11. X PRIZE information, www.xprize.org/, February 21, 2001. 12. Long Range Plan, Executive Summary, United States Space Command: New World Vistas: Air and Space Power for the 21st Century, United States Air Force Scientific Advisory Board, 1998. 13. John C. Mankins, Power from Space: A Major New Energy Option?, Proceedings of the 17th Congress of the World Energy Council, Houston, Texas, September 13–17, 1998.
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9. Private Possibilities in Space John Higginbotham If government is the Tyrannosaurus rex, it is often said that the venture capitalist is the velociraptor that runs around the room and nibbles at all the little great ideas, taking all the profits and gains for itself. That obviously is very true. We all know the traditional government drivers for the space industry: national prestige, national security, and exploration. We also know that a lot of the industry focus in recent years has been on globalization, privatization, defense conversion, and technology transfer—all the great buzzwords that we have come to know and love. Development of the Commercial Space Industry I am happy to report that there is in fact a commercial space industry that has emerged in the last few years. There are now in fact some large, diversified markets. There are many new emerging companies, in many different areas, that are bringing to the market enabling applications, new products, and new services that have created an emerging and well-performing commercial industry. Consider a few indicators of this progress. If we look back to 1980—and I want you to remember this number—the commercial industry accounted for roughly $2.1 billion, in an industry that, in total size, was roughly $16 billion per year. Some $14 billion was in government contracts. Contrast that with the year 2000, in which, by our reckoning, there were $133.4 billion of global revenues, of which $94.5 billion were from commercially generated activities. It is interesting to note that in the crossover year of 1996, just six years ago, approximately 53 percent of the space industry’s global revenues of approximately $60–$70 billion came from commercial activities. On the basis of that performance, let’s consider the outlook over the next five years. In this industry, one can get a fair idea of future 145
SPACE performance on a three- to five-year horizon, given the gestation period for a lot of satellite telecommunications projects, global positioning satellite (GPS), regional, national, and global systems. Thus we reckon that we are on path for industry gross revenues in excess of $200 billion by 2005, or a total of nearly $235 billion including government contracts. This, incidentally, is a relatively conservative forecast. If one looks at some other studies that have been done, those numbers are significantly higher. At SpaceVest we try to be conservative in our estimates. But I want you, again, to remember the 1980 number of $2.1 billion of commercial revenues and the 2000 number of $94.5 billion. That is a 20-year growth trend. Where does the activity come from? Major Sectors Fundamentally, the commercial space industry is generating opportunities in two areas. The first area is systems and services that are largely related to telecommunications and other information technology activities, including, for example, GPS. The second area is the intellectual property platforms that are created through the incredible technologies that this industry produces, which are then spun off into Internet, health care, distance learning, electronics, and many other industry sectors. We spun out a microelectronic machine company very successfully. So the industry has a demonstrated performance of generating successful commercial ventures in these two primary areas. Now, let’s get a sense of the big-ticket item in systems and services. In satellite services, the broadcast and backbone telecommunications services today dominate that revenue sector, which is projected in 2002 to amount to just under $40 billion of the global revenues of approximately $94.5 billion. In 1979–1980, largely as a function of the deregulation of the telecommunications marketplace here in the United States, private commercial companies could begin to build, launch, and operate their own telecommunications satellite systems. Before that, essentially telecommunications was the venue of a government agency or its proxy. In the United States the proxy was COMSAT. In other countries it was usually the ministries of post and telecommunications or other similar government or quasi-government industries. Seventeen years after COMSAT’s formation in 1963, that is, by 1980, annual commercial revenues had grown to $2 billion, revenues 146
Private Possibilities in Space largely associated with telecommunications satellites. Over roughly two decades, revenues grew from zero to $2 billion. By 1980 the Federal Communications Commission had deregulated licenses for telecommunications satellites or allowed licenses to be auctioned off. In the next 20 years revenues grew from $2 billion to $50 billion annually. A look at the ancillary services related to that sector—I would argue that a lot of the geolocation services and related GPS services we now see are tied into the fundamental telecommunications backbone—shows revenues growing from $2 billion to $94 billion in 20 years. Thus if one can embrace the commercial business model, and if government can turn space development and exploitation over to commercial industry, amazing things can happen. Civil and commercial plans and requirements for both government and industry suggest that we will need access to $250 billion of capital over the next five years to do all the things that we say we want to do in space. The aggregate revenues that we know we are going to generate in the commercial sector over the next five years will be $1 trillion. There is an old adage: Growth consumes capital. The more interesting sectors that are going to lead the generation of $1 trillion of commercial revenues over the next five years will realize a 60 percent growth rate. We know that that kind of growth rate eats capital. So an even greater capital requirement will need to be met in the marketplace to support such growth rates. The SpaceVest Story At this point let me explain why SpaceVest was founded. Back in 1991–1992, when we started the organization, we foresaw the emergence within 10 years of viable commercial activity associated with the space industry. We wanted to get some smart money into the commercial equation early in the process. We also wanted to avoid investments in companies with questionable business models; for example, Iridium. SpaceVest in fact did not invest in Iridium, the company that was placing in orbit satellites for a global system that would allow subscribers with handheld portable units (they were the size of a brick) to make calls from any place on Earth. At the time SpaceVest was not very large and not very well known, so the market would not follow our lead. But we were concerned about 147
SPACE it then; we did not see Iridium’s business model as making sense. Today, of course, despite successful launches of dozens of satellites, Iridium collapsed in the face of competition from cell phones. In short, SpaceVest has tried to apply fundamental investment principles to what is a very exciting, growth-oriented industry— that is, the space industry. As a result, we were able to hammer together, in 1995 and 1998, two funds, with aggregate capital under management of approximately $185 million. We initiated our third fund in 2001, increasing our aggregate capitalization to just under $300 million and operating, we hope, with a relatively mature, stable, conservative business approach to investing that capital in the businesses that make sense. What are the lessons SpaceVest has learned? Market knowledge is a critical success element that is needed to support growth in the commercial space sector and to increase prospects for a return on investment. Knowledgeable company management is key. A company needs management grounded in sound business principles. A company also needs sales and distribution power. It can have the best technology in the world, but the reality is that if it does not have a way to get the technology to market and does not have a dominant position in the market, the company is going nowhere. Consider the relative market positions of the Microsoft and Apple computer operating platforms. Apple could arguably have a better platform. Yet the reality is that Microsoft’s Windows commands approximately 90 percent of the marketplace. But if an alternative technology is better, wouldn’t market conditions suggest that it would be adopted? The secret, of course, is sales and distribution power. Because Microsoft has organizations like IBM and Intel supporting its products, it has a powerful tool to get those products into people’s hands. The same principles apply in the space industry. Reaction speed, technology ownership, and access to capital are all also keys to success. Another key is successfully managing the risks within the industry’s unique environment. So in light of the need for high growth, a lot of capital, and critical success factors, where does SpaceVest see the opportunities emerging over the next 3, 5, or 10 years? I am more skeptical than some entrepreneurs about mining asteroids and colonizing lunar surfaces in the next decade. I do think we are going to see an explosion in wireless broadband and Internet service. The Internet 148
Private Possibilities in Space is a kind of proxy for wide-area data services. It is here to stay and it is going to grow. Internet and other related data services are going to be a big part of the migration to a mobile telecommunications environment. Outlook Regional and global networks will emerge in a big way as comprehensive solutions to the telecommunications challenges for which a long-haul broadcast capability is critical. The integration of geographical information systems, remote sensing, GPS, and geolocationing is becoming a reality. These are absolutely growth markets in the next 10 years—no question in my mind. Finally, for the last 50 years technology platforms have had a consistent, reliable track record of creating technologies that are commercially applicable in mainstream economic sectors. That is the way it has been. That is the way it is going to be. That is not going to change. So this industry, if it is nothing more, is an engine for change that is unparalleled in the marketplace.
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10. Space Commerce: An Entrepreneur’s Angle Doris Hamill, Philip Mongan, and Michael Kearney
The 20th century ended with many important industries that the 19th century had not even envisioned. Air transport, automatic household appliances, radio, television, movies, computers and electronics, wireless telephony, underwater work systems, and the Internet all emerged as significant engines of economic growth, newly created wealth, and improved living standards. Yet although the so-called Space Age has occupied more than a third of the past century, manned space activity has not emerged as a new industry to stand beside these others in its impact on our daily lives. This traces in part to the technical complexity of operating in space, but it also cannot be denied that the economic environment has not provided, and still does not provide, the right conditions for entrepreneurial activity. Entrepreneurial activity may be broadly defined as private initiatives that develop into new commercial products and services. The participation to date of most private companies in the manned space program, even startup companies, has not met the test of commercial activity. To be commercial in the full sense means to invest significant amounts of private funds, to put them at risk to develop privately owned capital assets that form the basis for offering products and/ or services into a market in which price is based on an agreed value. Most of the companies that support human space activities fail this test on several accounts: ● they are not based on capital assets acquired at private risk; ● their risk is limited to the costs of preparing a proposal, not building significant hard assets; ● they do not own the assets they build in support of human space flight; 151
SPACE ● they offer products and services in response to specific government requests, not private initiative; and ● they are reimbursed for costs incurred rather than value provided. In fact, only SpaceHab, Inc. operates in the manned space environment on a commercial business model1. SpaceHab invested in and owns modules and pallets that ride in the Shuttle’s cargo bay to expand the inherent capacity of the Shuttle. When a Shuttle flies into space with one of SpaceHab’s assets aboard, experiments and cargo are carried in this privately owned laboratory or cargo module or on a pallet in the unpressurized environment of the payload bay. SpaceHab does more than lease NASA the use of these assets; it packages their use with turnkey integration and operations services. SpaceHab insures that during the integration process, the experiments and cargo in the module undergo rigorous analysis to ensure safety, compatibility with the Shuttle resources, and mission success. SpaceHab arranges for the training for the flight crews on the operation of the payloads, and orchestrates mission activities in the module such as research operations and transferring of cargo to the International Space Station. SpaceHab operates from its own facility using its own support assets and processes that emphasize efficiently, safely, and cost-effectively providing end-to-end integration and operations services to both NASA and commercial customers. To date, SpaceHab has invested over a quarter of a billion dollars in its Shuttle-borne modules and pallets and a recent initiative to build a private module for the Space Station. SpaceHab’s success with its hardware has demonstrated that the technical risk barriers to private assets have been surmounted. Its success in reducing the time and improving the service for flight customers has demonstrated the value of private enterprise. SpaceHab’s success finding non-NASA customers for its services has demonstrated the potential of market development. However, no other company followed SpaceHab down this entrepreneurial path, and although SpaceHab is still committed to this business approach, the company faces continual challenges in applying it. Instead of opening a trail, SpaceHab’s experience has been a disincentive for other companies to follow. NASA’s decisions about use of SpaceHab assets have not created a fertile environment for commercial activity. A 1997 study on commercialization policy discussed how SpaceHab’s experience affected other commercialization: 152
Space Commerce: An Entrepreneur’s Angle NASA received a product value of $1.2B (as determined by NASA) for the price of $250M (assuming that NASA paid for the module for the promised number of flights). By SPACEHAB’s books, this arrangement paid for the module and the cost of integrating the experiment payloads, plus a relatively low return for the high risks (SPACEHAB had raised and spent almost $80M before the first flight). Moreover, the contractual arrangement provided no R&D recoupment. This had not been lost on the financial community, which has stated that it would never again finance such an endeavor. Had NASA’s calculations been based on the value, the return should have been much higher, and competition (with new ideas) may have resulted from this better business environment. As it was, NASA may have found a bargain, but simultaneously reduced the supplier-base for this and future service buys.2
NASA continues to make decisions that favor its own developments over use of commercially provided assets. This stems in large measure from a profound lack of comfort at all management levels with commercial services. ● Without access to audited contractor costs, managers feel that they cannot prove that they are paying a fair price. ● Procurement officials do not appreciate the difference between the fee for cost-reimbursed services, generally in the range of 6–12 percent, and return on investment, which today’s capital market expects to be 15–20 percent even for low-risk investments. When officials suspect the commercial provider of achieving profits significantly above the 12 percent level, they consider it ‘‘gouging’’ or ‘‘profiteering.’’ ● Without control of all major operations and design decisions, managers are concerned that safety might be sacrificed for profit. ● Without ownership of the assets, planners feel they cannot guarantee that their needs will be met. ● NASA expects the commercial company to prove that its offering will cost taxpayers less than the noncommercial alternative. However, unaccounted overhead costs can make NASA assets seem less expensive than using commercial assets because fully accounted commercial costs are being compared with marginal 153
SPACE government costs. It is beyond the capability of would-be commercial service providers to prove their case when this full cost accounting data is not even available to the government. ● Well-established contractual mechanisms routinely procure noncommercial services, but purchase of commercial services is largely terra incognito for NASA. In the crush of activity attending the building of a Space Station and the operating of the Space Shuttle, managers have not had the time or patience to pioneer new ways of doing business. ● NASA is forbidden by law from committing to purchases that would obligate a Congress not yet elected. Without such a commitment, entrepreneurs have a difficult time convincing investors of NASA’s intention to purchase services that may not be available for a year or two. Economic Development of Earth Orbital Space The International Space Station (ISS) can be not merely a platform for government-sponsored research but a focus for developing commercial activity associated with human space flight. The Commercial Space Act of 1998 directs the NASA administrator to use ISS to establish an environment for space commerce: The Congress declares that a priority goal of constructing the International Space Station is the economic development of Earth orbital space. The Congress further declares that free and competitive markets create the most efficient conditions for promoting economic development, and should therefore govern the economic development of Earth orbital space. The Congress further declares that the use of free market principles in operating, servicing, allocating the use of, and adding capabilities to the Space Station, and the resulting fullest possible engagement of commercial providers and participation of commercial users, will reduce Space Station operational costs for all partners and the Federal Government’s share of the United States burden to fund operations.3
NASA’s immediate response to this direction reflected an eagerness to reap the benefits of commercialization. A plan for commercializing ISS emphasized providing access to public space facilities and resources to private users of space and establishing a nongovernmental organization (NGO) to manage utilization more generally. 154
Space Commerce: An Entrepreneur’s Angle NASA has emphasized private utilization of public space assets, socalled ‘‘entrepreneurial offers,’’ as the approach that is being actively supported. No mechanisms were put in place to address the congressional encouragement of ‘‘fullest possible engagement of commercial providers.’’ Those offering commercial services to the government were sent down the established channels for unsolicited proposals. Such proposals landed on the desks of mid-level managers who had no incentive, time, or capability to work the issues associated with purchasing commercial services, and who could use the conditions for unsolicited proposals, such as ‘‘technically unique and innovative’’ and meeting an ‘‘undefined requirement,’’ to dismiss such proposals. Achieving the efficiencies expected from commercial operation is to be entrusted to the NGO, and plans for that organization proceed apace. The NGO is a credible, tactical solution to obvious problems of government management but does not, in and of itself, constitute a strategy for moving toward the development of Earth orbital space. Beginning in 2000, NASA’s strategy reduced to establishing publicprivate partnerships to use space assets for commercial purposes. These partnerships suggest a willingness of NASA to participate in commercial activity, but in a way that could be viewed as working against free and competitive markets. Nor is it at all clear how the NGO and public-private partnerships can grow into the foundations for wide-ranging economic activity in space. A compelling strategy for igniting space commerce has yet to emerge from NASA. Developing Demand To date, most of NASA’s investments in commercialization have focused on developing demand for space products and services. The commercial space centers, located at universities around the country, have done a creditable job exploring the scientific possibilities and demonstrating the technology needed to realize those possibilities. Many companies have been sufficiently intrigued by the prospects to contribute toward demonstration projects. However, despite more than a decade of intriguing prospects, no market has emerged to use space for the purposes pioneered by the centers. That lack of commercial demand, even for things that have a well-established economic value, like protein crystal growth, traces more to business 155
SPACE considerations than to lack of demonstrated potential, technology readiness, or awareness by the market. The single biggest inhibitor to commercial demand is the paucity of opportunities to access space. The last Shuttle research mission was STS-95, the John Glenn mission in October 1998. The next research mission was not scheduled until June 2002. Furthermore, launch schedules have been notoriously unreliable. The April 2002 mission has experienced a series of delays that have accumulated to over two years. Momentum for commercial products and services cannot be sustained over such a long hiatus and with such unreliable schedules. Although the Space Station does hold the promise of more regular and frequent access, even this promise can be postponed or compromised by program delays, limited resources, or slips in the delivery of facilities and equipment. Commercial demand is also inhibited by the very high costs of space access. The cost of launch, at $10,000 per pound, had traditionally been cited as the major contributor. Efforts under way to reduce this cost by new launch vehicle development are unlikely to bear fruit in time to support commercial use of the Space Station in this decade. However, significant costs of space flight derive from safety and reliability certification requirements for payloads being taken into orbit. Studies have documented fivefold addition to equipment costs caused by Shuttle certification requirements, and anecdotal experience by those developing Station equipment results in an estimate that Station certification costs add another fivefold above Shuttle. Yet there are ways to ensure safety while reducing considerably this expensive burden and opportunities to work on cost reduction for space flight in ways that could respond well to innovation short of technology breakthroughs. Problems with cost, timeliness, and reliability of access have together created an environment in which there is essentially no commercial demand for the kind of research that the commercial space centers have been cultivating. One category of demand has emerged without NASA’s encouraging it or particularly wanting it to: media, advertising, and promotional activity. These activities are high enough in value to be undaunted by the cost of access, are flexible enough in their demands to accommodate the uncertain launch schedules, and have simple, lightweight materials needs that are not deterred by the cost of lift 156
Space Commerce: An Entrepreneur’s Angle or the demands of certification. NASA can serve this market today and has taken steps to do so. However, the space agencies would be within their rights not to expend taxpayer funds to cultivate this market, indeed to expect this market to pay its own way. It may prove to be ephemeral and therefore not a sound foundation for the economic development of Earth orbital space. Value-added applications like research and manufacturing hold out better hope for sustainable development and are therefore more worthy of deliberate cultivation by the space agencies. Developing Supply Value-added commercial interest in the use of human space waits, then, not on the kinds of scientific and technology things that NASA and universities do so well, but on the improvement of business factors that are largely beyond their ken. Such business factors do lend themselves to solutions by entrepreneurial businesses. SpaceHab’s experience is instructive in this context too. SpaceHab’s predecessor, the government-run program Spacelab, required over two years to integrate a mission: plan and coordinate it, obtain all the required approvals, place and test hardware, develop documentation, train astronauts, and so on. The pile of documentation required was literally three feet tall. Payload owners had to fight their way through an arcane and unhelpful bureaucracy. When SpaceHab began providing integration and operations services in conjunction with the use of its modules, they were able to reduce the integration time to 15 months routinely, with special effort when needed: the John Glenn mission was integrated in 9 months; a logistics mission reflight in response to an ISS contingency was integrated in 43 days without the use of multiple shifts or overtime. SpaceHab reduced the stack of paperwork from three feet to four inches and provided payload owners with a single point of contact who worked all the issues with the bureaucracy. SpaceHab’s commercial business model motivated it in a way that a cost-reimbursed contractor would not. ● SpaceHab’s fixed-price contract meant that the efficiency improvements generated higher profits. ● SpaceHab’s contractual terms, under which the company was paid only for flying, impelled them to improve customer satisfaction wherever possible, to merit more flights. 157
SPACE So SpaceHab’s experience strongly suggests that the business factors that are holding back commercial utilization could be relieved if more commercial suppliers could be brought into human space flight activities. However, improvements in the business factors will not emerge immediately; they require a market in which to mature. Yet until business factors have improved, there will be no commercial market. Clearly, the situation requires priming. Although there is no commercial market, the space agencies have many needs that could be provided on a commercial business model if the space agencies would purchase commercial services. Many of these needs are unmet, underfunded, or postponed out beyond 2005. The recent budget impacts from the Space Station overruns have generated a fresh raft of needs that could serve as the basis for commercial services. One group of unmet needs involves facilities and equipment for research. NASA’s cost of developing the hardware generally is large and must be borne up front. This makes it an obvious target for deferral or even cancelation in a constrained budget environment. However, if entrepreneurs were encouraged to provide commercial services, they would bear the up-front costs of developing the hardware. The space agencies would have use of equipment years earlier and would ‘‘spread out their payments’’ for it in the same way a homeowner spreads out payments with a mortgage. It does not necessarily follow, however, that the space agency will ultimately pay more with a commercial approach. Commercial companies can take advantage of efficiencies that are not available to the government. For example, federal acquisition regulations add considerable burdens in cost, schedule, and contractual complexity. ● Commercial companies have built-in incentives to manage their development costs strictly, incentives that do not apply when the developer is being reimbursed by the government for as much effort as needed to meet the specification. ● A commercial developer has the latitude to decide which needs to serve and which not, giving it the ability to optimize its design to serve the most users for the least cost. NASA’s approach often requires that the hardware serve every possible user, even when the needs of a small number drive the cost of the design. ● Commercial service providers have an incentive to improve their efficiency and customer satisfaction to retain and gain customers. 158
Space Commerce: An Entrepreneur’s Angle ● Efficiency improvements under fixed-price contracts accrue to contracts directly as profits. ● Commercial research service providers have an incentive to maximize the use of their equipment by finding commercial customers for it. The nonrecurring costs can therefore be amortized across a customer base that includes more than just the government. The owner of research equipment would probably want to provide its customers with a service package that includes more than the ‘‘lease’’ of the equipment. Clearly the commercial customer would expect to purchase the use of the equipment in a package that includes all the necessary services: access to the microgravity environment; power, cooling, and data resources; crew time to operate the payload; and so on. Other services might include science consultation; use of ground equipment for preparatory and/or flight control experiments; specimen certification; specimen launch packaging; launch and return arrangements; control and data routing to the user during the mission. While a space agency customer may not have the same need for the full package, allowing a research service provider to supply it could save the government money and will help the company refine the provider’s costs and business services. The second broad area that could benefit from commercial service providers, besides research, is operations. Many operations functions can be separated from the bulk of the activity for performance on a commercial business model. United Space Alliance, which services the Shuttle fleet, SpaceHab, and others, has offered NASA commercial operations services that might have increased performance, enhanced operations, streamlined processing, and significantly reduced NASA’s costs, but these were not taken up for many of the cultural reasons listed above. But large operations prime contracts could be incentivized to subcontract to commercial service providers with incentives along the same lines as those offered for small and disadvantaged businesses. Alternately, contractual arrangements that permit the prime to share any cost savings that result from commercial-style operation could also accelerate the transition to commercial services. The synergy between commercial research service providers and commercial operations service providers will accelerate the development of space commerce. A research service provider would be 159
SPACE pleased to take advantage of the services of a commercial operations service provider. This permits business-to-business transactions that will be simpler and more efficient than obtaining services through government auspices. Furthermore, operations service providers will support space commerce more generically than research service providers: whereas the owner of a piece of research equipment must limit its market to users of that equipment, the provider of transportation or communication support services will draw customers from many research markets. The operations service providers, then, become the foundation for whatever directions space commerce may evolve. For its part, a commercial operations service provider will appreciate the patronage of the research service provider. Since the research service provider will be cultivating commercial end users, that patronage offers the operations service provider a route to growth in a purely commercial market. The promise of that growth will motivate him to improve the business factors that inhibit growth into that market. The government will benefit from this interaction by improved efficiency and service aimed at wooing commercial users. The time is therefore ripe for the space agencies to expend some effort on developing the supply of commercial services rather than focusing entirely on developing a demand for them. The Use of Free Market Principles Having contractors willing and able to operate on a commercial business model is a necessary but not sufficient condition for space commerce. The businesses must operate in an environment that is governed by the rules of commercial activity, especially free markets. Currently human space flight operates under government activity models. The transition from government to commercial operations must happen in sync with the transition from government to commercial operators. The modalities of the transition are nowise obvious. Several paths could lead to the same goal. This section offers three examples of ways the transition can be made while protecting the interests of both sides: market pricing for access to ISS; risk covering; and development of a commercial market price for goods and services from space. 160
Space Commerce: An Entrepreneur’s Angle Market Pricing for ISS Access Space commerce waits, in part, on discovery of the correct market value for space access. Clearly the cost of space access now is above a commercial market value, since there is no space commerce. While the commercial space centers offered free or highly subsidized access, they had no shortage of takers. Neither extreme is appropriate for a free market environment, and NASA managers have acknowledged this by at once setting a ‘‘marginal cost floor’’ on its access to ISS while expressing a willingness to waive part or all of those costs for applications considered worthy. However, the waiver process requires the purchaser to provide NASA private business data and the NASA manager to make and justify largely subjective decisions. A pricing process based on free markets is much to be preferred. In a free market, industry will purchase something only when its price is not more than the value it expects to gain from the purchase. If a certain purchase adds, say, $1 of value to the product, industry will not and cannot purchase it for $2. A seller must attempt to determine the buyer’s value through market research, then structure costs to offer the product so that the sale price can be less than that value. Usually value is a range rather than a point; buyer and seller both weigh complex and intangible issues when deciding on a transaction. A purchase results when buyer and seller agree on value. To reach a price that is optimal for both the buyer and seller, there must be market competition: oversupply favors buyers, too much demand favors sellers. The challenge for space commerce is to identify ways to introduce competition into both the supply of and the demand for space access so that market forces can establish a price and adjust that price as necessary to meet changing conditions. If the approach outlined above is implemented—the purchase of commercial research services by the space agencies—the source of competitive purchasers for space access is obvious. Entrepreneurs with different research services will compete against each other for the access. However, the source of competitive supply in this scenario is not immediately obvious. Yet ISS is an ‘‘international’’ space station. It will contain at least four laboratories, each managed by a different, independent organization.4 Further, the Canadian Space Agency will manage a small share of the U.S. laboratory, and the Brazilians may also ultimately 161
SPACE manage some access. This arrangement offers the possibility for competitive sources of access to ISS. A key element of establishing free market conditions on ISS is an agreement between the international partners not to collude on access price and packages. Purchasers must be able to play the different suppliers off against each other, even while suppliers are playing different purchasers against each others. Market forces will thus establish a value-based price for access without need for intrusive and subjective waivers. In the beginning, while supply of access exceeds demand for it, prices will be lower. As demand saturates supply, the applications with an inherently higher economic value will pay more for access and raise the market price. This spares government agents the need to try to pick winners for favored terms of access. A second key to making free markets work on ISS is a firm policy that ISS will be a common market: space agencies must not discriminate either in providing access to or in purchasing services from companies based on their national origin. They should manage their taxpayers’ assets to get the best value in both sales and purchase decisions. This common market agreement is the only way to establish the value for space products and services that is undistorted by asymmetric subsidies. So to establish a market value for ISS access, the international partners must resolve among themselves to (1) compete in offering access to ISS and (2) treat ISS as a common market when providing access and/or purchasing services. Insuring Risks As noted above, the cost of certifying equipment adds enormous multiples to the cost of developing hardware. Clearly the government has and will continue to have a vital interest in assuring that private assets located on government property do not damage the taxpayers’ assets or harm the crew. Private industry should not be allowed to take risks at the public expense to make private profit. The system currently in place to control these risks asks for extensive documentation, reviews, and approvals. This system was particularly important when the hazards were unknown and had to be carefully anticipated, while the space agencies were building an experience base of what constituted a hazard in space. But those 162
Space Commerce: An Entrepreneur’s Angle risks are largely known now, and the principles that establish the risks can be articulated precisely. Subjective judgments by guardians of the taxpayers’ interests are no longer needed to protect those interests. Industry uses insurance to indemnify risk. Users of public facilities like the Space Station can be required to carry insurance that covers liability for any damage to the ISS or crew. This shifts the burden of insuring safety compliance to a commercial company that would presumably work with the hardware developer to insure that risk is minimized in a cost-competitive way. However, insurance companies may not wish to retain a staff of specialists for the purpose. A similar problem was encountered by insurance underwriters at the dawn of the age of consumer electrical appliances. These underwriters established an independent, commercial organization, Underwriters Laboratory, to certify compliance with industry standard practices for electrical equipment design and manufacture. Space commerce underwriters may wish to avail themselves of the services of such a certifying organization. Some seal of approval would assure insurance providers that their major known risks had been controlled, and allow them to offer insurance at a competitive rate. The certification laboratory would not necessarily replace NASA’s process, with all the standards they have accumulated; people with experience in certification would probably migrate to the commercial company to support its startup and initial operation. NASA may reserve the right to ‘‘certify the certifier’’ and/or require that it post a bond, subject to forfeit if damage results from neglect on its part. This will provide NASA assurance that process improvements made in the name of efficiency will not undermine safety. In any event, improvements in the efficiency of certification will add great value to a hardware developer’s bottom line and are therefore an entirely appropriate venue for entrepreneurial initiative. Other models could also move certification into the commercial arena. An ‘‘ISO9000 model’’ could rely on independent, commercial certification agencies, chartered by an industry consortium, to promote standards in a friendly, helpful, competitive way. The ‘‘FAA inspector model’’ could have federally licensed agents, either employed by the hardware developer or freelance, tasked with insuring compliance and keeping records for spot checking by a government inspector. 163
SPACE The choice of which model to employ is best left to industry, entrepreneurs, or both. The only actions required by the space agencies are establishing liability limits and working cooperatively with whatever group steps forward to assume the responsibility. Market Pricing for ISS Goods and Services While governments are the primary purchasers of services, even free market conditions will not establish a true commercial value: governments do not need to respond to market forces. It does not follow, however, that there will be no competition with only government customers; budget allocations within the space agencies will provide some internal competition. That competition will prepare the way for achieving a commercial value. Consider, for example, the situation of a space agency program manager in materials science. Presume that there are commercial service providers for both a conventional furnace and a levitation furnace. Presume further that the manager has an equal number of equal quality proposals to use each kind of furnace. If the conventional furnace requires $250,000 per experiment and the levitation furnace only $25,000 per experiment, the manager will quickly realize that he will get a lot more science done with the levitation furnace, so experiments requiring the levitation furnace will be funded more readily. The levitation furnace provider will have higher capacity utilization and presumably be more profitable. The provider of the conventional furnace will understand that it is not possible to set price arbitrarily high and expect optimum utilization. So even with only a space agency customer base, competition can generate a downward pressure on prices. Capital markets expect a company to continually grow. The stock market is not pleased when a company returns the same profit on the same revenue year after year. The entrepreneur will realize that space agency sales are inherently limited in the long run, and for unlimited growth there must be a way to serve commercial users. When intra- and inter-space agency competition for sales has driven down prices, they will come into a range that appeals to a few commercial applications with particularly high value added. At some point, entrepreneurial innovation and economies of scale will make the break needed to reach broader commercial users, and the service providers will be weaned from their dependence on space agencies. 164
Space Commerce: An Entrepreneur’s Angle This approach to attracting commercial users does not require the space agencies to perform market development activities, to command its contractors to find efficiencies that will undercut the contractors’ revenue stream, or to establish limits on how much they will subsidize commercial research. They only need to agree to purchase commercial services that meet their research needs within their budgets. The rest will happen by itself. Out of the Box and into Orbit Clearly NASA needs a fresh approach to space commerce. The money they have spent to date to develop demand for ISS goods and services, while helpful in its own context, has not generated even the rudiments of a self-sustaining industry. But some deliberate attention to developing the supply side, including funding targeted for it, will probably be necessary to take space commerce to the next step. Policies can be put in place to incentivize ‘‘commercial set-asides.’’ NASA could assume the responsibility for proving, on a full cost basis, that it is less expensive to ‘‘make’’ than to ‘‘buy’’ commercial, perhaps with an independent auditor employed to the accounting. Dedicated advocates can attack roadblocks on a case-by-case basis. To some extent, these policies have been tried. A renewed emphasis and more aggressive leadership might produce better results, but even clear and firm direction from Congress and policy statements by the administration have not translated into support for commercial activities from the busy mid-level managers who will make things happen. The one bona fide commercial service provider, SpaceHab, struggles for continued viability, and no company follows SpaceHab’s lead. NASA managers will not enthusiastically embrace commercialization or work and innovate on its behalf until they see how it will improve their own circumstances, reducing rather than adding to their burdens. Money, of course, will motivate them, but only if it doesn’t come out of other priorities in which they are invested. The best approach for winning the enthusiastic support of the middle-level managers may be to identify a pot of money that can be used only for purchasing commercial services. Optimally that pot would be added by Congress above the baseline. Alternatively the space agency could identify funds from other programs to fill 165
SPACE the pot, perhaps with Congress matching their contribution to ensure a good faith effort. Program and project managers could use the pot to ease their budget problems if they purchase commercial services. If competition for the funds is agencywide, NASA managers will be motivated to encourage and cooperate with entrepreneurs in areas that support their parochial interests and go after any barriers to using the funds. NASA is the undenied leader of the world’s space policy agenda. For too long, NASA’s culture has been at best indifferent, and often hostile, to the whole idea of commercial activity in human space. The suggestions in this paper could give NASA a self-interested reason to embrace effective commercialization, relieve its legitimate concerns about it, and establish space commerce as the first brandnew industry of the 21st century. Notes 1. Oceaneering Space Systems has also invested in transport containers and refrigerator freezers on a commercial business model. These investments are modest compared with SpaceHab’s and constitute only a small fraction of their revenue stream. 2. J. Beggs, J. McLucas, J. Rose, H. Schue, T. Straeter, and J. Richardson, The International Space Station Commercialization Study, Potomac Institute for Policy Studies: PIPS-97-1; March 20, 1997. 3. Commercial Space Act of 1998, Section 101. Commercialization of Space Station, subsection (a) Policy. 4. The four laboratories are Destiny, managed by NASA; Columbus, managed by ESA; Kibu, managed by NASDA; and Enterprise, managed by SpaceHab. The Russian Space Agency’s plans for its own lab have been postponed indefinitely because of budget problems.
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11. Expanding the Dream of Human Space Flight Dennis A. Tito Pursuing a Dream My interest in space travel began with the launch of Sputnik when I was a teenager and grew with the U.S.–Soviet space race. Given that my father was a working class Italian immigrant, looking back it may have seemed foolish for me to one day dream of going into space, but I just knew space flight was something I had to experience. I also knew that my parents had come to the United States because it was a country where, if you set high goals and worked hard to achieve them, anything was possible. On April 28, 2001, 40 years after the first manned space flight, I was able to prove that my mother and father were right. A boy from Queens could fly in space. My only regret is that they did not live long enough to see my dream become a reality. Focused on my desire to participate in the U.S. space program, I earned a B.S. in Astronautics and Aeronautics from New York University College of Engineering and an M.S. from Renssalaer Polytechnic Institute in Engineering Science. I began my career as an aerospace engineer with NASA’s Jet Propulsion Laboratory (JPL) at the age of 23. While serving at JPL, I was responsible for designing the trajectories for several Mariner spacecraft missions to Mars and Venus. I left to pursue a career in investment management and today serve as chief executive officer of Wilshire Associates Incorporated, a leading provider of investment management, consulting, and technology services. Despite my career change, I never lost my fascination with space, my commitment to our nation’s space program, or my dream that one day I might go there myself. Indeed, it was that career move that eventually enabled me to achieve my dream. Because it is currently impossible for the National Aeronautics and Space Administration (NASA) to fly civilians on the space shuttle, I was excited to learn last year that the Russian government was 167
SPACE receptive to citizens flying into space for a fee. My original intention was to fly to Mir, but that hope was dashed when it was determined that the Russian station needed to be de-orbited. Officials of the Russian Space Agency and the company RSC Energia then approached me about my possible interest in flying to the ISS on the April 2001 taxi mission. After much consideration, in January 2001 I signed a contract to do so. Training as an American Cosmonaut In the summer of 2000, in pursuit of my dream, I left my business, family, and home in California and moved into a two-room flat in Star City, a Russian military base outside of Moscow, where I lived a fairly Spartan existence, dedicating myself to my training. The comprehensive training program I completed closely mirrored that of any Russian cosmonaut engineer. In total, my training encompassed approximately 800 hours of instruction and practice and ranged from emergency and evacuation procedures and basic life support and engineering systems, to simulations of ascent and descent and zero gravity, to housekeeping chores and taking care of personal hygiene needs. I should note here that my detailed technical training covered not only the Soyuz, but also the Russian-built elements of ISS—Zarya, the functional cargo block or FGB, and Zvezda, the service module—as well as their subsystems. Of course, because of the nature of my flight, I would like to note that I was trained as a passenger, not as someone expected to take the controls of the Soyuz. As a ‘‘graduate’’ of the Russian cosmonaut training system, I was fully confident when the engines were ignited on the launch pad in Kazakhstan that I would be able to handle whatever might happen on my flight. In fact, my training prepared me so well that my heartbeat never went above 72 beats per minute during ascent, and I was able to track to the second the sequence of events from our launch until we reached orbit. I believe that it is a testament to my training that after just a few hours in space, I fully adapted to weightlessness. I was able to assist the crew in housekeeping chores like food sorting and preparation. I have to admit, though, that the training that prepared me for sorting food took place in college when I hand-sorted mail at the U.S. Post Office near Penn Station in New York City. 168
Expanding the Dream of Human Space Flight There was one thing not even the most extensive training could prepare me for: the awe and wonder I felt at seeing our beautiful Earth, the fragile atmosphere at its horizon and the vast blackness of space against which it was set. Just imagine being able to watch 16 sunrises and sunsets each day. And, thanks to a team of generous ham radio operators and the crew on the ISS, I was able to connect more clearly with my sons down on Earth than I had been able to previously when we were face-to-face. As any one of the 400-plus people who have traveled to space will tell you, no amount of training can prepare one for the experience of weightlessness and the freedom of effortless movement. It remains something that is still hard to describe to others. I can say that there is a sense of total relaxation. The nights I slept in space were the best nights’ sleep I’ve had since I was a baby. ISS Observations With regard to my observations as a visitor aboard the ISS, they are the opinions of someone trained for my taxi flight mission but certainly not those of an expert. I say without hesitation, however, that anyone associated with the development of the ISS has every right to be extremely proud. As it orbits our Earth, the ISS serves as tangible proof that men and women from diverse backgrounds and cultures—even former adversaries—can accomplish great things when we work together in a cooperative spirit for the betterment of all humankind. Anyone who hasn’t been to the ISS or toured full-sized mock-ups of it cannot possibly have a full appreciation of how large it really is. End to end it is already roughly 150 feet long. When it is completed, the ISS will be almost 300 feet long with its solar panels spanning over 350 feet. The ISS is so large and well-integrated that it is simply amazing to realize that it was built in pieces at different places on Earth, launched into space by different rockets, and assembled more than 200 miles above us. It is a triumph of humanity and technology. I spent most of my time in Zvezda, the service module, where I listened to opera, shot video and stereographic photos of the Earth out of the porthole, helped prepare food, and talked with the crew during meals. The U.S. Destiny laboratory module is dedicated to science and not yet fully operational, so after a tour and briefing on 169
SPACE safety procedures, there was not really a reason for me to spend time there. The three of us on the Soyuz taxi flight slept in Zarya, the FGB, each camping out in a third of its space. ISS Commander Yuri Usachev and James Voss each had a berth in Zvezda, and Susan Helms had chosen a nook in Destiny as her part-time bedroom. The crew on ISS works very hard, but most of their time is spent simply carrying out the day-to-day logistics of keeping the station functioning. Air filters have to be replaced. Computers need to be monitored and sometimes repaired. Supplies have to be inventoried and stowed. My observation was that the crew lacked enough time to do as much science as they wanted. In fact, I understand that NASA officials testified to the full Science Committee in March 2001 that currently the crew was spending just 20 hours per week on science. In fact, I was told by one crewmember that even less time was being spent on science. It would appear that the only way significant time can be dedicated to scientific experiments aboard the ISS is if the crew size is doubled, as was originally planned. I understand that cost overruns and budget constraints have forced us to keep the crew size at three for the foreseeable future. But, if the true mission of the ISS is to foster scientific research, we cannot expect it to succeed unless and until the crew size is increased to six. I can tell you that my Soyuz crewmates and I had plenty of room to spread and ‘‘camp out.’’ There is habitation space in the station to accommodate a six-person crew. In zero gravity it is easy to set up shop in any nook or cranny of the station. I could have been comfortable there for months. Furthermore, the atmospheric life support systems on Zvezda are capable of supporting both a regular crew of three plus the three visiting cosmonauts from a Soyuz swapout flight. The Electron system that supplies oxygen to the station and also supplied oxygen to the Russian Mir station can support a six-person long-duration crew. The system that scrubs CO2 from the station atmosphere also could support a long-duration six-person crew. Throughout my visit we never had to use the supplemental oxygen or CO2 scrubbing canisters. What this means is that we could transition to a six-person crew fairly quickly. We would have to purchase an additional two Soyuz 170
Expanding the Dream of Human Space Flight flights per year to have a full crew rescue capability and carry up additional food, water, and other supplies. Also, we’d have to use the Soyuz missions to swap crew as well as spacecraft, rather than conducting ‘‘taxi’’ flights, since the ISS currently cannot support a crew of six plus three visitors. By doubling the crew size sooner we can free up much more time for actual research on the ISS and it is hoped speed up progress toward growing the ISS even further. While this is not my area of expertise and I realize there might be logistical, resupply, and psychological implications that might need to be addressed, I do think it’s an alternative that merits NASA’s and your consideration. Spreading the Benefits of Space Travel to Society In my opinion, one of the benefits of the ISS and its long-term value to society is to lay the groundwork to expand human civilization beyond Earth orbit to the Moon, Mars, and other places in our solar system. In other words, we’re not just going to visit: we want to live in space. To do that, we need to learn more about the effects of longduration flight on the human body and psyche. We also need to develop self-sustaining life support systems that will reduce and eventually eliminate the need for resupply from Earth and allow us to complete space flights of 1,000 days and more. As an engineer, I want to suggest that we view the ISS not as a useful platform for scientific research only, but also as a site for the research and development of new technologies that will allow people to live in space for extended periods of time. That, as much as anything else, will create new economic and scientific opportunities for the future. In the short term, I believe we need to find ways to include the general public in our human space flight activities. As I have mentioned, it is hard for me to fully convey what it was like to be weightless for eight days. But then again, I’m a businessman. On the other hand, just think of how magnificently poets, writers, musicians, composers, teachers, filmmakers, painters, journalists, and other creative individuals would be able to communicate the beauty and inspiration of space flight. 171
SPACE Based on the extensive worldwide media coverage and public reaction, it would be fair to say that my taxi flight to the ISS captured the attention and imagination of millions of people around the globe and renewed their interest in human space flight. I’ve found that whether people agree or disagree with my decision to fulfill my 40year dream the way I did, they are fascinated by my experience. They don’t care so much how I got up there, but what it felt like when I got up there. I keep hearing questions like, How did you put on your socks? Can you wear contacts in space? How do you sleep when you’re floating around? Back here at home, I believe that the United States should consider reinstituting the Citizen in Space program. There is nothing that intrigues and excites the American public like seeing someone they can relate to achieve and experience great things they consider beyond their reach. Ours is a government of, for, and by the people. I think we know that if asked, the American people would say that as horrific as it was, it is time to put the Challenger tragedy behind us and move forward in a positive way that honors those aboard that Shuttle. We need once again to offer our nation’s teachers, journalists, creative artists, and others an opportunity to experience what is now the sole bailiwick of fighter or test pilots and scientists. The bottom line is that the American people, who pay for the space program, should have every opportunity to share in it. A recent survey found that nearly two-thirds of all Americans believe that NASA should allow citizens to pay to travel to outer space in order to raise funds for space exploration. Since that isn’t an option, I would suggest that we work with the Russians and allow them to send one paying passenger on each available Soyuz taxi mission. While I would agree that passenger criteria need to be put in place, we also need to be careful not to set the bar as high as the standard would be for a Shuttle mission commander, thus eliminating most candidates. Not only would this system allow for more citizens to experience space and communicate its awe to the rest of us, the amount paid by qualified passengers would represent a significant portion—up to one-fifth—of the entire budget of the Russian Space Agency. It is clearly in our interest to ensure that the Russian space community has the money it needs to continue supporting its portion of the ISS. This is one of the best ways to do that. 172
Expanding the Dream of Human Space Flight Speaking of the economics of paying passengers, although the terms of my contract prevent me from divulging the exact amount I paid for my flight, I can tell you that it was money well spent— by both the Russians and myself. The average Russian working in the space program makes about $100 per month. I can safely say that in a roundabout way I am responsible for the paychecks of 10,000 Russian aerospace workers for more than one year. These are the production line workers responsible for assembling the Soyuz spacecraft and the Progress supply vehicle, which are both critical to the ISS. Without them, no crews could stay on the ISS and it would become a ghost town in orbit. As I have said on many occasions, it’s my hope that as a result of my flight I will be able to combine my interest in space and my investment expertise to further the advancement of space commercialization. As you know, with the sole exception of communications satellites, to date the investment community has been apathetic, at best, to this idea. My ultimate goal is to build a much wider understanding and support in the business world for the goals espoused in NASA’s Human Exploration and Development of Space Enterprise. Most important for our space program, I intend to be an advocate in the national and international financial community to encourage long-term use of and investment in space. Observations of the Russian Space Program During my time in Star City I got to know many of the cosmonauts and astronauts who were training for missions to the ISS, including members of the crew that was on board when my crewmates and I arrived at the ISS on April 30, 2001. All were hard-working and passionately devoted to the space programs of their countries. Overall, the professionalism and dedication of everyone I came into contact with during my training—from the heads of Russia’s space activities, to the engineers, flight directors, medical staff and technicians—were of the highest quality and caliber. There were no corners cut or pages left unturned. The Russians have tremendous respect for America generally and NASA specifically. Without giving away any confidences, I can tell you that the cosmonauts have abandoned some of their valued traditions to comply with NASA guidelines for crew behavior. These 173
SPACE capable professionals have done this because they respect and want to continue working with NASA. To be sure, the Russian space program has fallen on hard times along with the rest of their economy, but I believe the Russian space program workers are still extremely capable, especially when we don’t have unrealistic expectations about the level of funding their taxpayers can provide to the Russian Space Agency—Rosaviacosmos—and the various private and governmental organizations it oversees. From my perspective the Russians have every right to be very proud of their space program. Like any American who grew up during the Cold War, I was initially skeptical about doing business with the Russians. I was wrong. At every juncture I found them to be trustworthy, honest, and aboveboard with me. The negotiations were tough, but friendly. And once they signed the contract with me in January 2001, despite a change in attitude by our country, they stuck to their convictions and faced down great pressure. At no time did I observe them acting unilaterally. Just as we do not allow the Russians to approve our Shuttle crews, they did not feel we had a right to select the crew for a Soyuz taxi flight. Perhaps my experience reflects what President George W. Bush encountered during his first meeting with Russian President Vladimir Putin. After that meeting President Bush said, ‘‘Can I trust him? I can.’’ I wholeheartedly agree with our President that it is time to put mistrust and suspicion behind us and move forward in constructive and respectful ways that benefit both Russia and our nation. I also agree with his assertion that ‘‘Russia has got great mathematicians and engineers who can just as easily participate in the high-tech world as American engineers and American mathematicians.’’ Now is the time to step back and, without casting blame, think clearly about our partnership with the Russian space program. There is no doubt that the Russians have tremendous technical and operational capabilities for long-duration space flight. But by presuming their economy could afford to fully fund their participation in ISS, we pretended that Russia could be an independent partner, just like the European Space Agency, Canada, and Japan. The reality, however, is that the Russian space industry has to be self-financing. So our partnership with Russia must become a commercial and economic one, rather than a political or bureaucratic one. 174
Expanding the Dream of Human Space Flight Looking beyond the Horizon All of the partners in the ISS should be proud because together we are building the first permanent human settlement above our planet. ISS is important to me, and should be important to all Americans, because it is our first foothold in space, our first enduring step in humanity’s expansion beyond its cradle on Earth. In the future, ISS will be judged based on whether it enabled our civilization to grow slowly upward and outward into the ‘‘neighborhood’’ of our solar system, in the process opening up an endless frontier to generations to come. That grand future—and not mere scientific knowledge, new technologies, or even economic return—is why the International Space Station is worth the political debates, technical challenges, and cost overruns we have endured to get this far. But achieving that future will require transcending those problems to ‘‘open up’’ the ISS. We can begin to do that by reinstituting our Citizen in Space program. Another step is to not just allow, but encourage, the Russians to sell the third seat on Soyuz taxi missions to individuals who meet criteria agreed upon in advance. Finally, we need to explore issues and opportunities with the Russians like an expanded crew with habitation in the Zarya module and two Soyuz vehicles docked at the station at all times. We need to demonstrate to them that we have confidence in their people and their programs and have no qualms about working with them. I consider myself blessed to have been able to live in a democratic country where free market capitalism allows any of us with a dream to know that no challenge is too difficult or goal too lofty if you work hard and never lose sight of your objectives.
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12. Changing the Space Paradigm: Space Tourism and the Future of Space Travel Buzz Aldrin and Ron Jones This paper examines key themes of a proposed new national space development strategy that would be based on people in space, technically achievable reusable space transportation, the use of existing systems and infrastructure elements wherever possible, and a government/private sector partnership that can be initiated with existing capabilities. Key topics covered include how a new commercially focused architecture can be funded and implemented, why the described approach is the best strategy to meet the needs of an embryonic space tourism business, and how the high-volume travel requirements associated with tourism can drive the evolution of civil space transportation to the next level of operational efficiency— total reusability. Current challenges of the International Space Station (ISS) are addressed as well, including how recently uncovered ISS cost overruns can help jump-start development of key elements of this new architecture not only to better satisfy near-term ISS programmatic needs, but also to facilitate government–private sector ‘‘joint’’ development efforts of next-generation systems. Introduction The fundamental building block of the U.S. space program is the transportation capability that provides access to space. With the exception of the Space Shuttle, American space access capabilities have changed little in the past four decades and no progress has been made in solving the greatest obstacle to space development— the high cost of space access. The primary reasons that costs for payload delivery to orbit remain high are that we launch so few payloads and then we throw away our space launch vehicles after only a single use. 177
SPACE While seemingly insane, that is the nature of our expendable launch vehicle (ELV) architecture, conceived and implemented almost half a century ago to satisfy the warhead delivery requirements of a now-gone era. Today we need a plan and an approach to move us beyond the throwaway Cold War mentality of the past toward a rational and affordable 21st-century civil space program. The greatest challenge to the future of America’s space program is the development of a robust, highly reliable reusable launch vehicle (RLV). After considerable study, the authors believe the attributes of an evolutionary two-stage transportation system can seamlessly evolve into a multi-faceted integrated architecture, using commercial space tourism as the catalyst to also enable longer-range civil programs such as a return to the Moon and a sustained program of Mars exploration and settlement. Such a system addresses concerns systemic to today’s expendable space launch architecture including the high cost of space access, mediocre reliability, and how best to introduce reusable systems into our current disposable infrastructure. But what is the wisest approach to integrate RLVs into our existing launch infrastructure? The Quest for Reusability The American Space Transportation System (STS) is the world’s first attempt at a truly reusable space launch system. The Space Shuttle has begun to forge the path as the first reusable Orbiter and, along with its solid rocket boosters (SRBs), has provided a wealth of knowledge and lessons learned about approaches to reusability. Although the SRB’s spent casings are reused following ocean recovery, they require a remote recovery operation and a significant and costly remanufacturing and logistics effort to fly again. The Shuttle Orbiter, however, has extended the definition of reusability an order of magnitude beyond the SRBs, needing only to be refurbished rather than remanufactured before re-flight. The next evolutionary step is to develop a much shorter turnaround time between flights and adopt technologies and approaches that reduce the cost and risk of high–volume, rapid–turnaround travel into space. The reusable first-stage booster is a concept that integrates rocket technology with well-understood aircraft design techniques and is the ideal vehicle to make this step. With this vehicle we can incorporate approaches that we know work and some hard lessons learned 178
Changing the Space Paradigm from the Shuttle program. The reusable booster uses the proven vertical takeoff–horizontal landing approach, returns to its launch site either by gliding or under its own power following staging, and offers a clear evolutionary path to separate humans from cargo during space flight, now seen as desirable following the Shuttle experience. Building upon the reusable booster, a naturally progressive evolutionary program that gains experience launching cargo with existing expendable upper stages, then develops a ‘‘crewed’’ upper stage creating a reusable two-stage-to-orbit (TSTO) Shuttle follow-on system, is the wisest evolutionary approach to integrate RLVs into our aged space launch infrastructure. This is also the logical, technically achievable, next evolutionary step beyond the current partially reusable space transportation system. Cost and Markets Issues prohibiting the initiation of a new space launch vehicle and impeding the process just described involve both cost and markets. Initiating any new launch vehicle is expensive, especially if it is a totally reusable system with only a small number of reusable units to be produced. Chemically propelled rockets—the only technology currently available to us for space launch—are expensive, and today, a reusable first stage sized to replace the Shuttle’s SRBs is a nonstarter. Far too large for commercial uses, an SRB-class reusable booster would be so expensive to produce that the Shuttle’s low flight rate makes it impossible to justify economically, even if its use on the STS made the system much less expensive to operate. Also, by the time a reusable booster replacing the SRBs could come online, the Shuttle would be closer to the end of its lifetime, with insufficient operational life to take full advantage of the new booster’s improved attributes. The other major problem with any new RLV, or ELV for that matter, is the market. The space launch market must be of sufficient size for a new vehicle to secure a high enough number of flights to amortize development, production, and associated costs. The current traffic model for all the world’s space launch vehicles is about 1,000 satellites to be launched over the next 10 years. That equates to only 100 payloads across the entire payload spectrum for all launch vehicles each year. Any new system must compete with all other 179
SPACE systems within its narrow fraction of the payload lift market, its ‘‘niche,’’ for the launches it needs to pay down development and production debt and still make a profit. Unfortunately, the present tight payload market and the glut of existing launch vehicles means that any space launch new start-up is doomed to encounter serious difficulty in raising venture capital, no matter how good the vehicle looks on paper. Such a low volume of traffic cannot justify development costs for even the least costly new vehicles. The reality of today’s space launch (limited satellite) market environment is that it is impossible to acquire adequate financing for a new launch vehicle without a partnership with the government and the promise of government assistance down the line. In this environment, how can we initiate a new vehicle that can solve our space launch problems? Is there an approach that can get around the perceptions of the financial community of a small and shrinking near-term market for space transportation so that we may open the new and expanding markets of the future? We believe there is. What is needed is what economists might call a ‘‘market shock’’ or an ‘‘explosion of demand’’ for the payload market to suddenly mushroom in size, so concerns of a dwindling market evaporate and economies of scale can come into play much like the airline business of the 1930s and 1940s. The ‘‘comfort level’’ for risk-adverse venture capitalists to invest in new systems would skyrocket and more of them would make more funds available for space transportation systems. If the revitalized market were very large and solid, government assistance could be reduced and eventually eliminated. Is there a market that could have such an effect on the space transportation industry? We believe the answer is, once again, ‘‘Yes.’’ Space Tourism: Catalyst for a New Space Development Strategy After 40 years of space exploration, space tourism has emerged as the only viable market with the potential to generate the highvolume traffic (i.e., revenues) needed to justify the investment required to significantly reduce the unit cost of space access. While the width and breadth of this market have yet to be bounded, recent studies, including NASA’s own research, have suggested that tens of millions of private citizens in the United States want to travel into space, far more if the global market is addressed. As in the airline 180
Changing the Space Paradigm industry of the past, this immense volume of potential fee-paying passengers can be the mechanism the government can use not only to solve its costly space access problem but also to drive access costs down low enough to enable the birth of a new arena for commerce, the large-scale public utilization of space. Consequently, space tourism is the only identified market to date that can also lead to significant commercial infrastructures both on Earth and in Earth orbit. The Space Launch Initiative Unfortunately, the federal government has yet to recognize the latent potential of space tourism, either as a prospective revenuegenerating tax base or as a market to drive the development of next-generation space transportation. Instead, NASA has decided to initiate its Space Launch Initiative program (SLIP as some call it) and spend another five years studying risk reduction and architectures that meet NASA-unique requirements for next-generation vehicles. This, of course, has left it to space activists and entrepreneurs to force a directional change. Quite frankly, a decision to base the next generation of space transportation on NASA-unique requirements would be as bad, and waste as much time, as the X33 debacle. Simply stated, we know what needs to be done in space transportation and we know how to do it with today’s technology. Solving NASA’s problem of keeping 3,000 personnel gainfully employed in Huntsville, Ala., for the next five years should be a separate issue entirely and holding the space program in stasis for another half decade should not be part of the solution of that problem. We believe that there will be plenty of work for aerospace and non-aerospace industries if this approach to space development is implemented. NASA and Space Access Costs It must be noted that while in many instances the advanced technology inherent in the aerospace industry has been successfully transferred on a selective basis to the commercial marketplace, the technology for two-stage space transport has yet to be promoted or pushed for either civil or commercial development. While there are likely many reasons for this, an important one is that there is little ‘‘new’’ technology required to build an effective two-stage architecture. Since the technology has already been developed, there is less 181
SPACE work for NASA employees who must be kept busy working on advanced technology projects. And since NASA is a technology development organization tasked with continually pushing the leading edge, two-stage-to-orbit transportation systems have found little favor within the agency. But should NASA’s need to always be working on an ‘‘order of magnitude’’ cost reduction for space launch systems preclude its responsibility to modernize our current antiquated launch infrastructure? Current systems were designed almost half a century ago and now inhibit the growth of commerce in space because of a prohibitive $5,000—$10,000 per pound to orbit cost of use. A modest infusion of well-understood aircraft design techniques into current systems can cut launch costs by one half to a third of today’s costs. It would seem that a wise approach to this problem would be to find a mechanism to enlist the private sector’s support to update current systems while keeping as technology development programs those ‘‘leading edge’’ technologies that will someday make single-stage-to-orbit (SSTO) a reality. The Wise Approach Because of the magnitude of tax dollars at risk, the government should be considering the broadest range of commercial, military, and civil market needs, including the tourism market, as we begin the process of defining the next generation of space transportation vehicles. Once the ramifications of space tourism are fully appreciated, we think the government will discover what private-sector entrepreneurs are acutely aware of, that technology development is not nearly as important a driver to systems development as is an understanding of the market environment that the next-generation system will function within. Before embarking on a design for the vehicle that will replace the Space Shuttle, NASA and the federal government must thoroughly understand the prospective space tourism market’s size and depth and how price, risk, and potential services offered can affect the potential demand for public participation in space travel. It would be wise before the government gets too far along in its multi-billiondollar Space Launch Initiative effort to identify new technologies for future systems that it invest a few million dollars in understanding the potential market such systems can address and how best to satisfy 182
Changing the Space Paradigm market needs while concurrently addressing civil and military requirements. We believe that NASA will discover, as our research has revealed, that a system can be designed that can not only satisfy high-volume passenger travel needs, but can also be a near-ideal architecture on which to base future lunar and Mars exploration and Department of Defense needs. To its credit, NASA has recognized the potential of a limited segment of private activity in orbit and is now actively looking for commercial enterprises to integrate into space station activities. According to NASA’s Commercial Development Plan for the International Space Station (published November 16, 1998), NASA’s long– term stated objective is: ‘‘To establish the foundation for a marketplace and stimulate a national economy for space products and services in low-Earth orbit, where both demand and supply are dominated by the private sector.’’ Today, especially following the flight of businessman Dennis Tito, which was supported by the public, the government should be seriously assessing the previously unanticipated potential of space tourism as a driver in the development in the market likely to have a profound impact on next-generation space transportation activities. Following a serious assessment, a well-crafted national space development strategy that incorporates the concerns and growth requirements of orbital space tourism should be forthcoming. It is our belief that an effective strategy can start small and build up in experience, capability, and systems reliability without large frontend expenditures. Strategy The civilian space program has been in need of a bold new central theme to focus space activities since the conclusion of the Apollo program. We believe that ‘‘civilians in space’’ is a theme that the American public will support since they’ve been paying for the space program for so long and have yet to reap the ultimate reward for their patience and support, a flight to space themselves. It is our belief that a new national strategy can be based on careful evolution to an achievable two-stage-to-orbit space transportation system that can lead to broad public participation in orbital space travel concurrent with the phase-in of the next-generation Shuttle 183
SPACE system. The new strategy would also target the elimination of our dependence on wasteful expendable launch vehicles and the expensive Space Shuttle system. To reduce the burden on the American taxpayer, the new reusable system should be developed by a government–private sector partnership and evolve to meet the needs of the future space tourism business. There is no reason that a properly structured national space development strategy cannot serve national defense, civil, and commercial requirements. With a clear eye toward the broad range of future civil needs, and applying the many lessons learned from Apollo, Skylab, and the Shuttle, an evolutionary strategy can be crafted for the next decade and beyond that keys on private sector inclusion, reusability, high flight rates, new uses for existing assets, and ‘‘people in space.’’ We owe this to the American people. We believe that space tourism can become the catalyst that takes our archaic expendable space architecture to its next evolutionary level, that of fully reusable vehicles. Tourism offers a potentially lucrative, high-volume traffic market model. Unlike traditional traffic models for satellite delivery, space tourism is based upon a firm commercial foundation, being a natural evolutionary outgrowth of the booming multi-billion-dollar adventure travel sector of the multitrillion-dollar travel and tourism business. The space tourism traffic model requires, however, that we look at reusable space transportation systems with emphasis on operability, reliability, safety, and cost rather than performance (the predominant use of leading-edge technologies to drive enhanced efficiencies), which has been NASA’s primary focus since its inception. It forces us to reexamine our existing systems, architectures, and ground operations, to consider the advent of space hotels, the vehicles that will launch them, and how they can be attained through natural evolution and integrated into a logical planning sequence. Most significantly, because of the sheer market implications, space tourism will provide the financial incentives to develop reusable two-stage systems that can be built with today’s technology, an approach yet to find favor as attempts have been made to develop technically unachievable systems. Space Hotels Space hotels can only evolve from a viable, robust, orbital space tourism business that has successfully operated a fleet of highly 184
Changing the Space Paradigm reliable vehicles, turning an acceptable profit from short-duration orbiting adventure space travelers. Once the transportation system is available, we can expect trip times of up to 24 hours in zero g inside the small confines of the passenger vehicle. Eventually, as soon as the business case allows, adventure travelers will require a destination to travel to and an extended stay period, up to a week, in an orbital habitat. Based on what we have learned from 40 years of space development, how can we cost-effectively construct these first ‘‘Heavenly Hiltons’’? Using America’s Skylab space station as the model and building upon the ‘‘wet’’ and ‘‘dry’’ workshop concepts first devised and demonstrated by Wernher von Braun, the challenge of large-volume, quickly deployable habitats to meet the needs of high-volume passenger traffic to low Earth orbit (LEO) can be met. Key is the Space Shuttle’s currently expended external tank (ET). The ET is a utilitarian asset whose worth can finally be realized by the advent of space tourism. This worth is, in large part, a consequence of investing sufficient energy in it to almost place it into orbit. In our commercially focused approach, a heavy-lift vehicle must be available to deliver a large habitable volume, a hotel, for immediate occupancy once the emerging in-space tourism business is ready to make the step to long on-orbit stay times. Using existing components and existing external tank tooling to construct a single new LO2 pressure vessel, a new external tank configuration can be developed. In this new configuration, two dry tanks (occupiable habitats), each 19,500 ft3 in volume, sit atop the inline vehicle. The top ‘‘dry’’ tank (habitat) will be a modified ET LO2 pressure vessel, retaining the ‘‘ogive’’ shape but modified to allow access through the nose cap in orbit. It will sit above a cylindrically shaped ‘‘dry’’ habitat of equal volume, which sits atop the ‘‘wet’’ (fuel carrying) cylindrical LO2 tank, which sits atop the ‘‘wet’’ LH2 tank. The entire stack is inserted into Earth orbit. The Shuttle’s main engines, or possibly the new Delta IV RS-68 engines, and orbital maneuvering capability, would be either cradled beneath the stack or side-mounted in an aft boattail configuration. In either case, the cryogenic rocket engines could be housed in reentry vehicles for recovery and reuse. These Shuttle derived hybrid ‘‘resorts’’ will be much larger than Skylab. Unlike the technique we used to deliver Skylab to orbit, the entire core of the heavy-lift vehicle is lofted to orbit and is available 185
SPACE
as habitable volume for the hotel, a total of 114,000 ft3, with an additional 9,100 ft3 of volume available if a habitable aft cargo compartment (ACC) is incorporated. Based on the experience of Skylab, following internal modifications and outfitting, approximately 83,000 ft3 of net internal volume can reasonably be expected as living space in the baseline core hotel. These massive ‘‘Marriotts in the sky’’ will be gravity-gradient stabilized and power rich, with enormous growth potential through either mating additional ET-derived elements or integrating large exterior TransHab-type inflatable volumes. They will be built with existing pressure vessel tooling and perhaps most important, they can be quickly fabricated and ready for occupancy following a short on-orbit configuration period. A Government–Private Sector Partnership for the Future What is needed is a strategy that focuses primarily on commercial market services and incorporates civil and military needs that do not hinder private-sector use of systems that can be paid for jointly by the government and commercial enterprise. With this approach, many civil programs long on the drawing boards but not funded because of launch cost, could become economically viable. Among these programs are renewed exploration of the Moon and human missions to Mars. 186
Changing the Space Paradigm
Key will be the federal government’s fostering of the commercial space tourism business by the joint government–private sector development of next-generation systems. In a partnership, jointly conceived, designed, and developed vehicles can lead to joint operations and eventually privately operated vehicles serving both civil and commercial needs. With this as a long-range (10–15 years) objective, the private sector should be invited, now, to participate in the development of requirements for the next-generation Orbiter, an important step to facilitate its eventual commercialization. Likewise, partnership is desirable as a tourism business required heavy-lift capability (to launch hotels) can also meet future civil and Department of Defense needs. Partnership with the private sector is not new. The federal government, including the Departments of Commerce, Interior, Transportation, and Defense, has a long history of supporting commercial enterprise, including tourism, in the case of the Department of the Interior. Similarly, NASA has supported the biomedical, pharmaceutical, and materials sciences industries by assisting them in the development of flight hardware and has flown their experiments. NASA has been reluctant, however, to support space tourism, an activity whose parent industries include the multi-trillion-dollar travel (including airlines), tourism, hospitality, and cruise line industries. While it is unclear why this has been the case to date, it is clear that by embracing space tourism, NASA and the other space-related government offices have an exciting opportunity to invite a major multi-industry consortium with substantial resources into the space development arena. If the government is truly interested in commercializing space activities, including space transportation, here is an opportunity to act. 187
SPACE Building upon a National Asset Also integral to this strategy, the existing Space Shuttle system can be used as a logical steppingstone to a host of next-generation systems beyond the next Shuttle Orbiter. This can be accomplished within the timeline that NASA now envisions as desirable to phase out present STS operations. Existing Space Shuttle system assets, when mated to the reusable first-stage booster and its derivatives, will enable a new class of heavy-lift launch vehicle; a vehicle that integrates its heavy-lift ability and potentially habitable large-volume propellant tanks to create single–launch deployable, very-largevolume space habitat(s). Today’s wastefully disposed-of Space Shuttle ET is the ideal volume to become the basic unit of construction for much of tomorrow’s in-space infrastructure. What This Administration Can Do The current administration should direct NASA, the Department of Commerce, or both to initiate space tourism market studies to enable government decisionmakers to make intelligent, informed decisions relating to future space transportation needs. Should those findings reveal what many in the community already suspect, and should the administration adopt the strategy suggested here, then the foundation will have been laid for major changes in the space program. We would then envision that, within the next six years, significant additions to the International Space Station could increase its productivity while decreasing United States dependence on Russia for key on-orbit elements. A new human capability that would augment and eventually phase out the current Space Shuttle can become operational. Along with the new Orbiter, a new space transportation architecture, based upon a single ‘‘workhorse’’ reusable booster that uses existing upper stages in new ways, can launch the entire spectrum of civil, military, and commercial satellites much less expensively than is possible today. Those new space launch tools will allow the United States to recapture much of the space launch market lost to foreign competitors over the past 15 years. In the next 15 years, upon completion of the new family of upper stages, the nation’s archaic expendable launch vehicle fleet, the Titan, Atlas, and Delta families, can finally be phased out along with the Space Shuttle shortly thereafter. 188
Changing the Space Paradigm Within two decades, the booster and Orbiter elements of the new two-stage space transportation architecture will demonstrate increased reliability with frequent use and evolution of both the products and procedures for use. This maturity will open space travel to the public at large. Passing the Ball to the Private Sector The initial next-generation Orbiter should be sized to meet ISS crew changeout requirements and carry 8–10 passengers and crew. A commercial derivative of this Orbiter, while small in size, should initiate regularly scheduled ‘‘orbital’’ space travel for the public. Should the business case allow, a subsequent, larger Orbiter vehicle, carrying perhaps as many as 80 passengers, could enable largescale public access to space. Concurrently, a large reusable booster, integrated with existing STS system elements, will enable the development of a family of highly efficient heavy-lift vehicles that will make high-volume space travel and high-occupancy space hotels a near-term future reality. These same vehicles will play key roles in the cost-effective return of humans to the Moon and can initiate a sustainable approach to the exploration and habitation of Mars. The Elegance of Cycling Interplanetary Transportation In 1986, the National Commission on Space recommended that this nation develop a relatively inexpensive and dependable interplanetary transportation system based on orbital mechanics and gravity (as a natural fuel) for a sustained program of exploration and settlement of the Martian system. This approach would involve one or more reusable spacecraft called Cyclers. Cyclers would be sizable structures that could be deployed by Shuttle-derived, habitatoutfitted, heavy-lift vehicles, again using the hydrogen-oxygen fuel tank as the basic unit of construction. A Cycler would rotate slowly to create artificial gravity to prevent the debilitating effects of weightlessness on passengers who will spend more than six months in transit to Mars. The beauty of the Cycler system is that we will no longer have to repeatedly accelerate, decelerate, and discard the most massive and expensive components of a traditionally conceived Mars vehicle. The uniqueness of the cycling orbit is that it requires only a minimal 189
SPACE adjustment on each cycle, eliminating the large and expensive injection propellant requirement of traditionally conceived Mars vehicles. Once set on its course toward Mars, the Cycler becomes a permanent, manmade inner solar system companion of Earth and Mars, tapping the free and inexhaustible ‘‘fuel supply’’ of gravitational forces to maintain orbit. Like an ocean liner on a regular trade route, a Cycler will glide perpetually along its beautifully predictable orbit. Twin Cyclers, one always en route to Mars, the other always returning to Earth, will greatly reduce the cost of exploring and settling Mars because Earth-to-Cycler taxi vehicles can be much smaller and cheaper, needing only enough fuel and life support capability for short-duration missions to rendezvous with the Cycler in Earth’s vicinity. Likewise, taxi vehicles coming from Mars need only to meet the Cycler high above the Red Planet. As currently envisioned, a Mars Cycler will be constructed from the basic LEO tourism-derived hotel structure but slightly modified to accommodate high- and low-thrust propulsion systems. The boattail with SSME engines used to deliver the structure to orbit can be outfitted with fuel tanks for the high-impulse delta-V (change of velocity) Trans-Mars Injection maneuver. Low-thrust delta-V maneuvers could be handled by an ion propulsion system situated perhaps on the aft end of the ET. Deployed as a single unit, the upper two dry habitats could be detached and both tethered together opposite one another and attached to the top of the core structure via a deployed cubic octahedron superstructure. This arrangement could allow the entire structure to slowly spin, creating an artificial-g environment in both outfitted habitats. A pressurized elevator would provide access to and from the habitats and core structure via an airlock/node that could sit atop the wet LOX tank. The node would also provide multiple docking ports for visiting vehicles and would serve as the power ‘‘service station’’ with protruding solar panels and heat disposal, as well as the main command and control facility for Cycler management. Ultimately, other habitats, either preoutfitted pressure vessels or TransHab-type inflatables, can be attached to the Cycler elements, creating an ever-increasing spaciousness on those deep space ocean liners. We believe that regular planetary flybys, made possible with a Cycler transportation system, would create an entirely new economic and philosophic approach to space exploration. Reliable, reusable, 190
Changing the Space Paradigm and dependable Cycler transportation can be the key to carrying humanity into the next great age of exploration, expansion, settlement, and multi-planetary commerce. It would also preclude the possibility of an Apollo-type abandonment of a future Mars exploration program. The Lunar Cycler A Lunar Cycler, made from one of the early LEO hotels outfitted with a propulsion system, could be an early testbed for these interplanetary ocean liners. A Lunar Cycler would continuously orbit in great loops between the Earth and Moon. It would fly by the Earth at regular intervals to meet upcoming tourists to be carried to a lunar rendezvous. Of course, the Cycler would not land; its orbit will take it by or into an orbit around the Moon, depending on the specific orbital trajectory selected. But those willing to pay for the adventure would swing by close enough to allow an incredible view that only 24 human beings have ever witnessed. Total trip times will be from 7 to 30 days, depending on the orbit. One could envision these trips as a profitable enterprise within the next few decades. As currently envisioned, the initial Lunar Cycler will not rotate, allowing early tourists a continuous zero-g experience in the large, pressurized volume of the Cycler. As we prepare for the emplacement of the Mars Cycling system however, it may become necessary to add additional elements to the orbiting lunar facility and use it as an engineering demonstrator of the Mars system. Tethered units coupled to the Cycler’s cubic octahedron support structure could create an artificial gravity environment similar to that required for the Mars Cycling system. Large pressurized volumes will certainly find a myriad of applications in space tourism; space transportation; and in-space infrastructure including commercial space business parks, space construction, and as space platforms. For this reason, it would be wise to begin storing the Shuttle’s large and valuable external tank on-orbit as soon as possible. Conclusion An integrated national space transportation and development strategy is needed to force the evolution of our aged disposable space architecture to a more affordable and reusable architecture. 191
SPACE Beginning with reuse of a small first-stage element, a progressive step-by-step ‘‘building block’’ approach to infrastructure development is possible that can lead to larger, low-cost reusable space transportation vehicles, lower-cost heavy-lift launchers, and a new generation of LEO facilities. This strategy, if implemented in partnership with the private sector, could enable the emergence of exciting new space-based commercial markets—all based upon technology available today. The evolutionary path described is the surest path to gain us the higher reliability and lower costs that we must seek within the time frame we need to acquire these benefits. Over the long run, the lasting transition that this strategic approach creates—from total government control to partnership with the private sector—will permanently integrate the free market’s engine of innovation into our space activities, continuously stimulating new markets and commercial-industrial growth. These new forces will accelerate the push of human expansion outward: a return to the Moon, creation of an artificial gravity research facility, tourism throughout cislunar space, establishment of an interplanetary space port, multiple lunar bases including a mass driver on the lunar surface, and an L-l lunar space port.
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PART FOUR:
PRIVATIZING SPACE
13. The Legislative Challenge in Space Transportation Financing Marc Schlather On October 28, 1998, President Bill Clinton signed the ‘‘Commercial Space Act of 1998’’1 into law. Many point to that day as the beginning of the real space age and, while progress in areas addressed by that legislation has been slow, proponents of private efforts in space finally have the imprimatur of the federal government on their efforts and their dreams. The bill, which passed unanimously in both houses, is specific about how the Congress envisions our future in space: ‘‘The Congress declares that a priority goal of constructing the International Space Station is the economic development of Earth orbital space. The Congress further declares that free and competitive markets create the most efficient conditions for promoting economic development, and should therefore govern the economic development of Earth orbital space.’’2 The Act specifically addresses a number of areas, from the promotion of United States global positioning system (GPS) standards to the administration of commercial space centers, from the acquisition of space science data to the commercial use of excess intercontinental ballistic missiles. This discussion will be limited to space transportation, specifically attempts by the Congress to address launch costs by aiding the development of a new generation of vehicles. SEC. 201. REQUIREMENT TO PROCURE COMMERCIAL SPACE TRANSPORTATION SERVICES. IN GENERAL.—Except as otherwise provided in this section, the Federal Government shall acquire space transportation services from United States commercial providers whenever such services are required in the course of its activities. To the maximum extent practicable, the Federal Government shall plan missions to accommodate the space transportation services capabilities of United States commercial providers.’’3
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SPACE While the bill provides for a number of exceptions, it is clearly the intent of the authors that all such services be acquired in the commercial markets. What the Commercial Space Act of 1998 could not accomplish is the lowering of launch costs, an issue at the forefront of the space transportation debate today. Certainly, at some $3 billion a year to operate, the Space Shuttle will never live up to the billing it received as the program was originally announced in 1972: ‘‘The new system will differ radically from all existing booster systems, in that most of this new system will be recovered and used again and again— up to 100 times. The resulting economies may bring operating costs down as low as one-tenth of those present launch vehicles.’’4 Reducing launch costs should be the number one priority of every space transportation customer and operator, both within and outside the government. But that is not the case, as noted by Robert Davis, chief executive officer (CEO) of Kelly Space & Technology in testimony before a subcommittee of the House of Representatives: ‘‘In the absence of demonstrated customer demand for less expense or better system performance, or both, current launch service providers do not have a significant incentive to radically alter their launch systems. Companies that offer these current launch services are also increasingly subject to the very fickle demands of shareholders for ever-greater earnings; even if they so desired to change what they are doing today, it is difficult to justify wholesale changes to their current product lines.’’5 In other words, if a provider is being paid $10,000 per pound to launch a payload and profits are a function of a percentage of revenue, the provider is unlikely to push for more efficient systems, particularly in the face of little or no pressure from the customer. Still, there have been efforts to seek lower cost alternatives. NASA has made several abortive attempts at building prototypes and demonstrators that the agency claimed would lead the way to a reduction in costs by a factor of ten.6 A number of private companies, spurred by the lure of the low Earth orbit communications constellations (i.e., Iridium) in the late 1990s, began design work on suborbital and orbital reusable launch vehicles. The subsequent failure of the ‘‘LEOComms’’ made it virtually impossible for these new systems to attract capital investment. Capital investment is in fact the leading challenge facing those attempting to develop the next generation of launch vehicle. Such 196
The Legislative Challenge complex systems are incredibly capital intensive, yet investors are not likely to see a return for a number of years. As one Wall Street expert noted at a recent congressional hearing, ‘‘In the early stages of development, there is little or no cash flow generated. For space related programs, the time to generation of positive cash flow may require 3–5 years or longer. This must be contrasted to competing startup commercial ventures in other industries such as technology and telecommunications where the gestation period to positive cash flow returns to the investor can be significantly shorter.’’7 In other words, at a time when dotcoms were providing double and even triple digit returns in a matter of months, it was difficult for the space transportation industry to attract the attention of the venture capitalists. The subsequent collapse of that market sector has not freed additional funds. Instead, it has made the venture capitalists even more wary of jumping into a new market until that market has been proven. The capital challenges faced by the industry in this regard have caught the attention of the White House and NASA as well as some members of the House and Senate, a development that has led to a number of initiatives. For the purpose of our discussion here, we will focus on three: 1. Direct government investment in research and development in the form of NASA’s Space Launch Initiative Program; 2. Loan guarantees for the development of new space transportation systems; and 3. Investment tax credits for space transportation. Direct Government Investment: NASA’s Space Launch Initiative In the National Space Transportation Policy of 1994, President Clinton assigned to NASA the exclusive role of developing the next generation of reusable launch vehicles (RLVs). As noted by Marshall Space Flight Center director Art Stephenson, within that policy ‘‘the Nation set forth a goal working toward a new RLV that would be commercially developed and operated in support of civil, commercial, and defense missions.’’8 That assignment led to a number of projects, including X-33, X-34, and X-37. As Stephenson observed: ‘‘These investments were focused on developing and proving key technological advances for RLV 197
SPACE systems. We invested in specific concepts based on the premise that major growth in the commercial launch market would enable significant private financing of a new RLV, once the technology and business risks were reduced. We partnered heavily with industry and pursued aggressive technology programs aimed at pushing the state of the art. We aimed at breaking paradigms related to the management and operations of launch system programs.’’9 Sadly, those investments were essentially for naught. Both X-33 and X-34 have been abandoned prior to flight test, at a cost of over $1 billion. In 1999 it became clear to NASA and the federal Office of Management and Budget that the approach commenced in 1994 was not bringing them any closer to their goal of a next-generation RLV. At that time, both agencies sat down to design a new program, one that would look toward integrated solutions. The result is NASA’s Space Launch Initiative Program. In the Program Description document that accompanied the announcement of SLI in February of 2000, the agency lays out its overall goals for the program: ‘‘Safe, low-cost space transportation remains the key enabler of the commercial development and civil exploration of space. Transitioning NASA’s routine space operation needs, including Earth-to-orbit launch, to the private sector will enable NASA to concentrate Agency resources on more science research, technology development, and exploration activities. To meet the goal of substantially reducing space transportation costs, NASA has established risk reduction activities to enable a 2nd Generation Reusable Launch Vehicle (RLV) architecture as the agency’s top new-development program priority.’’10 NASA was seeking some $4.4 billion over five years to finance the Space Launch Initiative. In his first statement about the proposed program, NASA’s then-Administrator Daniel Goldin told the House Subcommittee on Space & Aeronautics, ‘‘[SLI] makes the critical investments that will enable major safety, reliability and affordability improvements for future generations of space transportation systems. . . . The Space Launch Initiative program is focused on initiating full scale development of a 2nd generation RLV architecture and supports a 2005 competition to meet NASA’s launch needs through purchase of commercial launch services by 2010, with the specific goal of achieving commercial ownership and operation of any new RLV’s as soon as 2010 if industry performs as promised.’’11 198
The Legislative Challenge The program itself is made up of four elements, all of which combine together to form the second-generation RLV program. Those elements are 1. Systems engineering and requirements: ‘‘The integrated systems engineering process will develop the detailed technical and programmatic requirements necessary to link technology and other risk reduction efforts to competing architectures. It will also be used as the basis of critical decisions regarding architecture options and system characteristics to assure proper integration of the overall program.’’12 2. Second-generation RLV risk reduction: ‘‘[T]he pursuit of programmatic and technical advances that will sufficiently reduce risks to enable a 2nd generation RLV architecture with significant private sector commitments for developing privately owned and operated commercial RLV systems. The risk reduction activities will likely include business development and planning; technology investments; advanced development activities and flight and ground experiments, including largescale, long-life demonstrations and demonstrations of low-cost operability and supportability. Investments in the 2nd generation RLV activity will be driven by industry need to assure the highest degree of competition and program success.’’13 3. Government Unique Systems: ‘‘NASA will require additional systems (e.g., crew transport vehicle, cargo carriers, rendezvous and docking systems) to meet unique government mission requirements. These elements will be integrated with commercially provided Earth-to-orbit launch vehicles and other potential commercial systems to form the complete architecture for a 2nd generation RLV system. This third program element is focused on developing and demonstrating the designs, technologies and systems level integration issues associated with NASA-unique transportation elements. This program element will likely consist of contracted efforts in combination with significant government design, development and integration activities.’’14 4. Alternative Access: ‘‘Alternative Access funding is intended to enable NASA to establish and use alternative means of access to space to the International Space Station. Alternative access 199
SPACE could provide important benefits, including contingency capability and operational flexibility. . . . This contract provides for awards to multiple contractors with vehicles with demonstrated flight history. The Next Generation Launch Services (NGLS) contracts will also be competed and will enable launch services companies, with little or no flight history, to compete for offering launch services to NASA.’’15 SLI received a cautiously optimistic reception upon its arrival on Capitol Hill. Although it was not included in the original House version of the NASA budget, funding was included in the final FY2001 budget signed by the President. For the next six months, however, feelings about the program deteriorated in many sectors. Of particular contention was the NASA goal of reaching a so-called ‘‘down-select’’ point in 2005, where they would choose at least two vehicle designs that would then receive all NASA launch business once they were constructed and operational. That would have a chilling effect on those systems that were not chosen, as the capital markets might view a system seen as a ‘‘loser’’ in the NASA competition as not commercially viable. In fact, as we will see later, the down-select process and its negative effect on the private sector will come much sooner than 2005. Ivan Bekey, a 19-year NASA veteran who now runs his own company, suggested one possible solution. He argued that NASA should pledge ‘‘to allow full and open access to launch all its future missions to purely commercially developed vehicles of any size, beginning as soon as such commercial vehicles are proven sufficiently safe and reliable. . . . This would allow freedom from the ‘requirements-driven’ process, and might result in innovative low cost solutions. Furthermore, such equal opportunity of access to the NASA market is a necessary enabling condition to entrepreneurial firms when seeking investors.’’16 Start-up firms were particularly concerned about SLI, especially after the terms of competing for the NGLS were revealed. NGLS was seen by those companies as a vital first step in qualifying for the Alternative Access program, which would allow them to bid for contracts to provide lucrative resupply contracts for the International Space Station (ISS). But, as reported in Space News on February 12, 2001, ‘‘Executives of the start-up rocket firms targeted in NASA’s NGLS procurement 200
The Legislative Challenge are worried that winning one of the fixed-price launch service contracts could do their companies more harm than good.’’17 Their issue with the agency is that the funding provided by the procurement meant that ‘‘even the cost of preparing a responsive proposal would exceed the amount of money available during the technical insight period. . . . You are essentially bidding a launch service at a fixed price, picking up an enormous number of compliance requirements . . . and waiving your right to choose not to bid on any given launch that NASA decides to ask for under this effort,’’18 observes Mitchell Burnside Clapp of Pioneer Rocketplane. Other new companies complained that the procurement called for International Organization for Standardization 9000 certification, a costly quality assurance process that is out of reach for most startups. That requirement alone placed these companies in a position of having to boycott the NGLS procurement process. These and a number of other issues led to second thoughts in the halls of Congress. Rep. Dana Rohrabacher (R.-Calif.), chair of the House Subcommittee on Space and Aeronautics, was concerned that SLI might follow the lead of its predecessor programs: ‘‘Unfortunately, like gravity’s pull on the falling apple, the bureaucratic weight of NASA’s own launch demands may be pulling SLI off course. . . . For too long, we endured costly development programs that failed to deliver real dividends. Unfortunately, SLI is poised to head down the same path. . . . SLI should respond to the nation’s broader interest in cheap access to space and not just NASA’s bureaucratic preferences.’’19 Chairman Rohrabacher went on to suggest what a number of voices have been recommending: that NASA return to its roots in the old National Advisory Council on Aeronautics (NACA). Back in the days of NACA, the agency ‘‘focused on developing and demonstrating precompetitive, component technologies. In this instance, NASA would become responsible for identifying space transportation technology concepts for advanced development and demonstration, driven by operability and reliability objectives, as opposed to performance specifications.’’20 As stated earlier, the chilling effect that many predicted would be caused by the 2005 down-select has in fact already occurred. In presentations to Capitol Hill in March of 2002, NASA revealed that 201
SPACE it will down-select to just three full-scale vehicle concepts in November of 2002.21 They will do this without flying a single prototype, demonstrator, or x-vehicle model. At the same time, a multitude of questions about SLI are being asked throughout the Congress, the industry, and the space community as a whole. Many feel that the weight of economic and technological evidence is mounting that the program as it is currently structured makes no sense. Let’s take a look at just a small part of that evidence, starting with the economics. When asked by Space News about the ownership of a new system resulting from SLI, Program Manager Dennis Smith stated in part: ‘‘While the government would probably invest in a reusable rocket common to both systems, we envision that the rocket would be privately owned and operated and hopefully used for commercial launches as well.’’22 In splitting the cost of developing such a public/private system, NASA has said it looks toward a partnership similar to the Evolved Expendable Launch Vehicle (EELV) program. Within that program, Boeing and Lockheed each put up two-thirds of the money against one-third in federal funding. Apply that formula to SLI. Most estimates place the development of a full-blown next-generation reusable system at between $10 billion and $20 billion, which means NASA is expecting industry to contribute between $6.5 billion and $13 billion to build it. Now consider the central economic goal of SLI, which is to cut the cost of launch by a factor of ten. Let’s be clear what that means. The shuttle fleet currently costs NASA in the neighborhood of $3 billion per year. Reducing cost by a factor of ten means building a system that can do everything the current Space Shuttles do for about $300 million per year. That means a company must commit billions of dollars to a project that will result in annual revenues from NASA of about 2.5% to 5% of that investment. Even if that new system captured the entire domestic launch market as well, the revenues would not be anything near what is required to justify the investment. In addition, the system to be built is essentially a prototype, meaning initial cost estimates will be guesses at best and cost overruns are virtually assured. No responsible board of directors would commit their company to such an undertaking. 202
The Legislative Challenge The real question is technological: whether a single reusable system that meets all of NASA’s needs and cuts costs to promised levels is in fact achievable with current technologies. Most experts agree that a key factor is annual flight rate, or how many times a single vehicle can be used each year. In the interview cited previously Smith is quoted as saying, ‘‘We don’t think we need to fly 60 times a year to make this program work. We may not need to fly 25 times a year.’’23 That discussion is moot at this point as no vehicle except the Space Shuttle has been flown repeatedly at all. Two programs, X-33 and X-34, failed to produce a flight test vehicle. NASA managers say they have taken the lessons learned from those programs and built them into a strategy of ‘‘risk reduction’’ within SLI. We submit that it is not possible to retire risk before actively establishing that the risk has been overcome. Until demonstrators or prototypes are flown, recovered and recycled, and flown again in a matter of days rather than months, no risk has actually been conquered. To proceed to full-scale development of a new system without flight data is to be imprudent. Far too much is made of the old saw that the government should not be in the business of picking winners and losers. Indeed, every time they buy paper clips they in fact choose a winner. But they should not be in the business of suppressing open markets and competition by making decisions based on design studies. X-33 and X-34 both demonstrated that NASA has a less-than-stellar track record in picking the right technologies. Loan Guarantees: The Breaux Bill One proposed approach to lowering the cost of space transportation that has received a great deal of attention was put forward in a bill introduced in 1999 by Sen. John Breaux (D-La.). Entitled the ‘‘Commercial Space Transportation Cost Reduction Act,’’24 the stated purpose of the legislation was to create ‘‘a United States Commercial Space Transportation Vehicle Industry Loan Guarantee program to provide loan guarantees to support the private development of multiple qualified United States commercial space transportation vehicle providers with launch costs significantly below current levels.’’25 203
SPACE On its face this seemed to present a solution to the challenges faced by the industry in obtaining sufficient capital. Similar programs had engendered significant success in other domestic industries, such as shipbuilding, as Senator Breaux observed in the statement he made at the time he introduced the bill: ‘‘The legislation that I am introducing today . . . sets up a program which would be a loan guarantee program where the U.S. Government can pattern in the space transportation industry what we have done very successfully in the shipbuilding industry under what is known as a Title XI shipbuilding loan guarantee program, where the Federal Government comes to a qualified builder who is having a difficult time getting adequate financing because of the nature of the industry, . . . [the] company would go out into the private market and borrow the money but have the loan guaranteed by the Federal Government. Under that scenario, we have built literally hundreds and hundreds of vessels, probably thousands, through the Title XI loan guarantee program.’’26 More careful consideration demonstrates that the two industries, shipbuilding and launch vehicles, and their relative situations do not lend themselves to the same solutions as regards financing. First, consider the immense cost of developing a new space transportation system. Few experts would conclude a system capable of launching large payloads to geosynchronous Earth orbit (GEO) and doing so for substantially lower cost than existing alternatives could be brought to market for an investment of less than $5 billion. Under the terms of the proposed loan guarantee program, the developer could apply for a guarantee that ‘‘shall be in an aggregate principal amount which does not exceed 80 per centum of the Total Capital Requirement. . . .’’27 Given those parameters, the financing might look something like this: Program total 80% guaranteed loan Loan terms Amortized annual payments
$5 billion $4 billion 12 years @ 7% interest $493,633,926
If the new vehicle flew once a month (and remember the current state of the art in reusable vehicles, the Space Shuttles, fly just twice a year), each flight would carry debt service of $41,135,244. If we assume a payload of 40,000 pounds, that would result in debt service 204
The Legislative Challenge of approximately $1,028 per pound—before any recurring costs are addressed. If the goal is to reduce launch costs to the neighborhood of $1,000 per pound, it would seem that borrowing all the funds to develop the vehicle would be precluded. Some developers who favor loan guarantees agree, but contend that significantly higher flight rates, in the neighborhood of 36 flights per year, would alter the math. True enough but for two hurdles. First, that rate in the first four or five years of operation of a brandnew system is unlikely, given the massive technological obstacles any such new vehicle is bound to face. And even if it were possible, such a system would have to essentially monopolize domestic payloads in the requisite category. That means a lack of competition and that fact alone would have a negative impact on the possibility of significantly lowering launch costs. But this program presents more challenges than just excessive debt service costs. Proponents of loan guarantees for new space transportation contend that one of the most attractive aspects of the program is that the $500 million invested by the government in the guarantees could be multiplied by a factor of ten in the borrowing power of the developer. They point again to the maritime loan guarantee program. It is true that the shipbuilding program has been successful in aiding domestic yards to compete in the world markets. By guaranteeing the loan, buyers are able to secure significant interest savings from lenders. Those savings offset the slightly higher prices for American-built ships over those built in Asia and elsewhere. That is true also in other successful loan guarantee programs, including federally insured home mortgages. The government guarantee assures that lenders will be made whole should default occur, which in turn results in lower interest charges for the borrower. But all these loan guarantee programs have one thing in common. They are essentially demand-side guarantees, which in essence reside with the buyer. That customer uses the guarantee to buy a product that is a known quantity. For instance, the lender can determine the value of the ship by comparing it to existing vessels. Should the borrower default, the lender takes possession of the ship and resells it to cover the loan. The government guarantee covers only the shortfall between the amount of the loan and the value of the asset. In most cases, whether a ship or a home, that shortfall rarely exceeds 10 percent of the value of the loan. 205
SPACE New space transportation assets and the guarantees proposed for them are a different animal altogether. They are supply-side guarantees, with the funds going to the developer of a new system. Added to that is the fact that there is no real way for the lender to judge the value of a vehicle that does not yet exist. What happens if, after the funds have been expended, the builder ends up with a system that doesn’t work? What sort of protection might a lender require to cover such an event? To illustrate the challenge, take the case of X-33 and consider it as if it had been a planned operational vehicle and some $1.3 billion were invested. Under the loan guarantee program, about $1 billion would have been borrowed and guaranteed. The developer then finds that the concept is unworkable and defaults, so the lender moves in to repossess the assets and sell them to defray its losses before turning to the government to cover the shortfall. What assets? In this case, there are few. If it in fact had been a planned commercial vehicle, there might have been some sort of physical plant, a parts inventory, perhaps even some intellectual property that would have value. It is probably generous to estimate the value of the seized assets at $200 million, but let us be generous. That would still leave a shortfall of $800 million that the taxpayer would have to cover. Still, loan guarantees for space transportation might provide the Congress with a tool to aid the industry. Most of the new systems do indeed include a debt/equity ratio in their business plans. But it is clear that they cannot do the job on their own. And they will be ineffective for larger, more capable vehicles with multi-billiondollar price tags. Senator Breaux agrees that loan guarantees are only a portion of any financing process for new space transportation: ‘‘S. 469 was not offered as a cure-all for the space transportation industry. Loan guarantees may be a part, certainly a key part, but still only a part of an overall solution. . . . Tax incentives offer another option. Continued direct government funding of some technology development will also be necessary. The essential point is to focus on the United States historical record of achievement in assisting with the development and commercialization of technologies.’’28 Tax Incentives: The Space Transportation Investment Act For some years the tax code has been used effectively to spur research and development. ‘‘Research and development is the life206
The Legislative Challenge blood of technological change, which in turn drives long-term growth in real per-capita income. If properly designed, policies such as these can encourage technological innovation by boosting expected after tax returns on investment in R&D, thereby inducing firms to spend more on it.’’29 The current crop of research and development (R&D) tax credits is designed for the internal use of a company. By availing themselves of the credit the company can deduct a certain percentage of their R&D budget from their tax liability. The credit actually serves to stimulate investment that might otherwise not be made, even though the results of the research will actually improve the economic picture for the company. ‘‘Conventional economic theory provides a cogent rationale for government subsidies for basic and applied research. In general, the market economy is thought to operate efficiently when the decisions of consumers and producers are not distorted by government intervention. However, the market economy does not generate efficient outcomes in all areas, and one of the areas where it fails to do so is the generation of new technical knowledge. . . . As a result, without government subsidies private industry is inclined to invest less in research than its potential economic benefits would justify. Such a shortfall is an important public policy issue because technological advance propels long-term economic growth.’’30 Even with existing credits there can be a decided lack of significant innovation, especially in a capital-intensive industry such as space transportation. And that lack is exacerbated considering that the companies who have proposed the cutting edge solutions are the startups. Those firms do not yet have revenues, much less the profits that would make them eligible for the R&D credit. The key for those companies is not a tax incentive that protects their profits, but one that helps them attract capital investment. The solution? A new type of investment tax credit, one that passes through to the investors in companies seeking to build the next generation of space transportation vehicles. My organization, ProSpace, was approached in 1999 by several companies in just such a situation and asked to help forge a solution. We took their input, along with that of a number of offices on Capitol Hill, and developed a suggested solution. We proposed that solution to Rep. Ken Calvert (R-Calif.), who created the Invest In Space Now 207
SPACE Act. After further consultations with the Hill and the enlistment of Rep. Solomon Ortiz (D-Tex.), it was introduced in the House of Representatives in the 107th Congress on June 14, 2001. Twenty-two other members of the House have joined Representatives Calvert and Ortiz on the bill (HR 2177) as cosponsors. The concept of the bill is simple. To ‘‘prime the pump’’ by pointing private investment toward the space transportation industry, the bill creates a tax credit that benefits a company’s investors instead of the company itself. The credit is tiered to provide a higher return in the near term, declines over an eight-year period, and is then phased out. The object is to stimulate investment in the short term, not create a permanent subsidy for space transportation. Under the terms of the bill, the subject company could offer its original investors a credit on their current tax liability based on the following criteria: 1. A credit of 50 percent on investments made in years one, two, and three of the bill; 2. A credit of 40 percent on investments made in year four of the bill; 3. A credit of 35 percent on investments made in year five of the bill; 4. A credit of 30 percent on investments made in year six of the bill; 5. A credit of 20 percent in years seven and eight of the bill, at which time the credits will be retired. To moderate the cost to the U.S. Treasury, the new version of the credit legislation contains two devices to limit its scope. First, there is a maximum aggregate cap for all qualifying companies per year: 1. 2. 3. 4. 5. 6. 7.
$395 $580 $690 $875 $950 $430 $245
million million million million million million million
in in in in in in in
year one; year two; year three; year four; year five; year six; years seven and eight.
In addition, there is a cap per company per calendar year so that at least 10 companies are eligible to participate. 208
The Legislative Challenge It will come as no surprise that space transportation companies favor some kind of tax-based solution to aid in their search for investment: ‘‘We believe that tax incentives are an appropriate mechanism for encouraging private investment in the new commercial launch industry. The government has dominated the launch industry since its inception. A tax mechanism seems an appropriate mechanism to offset residual skepticism about the government’s commitment to commercial space and the industry’s prospects.’’31 But the companies are not the only entities enthusiastic about the potential of investment incentives. A state version of this legislation has already been passed in Oklahoma.32 Patterned on the federal bill, this would allow investors with state tax liabilities to receive a credit on their Oklahoma taxes as well. Those responsible for its introduction and passage are confident that it puts their state in a superior position to attract one or more of the new companies to locate within their borders. Within this basic framework, investment tax credits will accomplish two important goals. First, they will help to level the playing field on which all of the companies building new systems will have to play. Will the established larger firms still have an advantage? Of course. But the smaller startups will have a chance to present their cases directly to the capital markets on more even terms. Second, while maintaining the level field within the industry, tax credits will help tilt the capital markets toward space transportation, leading to large infusions of investment. Strong business plans along with creditable management will still carry the day with the venture capitalists. But an immediate 50 percent return on investment will serve to offset the need to wait out the several years until these new systems fly and begin to produce revenues. Conclusions An objective analysis of both the challenges facing us in space transportation industry and the methods available to the Congress to address those challenges leads to several conclusions. First, if the Congress is truly interested in lowering costs by seeing the first generation of privately built launch vehicles, it must end the practice of government-led design and development. Such efforts are usually doomed from the start by a lack of market-centric focus, 209
SPACE and instead tend to get caught up in the agency’s own requirements and desires, however arbitrary or laudable those might be. Second, any kind of direct investment by the government in such research programs is likely to have a negative effect on the eventual outcome, as opposed to tax incentives: ‘‘If the policy aim is to boost the Nation’s rate of commercialization of new products, processes, or services, then a tax incentive like the R&D tax credit has some advantages over direct funding. Success in commercialization hinges on a sound understanding of the market, and tax incentives have the advantage of leaving the decisions of which projects to fund in the hands of private firms rather than government agencies. Even with the tax subsidies, firms still will be putting up most of the money for projects they pursue, which insures that they, not taxpayers, will bear most of the risks of failure. By contrast, direct funding of commercial R&D could foster a misallocation of resources among major sectors of the economy.’’33 It is clear that a tax-based approach is preferable, at least to begin investment flowing to these new projects and companies. Once the process has moved forward and companies begin to see the light at the end of the tunnel, then a loan guarantee program begins to make sense. At that point lenders will more easily be able to analyze the value of assets and the overall project itself, which in time will allow the government far greater leverage with the guarantee pool. It is also clear that, whether financed by tax credits or loan guarantees, the financial markets are not ready to address the idea of a new multi-billion-dollar space transportation system. There are far too many variables, too many uncertainties, for those markets to look favorably on such an enterprise. Instead, it is time for launch vehicles to enter a period of natural evolution, much as other transportation systems have done through history. We did not go directly from clipper ships to aircraft carriers or from the Wright brothers to the 747. The industry should strive to build smaller, less capable reusable vehicles and use the lessons learned from their operation to build larger vehicles down the line. Once the new generation of RLVs demonstrate their abilities to the capital markets the private financing of those larger launch systems will be possible. The Commercial Space Act of 1998 instructs federal agencies to ‘‘plan missions to accommodate the space transportation services 210
The Legislative Challenge capabilities of United States commercial providers.’’34 The Congress must hold those agencies to that commitment. They have drawn the line in the sand and it was the right line to draw. Allowing an agency’s own requirements to overrule such sound policy in an effort to produce a vehicle that is not envisioned by the current state of the private sector will simply condemn space transportation to yet another generation of vehicles that are more expensive to operate than they should be. By aiding the private sector with carefully chosen financial incentives and a rational structure for the government to purchase commercial transportation services, the Congress can lead us into that real space age, one that creates new markets, new industries, new jobs, and new tax revenues. At the same time, the government will save billions of dollars on space transportation services. The choice is clear. Notes 1. Commercial Space Act of 1998, Public Law 105-303, 105th Congress, October 1998. 2. Ibid., Title I, Sec. 101 (a). 3. Ibid., Title II, Sec 201 (a). 4. Statement of President Richard Nixon announcing the development of the Space Shuttle, January 5, 1972. 5. Robert M. Davis, Testimony of 106th Congress Hearing on Commercial Spaceplanes before the Subcommittee on Space and Aeronautics, House Committee on Science, October 13, 1999. 6. Chief among these attempts were the X-33 and X-34 programs, both of which were canceled on March 1, 2001, without ever leaving the ground under their own power. 7. Testimony of Robert B. Landis, managing director, Telecom and Aerospace Division, Deutsche Banc Alex. Brown, 106th Congress hearing on ‘‘Financing Commercial Space Ventures’’ Subcommittee on Space and Aeronautics, House Committee on Science, July 18, 2000. 8. From a speech by Art Stephenson, director, NASA Marshall Space Flight Center, to the FAA 3rd Annual Commercial Space Launch Forecast Conference, Arlington, Va., February 8, 2000. 9. Ibid. 10. Space Launch Initiative Program Description, p. 3, National Aeronautics and Space Administration, February 2000. 11. Statement of NASA administrator Daniel S. Goldin before the Subcommittee on Space and Aeronautics, 106th Congress House Committee on Science, February 16, 2000. 12. Space Launch Initiative Program Description, p. 7, National Aeronautics and Space Administration, February 2000. 13. Ibid., p. 9.
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SPACE 14. Ibid., p. 10. 15. Ibid., p. 11. 16. Testimony of Ivan Bekey, president, Bekey Designs, Inc., ‘‘NASA’s 2001 budget Request: Aero-Space Technology Enterprise,’’ in a hearing before the Space Subcommittee on Space and Aeronautics of the House Science Committee, 106th Congress, April 11, 2000. 17. Brian Berger, ‘‘Start-Ups Plan Boycott of NASA Launch Procurement,’’ Space News, February 12, 2001, p. 4. 18. Ibid. 19. Representative Dana Rohrabacher, ‘‘NASA Space Launch Initiative Is Off Course,’’ Aviation Week & Space Technology, February 19, 2001. 20. Ibid. 21. ‘‘Integrated Space Transportation Plan: A National Strategy for America’s Future in Space,’’ NASA, March 2002. 22. ‘‘Profile: Dennis Smith, Manager, NASA’s Second Generation Reusable Launch Vehicle Program Office,’’ Space News, March 25, 2002, p. 22. 23. Ibid. 24. S. 469, introduced in the 1st session of the 106th Congress, February 25, 1999. 25. 106th Congress, S. 469, Title I, Sec. 101 (a). 26. Congressional Record, February 25, 1999, page S2011. 27. 106th Congress, S. 469, Title I, Sec. 104 (b)(2). 28. Opening statement of Sen. John Breaux, ‘‘The Commercial Space Launch Industry,’’ hearing in the Subcommittee on Science, Technology and Space of the Senate Commerce Committee, 106th Congress, May 20, 1999. 29. ‘‘The Research and Experimentation Tax Credit,’’ summary, CRS Issue Brief for Congress, Congressional Research Service, updated May 17, 1999. 30. Ibid., p. 6. 31. Testimony of George Mueller, CEO, Kistler Aerospace Corporation, before the Subcommittee on Space and Aeronautics, House Committee on Science, 106th Congress, October 13, 1999. 32. Senate Bill 55, 1st Session, 48th Legislature, State of Oklahoma, 2001. 33. ‘‘The Research and Experimentation Tax Credit,’’ CRS Issue Brief for Congress, Congressional Research Service, updated May 17, 1999, p. 7. 34. Public Law 105-303, 105th Congress, Title II, Sec 201 (a).
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14. Zero Gravity, Zero Tax Dana Rohrabacher We all know that the costs of going into space are very high. We also know that the private sector has proven again and again that it can bring the costs of goods and service down and the quality of products up. Therefore an obvious way to reduce the costs of access to and enterprise in space is to involve the private sector as much as possible. But private entrepreneurs in space, as on Earth, face many government-imposed barriers. Taxes especially tend to discourage new startup companies. Therefore, one way to make investments in space-oriented enterprises more attractive would be to remove that tax burden. HR-2504, the ‘‘Zero Gravity, Zero Tax Act,’’ is meant to do just this. The Act contains three basic provisions. The first would grant an income investment credit to spur new enterprise. In other words, taxes against an investor entity’s total income would be decreased by the amount invested in a space-related business. For example, if a company’s tax liability is $5 million in 2002 but the company invested $1 million in a space-related company during that year, that business would subtract the space-related investment from the total tax. The company would pay only $4 million in taxes rather than $5 million. That provision gives companies that are already established an incentive to invest in space-related activities. After the year 2012 the benefit would be phased out. This provision would give companies an incentive to invest sooner rather than later. A second provision of the Act would be a capital gains exclusion for sale or exchange of stock to help both established aerospace firms and startup enterprises. There would be no capital gains taxes on space-related investments for 10 years. A third provision would be a 10-year tax exclusion on gross income for companies that manufacture goods or provide services (including launches) in space, proportional to the total amount invested. Any 213
SPACE income generated in space would be tax free for 10 years. Space enterprise is capital intensive, with high up-front costs. Thus the capital gains tax and income tax exclusions would ease the burdens. Further, in all likelihood companies would reinvest as much as possible into the space-related enterprise, to ensure future profits. The tax exclusions would give them just such an opportunity. Excluded from the provisions of the Act would be any telecommunications service provided from Earth orbit, any service provided by weather or other Earth observation satellite, or any service provided before the Act was passed. This exclusion is to encourage new investment rather than reward old investment. Zero-G, Zero-Tax creates a kind of enterprise zone in orbit. The enterprise zone policy mechanism used here on Earth has been intended to help revitalize poorer neighborhoods and communities. It is based on the philosophy that, if given a chance, individuals would rather work to create wealth than receive handouts from the government. The federal government spends nearly $15 billion annually on the space program. But NASA officials as well as policymakers understand that eventually individual entrepreneurs creating space-related goods and services represent the best way to make space not a money-losing program for taxpayers but a profitable place to do business. The opportunities offered by Zero-G, Zero Tax will do just that.
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15. International Space Station Alpha: A Building in Space James Muncy, Rick N. Tumlinson, and Bob Werb Since the earliest days of the space age, we have evolved a perception of space that is mythical in proportions: a domain that is so dangerous and different, so ‘‘out of this world,’’ that even the basic rules and systems of our civilization cannot be applied to human activities there. We have treated that new frontier as if it were an isolated experiment in human activity, requiring its own special rules and participants. Our approach to space, from the beginning, has been programmatic: a sequence of events and projects managed by an insulated group of specialists, free from the burdens of the economic and social interactions that govern the rest of society. One result of this paradigm has been the acceptance of spectacularly high costs and huge uncertainty in most space activities. But as human space flight becomes a continuous reality with the construction of the first permanent settlement in space, we urgently need a new perspective. Furthermore, International Space Station (ISS) ‘‘Alpha’’ is a longawaited opportunity to pursue untold scientific and economic breakthroughs. That said, the questions we must ask are these: How do we fully exploit this opportunity? How can we best operate the space station to deliver the greatest benefit to the taxpayers who funded it and to humanity as a whole? In particular, who—in both the public and private sectors—should make which decisions about doing what with this expensive, but potentially even more valuable, facility? The Near and Far Frontiers Before answering these questions, it is useful to distinguish the role of government and the private sector in space by distinguishing between the ‘‘near frontier’’ and the ‘‘far frontier.’’ NASA is in effect an institutionalized descendant of the Lewis and Clark Expedition. 215
SPACE As was the case with Lewis and Clark, their primary activity should be to explore, to survey, and to expand our knowledge of the frontier just beyond the borders of civilization. NASA’s Lewises and Clarks have done their job here in the neighborhood of Earth. This area, the near frontier, comprises the area from the Earth to the Moon and the surprisingly large number of comets and asteroids that either inhabit or pass regularly through our neighborhood. From low Earth orbit, where the first astronauts and cosmonauts flew and where Americans and Russians have lived for two decades, to geostationary orbit and its halo of communications satellites, it is the next step outward for our species, the next zone for expanded human activity. This area is unique in all the solar system: the costs of accessing it are far lower than those of reaching other areas; much time has been spent exploring its potential; and it is already home to early economic activity. The near frontier should be handed over, as soon as possible, to universities and private firms to explore and develop for human use. Here, the government should create and apply laws and regulations that make space a safe place to live and work, just as it does here on Earth. At the same time, Congress and the White House should work together to streamline regulations and clear the way for innovation and swift development. The far frontier is currently defined as the rest of the universe, including Mars and beyond. Of course it is a flexible border, moving ever outward as the private sector follows the paths blazed by our explorers, learns way to create new wealth from what they have discovered, and turns those areas into the new edge of the human domain. Activities in this realm can be broken down into two types: pure scientific inquiry such as that now carried on by the Hubble Space Telescope, and exploration both for science and as a precursor to human settlement or use. On the far frontier pure science should be funded through grants to institutions such as universities, with projects such as Hubble handed to a university or consortium to operate. NASA should confine its efforts to exploration and cuttingedge activities. And NASA should always seek to support the private sector in space; for example, buying data for both scientific and settlement-oriented exploration from private firms, providing grants, and in some cases supporting mixed private- and publicsector missions. 216
International Space Station Alpha: A Building in Space The ISS as Real Estate Although its location may be unique, ISS Alpha is essentially just a building. It is real estate. Yes, it is in a remote neighborhood, and yes, it is very expensive and very complex; but just like an oil platform or skyscraper, it is still a building or facility. As such its management should be discussed in terms used to evaluate and manage similar ventures here on Earth. (This is a doubly useful exercise, as it helps us break free of our mythological perspective of space by bringing us, shall we say, back down to Earth.) To answer management questions, we first need to be clear about all the different functional roles that the various participants in a space station can play. As we are discussing facilities in space— essentially specialized, unique real estate properties—we’ll use terms that are widely understood in the economic life of our society but are rarely used in the aerospace arena. The owner of a property holds title to the asset and may or may not actually use, administer, or lease the facility. A landlord leases all or part of the property to one or more tenants, who gain temporary exclusive use of that property. The owner may function as the landlord, in which case the individual or entity is often referred to as an owner/landlord, or may lease the entire facility to someone else who serves this function. A broker is an agent who for a fee acts on behalf of the landlord. A contractor may work for either the landlord or a tenant to provide services. A supplier provides product(s) to either the landlord or a tenant. A customer is normally a person or entity that does business with any of the tenants at the property in question. It is important to note that a person or entity may be involved with any number of these various functions. Managing the Opportunity of ISS For the last year of its life the former government-funded space station Mir was essentially privatized. Energia, a partially publicly held firm, joined with American entrepreneurs to create MirCorp, which in turn commercialized Mir by marketing its commercial potential. Although formed in the midst of an immense controversy that resulted in a Russian government decision to de-orbit the facility, the MirCorp firm signed several high-paying customers and demonstrated the existence of new markets and potential economic drivers for orbiting space facilities. 217
SPACE But what of ISS Alpha? Can it, too, be privatized (and then commercialized)? Wouldn’t market forces be the best way to maximize ISS’s return for the partners and all humanity? The answer to the latter question is undoubtedly ‘‘yes,’’ but the answer to the former is probably ‘‘not completely.’’ We are among many who have long supported the full privatization of the ISS once its assembly was complete. Ideally, this would mean wholly transferring the station to a private entity (almost certainly an international consortium) that would both own and operate the facility. The partner governments’ roles (beyond regulation) would be limited to being favored customers and/or tenants. We recognize, however, that currently full privatization is not politically or economically realistic. Unlike Mir, the ISS involves multiple national governments that are still spending huge amounts of money on it and will be for several more years. After collectively spending over $50 billion of taxpayer money, the partner governments will not be willing to ‘‘auction off’’ the ISS to the highest bidder, nor would the taxpayers in those nations stand for it. Furthermore, ISS is still unfinished, with a hopeful but uncertain future. No one knows for sure how much it will cost to complete, let alone operate, or when it will be completed, and how much it will actually be able to deliver for its users. That’s an awfully blank check for any investor to sign. In fact, in recent years NASA leaders have suggested they could ‘‘turn over the keys’’ of the ISS to industry once it is operational, but there has been no overwhelming response. At the same time, no one seriously believes that the partner governments should, let alone can afford to, manage and conduct every aspect of ISS operations and use. In free societies governments enforce private contracts and regulate businesses for reasons of public safety and environmental protection. When governments do get directly involved in the marketplace, they try to limit their role to being intelligent customers of goods and services. Historically, when government goes beyond its normal role and assumes absolute control over the kinds of activities envisioned for Alpha, the result has been bureaucratic delays and higher costs for all involved. Imagine the headaches for those trying to develop innovative products, markets, or scientific breakthroughs if they needed to navigate through the bureaucracies of 16 partner nations, as is currently the case. Finally, the formation of a single multinational corporate consortium retaining ownership of the entire facility, backed and perhaps 218
International Space Station Alpha: A Building in Space subsidized by the partner governments, poses the danger that it will become an almost insurmountable competitor to other orbital facilities. Such a consortium would also be able to exclude users from the station if it considered them a threat to its monopoly or to the interests of any of the consortium members. So our challenge is to find a market-based alternative to the traditional aerospace command economy approach. The alternative should stop short of complete privatization. Fortunately, we have an excellent terrestrial model: the quasi-governmental infrastructure authority. Typically granted limited government-like powers to administer transportation-related or scientific infrastructure systems, authorities are especially useful when more than one governmental jurisdiction is involved. Examples include: ● The Port Authority of New York and New Jersey, which oversees airports, bus transit, and shipping in and around New York City; ● CERN, the European nuclear physics research organization; and ● The Great Barrier Reef Marine Park Authority in Queensland, Australia. Although varying in form and function, these authorities act as central managers for shared assets. A simple example would be the model of an airport authority. Such a quasi–civic authority is responsible for the complex and potentially dangerous interactions of large, high-technology fleets of aircraft carrying thousands of delicate passengers and their refueling and technical support. On the legal front, the authority often represents the interests of its tenants to the central government, has jurisdiction over the surrounding area, and may even have the right of eminent domain. Economically, it is responsible for creating a stable and economically nurturing environment for all involved, from passengers, to operators, to the person selling snack foods from a cart in the terminal. Given the worldwide scale of such operations today, we know this model works and often works well, providing a safe and relatively user friendly system for billions of passengers and workers around the world. An International Space Station Authority Using this model, we propose the creation of an international authority that would function as a landlord for the entire space 219
SPACE station. The partner nations would retain ownership (and therefore ultimate control) over their own modules and facilities, and would manage them using any one of a variety of models. These could range from handing their operations over to one of their contractors or universities, to setting up scientific organizations such as the Hubble Institute to manage the scientific activity of a lab or even a single instrument. Governments would then be free to purchase whatever goods and services they want from any number of tenants operating under lease agreements with the authority. Or, if they wish to, they could lease back the rights to exclusive use of some element of the facility itself. The ISS Authority would be responsible for hiring suppliers and contractors to help operate and support the entire facility. It would sign leases with as many tenants as it wanted, rent out the various parts and parcels of the facility, and be allowed to rent out any facility expansions. An ISS Authority would therefore create a stable management framework within which competitive market forces would allocate ISS utilization rights to the most productive uses, either in private profit or public good, and reward the most innovative and costeffective ISS contractors and suppliers. Simply put, an ISS Authority would rapidly increase the station’s beneficial returns while lowering its operating costs. Beyond this well-understood market behavior, however, are several more subtle, but perhaps more important, benefits of the arrangement. ● Once assembly of Alpha is complete, partner governments will be able to limit their expenditures to paying the Authority for their use of the station, rather than paying some arbitrary share of indeterminate operations costs. This echoes the recent public policy trend toward funding outcomes rather than inputs. ● The ISS partners’ current plans for operations and commercialization are disjointed and unrefined. (This situation is understandable, given the necessary focus on actually building, launching, and assembling the hardware.) Forming an ISS Authority as soon as possible would produce much-needed stability and predictability—vital for prospective ISS tenants, customers, suppliers, and contractors—faster and more comprehensively than waiting for a solution to evolve from today’s conditions. ● Because it is politically possible to create an ISS Authority, the partner governments can get started on this now, rather than 220
International Space Station Alpha: A Building in Space wait several years to (one hopes) embrace full privatization. At that point government-conducted ISS operations will be well established and the incumbent interests may not yield to a market-based approach. ● An ISS Authority is a better and cheaper way to manage the resources and operation of the ISS. It will therefore free significant time and funding for the partner governments to focus on more visionary research and development projects farther out on the space frontier. Let us use the old way of looking at space to make a new point. The completion of a conquest is followed by a handoff to civil authorities, who then begin to build the infrastructure for a thriving civic economy. The ISS is perhaps a positive version of this metaphor, as forming the authority will mark the end of the ‘‘conquest’’ of the near frontier and allow the partner nations’ space agencies to move on to the far frontier. The Urgency of Starting Today Creating an ISS Authority will not happen overnight, but it can happen sooner than any other serious mechanism for privatization and commercialization of the ISS. In part this is true because the Authority concept is generally well understood among most of the partner governments. It is also true because an ISS Authority is not as dramatic a change from the current Intergovernmental Agreement for the ISS as would be pure privatization. For example, an Authority could initially maintain some degree of ‘‘proportional work allocation’’ among contractors and suppliers from the various partners. But the greatest ‘‘political practicability’’ advantage of the Authority is that it would be a truly international entity that all partners could equally trust (or distrust) to serve on their behalf as an impartial manager of the ISS facility. For example, because an Authority would be required to contract out for goods and services, it would have fewer tendencies toward bureaucratic empire building (and therefore threatening space agencies). The Authority would have only one focus, the well-being of Alpha. It would have no interest in creating complex non-ISS barters or manipulating dealings on the station as part of any other schemes or projects beyond the facility. Additionally, because it would not be allowed to become financially involved in any specific business deals on the ISS, the Authority 221
SPACE would also be fairly well insulated from the conflicts of interest that are sometimes a concern in privatization deals. The benefits of a somewhat analog transition and political doability both argue, however, for initiating the ISS Authority creation process as soon as possible. Because that will involve considerable debate within and among the partner nations, we are proposing an inclusive mechanism for creating this entity. But there is another reason for urgency in refining the ISS Authority concept and beginning its establishment. All of us know that there are other things that the free nations of the world should be doing in space, both individually and in partnership. There are planets and other objects to explore. There are grand new industries to enable. There are discoveries to be made. Most important, there are inspiring dreams and challenges to be passed on to our children and their children. Little or no progress toward those possibilities will happen if spacefaring nations’ governments become bogged down operating a single outpost in the shallow waters of the new ocean of space. And failing to pursue these exciting achievements now, when we have the chance, will have incalculably harmful effects on our peoples and our planet for generations to come.
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16. Toward a Unified Theory of Space Property Rights: Sometimes the Best Way to Predict the Weather Is to Look Outside James E. Dunstan Introduction Some 40 years into the space age, we are still struggling with the optimal legal regime for the high frontier. Some observers decry the lack of a true space government, and others complain that space is a winner-take-all game mirroring the conquest mentality of the 16th and 17th centuries. Still others rail against the current treaty environment as a failed attempt at 1960s socialism. Some go so far as to claim that the lack of a clear real property legal regime for outer space has left us shackled to planet Earth. ‘‘Give us an outer space that can be owned,’’ they cry, ‘‘and we will lead humanity to the stars.’’ Some have gone so far as to take the law into their own hands and make claims of property ownership in space based on their own chosen legal paradigms. This paper disagrees with all of the assessments described. It will look at the existing legal environment surrounding the exploration and use of space and its celestial bodies. It will then conclude that ample evidence already establishes the existence of a coherent legal property rights regime that is flexible enough to accommodate a variety of uses of space resources. Those uses require no significant new domestic laws or international treaties. While we can posit a number of international agreements and domestic legislative initiatives that would better fine-tune the current legal regime, the likelihood that the international community would embrace the current a priori regime is doubtful. It is much more likely that any attempt to negotiate a new international treaty would drag the world back into a debate over what was meant by ‘‘the Common Heritage of Mankind’’ found in the Moon Treaty.1 223
SPACE It is not the lack of a clear legal regime that stifles the development of outer space, but rather the overarching impression of the public that space remains the domain solely of government entities. Only by changing this fundamental belief can space entrepreneurs hope to convince the public markets that investment in space development is sound. The Existing Legal Regime for Space The Underpinnings of International Law To understand the current state of the law of property rights in outer space, one must first be familiar with the ways that nations, and individuals as members of nations, have agreed to establish legal norms across borders. There is no ‘‘one-world government,’’ but rather a loose hierarchy of principles that apply to the way nations and nationals deal with each other. Generally, international law is established through three mechanisms: agreements,2 custom,3 and fundamental principles.4 The Development of an International Regime Before humans ventured into space with their first probes, lawyers and politicians worried about what, and whose, laws would apply to outer space.5 Most agreed that the race to develop space should be characterized not by the rules of conquest, but rather by the rule of law. There was agreement that outer space was most analogous to the high seas; a place where many traveled, but no one owned. But what of the celestial bodies that populate space—the Moon, the planets, the asteroids and comets? Would these new bodies be subject to appropriation and claim by national explorers? Early international legal scholars strove to focus debate on those issues before widespread development of outer space could establish customary international legal precedent that carried national conflicts on Earth into space.6 This was especially true concerning the militarization of space, since the same vehicles that were being developed to loft probes into space in the mid-1950s were also designed to loft nuclear weapons at other nations. From this debate emerged the 1967 Outer Space Treaty,7 which remains the linchpin of international space law.8 All activities in space must be measured against that document. For purposes of 224
Toward a Unified Theory of Space Property Rights this discussion, we will examine those provisions that affect theories of owning real property in outer space. The bad news for those who desire a real property ownership regime in space that mirrors that of the United States and most Western European countries is that the Outer Space Treaty makes clear that no nation can lay claim to any celestial body: Outer space, including the moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.9
Some commentators have argued that the Outer Space Treaty only outlaws the ownership of property by nations, and that individuals are free to claim ownership of celestial bodies.10 The more accepted view, however, is that the inclusion of the term ‘‘by any other means’’ at the end of Article II precludes an ‘‘end around’’ whereby citizens of nations may make property claims in outer space, while nations may not.11 This should be rather intuitive, as to conclude otherwise would allow state-owned industries to make outer space real property claims, rendering Article II a nullity.12 Such an interpretation of the Outer Space Treaty also would work to the benefit of stateowned economies and to the detriment of free market economies. The good news is that the Outer Space Treaty contains a number of provisions that protect the interests of private individuals and their activities in space. Article I makes clear, for instance, that both the exploration and use of outer space shall be free of restraint and discrimination, and that there shall be free access to all parts of space.13 Further, the Treaty ensures that the use of equipment and facilities necessary for exploration and utilization of space or celestial bodies shall not be prohibited,14 and shall proceed only on a noninterference basis.15 Finally, and most important for this analysis, the Outer Space Treaty establishes the principle that states are responsible for objects they (or their citizens) launch into space, and that they do not lose jurisdiction over those objects once they are in space.16 Development of Customary Law of Outer Space Property The remainder of this paper will discuss how customary international law, consistent with the Outer Space Treaty, has come to 225
SPACE develop a regime for property use that is compatible with private investment, even if it does not directly mirror Western concepts of real property ownership. Attempts to Establish Private Claims of Property There are at least two documented attempts by private individuals or groups to create property rights regimes through what can best be described as ‘‘adverse possession.’’17 In both instances individuals have laid claim to major celestial bodies and then announced their ownership claims to the world, apparently in the hope that worldwide indifference would give way to acquiescence, which ultimately would give way to some legal right. The first, and most audacious, attempt to grab ownership of the cosmos has been perpetrated by Dennis Hope. In 1980, Hope walked into the San Francisco County, California, claims registry office and filed a claim to ownership of the Moon.18 Not content to be the largest landowner in the solar system, Hope made sure that he would be the Galactic Donald Trump by also claiming ownership of all the other major planets and moons as well. Hope alleges that since a county official accepted his filings, he somehow has now gained ownership of essentially the entire solar system except for Earth. Hope has now created a business of ‘‘selling’’ parcels of land on the Moon for $15.99 (plus $1.66 in ‘‘Lunar tax’’).19 Lest you think this is all a joke (as opposed to a hoax), the Lunar Embassy claims to have sold over 300,000 parcels of outer space property.20 A quick calculation reveals that Hope has raked in almost $5 million from this scheme. But is it legitimate? Of course not! Hope filed a simple registry deed in a county in the United States, under United States law. As discussed earlier, United States property law does not apply to outer space, so the filing of a deed of registry, and the entire concept of deeds of claim under U.S. law, have no applicability to the Moon and other celestial bodies. The United States cannot grant legal right to something over which it has no jurisdiction. Moreover, even if U.S. real property law applied to outer space, Hope did nothing more than register a claim—that claim that has never been perfected under United States law. A slightly different course is being taken by the Archimedes Institute, a virtual ‘‘institute’’ found on the Internet.21 The Archimedes 226
Toward a Unified Theory of Space Property Rights Institute has established a ‘‘Claims Office’’ where individuals or legal entities can register claims of ownership of real property in outer space. The purpose of the ‘‘Claims Office’’ is as follows: This service has been established to lower the cost of doing business in space by helping to reduce the legal uncertainties associated with a wide variety of space activities. By providing an objective and public opportunity for individuals, corporations and other entities to register property claims, liens and judgments the Archimedes Institute is encouraging the formation of new, efficient and equitable legal standards for the sensible development of the high frontier.22
The Archimedes Institute does not itself claim to have jurisdiction over any parcel in outer space.23 Instead, it exists strictly as a repository of claims that, presumably, will be sorted out by courts of competent jurisdiction. That having been said, the Archimedes Institute has established four levels of claims that it alleges provide certain priorities of ownership.24 Presumably, lower priority of ownership can be trumped under the Archimedes claims system, such that a human expedition (Class A claim) could supplant the real property rights established by a valid robotic exploration and discovery of a valuable off-world resource (Class B claim). The Archimedes Institute also requires all claim filers to hold harmless the Archimedes Institute for its claim registry activities.25 According to the Claims Office, most of the solar system has now been claimed by individuals pursuant to Class D claims, but this author was unable to find any Class C or higher claims having been registered. In other words, the only claims that exist in the claims registry are by individuals who make claims based on getting to the registry first, even though they have never touched a claimed celestial body in any way, shape, or manner. Two fundamental problems exist with the Archimedes Institute scheme. First, the Institute possesses no authority or jurisdiction over either the parties or the matter involved. The Institute itself exists only in cyberspace, and has no basis to claim authority over outer space. Even if it could align itself with an entity possessing some power and authority, as mentioned previously, the Outer Space Treaty explicitly prohibits any nation from claiming authority over real property in outer space. 227
SPACE The second fundamental problem is that the Archimedes Institute Claims Office contains no claims that under any accepted theory of law could be valid.26 Indeed, claims listed with the Archimedes Institute are downright silly. As such, there is no reason to take the Archimedes Institute seriously. And indeed, no one has. When NASA landed the NEAR Shoemaker probe on the asteroid Eros in February, 2001, Greg Nemitz issued a press release welcoming the probe to ‘‘his’’ asteroid. It seems Nemitz had filed a Class D claim on March 3, 2000, claiming ownership of the asteroid Eros, based on a plan to build a recreational tourist facility and mine the asteroid.27 The popular press seized on the obvious speciousness of the claim.28 These two examples give further credence to the interpretation that the Outer Space Treaty’s prohibition on national appropriation of property cannot be circumvented by individual actors. At best, the above actors are merely comedians, not creators of customary international law. Owning Pieces of Space: Moon Rocks The discussion above demonstrates that private claims to entire planets have not been successful and, indeed, cannot be successful under international law. But is it nonetheless possible to own pieces of other celestial bodies? This author submits that customary international law precedent has been established for the proposition that ownership can be exercised and claimed over pieces of celestial bodies that are removed and returned to the Earth. The Apollo Lunar samples set this precedent. The six Apollo Moon landings brought back 842 pounds of Lunar material. This material has been maintained by NASA in an environmentally benign and secure facility for more than 30 years. NASA strictly controls the samples and, indeed, less than 10 percent of the total samples has been subjected to any experimentation.29 To get a pristine sample for experimentation, or even a ‘‘used’’ sample for display, one must submit a proposal that is subject to strict peer review.30 All samples must be returned to NASA upon completion of any experimentation. NASA itself claims that the Lunar samples are ‘‘a limited national resource, a future heritage and NASA policies require that samples be released only for approved applications in research, education, 228
Toward a Unified Theory of Space Property Rights and public display.’’31 NASA exchanged samples with the Soviet Union, which drew from the approximately 300 grams of Lunar material brought back by the Soviet Luna 16, 20, and 24 robotic sample return missions. Finally, the United States government has vigorously prosecuted any individual thought to have obtained any Lunar samples. Based on any definition of ownership, it is clear that the United States owns the Apollo lunar samples. Any entity that can claim something as an exclusive resource, control its transport and distribution, and exchange it for something else of value (in this case, other Lunar samples) clearly owns that object. Based on the thirty years of ‘‘open and obvious’’ dominion and control exercised over the Apollo lunar samples, it is clear that under customary international law, portions of a celestial body can be subject to ownership if they are removed from that celestial body. For outer space property rights advocates, this is the single most important precedent in the history of space exploration; it should provide great comfort to those who wish to exploit the resources of outer space.32 It is also consistent with many commentators, who allege that the prohibition on real property ownership in outer space relates only to entire celestial bodies as they exist ‘‘in nature,’’ and that both individuals and nations can claim ownership of resources extracted from celestial bodies.33 Owning Places in Space: The Geostationary Orbit Communications satellites present a fascinating example of the way international law has developed in such a way that a multibillion-dollar industry has evolved without traditional real property rights. Estimates of the total revenue produced by space communications range from $9 billion a year in 199834 to $7.1 billion in 1999,35 depending on how much revenue one ascribes to the space-based assets involved in communication networks. By any measure, communication satellites have provided the vast majority of revenues derived from space development, and the commercial space communications sector generates revenues equal to almost half the annual budget NASA spends on space exploration. The most valuable of these assets reside in geostationary orbit.36 Companies manage to finance, build, launch, and operate satellites without a shred of real property ownership in the orbital slots into 229
SPACE which they launch those satellites. How is this possible when many advocates of space property rights swear that nothing real can be done in space until a clear real property regime is established in outer space? Moreover, how is this accomplished when one considers that space communications involve the allocation of not one, but two, scare resources—orbital locations and frequencies? A full discussion of the development of the international law of communications satellites is beyond the scope of this article.37 What is important for this discussion is the way in which the geostationary orbital arc has been apportioned without also conveying traditional real property rights to the inhabitants of those orbital slots. Use of the geostationary orbit is governed by the International Telecommunications Union (ITU).38 It is important to note that the ITU is governed by a set of principles that is not far off from those espoused in the Outer Space Treaty. The International Telecommunications Convention, for instance, prohibits the ownership of frequencies or orbital locations. Article 33, amended in 1982, calls for the ITU to make orbital allocations in such a way that they ‘‘tak[e] into account the special needs of the developing countries.’’39 Although from a physical collision standpoint it is possible to image as many as 1,800 theoretical slots at .2 degree spacing, from a practical standpoint, for each frequency band there are currently only 180 slots (2 degree spacing). That number eventually will double to 360 as satellites are moved to 1 degree spacing. The closer spacing will become possible as ground stations become more sophisticated and less prone to adjacent satellite interference.40 In either case, for the major satellite frequency bands used (C, Ku, and Ka), the geostationary orbit is a scarce resource. How, then, is it allocated? The geostationary orbit is allocated differently by frequency, partially by historical accident and partially by political design. For the C band frequencies, which were the first used for geosats, an a posteriori allocation system was developed. An ITU member state or an individual company wishing to launch a satellite would follow a three-step process: ● advanced publication (announcing its intent to launch a satellite into a specific orbital slot); ● coordination (working with all other current users to determine whether the proposed satellite would interfere with any prior users); and then ● official notification to the ITU, which registers the orbit. 230
Toward a Unified Theory of Space Property Rights The understandable result of this allocation scheme is that the developed nations dominated the orbital locations for the C band: the vast majority of the 164 C band satellites operating today were launched by the United States, Western European countries, and Russia.41 In the Ku and Ka bands, which are characterized by higher frequencies and more difficult implementation, the ITU has adopted an a prior allocation mechanism whereby each ITU member has been given a greater opportunity for gaining an orbital slot. Each allocation regime has its advantages and disadvantages, best thought of as a balancing between efficient and equitable allocation. The a posteriori method for C band, best defined as a ‘‘first come, first served’’ regime, favors those who can move fast to launch satellites. This certainly was true in the early years of the development of C band geosats. As the arc began to fill, however, the problem of ‘‘paper satellites’’ began to appear—entities jumping in through the publication process to try to warehouse slots until future satellites were ready.42 The disadvantage of the a posteriori method is that less developed countries (LDCs) argue that they are not given a fair opportunity to utilize geostationary C band slots. Moreover, they are greatly concerned that once the slots are filled with satellites built and launched by developed countries, those slots will not be vacated, but will be occupied far into the future. The benefit of an a priori system is that it is more equitable than the a posteriori method. The a priori system gives LDCs an opportunity to obtain orbital slots without fear of being usurped by the developed nations. A fundamental problem exists with the a priori system, however, in that it is not efficient. Ultimately it turns the geostationary orbit into more of a commodity open for trade than was the case in an a posteriori regime. There have been ample examples of LDCs simply selling their slots to developed nations or handing over the slots directly to Western companies in exchange for capacity.43 The efficiency, equity, or efficacy of either a posteriori or a priori allocation regimes is not the focus of this discussion.44 What is critical for this discussion, however, is the fact that a segment of space has been allocated, and bought and sold as a commodity. Both satellites themselves and even orbital locations have been swapped, sold, leased, and otherwise hypothecated. The geostationary orbit has become its own economy, and parties involved in financing, building, launching, and buying and selling both capacity and physical 231
SPACE assets in space have the expectation that they will receive the benefits of the bargains they strike. Although no one owns the geostationary orbit, the customary international law that has developed around its use has granted players enough certainty that they are able to be part of that 11figure segment of the economy. Absolute property rights in the orbital slots are not necessary and certainly have not stifled development of that vital portion of the space economy. The system, although flawed, works. Having a Place to Live in Space: The MirCorp Story The venerable Mir space station is now gone. The Russian Space Agency de-orbited it on March 23, 2001. The last two years of its life provide one of the most fascinating stories in the history of space development and provide an insight as to how business can be done in space without the need for real property ownership. The last chapter of the Mir story begins in the summer of 1999. Russia was late in delivering modules for the International Space Station (ISS). The Russian Space Agency (RSA) was so strapped for funds that it had failed to make payments to the main contractor for the Mir Space Station, RSC Energia (Energia), the mostly privatized Russian company that produces rockets and space hardware. Without new funding, Mir would have to be brought down. NASA was pressing RSA to de-orbit Mir, claiming that Russia could not afford both Mir and its commitments to ISS. 45 RSA and Energia both believed that there was still life left in the old station.46 RSA agreed to grant Energia all rights to Mir in exchange for Energia’s agreeing to maintaining it in orbit and allowing RSA access to it for continued scientific experiments. Energia also was required to allow the Russian government to decide when to bring Mir down. Walt Anderson, a telecommunications executive and long-time space enthusiast and entrepreneur, learned of the possibility of commercializing Mir and, together with Energia, formed MirCorp. MirCorp was formed specifically to exploit the commercial markets Mir could support, including passenger travel, promotion and marketing, and materials processing.47 MirCorp is owned 60 percent by Energia and 40 percent by Western investors (mainly Walt Anderson and Dr. Chirinjeev Kathuria). Once established, MirCorp entered into negotiations with Energia, as RSA’s proxy, to lease the Mir space station. The original lease 232
Toward a Unified Theory of Space Property Rights began: ‘‘Tenant shall occupy the property known as the Mir space station, located at an orbital inclination of. . . .’’48 The lease is a residential property lease. Absent were the pages and pages of protocols normally associated with space activities. Both sides wanted something simple, a clear contract that would spell out the rights of the parties. The format for accomplishing this was an adopted form-book residential real estate lease, and both sides were delighted to use that as the basis of negotiations—it drove home the clear intent of both sides. Few translation errors could creep into negotiations when such universal concepts as ‘‘landlord’’ and ‘‘tenant’’ are used. The importance of this story is not the quaintness of using an apartment lease as the basis for the first human-based property rights transfer in space.49 The importance is that this lease could be done at all. Energia was able to prove to the Westerners that it had the rights to grant in the lease from RSA,50 and the Westerners ponied up real cash to make the deal happen. Had Mir remained in orbit, the parties contemplated future negotiations that would have allowed MirCorp to actually own the Mir space station (a sort of ‘‘rent to buy’’ agreement). There was never any question as to whether international law would preclude this deal, or that someone would crawl out of the woodwork and claim that Mir was somehow ‘‘the common heritage of mankind’’ and therefore not for sale or lease. No international convention was necessary to make this landmark deal happen; it took just the innovative thinking of rational businessmen who saw an opportunity to commercialize a great national treasure.51 Having a Place to Work in Space: Property Rights aboard ISS The last example that merits discussion is the manner in which the participants in the ISS program have dealt with both real and intellectual property rights aboard the ISS. The nations participating in the ISS have entered into a series of Intergovernmental Agreements (IGAs) to define their participation and duties. The first IGA related to then–Space Station Freedom was entered into in 1988 (hereafter IGA-1988).52 At that time, Russia was not a participant in Space Station Freedom, it was not a party to the IGA-1988. In December 1993, the United States and Russia entered into the first agreement on space station activities, the ‘‘Joint Statement of Cooperation in Space.’’53 This 1993 Agreement is important because 233
SPACE it defined the Shuttle-Mir project as ‘‘Phase One’’ of the ISS endeavor. On January 29, 1998, the major parties involved in ISS (the United States, Canada, Japan, Russia, and the European Space Agency ([ESA]), entered into the current IGA (hereafter IGA-1998), which replaced IGA-1988. IGA-1998 makes clear that the activities on ISS would be subject to international law, and specifically the nonappropriation provisions of the 1967 Outer Space Treaty. Pursuant to the Registration Convention,54 IGA-1998 calls for each of the partners to register its own components of ISS, and retain jurisdiction over them, subject to the provisions of IGA-1998 as to overall station management. Simultaneously, the United States and the Russian Space Agency (on behalf of the Russian Federation) entered into a separate Memorandum of Understanding (‘‘NASA/RSA MOU’’) that set forth the rights and responsibilities of the two largest partners on ISS, and went into more specificity concerning management, provision of ISS segments, launch schedules, and communications links provided by each side than is contained in IGA-1998.55 Article 21 of IGA-1998 deals with intellectual property issues related to ISS.56 The key provisions are these: 1. Adoption of WIPO definition of ‘‘intellectual property.’’ The parties agreed to define ‘‘intellectual property’’ consistent with the definition contained in Article 2 of the ‘‘Convention Establishing the World Intellectual Property Organization’’ Stockholm, July 14, 1967.57 2. Activities on a particular module will be deemed to have occurred in that partner’s country. This provision makes clear that inventions that are made onboard ISS will be considered to have been made in the country that controls the module on which the invention is made. Thus, if a U.S. citizen were to create an invention on a Russian module, Russian patent law would apply. 3. Partners may not apply domestic laws related to secrecy of inventions to inventors from other countries. This provision basically attempts to get around the ‘‘first to file’’ versus ‘‘first to invent’’ problem between the United States and the rest of the world, such that foreign nationals inventing things on a U.S. module are not subject to the United States’s ‘‘first to invent’’ rules.58 234
Toward a Unified Theory of Space Property Rights 4. ESA partners are treated as a single entity. The ESA partners agreed to treat the ESA module as if it were all the ESA countries combined. This means that an ESA member can sue only once, in one jurisdiction on Earth, for any alleged infringement occurring on an ESA module of ISS. Each ESA partner must also give ‘‘full faith and credit’’ to any license or agreement entered into by an ESA member related to patent rights on board an ESA module. 5. Temporary presence in a territory in transit will not give rise to jurisdiction for infringement action. This is probably the most important provision of Article 21. It means that just because an object that may infringe a patent in a jurisdiction is in that jurisdiction, proper venue will not exist for the bringing of a patent infringement suit, if that object is in the jurisdiction temporarily in transit to or from the ISS. For example: If a device developed in the United States were allegedly to infringe a Russian patent, jurisdiction would not lie in a Russian court for the filing of that action just because the device was transported to Russia for launch to ISS. The key limitation here is that for this ‘‘temporary presence’’ provision to apply, the object must be either going to, or coming from, ISS. Article 21 was negotiated among the dozen or so participant countries in the ISS project to ensure that intellectual property rights would be protected aboard ISS. While consistent with the property nonappropriation provisions of the Outer Space Treaty, Article 21 also firmly establishes that items created on board ISS, even those made with extraterrestrial matter, become and remain the property of the creators. They do not become ‘‘the common heritage of mankind’’ or have to be turned over to some international organization for apportionment to the world’s populations. Conclusions on a ‘‘Unified Theory’’ of Property Rights in Outer Space What do the examples discussed teach us? If we study them closely, a clear conclusion can be reached: The Outer Space Treaty represents the high-water mark of international socialism in its concept that outer space is the province of all humankind and that property ownership somehow leads parties to attempt to usurp territory. Every precedent since the Outer Space Treaty indicates 235
SPACE that the only thing that is outlawed under international law is the claiming of celestial bodies by nations and individuals. Short of that, property rights are fully protected in outer space. To wit: 1. Objects removed from their indigenous locations become the property of the removing party (e.g., moon rocks); 2. The noninterference provisions of the Outer Space Treaty are fully recognized (e.g., geostationary orbit slots); 3. Objects launched into outer space remain the property of the party launching them (e.g., satellites, space stations); 4. Objects launched into outer space and other rights gained from operating in outer space may be sold, leased, and otherwise hypothecated just as on Earth (e.g, sale of orbital slots, lease of the Mir space station); and 5. Inventions created in space remain the intellectual property of their creators (e.g., ISS IGA on patent rights). Given this backdrop, are true real property rights necessary? This author submits that they are not. If we recognize the limited reach of the real property prohibition of the Outer Space Treaty and compare it to the precedent discussed, it becomes clear that all the Outer Space Treaty precludes is the Dennis Hope’s of the world, trying to make a quick buck by selling the equivalent of space ‘‘swamp land.’’ We should be thankful that the Outer Space Treaty is there to do that much, but not be scared into believing that it otherwise affects what can be done in outer space. If the lack of real property rights in outer space is not stifling outer space commerce, then what is? Views differ on this subject. Clearly, the high cost of getting into orbit is a major contributor to the lack of business being conducted in space.59 This author submits that another, more insidious, factor also is a major contributor—the perception and expectation that only governments can operate in the hostile environment of outer space. Certainly, governments were the early players in outer space and will always have a vital role in developing the technologies that will spur economic growth and development. When the popular press assumes that the future is one where only governments operate in space, the public perception follows. Unfortunately, that is the picture of the future the popular press paints for us. 236
Toward a Unified Theory of Space Property Rights If space development can come only ‘‘courtesy of NASA,’’ then private investment in space will be slow to come, or nonexistent. It is this paradigm of perception about who should be conducting activities in space that must change. If the public were to believe that the future of space is one where profits are available and investments paid, then that future could become reality. This single change would do more for space development than any conceivable change in international or domestic law. Perception is reality. It is time to begin to change the perception of the future into one in which outer space is dominated by commercial market economic forces and not governmental bureaucratic agendas. Only then can property rights in outer space become real. Notes 1. ‘‘Agreement Governing the Activities of States on the Moon and Other Celestial Bodies,’’ December 5, 1979, 1363 United National Treaty Series 3 (entered into force July 11, 1984). 2. Usually in the form of treaties, conventions, or bilateral agreements. 3. Two elements are necessary to establish customary international law: usage and recognition, or corpus and animus. See North Sea Continental Shelf Cases (Fed. Rep. of Germany v. Denmark / Fed. Rep. of Germany v. Netherlands), 1969 International Court of Justice 3 (1969). 4. Fundamental principles are those ideas so fundamental to the human experience that it should be obvious to anyone that they should be considered as overriding all other forms of international and domestic law (e.g., freedom from murder, undue oppression, etc.). Many fundamental principles have been spelled out by the United Nations in the form of United Nations Declarations, such as the Universal Declaration of Human Rights, G.A. Res. 217A, United Nations Doc. A/810 (1948). 5. See, e.g., A.G. Haley, Space Law and Government at 10 (1963): ‘‘Whatever the ultimate products of space exploration and occupation may prove to be, man in his present state of civilization will in large measure determine whether they will be beneficial or nefarious. He will do so by the development of or the failure to develop a body of law which will govern his activities in space.’’) 6. See id. at 9, 154; H. G. Darwin, ‘‘The Outer Space Treaty,’’ 42 British Yearbook of International Law 278 (1967). 7. ‘‘Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space Including the Moon and Other Celestial Bodies,’’ Jan. 27, 1967, 18 U.S. Treaty 2410, Treaties and Other International Acts Series No. 6347, 610 U.N.T.S. 205 (entered into force Oct. 10, 1967). 8. Three other major treaties and conventions affect the activities of nations and citizens in space: ‘‘Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space,’’ 19 U.S.T. 7579, T.I.A.S. 6599 (1968) (‘‘Rescue Convention’’); ‘‘Convention on International Liability for Damage Caused by Space Objects,’’ 24 U.S.T. 2389, T.I.A.S. 7762 (1973) (‘‘Liability Convention’’); ‘‘Convention on the Registration of Objects Launched into Outer Space,’’ 28 U.S.T. 695, T.I.A.S. 8480 (1976) (‘‘Registration Convention’’).
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SPACE 9. Outer Space Treaty, supra n. 7, Article II. 10. See, e.g., S. Gorove, ‘‘Interpreting Article II of the Outer Space Treaty,’’ 37 Fordham Law Review 349, 351 (1969); W. White, ‘‘Implications of a Proposal for Real Property Rights in Outer Space,’’ Proceedings, 42nd Colloquium on the Law of Outer Space at 366 (AIAA, 2000); G. Reynolds, ‘‘Space Law in the 1990s: An Agenda for Research,’’ 31 Jurimetrics Journal of Law 5 (1990). 11. See Darwin, supra n. 6; E. Husby, ‘‘Sovereignty and Property Rights in Outer Space,’’ 3 D.C.L. Journal of International Law and Practice (Det) 359 (1994). 12. As discussed below, it should also be obvious that if no nation can obtain authority over outer space real property, no nation can apply its domestic real property laws to space. Therefore, no nation can acknowledge or uphold a claim for space property, since there is no basis in law for such a claim to be made. 13. ‘‘Outer space, including the moon and other celestial bodies, shall be free for exploration and use by all States without discrimination of any kind, on a basis of equality and in accordance with international law, and there shall be free access to all areas of celestial bodies.’’ Outer Space Treaty, Article I. 14. ‘‘The use of any equipment or facility necessary for peaceful exploration of the Moon and other celestial bodies shall also not be prohibited.’’ Id. at Article IV. 15. ‘‘In the exploration and use of outer space, including the Moon and other celestial bodies, States Parties to the Treaty shall be guided by the principle of cooperation and mutual assistance and shall conduct all their activities in outer space, including the Moon and other celestial bodies, with due regard to the corresponding interests of all other States Parties to the Treaty.’’ Id. at Article IX. 16. ‘‘A State Party to the Treaty on whose registry an object launched into outer space is carried shall retain jurisdiction and control over such object, and over any personnel thereof, while in outer space or on a celestial body. Ownership of objects launched into outer space, including objects landed or constructed on a celestial body, and of their component parts, is not affected by their presence in outer space or on a celestial body or by their return to the Earth.’’ Outer Space Treaty at Article VIII. 17. Black’s Law Dictionary defines ‘‘adverse possession’’ as ‘‘a method of acquisition of title to real property by possession . . . with intent to hold solely for possessor to exclusion of others and is denoted by exercise of acts of dominion over land including making of ordinary use and taking of ordinary profits of which land is susceptible in its present state.’’ Black’s Law Dictionary, 53 (6th ed. 1990). Of course, as described herein, none of these individuals or groups have actually managed to take possession of any portion of outer space, but rather merely have claimed to have plans to do so. 18. Hope’s own telling of this story is contained on his website: http://www. lunarembassy.com/lunar/index_e.shtml (last visited Feb. 28, 2001). 19. http://www.moonshop.com (last visited Feb. 28, 2001). 20. http://www.lunarembassy.com/lunar/index_e.shtml (last visited Feb. 28, 2001). 21. http://www.permanent/com/archimedes (last visited Feb. 28, 2001). 22. http://www.permanent.com/archimedes/register.htm (last visited Feb. 28, 2001). 23. ‘‘The Archimedes Institute makes no claims of ownership on space resources by virtue of this Registry. While the Registry may be useful in evidencing ancient claims, it does not affect the validity (or lack thereof) of any claims made prior to its establishment.’’ Id. 24. The claims are these: 1) Class A claims, based on physical in situ examination of a claimed site by a human or human agent;
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Toward a Unified Theory of Space Property Rights 2) Class B claims, based on physical in situ examination by robots; 3) Class C claims, based on new (since the establishment of the Claims Office) discovery of a celestial body via telescope or other remote sensing; 4) Class D claims, based on any other type of claim. Priority in this category is given to smaller claims. Id. 25. ‘‘All claimants, their agents, successors or assigns agree to hold the Archimedes Institute [the ‘‘Institute’’] and all of its officers, employees, volunteers and agents harmless from any cost, loss, liability, damage and/or expense associated with the loss or misfiling of any claim or part thereof.’’ Id. 26. For instance, according to the Archimedes Institute Claims Office, Dawn Lyons, of Boulder, Colorado, claims ownership of the Moon Europa, based on her intent to develop on that moon a ‘‘Spiritual Retreat to include meditation centers, spa, educational facilities, artistic facilities, agricultural facilities, parks, child care centers, maintenance facilities; and any real estate as needed to accommodate guests, workers, staff, and large groups as deemed necessary.’’ Claim d199905260923, filed May 26, 1999, http://permanent.com/archimedes/claims/d199905260923.htm. The Claims Office also lists Eric Bowen of Houston, Texas, as claiming ownership of the Earth’s Moon: Claim d199910221031, filed Oct. 22, 1999, http://permanent.com/archimedes/ claims/d199910221031.htm. It appears that Bowen and Hope have some explaining to do to each other! The Archimedes Institute has ducked this issue by claiming: ‘‘While the Registry may be useful in evidencing ancient claims, it does not affect the validity (or lack thereof) of any claims made prior to its establishment.’’ http:// permanent.com/archimedes/claims. 27. Claim d200003031631, filed March 3, 2000, http://permanent.com/archimedes/claims/d200003031631.htm. 28. See Time, February 26, 2001, at 18. (Nemitz would ‘‘like to develop Eros for mining and tourism. Short of that, he says, he may auction it on eBay.’’) Not to be outdone, Gregory Richardson filed a Class D claim for the 50 kilometers surrounding the Near Earth Asteroid Rendezvous Shoemaker probe. Claim d200102141048, filed February 14, 2001, http://permanent.com/archimedes/claims/d200102141048.htm. 29. Interestingly, if NASA continues to dole out the samples at current rates, the existing stockpile of ‘‘virgin’’ lunar samples will last approximately 300 years, providing an indication of when our government space agency believes it will be returning to the Moon to obtain additional samples. See Dunstan, ‘‘Free the Rocks!’’ Space News, July 14, 1997. 30. See http://www-curator.jsc.nasa.gov/lunar/samreq/samreq.htm (‘‘NASA carefully screens all sample requests with most of the review processes being focused at the Johnson Space Center (JSC).’’) 31. Id. (emphasis added). 32. For those who believe that a sustainable human breakout from planet Earth must be predicated on utilization of extraterrestrial resources, however, the sloth-like pace at which NASA has doled out lunar samples for experimentation is tantamount to a crime against nature. See Dunstan, ‘‘Free the Rocks!’’ supra n. 29. 33. See S. Gorove, supra n. 10; Cepelka and Bilmore, ‘‘Application of General International Law in Outer Space,’’ 36 Journal of Air Law and Commerce 30, 38–39 (1970). 34. A. Copiz, Scarcity in Space and the International Regulation of Satellites 2 (1998), unpublished manuscript.
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SPACE 35. L. Roberts, ‘‘A Lost Connection: Geostationary Satellite Networks and the International Telecommunications Union,’’ 15 Berkeley Tech. L.J. 1095, 1097 (2000). 36. ‘‘The’’ geostationary orbit is actually a set of orbits characterized by their appearance of being fixed above a point on the earth. If one launches a satellite into an equatorial orbit of 22,300 miles, the orbital period (the time it takes the satellite to orbit the Earth) is identical to the rotation of the Earth, such that the satellite will appear to hover over that point. See Georgetown Space Law Group, ‘‘The Geostationary Orbit: Legal, Technical and Political Issues Surrounding Its Use in World Telecommunications,’’ 16 Case Western Reserve Journal of International Law 223, 225–26 (1984). This orbital arc is sometimes referred to as a ‘‘Clarke’’ orbit because of the early theoretical work done in this area by noted science fiction writer and futurist sage Arthur C. Clarke. See A. Clarke, ‘‘Extra-terrestrial Relays: Can Rocket Stations Give World-Wide Radio Coverage?’’ Wireless World, October 1945, at 305–8. Of the 998 satellites registered by the ITU as of September 1997, nearly 600 were geostationary ‘‘birds.’’ See http://www.itu.net. 37. For a deeper understanding of the law of communications satellites, the reader is encouraged to review the following sources: Georgetown Space Law Group, supra n. 36; Roberts, supra n. 35; C. Kennedy and M. Pastor, An Introduction to International Telecommunications Law (1996). 38. Interestingly, the ITU can trace its roots to claim to be the oldest international organization, founded as the International Telegraph Conference of 1865. International Telegraph Convention, May 17, 1865, 130 Consol. T.S. 198 (Portland: Book News, Inc, 1996). 39. International Telecommunications Convention, as amended, 28 U.S.T. 2497, T.I.A.S. 8572. 40. Use of frequency polarization (horizontal and vertical) can double again the total number of satellites per slot. Currently, for example, there are 416 Ku band satellites orbiting the Earth at 22,300 miles. See http://www.indosat.net.id/elektro/ assi03a.html. Use of hybrid birds (satellites carrying transponders for multiple bands) is beginning to diminish the total number of geostationary satellites, as companies consolidate their space assets into larger and larger platforms capable of transmitting on more and more simultaneous frequencies. 41. Roberts, supra n. 35, at 1104, citing as a source for the 164 number http:// www.indosat.net.id/elektro/assi03a.html. 42. The most infamous geostationary ‘‘heist’’ via the ‘‘paper satellite’’ route was perpetrated by the small equatorial island country of Tonga, which filed for 16 geostationary orbital slots in the Pacific Arc. Under considerable political pressure, Tonga reduced this number to 6, but even then, ultimately sold the majority of those slots to Western companies for development. 43. Roberts, supra n. 35, at 1119. Papua New Guinea and Gibraltar both have entered into agreements whereby the majority of the capacity of satellites launched into ‘‘their’’ slots. 44. For discussions of those issues, see Roberts, supra n. 35. 45. It is equally likely that NASA was pushing RSA so hard to get rid of Mir because it did not want a competing space station to ISS. 46. While the core module of Mir was 15 years old, many of the other modules were only 3 to 8 years old, and many of the subsystems of the core module had been renovated. 47. See http://www.mirstation.com.
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Toward a Unified Theory of Space Property Rights 48. The author of this paper drafted and helped negotiate the terms of the lease between MirCorp and RSC Energia. For reasons of client confidentiality, no other material terms of the lease may be divulged. 49. This author, however, has chuckled at the thought of what the advertisement in the real estate section of the Washington Post would look like: ‘‘Seven rooms, furnished, awesome views of oceans, deserts, and forests, some minor plumbing problems, one room sealed off, three docking ports, transportation to and from extra.’’ 50. Both parties relied on Article VIII of the Outer Space Treaty to affirm the fact that the Mir station remained the property of the launching state after being placed in orbit. Then, it was only a matter of proving that Energia had acquired the necessary rights from Russia, through RSA, to enter into the lease. 51. While it currently does not look as though MirCorp made a smart investment in paying for the rights to a Mir space station that only lasted a little over a year of the lease, time will tell whether the deal was worth it, as MirCorp transitions its assets and customer base to other space platforms. 52. This document is available online at ftp://ftp.hq.nasa.gov/pub/pao/ reports/1998/. 53. Id. 54. See supra, n. 18. 55. Supra n. 53. 56. The NASA/RSA MOU addresses intellectual property rights in Article 12.1.k, which states that ‘‘each partner will respect the proprietary rights in and confidentiality of appropriately marked data and goods to be transported on its launch and return transportation system.’’ The NASA/RSA MOU also states that Article 21 of IGA-1998 will apply to the agreement between NASA and RSA. 57. The Russian Federation is a signatory to the ‘‘World Intellectual Property Organization Trademark Law Treaty’’ of Geneva, 1994. 58. The United States is known as a ‘‘first to invent’’ jurisdiction (one of the few). This means that an inventor may claim a patent for an object or method if he is the first to invent it and files a patent application within one year of the first publication of the invention. The Russian Federation is a ‘‘first to file’’ jurisdiction, in that a prior inventor can lose priority rights in that jurisdiction if a later inventor files first for patent protection. Because of the one-year limit after publication under U.S. law, American inventors often closely guard the early stages of their inventions, lest a leak become a ‘‘publication’’ and start the clock running on when an application must be filed. 59. See, e.g., ‘‘NASA’s Wish upon a Star: Inexpensive Space Travel,’’ Washington Post, March 4, 2001, at A3 (noting cancellation of the X-33/VentureStar project, which was hoped to bring the price to orbit down from $10,000 per pound to $1,000 per pound or less). 60. See http://www.lunacorp.com for a full description of this proposed venture, which intends to rely on less than 50 percent funding from government sources.
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Contributors Buzz Aldrin is chairman of both the nonprofit ShareSpace Foundation and Starcraft Boosters, Inc. He also serves on the board of governors of the National Space Society. Aldrin was Apollo 11 lunar module pilot for the first human landing on the Moon. James E. Dunstan is a partner in the Washington, D.C., office of Garvey, Schubert & Barer, where he is the head of the Space Law Practice Group. He is also a founding director of LunaCorp. Dunstan drafted and helped negotiate the first real estate lease in outer space on behalf of MirCorp. Doris Hamill does business research development for SpaceHab and is author of a number of studies on space-related business issues. John Higginbotham is founder and chairman of SpaceVest, and was a cofounder, former director, and senior vice president of International Technology Underwriters, Inc. Edward Hudgins is the Washington, D.C., director of the Objectivist Center and a Cato Institute adjunct scholar. He is Cato’s former director of regulatory studies. Ron Jones is a former Rockwell International and Martin Marietta aerospace systems engineer now living and working in the Washington, D.C., area. He is executive director of the ShareSpace Foundation. Michael Kearney is president and chief operating officer of SpaceHab. He has also worked for McDonnell Douglas and served for 25 years as a U.S. Navy aeronautical engineering officer. 243
SPACE David M. Livingston is a business consultant, financial adviser, and head of Livingston Business Solutions. He hosts a weekly radio program, ‘‘The Space Show.’’ Gregg Maryniak is the executive director of the X PRIZE Foundation, a member of the Board of Directors of the Space Studies Institute of Princeton, and a professor at and former managing director of the International Space University. Tidal (Ty) W. McCoy is chairman of the board of the Space Transportation Association and vice president for governmental relations at Thiokol Corporation. He has also served as acting secretary of the Air Force. Philip Mongan is vice president of space commerce for SpaceHab and spent 12 years at NASA training astronauts, integrating modifications into the Space Shuttle, and integrating payloads into the Mir Space Station. James Muncy is president of PoliSpace and a founder of the Space Frontier Foundation. He has also served on the Space and Aeronautics Subcommittee of the House Science Committee. Robert W. Poole, Jr., is founder and president of the Reason Foundation, and serves as director of the transportation program at the Reason Public Policy Institute, a division of the Reason Foundation. Dana Rohrabacher is a Republican member of the U.S. House of Representatives from the 45th district of California and the chair of the House Subcommittee on Space and Aeronautics. Liam P. Sarsfield is a RAND Science and Technology Policy Institute senior fellow and author of ‘‘The Cosmos on a Shoestring,’’ a report on the future of NASA’s civil small satellite programs. Marc Schlather is president and executive director of ProSpace; director of the Senate Space Transportation Roundtable; and founder and president of the Results Group, a consulting firm based in Arlington, Virginia. 244
Contributors Dennis Tito is chief executive officer of Wilshire Associates. Rick N. Tumlinson is president and cofounder of the Space Frontier Foundation, executive director of the Foundation for the International Non-Governmental Development of Space, and cofounder of LunaCorp. Bob Walker is a former U.S. representative from Pennsylvania and chairman of the House Science Committee. He is currently chairman of the Wexler Group in Washington, D.C. Bob Werb is with the International Space Station Congress, a project of the Space Frontier Foundation Wayne White, an attorney at law, is the senior research counsel and project administrator for the Remote Sensing and Space Law Center at the University of Mississippi, a member of the National Space Society’s Board of Directors, and chair of the society’s annual International Space Development Conference.
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Index Access to space correct market value for, 161–62, 164–65 costs, 181–82, 215 deregulating space and, xxiii–xxiv early U.S. space program, xi export controls and, xx, xxiv the human frontier and, xxv–xxvi, 34–41 Mars Direct, xviii–xix Mir space station, xix–xx national space development strategy and, 177 private property rights and, xxiv–xxv private sector involvement and, xiii–xviii public policy and private markets and, ix–x, 14–16 resolving NASA’s requirements issues, 37–39 the Shuttle and, xi–xii, xxi–xxii space station and, xii–xiii, xxii–xxiii tourism and, xx–xxi See also Space policy Access to Space report, 69 Admiralty law. See Maritime and admiralty law Advanced propulsion technology, 141–42 Advisory Committee for Aeronautics, 22 Aero Club of America, 23 Aerospike engine, 7 AeroVironment, 25 Affordable In-Space Transportation study goal, 142 Agreement Among the Government of Canada, Governments of the Member States of the European Space Agency, the Government of Japan, the Government of the Russian Federation, and the Government of the United States of America Concerning Cooperation on the Civil
International Space Station. See Space Station Agreement Agreement Governing the Activities of States on the Moon and Other Celestial Bodies. See Moon Treaty Air mail, 17, 23 Aldrin, Buzz, ix, xvii, 177, 243 Amsterdam Colloquium, 113 Anderman, David, 73–74 Anderson, Walt, 232 The Antarctic Treaty, 15 Apollo program, 12, 13 loss of focus after Moon landings, 3 lunar samples, 228–29 Skylab, 4, 58, 103, 185 Arbitration, disputes and, 107–8 Archimedes Institute, 226–28 Arianespace/Ariane vehicles, 47, 128 launch revenues, 129 Armstrong, Neil, ix AST. See Office of the Associate Administrator for Commercial Space Transportation Asteroid Eros, 228 Atlas launch vehicles, 128, 188 Augustine, Norman, xxii Aviation civil, x–xi commercial aircraft industry contrasted to NASA-driven space transportation industry, 60–61 effect of barnstormers on industry, 17–18 European, 19, 22 Golden Age of, 11, 23–24, 26, 30–31 impact of Lindbergh’s flight on, 24–25 NACA and aviation industry, 59–62 parallels between space and, 11–13 pre- and post-World War I, 18–24 prizes, 18–26 Baker, Howard, 87 Balanced space science program, 44–45
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INDEX Ballistic space capsule/missile technology, 14 Bantam launcher, 47 Barnstormers, aviation, 17–18 Barriers to space enterprise commercial development barriers, 18 ethical and behavioral considerations for commercial space ventures, 68, 80 general considerations, 67–68, 80–81 government policy as, 67, 68–70 jurisdictional conflicts, 76–77 laws and regulations as, 70–76 misperceptions about commercial space ventures, 68, 77–79 successful track record of space industry and, 68 uncertainties of commercial space ventures, 68, 77, 215 Bass, Lance, xv Bennett, James, 59, 61 Berman, Howard, 74–75 Bigelow, Robert, xvii Bigelow Aerospace, xvii Bigelow Prize, 140 Boeing, xvii, 128, 130 See also United Space Alliance Bonds, tax-free, 8 Braun, Wernher von, xi, 33 Breaux Bill, 203–6 Buran spaceplane, 12 Burnett, Mark, xix–xx Bush, George H. W. Mars mission, xviii, 34 Mir space station and, xix Bush (G. W.) administration challenges to, 134 national space development strategy and, 188–89 privatizing the Shuttle fleet, xxii C. E. Unterberg, Towbin, 68 Calvert, Ken, 207, 208 Carnegie Institution, xiii CATS. See Cheap Access to Space (CATS) prize CDSF. See Commercially developed space facility Celestial bodies, ownership of, 224–25, 236 See also Moon Treaty; Outer Space Treaty
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Certification compliance with industry standards, 162–64 International Organization for Standardization 9000, 201 Challenger disaster, xii, 57, 71 Chamberlain, Clarence, 24 Cheap Access to Space (CATS) prize, xxiv, 73–74 China export controls to, 74 piloted space flight, 12 Civilian space program. See National Aeronautics and Space Administration; U.S. space program Civilians in space, 15, 172 See also Space tourism Claims Commission, 86 Clapp, Mitchell Burnside, 201 Clinton administration, 64, 69, 197 Cold War, x–xi, 3, 13, 26, 134 Columbus-America Group, 102 Commercial development, 145–47 barriers to commercial personal space flight, 18 cost of, 15–17, 42–44, 215 funding for enterprises, 7–8. See also Space transportation financing government policy as barrier to, 68–70 government programs versus, 4–5, 26–27, 209–11, 237 loan guarantees, 203–6 Mars and, 41 of near and far frontiers, 216 tax incentives, 8–9, 108, 213–14 See also National space development strategy; Space commerce Commercial Development Plan for the International Space Station, 183 Commercial Space Act of 1998, 71, 195–96, 210–11 Commercial space industry commercial vehicles in space, 6–7 development, 145–47 major sectors, 146–47 number of employees in, xiv outlook, 149 SpaceVest, 146, 147–49 successful track record of, 68 uncertainties of, 68, 77, 215 See also Private markets and providers; Space tourism; Space transportation industry
INDEX Commercial Space Launch Act of 1984 (CSLA), 70 Commercial Space Transportation Cost Reduction Act, 203–6 Commercial ventures ethical and behavioral considerations for, 68, 80 launches in 2000, 129 misperceptions about, 68, 77–79 NASA’s vision and, 45–49 Commercially developed space facility (CDSF), 6 COMSAT, 146–47 Congress, jurisdictional conflicts and, 67, 76–77 Conostoga I, xii, 70 Convention on International Liability for Damage Caused by Space Objects. See Liability Convention Convention on Jurisdictional and Real Property Rights in Outer Space conclusions, 123–24 consultation, 120–21 definitions, 114–15 discussion and comment, 122–23 dispute resolution, 121 general provisions, 121–22 jurisdiction, 115–17 preamble, 113–14 real property rights, 117–19 resolution of legal issues, 119–20 Convention on Registration of Objects Launched into Outer Space, 96 Convention on the Law of the Sea. See Law of the Sea Treaty Cosmic Hot Interstellar Plasma Spectrometer microsatellites, xv–xvi Cosmos 954 incident, 88, 103 Cosmos I space sail, xiv–xv Cosmos Studios, xiv–xv Cost of launches, 36–37, 56–59 commercial demand and, 47–48, 156 as key criterion for vehicles, 60 legislative action to reduce, 195–97 satellite launch to LEO, 75 technologies capable of reducing, 142 Cost of space development acceptance of, 215 cost of access to space, 181–82, 215 ‘‘faster, better, cheaper’’ strategies, 42–44 Haynes’ observations, 15–17
national space development strategy and, 179–80 Crew transfer vehicle (CTV), 37–39 CSLA. See Commercial Space Launch Act of 1984 Customs territory, articles brought into, 89 Cyclers, 189–91 Czarnecki, Leszek, xxi Danish Space Challenge, 73 Davis, Robert, 196 DCX vehicle, 7 Declaration of Legal Principles Governing the Activities of States in the Exploration and Use of Outer Space, 95 Deep Rover, 15 Defense Threat Reduction Agency, 75 Delta missions/vehicles, 128, 129, 188 Deregulation, x, xxiii–xxiv Diamandis, Peter H., 25–26 Dispute resolution, 85–86, 105–8, 121 the Dniepr, 47, 75–76 DOC. see U.S. Department of Commerce DOD. See U.S. Department of Defense DOS. See U.S. Department of State DOT. See U.S. Department of Transportation Dubner, Barry Hart, 92 Dunstan, James E., 223, 243 Dyson, Freeman, 16 Earth Science Enterprise (ESE), 46 EELV. See Evolved Expendable Launch Vehicle program Eigenbrodt, Stanton, 106 ELVs. See Expendable launch vehicles Encounter 2001 Probe mission, 48, 49 Environmental policy, AST and, 72 ESE. See Earth Science Enterprise Ethical and behavioral considerations for commercial space ventures, 68, 80 European aviation, 19, 22 Evolved Expendable Launch Vehicle (EELV) program, 36, 37, 63, 202 Expendable launch vehicles (ELVs), 131, 136, 177, 179 Export controls, xx, xxiv Strom Thurmond National Defense Authorization Act, 67, 74–76
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INDEX External fuel tanks as platforms, xvi–xvii Extraterrestrial mining. See Mining law Far frontier, 215–16 ‘‘Faster, better, cheaper’’ (FBC) strategies, 41–43 FBC. See ‘‘Faster, better, cheaper’’ strategies Federal Aviation Act of 1958, 70 Federal Aviation Administration (FAA), xxiii, 70, 71 Free markets benefits of, ix space commerce and principles of, 160–65 Freedom space station, xii, 233 See also International Space Station French Academy, soda from seawater prize and, 25 Gagarin, Yuri, 11, 12 Gemini system, 12 General Mining Law of 1872, 98, 100–101, 102, 108 Geosynchronous Earth orbit (GEO) Affordable In-Space Transportation study goal, 142 market, 127, 128, 134 Global Satellite Marketplace 99, 68 Globalstar, 77 Goddard, Robert, x–xi, 13, 45 Goldin, Daniel, ix, 198 Government far frontier and, 215–16 investment in SLI, 197–203 involvement in marketplace, 218 space transportation and, 55–59 Government contracts fixed-price launch service contracts, 201 government specifications and, 7 NGLS, 200–201 Government policy, as barrier to space enterprise, 67, 68–70 Government/private partnership, national space development strategy and, 177, 186–87 Government programs versus commercial development, 4–5, 26–27, 209–11 launches in 2000, 129 space flight as sole province of governments, 13, 14, 18, 26, 37
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See also specific programs/projects GPS services, xiv Guggenheim Foundation, xi Hall, Cargill, 88 Hamill, Doris, 151, 243 Handberg, Roger, 69 Harris, Phillip R., 77 Harrison, John, 25 Hawley, Alan, 23 Haynes, William, 15–16 Henry Kramer prize, 25 Higginbotham, John, 145, 243 High-Altitude Research Corporation, 73 Highly Reusable Space Transportation Systems study goal, 142 Homestead Act of 1862, model for real property legislation, 108 Hope, Dennis, 226 HR 1707 (Satellite Trade and Security Act), 74 HR-2504 (Zero Gravity, Zero Tax Act), 8–9, 213–14 HR2177 (Invest in Space Now Act), 207–8 Hudgins, Edward, 243 the Human frontier, xxv–xxvi, 34–41 Human space flight civilians in space, 15, 172 conclusions, 26–27 engaging public interest in, 35 expectations for, 13–16, 26 40th anniversary of Gagarin’s flight, 11, 12 Golden Age of Space Flight and, 11 opportunities and limitations, 16–18 parallels between aviation and space, 11–13 prizes and, 18–26 Tito on, 167–75 See also International Space Station; Space Launch Initiative Hunsaker, Jerome C., 22 Hybrid propulsion development program, xv–xvi ICO Global Communications Ltd., 77, 128 Identifiable objects, 88 IGAs. See Intergovernmental Agreements ILS. See International Launch Services
INDEX Implications of a Proposal for Real Property Rights in Outer Space, 113 ‘‘Inactive payloads,’’ 87 Income derived from space or ocean activity, 89 ‘‘Inoperative objects,’’ 87, 103 Insuring risks, 162–64 Intellectual property rights, ISS and, 234–35 Intelligence payloads, 63 Intergovernmental Agreements (IGAs), 233–35 International Court of Justice, disputeresolution and, 86 International Institute of Space Law annual Colloquium, 97 International Launch Services (ILS), 128 International law customary international law, 225–35 space property rights and, 224, 229–32 trends in, 91–94 International Organization for Standardization 9000 certification, 201 International Space Business Council, current industry revenue estimate, xiv International Space Station (ISS), xix–xx, 36, 39–40 costs, budget, and capacity, ix, xii–xiii, 9, 39 criminal jurisdiction, 91 intellectual property rights, 234–35 inventions/creations taking place aboard, 235 jurisdiction, 89, 90, 234 liability, 90–91 Memorandum of Understanding, 234 national space development strategy and, 177 partner opposition to Tito flight, 139. See also Tito, Dennis political vulnerability, 132–34 privatizing and commercializing, xxii–xxiii problems encountered, 4 property rights aboard, 233–35 space commerce and, 154–55, 161–62, 164–65 Space Station Agreement, 89, 90–91 tourism and, xx–xxi See also Space station program
International Space Station (ISS) Alpha international ISS Authority and, 218, 219–22 management issues, 217 near and far frontiers and, 215–16 privatizing, 217–19 questions to ask regarding, 215 viewed as real estate, 217 International Telecommunications Union (ITU), 230 Inventions made, used or sold in outer space, 89 Invest in Space Now Act (HR2177), 207–8 Iridium LLC, 77, 128, 147–48 ISS. See International Space Station J. P. Aerospace, xxiv, 73–74 Japan Rocket Society, 17 Jet Propulsion Laboratory, 35 Jobs, Steve, 25 Johnson-Freese, Joan, 69 Jones, Ron, 177, 243 Jurisdiction, 84–85, 108, 122, 225 conflicts as barrier to space enterprise, 76–77 Convention on Jurisdictional and Real Property Rights in Outer Space and, 115–17 K-1 reusable launch vehicle, 72 Kathuria, Chirinjeev, 232 Kearney, Michael, 151, 243 Kelley Aerospace and Technology, xvii, 137 Kennedy, John F., 14 Kennedy administration, 56 Kistler Aerospace Corporation, xvii, xxiv, 72 KPMG Peat Marwick, report, 68 Launch approval, xxiii–xxiv delays and AST, 72–73 Launch providers, private, xii, xiii, xvii, 36, 38, 62–63 fixed-price launch service contracts, 201 NGLS contracts, 200–201 U.S. launch market, 127–29, 130 Launch vehicles attracting commercial investment in, 196–97, 209–11
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INDEX See also Reusable launch vehicles; specific launch vehicles and families by name ‘‘Launching State,’’ 87–88 Law of the Sea Treaty, 91–94 Laws and regulations as barriers to space enterprise, 70–76 to promote commercial development, 216 See also Legal regime for private activities; specific laws and proposed legislation LeBlanc, Nicholas, 25 Legal regime for private activities Convention on Jurisdictional and Real Property Rights in Outer Space and, 119–20 dispute resolution, 85–86, 105–8 existing regime, 83–84 general considerations, 83, 108 jurisdiction. See Jurisdiction liability. See Liability Convention maritime and admiralty law, 103–5 mining law, 97–98 national legislation, 88–90 Outer Space Treaty. See Outer Space Treaty pedis possessio doctrine, 98–102 real property rights. See Real property rights salvage law, 102–5 space debris and contamination, 86–88, 102–3 Space Station Agreement, 89, 90–91 Treaty on Jurisdiction and Real Property Rights in Outer Space, 97 trends in international law, 91–94 Legislative action. See Laws and regulations; Legal regime for private activities; Space transportation financing, legislative challenges; specific laws and proposed legislation LEO. See Low Earth orbit Liability Convention, 85–88, 96, 106 Licensing process, xxiv Lindbergh, Charles, x, xi, xv, 17–18, 23–25, 140 Liquid-fuel rocket, x–xi, 45 Livingston, David M., 67, 244 Loan guarantees, space transportation financing and, 203–6, 210 Lockheed Martin, xvii, 79, 128, 130 See also United Space Alliance
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The Longitude Act, 25 Low Earth orbit (LEO) commercial launches to, 134 cost of satellite launches to, 75 economy of, 80 Highly Reusable Space Transportation Systems study goal, 142 market, 127 LunaCorp, xv Lunar and asteroid materials, 16 Lunar Cycler, 191 Lusigan, Bruce B., 79 MacCready, Paul, 25 Manhattan Project, 13 Manned Orbital Systems Concept, 58–59 Maritime and admiralty law, 103–5 Mars case against, 40–41 Cycler and, 189–91 Mars Direct, xviii–xix Mars Pathfinder, 35, 41 Maryniak, Gregg, 11, 244 McCoy, Tidal (Ty), xiv, 127, 244 McDonnell Douglas, 58–59 Mercury system, 12 Merrill Lynch, 68 Micropopulsion products, xvi Microsatellites, xv–xvi Microsats, 47–48 Military aircraft, x launcher procurement, x, 55–56 specialized needs, 63 Mineral leasing, pedis possessio doctrine and, 100–101 Mining and Minerals Policy Act, 100 Mining law, 97–98, 102 need for mining treaty, 108 pedis possessio doctrine and, 98–101 Mir space station, xii, xix–xx, 65, 132, 168, 232–33 MirCorp, xix–xx, xx–xxi, 137, 139, 217, 232–33 Missile technology, 14 export controls, 74 Modules for payloads, xvi Mongan, Philip, 151, 244 the Moon, Hope’s attempt at ownership, 226 Moon landings, xi, 3, 228–29 Moon rocks, 228–29
INDEX Moon Treaty, 91–93, 94, 223 Mount Palomar Observatory, xiii Mt. Wilson Observatory, xiii Multilateral agreements. See specific treaties by name Muncy, James, 215, 244 National Advisory Committee for Aeronautics (NACA), 22, 30–31, 55, 59–62, 201 National Aeronautics and Space Act, 89 National Aeronautics and Space Administration (NASA) ‘‘90 Day Report,’’ xviii alternative model for, 33 approaches in last half of 20th century, 55–62 balanced space science program, 44–45 budget issues, xiv, 9, 131–32 buying and selling science and technology, 46–47, 216 choosing Saturn or reusable shuttle system, 3–4 civilian space efforts and activities, ix, xi. See also U.S. space program commercial services and, 153–54, 165–66 developing demand in commercialization, 155–57 domination of space efforts, ix ‘‘down-selecting,’’ 200–202 early years, xi–xiii entrepreneurs as allies, 47, 165–66 FBC strategies, 42–44 history and vision, 29, 30–36, 49 human exploration initiative, 35–36. See also U.S. space program institutional issues/choices for future, 29 Langley Research Center, 30 lunar samples and, 228–29 national space development strategy and, 181–82 near and far frontiers and, 215–16 objective, 183 private initiatives that threaten, 7–8 public expectations, 13 recasting its role, 62 requirements issues, 37–39, 46–47 risk certification, 163 science and technology programs, 41–45
space tourism cooperative study, 138–39 sponsoring prizes, 47–48 Strategic Plan of 1998, 70 taking advantage of market incentives, xxi–xxii year 2001 for, ix See also specific programs/projects, e.g., the Shuttle; Space Launch Initiative, etc. National Aerospace Laboratory of Japan, 17 National Oceanic and Atmospheric Administration (NOAA), 76–77 National Reconnaissance Office, xvi National security interests, 32 National space development strategy access to space and, 177 architecture, 177 Bush administration and, 188–89 cost and markets and, 179–80 Cyclers, 189–91 existing Shuttle system and, 188 expendable launch vehicles, 177 government/private partnership, 177, 186–87 ISS and, 177 Lunar Cycler, 191 NASA and, 181–82 next-generation Orbiter, 178, 188, 189 people in space, 177 reusable space transportation, 177, 178–79, 191–92 single-stage-to-orbit transportation system, 182 SLI and, 181 space access costs, 181–82 space hotels, 184–86 space tourism and, 177, 180–81, 182–83, 184 two-stage-to-orbit transportation system, 179, 183–84 use of existing systems/ infrastructure, 177 See also Commercial development National space initiatives (NSIs), 77 National Space Policy of 1996, 69 National Space Transportation Policy (NSTP), 69, 197 National Telecommunications and Information Agency (NTIA), 77 Near frontier, 215–16 NEAR Shoemaker probe, 228 Nemitz, Greg, 228
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INDEX Next Generation Launch Services (NGLS) contracts, 200–201 NGLS contracts. See Next Generation Launch Services contracts NGOs. See Non-governmental organizations Nicaragua v. United States, 106 1997 Outlook: State of the Space Industry, 68 Niven, Larry, 33 Nixon administration, 56 NOAA. See National Oceanic and Atmospheric Administration Non-governmental organizations (NGOs), ISS and, 40, 154–55 NSIs. See National space initiatives NSTP. See National Space Transportation Policy NTIA. See National Telecommunications and Information Agency Oberth, Hermann, 33 Ocean navigation, prize for determining time and, 25 Office of Commercial Space Transportation (OCST), xxiii, 70–71 Office of the Associate Administrator for Commercial Space Transportation (AST), xxiii, 71–74 O’Keefe, Sean, ix O’Neill, Gerard, 16 Operations service providers, 159–60 Orbital Sciences, 130 failed launches, 128 Orteig, Raymond, 23 Orteig Prize, x, xv Orteig prize, 23–24 Ortiz, Solomon, 208 Outer Space Treaty, 84–85, 224–25 amend, withdraw, or leave alone, 94–96 dispute-resolution and, 86 laws to govern mining activities and, 97–98 national legislation and, 88–90 real property rights and, 84–85, 96–97, 122–23, 227, 228. See also Space property rights space debris and contamination and, 86–88, 102–3 ‘‘space object’’ and, 87
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Treaty on Jurisdiction and Real Property Rights in Outer Space and, 97 See also Convention on Jurisdictional and Real Property Rights in Outer Space Outsourcing payload launches, xii, xiii Palapa B-2 satellite, 103 Payload launches devising the one best way for, 58 outsourcing, xii, xiii SpaceDev and, xv–xvi SpaceHab and, xvi using NASA versus private launch providers, xii Payloads cost of putting into orbit, xii, xviii, 47–48, 177 ‘‘inactive payloads,’’ 87 intelligence payloads, 63 market for, 26 modules for, xvi the Shuttle’s capacity, xii, 135 Pedis possessio doctrine, 98–102 Pegasus air-launched vehicle, 47, 128, 129 the Pentagon, xi Personal computer boom, analogy for changing public expectation, 24–25 Personal injury liability. See Liability Convention Pioneer RocketPlane, 137 Planetary exploration, 34 See also Mars Planetary Society, xiv Poole, Robert W., Jr., 53, 244 Pork-barreling, 32 Private markets and providers access to space and, ix–x ‘‘down-selecting,’’ 200–202 entrepreneurial vision, xiii–xviii entrepreneurs as allies, 47 growth trends in private sector, 134 national space development strategy, 179–80 role in space, 215–16 See also Commercial space industry; Commercial ventures; Launch providers, private; Space commerce; Space markets Private property rights, xxiv–xxv Private science and maintenance services, xv–xvi, 46–47
INDEX NASA contracts for the Shuttle, xxi–xxii Private space station, Bigelow Aerospace, xvii Prizes, aviation, 18–26 See also specific prizes Progress supply rockets, Russian, xx Property damage. See Liability Convention Property rights. See Private property rights; Real property rights; Space property ProSpace, 207 Protocol on Environmental Protection to the Antarctic Treaty, 91, 93–94 Proton vehicles, 128 launch revenues, 129 Public policy, access to space and, ix–x, 14–16 Public statements, misperceptions and, 78–79 Public Vessels Act, salvage awards, 105 Radio Shack moon rover, xv Reagan administration, 57, 70 Real property rights, 91–94, 108 Outer Space Treaty and, 84–85, 96–97, 122–23, 227, 228 private property rights, xxiv–xxv See also Convention on Jurisdictional and Real Property Rights in Outer Space; Space property rights Real Property Rights in Outer Space, 113 Research service providers, 158–59 Resource appropriation, 84–85, 91–94 See also Mining law Reusable launch vehicles (RLVs), 36–39, 64, 131, 135–36 Commercial Space Act of 1998 and, 71, 210–11 cost and markets, 179–80 K-1, 72 national space development strategy and, 177, 178–79, 191–92 next- or second-generation, 195–203 Reusable rockets, xvii Risks, insuring, 162–64 RLVs. See Reusable launch vehicles Rock and Roll satellites, 129 The Rockefeller Foundation, xiii Rocketry science fiction and, 32–33 See also Goddard, Robert
Rohrabacher, Dana, 8, 74, 201, 213, 244 Roland, Alex, xii RSA. See Russian Space Agency RSC Energia, xix–xx, 168, 217, 232–33 Russia the Dniepr, 47, 75–76 Joint Statement of Cooperation in Space, 233–35 Tito on space program, 173–74 See also International Space Station; Mir space station; USSR Russian Aviation and Space Agency (‘‘Rosaviacosmos’’), 139, 168 Russian Space Agency (RSA), 232–33 Rutan, Burt, xv S. S. Central America case, pedis possessio doctrine and, 101 Safety zones, 85 Salin, Phillip, 59, 61 Salvage law, 102–5 need for salvage treaty, 108 Sarsfield, Liam P., 29, 244 The Satellite Book, 68 Satellite communications, as commercial application of space technology, 14 Satellite industry export controls and, xxiv, 67, 74–76 private sector involvement in, xiv real property rights and, 229–32 revenues, 68 Satellite Industry Association, xiv Satellite radio, xiv Satellite Trade and Security Act (HR 1707), 74 Satellites allocation system, 230–31 capturing power in space for, 5–6 as inoperative objects, 103 Saturn 5, xi, xvi Saturn expendable launch vehicles, 3 Schlather, Marc, 195, 244 Scientific Applications International Cooperation (SAIC), 15 Scout-class launch vehicle, 47 Sea Launch, 128 Security Council, dispute-resolution and, 86 Shepard, Alan, 11 the Shuttle commander authority, 89 costs, 38, 136 as ‘‘DC-3 of space,’’ 11
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INDEX missions in 2001, 129 NASA and, xii other commercial uses, xxii privatizing, xxi–xxii replacing, 64–66 reusability, 3–4, 135–36, 203 subsidizing, 58 See also Reusable launch vehicles; X33 vehicle Shuttle II, xvii the Shuttle Orbiter, 178, 188, 189 Shuttleworth, Mark, xxi, 139 Single-stage-to-orbit transportation system, 182 Sirius Satellite Radio, 129 Skylab, 4, 58, 103, 185 SLI. See Space Launch Initiative Sojourner rover, 35 Solar energy. See Space solar power Solar sail technology, xiv–xv, 48–49 Solid rocket boosters (SRBs), reusability and, 178–79 Sovereignty, territorial, 84–85, 95–96 Soyuz vehicle, 12 launch revenues, 129 Space: The Dormant Frontier, 69 Space Adventures, xx–xxi, 137, 138–39 ‘‘Space Age,’’ 30–31 Space commerce developing demand, 155–57 developing supply, 157–60 economic development of Earth orbital space, 154–55 efficiencies afforded commercial companies, 158–59 insuring risks, 162–64 ISS and, 154–55, 161–62, 164–65 market pricing for ISS access, 161–62 market pricing for ISS goods and services, 164–65 media, advertising, and promotional activity and, 156–57 momentum and, 156 NASA and, 153–54, 165–66 operations service providers and, 158–59 research service providers and, 158–59 SpaceHab, Inc., and, 152–53, 157–58, 165 test of being fully commercial, 151–52 upfront costs and, 158 use of free market principles, 160–65
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See also Commercial development Space Debris: Legal and Policy Implications, 87 Space debris and contamination, 86–88, 102–3 Space exploration far frontier, 216 human exploration initiative, 35–36 planetary exploration, 36 prelude to, x–xi Space flight China, 12 major barriers to personal space flight, 18 market for suborbital space flight, 18 prelude to, x–xi as sole province of governments, 13, 14, 18, 26, 37 See also Human space flight; Space transportation; specific spacecraft and missions Space hotels, 184–86 Space Industries of Houston, xiii Space information, revenues, 134 Space Island Group, xvi–xvii Space Launch Initiative (SLI), 36–37, 64, 136–37, 181, 197–203 See also Reusable launch vehicles Space Launch Modernization Plan, 69 Space markets advanced propulsion technology, 141–42 decreasing civil space program funds and, 131–32 expendable launch vehicles, 136 future growth areas, 134–42 GEO market, 127, 128, 134 growth and trends in private sector, 134 international space launch market, 190 ISS and, 132–34 LEO market, 127 reusable launch vehicles, 135–36 SLI, 136–37 space solar power, 140–41 space tourism, 65–66, 77, 137–39 space transportation industry, 129–31 U.S. space launch market, 127–29 X PRIZE and, 140 Space News, 200–201, 202 ‘‘Space object,’’ 87, 90 Space policy, 3–9, 32, 69, 197 as barrier, 67, 68–70
INDEX 21st century policy, 62–66 Space property rights about, 223–24 ‘‘adverse possession,’’ 226 attempts to establish private claims, 226–28, 236 customary international law, 225–35 development of international regime, 224–25 existing legal regime, 224–25. See also Legal regime for private activities geostationary orbit and, 229–32 intellectual property, 234–35 international law and, 224, 229–32 owning places in space, 229–32 pieces of space/lunar material, 228–29 property rights aboard ISS, 233–35 ‘‘unified theory’’ of, 235–37 See also Real property rights Space sail, xiv–xv Space Sciences Inc., xii Space Services, Inc., 70 Space shuttle. See the Shuttle Space shuttle Discovery, satellite recovery by, 103 Space solar power (SSP), xviii, 5–6, 16, 140–41 Space Station Agreement, 89, 90–91 Space station program, xii–xiii, 31, 58–59 Joint Statement of Cooperation in Space, 233–35 power in space and, 5–6 servicing, 65 See also International Space Station Space tourism market for, 65–66, 77, 137–39 national space development strategy and, 177, 180–81, 182–83, 184 possibilities, 6, 17–18 STA cooperative study, 138–39 Tito and, xx–xxi. See also Tito, Dennis Space transportation, 62–64 Affordable In-Space Transportation study goal, 142 AST, xxiii, 71–74 benefits to society, 171–73 Commercial Space Transportation Cost Reduction Act, 203–6 financing. See Space transportation financing government and, 55–59
Highly Reusable Space Transportation Systems study goal, 142 industry. See Space transportation industry issues, 6–7, 36–39, 49 National Space Transportation Policy, 69, 197 OCST, xxiii, 70–71 perception of expense, 78 21st century policy, 62–66 Space Transportation Association (STA), 138–39, 140 Space transportation financing, legislative challenges Breaux Bill, 203–6 Commercial Space Act of 1998 and, 195–96, 210–11 conclusions regarding challenges, 209–11 direct government investment in SLI and, 197–203, 210 Invest in Space Now Act (HR2177), 207–8 loan guarantees and, 203–6 National Space Transportation Policy of 1994 and, 197 tax incentives, 206–9 Space transportation industry, 129–31 commercial aircraft industry contrasted to NASA, 60–61 current industry revenue estimate, xiv economic activity in dollars, 129, 130 pointing private investment toward, 7–8, 206–9, 237 successful track record of, 68 See also Commercial space industry Space Transportation System. See the Shuttle Space utility, 6 electrical grid in orbit, xviii See also Space solar power SpaceDev, xv–xvi SpaceHab, xvi, 152–53, 157–58, 165 SpaceVest, 146, 147–49 Spirit of St. Louis. See Lindbergh, Charles Sputnik, xi, 14, 55 SRBs. See Solid rocket boosters SS-18 ballistic missiles, 47, 75–76 SSP. See Space solar power STA. See Space Transportation Association
257
INDEX START II Treaty. See Treaty on the Further Reduction and Limitation of Strategic Offensive Arms Stephenson, Art, 197–98 Strom Thurmond National Defense Authorization Act, 67, 74–76 See also Treaty on the Further Reduction and Limitation of Strategic Offensive Arms Suborbital package delivery concept, 65–66 Suborbital space flight, market for, 18 Superpower competition, 13–14 See also Cold War Surplus space vehicles, 18 Taurus vehicle, 128 Tax incentives, 108, 206–9, 210 Zero Gravity, Zero Tax Act, 8–9, 213–14 Technological determinism, 32 Teets, Peter B., 79 Telecommunications industry, xiv Thompson, David, 130–31 Titan launch vehicles, 128, 188 Title XI shipbuilding loan guarantee program, 204–5 Tito, Dennis, 245 on benefits of space travel to society, 171–73 flight of, x, xix, xx–xxi, 139 on future of human space flight, 175 ISS observations, 169–71 propriety of trip, 15, 78, 139 pursuing the dream, 167–68 Russian space program observations, 173–74 training, 168–69 Transportation, conventional modes, 53–55 air traffic control system, x, 11 air travel congestion, x commercial passenger airline industry, x, 17 ownership of airports, x Transportation, space. See Space transportation Treaty on Jurisdiction and Real Property Rights in Outer Space, 97 See also Convention on Jurisdictional and Real Property Rights in Outer Space Treaty on Principles Governing the Activities of States in the
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Exploration and Use of Outer Space Including the Moon and Other Celestial Bodies. See Outer Space Treaty Treaty on the Further Reduction and Limitation of Strategic Offensive Arms (START II), 75–76 Tsiolkovsky, Konstantin, 16, 32–33 Tumlinson, Rick N., 215, 245 Turin Colloquium on the Law of Outer Space, 113 2001: A Space Odyssey, ix, 3, 15, 29 Two-stage-to-orbit transportation system, 179, 183–84 UN Charter, 105–6 dispute-resolution and, 86 Unidentifiable objects, 88 United Space Alliance (USA), xxii United States Commercial Space Transportation Vehicle Industry Loan Guarantee program, 203–6 Uranium mining, 99, 102 U.S. Air Force Civilian Reserve Airlift Fleet program, 63 EELV program, 36, 37 U.S. Department of Commerce (DOC), xiv, 69, 74, 76 U.S. Department of Defense (DOD), 69, 76 U.S. Department of State (DOS), 74 U.S. Department of Transportation (DOT), 69 U.S. government agencies interagency working group on new launch vehicle, 69 jurisdictional conflicts and, 76–77 U.S. space program balanced space science program, 44–45 classic missions, 45 Cold War and, xi, 134 decreasing program funds, 131–32 forces that shaped, 30–34 Joint Statement of Cooperation in Space, 233–35 manned spacecraft systems, 12 Memorandum of Understanding, 233–35 science and technology programs, 41–45, 49, 216 superpower competition and, 13–14 traditional missions, 44
INDEX trailblazer missions, 44–45 transportation issues and, 36–39 See also National Aeronautics and Space Administration; Space policy; specific missions, programs/ projects, vehicles by name US Airways, frequent flyer perk, xxi Usachev, Yuri, xv USSR lunar samples, 229 manned vehicle systems, 12 Outer Space Treaty and, 88 See also International Space Station; Mir space station; Russia; specific missions, programs/projects, vehicles by name V-2 rocket design, xi ‘‘Valuable mineral,’’ 98 VentureStar, 57 VentureStar RLV, 79 Villard, H. S., 19 Voss, James, xv
Vostock/Voshod vehicle, 12 Voyager, xv Walker, Bob, 3, 245 Werb, Bob, 215, 245 Weststar VI satellite, 103 White, Wayne, 83, 113, 245 World War I, 18–24 World War II, x–xi, 13 Wozniak, Steve, 25 X-15, 12 X-33 vehicle, 7, 57, 64, 79, 197–98, 203, 206 X-34 vehicle, 197–98, 203 X-37 vehicle, 197 X PRIZE Foundation, xv, 19 X PRIZE, 26, 137, 140 XM Satellite Radio, 129 Zahm, Albert F., 19, 22 Zero Gravity, Zero Tax Act (HR-2504), 8–9, 213–14 Zubrin, Robert, xviii–xix, 65
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U.S. $15.00 “The stagnation of America’s space program over the last two decades has had one positive effect––it has motivated and invigorated a growing army of entrepreneurs who understand that the future of space exploration and exploitation will fall not to governments but to the private sector. This book outlines their hopes, dreams, and realistic plans for changing the way we look at space. These pioneers are leading the way to a revolution that is long overdue.” —Lon Rains, Vice President and Editor, Space News
D
ennis Tito isn’t the only entrepreneur headed into space—many more are interested. The question we face is how to open space to private travel and other commercial ventures. The contributors to this book • review the development of America’s space program and NASA ’s bureaucratic problems; • examine the legal and regulatory barriers to private space exploration; • explore current and potential private space ventures; and • discuss various legislative and privatization proposals, as well as what kind of property rights regime is necessary if space is to become the next freemarket frontier. Edward L. Hudgins is the Washington director of The Objectivist Center.
CONTRIBUTORS Edward L. Hudgins Rep. Bob Walker Gregg Maryniak Liam Sarsfield Robert W. Poole David M. Livingston Wayne White
Dennis Tito Tidal W. McCoy Rep. Dana Rohrabacher Rick N. Tumlinson James E. Dunstan John Higginbotham Doris Hamill
Buzz Aldrin Philip Mongan Michael Kearney Ron Jones Marc Schlather James Muncy Bob Werb
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