4 comments

• Pzatchok

  July 1, 2014 at 4:21 pm

  nice how they slipped in that Space ship Two is now not just using Helium in its engine but also Methane.

  The Helium to make sure the solid fuel stops burning and the Methane to help the burn during flight.

  They should just go to an all liquid engine and just stop this dance.
  If they have to, just add on some solid rocket boosters. They would only need one piece boosters not the multi piece ones like the shuttle used.
• Edward

  July 1, 2014 at 5:41 pm

  Robert, this may be a little off topic, but last night on the John Batchelor show you said that there are those who say that the COTS and CCDev companies may have been subsidized. Although it is true that some say so, I disagree with them.

  1) Investors want a return on investment, otherwise they will not invest. The only assured customer for the CCDev and COTS companies is the ISS, and the only other potential customer for these services is Bigelow’s space habitats. There is no guarantee that Bigelow’s habitats will be there, so the only guarantee for return on investment is NASA’s ISS and the half dozen flights it currently wants to contract. The COTS contractors also only have NASA as its only customer, so all profits and development cost reimbursements must come from those contracts, otherwise there is no return on investment and no investors. Without return on investment, there is no incentive to go into the business, invest in the business, or to loan it money (another form of investment). Because these companies must recover development costs, that recovery is not a subsidy. If they do not recover the cost, they stop being in business.

  2) SpaceX is the company I most hear about as receiving subsidies. Just because government is their first or main customer does not mean that the profits derived from this business are subsidies. Profits are profits, no matter who the customer. It has started putting commercial satellites into orbit, so should these companies also be considered as subsidizing SpaceX? SpaceX gets to spend its profits on Grasshopper and Falcon 9-R without the profits spent on that R&D being considered subsidies.

  3) The CCDev plan is to downsize from the original four to one contractor to taxi crews to ISS. Without government contracts to cover development costs, each company would have a one in four chance of getting a return on investment. Either the government assures a reasonable return for each company, or the price charged by the winning company would have to be exorbitant in order to make up for that risk, and that would eliminate the low cost part of the service, defeating the whole point of the exercise. Sometimes you have to pay as you go, such as with a kitchen remodel, and pay-as-you-go is how NASA saw this program. As with the kitchen remodel, that does not make it a subsidy. If the government is to get what it wants, it has to pay for it and to make it worth the contractors’ and the investors’ efforts. That does not make the profit a subsidy.

  Virgin Galactic is an example of the desire for investors to get a return on investment (see? this is not entirely off topic). Its investors are now insisting that it begin providing service by the end of the year. Virgin’s success is not guaranteed. This increased risk means that investors demand greater reward if it is a success. (Its customers may also be starting to worry that they will pass away before they get their rides.)

  Bigelow, Boeing, Blue Origin, Sierra Nevada, SpaceX, Virgin Galactic, XCOR, and some others are doing what only governments, with enormous resources, have done before: get people into space. Getting into space is difficult, dangerous, and expensive. The owners and investors of these companies are heroes; I root for them every day. It is very likely that some will fail, as happened to Kistler, whose investors and owners were left with nothing. That is the risk that these heroes take. That these companies don’t have the resources to create entire space programs from scratch seems to be held against them, as the legitimate profits for the services rendered are considered by some to be subsidies.

  SpaceX and the others receive money for services requested and rendered for agreed upon prices, and make profits from these services; these payments should not be confused for subsidies.

  Arianespace receives money beyond the agreed upon price of their services rendered, which is why that money is a subsidy.
• Robert Zimmerman

  July 1, 2014 at 5:47 pm

  Edward,

  You are preaching to the converted. We agree on the question of subsidies completely. I think the issue of subsidies that you are referring to on Batchelor was my discussion of Arianespace, comparing them to SpaceX. Unlike Kelly Starks, I do not see the contracts that NASA has with SpaceX and Orbital Sciences as subsidies, in any way.

  NASA needs to get cargo to ISS. They have hired these two companies to deliver that cargo. Arianespace, however, is not providing any particular product to the European partners, other than jobs in their various countries. Thus, the money Arianespace gets from ESA acts like pure pork, accomplishing little while sending cash home for politicians to brag about.
• Edward

  July 1, 2014 at 6:29 pm

  Robert,

  I must have missed an important word or phrase, because it was not clear to me that you disagreed with those who consider these to be subsidies.

  At least I have put down my thoughts in one place and in a (semi?) coherent statement. With luck, it will convert one or two people in the “subsidy camp.” I will try it out on one or two of my friends.

  Meanwhile, I hope that Virgin Galactic has solved the crack/”adhesion imperfection” problem on WhiteKnightTwo, which sounds to me like a large crack, except it is between layers in the composite.