The Heritage Foundation

Backgrounder Update #20

August 8, 1986

August 8, 1986 | Backgrounder Update on

Why Reagan Should Give a Green Light to Private Space Launchers

(Archived document, may contain errors)



(Updating Backgrounder No. 500, "What Next for NASA,H April 4, 1986, and Backgrounder Update No. 12, "Private Launchers Can Ease America's Space Vehicle Crisis," June 5, 1986.)

The Cabinet-level Economic Policy Council last week proposed sweeping changes in the way that the United States launches commercial satellites. If executed, the plan would open the door to the development of an American private sector launch industry. It also would help reduce much of the satellite launch backlog that has resulted from the loss of the Challenger Space Shuttle, the grounding of the remaining three orbiters,. and the serious technical problems with America's three unmanned rocket systems.

The plan calls for barring the National Aeronautics and Space Administration (NASA) from using Space Shuttles to launch commercial satellites except when the Shuttle is the only vehicle capable'of doing so or where there is an overwhelming foreign policy or national security interest. The Economic Policy Council proposal also would require NASA to terminate six current agreements to launch commercial satellites. The Council's proposals would boost the private launch industry by eliminating the fear within the investment community that private launch firms would have to compete with heavily subsidized government launch services. This concern has been the principal obstacle to raising money for private launch services.

A private launch industry would ease the enormous backlog of unlaunched private and government satellites. Most of the 43 commercial and foreign satellites currently waiting to be launched could be carried by unmanned rockets (known as Expendable Launch Vehicles, or ELVs). This would leave the three remaining Space Shuttles free for manned missions or those involving national security.

Because private firms entering the launch business would be investing their own capital to reopen the now closed ELV production lines, NASA and the taxpayer would be relieved of the need to spend between $200 million and $400 million to open those lines. By creating strong price competition in a market where none currently exists, moreover, launch options available to firms wishing to deploy satellites would increase and costs would fall. Finally, the firms initially offering launch services would become the nucleus of a new full-scale commercial space industry, promising untold commercial possibilities. There could be, for example, enormous export potential as carriers for foreign payloads.

The proposed new policy is essential for private launches. Regrettably, NASA is lobbying vigorously against it. The space agency was the only dissenting vote in the Economic Policy Council meeting that set the new launch initiative, and it consistently has opposed attempts to reduce its domination of space-related activities. This has been particularly true in the area of launch services using ELVs, despite a 1984 Presidential Directive mandating cooperation in efforts to privatize these unmanned rockets. In recent weeks, as the likelihood of a Cabinet-level decision in favor of ELV privatization became apparent, NASA intensified its obstruction, encouraging Members of the House and Senate to introduce legislation blocking it. NASA also has been issuing press statements questioning the viability of private launch services and dragging its feet on finalizing agreements to privatize ELV systems.

NASA ignores that fact that there really is no option to ELV privatization if the U.S. is to solve the current launch shortage. In a time of budgetary austerity, federal funds will not be available to open ELV production lines without serious cutbacks in other programs, including possibly the proposed Space Station. Worse, the lack of space launch capacity already has begun affecting military launches. As a result, many vital defense programs, including intelligence gathering and monitoring capabilities for arms control compliance have been undermined. The creation of a strong private launch capability would help alleviate these shortages.

NASA's footdragging on privatizing ELVs has led to a dangerous and embarassing irony: America, once the world's space exploration and development leader, is now dependent on other countries, even the People's Republic of China, to launch its satellites. Ronald Reagan must ensure that NASA stops undermining his space commercialization initiative. He should endorse forcefully the sensible recommendations of his Economic Policy Council, thus setting the stage for the birth of a private American launch industry. The U.S. already has lost too much time to the maneuverings of federal bureaucrats who want to keep control of commercial space development in their own hands.

Milton R. Copulos Senior Policy Analyst

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