"Rocketing into a cheaper space race"
Rocketing into a cheaper space race
By Leslie Wayne The New York Times
SUNDAY, FEBRUARY 5, 2006
EL SEGUNDO, California Ask Elon Musk what he wants to
do with his life - after having amassed a $300 million
fortune from the Internet - and the answer is
At 34, he says, he is too young to retire, and
philanthropy is a bit staid. Starting another
Web-based venture is hardly a challenge for a man who
bought the idea for PayPal, built it up and then sold
it to eBay for $1.5 billion. So, in seeking a new
direction in life that would be as ambitious as his
dreams, Musk has picked a bold one: cheap and reliable
access to space.
Making money from space is a road that several other
self-made millionaires have tried, from a Texas banker
named Andrew Beal to one of Microsoft's co-founders,
Paul Allen. There have been enough of them to warrant
a mocking nickname: "thrillionaires." And so far their
efforts have either ended in failure or just been
ventures in "space tourism" that brought test pilots
to the fringe of space.
Musk wants more, and he has put $100 million of his
fortune on the line to try to get it. His goal is to
make a business out of inexpensively launching
satellites into orbit. Inexpensive, of course, is a
relative term in a business where launchings of
private commercial weather, telecommunications and
other payloads start at $30 million and go up to $85
million or more.
Through his company, Space Explorations Technology, or
SpaceX, Musk wants to send things to space for
one-third of the going rate or less - even bringing
down the price to $7 million for small payloads in low
Earth orbit - with a series of simple rockets of his
own design. His goal is to build a Volkswagen Beetle
of the cosmos, a bare-bones and dirt-cheap rocket that
will go into space and return to be used again and
Commercial launchings currently cost $5,000 to $10,000
for each pound of payload; Musk says his simple
rockets could do it for $1,000 a pound. His first
rocket, the Falcon 1, of a two-stage liquid-fuel
design, is scheduled to lift off on Wednesday from a
U.S. Army facility on Omelek Islet in the Kwajalein
Atoll, part of the Marshall Islands in the Pacific. On
board will be a 43-pound satellite, or nearly 20
kilograms, the FalconSAT-2, designed by cadets at the
U.S. Air Force Academy to study the ionosphere.
The launching has been postponed twice for technical
reasons, but if it succeeds, it will move SpaceX
closer to filling some of the $200 million in firm
launching orders already placed by the Pentagon,
governments and private companies.
Less clear is whether a success will also silence the
many skeptics who have seen other wealthy space
"This is an enormously difficult business to make
money in," said John Pike, a space policy analyst at
GlobalSecurity.Org, a nonprofit group in Alexandria,
Virginia, that analyzes national security issues. "The
best way to make a small fortune in space is to start
out with a large one."
Musk says he was drawn to the project not only because
he has long been fascinated by space - he has a degree
in physics from the University of Pennsylvania - but
also because he sees a market opportunity in America's
declining share of the world's satellite-launching
In the commercial market, the two big rocket giants in
the United States, Lockheed Martin and Boeing, have
been priced out by lower-cost competitors from Russia,
Ukraine and France. Lockheed's Atlas 5 had only one
commercial order in 2005, compared with 22 in 1998.
Boeing has withdrawn its Delta 4 rocket from the
commercial market and relies exclusively on business
from the U.S. government.
At stake is a market that was worth $4 billion last
year, when governments and businesses paid for 55
launchings, according to the Federal Aviation
Administration. Of those, 18 were commercial, with a
value of $1 billion. American companies compete for
commercial orders only by teaming with foreign
partners - often former Cold War rivals. Lockheed has
teamed up with Khrunichev State Research of Russia to
form International Launch Services. Boeing has joined
with several nations to form a consortium called Sea
Musk says he wants to develop an all-American option
that will be price-competitive and break the duopoly
of Lockheed and Boeing on contracts with the federal
government. Ultimately, he wants to send people into
space, to the moon and beyond.
"We have to do something dramatic to reduce the cost
of getting to space," Musk said in an interview at
SpaceX's offices in El Segundo. "If we can get the
cost low, we can extend life to another planet. I want
to help make humanity a space-faring civilization."
SpaceX's first effort, the Falcon 1, will not put
anyone on the moon. It is designed to send small
satellites - typically communications and scientific
payloads smaller than 1,000 pounds - into low orbit, a
maximum of about 300 miles, or 500 kilometers, above
the Earth. The two-stage Falcon 1 is designed to be
mostly recyclable, with part of it falling into the
ocean to be picked up and used again.
The Falcon 1 will charge $6.9 million a launching. It
is intended to go head to head with the Pegasus rocket
made by Orbital Sciences of Dulles, Virginia, which
charges $25 million to $30 million for the same
launching, as well as rockets sent up by India and
Next up are the Falcon 5, the same rocket with five
engines, and the Falcon 9, with nine engines. The
Falcon 9 would bring SpaceX into direct competition
with Boeing's Delta 4 and Lockheed's Atlas 5 in the
so-called heavy-lift market, in which the U.S.
government is the main customer. A Falcon 5 will
launch 8,000-pound payloads for $18 million, a third
of the price charged by competitors. The Falcon 9,
which will put 10 tons of payload as far as 22,000
miles into the sky, will cost $27 million a launching.
A similar launching by Lockheed or Boeing costs about
$70 million to $80 million.
Expecting that it can compete in this market, SpaceX
has sued Boeing and Lockheed in federal court in
California, seeking to prevent them from combining
their rocket units in a joint venture called the
United Launch Alliance that would have a lock on $32
billion in Air Force launchings through 2011.
"SpaceX has the potential of saving the U.S.
government $1 billion a year," Musk said. "We are
opposed to creating an entrenched monopoly with no
realistic means for anyone to compete."
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