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Apollo 12's Pete Conrad speaking at CATS. Dana Rohrabacher speaking at CATS.
The Cheap Access to Space Symposium is a Success!
Washington, D.C., July 21-22, 1997: The Space Frontier Foundation's Cheap Access
to Space Symposium on Capitol Hill was attended by hundreds of aerospace
executives, government officials, space advocates, and media representatives.
Among the highlights:
The first public presentation of the Roton, a new commercial Single Stage to
Orbit vehicle being developed by Rotary Rocket Company.
The Honorable Dana Rohrabacher (R-CA), Chair of the House Space
subcommittee, states that Shuttle Liquid Fly-Back boosters are a dead
issue. Read his space policy address.
Keith Calhoun-Senghor, of the Department of Commerce, provided an overview
of the historic significance of Cheap Access to Space in an opening
presentation. Read his speech.
Panel One: "How Can America Create Free and Competitive Markets for Space
Launch Services?" discussed the government's role in promoting space
development. Read the Panel One transcript.
Virtually all of the chief executives of the new Reusable Launch Vehicle
companies discuss critical regulatory issues with the chief regulators at the
Office of the Associate Administrator for Space Transportation (FAA).
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Amazon.com. "What is the Role of Federal 'X-Vehicles' in Supporting Commercial Development
of Affordable Space Transportation? " was hosted by Jim Muncy, and featured
Henry Vanderbilt, Pete Worden, Pete Conrad, and many other noted experts on
advanced space transportation. Read Henry Vanderbilt's speech.
For more information, read Jeff Foust's article about the CATS Symposium.
Check out photos from the Cheap Access to Space Symposium:
| CATS Symposium Photos |
For more information call 800-78-SPACE (800-787-7223)
or send us your comments
Return to the Space Frontier Foundation Home Page
Copyright 1996 - 2008 Space Frontier Foundation. All rights reserved.
All work contained herein is protected by United States copyright/ intellectual property law.
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CATS Symposium
Home
Dana Rohrabacher
speech
Keith Calhoun-
Senghor speech
Henry Vanderbilt
speech
Panel One transcript
Jeff Foust article on
CATS Symposium
Symposium Photos
Media Contact
Join the Fight!
Space Frontier
Foundation Events
Foundation Home
Page
The High Frontier
is Gerard K.
O'Neill's
masterpiece. This
new 3rd Edition
Includes an
introduction by
Freeman Dyson.
Click above to
order The High
Frontier from
CATS Symposium Report
by Jeff Foust, SpaceViews
Finding the right balance between government and commercial space interests in the development, regulation,
and marketing of a new generation of launch vehicles that promise radically cheaper access to space is critical,
officials from industry and government said at a Washington symposium in July.
The Cheap Access to Space Symposium, sponsored by the Space Frontier Foundation and NASA, was held at
the Hyatt Regency Hotel, a few blocks from Capitol Hill, on July 21-22 as an open discussion of the roles of
industry, including both the established major companies and the new start-ups, and government agencies in
improving space access.
The sessions focused on key areas that needed to be addressed for new commercial launch activities to
succeed. These areas included free and competitive markets, regulatory issues, and the eventual transition
from the shuttle to future launch systems. Notably absent were extended discussions and debates on
technology evidence that the technical concerns with developing reusable one- or two-stage vehicles are less
important than concerns about operating them legally and successfully.
Free and Competitive Markets
A key area of concern of conference attendees, including a panel of industry leaders and government officials,
was how to make the commercial marketplace for launch vehicles free and competitive while determining the
role, if any, the government should play in the marketplace.
Most saw a role for government in research and development of new launch technologies. "It's hard to be
against R&D," said Rick Fleeter, president of AeroAstro. However, he thought the government had not done a
good job stimulating commercial enterprises to develop new vehicles, and thought an incentive like the X-Prize
was a much better stimulus.
Panels were divided, though, on whether government should protect domestic launch companies though the
use of quotas on international launchers, such as Russia's Proton. Fleeter thought the way to get launch costs
was to eliminate quotas, to get "a lot of people doing a lot of stuff as cheaply as possible."
Mark Bitterman, vice president for government relations at Orbital Sciences Corporation, offered a somewhat
different view. He said his company was against "protectionism", but thought a level playing field was necessary
for American companies to compete. He called on the government to be "a little tougher" with non-market
economies.
There was also a discussion on just how elastic the market must be to permit decreases in launch costs. Pete
Conrad, former astronaut and current chairman of Universal Space Lines, said in a separate talk, "The market is
certainly there," adding that he expected a "fantastically larger market when we start getting cheaper access to
space."
That position was questioned by William Claybaugh, business advisor for NASA's Reusable Launch Vehicle
program. He questioned the elasticity of the market, noting that the demand for low-cost "Get-Away Special"
payloads on the shuttle, available for only thousands of dollars, was far less than planned.
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Amazon.com.
Claybaugh says the current market is "clearly" not free and competitive, and called the current situation of high
launch costs and low demand a good example of a "failed market." He believed that launch costs have to go
down to $600/pound or less before there will be a great growth in demand.
Improving the Regulatory Environment
An issue that looms larger than technical issues, and perhaps even more than the marketplace for new launch
vehicles, is the regulatory environment. Technology for commercial launch vehicle is moving faster than the
Federal Aviation Administration's ability to provide regulations for it, although both industry and government
officials agreed that the FAA was doing its best to work with the launch services industry to draft new
regulations.
Patricia Grace Smith, Associate Administrator of the FAA's Commercial Space Transportation office, said that
the development of RLVs posed "the most challenges" to the FAA. Smith said the FAA currently has the power
to license launch vehicle, but has no authority over landings; making it impossible for the agency to regulate and
approve for use commercial RLVs.
Smith said legislation that has already passed the House of Representatives, with a similar version currently
being drafted in the Senate, with give the FAA the authority it needs to handle reentry and reuse issues.
Manuel Vega, chief of regulations of the FAA's Commercial Space Transportation office, said 16 pages of
regulations currently exist for commercial space launch vehicles, with new regulations under development. Two
new regulations, which call for updated licensing rules and financial responsibility by launch companies, are
currently open for comments, while two more which would cover private and state-owned launch sites are under
development.
Vega listed several criteria which he considered essential to a favorable regulatory environment. Such an
environment, Vega maintained, protects the public, is cost effective, enables technology development,
complements market forces, involves industry and the public, and more.
Members of the launch industry on the regulatory panel agreed that the FAA was doing a good job to date, but
had concerns. Gary Hudson, president of Rotary Rocket Company, said he thought the agency was doing a fine
job, but was concerned about the future since "regulation can be used as a barrier to entry."
Still, there was concern that an unfavorable regulatory environment might push launch companies to offshore
launch sites. Kistler Aerospace, for example, is considering launch sites in Nevada and Woomera, Australia for
its reusable launch vehicle. One Kistler official said the company had "a fiduciary duty to its investors to act to
protect their investments and maximize return."
Other companies maintained that moving their launch operations outside the U.S. to escape the regulatory
environment would be unnecessary. Hudson said that the country would suffer "a big hit in prestige" if
companies were forced offshore, which would likely ensure changes to regulations.
Making the Transition from Shuttle
One of the liveliest debates of the symposium was the question of when and how NASA would make the
transition from the current fleet of Space Shuttles to a new fleet of reusable launch vehicles, likely operated by a
private company.
Stephen Oswald, NASA's Deputy Associate Administrator for the Space Shuttle, said shuttle flights would
continue to 2012, the end of the planned operational life of the International Space Station. Until then the shuttle
would undergo a number of performance and safety upgrades, including perhaps the introduction of liquid
flyback boosters next decade, study contracts for which were released earlier this year.
Robert Crippen, former astronaut and KSC director and current president of the Thiokol Propulsion Group,
suggested private funding may be used for shuttle upgrades, perhaps by United Space Alliance, which takes
over all funding for shuttle operations later this year.
Not all members of the panel were happy with continuing shuttle operations well into the next century. Rick
Tumlinson, president of the Space Frontier Foundation, said the current fleet of shuttles was getting old and
called on NASA to make a "real commitment" to making a transition from the shuttle to one or more vehicles.
However, Alan Ladwig, NASA's Associate Administrator for policy and plans, called any thoughts that the
Shuttle would end soon "pathetic."

The Role of X-Vehicles
The purpose of X-vehicles government-funded programs to develop advanced launch technologies also
came under the scrutiny of symposium attendees, but found wide support in its current role among industry and
government officials.
NASA's Stephen Cook described the two tiers of NASA's efforts to develop new launch technologies.
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"Trailblazer" programs will be fully integrated flight demonstrators, while "Pathfinder" programs will have a
narrow focus, demonstrating just "1 or 2 big items" for less than $100 million and in under two years.
The Air Force is also interested in testing new technologies for a military spaceplane, which according to Lt. Col.
Jess Sponable of the Air Force's Phillips Laboratory, is "synergistic" with commercial launch vehicle
development. He said the Air Force needs to "blacken the skies with X-vehicles" to improve space access, just
as it did in the 1940s through the early 1960s to improve aircraft.
Current X-vehicle development is going "pretty well" so far said Henry Vanderbilt, executive director of the
Space Access Society. He urged the government to keep the distinction between X-vehicle and flight prototypes
very separate, to prevent problems that have happened in the past as X-vehicle got less experimental.
However, Air Force Col. Pete Worden thought that operations were as big a consideration as the technology,
and urged that X-vehicles be able "to do something", to test their operational capabilities.
All agreed, though, that not all X-vehicles will work, and the government and the public need to be aware that
failures are an important part of the process. "What doesn't work is valuable," Vanderbilt said.
David Swain, Vice President and general manager of McDonnell Douglas's "Phantom Works", summed it up by
saying, "X-vehicles are about learning."
Check out photos from the Cheap Access to Space Symposium:
| CATS Symposium Photos |
For more information call 800-78-SPACE (800-787-7223)
or send us your comments
Return to the Space Frontier Foundation Home Page
Copyright 1996 - 2008 Space Frontier Foundation. All rights reserved.
All work contained herein is protected by United States copyright/ intellectual property law.
Space Frontier Foundation - CATS Symposium Jeff Foust Article http://archive.spacefrontier.org/Events/CATS1997/CATSfoustart...
3 of 3 6/15/14 2:19 PM
Dana Rohrabacher at the CATS Symposium.
CATS Symposium
Home
Dana Rohrabacher
speech
Keith Calhoun-
Senghor speech
Henry Vanderbilt
speech
Panel One transcript
Jeff Foust article on
CATS Symposium
Symposium Photos
Media Contact
Join the Fight!
Space Frontier
Foundation Events
Foundation Home
Page
The High Frontier
is Gerard K.
O'Neill's
masterpiece. This
new 3rd Edition
Includes an
introduction by
Freeman Dyson.
Click above to
order The High
Frontier from
Policy Address by Rep. Dana Rohrabacher
July 22, 1997 Cheap Access to Space Symposium
Much thanks to NASA, of course, for helping to
organize this, as well as the Space Frontier Foundation,
Phillips Lab, and Rick, Dave Anderman, Chaz Miller,
and all the rest. I really appreciate this.
Let's start out today with a discussion on a positive
note. I think that with a positive spirit we can and will
move forward. I hope we'll move forward at a very fast
pace; there are others who are a little more cautious.
But as we're evaluating where we are, we should first of
all note how far we've come in these last eight years
and there's a lot of reasons for optimism when we take
a look at what we've done.
Eight years ago I had just been elected to Congress,
and President Bush was calling for a $500 billion
mission to Mars. Lots of people were listening to what I considered to be that impossible blabber. The fact is
that cheap access to space is the next step. And I'm not opposed to going to Mars at all I think that's exactly
what mankind should think about doing, and not only Mars; we should think about mankind's ascent into the
heavens and the conquest of the universe. But that's not the next step the next step is making sure that we
can get into low Earth orbit. Heinlein said that once you're into low Earth orbit, you're halfway to anywhere in the
universe. So we have to get to the next step and, eight years ago, we had people again trying to skip steps,
and trying to get us to involved in something that would be beyond our capability and thus hurt our ability to
actually do things in space within our lifetimes which we are capable of doing. So, anyway, if we had at that time
when George Bush was talking about going to Mars had a meeting like this calling for "cheap access to
space", you would probably have had two or three people in the room, and that would have been it. But the fact
is that today we have an impressive gathering, and you can see by the number of companies and different
organizations that are sponsoring this that cheap access to space has finally caught people's attention as to not
just the importance, but the necessity, of coping with this challenge before we go on to other challenges in
space.
Today, after eight years, we have Pathfinder and the Sojourner rover on Mars, costing much less than the price
of one Shuttle launch, and about one-third of this year's cost overruns for Space Station. We have President
Clinton and Vice President Gore strongly supporting the X-33 experimental RLV program, and we also have a
Director of NASA who is committed to developing a reusable rocket system. These are terrific accomplishments
major steps forward. Cheap access to space is today on nearly everyone's priority list. No longer are those of
us who are pushing for this voices in the wilderness we actually have people in the corporate boardrooms
saying, "Look, we're going to get involved in this because this is something that will take in the near future and
we want to be in the competition."
We have six private companies, including Lockheed Martin, involved in developing RLVs at this time. And
they're different kinds of RLVs, as you know. There are all kinds of new concepts that are emerging. And this is
healthy it is healthy that you not put all your eggs in one basket. Mark Twain said, "Put all your eggs in one
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Amazon.com.
basket and then watch that basket!" But that's not really the way to do things; that's not the way to have
progress and to develop new technology. The way to develop new technology is to make sure there are
diversified approaches to solving a problem, just in case the computer graphics don't work when you actually
start twisting the metal and building the craft. We're finding some problems now VentureStar is having some
unforeseen problems. I'm sure they will overcome those problems. But, as far as I'm concerned, we can't rely on
one piece of technology to carry the whole load ten or 15 years from now. Even if it is successful if
VentureStar, for instance, is successful, as we all pray it is; I am supporting it 100 percent we don't want just
one craft to be available; we want there to be competition. Competition is a good thing. Competition will ensure
that quality remains high and prices go low. That's what the free enterprise system is all about.
And so we not only have VentureStar and DC-X we have a myriad of different approaches. Out in central
California at Redlands, they're developing this craft that will be sort of dragged up like a glider, and it will take off
after it's reached 40,000 feet. These innovative ideas are exactly what we've been wanting to happen. And they
should all be taken seriously, looked at and considered, and be put into a cost-effective analysis of how they will
work. And, if possible, they should all be in competition with one another a few years from now in getting people
and things into space.
So a lot of credit for the progress we've had can be given to people right here in this room, and I'm grateful to all
of you. There are leaders like Bud Kramer Bud and I have been working very closely. I think that on the Space
Subcommittee, we've shown that you can have cooperation between Republicans and Democrats, and we are
working for the good of the country and to push this particular technology. So thanks to all of you for being part
of the team, and let me say that it is a lot easier to be part of a team than it is to be a voice in the wilderness
which is what I felt like eight years ago. I felt that people were sick and tired of hearing me talk about developing
cheap access to space or, as I used to say, bringing down the cost of getting into space. I was almost like a
Johnny-One-Note, and they just got sick and tired of hearing me.
I figured that what I'd do is give you a little summary this morning of what's happened and what's going on this
year the bad news, the good news, and the weird news. The bad news is that I'll have to give some mea
culpas here myself for a setback that we experienced in Congress last week. Tim Roemer and I were planning
to offer an amendment to the NASA appropriations bill which would have moved $100 million from bailing out
the Russian government for its failure in Space Station into an RLV to follow on after the X-33. But because of a
snafu, the appropriations bill moved so fast that the NASA part of the bill came up two hours earlier than it was
supposed to; and six people including me who had amendments lost their time to offer those amendments
because their time had already passed on the floor. It was basically one chance in a hundred that this would
happen, and I was flabbergasted. One Congressman who was supposed to offer an amendment didn't show up
on time, and so he lost his hour's slot and then the other Congressmen (five of them were ahead of me) lost
their slots because they were counting on that Congressman to be on time. When I thought I had three or four
hours, I didn't have any time at all, and I got there about one minute late. As I say, those things do happen, but it
is very disheartening when they do. But it makes me a little more appreciative of other people who sometimes
get themselves into situations they didn't count on. Much to his credit, Chairman Sensenbrenner the Chairman
of the Science Committee tried to offer my amendment, but the appropriators used a procedural maneuver to
prevent him from doing so. They had every right to use that maneuver they had their priorities; I have mine
but that was an unfortunate thing. But next time around, we'll be ready.
But nevertheless, while the NASA appropriations haven't turned out as well as we had hoped, basically there
are some good things happening. There is good news. First, I believe that the NASA Authorization Law, which I
was involved with writing, is basically going to be passed. So it will be the first time in years that we've actually
had a Space Authorization Bill passed into law. And that authorization gives Dan Goldin and NASA strong
direction to find the resources to build a follow-on RLV. So, basically, the authorization bill empowers NASA to
move forward on this road. I've spoken to Dan, and he is committed to bringing down the cost of getting into
space he's got lots of great things he wants to do, including going to Mars. And he knows, as well as I and
many of you here do, that before we can go anywhere we've got to tackle this problem we've got to come to
grips with this and bring down the cost of getting into space.
The second reason for a little optimism: there is funding in the defense bills for military spaceplanes and military
research and development. So instead of just focusing on old technology, we do have some help coming from
the military side. Finally, we're about to go to the House floor with H.R. 1702, the Commercial Space Act of
1997, which does several things for commercial space transportation. First, it sets up the regulatory authority for
commercial RLVs so, after this bill passes, we will have the regulatory foundation for RLVs in business.
Basically, the bill also tells the government to buy commercial space transportation services instead of
developing and operating launch systems itself, and it pushes the Space Shuttle towards further privatization.
So we've really had some good things, and I look forward to working with Bud Kramer in building the momentum
for next year, and we have all next year to work together and try to do things, because we have a two-year
authorization this year. I think we're going to have some exciting hearings in our Space Subcommittee some
hearings that will actually propel and push the industry along and open up some exciting new doors. However,
whatever progress we make, I know it's not going to be easy. Bureaucracy, whether it's space bureaucracy or
any other kind in the government, is difficult to overcome. As somebody said, bureaucracy is the most efficient
method known to man of turning pure energy into solid waste. The fact is that we have a space bureaucracy
today, in large corporations and in government, who are tied to their own particular status quo because that's
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how they pay their mortgage. They want to pay their mortgage, and they don't want to do new things that might
threaten that. I cannot blame people for being in that situation after all, that is a very human condition. But for
the rest of us to progress, we have to be able to move beyond the inertia that is created by the status quo.
So, basically, I'd like to talk about some of the things I've heard about that will impede progress. And the first
thing I've heard about is the mistaken notion that the NASA budget is eventually going to go up, and thus we
can start spending as if it's going to go up. This wishful thinking is something that will probably get us in trouble
unless we get control over that wishful thinking which flows, naturally, from people who don't really want to
change the status quo, but want all change to be outside the status quo. And, frankly, I don't see the NASA
budget increasing. We should be thinking about a steady NASA budget now and at least for another decade.
Those who believe that NASA will have an increasing budget believe that we will take the savings from
consolidating the Space Shuttle and satellite operations, and revenue from commercialization of the Space
Station and with those items and an increasing NASA budget, we're going to have enough money to send
astronauts to Mars. Of course, they're going to do this in cooperation with Russia even after the last two
weeks. To do this, NASA needs and this is an idea going around that I'd like to talk about a little bit today,
because I believe that the more we keep this notion in our mind, the less progress we're going to have in those
areas that we can progress in. So, to me, it is a negative idea instead of a positive one because to accomplish
this, NASA needs a new heavier-lift rocket, which I understand will be called Magnum Lifter. I think this is
unaffordable to get right down to the foundation and there is a lot of talk about maneuvering us to the point
where we can develop this Magnum Lifter. Perhaps one of the steps in doing this that is now being talked about
is developing liquid fly-back boosters that could also be used for the short term on the Space Shuttle.
Now if this is all part of one scheme, it is a very complicated, convoluted scheme and I've heard complicated,
convoluted schemes before: "If this works out, and this works out, and this works out, we will be on the Moon
without breaking the budget." Usually, schemes that rely on five or six variables like that do not succeed, and
usually waste a lot of money or lives. I will tell you right now that when I was in the White House, I was told why
the Marines were landing in Lebanon. There was a convoluted plan that would bring peace to the Middle East.
We ended up losing a lot of Marines not to mention the money, but the Marines' lives were far more important.
In this case, we may lose some lives, and we may lose a lot of revenue that could be put into developing those
technologies that we can develop and taking that step so that we can take the next step after that.
To rationalize the huge cost that we'd have to have for developing those boosters that I'm talking about, the
Shuttle would have to fly more often and it would have to keep flying long beyond 2012. So here's another
part of this strategy that I think is a poor use of revenues and technology. We should be looking to replace the
Shuttle as soon as possible. The Shuttle is a brilliant piece of technology. It is a masterpiece. It is something that
we can be proud of. It served our country well when our country needed it. Ronald Reagan happened to be
President when it first took off and landed, and it did more to lift the spirits of the American people, and to
solidify that positive infusion of energy that came about during the Reagan years, than anything else.
It [the Shuttle] was magnificent and it is magnificent. But it is not a space transportation system that we can
afford. And now it is old technology and it is better to move on and, as we do, to give our praises to older
things and put them into the museum.
So what this idea about using the Space Shuttle will require, if this strategy I'm hearing about continues, is that
the Shuttle will have to use commercial customers. But NASA, basically, is not going to be selling space to
commercial customers, is it? Isn't that something we've agreed to that commercial customers will be left to the
commercial space enterprises? Isn't there some way we're going to bolster these new developments that we've
been talking about here today? So I think that truly privatizing the Shuttle is an important step but we should
not end up with a situation where privatizing the Shuttle means a prolonged use of the Shuttle, and nothing
more than a government-owned but privately-operated Space Shuttle system. That's not what we have in mind
for the Shuttle, and any plan that is based on that will not work. So what do you have? NASA gets the Shuttle
and the Space Station and with that scenario that I've just outlined, commercialization is nothing more than
rhetoric, and in the end with the boosters that we've developed we can set out for Mars. A very expensive plan.
Now the really weird part of this scenario that I've just outlined for you is that there are some people who believe
that it's going to happen. That plan cannot happen without being authorized by my Subcommittee. And it's not
going to happen bottom line; that will not happen.
Now if there's other scenarios for getting to Mars that people want, and they can show that it won't totally defund
every other space enterprise that's going on, I will be open-minded about it. Dan Goldin has an appointment to
talk to me later on today, in fact, and I'm anxiously waiting to hear him. I will listen and be open-minded to any
new ideas. In fact, I will permit any idea to come before the Space Subcommittee that I chair, and if the majority
of members want to go in that direction, that's the direction our country will go, because this is a democracy and
I run my committee like one. I am just one voice. I have the say in how to organize the hearings, but I don't use
that organizational power to thwart the majority's will on my Subcommittee. But I do not believe our
Subcommittee will authorize something that will consume so many billions of dollars that it prevents us from
doing all the other wonderful things we can do in space.
So it sounds to me as if we're going to have a good conversation with Dan Goldin this afternoon, because I
don't believe that Dan Goldin or Vice President Gore or President Clinton is going to OK a program to go to
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Mars if it means that all of these other reusable rocket concepts including the one they've already approved,
the X-33 will lose any potential for any type of government help because the money is being sucked into a
Mars program. I don't see that that's going to happen and again, the bottom line on all this talk is that when
people start talking this way, show me the money. If Dan Goldin can show me the money today, or anyone else
can show me the money in the future, I'll come back and give just as long a talk on why Mars is such a great
idea. Who knows? Perhaps the rover up there will uncover a bottle of Guinness on Mars and when we do, the
Irish will help us fund our entire space program. But until that happens, we have other things to talk about.
The Civil Space Authorization bill that I sponsored gives NASA full funding to operate, and makes safety-related
upgrades to the Shuttle. But it does not in any way give authorization for the development of liquid fly-back
boosters and neither does the appropriations bill that was just signed. After all, both the appropriators and the
authorizers want to give Lockheed a chance to succeed in the development of the X-33 VentureStar. Chairman
Sensenbrenner and I want there to be at least one other follow-on vehicle, as you are all aware and this,
again, is the type of thing that will not be funded if we waste our money on trying to reach too far.
Now it may be possible to privatize the Shuttle and don't think that what I'm telling you today means that we
shouldn't be moving forward and trying our best to privatize the Shuttle. I've supported the consolidation of
operations under USA, and I'd like to give them a chance to slash costs even further. And if that can save the
taxpayers money and earn USA a profit between now and the arrival of cheap access to space, then that's a
great idea. And, by all means, let's include the Shuttle in this large perestroika of space transportation that we're
talking about in the next ten years. But I am absolutely against subsidizing the Shuttle to compete against
VentureStar or the privately emerging RLV companies. I am especially against government-funded upgrades to
the Shuttle just to prolong its use. I believe I've made myself clear on that: if it makes economic sense to
upgrade the Shuttle with private money, that's fine. Let USA upgrade the Shuttle; that's terrific. If it makes more
sense to invest in A-1, Pathfinder, VentureStar, Delta Clipper, Roton or anything else, then let's let private
money flow into those projects, and let's let industry make those decisions instead of Washington, D.C.
Washington should not be deciding what is the perfect path to cheap access to space. Most of you are here I
hope from other parts of the country. I believe that Rick was complaining about the transportation system right
here in Washington. If you remember, the transportation system here in Washington was designed by a
Frenchman. When Mr. L'Enfant designed these roads, it's pretty hard to determine what was going on in his
mind. They go in all directions; you cannot go on one road across the city. They change names, and you have
to turn to stay on the same road. This is a perfect road system for a government. I finally figured it out a couple
of years ago after I was elected, because I had some people coming here to Washington to complain about the
government. Once they landed in Washington, they couldn't find the government and that's what that was all
about.
Well, we should not be relying on government to set the whole direction for this incredible industry that I believe
we will have in space in the years ahead. Certainly government will play a role there's no doubt about it but
government should not be the deciding factor. In fact, what government should be doing is developing the
technology and helping to push back the technological frontiers, so that the private sector and not the
bureaucracy will be able to accomplish this mission and be able to make the ultimate decisions.
I have a distrust of government everybody knows that; that's my basic philosophy I'm a conservative
Republican. But government does have a role and its first role, as I say, is to help develop the technology that
we need to push back, not only the space frontier, but elsewhere where we can encourage the development of
new technologies. We also have to write clear, stable laws and regulations, and we need to encourage people
to invest in space technologies. We can do that through the tax system, and I've spoken to Dan Goldin about
this. Dan is not only optimistic; he's enthusiastic about the idea of trying to restructure our tax system so that
people will have a great incentive to invest in new space business. This could be a whole new source of
revenue for some of the things that we're trying to do, because if we could change the tax law in a way that
would make it profitable for people with large amounts of money to invest in space, they will invest in space
because there will be a profit in it.
And anything that I've said today about this potential conflict on space in terms of Mars and the Shuttle well,
let me say a few good words about Dan Goldin. We may have a little disagreement here on this maybe a big
disagreement but I have the utmost admiration for Dan Goldin. I think he is a terrific Administrator of NASA.
He's doing a great job; he's a wonderful human being, a bright man with a vision for the future. I enjoy working
with him, and I'm looking forward to working with him in the future. So please don't think that because we've had
a little disagreement here, it's personal at all. In fact, it's not personal. My admiration for Dan Goldin has not
been diminished one iota and, again, as Chairman of the Space Subcommittee I'm looking forward to working
with him.
Basically, let me say that we need cheap access to space, not just because we need new technologies (and I'm
trying to push new technologies) but because space will open the door that will permit Dan Goldin to do those
things he wants to do. He does want to go to Mars, and we will be able to do that once we bring down the cost
of getting into low Earth orbit. We also will be able to do some of the things that I'm dreaming about. I dream
about the day that we have a colony on the Moon again. I can imagine actually having a colony on the Moon
that is productive, doing things that will help us on the Earth in my lifetime. I don't see anything more in the Mars
mission than simply going there one time, planting a flag, and spending billions of dollars to do it. But we can
actually have an ongoing, exciting colony on the Moon in our lifetime if we can bring down the cost of getting
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into space. We can have facilities in space that will generate clean, cheap power for the people of the Earth. I'm
not a big fan of the global warming theory, as most people know; but I want to develop methods that will
produce cheap and clean power for the people of the world. We can do that using solar collectors and
microwave technology in space if we bring down the cost of getting into space. We can mine asteroids. We
can have colonies on asteroids! We can do things in space that I can't even think of right now. And the fact is
that we are just on the edge of the universe and it's just that one step into space that we're talking about.
We've got to bring down that cost and then, as Heinlein said, we're halfway to anywhere else in the universe.
I don't see mankind in terms of a ten-year budgetary cycle; I see humankind as being in this tremendous
advance that will not stop until we are at the stars until we can transport ourselves in ways that no one could
ever dream of. Just think of what it was like at the turn of the century. Many people were still using horses to pull
their plows in the United States. My parents were farmers. They still had horse teams that they worked with.
And when someone in the neighborhood got a car, it was a big deal. At the turn of the century, there were no
heavier-than-air craft flying anywhere in the world. Now we're arguing about how to go to Mars! That was a
hundred short years ago -- just a very short time in the history of humankind. I am tremendously optimistic about
what can be accomplished, because the rate of change is not declining; it is accelerating. As we go into a
situation where we can actually process that information and use it for our betterment, it will catapult humankind
into higher and higher orbits into human conditions that our greatest science fiction writers couldn't even
imagine twenty years ago. So that's what we're all about today. That's what this Conference is about. We want
to get there and I understand that people want to take some short cuts because they're anxious to get there.
But it's not the time for short cuts. It's the time to move ahead with a solid system where we can actually take
that step and then have a platform from which we can take the next step. I see lots of those scattered around
here. Any one of those can be part of that foundation that will provide us with a staging area for the next step.
I want to thank all of you because you're part of building that foundation, too. It's not just technology with metal
and composites and engine parts that build that foundation. Part of the foundation is the human understanding
and the human acceptance of the necessities of where we're going and what we're going to do. You folks,
probably more than anyone else, represent America's cutting edge and America's frontiersmen. So thank you to
the Space Frontier Foundation, to NASA, and to all of you for letting me be part of this today and to extrapolate
on my own position as Chairman of the Space Subcommittee. I believe in what I'm saying, and I believe that
people can honestly disagree. What you heard today was not "My way or no way", but was instead the
advocacy of things that I really believe in. I know you believe in those things too, and I know that there are some
people who disagree with me. All I say is that this is a great country, it's a democracy. Technology and freedom
that's what America is all about. And part of freedom is respecting those people who have disagreements with
you. So no matter what they are, we're all going to work together, and we're all going to get there. Thank you all
very much.
Questions from the press:
Q: Eric Daley of Gannett News Service: Congressman Rohrabacher, you said that the Shuttle should perhaps
be in a museum sooner or later. What would you envision would happen to NASA's infrastructure if the Shuttle
goes into a museum? And how would Congress, with its parochial interests, manage that downsizing?
Rohrabacher: It was asked that, if the Shuttle does go into a museum realizing that NASA's infrastructure is
built around the Shuttle how will we overcome that problem, and what will happen to NASA?
Our policy should not be based on maintaining government jobs. Neither space policy nor any other policy
should be based on that. Unfortunately, I believe that much of the inertia that we have experienced has been
due to the fact that people in government jobs in NASA and, by the way, in private-sector situations too --
have been hesitant about change because they can't see themselves in the picture. That's not going to work.
That's not what's going to make progress for humankind. I think that every time the Shuttle takes off, there are
golden chains attached to that Shuttle, and they are attached to golden desks. And that's what's costing all the
money going up there. It's not necessarily the specific costs of the Shuttle itself, but everything that's attached to
the Shuttle. We have to break that dependency.
In my area in California, we had 11 percent unemployment six or seven years ago, right after I got elected. The
unemployment rate in my area is now 2 percent. We don't have unemployment in my area now; what we have
are people who are between jobs. And why? Because we took people out of the cycle of being employed by
huge corporations or the government. And because of the computer capacity and computer technology that is
available to the average person, these aerospace workers went out and have established all kinds of
enterprises in developing environmental technologies, health care technologies technologies that are
exportable and good-paying. But it required that the entrepreneurial spirit be forced upon them before they did
it. And I think that once we get the thousands of people in NASA that were dependent upon the Shuttle once
we get them to the point that they are no longer dependent upon the Shuttle, they're going to be better off. And
certainly we don't want to breed another generation of people who are dependent upon the Shuttle. And
everybody, including the country, will be better off at that point.
Q: Bill Sweetman from Popular Science magazine: I'm interested, Congressman, in your views on how the
follow-on reusable vehicles will play out in terms of NASA -- in terms of its relationship to X-33 and possible
competition with VentureStar, and in terms of the different but parallel needs of the Air Force for a military
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spaceplane.
Rohrabacher: All good questions and let me put it this way. I mentioned this in passing in my speech. We
don't need a situation where, fifteen years from now, we have the best space transportation system in the world,
but it is reliant upon one technology built by one company. We don't need that. That will have a deleterious
effect upon that company, and on costs, and on quality. Competition is a good thing. The concept for the
follow-up RLV that we have in mind is designed for (number one) if something happens to the VentureStar, so
that it doesn't work for some reason (and we all pray that it does) we aren't stuck with a $400 million per flight
Shuttle for decades on and, if it does work, after a 10-year time period we have at least two vehicles with two
companies involved so that they will be in competition in the future that will come to play to keep quality higher
and to keep the costs down. There are also and I'm sure that you're discovering this right now a myriad of
other ideas that are bubbling to the surface. All of you were probably in the same shoes that I was in, in the
sense that we spent a lot of time and effort and money and a lot of our intellectual capital in pushing NASP, the
National Aerospace Plane. I thought at the end of that: "My gosh, why did I waste my time on this?" But in the
end what happened is that a lot of the composite materials, and a lot of the research and development that went
into NASP, are now going into some of these vehicles and actually opening the door to much greater
competition by them. So it won't just be one follow-on; I think there will be several follow-ons. But there has to
be at least one. And I would hope we can afford that, and afford to give the others a little bit of a boost. Finally,
the last part of the question dealt with the military, and where the military plane is. I don't usually talk about the
military end of this. But I will not apologize for it. I believe the United States of America should be the strongest
power in the world, and be able to defend our interests anywhere in the world against any adversary in the
world. I have no apologies to make on that at all.
And this piece of technology will do more to maintain the peace and stability of this planet if it is in the hands of
a democratically elected government the United States than any other thing I can imagine being developed
in the next 20 years. This will give America the high ground over any future battlefield. No longer should we ever
think about sending hundreds of thousands of American troops overseas to meet an enemy head to head.
That's Old-think. The Saddam Husseins of the world are not worth risking the death of thousands of Americans.
If we have this technology, the Saddam Husseins of the world can hang it up because we'll be able to have
the high ground over their country; and if they have committed acts of aggression upon their neighbor, they can
pay an awful price and we will be able to deliver it.
I don't talk about this because people sort of look at it as the negative, because we're talking about the use of
force. But in reality we're talking about the maintenance of peace, and maintaining stability, and making sure
that the democratic forces on this planet the good and decent people on this planet have a technological
edge over the Saddam Husseins and the Khaddafis and all those other petty dictators in the Third World and in
the Second World.
So, with that, I see the military playing an important role in this. And this is the ultimate joint-use technology
this concept that we're talking about today.
Thank you all very much. I enjoyed being with you.
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Keith Calhoun-Senghor at the CATS Symposium.
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Speech by Keith Calhoun-Senghor, U.S. Department of Commerce
July 21, 1997 Cheap Access to Space Symposium
Good morning. I usually don't like to disclose my legal
background in a room full of non-lawyers I usually try
to pretend, at least, that I have some technical
grounding on this. But I've been uncovered, so I'll try to
make the best of it by not boring you with anything
that's related to law. I like to say that I'm a recovering
lawyer. (Sometimes you can't help it.)
I want to say that it's a pleasure to be here today. I
always find these kinds of conferences and
particularly this type of conference that deals with
launches very exhilarating. It's an important issue,
and I want to thank the Space Frontier Foundation
and particularly Charles for the invitation to be here. It
is actually our honor to be one of the honorary
co-chairs, along with Patty Smith of the Department of
Transportation. This is because, from our point of view, we are at a fairly pivotal point in this industry's
development. A lot of very exciting things have been happening over the past well, I'd say from about 1990
on, with the collapse of the Berlin Wall and the end of the Cold War and it has simply been accelerating over
time. In the four and a half years that I have been in this position, I have seen a dramatic change, and I think
that change is going to accelerate. One of the features of this industry is that change is probably the only
constant, and I expect that conferences like these give us an opportunity to talk and think about what's
happening and to get ahead of the curve, and therefore to help policy-makers and those in business anticipate
where the future will be heading.
I want to give you a context, if I may, as to why we at the Dept. of Commerce and, I think it's fair to say, this
Administration think that launch is so important. It's a pivotal industry in terms of a much larger aerospace
industry, and it's pivotal in terms of a larger and fast-growing information industry, although I think it has not
been thought of traditionally as an information industry. Many of the satellites that are going up the remote-
sensing satellites, the GPS satellites, the telecom satellites are really an extension of information
technologies, and the launch industry in particular is the way to get these products there. And so it becomes
critical that Cheap Access To Space becomes a reality.
When I first took this job, I used to be able to joke that "commercial space" as a term was an oxymoron,
because it was very difficult to put the two together since it was so heavily dominated by government. I think it is
true that in the short time that I've been involved in this area and many of you here were here at the birth, at
the creation I think it is the driver for what space is going to be in the 21st century. I have a term that I've
coined because it helps me remember it: "New Space", the concept that we have entered a new era of space,
one that has transitioned away from government-dominated and largely science-dominated space not that it's
separate; it's just increased the distance between those endeavors which are scientifically oriented and those
which are commercially oriented. I think that when the history is written on this particular chapter years or
decades from now this period that we are now in will be remembered as a time when "New Space",
commercial space, became a reality.
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There's an analogy, an image I like to use, about how the evolution has taken place. If you think about trade and
commerce as essentially starting off at the village and community level, and you trade with individuals within
your village and then your city and then your nation, the expansion of that went beyond national borders, and
then it eventually became one of the driving forces for exploration certainly European exploration, and I think
exploration in all cultures across the ocean. So a lot of the early voyages of discovery were essentially
voyages to find ways to make it economically feasible to do trade. The Northwest Passage, and a lot of the
routes around Africa to get to India, were alternatives to very expensive and very hazardous land routes. But the
circle, the zone, the sphere of commerce constantly expanded. I think that if you look at that analogy, and if you
look at where the Law of the Sea was until very recently, the territorial boundaries outside your coastline were
essentially what you could defend from a battleship; so you had zones that were, first, three miles offshore, and
now 200 miles and the expansion and extension of the economic zone of commerce has increased.
I see the fact that we are now talking about really doing commercial activity in space as a logical extension of
expanding the zone of economic activity off the planet. It is as natural as getting in a boat and sailing beyond
the horizon to see if there's somebody else out there to trade with. And if you think about a lot of the
telecommunications satellites and remote-sensing satellites and other types of satellites that people talk about
as being commercially viable, it is a very logical and, I think, inevitable expansion of the zone, the sphere, of
economic activity off the surface of the planet.
If that's the case, then it becomes critical that we have what was absolutely necessary in the early days of
navigation; and that is the technology to get off the planet, the same way people had to have the technology to
move and navigate offshore and find their way back ship designs that allowed you to take advantage of wind
conditions and be seaworthy on the high seas, and to make it affordable for you to take a voyage sailing west to
try to reach east. So therefore, in my opinion, the commercial launch industry is the pivotal industry as to
whether we are going to extend that zone, that sphere of economic activity, off the planet. And there is certainly
no reason why we should stop in the immediate area surrounding the planet why it cannot extend to
near-Earth asteroids, or to the Moon, or Martian exploration projects. The fact is that it's solely a function of
finding a cheap way to get there. And so from our perspective, it's not the launch industry by itself which is
critical; it's the launch industry as a critical component for taking advantage of the economics that lie beyond the
planet. You know, one of the things that is true about extending the economic sphere is that more often than not
the people who are financing that expansion are on the planet. I mean, let's face it; the fact is that a lot of what
was being financed it's a different analogy, I understand, so the economists out there please bear with me on
this one but the Hudson's Bay Company and the East India Company were financed by people who basically
sat in London and said, "I think I can make some profit off this", and so they basically financed it. The money,
the economic activity, the jobs well, certainly the capital that was created and was deposited largely went
back to London.
In this case, the economic effect of extending the sphere of activity off the planet is of direct benefit for us here
on Earth. So, therefore, I think it's critical that we do what I think Winston Churchill did. I love this quote, so for
those of you may have heard it before, you'll have to forgive me Churchill led England during World War II,
and after his death one of his biographers asked one of his close friends: "What was it about Churchill that
made him great? What was his single greatest contribution to winning World War II?" The person thought for a
second, and then he said, "He talked about it. He talked about the importance of winning the war. He talked
about its importance in terms of Western civilization. He talked about it in terms that average people could relate
to and could therefore get fired up about." And I say that all the time: I think people underestimate the
importance of engaging in a public dialog about things that are important. And I think we have to talk about
launch, not just in the context of itself, but in the context of 21st-century jobs for this country; in the context of
keeping the U.S. technologically ahead, not just in launch technology, but in space-based information
technologies also.
Therefore I think this is a very, very important gathering. I certainly welcome the opportunity to be here. I did not
know I heard Charles mention at the end that H.R. 1702, the Space Commercialization bill, was something
that he had made reference to earlier to me that's a perfect example of how things that really matter need to
be brought to our attention. Regardless of how you feel about the bill, the fact remains that it is a
commercial-space bill which is now moving through the House that will have real impact on this industry as
well as other industries. And symbolically it's significant in terms of how Congress and the Administration relate
to those provisions. So I say that anyone who has an interest in this should take the time to take a look at it and
see whether or not it affects your interests.
I'm out of time, so it was a pleasure to talk with you today, and I wish you a good conference. Thank you very
much.
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Panel One at the CATS Symposium.
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Panel One Moderated by Joseph Anselmo
July 21, 1997 Cheap Access to Space Symposium
Introduction
Charles Miller: Good morning! My name's Charles
Miller. I am the director of development of the Space
Frontier Foundation and a member of its Board of
Directors, and I will be your master of ceremonies for
this symposium on "Cheap Access to Space: The Key
to the Space Frontier". My first order of business is to
introduce our first speaker. He is the President of the
Space Frontier Foundation. Mr. Tumlinson is a
well-known evangelist for the space frontier. His
writings and quotes have appeared in the New York
Times, Wall Street Journal, Los Angeles Times, Miami
Herald, Reader's Digest, Space News, and dozens of
other publications. He has appeared on such national
television programs as ABC's "World News Tonight",
"The CBS Morning Show", and "Politically Incorrect".
Tumlinson worked for noted scientist Dr. Gerald K. O'Neill at the Space Studies Institute, helped pass the Space
Settlement Act of 1988, testified before the National Commission on Space, and was a lead witness in
Congressional hearings on NASA in 1996 and 1997. He is a founder of the Foundation for the International
Non-governmental Development of Space, or "FINDS" a multi-million dollar foundation which funds
breakthrough projects and activities and a founder of LunaCorp, a seven-year-old firm planning a commercial
return to the Moon in 1999. I'd like to introduce and welcome Rick Tumlinson, the President of the Space
Frontier Foundation.
Rick Tumlinson: Before we begin, a little bit of sobering business we have to deal with. They say space is
dangerous; but in the last few days we've lost two great space pioneers right here on Earth. Gene Shoemaker
was killed this weekend I don't know how many of you know that in Australia, on a highway. And Bob
Quisenberry, one of the participants in this conference and a real member of the revolution one of those who
was fighting for a regulatory environment that's going to let you entrepreneurs fly out there passed away as
well. I'd like to ask that we have a few moments of silence in their memory. (We are, by the way, going to
dedicate this symposium to the memory of Bob Quisenberry.)
Welcome to the revolution! The revolution begins here, and it begins now, and it begins with the people in this
room. When the Space Frontier Foundation coined the term "cheap access to space", we did it on purpose. We
didn't want people to think of space in terms of "relatively low cost". We knew that would happen when it hit the
Beltway it would start changing and transmogrifying into all kinds of different names. We wanted it to be cheap
the goal eventually down to as low as $100/pound to LEO. Cheap Walmart! We wanted mainframes. We
wanted Casios, not Cartiers. We wanted Fords, not Ferraris. For us, the frontier of space represents not just an
economic future, and lowering the costs of getting there doesn't just mean that we're going to tweak the bottom
line of a telecommunications company, or allow a national space agency to send a few more missions into
space. For us, space is the greatest, grandest and most important frontier in human history, and our job in the
Space Frontier Foundation and the job of many of you here is to open that frontier to the people of America
and the people of the world. For us, space is not a series of linear programs, one following another like
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dominoes into the future but much more like the Oklahoma border when they fired the gun in the air and
people went west on wagons, on horses, on trains and canals, and used their own dreams, their own
imaginations, to carve the greatest nation on earth and thereby transform the world. That is what we are about.
Oh, and by the way, if we get cheap access to space, the bottom lines of those telecommunications companies
will look a lot better, and missions such as the recent Pathfinder mission to Mars will be spread all over the
Solar System because it will be so much cheaper to do so. But our job is to get the people out there. For us,
cheap access to space was the answer to the question "How do we throw open the gates of the frontier?" but
we very soon realized that there were a lot more questions underneath that one questions such as "Who
cares?" Not the people, ironically enough they've been trained very well, like the serfs of pre-New World
Europe, to believe that only the knights in shining armor are allowed to ride horses. We have to shatter that
myth, by getting them out there and giving them a chance. Or the poor regulators; they have a question: "Why
me?" Because down the pike is coming a whole series of new questions and new possibilities and new lawsuits
and it's coming fast, and they're going to have to deal with it.
We have ahead of us, answering over the next couple of days, one of the great ones for me, and one of those I
use quite often when I talk to the media pointing out to them that it is legal to fly a rocket into space and test it,
but it is illegal to return to the Earth in that rocket. This is like well, I can see the Wright brothers at Kitty Hawk,
trying to take off with some federal regulator telling them that they cannot land. Imagine where we would be! Or
Mr. Ford: you can take the car out, but you can't bring it back. There is a reason nothing is happening in space
right now.
We have questions: What is the appropriate government role in space? Is to enable and enhance the capability
of American industry and science to get out there and do things all kinds of things? Is it to fund projects, like
the X-33, that allow innovation and create competitive markets to be a market-maker themselves? Or is it to
refurbish old space vehicles with new methods that lower the costs of their operations and forever maintain a
stranglehold on that frontier? These are the questions we have ahead of us, and the questions we hope to
answer in the next couple of days. As Robert Heinlein the great science fiction author and, I think, one of the
inspirations of a lot of people in this room once said, "If you can get to LEO, you're halfway to anywhere in the
universe." If you can get to LEO, you're halfway to the future, because the future lies up there and the people
in this room are the people who are going to open up that future. It is up to you. It is up to all of us to get past
the squabbling and the finger-pointing, and get down to the answers, and create some opportunities.
There are a lot of people who say, "Well, what's the market?" It is those very same people who don't know they
are the market, who are the market. It is those same people who came over from Europe to this new world, who
did not know they were the market. It is the same people who bought cars, who did not know they needed cars
who bought computer but who did not know they needed computers until somebody came up with a better,
cheaper, faster way of getting one to them. It is those people the people you will pass on your way home in
those cars, the people you will talk to on your computers, the people you will watch on your televisions and
speak to on your telephones all products we did not know we needed until they were created in a method that
got them out to those people. The market well, ladies and gentlemen, when you go home and look into the
eyes of your children, that's the market. That is the customer. Those are the people for whom we are opening
the frontier. Welcome, and have a wonderful couple of days! Thank you very much.
Miller: Before we begin, I want to give everyone a few changes of the agenda. First, on the afternoon panel, in
place of Bobby Quisenberry will be Mr. Greg Sullivan. Also, I am told that Dr. Paul Coleman will not be here
today, and he will have his executive director of the University Space Research Association sitting in for him.
Tomorrow, to be announced is our luncheon speaker, and that will be Mr. Jerry Rising of Lockheed-Martin Skunk
Works. He's the X-33 program manager. Recently there were changes, and the entire program got consolidated
under his leadership. Tomorrow afternoon there has been one addition to the panel: Col. Simon "Pete" Worden
of the Dept. of Defense. Finally, Mr. Tom Clancy will not be making it today.
I'm going to introduce our primary keynote. This gentleman, who is a member of the Board of Advisors of the
Space Frontier Foundation and has been a long-time friend of ours, is known to all of you. In September 1962,
he was selected as an astronaut by NASA, and his first flight was on Gemini 5. He then served as commander
of Gemini 11, and helped set the world altitude record. After that, as some of you may know, he served as
commander of Apollo 12, the second lunar landing; and on his final mission he served as commander of Skylab
1, the first space station of the United States. Later in his long career, he joined the Space Systems Company of
McDonald-Douglas, and became flight systems manager of the Space Systems Company's single-stage-to-orbit
vehicle, the Delta Clipper. After successfully its series of flight tests, the DC-X was modified, renamed the
DC-XA, and turned over to NASA to continue flying at White Sands Missile Range. Mr. Conrad retired from
McDonald-Douglas in 1996 to form Universal Spacelines, the first commercial space services company. As
chairman of Universal Spacelines, he manages assets in space. I'd like to have a warm welcome for Charles
"Pete" Conrad, Jr.
Conrad: Gosh, I don't know what the answer is to coming on after "The Hunt for Red October"; I was sort of
counting on following Mr. Clancy there.
I think Rick started the thing off correctly by saying, "There are whole new horizons out there. "I'd like to go back
to about 1927, when Charles Lindbergh flew across the Atlantic. In my eight years at the Douglas Commercial
Aircraft Company, I learned a lot about commercial transportation. If somebody had stood on the beach when
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Lindbergh passed by on his way across the Atlantic and said, "In 1990, fifty million people will fly the Atlantic for
summer vacation, you'd have said the guy was crazy. I just wonder where, sixty years from now, we will be with
commercial space transportation. I would have to predict that people will be routinely flying in space for
vacations; I believe we will long since have landed on Mars; we will probably have returned to the Moon. And I
believe a lot of that will be done for commercial reasons.
Now we are really on the frontier of commercial space. I really don't consider putting satellites up on ex-ICBMs
out of what are now called "civilian launch sites" at Cape Kennedy or Vandenberg, going right back into a
government tracking network to get up there I don't really call that "commercial space". What is happening,
though, is that people are getting ready to build truly commercial reusable and expendable launch vehicles. The
infrastructure is about to start being put around the world for a true "commercial tracking network". I was talking
this morning with people from the FAA, and that whole system is in the dawning. We all have to work very hard
to see that that gets up successfully. My personal feeling is that the commercial infrastructure, although it will
have to operate to government regulations and certainly it should, for the purpose of safety and to assure (just
as the FAA does today) safe air traffic control and so forth that this infrastructure will probably be run
commercially under the government regulations because I firmly believe that that will be the cheapest way to do
that. If you look at what goes into launch costs today, commercial spaceports are going to have to beat by a
long margin the costs of just launching. And, as was pointed out, eventually when we're allowed to reenter
commercially which, hopefully, will take place very shortly because of a change in the Act all these things
will operate to give us cheap access to space.
I believe we're going to have to build the vehicles differently from what's being built today. Just as the DC-X
really revolutionized the thinking of a lot of rocket people, we're still going to have to apply that kind of shifting in
our thinking to the whole commercial network. The market is certainly there.
I think that there is an even fantastically larger market when we really get into giving cheaper access to space.
It's going to be sort of self-generating. I kind of laugh at the people who are saying in the communications
business that, if they put up all these comsats that they're talking about, there isn't enough business out there. I
think that's absolutely ridiculous. If there's one place we're seen where they can suck up capacity, it's in the
communications business. The more communications you can put out, the more people suck it up, whatever it
is data, television, on and on. And so I think that's sort of like the people who said the commercial jet airliner is
too efficient, that there's not enough people to ride on it because it flies twice as fast as the other ones and
therefore it can carry twice as many people. That certainly didn't prove to be true. I think the same thing is there
in the commercial space world.
And let's not forget that there's is no place on Earth that's more than forty-five minutes away on a sub orbital
flight in a space vehicle. And it's not that far to get to the Moon if you can do a little refueling in orbit with some
potential vehicles that have been looked at. So, I don't think we're that far from getting back to the Moon.
I don't think we're that far from seeing people ride in space for vacations. I know that in Germany this March
1997 they held the first symposium on space tourism. I wish I'd had the time to go just to see who showed up
there. I know that the Japanese, through the Shimizu Corporation, have been looking at a space hotel for a long
period of time. I know that they've been working on total closed-loop environmental control systems, thinking
about long-term space operation, or thinking long-term in putting people on other planets where we're going to
have to supply our own complete ecological cycle. So: Much work is going on, but I think the dawn is just
coming. I'm sure that you're going to hear some interesting discussions today and tomorrow, and I look forward
to being a part of the great boom that I believe is about to take place. Thank you very much.
Miller: One of the things about this symposium that we're doing is that we're trying to add a little audience
participation, which you'll get later during the session. So we'd like to invite some questions for Mr. Conrad.
Q: [unintelligible]
Miller: The question was: In light of the press conference this morning by another launch vehicle company, does
Pete see Universal Spacelines buying rockets from other companies?
Conrad: All of the above and I have to say that because right now it seems to me that some of the potential
out there will make good commercial vehicles, and Universal Spacelines' ultimate objective is to be a
commercial reusable launch vehicle operator, a la spacelines/airlines. And if we have to ultimately wind up
building our own, I think we'll do that. If we can buy one sooner that will do the job, we'll do that. Right now
there's a couple out there that have a lot of potential in my opinion and I'm talking strictly commercial. Not that
the others won't work; but when it comes to cheap access to space, it's going to have to be done very, very
simply and efficiently, or you're not going to have cheap access to space. What's out there is developing, and
we want to be in a position to go either way.
Q: [unintelligible]
Miller: What is the best way to do on-orbit refueling?
Conrad: I'm not exactly sure whether you're talking about going to the Moon. I haven't really thought of tactical
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ways to do it. The reason I brought the subject up is that it turns out that, with the right kind of vehicle, if you can
refuel it fully in orbit, it has the delta-V in it to go to the Moon and to return and land safely on the Earth. If you
want to talk about schemes: If you could put Shuttle external tanks into orbit, they would make great gas
stations for other vehicles. Obviously, you have to take propellants up to refuel although on-orbit is the easier
place to store cryogenic propellants because of the vacuum; you can make good thermos bottles, you don't
have big boil-offs, and you can have things like that.
But I think it's probably going to get done. It may become part of a big space station complex. I haven't really
thought out how you do that; I just wanted to mention that it's a possibility for going to the Moon cheaply with a
cargo if you can get propellants cheaply to orbit and store them. Like I say, I haven't really tried to think out big
things like that. What we really have to do is get the cheap on-orbit going first, and the rest of it will come.
Miller: I'll add my own little two bits to that. The best way to do on-orbit refueling is to it commercially.
Q: [unintelligible]
Conrad: There's no doubt about it that you can move packaging around the world as long as the price is right.
And I think that there's a great market out there for that kind of delivery service. You know, a hundred dollars per
pound has been kicked around as a nice number and I don't know how many of you think about it, but you pay
over a hundred dollars a pound whenever you ship a Fed-Ex letter. (It's about $17.50 for two ounces.) So if the
price is right, the market's there to move goods from one place to another around the world in a 45-minute time
frame.
And if you add on the ability to have close landing sites to where you want the cargo delivered, that's where my
vertical-vertical background comes out, because it takes very little infrastructure in comparison to airplanes or
large horizontal-takeoff spaceplanes to come in vertical-vertical. That, I think, also lends itself to cheap
transportation.
Again, if the cost is right, people will ship something. As a stupid thought about that: Having spent a lot of time
in Las Cruces, New Mexico, some of my friends that I met down there are commercial produce brokers.
Apparently there's a great delicacy of raspberries being transported to France. It has to be refrigerated and all
that other stuff; and if 3 Gs doesn't mash the raspberries, you could get them there in 45 minutes or less from
Las Cruces out of the New Mexico spaceport! That sounds silly now, but just remember those guys in 1927 who
would laugh at fifty million people flying the Atlantic for vacations in the summer of 1990. So nothing's out of the
realm of possibility if you can do it cheaply and for a profit.
Q: [unintelligible]
Miller: The question was about the law that prohibits re-entry. Is it U.S. or international? How close are we to
getting it changed, and what can the people in the audience do to help?
Conrad: I think it's the lack of a regulation not that it's prohibited. . . It is? I don't really know what the problem
is; I just know that when somebody tried to have a commercial reentry vehicle, they ran into all kinds of
problems because it wasn't covered by the law. I don't think it's an international thing. I suspect that if you could
get the license to go out and you wanted to come back in right now, you could land over the ocean or something
like that and it would be fine. The problem, as I remember, was that somebody wanted to land a recoverable
capsule in Idaho or somewhere, and they just ran into one problem after another because it wasn't really
covered. So it went away -- and I believe they're going to change that with this forthcoming Space Act.
Miller: I'll just add two bits to that. That will be covered in very much detail in the afternoon panel on the
regulatory environment for RLVs. We'll have people from the Department of Transportation here, and the
companies who are most at risk from that regulatory environment. All five of the major new start-up RLV
companies will be sitting on the panel. It will be covered in detail.
One of the things that you can do to make a difference: There are a couple of laws up on the Hill. One is HR
1275, the Civilian Space Authorization Act. The other one is HR 1725. The Authorization Act passed the House;
it has it in it, and it will be coming up before the Senate probably later this summer. The Commercial Space Act
of 1997 HR 1725 is expected to come up very soon before the House of Representatives. Senator McCain
has said that they are looking at it closely. We don't have a sponsor in the Senate yet. But you can get involved
with some of the pro-space organizations like the Space Frontier Foundation, and they can give you more
information on what you can do to help. One more question.
Q: [unintelligible]
Conrad: I believe that the question was about. . . I didn't quite get the part about the currency, but Mir is a joint
operation, and we see ourselves as possibly supplying -- is that right? -- the International Space Station.
Q: [unintelligible]
Conrad: We haven't even thought about that sort of stuff. I'll tell you what I do foresee, though: I see
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commercial space stations performing specific functions. I heard Dr. Goldin speak the other day, and he talked
about the three-dimensional growing of human tissue that has been going on I guess either in the American
side of Mir and/or on the Shuttle. He talked about the fact that the doctors have figured that nerves that have
been severed you know, some of them will grow back down their old path, and some of them won't if they're
allowed to do that in zero-G, nerves will find the old passage and will regenerate themselves down that
passage.
There are just so many things that can be done with a commercial space station we can think of it as a factory.
It's all in bringing down the cost to get the stuff up there and to get it back. Bring those costs down, and there's
no telling what's going to happen later.
Miller: Thank you, Pete. That's a very good question, and I'd just like you to think of it in this way. Before we
move on, I'll just throw a few comments in. The outstanding question to look at: Isn't it ironic that the Russian
space station is a hotbed for entrepreneurial commercial activity? That they are actually using cash and treating
it like a commercial market?
You should know that another issue of the Space Frontier Foundation, like cheap access to space, is what we
call "Alpha Town", where we are champions of a low-earth orbit that is a rapidly growing, evolving
entrepreneurial-commercial center for activity based on the best concepts of how we do commercial
development on earth. And one piece of that is that we believe that the International Space Station should be
privatized after construction is complete, and that it could take a variety of forms. One idea that's been tossed
around is that it be an International Space Station Port Authority that then purchases all its supplies and
services in a commercial manner. Wouldn't that be a neat way to open the space frontier? When you run out of
volume or you need more power, they can purchase it commercially. And then they serve all the science needs
of all the nations that participate in the Space Station. That's just something to think about but that's an issue
for another symposium.
Before we go on, I'd like to thank the sponsors of this symposium. The primary sponsor is NASA, and in
particular the RLV program. The primary co-sponsor is Air Force Phillips Lab in the Dept. of Defense. Also
co-sponsoring are AeroAstro, Rotary Rocket, Boeing-North American, and Lockheed-Martin.
A correction on something I said earlier: The Commercial Space Act of 1997 is HR 1702, not HR 1725.
Our next presenter is one of our honorary co-chairs of this "Cheap Access to Space" symposium. He is the
director of the Office of Air and Space Commercialization of the U.S. Department of Commerce. Keith Calhoun-
Senghor was appointed director of the Office of Air and Space Commercialization in March 1993. In his position,
Keith is responsible for advising the Undersecretary for Technology and the Secretary of Commerce on policies
to foster the growth and international competitiveness of the U.S. Commercial space sector, and to encourage
and promote the use of outer space by U.S. private industry. His areas of responsibility include acting as the
senior Commerce Department official responsible for developing and implementing the President's commercial
remote sensing policy, the President's policy on the commercial use of the Global Positioning System, the
President's national space transportation policy, the negotiation of space launch trade agreements with China,
Russia and Ukraine, and formulating the role of commercial satellites in the national information infrastructure
and global information infrastructure.
Keith earned his A.B. with honors from Stanford University and his J.D. from Harvard Law School. He has
practiced law with a number of major law firms, including Gibson, Dunn and Crutcher. He most recently served
as founder and president of an international trade and project development firm engaged in identifying
opportunities for U.S. firms in eastern Europe and eastern Germany, and was Washington counsel to the New
York law firm of Wood, Williams, Rafowsky and Harris. Prior to this, he served as the vice president and general
counsel of a Washington-based high technology firm. He was a Fulbright Scholar to Germany, and
subsequently studied the German legal system on a fellowship awarded by the German government. He also
clerked with the Honorable John D. Butsner Jr. of the U.S. Court of Appeals for the Fourth District Court. Please
have a warm welcome for Keith Calhoun-Senghor.
Calhoun-Senghor: Good morning. I usually don't like to disclose my legal background in a room full of
non-lawyers I usually try to pretend, at least, that I have some technical grounding on this. But I've been
uncovered, so I'll try to make the best of it by not boring you with anything that's related to law. I like to say that
I'm a recovering lawyer. (Sometimes you can't help it.)
I want to say that it's a pleasure to be here today. I always find these kinds of conferences and particularly this
type of conference that deals with launches very exhilarating. It's an important issue, and I want to thank the
Space Frontier Foundation and particularly Charles for the invitation to be here. It is actually our honor to be
one of the honorary co-chairs, along with Patty Smith of the Department of Transportation. This is because,
from our point of view, we are at a fairly pivotal point in this industry's development. A lot of very exciting things
have been happening over the past well, I'd say from about 1990 on, with the collapse of the Berlin Wall and
the end of the Cold War and it has simply been accelerating over time. In the four and a half years that I have
been in this position, I have seen a dramatic change, and I think that change is going to accelerate. One of the
features of this industry is that change is probably the only constant, and I expect that conferences like these
give us an opportunity to talk and think about what's happening and to get ahead of the curve, and therefore to
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help policy-makers and those in business anticipate where the future will be heading.
I want to give you a context, if I may, as to why we at the Dept. of Commerce and, I think it's fair to say, this
Administration think that launch is so important. It's a pivotal industry in terms of a much larger aerospace
industry, and it's pivotal in terms of a larger and fast-growing information industry, although I think it has not
been thought of traditionally as an information industry. Many of the satellites that are going up the remote-
sensing satellites, the GPS satellites, the telecom satellites are really an extension of information
technologies, and the launch industry in particular is the way to get these products there. And so it becomes
critical that Cheap Access To Space becomes a reality.
When I first took this job, I used to be able to joke that "commercial space" as a term was an oxymoron,
because it was very difficult to put the two together since it was so heavily dominated by government. I think it is
true that in the short time that I've been involved in this area and many of you here were here at the birth, at
the creation I think it is the driver for what space is going to be in the 21st century. I have a term that I've
coined because it helps me remember it: "New Space", the concept that we have entered a new era of space,
one that has transitioned away from government-dominated and largely science-dominated space not that it's
separate; it's just increased the distance between those endeavors which are scientifically oriented and those
which are commercially oriented. I think that when the history is written on this particular chapter years or
decades from now this period that we are now in will be remembered as a time when "New Space",
commercial space, became a reality.
There's an analogy, an image I like to use, about how the evolution has taken place. If you think about trade and
commerce as essentially starting off at the village and community level, and you trade with individuals within
your village and then your city and then your nation, the expansion of that went beyond national borders, and
then it eventually became one of the driving forces for exploration certainly European exploration, and I think
exploration in all cultures across the ocean. So a lot of the early voyages of discovery were essentially
voyages to find ways to make it economically feasible to do trade. The Northwest Passage, and a lot of the
routes around Africa to get to India, were alternatives to very expensive and very hazardous land routes. But the
circle, the zone, the sphere of commerce constantly expanded. I think that if you look at that analogy, and if you
look at where the Law of the Sea was until very recently, the territorial boundaries outside your coastline were
essentially what you could defend from a battleship; so you had zones that were, first, three miles offshore, and
now 200 miles and the expansion and extension of the economic zone of commerce has increased.
I see the fact that we are now talking about really doing commercial activity in space as a logical extension of
expanding the zone of economic activity off the planet. It is as natural as getting in a boat and sailing beyond
the horizon to see if there's somebody else out there to trade with. And if you think about a lot of the
telecommunications satellites and remote-sensing satellites and other types of satellites that people talk about
as being commercially viable, it is a very logical and, I think, inevitable expansion of the zone, the sphere, of
economic activity off the surface of the planet.
If that's the case, then it becomes critical that we have what was absolutely necessary in the early days of
navigation; and that is the technology to get off the planet, the same way people had to have the technology to
move and navigate offshore and find their way back ship designs that allowed you to take advantage of wind
conditions and be seaworthy on the high seas, and to make it affordable for you to take a voyage sailing west to
try to reach east. So therefore, in my opinion, the commercial launch industry is the pivotal industry as to
whether we are going to extend that zone, that sphere of economic activity, off the planet. And there is certainly
no reason why we should stop in the immediate area surrounding the planet why it cannot extend to
near-Earth asteroids, or to the Moon, or Martian exploration projects. The fact is that it's solely a function of
finding a cheap way to get there. And so from our perspective, it's not the launch industry by itself which is
critical; it's the launch industry as a critical component for taking advantage of the economics that lie beyond the
planet. You know, one of the things that is true about extending the economic sphere is that more often than not
the people who are financing that expansion are on the planet. I mean, let's face it; the fact is that a lot of what
was being financed it's a different analogy, I understand, so the economists out there please bear with me on
this one but the Hudson's Bay Company and the East India Company were financed by people who basically
sat in London and said, "I think I can make some profit off this", and so they basically financed it. The money,
the economic activity, the jobs well, certainly the capital that was created and was deposited largely went
back to London.
In this case, the economic effect of extending the sphere of activity off the planet is of direct benefit for us here
on Earth. So, therefore, I think it's critical that we do what I think Winston Churchill did. I love this quote, so for
those of you may have heard it before, you'll have to forgive me Churchill led England during World War II,
and after his death one of his biographers asked one of his close friends: "What was it about Churchill that
made him great? What was his single greatest contribution to winning World War II?" The person thought for a
second, and then he said, "He talked about it. He talked about the importance of winning the war. He talked
about its importance in terms of Western civilization. He talked about it in terms that average people could relate
to and could therefore get fired up about." And I say that all the time: I think people underestimate the
importance of engaging in a public dialog about things that are important. And I think we have to talk about
launch, not just in the context of itself, but in the context of 21st-century jobs for this country; in the context of
keeping the U.S. technologically ahead, not just in launch technology, but in space-based information
technologies also.
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Therefore I think this is a very, very important gathering. I certainly welcome the opportunity to be here. I did not
know I heard Charles mention at the end that H.R. 1702, the Space Commercialization bill, was something
that he had made reference to earlier to me that's a perfect example of how things that really matter need to
be brought to our attention. Regardless of how you feel about the bill, the fact remains that it is a
commercial-space bill which is now moving through the House that will have real impact on this industry as
well as other industries. And symbolically it's significant in terms of how Congress and the Administration relate
to those provisions. So I say that anyone who has an interest in this should take the time to take a look at it and
see whether or not it affects your interests.
I'm out of time, so it was a pleasure to talk with you today, and I wish you a good conference. Thank you very
much.
Miller: Thank you, Keith. Before I introduce the moderator of the next panel, I'd like to add a little more about
H.R. 1702. That's this year's bill for those of you who don't know and I mentioned that it was coming up in
the House and is expected to pass. Last year, the week before Congress ended, an almost identical piece of
legislation passed the House of representatives and was strongly pushed to be passed by unanimous vote in
the United States Senate. Two, or maybe three, senators objected to that in the last week of Congress and it
failed to pass. So your participation and voice as a citizen may make a difference this year.

Panel One: How Can America Create Free and Competitive Markets for Space Launch Services?
Our next panel is on free, open and competitive markets for space transportation to lead toward Cheap Access
To Space". The Space Frontier Foundation believes that market-oriented and market-driven space
transportation is a requirement and principal criterion for opening the space frontier. We cannot do so without it.
Everything America's done and developed that has been done over the long term, that is sustained and
irreversible, is by using the free enterprise system, the market system. In the rest of the world, there used to be
a great debate about this. The debate is over. The entire world uses, or is moving toward, the capitalist system
to serve their countries and their people and to deliver goods and services. That is on this planet Earth. "Off the
planet" is a different issue. So we'll have a panel discussing that.
The moderator of the panel is Mr. Joseph Anselmo. He is the Space Technology editor of Aviation Week and
Space Technology magazine. Based in Washington, he covers the science, politics and business of commercial,
military and civil space programs. He began covering the space industry in 1992, and reports on numerous
space and military programs in the U.S., France, and across the world. He has won an award from the National
Space Press Club for his coverage of NASA.
I'd like to have Joe come up with the rest of the panelists, and give them a warm round of applause. We have a
substitution for Dr. Coleman; it's David Cummings. He's the executive director of the University Space Research
Association. Joe, the party's yours.
Anselmo: I think it would be fair to open this by noting the obvious: The market conditions today are ripe for new
launchers. Demand is booming; satellite manufacturers are saying that launch demand far outstrips supply. If
you look at some of the projections: Arianespace is projecting that in the next three years alone, the number of
geostationary communications satellites is going to increase by 40 percent, and the number of transponders in
orbit will go up by 80 percent. So what this panel has been set up to do is sort of address the question: How
should the U.S. government help spur the development of the launch industry and the space industry that drives
it? Charles has asked me to address several broad topics. We've set up five broad topics that we're going to
address over the next hour or so.
The first topic is: What is the role of the government in encouraging new space companies? The second is: In
1990, Congress passed and the President signed the Launch Services Purchase Act, which would require the
government to start getting out of the business of managing launch services. How can the government complete
the transition from a launch services operator to a customer purchasing launch services? They go on; I'll go
through them one at a time when we get to them. What we'll do is go through these five topics for about an hour,
then we'll take questions from the audience. Hopefully, we can get in at least a good half-hour of questions.
I'll briefly introduce our panel here: Keith has already been introduced. To Keith's right is Dr. Rick Fleeter. Rick is
the president and founder of AeroAstro, which is a small satellite and space transportation company. Rick's
been responsible for the development of over 20 small and miniature satellites. Dr. William Claybaugh is the
business advisor for NASA's Reusable Launch Vehicle Program. After that, in place of Dr. Coleman, is Dr. David
Cummings, who is executive director of the University Space Research Association, which is a non-profit
corporation owned by 80 universities. It promotes space-related research and development, and technology
development. Finally, we have Mark Bitterman, who is vice president of government relations at Orbital
Sciences Corporation. Mark sort of addresses a wide array of federal and military policies related to commercial
space for his company. I guess I'd like to start out by letting everyone do a free-for-all on this first question we
had here: What is the role of the government in encouraging new space companies? Should the government
provide new companies with competitive advantages, such as grants and subsidiaries? And what barriers to
entry into the launch services market do new companies face which the government can help mitigate? So, I
guess, Keith, you're the first guy I should pick on.
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Calhoun-Senghor: I look on this strategically. First of all, I have to share a microphone with the moderator, so I
thought, "Great; I don't have to say very much because he'll want to keep it most of the time. Second, I get the
advantage of hearing what the rest of the industry has to say before I respond. "But I'll make a brief comment
and maybe reserve a few seconds towards the end.
I think the role of the government that's a fairly complex question. In the policy environment in which we
operate, I think it is very legitimate for the U.S. government to create the kind of economic and policy
environment that allows individuals with imagination and energy and, hopefully, capital to put together
creative solutions to the launch problem. I think that that is, in broad strokes, the best use of government, as
well as a clear indication that an industry is important because once we define it as important, things follow
from that. It is easier to remove impediments; it is easier to track information and to disseminate it. I think a
government model that extends what was the previous model of the government being in the launch business is
one which I don't think, in the long term, will work. So, therefore, my short answer is that I think we have to be
creative in terms of how we support the industry, in terms of policy, consistency and transparency but not
necessarily guarantee a market that might artificially skew what would be a commercially viable enterprise.
Cummings: From our point of view I guess, the university community and in the R & D area, we still see a
role for the government in long-term high-risk R & D research that benefits the whole industry; and the model
that we often use is the old NACA, which performed the same sort of thing for the aircraft industry.
Bitterman: If I can just add a comment: I'd agree with that. I think there's an appropriate role for government in
fostering new technology. In Orbital Sciences' case, we see it very clearly with the X-34 program. There are
some very unique issues there. First of all, X-34 is going to demonstrate new technologies for X-33 and the
RLV, very important for the future of space transportation. But also the current mode or structure of the contract
is very unique, in that the contractor is really in the lead. The NASA centers are in effect our subcontractors, and
that process is a new process, and it's working extremely well. I think those are appropriate ways in which the
government can foster new development.
Miller: Mark, what kind of barriers do you see that maybe the government can help companies such as yours
overcome?
Bitterman: Well, there are several types of barriers. First of all, if you look domestically at the regulatory
environment in which we all have to operate, there are certain new regulations that need to be adopted. Now,
there are some serious problems in this area. Number one: The Congress has not enacted new legislation in
the commercial space launch arena in over five years. It's not for want of trying. As discussed earlier, the House
has already passed legislation. Things look very promising in terms of the issues addressed in the legislation in
the Commercial Space Bill, as well as in the NASA authorization bill. But prospects for enactment are still iffy
this year. The Senate has yet to take action. Congress adjourns for the summer in just two weeks, and then will
come back in September and have to pass numerous appropriations bills before adjournment for the year. So I
think the challenges are pretty significant. But the needs of commercial space launch companies are very great
in terms of new legislation that needs to be passed. There was discussion earlier about re-entries. There's no
legislation currently providing a legal framework for re-entries. There is legislation needed in terms of licensing
pre-launch activities that companies like Orbital Sciences are involved in, since we integrate in one site and
often fly from another site. So there's a whole range of issues that need to be addressed there.
And then just jumping over to the international side: We have to look at barriers a little bit differently
internationally. There are launch trade agreements in place. They expire just after the turn of the century. Those
agreements are important in terms of easing the non-market economies into the launch environment. However,
these agreements have not been very effective in ensuring the level playing field that companies like ours look
for. Some others may have comments on that; but we're of the view now that, at least in the case of the Russian
agreement, in the absence of enforcement of that agreement you might as well phase it out as quickly as
possible because it has no effect.
Calhoun-Senghor: I would agree with the high-risk R & D; I think that's a need. Our office was involved with the
X-33 and ELV selection; that makes a lot of sense. The fact is that with a lot of these technologies, what you
have to do is buy down the technological risk, and I think that's a very appropriate role for government. I have a
couple of follow-up comments on yours, Mark. I don't disagree on it fundamentally, but I just wanted to enhance
on it. I agree that congressional action on commercial space has a significant impact in terms of the climate,
because it shows that this is a front-burner issue and that it's important. Again, it comes under my category of
talking about it. And you're right; there are significant hurdles between here and there. But I think a constructive
bill is a good thing for the industry, because I think it focuses attention on it. Licensing of pre-launch activities is
something I would defer to Transportation, since I don't have anything. . . And, you know, you touched on the
last thing, the international launch trade agreements, and that's a very good point. There are very, very
interesting issues on that. The launch trade agreements are, I think, by definition imperfect instruments to get at
the essential problem. And I think that, frankly, we need to spend a lot of time thinking about how we move from
here in terms of a transition. I know that your company in particular has some real issues because you're at the
smaller end, and frankly you face a lot of the competition involved with excess ballistic missiles and things like
that. I think that, frankly, we haven't cracked the code on how the launch agreements can deal with that end of
the spectrum. And I'd be willing to hear good ideas on that and move that up in terms of our priorities, because
that's an important issue.
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Fleeter: They put me on these panels because they know that I'll say anything. But I was reluctant to say
anything on this panel, because the first note I made was that if I ever get a chance to work in a free and
competitive market, then maybe I'll have something to say on a panel like this. But then I thought: Well, are
there really very many free and competitive markets out there? They all work in the environment of the country
that you're working in, the government that you're working under, and so on. And it is hard to find one I don't
think that our problems in the launch vehicle industry are so unique. We tend to think that way because many of
us myself included spent our whole lives working in this market.
My perspective is a little different from Mark Bitterman's because I'm coming from the "trying to get into the
business" side of things, whereas AeroAstro has been trying to become a provider of launch vehicles. We are
making a little progress in that area, in the meantime selling satellites and subsystems for rockets. And one of
the things that I've talked about already with several people this morning is the tendency of the government to
pick winners and losers. I have trouble with that. I agree with Mark's comment that it's hard to be against
support for R & D, and it's easy to be for it, and it seems that that's something that everybody thinks is a good
thing. On the issue of trade, we look at it from a little bit different point of view, because one of the obstacles we
face and I think the major obstacle you face trying to get into the launch vehicle business, and I bet you that a
lot of the entrepreneurial companies out here would agree with me is that it takes a lot of money. You have to
raise a lot of money in order to get enough capital together to build a launch vehicle.
We have two government-related problems in raising that money. One is that a lot of times you want to work
with other companies and try to pool your resources to raise that money, and sometimes those other companies
aren't U.S. companies. We've particularly had this problem in the satellite business, but we have it even more in
the launch vehicle business, because of the historical restrictions on export of rocket technology. It's very
difficult to team with a company even in a fairly friendly environment. We've worked with the Swedes and the
Australians quite a bit, and it's a constant impediment caused by the government to the point that those
customers will quite often team with some other country rather than team with a U.S. company, because the
perception is that it'll never happen because the U.S. government is so restrictive in that technology area. This
is not a trade import restriction problem; it's a technology export problem that we've also seen in our satellite
business. We quite often lose contracts to foreign satellite providers because the ultimate customer has faith
that the U.S. government will be slow and bureaucratic in approving the export of whatever it is that we're
offering to sell them.
And the other thing that you need to raise a lot of money to build launch vehicles is: you need customers,
because investors like that they like to see that you've already got people signed up for this thing, so that if
they put their money in, and if you really know what you're doing, and if you really build the rocket, at least if all
those "ifs" come to pass there will be somebody out there who wants to buy it. And I think the government has
kind of a mixed record in being a customer. It's not that hard a thing to do, because they really are a customer
they buy rockets all the time. But they tend to buy rockets from people who are already selling rockets, and it's a
lot harder to buy rockets from people who don't have a rocket to buy and yet that's what you need. And, again,
I think that I speak for a lot of the entrepreneurial firms out here when I. . . "Entrepreneurial" is a euphemism for
"You're not there yet. "You're still entrepreneurial even if you have a product, but for some reason no one uses
it. So when you're in that situation, you really need a government that's capable of buying something and
realizing that it's going to be experimental, it might fail and therefore the government might want to be
prepared to buy a launch vehicle and buy the insurance, so that if that new vendor who has never done it before
should fail, the government's interest is kind of protected.
Anselmo: Anyone else want to jump in before we move on to the next topic?
Claybaugh: Just a couple of comments from my point of view sitting in the RLV program office. After 30 years of
no significant change in the real price of a space launch, I think we can dispatch the question of whether the
market is either free or competitive. It plainly is not. The issue, then, is what we do about it and that is a matter
with profound government policy implications.
Any good graduate student in economics will tell you that the standard response to a failed market which I
believe is an accurate description of the space transportation business the standard correct response on the
part of government is to intervene in that marketplace. That looses a vast world of policy implications that are
very, very contentious. Our system is an adversarial system; there are ultimately three branches of government,
each of which has its input into these kinds of decisions. How that might roll out, and whether the thing that
comes out of the end of that process has any relation to the going-in need, is a wide-open question on almost
any issue.
But the issue here is plain enough. The market has stabilized in a position where revenues are maximized to
the industry relatively few launches at relatively high price. There is good evidence in the data that the market
is inelastic at this position in the demand curve. If you lower prices, launches do not increase. There is some
evidence that even dramatic lowering of prices does not dramatically increase the demand. We have
non-market economies offering launches at a thousand dollars a pound, in effect, and no significant additional
demand has appeared. More distantly, for much of the 1980s one could buy a GAS can ride on the space
shuttle for effectively $50 a pound. Nothing happened. There was no significant demand for those uses. And so
there is some question to be raised about the elasticity of the market at its current price point, and all of that
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suggests that something needs to be done. The details of what that might be are far beyond my ticket level.
Anselmo: I'd also like to encourage the panelists that, if anyone says something you don't agree with or have a
contrary point of view, please jump in and express your views.
I'm going to go to topic number two that the Foundation wanted to address: In 1990, Congress passed and the
President signed the Launch Services Purchase Act, which required the government to start getting out of the
business of managing launch services operations. How can the government complete the transition from a
launch services operator to a customer purchasing launch services in a market-oriented manner?
Cummings: [Unintelligible] That is, again, from the university research community, but there are at least some
trends that we're encouraged about. And those are you mentioned handoff, which we've experienced, and we
think is in the right direction -- but also giving more control and accountability to Mission PIs in the sciences.
This has happened on our Student Explorer Demonstration Initiative, which USRA managed; and it's also in the
other NASA Explorer lines and in comparable lines in the earth sciences and the planetary sciences. The
problem is, the control and the accountability only goes down through the satellite and the operations, but it
doesn't go to the launch vehicle. We're looking for the day when the Mission P.I. can trade off cost between
mission operations and launch vehicle cost; and that, it seems to us, is going to take a lot more competitiveness
in the low end of this market than we have now. And it causes us, in an unlettered way, to be not so against
opening the markets to the Israelis or whoever else can create some competition and allow some choices to be
made as we move further down the line towards allowing the Mission P.I. to make those choices.
Claybaugh: I'll just observe that competition in and of itself does not guarantee lower prices. And in particular, if
one is in a marketplace where there are, for example, twelve launches per year available and it takes ten
launches per year to make a profit, then if you have two competitors, what you are assured of is that both will go
out of business.
Anselmo: Anyone else?
Bitterman: Joe, if I can just comment not specifically on that, but in terms of the government moving away from
being a manager of launch services to becoming a purchaser: we've seen some positive trends recently. About
a year ago, Orbital Sciences and several of the other larger launch companies began negotiating with the Air
Force on something called the Commercial Space Operations Support Agreement. Initially, the Air Force's
position was quite different from the industries', and very much on the order of really managing the process
exclusive of commercial realities. However, we've worked extremely closely with the Air Force in a working
group for over a year, and we see the approach changing at least in the military) to one where industry's
concerns whether they be launch rates, or financial requirements like insurance all those things are being
taken into consideration, with an eye down the road toward the international competition question how to
enable U.S. companies to be the most competitive around the globe.
Calhoun-Senghor: I want to just sort of raise a macro-issue on this because I think it's important at least for
me I understand it better when I look at the context.
You know, many of the problems that we're discussing here in terms of the ability to team with foreign
companies, in terms of being able to make trades that have the U.S. become more of a purchaser of launch
services as opposed to providing them is a function of the fact that the history of the development of launch
vehicles really was driven by a defense-oriented ability to launch nuclear weapons. So therefore what we're
really talking about now is how we manage the transition from a period where launch vehicles principally had a
different function, to one where they are moving from a defense-oriented function to a commercially-oriented
function or dual-oriented functions, since you never lose that second aspect. Therefore it seems to me that
part of the difficulty we're having is how to wrestle with that fact, that these are ballistic missiles as well as
commercial satellite launchers. And so therefore, the technology transfer issues are going to be real, and it is
hard.
I think that, in the end of the day, the way you do that is that the answer will be very simple when 90 percent of
this industry is devoted to commercial launches, and when the overwhelming emphasis is on putting up
commercial launches, and we have some other shift where nuclear uses of them are less relevant. I don't know
if that day will ever come, but all I'm saying is that we carry a lot of baggage in this industry that we carry in
other industries too; this is not the only one. (I mean, you see it in remote sensing, you see it in GPS, in others.
But it is a real live function of this, as well as the fact that we now have embedded capability certainly NASA
knows how to build this stuff and the DoD too. So the heritage of it is a large part of the current problem that
we're wrestling with. And I see it as a transition issue, and we'll hopefully get it right.
Fleeter: I didn't have much to say on this issue, which is because I can't think of a time when the government
really did a very good job at this business of stimulating companies to be competitive and to act in a commercial
way. I was thinking a little bit about the X-Prize. That is a situation where you stimulate a lot of different
competitors to all try to do something. And I don't see the way the government traditionally acts as being a way
to stimulate a lot of different companies to come in with a lot of crazy ideas, and try them and take risks and
have these conversations with some of the launch procurement people at NASA.
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Basically, there isn't room for that kind of risk-taking that you will see in a kind of Silicon Valley-type environment
where people will fund a lot of high-risk, high-return ventures. As long as the government is a large customer,
high return doesn't tend to be there, and so the people who invest in high-risk, high-return things don't tend to
want to bother. And that is a problem in the launch vehicle business. People will say to you, "Well, show me one
company where the investors got enormously wealthy because somebody built a launch vehicle", and the
answer is that it's pretty hard to find an example like that. This whole business of doing something risky that
might fail has never really been a part of the government agenda. And so I guess I'm also just a little bit lost on
how the government could create a more commercial market, because it's not a commercial market; it's a
government market.
So I agree with you that if we ever reach that day where 90 percent of the customers were commercial
customers, you might see a difference. But the question of, well, "How do you get the government to simulate
that environment? " I don't think they really can. That's my answer to that question.
Anselmo: I think that's a perfect segue into topic number three, which is: "In the light of U.S. efforts to
encourage free trade, and governmental efforts to reduce trade barriers and indirect subsidies around the world,
does the U.S. government still have a role in protecting domestic launch services from foreign competition?
"And a subset of that is: "If it does have such a role, what is that role? "Maybe you can get into some specific
issues. Keith talked earlier about launch quotas, Proton and Long March. There's also this Israeli proposal to
launch a Shavit derivative from the U.S.
Fleeter: I'll put my hand up right away; I don't want to be accused of sitting around and waiting for the answers
and then spitting them back to you. I did have something to say about this, and that was: Do a thought
experiment and say to yourself: "I don't care about building satellites; I don't care about building launch vehicles.
I'm kind of an angel, and all I really care about is that I want to see a lot of people doing a lot of stuff in space as
cheaply as possible. "And then how would you answer that question? Should there be quotas, and should we
take launch resources from all around the world and not use them?
If you do that thought experiment, it's kind of obvious that that's not the thing to do. And so the thing that you
would do I kind of think of myself a little bit that way; I'd probably be running a bigger company today if I was a
little more parochial in my attitudes. But my attitude is really that I'd like to see a lot of people doing a lot of stuff
in space as cheaply as possible. So my answer to that question is: No, I wouldn't have quotas, and I would go
ahead and import all the Russian and Chinese and Israeli launch vehicles I can if they're really cheap, because
it's going to help people do cheap things in space. And I think the biggest argument to not do that is the one Bill
made, which is that you'll drive the existing companies out of business. In fact, I don't think that's true but
there's two roads: Either you do or you don't. If you drive them out of business, well, I guess they'll have to
come back some day when they figure out how to be competitive in that market.
I had this conversation with Paul Coleman once, and he was saying, "Well, you know, the commercial aircraft
business was like this after World War II. There were all these airplanes out there that we built for the war, and
how could companies actually make a commercial business when we had all this World War II surplus lying
around out there? But they made a business out of that, and the way they made that business was that they
took those airplanes and they got into what one of our customers calls "the van-conversion business". They
took those airplanes which are not really what the customer wants; I mean, the executives from companies
didn't want to be flying around in WW II surplus airplanes. They wanted something a little quieter, a little more
comfortable, maybe a little roomier so they started changing, modifying, these existing airplanes. The same
thing can be done with I mean, ballistic missiles are really not very excellent launch vehicles, when all is said
and done. They have all kinds of problems.
But if they're really all that cheap, and there's really a business there to use them, then companies will fill that
niche. They'll say, "Well, maybe I shouldn't be building rockets from scratch. Maybe I shouldn't be machining my
valves myself in the back room. Maybe I should take what's out there which is free, and if I can get people into
orbit more cheaply that way, that's my business. "So, yes, if your picture of your business is very narrow, and
that picture is "My business is to build launch vehicles from scratch and launch them, and if it costs a lot of
money, too bad", if you switch to a mode where you say "My business is to get people into space as cheaply as
possible and I'll use whatever resource is out there", then there are businesses that you can imagine. Yes, some
companies will fail. That's exactly how efficient markets work they drive out companies that are not producing
product at the lowest possible cost.
So I guess I'm a little bit of a libertarian in this regard, and I can only think of a couple of exceptions where I
would be protectionist. One is that there are certain national security requirements that we meet with our launch
vehicles, and so maybe it's not to our advantage to become totally dependent on importing launch services from
other countries and I think that part of the industry will always survive like that, and I think that's fine, and I
think that may be a relatively poorly performing segment from a commercial point of view compared with people
who are actually providing product at the lowest possible price.
The other half of that question is getting back to "Either they all go out of business or they all don't go out of
business" I don't think they will all go out of business. I think that being a small-satellite guy, what you have
to endure is doing launches from China and Russia, and I would pay a lot more for my launch vehicle to be able
to launch it from Florida or California. And so it's not clear to me that our indigenous industry would curl up and
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die. And I'd hate to think that it only exists because we have some lawmakers who are protecting our market. If
that's the only way we can survive, then we're really not very clever. I think we're more clever if we can survive
by doing a better job; and in some respects, we already do a better job.
Bitterman: If I can comment on that: Protectionism is kind of a strange word in this context, because it's not
something that any of us is really for. However, I think we all want a level playing field to exist but we can't just
wish it true; we all have to work for it through government policy and implementation of those policies. The
problem that I think we face: If the U.S. government and all the non-markets were to suddenly make all their
Cold War hardware available all their Minuteman IIs, SS-25s or SS-18s you can just pick your missiles. I
think that there you will find a problem in the stifling of new technology. I think that a lot of the new startups that
you see coming out today many of them are here at this conference talking about their new concepts would
probably go away, even though their technologies are certainly warranted, certainly exciting, and certainly going
to move us down the road. If we're only going to rely on former Cold War hardware, I don't know where that gets
us in, say, five to ten years. That's one comment.
Also, in the area of protectionism: Orbital Sciences is one company that's not at all in favor of quotas. We
don't think quotas are the way to go. I think you had to have them early on in the trade agreements to enable
competition to evolve, but I think that's happened. The problem is that these agreements and protectionist
measures need to be evaluated by the market. In our market, which is a small market, there are very few launch
vehicles and relatively few satellites. Our market doesn't consist of the Teledesics and Globalstars and Iridiums,
so we're in a much smaller market with different sorts of payloads scientific payloads. And there really are
very few launchers. We're only talking about Pegasus, Taurus, and the Lockheed-Martin Launch Vehicle at the
moment. And those U.S. launch vehicles really have to be the only standard that we have now in terms of
pricing; and if foreign launchers at very subsidized levels are coming in at half or less than half of those levels,
we don't know how else to fight that issue. We can't just simply lower our prices; we'd go out of business in that
case. Our margins certainly aren't that high anyway on our Pegasus and Taurus launch vehicles. So I think
although we're not in favor of protectionism, we need to be very careful about how we make this transition. And I
think all it really takes is the U.S. government being a little bit tougher with some of the non-market economies
as we make this transition to the year 2001.
Anselmo: Keith, let me put you on the spot. When are the quotas going to disappear? Is this going to be
accelerated? Could we see this happen in the next year or two?
Calhoun-Senghor: I don't have Karnak out here, so I can't really predict. "I don't know" is the short answer. Let
me tell you what I do know, though. What I do know is that this is likely to be the subject of some debate, and it
should be, because the implications are pretty clear.
The irony of this, from a policy-making point of view, is that you, Mark, and those of you who operate at the
small end of this -- if you take the template of your position in relation to what Rick was saying, people who
would like to make a business out of what's out there it's a fairly compelling analog to the larger launch
industry folks versus those who were saying "We'd like to make a business out of it or create a new one.
"What's the lesson of this? Well, if you've got something to lose, you'll probably care about quotas, I guess. If
you don't have anything to lose, then maybe you don't. I guess that's probably the best lesson to draw from that.
From a government point of view, though, we have to care. There is a technology base issue; there is a national
security reliance issue. There is also, however, an economic stimulation issue. You don't want to stifle new
ideas. You don't want to skew the market. As I said, I don't have all the answers on it, which is why I guarantee
it will be a very interesting debate. I mean, the university community is looking at this and saying, "Hey, we've
got experiments we'd love to get up there. We've got these things sitting around."
The analogy of the airplanes is interesting because I've had people tell me: "Well, after World War II there were
a lot of Jeeps, and what they did is they dumped them off of aircraft carriers in order to prevent flooding the
market with that. "It's an imperfect world, and unfortunately you'll probably end up getting a little of both. But it
would be nice if there was some clarity, because I think the implications are huge for both ends of that spectrum
those who have something to lose, and those who are trying to break into the game.
Claybaugh: There's also one other issue that is germane to this discussion, and that is that protectionism is not
a unilateral activity. And in that regard it is important to recall that, at the initiation of the European Union, space
launch services were not subject to the GATT. And in consequence, whatever the U.S. government might do in
this regard has to be taken in the context of what other governments might do and are doing.
Anselmo: Without objection, to leave time for questions, I will move on to the next topic.
Topic number four: Should reusable launch vehicle manufacturers also operate these vehicles? It's noted that
the Airmail Act of 1934 forbids aircraft manufacturers from operating as airlines. And the question is,
basically: Should this also apply to space transportation? Bill, do you want to start off?
Claybaugh: A real quick notation: my background is finance and venture capital, and this sort of thing
immediately strikes me as depending on what you want to pay. If I'm the manufacturer of a vehicle and I also
operate that vehicle, then I get my return on the cost of developing and building that vehicle from those services
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which I provide. If I have to sell that vehicle to somebody who then goes into that business, then I tack on a 20
percent gross profit, which that operator then has to pay and price accordingly. So the quick answer is: do you
want to pay 20 percent more?
Anselmo: Anyone else?
Fleeter: We all decided while we were waiting to come up that we didn't know anything about the Airmail Act.
Senghor: Really, on this one, I'd probably be more interested in listening to what those who plan to build and
operate these systems want to say. The question is if those of you who have worked in this area, either in the
audience or on this panel, can help me is, do we do this with other areas? In other words, are satellite
manufacturers prohibited from operating those, and is there a rationale for not extending it?
Claybaugh: I actually had to look up the Act at one point and find out what it was about. At the core, this was a
response to the perception of a monopoly developing by Boeing Corporation's ownership of United Airlines.
Centrally, that was the point of the Act, although it was (in the way of policymaking) couched in much different
terms. The question here is one of monopoly. Clearly, at some point in the development of a marketplace, you
don't want manufacturers owning airlines and therefore giving those airlines preferential treatment with respect
to the availability of the newest model, the newest equipment, that sort of thing. And there will no doubt be some
day in the space travel business when that may be an appropriate government action. But in the relative near
term, I really do think it comes down to a question of how much extra you would like to pay.
Anselmo: Anyone else? Okay, our last topic here: Some projections are that the Evolved Expendable Launch
Vehicle (EELV) could capture 20 commercial launches or more per year not government launches. A
commercial spin-off of the X-33 Lockheed-Martin's VentureStar vehicle is projected to capture most of the
commercial market. So the question for our participants is: Number one, do you believe these projections? Are
they credible? And number two: Do you think VentureStar and EELV are sort of a threat to the smaller
entrepreneurial companies? The third part of the question is: Is it appropriate for the government to subsidize
competition in the commercial marketplace? Who wants to jump in first? Mark?
Bitterman: Well, there are really only a couple of things here that I can comment on. First of all, as a policy guy I
don't know whether these projections are accurate. In terms of the capability of EELV to capture that much of
the market, I certainly wish the program well. But, again, I can't really characterize it. VentureStar and EELV are
certainly not a threat to Orbital Sciences' business quite the contrary. X-34 is part of the Advanced Space
Transportation program, and we're hoping to demonstrate the technologies necessary to move forward. So,
clearly, even though these are two government-sponsored programs, they're very clear spin-offs here for
commercial companies. Is this, in effect, government subsidization of competition in the commercial
marketplace? I don't think so. You're dealing here with programs that would not happen but for the resources of
the federal government. I think that's a very important test as we move forward. The federal government should
not be subsidizing new ventures. . .
{technical break}
Claybaugh: . . . who knew what he was talking about, and who pointed out to me that the whole airmail
exercise was an unmitigated disaster that all the companies that were involved in doing it failed, and that the
U.S. Army had to be brought in to take over the air carriage of the mail. This particular staffer then asked me
what exactly I was talking about. One wants to know one's history when one goes up on the Hill. There are
some very, very bright people there.
Existing law already requires government managers to purchase commercially, and at least at NASA, with the
exception of the Shuttle, that is what we do. And I think that the question is implementation, to a large extent,
rather than any need for further legislation.
Anselmo: Okay, does anyone from the press have a question?
Q: Keith Cowing from NASA Watch. A question for Mr. Senghor: Is space commercialization better today than it
was when Mr. Clinton took office? And, specifically, can you cite one act or change in regulation or rule that has
caused a specific bit of commercialization to occur that would not otherwise have occurred? And I don't mean to
refer to privatizing launch operations. I mean something that somebody is building or selling now that the
Administration has caused to exist by its activism in this area.
Senghor: First of all, I want to say that none of this takes place in a vacuum. I think there were some specific
things that the Administration did, but there were also a lot of people in a lot of areas -- a lot of people here --
who helped in that. So obviously I want to toot the Administration's horn, because I think it was forward-leaning
in a lot of these areas; but there were a lot of people who recognized this also, and a lot of work done before,
and a lot of work will be done afterwards. I just want to make that point clear.
Let me give you a couple of examples. Let me give you one outside the launch industry first. I'd start with
commercial remote sensing. In March 1994, there was a presidential policy which allowed for one-meter
resolution imagery to be taken by commercial companies. That was preceded by the Land Remote Sensing Act
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Amendments of 1992, and before that the original Act of 1985, I believe. But what it did is that it essentially
allowed companies to take imagery that was at a commercial level. It helped create an industry, I think we'll
see how far it goes I'm very hopeful about what the results of that will be. But that's one concrete example. I
think that, depending on how it works and how successful Bill and others are, that the Space Transportation
Policy in 1993 (I believe it was 1994 also ), which basically set out the path that NASA will work on the
technology demonstrator X-33 and DoD will work on the EELV, also was a significant step in the development of
a new generation of launch vehicles and putting the money there to do that but also in the development in real
terms of a reusable commercial launch industry. Again, we'll have to see where it goes. But I think those are two
examples that are significant steps in that direction, and I think that, when we look back on it hopefully will
have a major impact.
Anselmo: Do we have another press question?
Q: Tom Green of Defense Daily and Space News. Within the industry there was a lot of criticism about the way
the Air Force handled the Delta 2 investigation in the wake of the explosion. I'm just curious if you can address
that issue frankly. And secondly, what this agreement with the Air Force it sounds good on paper, I guess
but what exactly it's doing? I'm a little bit confused as to the results of the agreement.
Anselmo: Are you addressing that to anyone in particular?
Green: That would be to the panel. Mr. Bitterman mentioned the agreement earlier.
Bitterman: On the Delta failure issue, I'm probably not in the best position to comment on that. On the broader
issue of the Commercial Space Operations Support Agreement, there were some very significant differences
between industry and the Air Force on the financial responsibility issues involved in striking up a commercial
agreement with industry. We had commercialization agreements in force; but in coming up with a brand-new
agreement that would bind all the launch companies, the Air Force in fact tried to put in our view quite a bit
more burden on industry than was reasonable. And rather than just being put in a take-it-or-leave-it position, we
became part of these working groups, and actually demonstrated to the Air Force, we believe, what the
ramifications were of these new financial requirements insurance and otherwise. And we were able to come
back and further demonstrate what value commercial launch companies had brought to the government, and
there were some significant contributions there as well. I think all that give-and-take is going to lead to an
agreement that is satisfactory to both the Air Force and industry. But I'm sorry I can't comment on the Delta
failure; I'm just not in a position to do that.
Anselmo: Did anyone else on the panel want to address the question? . . . Okay, I'll move on. Rick, your
comment about the market being inelastic has generated a few comments. One person here said that, if the
market is inelastic, maybe the market is too small. The question is: What other markets can be encouraged by
the government to increase demand for more launchers? And the second part of the question is: Are tax
holidays for profits from space activity a viable incentive?
Claybaugh: In precise order: I don't know, and could be.
Anselmo: Dr. Cummings, do you have any comment?
Cummings: I don't think so. If I could just make a comment on something Mr. Claybaugh mentioned about it now
being NASA's policy to go for a commercial launch in any case: It seems to me that that's still not solving the
university user's problems. An example is our Student Explorer Demonstration Initiative, where the only provider
in town is to my right here [Bitterman], and NASA is so dependent on that provider it's essentially so much a
part of the government that when there are delays, the delays are just accepted. This is a frustrating thing for
us. It hasn't helped that you've gone to the commercial provider in this case.
Fleeter: I hear what you're saying about the inelasticity, but I don't buy it. When the Getaway Special program
shut down, they had a backlog of 330 to 360 payloads waiting to launch. That's huge. And not very many of
those were satellite payloads. But I built three of those satellite payloads. It was an enormous incentive when
you could go to a university group or to a customer who wanted to put their first toe in the water in space, and
for $50,000 that's kind of a meaningless size satellite from a lot of missions' point of view but even if they
didn't end up using the Getaway Special, it was there. You could start off with that.
And the University of Utah Defense Systems got started that way Orbital Sciences has just bought the
remnant of that back from CTA really got started building Getaway Special satellites. They used me this was
back in the early Eighties as a consultant to help them build those satellites. They got into that whole business
primarily because they went to one customer and said, "We can build, launch and operate a satellite for you for
about half a million dollars. "And the customer basically said, "At that price, it's worth giving it a try. "
So I think there is elasticity there. And I'll tell you another reason why I think so: I see our satellite customers
shopping all over the world for price and if they can't reach that price, they can't make their numbers, and their
businesses finally just don't do it. Our biggest customer right now just signed an agreement for three launches in
Russia. And I remember writing an E-mail just the other day saying, "Well, who are you going to find to spend a
year in Plesetsk? Because that's what it's going to boil down to now. " It's not that they wanted to go to Plesetsk.
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It's that they couldn't show the return on investment that they needed if they had to pay U.S. market prices
and coming from Australia, they really had no reason to want to pay those prices. So I think there is elasticity
there.
And as far as tax holidays go, Wall Street is kind of like what Churchill said: it's a lousy system, but it's the best
one we've got. Wall Street's in the business of picking winners. When they don't want to invest in a business it
pays to look at the biggest investor the world has ever known and say, "Why don't these guys want to invest in
that business? "And the answer is usually that they don't think they can make money in that business. Okay,
our space business is maybe a little marginal in that regard, and we're struggling to attract that kind of capital.
And we succeed sometimes. When you do something like a tax holiday, all you're really doing is that you're
changing that ratio of investment to return by a little bit. So taking my angel hat off and putting my parochial
hat on I'd say, "Yes anything I can do to make that investment look a little more attractive, I'm going to be for
it, because it may push some investor. "And I think you'll find that in history; a lot of companies get started at a
time when some administration passes some rule to lower the capital gains tax, or to give an investment tax
credit for R & D investments. More things happen during those windows of opportunity. So, even though I come
down against messing with the market, I really come down for messing with the market in a way like that,
because it doesn't pick a winner it just makes the overall environment more attractive. And then you still have
to win, except that the level playing field is tilted downhill a little bit, so it makes it a little bit easier to actually get
some acceleration and go.
Anselmo: I apologize; I misquoted you. I attributed Bill's remark to you.
Claybaugh: Let me, if I may, address Rick's comments. It's vital, when discussing history, to verify the details.
It's correct that there were almost 400 scheduled GAS Cans in backlog, but none of them had built anything.
When you actually go out to Goddard and talk to the folks who run the program, what you discover is that every
GAS Can that was actually ready to fly has done so and that is a very small number. The program continues,
and they continue to try to gather up payload, but it is almost a case of NASA managers having to beat on the
folks who have put down deposits ir order to actually get them to build something to fly. I assert that at least in
that particular case and, let's be clear, there are a lot of constraints on the GAS Can program that make it an
unattractive $50/pound payload the real data does not suggest a surge in demand.
I want to be clear, however, that I do think the market is elastic; and if we had a viewgraph machine, I could
even show you one of my favorite charts, which is from the Commercial Space Transportation study and is (so
far as I am aware) the best publicly available information on the elasticity of the market for space travel. My
colleague Bill Piland down at Langley who is here today sponsored that study. And it does suggest that
there is elasticity in the market. In fact, it suggests that the market breaks at about $600/pound, that below that
level demand takes off in the sort of exponential manner that you are used to in demand curves, and that above
that number, demand is pretty flat it basically crawls along at levels similar to existing business, with a little
growth. Our remote-sensing guy, for example, will put up a second satellite if the price halves, and he'll put up
another one if the price halves again, but he won't put up any more because once he's got three up he's got the
whole planet covered. And so there are limits to how far the demand goes in our business. What I suggest, and
what I want to be clear about, is that I believe we are dealing in a failed market, in the specific sense that market
forces drive the marketplace to high prices and low volume, and that the incentives in the market are in that
direction. That is a conclusion I have reached on the basis of our analyses. There are numerous examples
which I will not embarrass any particular company by going into but I do believe that at some price the market
must be elastic. The question is where that price break is. The one existing study suggests that it's around
$600/pound. For a variety of reasons based on my own personal analysis of that study, I think the number is
actually higher closer to $1000/pound. But we'll never know until we get there.
Anselmo: Anyone else want to jump in? . . . Okay, we'll go to the next question, which is actually you again, Bill.
It says: U.S. government funding of high-risk R & D is desirable, but a key test of R&D versus product
development is who gets the results of that research. The X-33 program is developing a body of research data,
mostly at government expense but Lockheed-Martin is acquiring most of the research data. Do you agree with
this characterization, and can you justify it? Claybaugh: The characterization is incorrect. Lockheed Martin has a
three-year lock on the data and then must make it public.
Anselmo: Another question here, that's for both Bill and Keith: The government's effort to save commercial ELVs
has resulted in basically a standard government contract with the word "commercial" in the contract
introduction. Why won't government executives force the NASA bureaucracy to let go and buy rockets like any
other commercial product?
Claybaugh: I'm not willing to touch that one at all! I will make the following notation: After five years of very, very
serious effort on the part of Administrator Goldin, I think we are only just now at the point of getting part of our
community to believe that small planetary spacecraft are, in fact, a good idea. The changing of an
organizational culture is a process which takes a very, very long time, with a requirement for constant insistence
by the chief executive. The literature on that subject suggests that ten years is a normal number to get an
organizational culture changed, and that it takes insistent pounding from the top even then. So I'm not willing to
suggest that all NASA does is wise and proper, but I'm willing to suggest that some change has occurred one
sees in the planetary program in particular a dramatic change from the billion-dollar once-per-decade kind of
missions that we have been running and I think in time one is likely to see other changes beginning to surface
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as the institution evolves.
Senghor: I would second that. I think Bill has put his finger on the basic problem, which is as I mentioned
earlier, I think we're in a period of transition. The problem is that we are moving from an era in which we were
doing things one way because it made sense in that context, to a period where that doesn't work anymore and
so we have to figure out how to get to this other way in which at least as we look out at the data we can see
the outlines, we think, of how things are moving (inevitably, I think) towards a much more commercially
dominated era. And so, in any transition era where you're moving from one to another, there is the resistance to
change; there are institutional culture issues, as Bill said; there are turf issues. There are education issues
(letting people know what's out there); there are public education issues; there are policy education issues.
There is coming up with realistic solutions. There is, overlaying on top of all that, the fact that the external world
around you is changing and affecting the decisions.
Churchill is getting quoted a lot at this conference, at least on this panel but going back to Churchill, I think we
have to keep talking about it. Let me quote someone else for a second: This is a story I like to tell about
Secretary Brown. He used to make this quote about someone who was once a journalist. A member of the
press corps once asked Wayne Gretzsky what made him such a great hockey player. He thought for a second,
and then he said, "I skate to where the puck is going to be." The ability to move organizations from where they
are now to where they're going to be is the defining criterion for what makes great nations, great leaders, great
organizations. It is not an easy thing to do and therefore, to the extent that you do that, I think that is a good
thing. That is why, to the gentleman's question about what this Administration has done that is useful, I think
there's a lot to say on that and that's not from any political sense, but I think a lot of people spent a lot of time
trying to move this ball from here to there. And, as Bill said, it's not something that's going to happen overnight,
but I think there is a lot of pressure on the back end to keep moving it that way. And I think what you do is, you
keep knocking at that door you keep pushing the envelope on that and I think at some point you get through.
Anselmo: We have another press question.
Q: It strikes me that if Israel is allowed to use U.S. launch facilities, the U.S. is going to lose its moral claim
say, if the Iranians or Syrians or Egyptians approach Russia or China or Kazakhstan for the use of their launch
facilities. And I was wondering if the State Department has given you any guidance on that at all.
Senghor: Let me just make sure I understand. The question is: If we allow the Israelis to use U.S. launch
facilities, we lose the moral basis for arguing that other countries cannot do the same. I've not discussed this
particular question with the State Department, and so therefore I can't speak for them. The question of
U.S. launch facilities and who uses them is an interesting one, because, again, it's in the larger context of the
transition away from government-owned facilities to commercial spaceports. So the question becomes: If space
travel and access to space becomes a commercial venture, what is the basis for treating them as if it were a
national security issue versus an airport? So if the Russians when they launch commercial launch competition
want to launch from the Florida commercial spaceport or the California spaceport or the proposed Alaska
spaceport or New Mexico or Wallops, what is the problem with that?
Q: That's not the question. The question is: What happens when, say, Syria or Iran or Egypt approaches Russia
or China or Kazakhstan about using their launch facilities? What happens to the US position as far as
preventing that from happening?
Senghor: I'm sorry I misunderstood your question. What happens if we allow the Israelis to use a U.S. launch
facility? How do we prevent. . .
Q: Right now they aren't using it.
Senghor: I think I understand you. The idea is: However you define bad actors, how do you prevent their access
to third party launch facilities? I would defer on that; I need to consult. How we deal with other countries' access
to third country launch facilities is in the context of a much larger MTCR and proliferation issue. There may
actually be regulations on that; I'm just not familiar with them. So that's a question I'm really not qualified to
address.
Bitterman: If I can comment on that briefly: I think as long as the missile proliferation problem remains, there is
going to be very close scrutiny of any proposal such as the one the Israelis submitted to use U.S. facilities.
Having observed that process pretty closely Orbital Sciences was obviously interested in what was happening
in that policy deliberation process we're convinced that the national security evaluation and missile
proliferation questions were raised very significantly during that process.
I think you raise a very good point: the U.S. can't be seen as being a sponsor of that kind of proliferation, so it's
very important to make the tests as stringent as possible, from both the national security and foreign relations
context, and also from a commercial context as well.
Anselmo: Do we have another press question?
Q: I'm Sam Silverstein with Satellite News. I have a general question to address to the panel at large. Can you
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give me a sense of where you see public support in this country for access to space? Clearly the Mars
Pathfinder mission shows that the public is there and supports or, certainly, enjoys certain activities related
to space. But is there the public support that we need for the continued development of the RLV and other
initiatives?
Claybaugh: I'm not clear on how one measures public support. If press coverage is a measure of public support,
then is the press the public? For who decides what gets covered? I think the issues are narrower than that. The
issue is the cost of space travel. The U.S. government spends, in toto, something on the order of 6 to 7 billion
dollars per year buying space travel NASA and DoD. If one could meet a goal of $1000/lb., then that number
would go down by a factor of ten, and 600 to 700 million dollars per year is a vastly smaller number than 6 or 7
billion. And that alone justifies a pretty significant investment, just on direct payback. I don't know that those are
issues that are directly related to some vast public outcry for lower costs; they're simply efficient use of national
resources.
Fleeter: I'll give you an answer that's not really in my department. I think Goldin has done a good job of
promoting space to the public, and I think that's been one of the great things he has really done as the
Administrator to realize that NASA lives because of the public largesse, so to speak. I think that's a good
thing. I mean, if we don't get out there and popularize our field to the public, then we deserve to be ignored
and if you're ignored, people won't vote for money for you to do those things.
But I think that what people really want is access to space cheap is better, of course and in a way I think that
I what I sense is that a lot of people really want to go into space themselves. Space tourism is something that
people don't like to talk about because it's considered so fringe and so flaky; but hey, if you could go you'd
probably go, and so would most of the people I know. And so I think a lot of undercurrent you know, if you
can't go yourself, then you have an astronaut who goes; and when the astronaut goes, a lot of people live
vicariously through that experience just because they can't afford to go themselves. And kids really live
vicariously through that experience. That's part of the reason we do it: Astronauts go into space; kids love it;
kids are the greatest brainwashers of their parents; and if the kids love it and it stimulates the kid to be
interested in anything other than trash TV, the parents are going to be for it. And if you can't send an astronaut
to Mars, then you send a robot to Mars. That, at least, is still in a sense some kind of human access to space.
But I trace a lot of the interest back the interest in Mars, the interest in the Shuttle and the Shuttle astronauts
to a strong desire on the part of many people to themselves be in space. And cheap access to space, if it
resulted in space tourism, would just be a fantastic driver to what's going on in space.
And the reason I say that it's not really my field is that it's so far away from what we do and also I'm not in this
business so that I personally can go into space; I'm in this business because I like giving people things that they
want. And what I see that almost everyone that I meet wants is that they themselves could go into space. So I
think the public is very interested in access to space, and they're only a little bit less interested in seeing
somebody else get access to space that they don't get, and a little bit less interested in seeing nobody get
access to space except for robots with color TV cameras. And as you step down the food chain, the excitement
on the part of the public you know, once it gets down to "1"s and "0"s coming back from space like we used to
do in the Seventies, pretty interesting scientifically but not very grabbing on network news the interest level
gets proportionately lower.
Senghor: I just want to make a couple of comments.
I take a little different cut at the same problem, but I think it's essentially the same. I think we must make a
distinction between how we want to sell this the public perception in terms of space exploration, which is what
NASA does, and I think that's extremely exciting; that helps versus what's interesting and exciting from a
commercial point of view. Because I'm back to my same point: I think that there really is enough critical mass so
that you can talk about two separate views on this. So that's the first thing.
From a commercial angle, I think it's chicken-and-egg. It's the Churchill quote again: You generate public
support by talking about it in ways that the public understands and gets excited about. I think that, for two
reasons, this is a very exciting area and under-reported, I guess, is the best way to say it. The fact is that
there are two things that make this a very, very interesting area. The first is that the future of information
technologies into the 21st century as far as I can see right now the early part of the 21st century is going to
be based on a space-based infrastructure. It's not happening unless you have the reality of the commercial
satellites that people are talking about. And that's the diffusion of telecommunications with GPS and with
imagery. It's going to create a whole new way that we look at the world. We won't think about it in terms of
space, but it is a reality in terms of what we do with information technologies. It's already true I mean, we get
our television information from that. So what you're talking about is a "quality of life" issue that is dependent on
that.
The second aspect of this is that what you're talking about is the ability for profits big profits. It's the well, this
could be a hot area in the way that computers were hot areas; and in the way that now telecommunications, as
a narrow slice of that information spectrum, is a hot area (not looking at the other downstream pieces of that).
So I think that that particular story that slant on it can coexist very well with the space exploration part of it.
But I think people have to understand that now it's a separate and independent dynamic that will affect our lives
far more. And that's something that will touch people's lives that is something that people can do now in a way
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that you can get excited about how you sell this kind of thing.
Anselmo: I'm going to try to sneak one more question in here. I'm not going to get to every question,
unfortunately there's a lot of really good questions, and I apologize to those people whose questions we did
not get to. The question here is: How can grants be provided to spur the development efforts of small
companies with high-risk, high-return concepts? Should these grants come from the government or should
they be from the legislative sector, such as tax benefits to sort of attract private financing? Bill?
Claybaugh: As you might imagine, the whole question of what the government can do is one that I've had to
spend a good deal of time looking at. At one level: If it's research or technology, those are called NASA
Research Announcements, and they come out regularly. Those associated with the Reusable Launch Vehicle
program come out of the Marshall Space Flight Center, and can be found on their home page on the Web. And
there's a lot of technology to be bought. Within our office, we are looking at the generation after the next
technology level at technologies that will even more dramatically change the potential cost of getting into orbit
than the X-33 class of technology will.
In the broader question of what the government can do to encourage private investment: I used to be a venture
capitalist. A venture capital firm typically gets 40 to 50 percent per annum compounded. If you've got a minimum
investment and invest in a venture capital fund today, you personally can get those kinds of returns: 50 percent
per year, compounded year after year for a decade. That's what the American economy provides as a return to
people who are willing to take venture-capital kinds of risks. To my knowledge, no investment in space
transportation assets no commercial investment in them has turned a profit, period. Our economy is a rich
one; biotechnology and software those are places where enormous amounts of money can be made, and
professional investors make that kind of money day in and day out. This is not a business opportunity for that
sort of investor. The returns are not there. To date, no one Orbital Sciences has invested in two commercial
launch vehicles; Lockheed has two; there are the PAMs developed by McDonald-Douglas go down the line
and you cannot find any example of a commercial investment in space transportation which returned an
economic profit. It is almost literally the case that national economy would have been better off if those
investments had been put into Treasury bonds. More money would have been returned to the nation's economy.
Thatis just a fact, and it's a fact that is known to all the professional investors that I work with. And this is
therefore not an area that is of great excitement to them.
Now, there are ways finance being finance to get leverage and create high financial returns even though
there is little or no economic return. And those sorts of deals can be done. Orbital Sciences, frankly, did a very
good job of creating just that sort of environment with the original TOS funding. So one can create opportunities
where a venture capitalist can make a financial return even in the absence of an economic return. That sort of
thing can and has been done. But it's crucial that we realize, in terms of investment opportunity, that our
economy generates fabulous investment opportunities and in that context, ours has not to date proven itself to
be a business which is competitive against those kinds of terms.
Anselmo: Okay, thank you. Charles is ready here; lunch is coming up. I want to thank all our panelists for
providing all their valuable insight.
Miller: Thank you, Joe and everybody. We're going to break for lunch here.
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What is X?, or X Versus Y
The Effective Integration of New Technologies into Advanced Aerospace Vehicles
A Commentary by Henry Vanderbilt, Space Access Society
at the Cheap Access to Space Symposium
July 21-22, 1997, Hyatt Regency Hotel, Capitol Hill, Washington, D.C.
(I'd like to thank the Space Frontier Foundation and NASA for giving me this opportunity to present Space
Access Society's position. The opinions that follow are not necessarily those of the Foundation or NASA
although they should be).
X-vehicles are hot in the space business these days
fashionable and fundable. It should come as no surprise then
that all sorts of people are tagging their pet projects "x" in hopes
of jumping onto the funding bandwagon. But while federal
funding for space X-vehicles is available, it's far from unlimited.
We have a strong interest in making clear what is and isn't
actually "X", what we will and will not support the government
doing with the available funding.
One pseudo-X example is the X-38 ACRV, a "Y" vehicle in X
clothing, a routine operational mission-flying vehicle project
disguised as an advanced experiment. A variation on this theme
is "x" projects where operational mission requirements are mixed
willy-nilly with experimental goals, as with the original X-34. Such
confusion between experimental and operational goals fed to the
original X-34 project's demise, and causes ongoing problems for X-33.
Y-vehicles are prototypes of ships intended, with minor production refinements, to carry operational payloads
and perform operational missions. (Repeat after us: "Prototypes" are NOT X-vehicles.)
OK, you say, so how would we define a genuine X-vehicle? We're glad you asked... New aerospace vehicle
technologies can be taken only so far in computer simulations and wind tunnels and test stands. There comes a
time when the only way to pin down the remaining uncertainties is flight test the sims and ground tests are
good and getting better, but there are always conditions the sim only approximated, interactions the ground-
testers didn't anticipate.
The wrong way to flight-test new technologies is to bring together a whole bunch of them directly into a project
to build, say, a prototype airbreathing-to-orbit spaceplane (NASP) or (hypothetical example of course) an SSTO
replacement for NASA's Space Shuttle. In theory this approach saves time and money skip all the
intermediate flight-test data-gathering and debugging, and go straight to a prototype as close as possible to the
final operational vehicle.
There's a problem with this approach: the relatively large remaining uncertainties in the partially tested new
technologies force the designers to use large safety margins, because the resulting vehicle MUST work, reliably
over many flights it's costing billions, it has a high political profile, and it has missions it MUST fly. High risks
for high payoffs are not allowed.
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The large margins translate to heavier subsystems. The heavier subsystems multiply more than add: heavier
tanks require heavier support structures require more powerful engines require larger tanks require... More
expensive materials and more exotic manufacturing techniques are dragged in to try to contain the weight
increases. The vehicle size and cost balloon, the project bloats and stretches out, the final result is at best a
marginally operable kluge.
As we said, a hypothetical example only. The right way to flight test new technologies is, well, to flight test 'em.
An X-vehicle is an ad hoc flight demonstrator, designed to find out as quickly and cheaply as possible what
happens when one or more new technologies are pushed to their limits.
X-vehicles can range in scope from a new rapidly solidified unobtainium TPS sample bolted onto a sounding
rocket for a few millions, to a package of mostly existing plus a few new technologies bundled into an integrated
flight test vehicle for a few hundreds of millions. Either way, X-vehicles have no missions but building experience
and returning data, and no payloads but instruments and in some cases pilots.
X-vehicles are essentially disposable you don't waste resources on production engineering, you don't
include much systems redundancy, you build several copies and count on breaking one or two before the test
program's over. After you've built and flown an X-vehicle, THEN you have the data and experience to design an
operational prototype.
Paradoxically, doing two design-build-fly cycles, X-vehicle then prototype, historically ends up quicker, cheaper
and more effective than trying to compress the process into one giant leap from the ground test labs to an
operational vehicle.
For more information call 800-78-SPACE (800-787-7223)
or send us your comments
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Charles Miller of the Space Frontier Foundation
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For more information call 800-78-SPACE (800-787-7223)
or send us your comments
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