Commentary | Time for a Rocket Intervention

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Recent disclosures that United Launch Alliance (ULA) is being investigated by the U.S. Federal Trade Commission over allegations that it employed anti-competitive tactics to restrain the trade of RD-180 engines raises more general and timely questions about ULA’s behavior in the marketplace and an industrial policy that has proved self-defeating. The trade commission is apparently investigating whether ULA, through the use of exclusivity agreements in contracts with RD-AMROSS, prevented Orbital Sciences Corp. from acquiring the RD-180 rocket engine for use in future versions of the Antares booster. 

The fact of this investigation has brought much-needed light on two of the most curious and frankly disturbing aspects of American space policy over the last two decades: the costs of monopoly and the continued reliance on foreign main engines.  

In view of the special privilege extended to Boeing and Lockheed Martin in allowing the formation of a de facto launch monopoly in 2006, the current allegations are particularly disquieting. Given the widely publicized and dramatic increase in costs to the taxpayer in the Evolved Expendable Launch Vehicle (EELV) program, ULA’s inability to compete on the commercial launch market, and the notable decline of the industrial base, it is important that the Federal Trade Commission carefully examine what other practices, if any, have exerted a chilling effect on competition. 

Orbital’s belief in the business case for Antares is noteworthy, and its apparent commitment to achieve EELV-level capability is positive and important. But the fact that the entire substance of the antitrust allegation is over one American company preventing another American company from buying a Russian-built main engine for use after the latter company’s original source of 40-year-old Russian engines runs out underscores the fact that efforts to protect the industrial base have not merely failed, they have become a farce. 

In attempting to understand how that may have happened, and what to do about it, an all too familiar analogy may apply. Certain aspects of the issue bear a remarkable resemblance to drug addiction, complete with a supplier, dependency, loss of initiative, denial and of course the ever-present enabler.  

As industrial policy, it could hardly be more counterproductive. The two-chambered RD-180 is basically one-half of the four-chambered RD-171 engine, which powers the Zenit boosters and is built in the same factory. Furthermore, a closely related single-chamber version, the RD-191, is slated to power each core of Russia’s Angara family of boosters, intended to compete on the world market for years to come. Quite simply, U.S. taxpayer-funded procurement of the RD-180 engine is, and has been, effectively supporting the Russian industrial base at the expense of our own. Although the decision to incorporate the RD-180 into the prior Atlas 3 launch vehicle made both political and economic sense in the world of the late 1990s, much has changed since then. Subsequent decisions to continue importing the RD-180 in lieu of initiating U.S. production — an original EELV requirement, but quietly dropped — significantly contributed to the full-fledged retreat from an indigenous hydrocarbon main engine capability, which is only now being countered by Space Exploration Technologies Corp. (SpaceX) and its Merlin engine. The suggestion periodically put forward that the U.S. could start domestic production of the RD-180 at any point evokes the familiar protest, “I can quit anytime I want.”        

Foreign sourcing for such a fundamental critical path component makes for highly questionable defense policy as well, a concern raised by the RAND Corp.’s 2006 report on the EELV program. Congress reiterated this concern in its National Defense Authorization Act for Fiscal Year 2013, which called for a report on the national security implications of continued reliance on foreign propulsion systems for EELV program launches. Considering Russia’s slide back toward authoritarianism and renewed role in actively opposing U.S. interests on a global scale, continued reliance on the RD-180 leaves the United States needlessly vulnerable to external manipulation. While Russia is a valued and indispensable partner in the international space station program, it also remains a potential adversary, as underscored by ongoing development of a new generation of ICBMs, including a new “heavy”  liquid-fueled missile, all tailored for the specific purpose of overcoming U.S. anti-missile defenses. 

If there is a bright side, given its clear success in sapping U.S. initiative in the field of hydrocarbon engines (SpaceX and other “new space” efforts excepted) completely cutting off access may be the last thing Russia wants to do. What dealer would? Raising prices however, is another matter.  

With the RD-180 powering two of three entrants in NASA’s Commercial Crew Program, the implications for civilian space policy are worthy of further consideration as well, preferably before the United States exchanges one form of dependence for another. If budget considerations allow only one or two winners, as seems likely to be the case, any scenario that does not include SpaceX would leave the United States completely dependent on Russian technology for the most elemental component of its human spaceflight program, undercutting the rationale for getting away from buying seats on Soyuz in the first place and making a mockery of the current call to “end our dependence on Russia.”  

Perhaps it is time for an intervention. A more proactive national space policy, one not in denial, might address how to break the United States from its addiction to Russian engines without endangering the military’s access to space. It is time to bring real competition to national security space launch and some much-needed clarity to the EELV program’s murky cost accounting by consolidating the two EELV contracts into a single unit and disclosing per order rather than per core costs, just as it is done through the much clearer, more competitive and less costly NASA Launch Services 2 contract.

As a related measure, it is important to ensure a fair and level playing field in the upcoming competition between ULA and the certified new entrants. The government must not allow ULA to leverage its generous EELV launch capability subsidy to unfairly compete or conceal its true costs in a head-to-head competition against SpaceX, Orbital or any other new entrant.      

One possible solution for the engine conundrum not involving a direct subsidy for one competitor at the expense of another would be to place a sunset provision on Department of Defense launches conducted by boosters with foreign-sourced main engines. The Air Force has wisely decided to put more players on its launch services bench, and as certified new entrants come on line, the arguments used to justify the continued reliance on foreign propulsion systems recede. At that point, the United States will have at least two completely independent domestic options in the Delta 4 and the Falcon 9 as well as the status quo in the Delta 4 Heavy. It would then be up to ULA to determine the relative merits of soliciting a common engine for the Atlas 5 from Aerojet Rocketdyne, possibly in co-operation with Orbital Sciences, versus the alternative benefits of securing a higher production rate for the Delta 4 than is going to be available to it anyway at whatever point SpaceX achieves certification. 

No matter how strident the calls for subsidized development become, and they will, the best solution for the ailing industrial base is a heavy dose of the tough love that demands others follow the example already being set, and assume responsibility for their own success. 

 

Stewart Money is freelance writer living in Alabama. He publishes the blog Innerspace.net and is currently completing a history of SpaceX and the development of the Falcon 9 system.