Private Capital Heralds the Second Space Race
“Space, the final frontier” began the memorable title sequence from the “Star Trek” television series.
After decades of stagnation and decreasing government funding following the Cold War, the U.S. space industry has found new legs in recent years due to massive private financing and an increased interest from the Trump administration.
At the forefront of space launch innovation is SpaceX, the Hawthorne, California-based private aerospace engineering and space transportation company founded by Elon Musk, a modern-day Howard Hughes figure, who also heads electric car manufacturer Tesla Inc.
On Feb. 6, SpaceX successfully launched its Falcon Heavy booster rocket, the world’s most powerful rocket, using the same spaceport as NASA’s Apollo missions. The Falcon Heavy demonstrated that it could carry more payload at less expense than its competitors. With the ability to deliver 140,660 pounds (64 metric tons) to low Earth orbit, the Falcon Heavy could carry almost three times the payload of its closest competitor, the Delta IV Heavy built by the United Launch Alliance, according to SpaceX data. To top it off, the three first-stage boosters of the Falcon Heavy are designed to be recoverable and reusable.
The real game-changer is cost. SpaceX advertises that the Falcon Heavy flights cost $90 million per launch, which is a fraction of the $300 million to $500 million per launch charged by United Launch Alliance for the Delta IV Heavy.
The fact that SpaceX is able to support this research and make the technology commercially viable—as a privately funded company—is no small feat.
In the decades following the launch of Soviet satellite Sputnik I in 1957, early innovations in space were sponsored by governments of the United States and Soviet Union. Funding slowed during the years following the end of the Cold War, while the spaceflight industry was dominated by agencies such as NASA, its counterparts in other countries, and defense contractors such as Boeing and Lockheed Martin.
But in the last 10 years, SpaceX has become a major innovator and contractor for governments and private institutions as a platform to launch satellites cheaply; it’s already successfully launched rockets to carry satellites and supply the International Space Station (ISS). The company was initially born out of a desire by Musk to send humans to Mars, and in recent years it has pioneered reusable rocket technology to become a price leader among space launch companies.
And Musk isn’t alone. The world’s wealthiest man, Jeff Bezos, has his own rocket company Blue Origin, and entrepreneur Richard Branson also has plans to commercialize space travel.
Private capital from these billionaires, along with increased investment by incumbent aerospace contractors such as Boeing and Lockheed and countries such as China and Russia, have ushered in a second space age.
Beyond Falcon Heavy
Musk told reporters in Cape Canaveral, Florida, that the “Falcon Heavy opens up a new class of payload … it can launch things right to Pluto and beyond, no stop needed,” according to Space.com.
Musk predicts the next launch of the Falcon Heavy to be in the next three to six months, depending on how quickly the company can produce the airframe of the center core. To anyone who follows Musk’s other company, Tesla, this can sound concerning, especially given that the center core of the Feb. 6 launch was lost.
Two more Falcon Heavy flights are planned for 2018, one to launch a communication satellite Arabsat 6A for Saudi Arabia, and the other a test flight for the U.S. Air Force.
Beyond the Falcon Heavy, SpaceX plans to deliver NASA astronauts aboard its Dragon spacecraft on the smaller Falcon 9 rocket. So far, all of the Falcon 9 flights have been cargo-only.
Musk announced in late 2017 plans for the ambitious Interplanetary Transport System, code-named BFR, where the “B” and “R” stand for Big and Rocket, respectively. “All our resources will turn toward building BFR,” Musk told the audience at the International Astronautical Congress in Adelaide, Australia, in September 2017.
The BFR is a giant booster rocket with the ability to carry a large spaceship with potentially hundreds of people, to eventually send humans to the moon or Mars.
The New Space Race
Space is quickly becoming a focal point for governments and the private sector.
“Rapidly falling costs are lowering the barrier to participate in the space economy, making new industries like space tourism, asteroid mining, and on-orbit manufacturing viable, and growing the existing flagship communications satellite services business while taking exploration deeper into space,” Goldman Sachs analysts wrote in an April 2017 research note titled “Space—the Next Investment Frontier.”
The key players in the space industry belong to three main groups: launch providers, satellite manufacturers, and operators. There are additionally emerging industries of space tourism, space militarization, and deep space mining.
Launch providers—the backbone of all space endeavors—are attracting the most investment. This market is dominated by SpaceX, United Launch Alliance (a joint venture between the aerospace arms of Boeing and Lockheed Martin), and European launch service provider Arianespace SA. Bezos’s Blue Origin, which is developing its own reusable orbital vehicles, is an emerging player.
Blue Origin last month successfully conducted a test fire of its BE-4 rocket engine expected to power its upcoming “New Glenn” rocket. The New Glenn rocket, which has a slightly smaller payload than the Falcon Heavy, is expected to launch in 2020.
The space market is estimated to grow from $339 billion today to $2.7 trillion by 2045, according to an Oct. 30, 2017, research note by Bank of America. The bank estimates that over $16 billion has been invested in space-related startups since 2000, with $2.8 billion invested during 2016.
The influx of private capital coincides with the Trump administration’s plan for NASA to focus its research beyond low Earth orbit. President Donald Trump’s NASA Transition Authorization Act signed last year directs the agency to transition away from funding the ISS to focus instead on the development of deep space exploration and potentially returning humans to the moon.