SpaceX Receives Boost in Bid To Loft National Security Satellites

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COLORADO SPRINGS, Colo. — The three biggest U.S. government satellite-buying agencies have concluded a memorandum of agreement to establish rules permitting Space Exploration Technologies (SpaceX) and other emerging rocket makers to launch U.S. Air Force and other national security satellites, an Air Force official said April 14.

Air Force Undersecretary Erin C. Conaton, in a speech delivered to the National Space Symposium here, said the memorandum, signed by the heads of the Air Force, NASA and the U.S. National Reconnaissance Office (NRO), should be released this summer.

The agreement “is designed to ensure a consistent position on opportunities, certification and requirements for potential new entrants to space launch,” Conaton said in her speech, which in her absence was read by Richard W. McKinney, Air Force deputy under secretary for space programs. “We expect to release new-entrant criteria by late this summer, and we expect to allow new entrants to compete for near-term launch missions.”

The memorandum applies not only to SpaceX, but to any company that decides to builds a rocket suitable for relatively heavy military satellites, he said.

Briefing reporters after the speech, McKinney said the policy will set out hurdles that SpaceX will need to clear before its Falcon 9 Heavy rocket, now in development, is permitted to join the Boeing-Lockheed Martin joint venture, United Launch Alliance (ULA), in placing national security payloads into orbit.

Hawthorne, Calif.-based SpaceX recently signed its first contract with a major commercial satellite operator whose assets are in geostationary orbit.

The contract, with SES of Luxembourg, is for a 2013 launch that will occur only once SpaceX has successfully demonstrated, at least twice, a new and more powerful Falcon 9 main-stage engine and a new, wider payload fairing.

McKinney pointed to the SES-SpaceX deal as a model that could be adopted by the Air Force, NASA and NRO. The Air Force’s absence from SpaceX’s current customer lineup has been a source of frustration for the company’s managers.

Left apparently unaddressed by the memorandum of agreement is a longer-term vision of how the U.S. government expects to support two independent launch-service providers. It was the inability of Lockheed Martin’s Atlas 5 rocket — and especially Boeing’s Delta 4 rocket — to maintain financial viability that drove the Air Force to merge the two launch systems into ULA.

SpaceX has high ambitions to attract commercial satellite customers and is offering prices that are far less than what ULA charges for its Air Force and other U.S. government launches. As such, its current vision is to diversify its customer set to reduce its financial reliance on any given market.

Launch-service providers agree that their viability, as well as their ability to keep costs down, is based on launch rhythm. The more often a vehicle launches, the more reliable it becomes. Scale economies are introduced as well in a virtuous cycle.

One U.S. government official agreed that if SpaceX is now allowed to break ULA’s monopoly on U.S. government satellite launches as indicated by the memorandum of agreement, it could force ULA’s already high prices even higher as it eats into ULA’s current market.

“In the longer term we may be faced with questions about whether one of them [ULA or SpaceX] can remain viable without direct subsidies — the same questions we faced with ULA,” this official said. “Then what do we do? We have a policy of assured access to space, which means at least two vehicles. The demand for launches has not increased since ULA was formed, so we could be heading toward a nearly identical situation in a few years. But we are spending taxpayers’ money and if we can find reliable launches that are less expensive, we are not going to ignore that.”

 

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