Washington Bubble fights back against Capitalism in Space


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The response to my policy paper, Capitalism in Space, has been not surprisingly mixed. Eric Berger at Ars Technica wrote a reasonable analysis that focused on the absurdly high overhead costs of SLS/Orion. There have also been a number of critical reviews, one in Forbes and a second today in the print edition of Space News.

Both have tried to discredit the facts I have put forth about the ungodly cost of SLS/Orion, when compared to commercial space, without actually citing any incorrect facts in my paper. The truth is that everything I have written is true. This graph from my paper remains fundamental:

Table 5 from Capitalism in Space

SLS/Orion is costing four times as much, is taking more than twice as long to build, and is producing one tenth the operational flights. It is essentially a pork-laden jobs program that has no ability to get the United States anywhere in space. It might be an engineering marvel, but the cost is so high and its operational abilities so slow (one flight per year, at best) that it will never be a reliable and effective tool for exploring the solar system.

Meanwhile, private enterprise is getting innovative new rockets off the ground, for far less money, and repeatedly. If we want to settle the solar system, they are providing us the only viable way to do it.

People must recognize that these attacks are essentially the bubble of Washington working to protect its financial and intellectual interests. A lot of people in DC depend on keeping the faucet of government spending flowing to SLS/Orion, even if those projects accomplish nothing. In the case of the attacks from academics, they don’t like the fact that I am an outsider and not beholden to them. Moreover, they are instinctively appalled by the idea of allowing capitalism and freedom to operate freely, without their guiding hands controlling things. Such thoughts must be attacked and squelched (if possible), in order to protect their interests.

That they don’t seem to care that much about the interests of the American people and the country is quite revealing however. As some have said repeatedly, this is how you got Trump.

26 comments

  • Tom Billings

    The one reply by “Edward”, to the Thompson article in Forbes seems to adequately address everything Thompson implies excepting the interest Congress has in designating subcontractors in a project, through specifying design parameters, like using using Shuttle Tech wherever possible. I don’t have access to the print edition of Space News, so I may have to see if a local library still carries it to check on how Scott Pace schmoozes things. Don’t know if that’s any better.

    As you say, this is an immunologic reaction to ideas that would deconstruct so much of the congress-centric flows of wealth over the last 60 years

  • Richard M

    Thompson is right: SpaceX has had delays. It has had two of its launchers blow up due to problems in the second stage (one of which appears to have been quality control flaw, not a design problem).

    But how impressed are we supposed to be with how NASA itself has fared on traditional FAR contract crewed vehicle systems? It’s managed to kill 17 astronauts (every one attributable to design flaws in its systems) over the past 50 years; and its SLS/Orion system under development is years behind schedule – it may not launch its first crewed mission now until 2023.

  • Concerned citizen

    Your criteria (freedom, and a high capability/cost ratio) may not the the criteria chosen by society to provide the most benefit. Maybe spreading the work around to more states causes spin-offs that help even more. Who are you to decide?

  • wodun

    Concerned citizen
    March 29, 2017 at 1:44 pm
    Your criteria (freedom, and a high capability/cost ratio) may not the the criteria chosen by society to provide the most benefit. Maybe spreading the work around to more states causes spin-offs that help even more. Who are you to decide?

    Is this satire?

    Blue Origin is based in Washington state and launches in Florida. SpaceX is based in California and launches from Florida, California, and Texas soon. Boeing, Sierra Nevada, Orbital ATK, and have shops in other states. The companies they partner with as part of the supply chain are located all over too.

    When things are left to the free market, work is spread around even if launches of orbital rockets are limited by location. Spin offs are not bound by location either.

    Don’t try and say that society is making these choices. It isn’t society, its congress. For society to decide, we need congress out of the picture. Who is congress to decide how to develop rockets or evolve the economy? They can’t. They don’t know what the future has in store any more than they can anticipate engineering advancements.

    Math shows the problem with SLS/Orion and traditional cost plus contracting in comparison to capitalism. History has clearly shown that the most benefit comes from letting people and companies engage their own creativity in pursuing their desires. How is it that we have Americans who do not even understand the concepts that have enabled us to live the amazing lives we do now?

  • wodun

    You can see where that might be a problem for the Air Force if the payload being launched was a high priority such as a missile-warning or spy satellite.

    Reliability is a concern but delays are common in the industry. Even ULA has delays due to weather and problems with their rockets. The question isn’t whether or not SpaceX has had launch failures but whether or not they will in the future. Assuming that past events means there will be more failures is also assuming that no steps have been taken to solve those problems. The best way for SpaceX to deal with this, is to continue to be successful. The block 5 will address a lot of these concerns.

    Author Zimmerman treats Falcon Heavy like it’s a real thing, but I’ll bet this is the sixth consecutive year it doesn’t launch.

    Its more real than SLS/Orion. SpaceX has a lot going on. They are working on, and achieving, many things that NASA thought impossible. Developing the Falcon 9 is working on Falcon Heavy and parts of the Falcon Heavy system are being tested with actual launches. How many times has the SLS system been tested with actual launches? NASA will know more about the Falcon Heavy before its first launch than they will SLS.

    Last year a routine test of that procedure blew up a rocket on the launch pad.

    To be routine, it must be an activity that happens often. Maybe someone could chime in with how often that procedure was done before and by SpaceX started doing it.

    One problem with buying launch services under commercial contracts rather than using the traditional approach is that the government has less latitude to investigate what happened when things go wrong.

    NASA is so far up SpaceX that this complaint is worthless.

    And that brings us to the question of what exactly a “commercial” launch provider is.

    Well in this context, it means NASA pays a fee for a service rather than a cost plus contract. It also means that commercial providers retain control of their products to market to other customers. NASA and national defense benefit from this approach. In the case we need to rapidly launch satellites and other assets in the event of war, who would be better able to accommodate that need, ULA or SpaceX with a fleet of reusable launchers?

    The strength of our military and government flow from the strength and capabilities of our economy and people. Any defense analyst should know this, especially if they have a handful of degrees.

    Imagine where Donald Trump’s business empire would stand today if he typically delivered projects two years late, and every once in a while one of them blew up due to design features.

    He would be a billionaire and run for President.

  • DougSpace

    There remains the question of capability. Falcon Heavy can deliver a bit less than half of the payload to LEO than the Saturn V and a fair less than half on TLI. And the Saturn V wasn’t trying to develop a base. It would take quite a few FH launches to provide the equivalent of each Mars DRA-5 mission.

    So, whereas the F9 was developed at much less cost than had it been done the FAR way, I think that we need a clear architecture explaining how we can accomplish lunar development and crewed Mars exploration using SAAs. Positing the SAA development of a SHLV is fine but it is not clear that the market forces which helps the F9 would play out the same way with a SHLV when the market isn’t obviously demanding such a rocket.

    I believe that lunar development can be accomplished with FH-class rockets and Xeus-type landers sized for those rockets. Mars exploration with FHs only would be more iffy but a crossfed full-thrust FH would be quite interesting for Mars. Having to wait for the ITS to prove itself may be asking our congressional leaders for too much faith at this moment.

  • Edward

    Concerned citizen wrote: “Your criteria (freedom, and a high capability/cost ratio) may not the the criteria chosen by society to provide the most benefit. Maybe spreading the work around to more states causes spin-offs that help even more. Who are you to decide?

    Actually, the report gives recommendations, not decisions. The current decision makers are those in charge of NASA, including Congress, who has the purse strings, and the president’s people, which would include the higher levels at NASA itself. But they are not society itself, they are government.

    Perhaps we could define “society” not as government but as the private businesses that would choose to pay for the use of the most beneficial capabilities, and include into that definition the private companies that would provide the goods and services that create the beneficial capabilities.

    As was noted in the report, the current decision is to spread around the work to various congressional districts. The report suggests that this is an expensive way to manage space projects.

    I would suggest that if costs are reduced by focusing on the private market, then the saved money could be used for other exploration and development projects or programs, adding to our knowledge of the universe for the same cost.

    Robert Zimmerman’s report notes that additional advantages can be had because the private companies can better cater to more customers when they are free to design their hardware for a more general market than just the government market. The other customers benefit, commercial use of the rockets increases, and the pace of space exploration and development increases.

    We have suffered under the standard governmental method of space access and space development for more than half a century, and as a nation, the US only owns a portion of the ISS to show for all that development cost. We do not even have our own manned access to the ISS and won’t for another couple of years.

    Clearly, the governmental model of space access and development has failed to produce much results. The private space model has the potential for much more frequent and less expensive access, as well as plans for many more space stations at much lower cost each than the ISS. Private space companies are now testing manned spacecraft that will fly for significantly less than the Space Shuttle did, increasing the access per dollar spent.

    Private space companies are now leading the way to lower the cost of access to space, challenging the government-run programs to find more cost effective methods, too. It is a shame that the government-run programs did not emphasize low cost decades ago. Instead, government-run programs kept costs so high that space access for small satellites has been severely limited, stifling the development of additional private companies doing business using space hardware. Private companies are now falling over themselves to provide affordable access for those small satellites, and many other companies are forming just to do business with data generated by those small satellites.

    ULA has an eye toward operations in space that includes operating on the Moon, and sees the potential for a thousand people to be working in space by the middle of this century. These plans are similar to the dreams that we had in the 1960s. In five decades, government made shockingly few of these dreams come true, but ULA’s planned ACES long-duration, space-based, upper stage is private space doing what it takes to expand rapidly, as we had desired half a century ago. Congress failed to direct NASA to do this, but private space is now directing itself to do so.
    https://www.youtube.com/watch?v=uxftPmpt7aA (7 minutes)

    It is time for us to acknowledge that Congress has squandered the skills and knowledge of the experts at NASA, and for us to give private space an opportunity to make money while working on the expansion and development that we dreamed of in the 1960s, some of which were visualized in the movie “2001: A Space Odyssey.”

  • Tom Billings

    Concerned Citizen said:

    “So, whereas the F9 was developed at much less cost than had it been done the FAR way, I think that we need a clear architecture explaining how we can accomplish lunar development and crewed Mars exploration using SAAs. ”

    We won’t. Congress will get *no* political profit from settlements in the Solar system, and Congress knows that. Therefore, they will not fund it. It will be done privately, or it will not be done.

  • Tom Billings

    Excuse me, that was Dougspace, not concerned citizen who I replied to above.

  • Tom Billings

    DougSpace said:

    “Having to wait for the ITS to prove itself may be asking our congressional leaders for too much faith at this moment.”

    ITS will not be funded by Congress. It is involved with the space settlement that is not politically profitable for Congress. Professional politicians will not be committing career suicide.

  • LocalFluff

    Thompson in Forbes cannot believe the cost difference and just assumes that we get some hidden good for the monies. He guesses that it is safety. That’s his whole “analysis”. Etatists begin with their emotional conclusion about the Godlike state and then make stuff up to make it sound plausible (to themselves).

    With the service module for the Orion now being developed by ESA, further delays are to be expected. I bet they have to do alot of retooling in order to make European suppliers able to deliver according to specifications deliberately make to require American suppliers. It is about putting monies in friends’ pockets and putting men to work, not in space. I expect the first SLS to fly without Orion, hopefully with that Europa clipper instead.

  • Cotour

    Related, because its about Washington and how what goes on there is counter intuitive:

    Is Trump really going to choose triangulating with the RINO’S and the Democrats instead of moving towards those who actually put him in office? Bad move IMO.

    http://www.mediaite.com/online/trump-declares-war-on-freedom-caucus-we-must-fight-them/

    I suppose there is some political logic to pandering to Democrats to over whelm the Conservative factions in government, but I do not think its a good long term strategy. I see more failure in his future instead of solid long term wins that will be best for the country. I believe this road leads only to more locked up government, if so, so be it. This is not how to win more true Right 2018 seats in Congress, but maybe that’s the intent?

    When he realizes that he must move towards the true Right instead of the middle Left then he will be rewarded with success, until then he is getting bad council IMO. Wake up Trump.

  • DougSpace

    Tom, to be clear, I wasn’t suggesting that either Congress nor NASA should provide a clear architecture using SAAs for crewed Mars exploration. I’m actually suggesting that ‘we’ (meaning space advocate(s)) provide such an architecture. Zubrin for example has offered a FH-based architecture but it is minimalist to the point of possibly using midgets. I can’t blame NASA or Congress for ignoring that plan. Without a reasonable alternative to the FAR-SLS approach we won’t know if all members of Congress is supporting pork in their colleagues districts or if they are just wanting to preserve America’s space capability in the face of nothing offered as an alternative.

    For Mars, I think that we need something more capable than the FH as currently described. I would like to see a space advocate do the math indicating what the capability would be for FH-FT with crossfeed to LEO followed by SEP for cargo. Although I am not an engineer, my calculations are that crossfeed would get the FH-FT to about 90 tonnes to LEO and that SEP would make that about as capable as the SLS B2. But we need someone qualified saying this.

    As for Congress not supporting settlement because it is political suicide, they don’t have to. A permanent base can achieve legitimate government political needs such as international prestige. A regolith-shielded habitat with an indoor centrifuge is good for extending crew stay which lowers rotation costs and improves crew safety. Then if that crew are company employees as part of a public-private partnership and if they include married couples settling down for a long period, then this is the definition of the start of settlement.

    Cynicism about Congress can be fun, but until we offer plausible alternatives we can’t and shouldn’t assume their motivations are all wrong.

  • Vladislaw

    I was surprised Thompson even mentioned he was paid by the usual suspects. He wrote:

    “Zimmerman contends SpaceX and a bevy of other upstarts such as Jeff Bezos’ Blue Origin are showing there is a better way to do business, if government will just get out of the way.”

    I am a progressive liberal and make no apologies for it. But I am also a die hard capitalist and studied economics at the university, not aerospace engineering. Being a space junkie a lot of my thoughts and what I advocate for have to do with costs associated with it. That said I have to disagree with Thompson’s take on what Zimmerman and a host of others are saying. They always grab their broad brush and instantly paint what we say into “get government out of the way”

    No where have I ever read Robert say that or myself for that matter. I want government involved. I want it involved more as a referee of the “game” and not both a referee AND a player. I want Government to set the “rules of the road” so to speak and then let the capital markets and the consumer launch markets and the private sector aerospace manufacturing industry determine the winners and losers. I would rather see Government act as a pump primer on the technology. Raise the TRL (technology readiness level) and then shovel that technology into the private sector so NASA can buy that tech COTS (commercial off the shelf). NASA would be better suited to act as an anchor tenant and lease “floor space” from commercial habitat suppliers rather than be distracted with doing the grunt work of maintaining those facilities.

  • ken anthony

    It surprises me that people think FH isn’t up to the job of Mars colonization (even Musk!) FH can put unmanned landers in Mars orbit. Thanks to the heatshield already on the Dragon and rethinking it’s landing procedure, by 2020 it’s ability to put over 2 tons on the surface of mars will soon be tested. That takes care of cargo to mars even if there are more efficient ways to do it.

    If we have a lander (FH/Dragon to mars orbit) and a launcher (F9/Dragon to LEO) all we need for humans to mars is a ship to go from LEO to mars orbit which is the least challenge of a mars mission (launching and landing are magnitudes more difficult.)

    Musk’s mars colony transport is a way to get cost per colonist down. It is not required to colonize mars (although it could be the basis for an orbit to orbit general purpose reusable ship.)

    Govt has no real vehicle beyond vague imagination for landing humans on mars.

  • LocalFluff

    Cotour,
    With the Democrat elite having been totally defeated and is dominated by extreme leftists, this is the time to win over all of the moderate Democrats. Since they are afraid of libertarians, Trump improves his position by distancing himself from them. I had hoped that the Republican party could unite on its one defining policy issue, but that wasn’t possible. This is the logical consequence, alliances have to be cut right through party’s.

  • Cotour

    I would think that your strategy would better be employed after the 2018 elections. The power is in his control now and he chooses to dilute it? The Democrats (the Borg) will never stray at this point from their leadership, but they may after they again lose in 2018.

    Strike while the iron is hot and accumulate the victories that you can, a bird in the hand is better than two in the bush, etc, etc. Your scenario seems a bit too complex and long term for me. The Republicans are always worrying about the next election, this time its the push back to ending Obamacare and what they think they will lose based on their actions today. I think in this political game its best to get what you can get today and tomorrow will take care of itself.

    We wait and see.

  • John E Bowen

    Hey Doug,

    “. . . I think that we need a clear architecture explaining how we can accomplish lunar development and crewed Mars exploration using SAAs”

    It’s a good question. I’m in favor of COTS, and of Lunar COTS. A philosophy is the right start, a way of approaching things, but it is not an architecture. Perhaps some group will come up with a Design Reference Mission (DRM) for lunar development with clear goals of building on what’s already been built, leaving infrastructure in place for future use, and depending on Adam Smith’s invisible hand to keep multiple contractors in line.

    To me, the cool thing about DRMs is they are not tied to any current Program of Record. Any group with the knowhow and stamina can produce one. The group lets their own philosophy inform their goals, which decides their Level 0 requirements. They can choose to use technologies and vehicles which are most likely available in the near future, or choose to only use capabilities which are actually on sale today, right now.

    NASA produces these documents too, though it seems to me that their goals are highly influenced by the administration at the time of the study.

    I’m used to DRMs containing generic requirements and high level design “notions.” They’re mostly technical in nature. I’m not used to the documents containing specifications on how the program should be contracted, how many players, etc. If the document’s authors want Falcon 9, they just say “use Falcon 9.” Please correct me if I’m wrong.

    However, I suppose a DRM or other closely associated document could contain requirements for a COTS-like approach to contracting and ownership. I personally have no problem with that — it would keep down cost and time overruns. Plus it would provide a crucial redundancy. To paraphrase Arthur C. Clarke, “the Ramans do everything in threes . . . and all from different contractors!”

  • wodun

    DougSpace
    March 29, 2017 at 3:17 pm
    There remains the question of capability. Falcon Heavy can deliver a bit less than half of the payload to LEO than the Saturn V and a fair less than half on TLI. And the Saturn V wasn’t trying to develop a base. It would take quite a few FH launches to provide the equivalent of each Mars DRA-5 mission.

    Isn’t the current bottleneck what we can land on Mars surface? Maximizing payload launched from Earth isn’t the same as how much payload can be landed on Mars. Current technology limits what we can land on Mars, which are things about the mass of our latest rover.

    I like looking at what we can do right now. The opportunity cost between building SLS in terms of cost and time compared with using current or near term alternatives. Ignoring the development costs of SLS from the past and just focusing on the future costs before it is completed is damning enough for the launcher. What kind of payloads could we fund with current launchers with those many billions of dollars?

    Time is also important because SLS wont be flying for some time and when it does, it will have a very low flight rate.

    For Mars and cis-lunar space, it would be nice to see actual space ships, cyclers for example. Building these is where a heavy lift or super heavy lift vehicle could be useful. We have the technology to build these right now. Mathing out architectures is certainly needed but I suspect comparisons would show a COTS approach to building a station at a lunar lagrange point, participating in a lunar village, and a manned orbital mission to Mars would all be cheaper combined than using SLS to land people and cargo on Mars.

    To deal with radiation, I wonder if a suit would be a better route than shielding the entire craft.

  • Edward

    wodun,
    Good thoughts and excellent questions.

    Isn’t the current bottleneck what we can land on Mars surface?

    In a way, this is true. However, SpaceX is planning on demonstrating a method for landing a Dragon-sized (weight) craft. Heavier craft may also be possible. Heavier landers have a harder time taking advantage of the Martian atmosphere to slow down before landing, and a Martian landing for heavy equipment may look more like a lunar landing — using rocket propulsion to slow down — than a Spirit/Opportunity or Curiosity type of landing, using heat shields and parachutes.

    Thus the technology does not so much limit what we can land on Mars, but heavier landers would require more propellant for landing than lighter ones would. Heavier landers would be less efficient than lighter ones, but the benefits (e.g. capable of landing people) may outweigh the costs.

    I agree that unless we create uses for SLS that require such a large launch vehicle, then the timing of its development was poor. Early money spent on SLS could have been better spent on commercial manned vehicles to the ISS, and we could have been sending American astronauts on our own rockets for over a year, rather than continuing to pay Russia for the next couple of years. That is an example of a lost opportunity cost of SLS.

    The low flight rate of SLS could be another disappointment. If a manned Mars mission were to need two SLS launches, then with a launch rate of once every two years it would take two years to put together that mission using SLS. However, if that mission could be put together with four or so Falcon Heavy launches, then it could take only a couple of months or so to put together the mission.

    Radiation shielding will be an interesting problem. Using a shielded suit would be lightweight, but it would require that the suit be worn most of the time, which may be inconvenient or uncomfortable. I think that something like a Bigelow habitat, or two, with a shielded central core would be weight efficient, and the sleeping quarters could be there, providing shielding for the 1/3ish of the time that they spend sleeping and providing a refuge during solar radiation events.
    https://bigelowaerospace.com/b330/

    I hope everyone saw today’s Falcon 9 launch and landing, the first time that they reused a first stage. SpaceX is on the way to making this routine.

  • John E Bowen

    Edward,

    “Heavier landers have a harder time taking advantage of the Martian atmosphere to slow down before landing, and a Martian landing for heavy equipment may look more like a lunar landing — using rocket propulsion to slow down — than a Spirit/Opportunity or Curiosity type of landing, using heat shields and parachutes.”

    You hit the nail right on the head. In the beginning, our spacecraft are energy poor, so the engineering needs to be really creative. And I admit they were astounding pieces of design: the parachutes plus bouncing ball protection for Spirit, the heat shield plus drogues plus parachutes plus the amazing self-disposing sky crane for Curiosity. Amazing stuff, and gets the job done for the early science missions.

    In the early days of jet engines, several types had rockets attached, which would help the aircraft get up to the speed needed to take off, called Jet-Assisted Take Off (JATO). Then the rockets would drop off, expendable, to save the weight during flight. Again, this was cool stuff for its time, but once the jet engines were powerful enough, everyone agreed jet power alone was the way to go, no rockets needed.

    Back to spacecraft landing on Mars, the point is that here the rockets are the central technology. Airbags and skycranes were cool, but if we design for the right amount of fuel (energy rich), landing with just rockets is the future. OK, we still have to consider the atmosphere, but I’m hoping the heat shields can be reusable at least several times, like with Dragon. Just my two cents.

  • Joe From Houston

    Before Dorothy showed up in The Land of Oz, the Munchkins, the witches, the monkeys, the talking trees, the Wizard of Oz, and the people of Oz were in this symbiotic relationship where nothing new happened (Old Space). The scarecrow was stuck without a brain on a stick. The tin man was rusted up. The lion was hiding in the woods like a coward.
    Then, bam, Dorothy’s house with her in it landed on the wicked witch of the east and killed her (New Space). This got the wicked witch of the west real made since they were sisters who fought against the good witches. That was the status quo. What does Dorothy do to avoid being hurt by the remaining witch? She accidently splashes some water on her and melted the witch a little at a time over time until she vanished.
    This is the trick you need to use to resist the fact less scrutiny from the Washington Bureaucrats. With the successful landing yesterday, the truth in your paper is going to show up in the votes to elect the right people to change the status quo with Old Space and their Washington supporters. You showing facts to voters of Washington Bureaucrats and the like is what deters the wicked witch of the west. Since Old Space is basically dead based on the reused rocket that landed yesterday, every commercial satellite company is going to spend $140M/launch less than what they paid before on commercial satellite launches since that is how money works. The commercial companies are going to make a lot of money and launch lots and lots of rockets to meet the demand! Customers of commercial satellite services are going to pay less money which eventually lowers demand. Yay! This shift in access to space is going to show up in NASA’s front yard some day like flooding happens during torrential down pours. Just splash a little water on the Washington Bureaucrats and watch them melt away like magic. This is done through the election process. That’s how money works!

  • Edward

    I received this week’s edition of Space News, and I have some thoughts on Scott Pace’s commentary, “Wishful Thinking Collides with Policy, Economic Realities in ‘Capitalism in Space,’” a CNAS study that Robert Zimmerman wrote.

    Pace writes: “Unfortunately, the report is rife with factual errors and misleading comparisons that make it all but useless.

    Unfortunately, Pace fails to point out the factual errors and inform us of the correct facts. His comments largely only regard opinions and the recommendations in the Capitalism in Space report.

    Pace writes: ‘It projects outcomes based on the only operating NASA example of a public-private partnership, ISS cargo transportation.

    Later, he calls Trump’s call for public-private partnerships to be laudable and necessary, with the caveat that careful analysis is needed to know which partnerships make sense. Yet, Pace seems to think that using the only operating example to project outcomes does not make sense.
    Does he think we should use hypothetical examples for the needed careful analyses?

    Pace writes: “In effect, [Zimmerman] makes an unsupported claim that commercial markets exist (or should exist) for the public goods of science, exploration, and security.

    Isn’t Bigelow aerospace building space habitats in order for scientists to use as orbital laboratories independent of the ISS (per the interview immediately prior to Pace’s commentary in the same issue of Space News)? Isn’t SpaceX planning biennial unmanned voyages of Dragon capsules to Mars? Hasn’t the Air Force certified Falcon 9 to loft national security payloads to orbit and already signed a contract for such a launch?

    Pace writes: “[Zimmerman] argues that public funds should be provided to private actors with little accountability or oversight in order to realize cost savings,” and later: “[Procurement] reform is not achieved through the abdication of responsibility for the proper stewardship of taxpayer funds.

    However, Zimmerman proposes “the use of streamlined SAA/FAR agreements instead of the more complex FAR contracts” to reduce “the costs to both NASA and the contractors while speeding up construction time” (both quotes from the “Capitalism in Space” report). If this currently used agreement provides acceptable accountability and oversight now, then why would it be too little in the future?

    Pace writes: “The comparisons [between SLS/Orion and commercial cargo] are misleading as they have very different purposes.

    Falcon Heavy is one rocket that has similarly different purposes. It will deliver cargo and people to and from ISS, deliver satellites to LEO and GTO, and send Dragon to Mars.

    Pace writes: “[SLS] is being created for non-commercial deep space exploration missions. That’s why it’s a NASA program.

    SpaceX’s program to send Dragon capsules to Mars is for deep space exploration, to explore what it takes to put heavy payloads on Mars, yet it is not necessary for this to be a NASA program. Launch and transport for deep space exploration can be provided commercially; there is no necessity for NASA to own the launch rocket.

    Pace writes: “This is a false comparison of vastly different capabilities, the reported first stage Falcon Heavy thrust is approximately 1.71 million pounds. SLS thrust is 8.87 million pounds of thrust. Again, these are government requirements, not commercial requirements, and that’s why SLS is a NASA program.

    The thrust argument is a red herring, as it is payload capacity that matters. A factor of two in payload capacity is not as vastly different as Pace suggests, and NASA specified the requirements for the commercial cargo program for ISS, yet commercial cargo is not necessary to be a NASA program. Both SpaceX and Blue Origin have proposed rockets similar in capability as SLS; they both see future commercial requirement for such capability, but for a lower price and higher launch rate.

    Pace writes: “[Zimmerman] shows a lack of understanding on how the Obama administration, through the Office of Management and Budget, treated favors over disfavored programs and impacted costs and schedules. For example, SLS and Orion budgets were routinely burdened with termination liability costs and institutional taxes that were not imposed on the commercial crew and cargo programs.

    This is yet another argument in favor of Zimmerman’s recommended procurement system. This is Zimmerman’s point, that the current system has unnecessarily excessive overhead expenses. Zimmerman need not have broken out this problem for special attention in his report for this overhead cost to be part of the problem that could be avoided in future procurement.

    Pace’s writes: “The commercial cargo effort, while privately managed, was only partially privately capitalized. NASA subsidies created the private sector capabilities that NASA later paid additional funds to use.

    The word “subsidies” is both inaccurate and inflammatory. NASA did not pay subsidies to SpaceX, Orbital Sciences, or Kistler. Indeed, an early requirement of the commercial cargo effort was the raising of private, independent capital. Kistler was unable to do so, otherwise Kistler would have used the mythical subsidy to stay in business and build their rocket. If government were choosing winners and losers in the commercial cargo effort, Kistler would still be in business.

    The word means: pay part of the cost of producing (something) to reduce prices for the buyer. However, as with virtually every other rocket ever built, commercial cargo was created on contracts in order to provide the services that have been supplied to the customer.

    To say that Falcon 9 and Antares were subsidized would be to place Atlas and Delta commercial launches on the same level as the truly subsidized Ariane launches. Ariane has never made money, so Europe has paid billions of non-contract Euros, over the years, to keep it solvent.

    Under Pace’s paradigm, the only currently flying rockets that have not been subsidized are New Shepard and (possibly) Pegasus.

    Pace writes: “Space launch today is about as commercial as a private shipyard that builds aircraft carriers and an occasional yacht.

    The analogy is more closely appropriate to Boeing’s contracts to build SLS and an occasional CST-100 Starliner. The analogy is not as appropriate to SpaceX, as it sells the same aircraft carrier to the yachtsman.

    Isn’t it about time that we started to truly commercialize space? Don’t the several new space companies provide that opportunity at this time rather than some unspecified time in the future?

    Pace writes: “The price competition created by SpaceX has not resulted in new demand coming to the market, merely a reallocation of market share among suppliers, largely to the detriment of the European Ariane launcher and the Russians. This is good for the United States, but it doesn’t mean there’s a commercially viable launch market without government supports.

    The worldwide launch rate has increased since Falcon started launching at lower prices than Ariane and the Russians. Falcon 9’s first launch was in 2010, and from 2005 to 2009 there were only 325 launches, worldwide, but from 2012 to 2016 there were 417.

    There are now multiple companies raising private funds in order to put constellations of thousands of satellites into orbit. These constellations were not even inklings in their fathers’ eyes in 2009.

    Pace writes: “To date, no investment in a new launch system has returned that investment in real terms. This is consistent with historical experience with other transportation systems such as railroads and airlines.

    So much for the 19th century robber barons and the growth in their railroads, and so much for the growth of US air carriers in the 20th century.

    Pace writes: “The bigger challenge is that launch and return systems would also have to demonstrate historically unprecedented levels of safety at these lower prices.

    Unfortunately for Pace, the precedence is in the airline industry, which had a significantly worse safety record before deregulation allowed for lower prices. Aerospace is cognizant of safety.

    The Air Force certification of Falcon 9 sets a precedent for the level of safety needed for these lower prices.

    Pace writes: “Suborbital launch and balloon missions are valuable pathfinder efforts for the space tourism market, but their success or failure is not a government responsibility.

    Suborbital space tourism and balloon-ride companies are not asking government for development contracts. So far, government has not taken over responsibility for any company’s development effort, and they don’t have plans to, unless Pace knows something that the rest of us don’t.

    Pace writes: “What the CNAS study unintentionally shows is the deep desire of some space advocates to believe that a path to the stars exists independent of political and economic realities.

    For this to be true, ULA’s cisLunar 1000 idea would have to be economically infeasible, that their ACES reusable space-based upper stage has no economic use.

    Pace writes: “We need to dream, but with our eyes wide open, so we can make wise choices on the use of markets and governments for exploring and developing space.

    This is what the recommendations in the CNAS study would provide and the current government-run system does not provide. The wisest choices for the use of markets come from those markets, not from government decisions about those markets. Otherwise we are bound to get a space station that costs a hundred billion dollars, a Space Transportation System that costs more than the market could afford to use or operate, and launch rockets that cost so much that small satellite operators have to piggyback on the launches of large satellites, often ending up in suboptimal orbits.

    At some point, the space market needs to become economically viable, where commercial use — not government use — determines the best direction for it to take at any given point in time, and the CNAS study suggests that this is the point in time for this to happen.

  • Vladislaw

    Pace wrote: “For example, SLS and Orion budgets were routinely burdened with termination liability costs and institutional taxes that were not imposed on the commercial crew and cargo programs.””

    And why did President Obama do that? Because Shelby allowed the contractors to blow through that money on the CONstellation program. NASA was forced to come up with it later when it was canceled and everyone KNOWS that SLS will be canceled also so those termination costs should be maintained. There wasn’t any termination liability with CC because it was SAA’s with fixed costs and milestone based.

  • Edward,

    You might consider sending this as a letter to Space News.

  • wayne

    Edward–
    good stuff.

    Lifting a sentence out–
    [“Pace writes: “In effect, [Zimmerman] makes an unsupported claim that commercial markets exist (or should exist) for the public goods of science, exploration, and security.”]

    –I don’t know who Pace is, but he presents as a Crony Statist. A skilled, Crony Statist, but a Crony Statist nonetheless.
    I would put forth the proposition– This guy (Pace) never met a free market solution that he didn’t want subsidized, taxed, or heavily regulated.
    He considers all this to inhabit the realm of “Public Goods,” and thus clearly exposes both his Ideology & his bias.

    “Public Goods and Private Solutions in Maritime History”
    https://mises.org/library/public-goods-and-private-solutions-maritime-history-0

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