Biggest Bailout In History

guest blogger john hare

I have not said much on the commercial take over of NASA orbital deliveries, so I thought I would lay out the timeline that I see happening.

Commercial space will start sending up astronauts to ISS in 2016 after $16B-$20B in development costs.

Commercial space will get a bit cocky by 2021 and mistakes will cause accidents that kill ten percent of the riders that year. The funding of $6B-$8B a year until that point will be increased for a few years to address the problems that caused the accidents while no commercial vehicles fly astronauts for a couple of years.

From 2021 to 2038, commercial space will continue to be overpriced and under performing to the point that the military redevelops it’s own launch capability in the national best interest. People with real commercial payloads find other providers, even foriegn ones.  Almost frantically NASA explores other means of getting commercial companies to perform with a different focus every two to four years with a couple of billion to each failed attempt in addition to the $6B-$8B a year sent to the ‘commercial’ launch providers.

In 2039 additional accidents will cost the lives of twenty percent of it’s riders that year. The government  finally realizes that the current crop of ‘commercial’ companies won’t get the job done and initiates a new program with new commercial companies to get the job done right and get back the capability before  had before it started down the commercial path.

The commercial companies continue to get $6B-$8B a year to launch even while they are being phased out in favor of the new new commercial companies. In 2045 the government learns that the new new crop of ‘commercial’ launch companies have screwed up even worse than the old new launch companies and decides to shut them down and eat the $18B that they collected for their paper studies with no real hardware to show.

During all this time the commercial companies have built up a lot of political power and the shut down attempt becomes a very long drawn out fight in congress and the press.

Substitute the word Shuttle for the word commercial in this post and back date everything 35 years with costs adjusted for inflation at 2% anually and you have the NASA human spaceflight operation for the last thirty years.

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I do construction for a living and aerospace as an occasional hobby. I am an inventor and a bit of an entrepreneur. I've been self employed since the 1980s and working in concrete since the 1970s. When I grow up, I want to work with rockets and spacecraft. I did a stupid rocket trick a few decades back and decided not to try another hot fire without adult supervision. Haven't located much of that as we are all big kids when working with our passions.

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22 Responses to Biggest Bailout In History

  1. Ian Woollard says:

    LOL. An instant classic!

  2. There’s not enough manned spaceflight traffic from the US to the ISS to support more than one manned spaceflight company. And if the people and Congress finally decide to end their support for the ISS program before 2020 then these private companies will be doomed.

    The emerging private manned spaceflight companies need to focus on space tourism and launching private space stations into orbit as tourist destinations. Polls have shown that 7% of those wealthy enough to pay $20 million to fly into space would do so. That’s 7000 people out of 100,000 super wealthy people world wide. Even if only 10% of that number flew into space every year, you’d probably have to launch nearly 200 flights annually to accommodate such numbers. That’s a lot more than 3 to 5 manned flights to the space station every year from US soil.

    But there are probably hundreds of millions of people in the US that would probably be willing to spend a few dollars every year for a chance to fly into space through a space lotto system and probably billions of people world wide who would like to do the same. So a few billion dollars a year generated for space tourism from a lotto system could add 10, 20 or more manned flights per year for private commercial companies.

    The private commercial companies need to continue taking the free money that they’re being given by NASA for their development with a smile on their faces and focus on developing reliable space craft that can safely take tourist to and from orbit and deploying space stations so that their customers have some place to go.

    The real money is in space tourism– not government contracts.

  3. mike shupp says:

    Very funny, but at which magic moment do you think in retrospect NASA should have given up the Shuttle?

    Bear in mind, limiting NASA to earth orbit and shuttle has been the policy of 5 of the last 8 eight presidents, and limiting NASA’s budget to basically keep it in earth orbit has been the practice of the last 8 presidents and the last 20 Congressional terms.

    So, what is the occasion on which a NASA Administrator should have gone to Congress or the White House and said “We can’t continue. Time to pull the plug”? And should the idea have been to kill off just Shuttle, or the entire manned space program? And what exactly should Congress or the President have decided to do in response?

  4. john hare says:

    The plug should have been pulled before funding of the development if it wasn’t going to be done right in the first place. My point here is that commercial is going to have to really stink to be worse than the known history of the Shuttle and other recent NASA HSF efforts.

  5. Jonathan Goff Jonathan Goff says:

    I think that the post Challenger standdown would’ve been a reasonable time to retire the shuttle. By that point it was obvious that:

    a) The shuttle was never going to be physically capable of the flight rates originally predicted
    b) With commercial and military satellites removed from the Shuttle, there was never going to be enough flight demand to justify the cost of the Shuttle

    If they had at that point said “now that we don’t have the military requirements or the commercial requirements any more, let’s retire these and go for a smaller, second generation system using everything we’ve learned” we might have been a lot better off.


  6. mike shupp says:

    John Hare — it became obvious that Shutlle was not going to be “done right” back about 1972, when NASA redesigned the thing to satisfy the USAF, and OMB started calling for program R&D cuts and a stretched out program, deliberately chosing higher operational costs because they were postponable.

    Jon Goff — I can imagine a NASA Administrator arguing in 1986 that Shuttle had failed and was not going to be successful. I can’t imagine one doing that and staying in office for more than 48 hours. I also can’t imagine the White House and Congress agreeing to a second generation shuttle — the likeliest outcome would have been a new Administrator pledged to continue “the President’s bold and inspiring vision.”

    Bear in mind, neither in 1972 nor 1986 was anyone planning on keeping Shuttle operational through 2010. Virtually everyone expected that sooner or later a President was going to call for an improved vehicle (Orient Express, anyone? NASP?). But it never happened, and NASA’s efforts (X33, etc) to develop something else always got trashed once it was clear that the President/OMB/Congress weren’t interested. Yes, shuttle was disappointing, but it was _there_ and it was good enough to satisfy the government, good enough to prevent competing launch vehicles appearing, until the AF explicitly decided that they should push some EELVs along, not because they expected to save money, but because they simply didn’t want to risk being dependent on shuttle.

    I think both you guys are comparing NASA to say Thomas Cook & Sons, Ltd., and arguing that “If NASA had been run like a _proper_ business from the start, we would have been spared all this nonsense.” Let me suggest a better comparison is with the US Coast Guard — another neglected government agency which limps along from year to year on an inadeuate budget, becoming visible (and thus truly useful) at roughly 30 years intervals.

  7. Archibald says:

    Excellent post Mike Shupp. James C. Fletcher had an important role in the decision, not only to build the shuttle (1972) but also to bring it back to flight after Challenger (1986).

  8. john hare says:

    The new direction is comparing NASA to Thomas Cook & Sons, Ltd. The timeline I laid out is the performance to match known Shuttle history. If it really is that bad, the plug will be pulled well before the Challenger equivilent.

  9. Roderick Reilly says:

    I think that the post Challenger standdown would’ve been a reasonable time to retire the shuttle.

    Jon — with no replacement in site? It would have made sense to start a phaseout plan if that plan included a doable (i.e., no NASP-like or X-33-type pushing-of-the-envelope debacles) plan for a smaller passenger-only replacement.

  10. Roderick Reilly says:

    everyone expected that sooner or later a President was going to call for an improved vehicle (Orient Express, anyone? NASP?). But it never happened, and NASA’s efforts (X33, etc) to develop something else always got trashed once it was clear that the President/OMB/Congress weren’t interested.

    Mike: as I alluded to in my comment to Jon, NASP and X-33 were part of the problem, and, frankly, followed the same mentality and pattern as Shutle: too much, too soon. U.S. Space R&D seems to swing between either the overly-ambitious (for its time) such as Shuttle, NASP and SSTO (X-33), or retroing back to Apollo, as in Constellation/Orion. A reasonably paced and funded, realistic evolutionary approach to RLV development has never been tried.

  11. Extremely well done, if only enough of the “right” people would read it (or would they still miss the point?).

  12. Coastal Ron says:

    John Hare, you stated:
    “Commercial space will start sending up astronauts to ISS in 2016 after $16B-$20B in development costs.”

    Would you care to elaborate on your assumptions? I think you are way too high.

    The President & CEO of ULA stated that Delta IV Heavy could be man-rated (plus launch pad upgrades) for $1.3B, and that it would take less than 5 years. After that, they could launch an Orion for $300M/per. They also could man-rate the Atlas V for commercial flights, and launch for $130M/per.

    SpaceX, which has developed it’s Falcon 9 & Dragon with internal funds, is taking $278M from NASA for COTS milestone payments. This could be defined as “priming the pump”. After that, SpaceX receives payment for services provided, and it works out to an average of $133M/delivery.

    So my question to you John, is where do you get $16-20B in development costs?

    The metric we need to focus on is what are we paying to put crew & cargo into LEO. For crew, Soyuz will do it for $45-55M/seat, although you are limited to 3 or less crew delivered. SpaceX has quoted $20M/seat, and here are the figures I see supporting that claim:

    Launcher – $51.5M (published SpaceX price w/fairing that’s not needed)
    Dragon Capsule – They will have 12 once-used capsules after COTS, so the only cost is refurbish to add seats, and add LAS and environmental systems. For material & labor + overhead stuff, call it $20M per capsule.
    Facilities & Mission Tracking – They need to add crew access & pad escape infrastructure, as will as a staffing for crew monitoring (they already have their own operation center). NASA could be contracted for some of this too. Again, material & labor + overhead stuff, call it $10M per capsule.
    Recovery – Call it $10M. I think they will contract for these services.

    SpaceX will charge $20M/seat on a 7 seat Dragon, and I think they will have two crew, so with 5 passengers, they receive $100M in revenue. If you add up the above costs, it’s somewhere around $90M/launch, giving them $10M in profit. These are a SWAG, but they fit within the $20M/seat quote from Elon Musk.

    As long as there are no show stoppers, this is the potential of commercial space services.

  13. A_M_Swallow says:

    Refurbishing Dragon includes replacing the heat shield for each flight.

  14. Doug Jones says:

    Coastal Ron, the numbers are too high because they are _shuttle_ numbers, all part of the satire.

  15. Coastal Ron says:

    Doug Jones you are right – I guess I didn’t read the last paragraph.

    My apologies to John Hare too. You wrote it so well, I was chomping at the bit to respond, and missed the irony.

    At least it gave me a chance to display the commercial prices. I still think NASA should go forward and fund Delta IV for crew, and then open up a second crew launcher to competition. Atlas V, at $130M/launch, is competitive with Soyuz when delivering three crew, and within the ballpark of SpaceX when delivering five. Oh, and I like the potential of Dream Chaser too. Go commercial!

  16. mike shupp says:

    Roderick Reilly — ” U.S. Space R&D seems to swing between…”

    Not disputing the point, but I don’t think this is peculiarly a space-related issue. R&D management in the USA makes the same sort of errors in all kinds of industries — software in particular (Ed Yourdon used to write books about this). It seems to be a cultural thing — how to you select managers in the first place, how do you evaluate their work, how do you promote the ones who impressed you and so on. We tend to pick optimisitic people for managerial jobs (“Yes, I can do the job in 6 months rather than 9! Yes, I can get it done if my budget and workforce is cut 20% tomorrow!”), and they’re the ones who move up the corporate hierarchy.

  17. Derek Nye says:

    I do like this post. What is interesting is that there are many people who probably believe that extreme reality you painted. Bitter old Senators, and NASA Fanboys and Girls who believe nothing good can come from a commercial sector, imagine this doomsday scenario. It will be a great moment in our history when regular people start getting the chance to go to space, thanks to commercial companies. Hopefully, at that point, people will feel foolish for being so pessimistic about the passionate people who want space for everyone, and not just a government.

    -Derek Nye

  18. A_M_Swallow, hmm? Not necessarily. I expect they’ll do inspections on the heat shield and empirically determine how many times it can be reused.

    Especially considering that NASA doesn’t want used Dragons.. so I’m guessing it’ll be up to whoever buys them to decide if they want to pay for the refurbishment or accept the risk.

  19. Coastal Ron says:

    Regarding SpaceX Dragon capsules, SpaceX Pres. Gwynne Shotwell said that they retain ownership of them, since their contract with NASA is for services rendered.

    For the PICA-X heat shield, I haven’t heard what their expectations are, but I would imagine they have the ability to remove & replace them, not unlike the Shuttle tiles.

  20. Mike Lorrey says:

    Marcel F. Williams

    “There’s not enough manned spaceflight traffic from the US to the ISS to support more than one manned spaceflight company.”

    This is the typical driving with the rear view mirror errors of logic we see so much from anti-newspace curmudgeons. Much akin to the false conclusion that since the Russians only allow one tourist on a Soyuz a year, that therefore there is only a market for 1 paying orbital space tourist a year, ignoring the fact that the limitation is not on the demand side but on the supply side.

    The limitations on the manpower sent to the ISS annually is similarly a supply side issue of restricted budgets and poor sortie rate capabilities limiting the number of missions and crew sizes. NASA cancelled having a Bigelow transhab on ISS as a living module for budget and mission limitations reasons (its installation was one of the missions originally scheduled to fly after 2010). Part of that cancellation I am sure also had to do with NASA’s anti-tourism attitudes that were expressed when they tried to prevent the russians from sending tourists up as well, with the russians responding that without tourist dollars they couldn’t afford to keep up their end.

    With commercial transportation to ISS, particularly with capsules like the Dragon having a max carrying capacity of 7 means that the US side of ISS could have as many as 14 crew in orbit at any time, with 7 man rotations returning with the designated crew rescue vehicle every 6 months.

    Not all science missions will require 3-6 month durations, with potential industrial scientists making for shorter stays to install and check in on industrial science installations, etc. And yes, there will be more seats available for tourists to fly.

    Marcel, people made the same sort of illogical statements in the 1920’s about airline transportation…

  21. john hare says:


    Either you did not read or did not understand the last paragragh. That timeline is the Shuttle plus 35 years. The budget is the actuall Shuttle budget plus thirty five years adjusted for 2% inflation. This is the time value of the money that has already been spent.

  22. mike shupp says:

    Derek Nye —

    You don’t seem to understand how actual people think. In lieu of that, you might want to take some economic courses when you get to college.

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