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Spaceflight Is Getting Cheaper. But It's Still Not Cheap Enough.

Jul 21, 2011
Originally published on July 21, 2011 4:54 pm

Elon Musk wants humans to live on other planets one day. But he's worried about the cost of getting there. So in 2002, he took the fortune he made in Internet start-ups and started his own rocket company. He called it SpaceX.

The company is still in its early days. It's had seven launches, four of which made it into orbit. According to the company's website, the price to put stuff in orbit runs around $2,000 to $3,000 per pound.

Musk says SpaceX's latest rocket in development, the Falcon Heavy, will be able to do it for as little as $1,000 a pound.

Historically, that's pretty low. Using the Space Shuttle to get a pound of something to the Space Station, for example, costs around $10,000.

But it isn't cheap enough to make spaceflight an ordinary event. Even at $1,000 a pound, sending a person into orbit would still run to more than $100,000.

"Clearly that's still too much," Musk says. "We really need to get to well under $100 a pound."

It's hard to say precisely how those prices compare with SpaceX's competitors'. The industry is pretty secretive. Companies usually don't post prices on their websites and customers don't often talk about how much they spent.

But Jeff Foust, an analyst with the Futron Corporation, has done some calculations with the available data. He says that it's pretty clear to him that SpaceX is cheaper than its competitors. Perhaps even twice as cheap.

How has SpaceX been able to get the price so low?

The answer isn't in any big technological breakthroughs. Musk says that his company is just lean and smart. They make the engines themselves, for example, which saves money. He says his competitors, industry giants Lockheed Martin and Boeing, are wasteful and inefficient.

But Michael Gass, the President and CEO of United Launch Alliance, a joint venture of Lockheed Martin and Boeing, points out that price isn't the only thing to look at. There's also reliability: you don't want your multimillion dollar satellite blowing up on the launchpad.

Lockheed and Boeing have been launching for 50 years, they've done over 1,000 launches, and Gass says they have a history of reliability. SpaceX is just getting started.

As to why United Launch Alliance doesn't post prices on its website, Gass says the answer is simple. There is no one price. It depends on how far you're going: 200 miles or 22,000 miles.

Elon Musk argues that prices should be lower. One reason is the lack of competition in the launch business. After Lockheed and Boeing merged, they had a monopoly on the market:

If you read the press release announcing the merger, it reads like something out of an Orwell novel. They actually announced that the reason they were merging was to save the US government money. Now I did at the time ask for examples in history of a monopoly that was formed that subsequently resulted in prices going down and I did not receive an answer.

Michael Gass says the companies merged because there wasn't enough business to sustain both of them. But If Elon Musk and SpaceX think they have a better way of doing things, Gass says he welcomes the competition.

As for how cheap space flight should be, Gass agrees with Musk: $100 a pound to orbit could one day be possible.

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STEVE INSKEEP, host:

Now, one of the lessons from the Space Shuttle Program is that putting things in orbit is expensive. When using a space shuttle, getting just one pound of coffee up to the space station costs in the neighborhood of $10,000. That is slightly more than a latte at your local Starbucks.

NASA is now planning to use a private company to take supplies to the International Space Station. And that company, called SpaceX, claims it can do the job on the cheap.

NPRs David Kestenbaum looked at that claim.

DAVID KESTENBAUM: Elon Musk started SpaceX because, as he will tell you, he wants humans to one day live on other planets. And he was upset when he saw how much it cost to get things into space. So in 2002, he took the fortunes hed made from Internet startups and started a rocket company.

(Soundbite of music)

Unidentified Woman: Five, four, three, two, one, we have liftoff.

KESTENBAUM: SpaceX's latest rocket in development is called the Falcon Heavy. Its giant, and Musk says it will be able to get a lot of stuff to orbit, pretty cheaply.

Mr. ELON MUSK (CEO, SpaceX ): With the Falcon Heavy, we're at about a thousand dollars a pound.

KESTENBAUM: So a thousand dollars a pound, historically people would say wow, you know, thats pretty cheap. But I mean how much do you weigh?

Mr. MUSK: Me personally?

KESTENBAUM: Yeah.

(Soundbite of laughter)

Mr. MUSK: I probably could stand to lose a few pounds. But Im around 225.

KESTENBAUM: So thats $225,000 to send you to orbit without - it's like naked without any food, right?

Mr. MUSK: Right.

(Soundbite of laughter)

Mr. MUSK: So clearly it's still too much. I mean we really need to get to well under a hundred dollars a pound.

KESTENBAUM: SpaceX is in early days. Its had seven launches. The first three did not make it to orbit. But the last four did.

Elon Musk makes a point of posting prices online. And right now, hes around $2,000 or $3,000 a pound. His competitors do not post prices though, so its hard to compare. Micah Walter-Range, an analyst at the Space Foundation, said the industry is pretty secretive.

Mr. MICAH WALTER-RANGE (Analyst, Space Foundation): The price of a launch is not really known. Apart from the company that is providing the launch and whoever the customer is.

KESTENBAUM: People wont talk about how much they spent for a launch or how much it cost for a launch?

Mr. WALTER-RANGE: In many cases they will not.

KESTENBAUM: Jeff Foust, an analyst with Futron Corporation has done some calculations with the available data. And says its pretty clear to him. Yes, SpaceX is cheaper.

Mr. JEFF FOUST (Space Analyst, Futron Corporation): Perhaps a factor of two less expensive than many other competing vehicles on the market. Very few people question that SpaceX is selling launches for considerably lower prices than anyone else out there at this point.

KESTENBAUM: The question then is how? How has SpaceX been able to do this? There havent been any big technological breakthroughs. Musk says his company is just lean and smart. They make the engines themselves, for instance, which saves money. He says his competitors, industry giants Lockheed Martin and Boeing, are wasteful and inefficient. So, are they?

Mr. MICHAEL GASS (President, CEO, United Launch Alliance): Elon Musk makes lots of claims, and, you know, lots of promises. Wait and see whats being delivered yet.

KESTENBAUM: This is the competition, Michael Gass, President and CEO of United Launch Alliance, a joint venture of Lockheed Martin and Boeing. Gass says price isnt the only thing to look at. Theres also reliability. You dont want your multimillion dollar satellite blowing up on the launch pad. He says Lockheed and Boeing rockets have been launched over 1000 times.

Mr. GASS: Weve been launching for 50 years, and hes starting. What's more to be said?

KESTENBAUM: So what is your reliability?

Mr. GASS: When the customer wants that well go dig it up, 'cause, you know, figures dont lie and liars figure. We can cut reliability any which way you want.

KESTENBAUM: Give me an impressive sales number.

Mr. GASS: It's 98 or 99 percentile. Anybody that knows the space business knows that.

KESTENBAUM: I asked why United Launch Alliance didnt post its prices on the Website. He said, there is no one price. He says his customers know that. It depends on where youre going.

Mr. GASS: The price to get to space station, that's only 200 miles to 300 miles above earth. We go to places 22,000 and sometimes out of Earth's gravitational pull, so there's no one answer.

KESTENBAUM: Elon Musk at SpaceX argues that one reason prices havent come down is that there wasnt real competition in the launch business. When Lockheed and Boeing merged, they had a kind of monopoly.

Mr. MUSK: If you read the press release announcing the merger, it reads like something out of an Orwell novel. They actually announced that the reason that they were merging was to save the U.S. government money. Now, I did at the time, ask for examples in history of a monopoly that was formed that subsequently resulted in prices going down. And I did not receive an answer.

KESTENBAUM: Michael Gass at United Launch Alliance, responds that the companies merged for a simple reason: there wasnt enough business to sustain both of them. If Elon Musk and SpaceX think they have a better way to do things, he says, good luck to them.

Mr. GASS: If the answer is yes, they should be in business and we should go out of business. And well be anxious to participate in that competition.

KESTENBAUM: As for how cheap spaceflight could get, Gass agrees with Elon Musk that $100 a pound to orbit could be possible someday.

David Kestenbaum, NPR News

(Soundbite of music) Transcript provided by NPR, Copyright NPR.