Privatising the race to space

 By Nicholas Newman

It’s been five years since the last Space Shuttle thundered off the pad at Kennedy Space Center and Nasa is turning some of its facilities over to commercial entities. We look at the transition from government launch base to commercial spaceport. Today a range of private companies like developing space launch systems such as SLS, SpaceX, Boeing, Blue Origin, Orbital ATK, virgin Space etc, beginning to compete with the likes of NASA, Roscosmos, Arianespace etc. Nicholas Newman looks at the progress and prospects that have been made by the private sector in the race to space…

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Until recently, government agencies such as Russia’s Roscosmos, America’s NASA and Europe’s Space Agency dominated the rocket launch business. This is unsurprising given the huge costs and risks of sending a rocket into space. Western governments did not themselves design or build rockets, let alone the objects carried into space, but contracted these activities out to private sector companies like Boeing and Lockheed Martin in the US. However, in Europe, the European Space Agency contracted Arianespace, a consortium of twenty of Europe’s aerospace and defense contractors that became the world’s first commercial launch service provider.

The Privatization of space

Russia’s space industry was a pioneer in space and alongside the US, is a world leader. Russia’s companies today are all in the private sector but are descendants of Soviet-owned design bureaus and state production companies. Today, Russia’s space sector employs over 250,000 people and comprises over 100 companies including NPO Energomash, Khrunichev and OKB-1, the builder of the Russia’s Soyuz range of rockets. Soyuz vehicles currently launch the manned Soyuz spacecraft, as well as the unmanned Progress spacecrafts supplying the International Space Station. Commercial launches, marketed and operated by Russian-led Starsem and Europe’s Arianespace companies, use Soyuz vehicles.

In addition, Russian-led International Launch Services (ILS), holds exclusive worldwide rights for the sale of commercial Proton and Angara 1.2 vehicles rocket launch services from the Baikonur Cosmodrome in Kazakhstan and the Plesetsk Cosmodrome in Northern Russia.

In the US, NASA traditionally commissioned major defense contractors to develop, build and provide launch services. However, instead of privatizing its space industry, the US chose the path of deregulation in 2012 and has subsequently diverted NASA funds to private US spacecraft firms. As a result, market leaders Boeing and Lockheed Martin have set up a joint venture, called United Launch Alliance, to offer non-reusable Atlas V and Delta IV vehicles. The lure of space together with its deregulation has attracted new companies dedicated to space, including SpaceX, Virgin Galactic, Blue Origin and Orbital ATK. The billion-dollar Orbital ATK company is, in reality, a privatized version of NASA which has sent up orbiting satellites, launched deep space probes and holds a $1.9 billion NASA contract for flying cargo missions to the International Space Station.

In Europe, under government encouragement, space has offered private sector companies new and exciting long-term business opportunities. While no individual European company was large enough to go it alone, the prospect was sufficiently promising to attract 20 major European aerospace firms and defenze contractors including Airbus, CNES and GKN to form a consortium called Arianespace, which in 2014, claimed a 60 percent share of the global commercial launch market. An Ariane 5 type rocket has been successfully launched 72 times in the last 13 years.

The future of private space travel is still in its infancy, which means there is a long way to go before anyone stakes a real claim to Star Trek's final frontier...

Reasons to privatize

Financial, economic and political factors lie behind the privatization of the space sector. In Russia, the collapse of communism and the financial shock to the state budget caused a shift from the state to the private sector. In the US, cuts to NASA’s budget and the realization that the private sector was capable and more cost effective, initiated the shift to deregulation. This was cemented by the political desire, following the end of the Space Shuttle program, to become independent of foreign space companies and to compete with India and China’s space programs.

An underlying economic factor was the prospect of creating the next Apple, Cisco and Google for, as seen in other spheres, commercialization offered the prospect of faster development. A good illustration of this is the development of the Internet. Had control of the Internet’s technology remained with the US Defense Department, it is unlikely that it would be so universally used as it is today. The diffusion of this technology owed much to private sector investment dating from the late 1980s. Therefore, it is not surprising that major economies are encouraging the private sector to participate in the space race.

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Towards reusable rocketry

Space was traditionally reached by a once-and-only expendable launch system, until NASA’s Space Shuttle program in which the orbiter, which included the Space Shuttle main engines and the two solid rocket boosters, were re-used after refitting for the next launch. Efforts to develop a fully reusable commercial launch system—a launch system which can send a payload into space more than once—are underway.

The case for private sector development of a reusable system rests on cost cutting technological advancement and perhaps even as a step towards kick-starting journeys to Marsfor mining of asteroids and development of a moon base. For example, it costs NASA at least $50 million to send an astronaut on a Soyuz rocket to the International Space Station. This compares very favorably with the annual $750 million to $2 billion cost, depending on the number of launches, of operating the Space Shuttle.

Update on selected players racing into space


Elon Musk’s SpaceX reusable Falcon 9 First stage rocket is a pioneering initiative. The Falcon 9 is the first ever reusable rocket—its first stage is recovered by landing on a barge in the sea. The expected cost of a Falcon 9 launch is around $40 million and 30 percent less on a subsequent flight using previously used Falcon 9 first stage boosters. Thus far, SpaceX has flown 29 Falcon 9 missions. However, the explosion on September 1, 2016, was SpaceX’s second failure in 15 months, and it is now postponing the nine remaining Falcon launches planned before year end. The Falcon Heavy, the most powerful rocket in the world today, could be launched next year if all goes to plan. With contracts from NASA to fly cargo and supplies to the International Space Station and orders from private Satellite firms the rocket failures are not the end of the line.

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United Launch Alliance

Building on SpaceX’s progress in reusability, United Launch Alliance has unveiled plans to build the Vulcan, a new, next-generation launch system, blending its existing Atlas V and Delta IV rocket technologies to allow the engine compartment of the first stage to detach after use, thereby reducing the first stage propulsion cost by 90 percent. This approach would allow for a “bare bones” Vulcan rocket cost of approximately $82 million—roughly half the cost of a basic Atlas V.

Virgin Galactic

Richard Branson’s Virgin Galactic seeks to produce a reusable commercial spacecraft suitable for sub-orbital spaceflights for a variety of customers ranging from space tourists, science missions and orbital launches of small satellites. In October 2014, Virgin Galactic’s fourth rocket-powered test flight ended with the VSS Enterprise breaking up in mid-air shortly after its release from the mothership.

Undaunted, in February 2016, Richard Branson together with Professor Stephen Hawking, unveiled Virgin Galactic’s New Spaceship, VSS UNITY. He commented, “Together, we can make space accessible in a way that has only been dreamt of before now, and by doing so can bring positive change to life on Earth. Our beautiful new spaceship, VSS Unity, is the embodiment of that goal, and also great testament to what can be achieved when true teamwork, great skill and deep pride are combined with a common purpose.”

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In response to the American space sector’s shift towards reusability, Arianespace, in conjunction with the European Space Agency, is working to retain its competitiveness. Ariane 5s will be replaced by Ariane 6s in the 2020s. Engineers are currently evaluating ways to turn Ariane 6 into a partially reusable rocket including using a new methane-fueled engine to plug into Ariane 6’s first stage and a booster recovery system to return the engine to the ground for another mission. “Ariane 6 will reduce the cost of our launchers by 50 percent compared to today,” said Gaele Winters, ESA’s director of launcher programs. Ariane 6’s launch price is forecast to be around $80 million, tailored to deliver up to 7 metric tons—more than 15,000 pounds—to low polar orbits often used by Earth observation satellites.

One thing is for certain, the future of private space travel is still in its infancy, which means there is a long way to go before anyone stakes a real claim to Star Trek’s “final frontier,” let alone reaches it.

about the author
Nicholas Newman
Freelance energy journalist and copywriter who regularly writes for AFRELEC, Economist, Energy World, EER, Petroleum Review, PGJ, E&P, Oil Review Africa, Oil Review Middle East. Shale Gas Guide.