Witnesses Highlight Potential For Profitable Business Models

The Committee on Science, Space, and Technology held a hearing late last week to provide aerospace companies and NASA an opportunity to testify about progress being made toward the goal of establishing a commercial capability to fly humans to and from low Earth orbit and the long-term non-Government commercial market for private launch services.

Emphasizing the uncertainties of this new business model, Committee Chairman Ralph Hall (R-TX) (pictured) said “I think that NASA owes Congress and the laudable companies that are before us today a much more thorough assessment of the situation ahead.  These companies have invested millions of dollars and Congress has committed millions more—it is time for NASA to deliver credible plans and analysis so that we can move forward with more confidence.”
 
Until a commercial crew launch system becomes operational around the planned 2017 timeframe, NASA is reliant on Russia’s Soyuz launch system to ferry American astronauts to and from the ISS.  NASA currently has a contract with the Russians to purchase Soyuz seats at a cost of approximately $56 million per seat through 2013, and increasing to approximately $62.7 million in 2014 and 2015.  In total NASA expects to spend about $1.4 billion if it fully exercises all contracts.  Representatives from commercial companies today said that they will eventually be able to provide crew transportation at a much lower cost.
 
After expressing several concerns, Chairman Hall said, “For all my seeming skepticism, I am willing to be convinced that I’m wrong, and I hope I’m wrong.  I want the private markets to relieve NASA of the cost and burden of building a new launch system for low Earth orbit. In a time of constrained budgets, we must first protect our presence in space and keep the faith with the American people and our foreign partners.”

SpaceX Dragon

Witnesses highlighted the potential for a future profitable market, saying that the market exists, but its size and composition are not yet known. “There is ample evidence of a demand for spaceflight beyond NASA, though it has yet to emerge as a substantial operational secondary market,” said Elon Musk, CEO and Chief Technology Officer of Space Exploration Technologies Corp. (SpaceX).
 
George Sowers, Vice President of United Launch Alliance, said “There is extremely high uncertainty in this market and NASA shouldn’t build its program assuming it materializes.  But if a market does emerge, everyone will benefit:  new jobs will be created and the Government’s prices will go even lower, across both the civil and military sectors.”
 
NASA Inspector General Paul Martin said the commercial human spaceflight industry is in its infancy and the market beyond NASA’s own crew transportation needs is uncertain. “Many of the risks associated with achieving anticipated cost savings are largely out of NASA’s control, particularly in the area of creating non-Government demand for commercial human spaceflight services,” he said.

William H. Gerstenmaier, Associate Administrator for the Human Exploration and Operations Mission Directorate at NASA, acknowledged that relying on commercial crew services may be risky. “Human spaceflight is a very difficult endeavor, and our industry partners will have the responsibility for the full end-to-end system,” he said.  “We cannot guarantee their success; however, we can structure an approach that provides the highest probability of success.”
 
During the hearing, comments and questions by Chairman Hall and other Members of the Committee highlighted how and when NASA astronauts will return to space in an American-built rocket on U.S. rockets, uncertainty of the commercial markets, and the lack of supporting documents NASA has provided to Congress to justify their budget numbers.

FMI: http://science.house.gov