Spacelift Washington: The Future of Space: Part four: A Thriving Commercial Space Now Key to All Sectors

WASHINGTON – With the shifting fortunes of NASA and DoD space programs, only one fact is indisputable as the Bush space team is assembled: the essential space sector is commercial. Whether it be a solution to the vexing reusable space transportation problem for NASA, or how to supply communications satellites for the DoD’s Wideband Gapfiller program, most programmatic answers to civil and military space issues require use of a commercial solution. So now, in the earliest days of the Bush presidency, it is the health of the U.S. commercial space industry that is being carefully assessed, above and beyond the analysis of the desires of each space-going service and bureaucracy.

For its part, the FAA looked at the transportation part of the commercial space industry, analyzing data compiled by the Satellite Industry Association. It found an industry that contributed $61.3 billion of economic activity to the nation’s economy. Moreover, the FAA analysis said that commercial space transportation effected in whole or in part 497,000 jobs generating some $16.4 billion in employee earnings. These areas included launch vehicle manufacturing, satellite and ground equipment manufacturing, satellite services, remote sensing, and distribution industries. Their data’s breakdown looked like this:

• Launch Vehicle manufacturing: $3.5 billion in economic activity, $1.07 billion in earnings, and 28,617 jobs
  
• Satellite & ground equipment manufacturing: $30.9 billion in economic activity, $8.8 billion in earnings, and 270,448 jobs
  
• Satellite services: $25.8 billion in economic activity, $6.1 billion in economic activity, and 186,954 jobs
  
• Remote Sensing: $235.8 million in economic activity, $85.2 million in earnings, and 2,820 jobs
  
• Distribution industries: $873.9 million in economic activity, $265.7 million in earnings, and 8,506 jobs

And this was only the space transportation industry’s impact on the U.S. economy. What is also needed, and most likely goes beyond the scope of the FAA’s mandate, is a similar detailed review of the economic activity generated by all space spending. Still, what the review did not show was a cooling effect in which this industry was contracting in both number of annual launch services contracts and in commercially-sponsored launches.

For the past three years, since 1998 and through last year, space launch has been slowing, not growing as had been predicted in the mid-1990s. Worse yet, a growing over abundance of launch vehicles is leading the industry towards excess capacity issues that can only be addressed ultimately by either explosive demand, or-more likely- contraction of the service providers. With supply meeting current demand, two more launch providers are set to enter the crowded field soon; the Indian GSLV and the Japanese H-IIA. On and on they come, building up the commercial pressures.

A contraction has already been seen in the satellite manufacturing marketplace, with Hughes joining Boeing. Together, that team has been winning satellite contracts in the national security sector that were once the sole terrain of Lockheed Martin. If this trend continues, and accelerates, eventually driving Lockheed out of the satellite building or launch services business altogether, how would that be a good thing for the U.S. commercial space industrial base? After all, wasn’t the 1996 restructuring of the EELV contract aimed at preventing just such an industrial reduction and keeping two manufacturers in business?

On the face of it, having a single large U.S. satellite maker, and a single large launch vehicle builder would seem to reduce competition in the U.S. in a way that would hinder future growth-and current pricing competitiveness. And all the while the industry is struggling, NASA retains the same number of field centers it had at the height of the Cold War space race. But less overall R&D spending. How long can that go on?

The issue of the health of the space industry-including how many rocket engine makers can survive in this climate- will be the subject of Bush’s Space Advisory Board studies, and the newly-minted U.S. Aerospace Commission as they set about their work this spring. Getting answers, and setting long-term fixes, won’t be easy- or cheap. And any solution will still require U.S. domestic space budget stability.
If the administration seeks to really protect commercial space assets, it won’t just have to craft a defensive technology for orbiting satellites.

It will have to start with the industry itself, still on the ground.

Ed. Note: Coming later this week, FAA’s A day in the life of U.S. space

Related Links:

° The Economic Impact of Commercial Space Transportation on the U.S. Economy (Adobe Acrobat), FAA Office of Commercial Space Transportation

° 2001 Quarterly Launch Report – Q1 2001 (Adobe Acrobat), FAA Office of Commercial Space Transportation

° 2000 Year in Review (Adobe Acrobat), FAA Office of Commercial Space Transportation

° 2000 Reusable Launch Vehicles – Programs and Concepts (Adobe Acrobat), FAA Office of Commercial Space Transportation

Articles in the Spacelift Washington “The Future of Space” series:

° Part One: Air Force Space Leaders Prepare for Weapons in Space

° Part Two: The Future of Space: President’s Space Advisory Board to be staffed with outside experts

° Part Three: Commercial Space cooling trend continues

° Part Four: A Thriving Commercial Space Now Key to All Sectors