Virgin Galactic Pushing for New Mexico Liability Relief

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CAPE CANAVERAL, Fla. — New Mexico’s fledgling commercial spaceport is in danger of becoming a white elephant if the state does not extend a liability shield to manufacturers and suppliers supporting emerging private spaceflight operators like Virgin Galactic, say proponents who have twice failed to get legislation passed.

As an operator, Virgin Galactic, the primary tenant at the newly built Spaceport America near Las Cruces, N.M., is protected, but if lawmakers again pass on extending the liability shield to manufacturers, the company said it will rethink its commitment to flying its planned fleet of suborbital passenger spaceships from New Mexico.

“We’re going to look at what the legislature does and then evaluate our stance toward the spaceport after the session,” Virgin Galactic President George Whitesides told SpaceNews.

“It’s a serious issue and a big deal for us. If we’re the only tenant at the spaceport, then it is unlikely the spaceport will be healthy,” Whitesides said.

Currently, New Mexico law protects firms operating spacecraft from claims filed by clients who have signed informed consent agreements and waived liability before they fly. But other states, including Florida, Texas and Virginia, also indemnify manufacturers and suppliers.

“We think that for [New Mexico] to be competitive it has got to pass a bill that brings it into parity with the other states,” Whitesides said, adding that the legislation is “a no-brainer.”

“It doesn’t cost the taxpayers a dime. It doesn’t affect the rights of anybody who’s not involved in spaceflight. It is purely an issue of the informed consent of passengers themselves and what other states are doing. Given that the taxpayers of New Mexico have made a $200 million investment in commercial space, it seems like an obvious thing,” he said.

Lobbying efforts are under way in advance of the New Mexico Legislature’s official opening in January. On Nov. 14, the Save our Spaceport Coalition announced its formation at a press conference in Albuquerque, N.M. Previous attempts to limit commercial space companies’ liability reportedly failed due to opposition from trial lawyers.

“I think Virgin Galactic’s concerns are valid,” said Mike Gold, director of business growth for Bigelow Aerospace and newly named chairman of the Federal Aviation Administration’s (FAA) Commercial Space Advisory Committee.

“Until a case goes to the courts there is always going to be a lot of uncertainty surrounding this issue, no matter what the law says. In such an uncertain environment, it would seem to me that the least a state could do is pass legislation to protect space operations,” Gold wrote in an email to SpaceNews.

Companies would still be liable for accident damages to uninvolved third parties.

“If somebody’s spaceship crashed on somebody’s cow, there are no laws that prohibit that farmer from suing anybody. This is one of the big confusions with this piece of legislation. There’s this idea that any of these bills in some way curtails the uninvolved public’s ability to sue if they suffer damages and it’s just completely not true. In none of these bills does the farmer on the ground have his rights curtailed,” Whitesides said.

“The whole point of flying from New Mexico is that there’s not a lot of stuff around, so the probability of anything happening is incredibly low,” he added.

Virgin Galactic, which expects to begin passenger flights to suborbital space in late 2013 or 2014, has a 20-year lease to operate at Spaceport America.

Another company that currently flies from New Mexico, Armadillo Aerospace, says indemnification is not presently an issue for its operations, which included FAA-licensed launches of scientific payloads.

“We carry mandatory launch insurance in an amount specified by FAA, and then above and beyond that, we are covered to the tune of $1 billion-plus by the U.S. government. Fortunately, in 12 years of flight operations we have not had a single claim on either insurance provider,” Neil Milburn, Armadillo’s vice president of program management, wrote in an email to SpaceNews.

When commercial manned operations begin, though, insurance will play a much more important role, he added.

“There are new competitors for Spaceport America cropping up all over the world, including some in their own backyard. The launch operators, of course, will be looking for every competitive edge they can leverage and the indemnification environment will be part of that equation,” Milburn said.