FAA Space Transport Chief Urges Action on Launch Indemnity

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WASHINGTON — The top U.S. commercial launch regulator and his office’s chief adviser told a congressional panel that the United States must extend, and perhaps even strengthen, the liability shield it offers to commercial launch providers to ensure that the domestic industry can stand up to international competition.

“We need it to be competitive internationally,” said Wilbur Trafton, the former Boeing launch executive who chairs the Commercial Space Transportation Advisory Committee (COMSTAC). The body, which includes industry and government representatives, makes recommendations to the Federal Aviation Administration (FAA) on commercial space transportation issues.

“Everybody else has this,” Trafton said. “Without it, our industry will suffer. Russia takes care of theirs, Europe takes care of theirs, China takes care of their launch providers. We need to do the same.”

Trafton spoke at a March 20 hearing of the House Science space and aeronautics subcommittee. The hearing was called to review the White House’s 2013 budget request for the FAA’s Office of Commercial Space Transportation, known as AST. Trafton testified alongside George Nield, FAA’s associate administrator for commercial space transportation, who urged the subcommittee to extend a risk-sharing liability and insurance regime U.S. launch providers have operated under for the past two decades.

The U.S. government currently indemnifies commercial launch operators by promising to pay up to $1.5 billion to cover third-party damage claims that exceed the insurance coverage the AST requires licensed operators to carry.

Congress established launch indemnification in 1988 as part of the Commercial Space Launch Act Amendments and has extended the risk-sharing regime five times, most recently in 2009.

That three-year extension will expire Dec. 31 unless Congress acts.

“In general, we definitely need to extend the regime,” Nield said. “The recommendations that COMSTAC has made … are that we consider having it renewed for more than a few years, perhaps 10 years or even making it permanent, and lifting the cap.”

Trafton said that COMSTAC would settle for a one-year extension so that Congress, industry and the FAA could “work the fine details” of a longer-term solution.

The subcommittee is set to explore the issue of commercial launch indemnification in greater depth in a separate hearing later this spring.

“We are going to be having a hearing on indemnification in the latter half of May,” said Rep. Steven Palazzo (R-Miss.), chairman of the subcommittee. “We’re hoping to have the [Government Accountability Office], who’s conducting an extensive analysis of the market right now, to come and be one of our witnesses.”

Much of the hearing focused on AST’s 2013 budget request of $16.7 million, or about 3 percent above the office’s 2012 level.

While that is a much smaller increase than AST sought last year, when it asked Congress to raise its budget to nearly $30 million, lawmakers continue to express doubt AST needs so large a budget when the industry it oversees is so small.

Nield said that his office will be overseeing more launches and re-entries this year than at any other time in AST’s history. The extra funding, he said, would help pay for additional personnel.

Nield’s office forecasts that it will oversee 40 launches in 2013, a figure that includes suborbital flights from companies targeting the space tourism and research markets. That is up from an expected dozen or so in 2012, Nield said. In 2011, the agency oversaw only a single launch.

The expected increases are due to the expected on-ramp this year of NASA’s Commercial Resupply Services program and the anticipated debut of Virgin Galactic’s New Mexico-based suborbital space tourism business early next year. Both the program and the business are years behind schedule in getting to space.

Under the Commercial Resupply Services program, NASA has agreed to pay Orbital Sciences Corp. of Dulles, Va., and Space Exploration Technologies Corp. (SpaceX) of Hawthorne, Calif., a combined $3.5 billion to conduct 20 cargo launches to the international space station over the next several years.

Those launches, like the demonstration flight SpaceX conducted in 2010 for NASA, are considered commercial and will need licenses from AST, Nield said.

The re-entry of SpaceX’s Dragon capsule at the end of the 2010 mission was likewise licensed by AST. That re-entry is the only one to date for which AST has had to grant a license.

 

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