Posts Tagged ‘SpaceX’

We all know there’s really only one sure way to make money in, to, through, or from space: sell space-related goods and services to the government.

Now, if $7.3 billion in proposed cuts to “commercial imagery contracts” hit GeoEye and DigitalGlobe, what will be the effect on the rest of the space industry? How much would the cuts in space services cascade over into satellite and booster builds and shared overhead, to especially include “new” space?

While Lockheed-Martin, Boeing, and Northrop Grumman likely have sufficient capitalization, lines of credit, product diversity, and flex in their workload (to of course include layoffs), what about, in particular, SpaceX as well as some of the other less well-knowns?

Sea Launch was a recent example of operating on (or beyond) a shoestring and when they suffered a launch failure, their house of space cards collapsed. While Sea Launch has since come out of bankruptcy in a several-year-long re-org, are the situations analogous?

Given what appears to be a world-wide glut of launch capacity (India, China, and Russia, as well as SpaceX and all the traditional players), it will be interesting to see how things pan out. Of course, then there are possible cuts of great significance to NASA and mil space as well.

 

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SPAC_Falcon_Family_lgThe media is enamored with Elon Musk. Why not? He’s building rockets and rockets are cool; he doesn’t discourage the many ‘genius’ tags thrown his way (maybe because there aren’t too many physics majors in journalism); he’s already made a fortune (PayPal) in the real world (and cashed out), and he’s a reliable political and social liberal.

But that won’t make a rocket fly, nor will it make SpaceX succeed, even if they are unencumbered by the cost-adding layers of bureaucracy the military, NRO, and NASA all create. Less ‘oversight’ equals less cost, after all, but can a new start reliably reduce the cost to orbit by something approaching a half-order of magnitude? I don’t think so.

And at some point, the SpaceX ‘get real’ flag has to be thrown. For example:

Even if an engine [on the nine engine Falcon 9] explodes, says [SpaceX propulsion chief Tom] Mueller, the others will not be affected.

I’m not too sure about that; engine failures tend to be catastrophic and don’t much seem to gracefully degrade. And then there’s this:

Talking about a [8000 person] city on Mars by the middle of this century—even as SpaceX has yet to fly its first cargo mission to Earth orbit—is one of the reasons space professionals are skeptical about Musk’s claims.

SpaceX is for real and they are showing it with substantive and unprecedented accomplishments, but they are like everyone else in the space industry in one important way: they can only make money by selling the government a service. The competition is useful to the customer (that is, the government), but at some point this thing called reverting to the mean comes into play and space launch falls prey to regulatory capture, rent-seeking, and/or crony capitalism.

Will reverting to the mean affect SpaceX’s performance, cost, or schedule? History suggests it is most likely to revert on cost and schedule, especially as the customer demands ever-increasing insight.

A wise man once said the government wants to pay a fair price and have the contractor make a fair profit. If we could only agree what we mean by fair.

Loren Thompson asks the question “Is SpaceX really commercial space?” While a space-outsider would say “No,” the insider answer is “It depends on how you define commercial space.”

The reason for such an answer is because SpaceX makes much of their space money the old fashioned way: by selling space services and hardware to the government.  And if that’s “commercial space,” then everything is commercial space; after all, the government doesn’t have any rocket or satellite factories.

Then what is SpaceX?  I’d call it ‘new space’ for lack of a better term.

Yes, SpaceX is penciled in to do the launch ops for the Iridium Next constellation which does appear to be true commercial space and entailed SpaceX beating out the Chinese and the Indians along the way.  But without the selling-to-the-government part of the SpaceX company business in place to sustain their operations, would an excursion into ‘real’ commercial space be possible?

“Commercial space” may be an ill-defined misnomer, perhaps best defined by what it isn’t: existing legacy practices with massive levels of government oversight, directed rework, and intrusiveness.

Loren Thompson, writing at Forbes, backtracks a bit and clarifies what he’d earlier said regarding SpaceX vis a vis Old Space.  And then he does after SpaceX once again.

Thompson’s main point is that old space offers mission assurance./mission success, that is, the likelihood of the payload getting to the desired orbit with the ability to then function as desired.

The point Thompson misses is that this is really only essential for manned space flight and even then, as we know, it isn’t achievable.   And manned space flight is really only required for…manned space flight.

In other words, everything that can be done in space can be done cheaper, faster, better, longer, and more accurately with robotic space as opposed to manned space.  Manned space flight has one clear purpose at this point, to awe people.  So if you want to say you’ve been to space, you can catch a ride on one of the SpaceShip vehicles, ride on up to 100 km and say you’ve done it for much less than the cost of really getting to (and staying in) space which accomplishes about as much as you’re going to get.

Only manned space flight can fix the Hubble or the ISS you say?  How about the fact we can replace the Hubble with something cheaper and better than sending people up to fix it or the fact the ISS creates value that approaches zero.

So by extension to Thompson’s logic, for any mission other than manned space flight, all other things being the same, the cheaper ride to space should be the outfit that should capture the mission.

While Thompson says Boeing and Lockheed-Martin kicked in $4 billion of their own money to start up the EELV effort (I’d bet that it’s actually something less than that after a variety of recoupment campaigns against the U.S. government, but regardless), they didn’t do it out of the goodness of their hearts; they did it to make money.  Same as SpaceX.

Remember the acquisition phrase from the 1990s, ‘cost is an independent variable’?  It’s still true.

The Atlas V and Delta IV families of vehicles are marvels but at this point, you can’t just waive away SpaceX with the ‘mission success’ argument.

Rand Simberg lays the wood on Loren Thompson regarding SpaceX, AKA new space.

New START may leave a lot to be desired but new space, not so much: legacy launch system costs, that is EELV, are (forgive me) sky high.

Other recent and related stories:

Elon Musk Revisited

SpaceX, The Company That Saved NASA?

China and SpaceX, and

SpaceX’s Step Into the Mega-rocket Market

 

moon bus adThe Lexington Institute’s Loren Thompson takes a look at the SpaceX/Elon Musk story and is underwhelmed.

While I’m wondering myself how SpaceX can underbid India and China (and the Chinese are asking the same thing.  Think two words, loss leader), Thompson misses a few major points:

Space launch is an inherently and hugely risky business and offers few rewards to the bold.  The fact Falcon 1 had several failures is little different than, let’s say, the Corona program which went thirteen missions before it delivered space-capability.  And after the one successful mission, there were another three unsuccessful missions.

Or the Atlas program which had five acknowledged failures in thirteen months.

Thompson notes a planned “family” of launch vehicles, Falcon 5, never did launch.  The reality is there have been plenty of launch vehicles which have had minimal or no launches due to market forces, financing, technology, sizing (payload to orbit issues) and the likes, and consider the Delta III as a case-in-point.  While it’s easy to mock paper rockets, all rockets start as paper projects and SpaceX has moved well beyond that.  They have real rockets.

So no matter what, I’m willing to give SpaceX a chance for the fundamental reason that competition is useful (begin sarcasm font now: unless you’re talking about the second engine for the F-35; then of course, it’s wasteful).  Otherwise, U.S. space launch becomes an issue of keep doing what you’re doing, keep getting what you got.

Of course, Thompson still hits the nail on the head in one regard: the way to really make money in, to, through, and from space is to sell space hardware and services to the government.  Providing launch services to Iridium Next is not likely to be the real target when you ponder the taxpayer-provided monies of NASA, the Air Force, and the NRO.

 

By any conventional measure (that is, cost), the EELV program is broke hard.

How so?

Bloomberg reports the Air Force is projected to spend just shy of $10B on the EELV program in FY12 to FY16.  That’s a 54 percent increase—a plus-up of about $3.5 billion—from last year’s estimate for the same period of time.

If there was a 54 percent increase in the number of launches, the increase would make sense.  However, no one is saying that’s the case.

EELV was born in the 1990s and was based on the bogus (and metaphorical) assumption that the skies would soon be darkened with satellites.  The result: the Air Force’s space launch needs would benefit from this economy of scale and associated cost-sharing. 

Personally, I think the whole EELV program was a reflexive and even emotional response to the post-shuttle era’s move back to ELVs.  In those days, one bad actor (read Titan) managed to tar existing ELVs in general.  Delta and Atlas were the good ELVs…and then there was Titan.

Through the years, the EELV assumptions and the associated business model have proved to be less than completely accurate and while EELV has been a total success as it regards providing a ride to orbit, it has been a major bust on cost.

The Air Force solution to EELV’s cost problem has been advertised as block-buys.  That may help, however there is more that can be done.

The real solution is competition.  While SpaceX (for example) doesn’t have the same record of success as the long string of uneventful EELV launches, they don’t have the same failed funding legacy either.

If we keep doing what we’ve been doing (two families of boosters single sourced under the United Launch Alliance umbrella), we’ll keep getting what we’re getting (cost explosions). 

The alternative, if we’re not already there, is to give someone else a chance to launch national security payloads.  Since SpaceX is the only other viable U.S.-based game in town, they’re almost certain to get a chance.