This article originally appeared in the Jan. 16 issue of SpaceNews magazine.
While 2016 certainly had its share of highlights, the overall tone of the year was something more akin to an extended stay in the doctor’s waiting room. Elon Musk unveiled his much-anticipated plan for colonizing Mars….but no viable path forward. Satellite orders stagnated. Launch delays proliferated. NASA’s commercial crew program slipped to the right. Satellite operators battled unprecedented pricing pressures.
Will 2017 bring more-of-the-same? Possibly, but not likely. In fact, 2017 is shaping up to be one of the more exciting years in recent history, with the potential for several “industry firsts,” along with profound shifts in public policy.
MOON OR MARS?
Although loathe to admit it, NASA has been “The Agency Without a Cause” since President Obama canceled the Bush-era Constellation program in 2010. Congress, in an effort to avoid punishing job losses, subsequently ordered NASA to build an Apollo-class rocket and crew exploration vehicle (SLS and Orion, respectively). But it never fully endorsed -— much less funded — NASA’s long-term strategy of sending humans to Mars in the 2030s. With nearly 20 percent of its budget siphoned off to pay for SLS/Orion hardware, NASA has done its best to keep the dream alive while advancing targeted and achievable goals in areas such as Earth and planetary science and commercial crew and cargo.
Enter U.S. President-elect Donald Trump. While Trump’s personal views on NASA and U.S. space policy are largely unknown, the evolving composition of his transition team strongly suggests that big changes are afoot for U.S. space policy. Our predictions for 2017:
• Newt Gingrich gets his moon base (well, figuratively at least). Following a prompt review, NASA’s new administrator (moon advocate Rep. Jim Bridenstine?) mothballs the agency’s Mission to Nowhere and announces plans to establish a permanent human presence on the moon. Trump Tower to follow by 2025.
• SLS/Orion survive Trump Twitterstorm. After being informed that the Orion capsule costs as much as a Ford-class aircraft carrier, and that the SLS will cost $2 billion-plus per launch, President Trump threatens to re-bid both programs. The threat proves fleeting, however, due to the successful lobbying effort of the Alabama congressional delegation, combined with a subsequent controversy involving an overrated Hollywood celebrity.
• Earth science takes a drubbing. With a budget of approximately $2 billion per year, NASA’s Earth science division represents an easy target for climate skeptics seeking to pare back the Obama administration’s “overreach.” Earth science funding experiences double-digit declines with the first Trump budget.
• An asteroid “near miss” spurs calls for a global planetary defense system. Then everyone forgets about it. It’s just human nature.
READY TO LAUNCH
On paper at least, 2016 was an average year for space launch activity, with 85 orbital launch attempts worldwide. That’s essentially flat with 2015. Industry revenues, however, were likely down substantially due to the fact that two of the industry’s four commercial heavy lift vehicles (Proton and Falcon 9) were out of commission for a substantial portion of the year. 2017 is shaping up to be a better year. Our predictions:
• China takes the lead. In 2016, China carried out a record 22 orbital launches, tying the U.S. for the most launch activity. China is targeting 30 launches in 2017, a total that should prove sufficient to claim the undisputed crown in 2017.
• Falcon Heavy debuts. Four years behind schedule, the Falcon Heavy makes its epic debut in late 2017. Although late-to-market, the Falcon Heavy could nonetheless prove to be a game-changer for the industry, offering twice the lift capacity of its closest challenger, combined with a per-kilogram launch cost more than 50 percent below industry peers.
• A small launcher (or two) takes wing. More than 50 small launch vehicles are currently under development, but a grand total of zero have actually flown to date. We expect one or more of these vehicles (Rocket Lab, Vector Space Systems?) to perform a test flight in 2017, followed by operational launches in 2018.
• Reusability moves ahead. SpaceX has successfully recovered a half-dozen orbital stages, but in early 2017, the company will finally demonstrate full-cycle reusability with the launch of SES-10 from the Kennedy Space Center.
• Orbital-launch activity breaks the century mark. Although it hasn’t happened since 1992, global launch activity will enter triple-digit territory in 2017, aided by incremental launches from Russia, SpaceX, China and a handful of small launch vehicles.
CAUTIOUS UNCERTAINTY PERSISTS
Turning to the broader commercial space sector, “uncertainty” will once again be the dominant mood due to global political turmoil and competitive uncertainty. Key predictions for 2017:
• Satellite orders remain weak. An estimated 15 commercial geostationary satellites were ordered in 2016, representing the industry’s lowest total in more than a decade. Orders will improve modestly in 2017, but still fall well below the traditional benchmark of 20-22 satellite orders due to ongoing uncertainty regarding the impact of high-throughput satellites (HTS) combined with potentially disruptive changes to tax, accounting and interest-rate policies
• Transponder price erosion continues. Satellite operators have experienced unprecedented price erosion in recent years due to a massive glut of new HTS capacity. This price erosion will continue in 2017 — albeit at a moderated rate — as another roughly 500 gigabits per second of new HTS capacity comes online.
• The NewSpace herd thins. Several dozen NewSpace startups have opened for business over the past five years, and many of these companies are currently seeking Series A/B financing as their seed funding runs dry. Two prominent NewSpace ventures, Firefly and S3, closed shop in 2016. We expect this total to grow in 2017. Also, look for a step-up in M&A activity as NewSpace rivals merge and “OldSpace” companies seek to scoop up new talent.
• Satellite operator consolidation. Nope. Always high on the speculation list, but unlikely to happen in a year of elevated “uncertainty.”
• Defense grows modestly. Global disorder, rising nationalism and the prospect of an “all-Republican” government in the U.S. should bode well for global defense-spending trends. That said, any budget increases pushed through in 2017 won’t be felt until 2018 or beyond.
To sum up, the commercial space industry is likely to experience modest-to-moderate growth across most sectors, assuming a reasonably stable political/economic environment and the absence of major launch failures. In other words, anything could happen.
Chris Quilty is the president of Quilty Analytics, an independent research and consulting firm specializing in satellites and space.
