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SPACE TRAVEL: BRINGING COSTS DOWN TO EARTH
NASA should give startups room to maneuver

Feb. 02, 2004
By Otis Port
www.businessweek.com

Mars or bust. That's the banner that President Bush wants to run up the White House flagpole. Establishing an outpost on Mars is a fine goal -- if you worry about the sun exploding and toasting life on Earth in a few billion years. But for now, avoiding the "or bust" is the challenge.

A decade ago, NASA calculated it would cost close to $500 billion to head back to the moon as a stepping-stone to Mars. Today, the tab could top an astronomic $750 billion. But taxpayers would get handed a far smaller bill if Washington made some long-overdue changes. Since man last set foot on the moon in 1972, NASA has enjoyed a monopoly on U.S. manned space missions, doling out contracts to its aerospace cronies. As a result, the cost of putting people into orbit is about the same now as 30 years ago -- roughly $10,000 per pound, although cheaper commercial launch vehicles are available.

To get more boost for everyone's buck, NASA should gracefully exit the space-ferry game and get back to the future of exploring new frontiers. The agency is like a former Olympic athlete gorging on potato chips and beer while watching videos of past glories, says Rick N. Tumlinson, founder of Space Frontier Foundation, a group that avidly promotes opening up the space business. Getting off this planet, he adds, "will never get cheaper if the government stays in control."

Last December, two small companies showed what they can do on a relative shoestring. To celebrate the 100th anniversary of the Wright brothers' flight, Space Exploration Technologies Corp. (SpaceX) trucked its new Falcon I rocket from El Segundo, Calif., to the Smithsonian Institution. SpaceX designed and built the seven-story-tall rocket in the two years since it was founded by Elon Musk, who made a mint as co-founder of PayPal Inc. A bigger, five-engine rocket is due next year. His investment so far? Less than $100 million. And SpaceX has signed contracts to loft satellites at a cost of $1,500 a pound. That's one-fourth the rate for the cheapest U.S. "heavy-lift" launcher -- and one-sixth the cost of shuttle launches.

Last month's second milestone was reached on the West Coast, where a small, private space plane thumbed its nose at NASA. On Dec. 17, a rocket-propelled plane dubbed SpaceShipOne zoomed to 68,000 feet (just under 13 miles) over California's Mojave Desert. How? By hitching a ride on a jet called the White Knight for the first 48,000 feet. Thirteen miles high is only one-fifth of the way to space, but the plane might have gone all the way if its creator, Scaled Composites LLC in Mojave, had had permission for more than a 15-second "burn" of the rocket engine. Scaled Composites is run by Elbert L. "Burt" Rutan, the standoffish designer of the Voyager plane that circled the world in 1986.

Getting astronauts and tourists into space on the cheap is the notion behind a privately sponsored race with a $20 million reward. Announced in 1996 by entrepreneur Peter H. Diamandis, the X Prize is modeled after the $25,000 Orteig Prize that enticed Charles A. Lindbergh to fly solo across the Atlantic in 1927. To win the X Prize, a privately developed spacecraft capable of carrying three people must soar to 62 miles, then pull off a repeat within two weeks. That would show the plane's ability to operate like an airliner -- and potentially make space travel almost as routine as air travel has become since Lindbergh's feat.

Rutan is one contender for the X Prize, and there are 26 others from seven countries -- several financed by computer and software whiz kids. Paul G. Allen, who made billions by co-founding Microsoft Corp. (MSFT ), is Rutan's sugar daddy. And Armadillo Aerospace in Mesquite, Tex., is backed by video-game millionaire John Carmack, creator of Doom and Quake. Still, most X Prize entries have been built "on budgets that wouldn't pay for one NASA viewgraph study," says Henry R. Vanderbilt, executive director of Space Access Society, a Phoenix group that advocates privatization of space.

Not all space wannabes are vying for the X Prize. Another Mojave outfit, Xcor Aerospace, hasn't entered the race but is flight-testing a plane that could offer the ultimate roller-coaster thrill: suborbital space hops. And SpaceDev Inc. (SPDV ) in Poway, Calif., has developed a new rocket engine -- the one that powers SpaceShipOne.

There's no telling what such newcomers could achieve if Washington were to encourage private enterprise. Already, the entrepreneurs have been showing up NASA and its heavyweight contractors, says James W. Benson, the ex-software entrepreneur who founded SpaceDev. NASA's attempts to come up with something better than the aging Space Shuttle "have been billion-dollar boondoggles," he notes. These started with the National Aero-Space Plane in the 1980s, then went through a series of hyperfast X planes -- down to the Orbital Space Plane.

NASA says it is trying to learn from the startups. But early on, the agency painted itself into a corner by currying political support with assurances that manned space flight could be virtually as safe as airline flight, says Vanderbilt of Space Access. That's why many NASA systems sport triple failsafe features. Even some NASA allies think the agency overplayed safety. Space is risky, notes Elliot G. Pulham, president of the Space Foundation in Colorado Springs, Colo. "But the American people understand -- probably better than some politicians -- that this risk is worthwhile."

So NASA now has another space race on its hands, this time with a bunch of nimble companies eager to commercialize space. "There's money to be made with cheap space transportation," insists Vanderbilt. Apart from tourism, the moon holds new sources of energy, and asteroids have huge deposits of precious metals. When private space planes begin poking into space, warns SpaceDev's Benson, "the government won't be needed anymore." That's what a little competition can do.

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