Two Disasters Raise Concerns Over Private Space Industry

Source: Time.com In the final days of October, the private space industry suffered two major setbacks. As two of its leading firms saw disastrous results from launches, experts have raised questions about the future trajectory of space exploration.

On October 28, one of Orbital Sciences Corporation’s unmanned Antares rockets malfunctioned and exploded within seconds of liftoff. Three days later, on Halloween, one pilot died and one was injured when Virgin Galactic’s SpaceShipTwo crashed on a test flight. The two incidents resulted in the loss of millions of dollars for the companies involved and shook many investors’ faith in the feasibility of commercial space operators.

Orbital Sciences, whose rocket was carrying a cargo payload to the International Space Station that included an experiment designed by Georgetown undergraduates, signed a $1.9 billion deal with NASA to carry out eight deliveries to the station through 2015. Though the company has already executed two such missions successfully, this third mission’s failure has called into question its ability to complete the other contractually-obligated missions before the contract’s expiration. Orbital Sciences chose to use modified Soviet engines from the N1 rockets of the late 1960s (with which the Soviet Union had hoped to complete a manned moon mission) instead of developing their own independent technologies (as rival SpaceX has done).

A week after the crash, Orbital Sciences announced that it will no longer be using the Soviet engines and that it will instead be pausing its own launches until at least 2016 while it rents space on other companies’ rockets in order to fulfill its contract with NASA. While this strategy is best for Orbital Sciences in the long run, enabling it to develop its own technologies and strengthening its employees’ understanding of their own engines, it could be a risky one. If the company cannot build a sufficiently-capable engine at a low enough cost, it will become reliant on competitors’ designs indefinitely and most likely not win another NASA contract. In the meantime, the longer it takes to re-develop the ability to launch payloads on its own, the longer Orbital Sciences will have to bear the high costs of renting space from its own rivals. Investor concerns left the stock price down by more than 16% following the explosion. For Orbital Sciences, the transition to a proprietary rocket engine design will likely be the most important action the company will ever take, and subsequent failure would be crippling.

Space tourism, on the other hand, suffered a painful blow of its own with the crash of Virgin Galactic’s SpaceShipTwo on Halloween. Virgin Galactic, Sir Richard Branson’s company whose goal is to eventually enable recreational space tourism, has been working towards that end for just over a decade.  With its original SpaceShipOne design, Virgin Galactic won the Ansari X Prize for successfully launching a manned reusable spacecraft into orbit twice within a two week period in October 2004. Since then, more than 800 individuals have paid deposits towards the $250,000 price for a short space flight above the atmosphere in SpaceShipTwo. On October 31, however, human error led to one death and one serious injury for the test pilots and the destruction of SpaceShipTwo. As a result, the first of the space flights will now be delayed until at least 2016, when construction of a second SpaceShipTwo is scheduled to be completed.

While both Virgin Galactic and Orbital Sciences face serious challenges in the wake of these disasters, Orbital Sciences faces deeper structural deficiencies that will require it to re-evaluate its mission approach – in terms of technological improvement and business strategy. Rushing to develop a more modern engine, while struggling to stay competitive for NASA contracts by subcontracting out launches to rivals (who, in turn, can use successful launches to demonstrate their own competence and fitness to compete for contracts in the future), will severely hamper Orbital Sciences’ success.

Indeed, the problem facing both firms may be somewhat deeper. Orbital Sciences chose to re-use half-century-old Russian engines in order to save substantial capital early in the company’s life. Because it did not have sufficient financial resources to properly develop the necessary technology for ideal safety and functioning of the engines, Orbital Sciences’ rocket launch proved disastrous for its payload and possibly even for the company itself. If companies such as Orbital Science and Virgin Galactic (along with competitors SpaceX, Sierra Nevada Corporation, and Blue Origin, among others) received direct assistance from NASA or conditional financial subsidies to develop necessary technologies (thereby providing additional funding to make advances possible while ensuring that incremental goals would be met according to schedule), the United States and the world would be able to benefit from the growth of the private space industry. Already the private space industry has proven to be more efficient than the NASA system; providing conditional subsidies for the development of new space technologies might provide financial resources for these companies not sufficiently provided by the cautious market.