The Buzz

Why America’s Space Launch Must be Competitive

The Sept. 1 pad explosion that resulted in SpaceX losing a Falcon 9 rocket and the associated commercial communications satellite may have been frustrating to those responsible for the mission or financial costs, but looking at the data and trend analysis associated with space launches gives a reason to have confidence that SpaceX will successfully return to space with a launch on Saturday, Jan. 14. Moreover, there should be broad encouragement for such a fast and robust recovery in that such a highly adaptive and efficient space launch company (or two or three or five) is just what this country needs. The U.S. (to include both government and private industry) needs a competition driven launch industry wherein a healthy free market rivalry brings down cost, promotes innovation, and expands market opportunities. Without competition, the U.S. would continue to face stagnant launch system development, shoulder increasing costs, and accept limited access to space.

Putting people and satellites into orbit around the earth has been, historically, very expensive. What’s more, until 2012 there was very little market incentive to lower costs. However, in this decade new companies like Blue Origin, Orbital ATK and SpaceX created a new market incentive by forming themselves as privately funded companies seeking to join the space launch sector. Before 2012 NASA’s traditional launch partners, Lockheed Martin and Boeing (which merged their launch sectors in 2006 to form United Launch Alliance), were the only private sector U.S. companies to receive government contracts as a launch service. While ULA can proudly point to its perfect launch record, until SpaceX entered the market in 2012, the joint Boeing and Lockheed venture presented static launch vehicle designs and either flat or rising cost curves.

To place cargo in low-earth orbit, SpaceX currently charges $4,653 per-kilogram, Orbital ATK has a medium rate of $28,000 per kilogram, ULA charges $14,000-$39,000 per-kilogram , and finally, the cost to use Russian launch systems between 2006 and 2018 is estimated to be $3.4 billion for 64 total seats to ferry astronauts to and from the International Space Station. What’s more, in a study conducted by NASA to estimate the cost to develop the Falcon 9 launch vehicle using two different approaches (traditional NASA environment and culture approach and a commercial development approach), NASA assessed that the commercial cost was considerably less than anything the NASA culture/environment could have produced. In NASA’s research, they estimated that SpaceX could produce the Falcon 9 for $443 million compared to NASA’s $1.38 billion. Because of this innovative and competition driven strategy SpaceX, at the tender age of 14, has already been awarded $10 billion in contracts from both the government and private industry despite the launch failures SpaceX has experienced along the way.

This is a good thing. It shows the market’s trust in the commercial sector broadly and SpaceX specifically, and there is hope that other smaller commercial companies can join the competition. Despite the Sept. 1 anomaly, SpaceX still has a stellar (pun intended) record. According to defense analyst at Forecast International, SpaceX’s reliability with the Falcon 9 is still 93 percent compared to the industry average of 95 percent. Let’s also not forget that SpaceX is the only organization to launch and land a booster stage for the purpose of reuse not once, but six, times.  Bottom line, launching a rocket into space is highly complicated but if the failure is met with a persistent determination to innovate and compete, the market can bear their occurrence.   

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