Commercial Space
Part 4 of a 7 part series
Part 1: On The Proposed NASA Budget
Part 2: Understanding Current NASA Structure: Space Race to the Shuttle
Part 3: Fundamental Problems with the Shuttle, ISS, and Constellation
The thing most are familiar with when it comes to commercial space is Virgin Galactic, built on the success of Burt Rutan's SpaceShipOne. Virgin Galactic is a nice little commercial venture that hopefully will kick off real space tourism.
Who you should really be thinking about when it comes to commercial space applications, though, is SpaceX.
SpaceX has successfully put a satellite in orbit with their designs, and is pretty much who NASA is talking about when they talk about commercial human access to the Space Station. Also on this docket is Orbital Sciences Corporation, which is based in Virginia, who will be providing unmanned resupply missions to the ISS. To understand why SpaceX and Orbital are so exciting, you have to understand the current state of rocketry today.
First thing to understand is that the field of launch vehicles is pretty sparse. By launch vehicles, we are talking about vehicles which have successfully placed a payload into orbit. Technically, SpaceShipOne and the next generation of that technology which will be applied by Virgin Galactic don't make this list, because they are sub-orbital vehicles, i.e. they don't reach sufficient velocity to reach stable orbit, they just fly into space but then fall back down Earth's gravity well.
The list of countries with this capability speaks to how sparse this field is, though to be more accurate you should group Soviet heritage systems together (the Ukraine also has access to some Soviet design, which will be interesting if the Ukraine joins the EU). You also need to talk about tiers, as a few countries have gotten one or two small payloads to orbit, but do not represent comprehensive space programs. So, first tier, there are the Soviets (Russia and the Ukraine), the US, China, Japan, the EU (through ESA) and India. Second tier, you have Israel, which has launched a handful to orbit, and Iran, which has launched a single payload. Third tier are countries that haven't had a successful orbit insertion, but have vehicles that are capable but not proven: Brazil, North Korea-- and the South Koreans have a project (though they're collaborating with the Russians on theirs). Talking about man-capable systems, the list is shorter-- that falls to the US, Russia, and China. India has an active program, theoretically they will achieve human space flight sometime around 2016. The EU has a man-capable system on the books slotted for the 2020's, but hasn't really started any work on it.
We're talking about the American space program, though, so let's talk about American capability. There is of course NASA and the space shuttle. The Shuttle is really the only launch vehicle operated directly by NASA at this point, and is the only man-capable launch vehicle still in US operation. NASA satellites tend to launch on either commercial or foreign-partner rockets.
For domestic commercial platforms, you're really talking about a handful of companies. For a very long time, American domestic commercial space platforms were limited pretty much to the Atlas and Delta family of rockets. Boeing and Lockheed have a consortium they refer to as the United Launch Alliance (ULA), which operates these families of rockets. These families of rockets weren't always Lockheed and/or Boeing, but Lockheed and Boeing are the companies that emerged after a ginormous consolidation of aerospace defense contractors in the 90's. Sometimes they contract to ATK for booster rockets, ATK itself being a smaller consolidation of some older companies.
The trouble with the Delta and Atlas families is that they are old technology, for the most part. They have been updated slightly with each build, but at a fundamental level, they represent a design approach stretching back to their original design-- the Atlas family dates back to the 50's, and the Delta family to the 60's. They both represent technology that was originally put to use in ICBM technology-- it's no mistake that they were built by defense contractors who were also building the ICBMs.
The reason the US has stuck with these families comes down to rocket reliability. Designing new rockets is very hard. In fact, the majority of new rocket designs are failures on their first few launches, because it takes a few tries to work out all the kinks. That means that you have to have the cash reserves to eat these losses, which means you need customers with payloads they're willing to risk (basically, not many). From there you, improve your design and operations before you have a rocket that is capable. Even if your design were successful from the first launch, it would still be very, very expensive. Which is why the Defense contractors building ICBMs already had an edge on the market; they had the investment in infrastructure mostly already, the personnel, plus they had big fat cash reserves from their nice big fat defense contracts.
For a long time, in what commercial market existed for launch vehicles-- communications companies, defense contracts, NASA contracts, and foreign investment-- reliability of the rocket was a big factor. You don't want to build a satellite that costs tens or even 100's of millions of dollars and then have it blow up on the launch pad. Which meant that throughout the Cold War, these two families of rockets were the go to guys. Especially towards the end of the Cold War, there were a couple attempts at getting new rockets off the ground, but mostly these efforts fell apart before they could produce anything, and the few companies who did make it to their first launch fell apart after the first launch failed. Rocket failures are big giant explosions-- they're pretty dramatic. It makes investors antsy.
It wasn't until the late 80's that the Delta and Atlas families really started to face challenges in the market which they dominated. This pressure started to come from the European Space Agency's Ariane family of rockets, which by the end of the 80's were pretty established. Then the Cold War was over, and suddenly the former Soviets were on the market, and desperate for cash flow. In the 90's, the Indians also started showing up (the Indian Polar Satellite Vehicle, with a payload of 3500 kg, launches for $17 million USD to Low Earth Orbit). The Japanese started hitting the market-- their main rocket was a derivative of the Delta family of rockets, but it was still cheaper for some things. This pretty much meant that foreign customers stopped coming to the out-dated and costly market for American commercial rockets. In fact, even the Pentagon was getting sick of it for their projects. They started looking for cheaper domestic partners for defense delivery.
Who ended up filling the Defense Department's gaps was Orbital Sciences. Orbital was the first company to successfully put something into orbit launching from a carrier aircraft, a vehicle called Pegasus. After success with that, they got funding from the Defense department to try to do the same from on top of ICBM launchers; the Minotaur and Taurus were what followed. Minotaur is basically a Pegasus on top of a Minuteman missile, while Taurus is multiple Pegasus stages on top of a Peacekeeper rocket (I am simplifying a bit for brevity).
In the 90's, after the Cold War was over, a LOT of sharing started to happen, between the Russians, the US, the Europeans, India and to some extent Japan. During the Cold War, there was this wall of secrecy, especially with the Russians, but to some extent foreign partners too. The Europeans were less trusted than the Japanese, because the Europeans had less in the way of export control-- the fear was that Russian spies could get American rocket science by stealing it from Europeans if we shared with them. That's why we helped the Japanese build a Delta variant, while we left the Europeans on their own to build up from French designs. The Indians were pretty much still out in the cold, and to some extent still are, though the Russians have shown a willingness to work with pretty much anyone (the Russian Space Agency is desperate for cash). But after the Cold War, a lot of those barriers came down. In the US, that has meant that we suddenly got a lot of the Russian data. The aerospace field suddenly had a lot more access to the impact of certain design choices, and we could start to understand how foreign counterparts were doing rocketry for cheaper than most US endeavors.
That's what kicked off the X-Prize, because foreign success had shown that it was possible for a sufficiently sized and disciplined commercial operation to produce a rocket capable of sub-orbital flight for much less than the defense contractors could offer. The X-prize attracted a lot of investors, as the commercial space industry was starting to take off in the late 90's. There were more foreign customers as more countries sufficiently industrialized to support companies with needs for communication satellites, and desires for their own defense-oriented satellites. GPS was starting to take off, and of course there was satellite radio, but more importantly it was vital to extend bandwidth of communications satellites for the explosion of the internet. The idea of space tourism was beginning to take root. A lot of people were bringing the money they made from the Internet Bubble to compete in the X-Prize competition.
Thing was that after a lot of investors got involved, some of them started to see a different possibility: if they were building the next generation of rockets, and those rockets were cheaper and more efficient, then they could knock the current Defense contractors out of the private market, and start picking up defense contracts. That's oodles of cash, because those government contracts are meaty; in fact, if they were cheap enough, they could reclaim some of the global market from the Russians, ESA, India, etc.
Burt Rutan eventually won the X-Prize with SpaceShipOne, which took the Pegasus approach of launching from a carrier aircraft. Virgin picked them up to start the Virgin Galactic project, and chose to focus on space tourism.
SpaceX wasn't really founded for the X prize, though, despite it's name. It formed far to late to really compete for the prize. It was formed by PayPal co-founder Elon Musk, one of the X-Prize board of trustees. It's probably more accurate to say that Musk saw an opportunity to reduce costs in space access costs by technologies that were begining to emerge from the X-Prize competition.
The X-Prize competitors produced a fair amount of viable rocketry hardware; it was just that most of it was geared at sub-orbital flight and few of the competitors had really turned an eye to reaching orbit insertion capability. The buisiness plan of most X-prize competitors looked like this: a) Win X-prize with sub-orbital rocketry, b) develop technology from (a) to turn around profits through space tourism, c) use money from (b) to develop orbital capability, d) use (c) to enter conventional space access market and expand space tourism, (e) profit.
SpaceX chose to just skip the X-Prize and space tourism markets and just enter the commercial space access market directly, developing a straighter path to reduced cost-to-orbit, targeting a reduction of costs by a factor of 10. To be fair to the X-Prize companies, they needed those interim steps because they simply didn't have the capital to skip right to the conventional space access market, and hence they needed to make big bucks off of space tourism to have the financial backing to get into the orbital space market. Space-X was possible only with Musk's backing from the fortune he made co-founding PayPal, but with it, SpaceX had the financial backing to bring a new rocket directly to the orbital market.
Meanwhile, a year before SpaceShipOne won the X Prize, the Columbia disaster happened. NASA was starting to come to terms with the reality that the Space Shuttle program was going to have to end. For a long time, the Shuttle was inoperational while they figured out what had caused the disaster. It was decided that the Shuttle program would end after the completion of the ISS, so that NASA would have the funds to complete the Constellation program. NASA was starting to look at a period of at least 3 years, possibly even double or more of that, where there would be no US-based human access to space. In 2005, they announced the COTS program, which was designed as a funding vehicle for investing in commercial US access to the ISS. The idea behind COTS was to contract re-supply missions to the ISS out to the developing commercial space access companies while NASA focused on Constellation; eventually through a competitive bidding process NASA could develop a domestic commercial contractor for such that could provide the capability for a lower cost.
By this point, SpaceX and a few other companies already had some customers on the books. SpaceX had a Malaysian project, and a few defense contracts (remember, the American military was hungry for cheaper commercial access for defense satellite operations). SpaceX entered the bidding for COTS, and emerged as one of two winners of the COTS program with their Dragon design. In 2006, they were selected as one of six semi-finalists. Also on that list was Orbital. Later that year, SpaceX and another company by the name of RocketPlane emerged with NASA contracts. RocketPlane failed to meet financial benchmarks, so in 2007 NASA cancelled that contract and held a secondary competition, which Orbital won in 2008, beating Boeing on being both cheaper, and bringing a NEW launch vehicle, the Taurus II, to market. Also in 2008, on the SpaceX side, the rest of the PayPal mafia, who by this point had also made big money on Facebook, also got involved, settling any concerns about SpaceX's investment capital. SpaceX rolls deep in the money of people who made fortunes from the internet.
That's where things were in 2008. Which brings us to the Obama administration.