Thursday, October 16, 2014

Space Money: Brand spaceX

One month ago, Boeing was awarded a $4.2 billion contract, and SpaceX $2.6 billion to begin ferrying astronauts into orbit by 2017. Once each company’s space capsules are certified, the companies will both perform 6 missions through 2023. Completion of those launches is the only way they get all their money.

SpaceX’s involvement—and the fact that a smaller company Sierra Nevada was apparently also a close enough contender that they contested NASA’s decision not to also award them a contract—is highly significant and a new development in how we launch people and satellites into space.

Boeing and Lockheed Martin have heretofore exclusively received government contracts for space work through their joint venture called United Launch Alliance (ULA). It’s widely written that this is a monopoly on U.S. space industry, and that the lack of competition drives up what they charge for their launches. Elson Musk of SpaceX claims he can launch into orbit for under $100 million, while ULA charge $380 million on average.

Another interesting wrinkle is that while SpaceX’s rocket is American made, ULA rely on Atlas Vs, which require a Russian made RD-180 engine.    

Also, politicians with a Boeing or Lockheed plant in their district will have a bias when talking about SpaceX. But there are others who are not on the SpaceX bandwagon, for better reasons than politics.

I suspect that SpaceX and companies like it will continue to play a larger role in the American space presence. When hearing about these companies and their big dreams in the news, we need to keep in mind the fundamentals they are operating under: money, and the realities of the aerospace industry. These companies are not just about space tourism and building hotels on the moon. They are about the government’s space policy (and presumably military space policy). The next Neil Armstorng—if we are to ever have the like—will be a private contractor.   

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