Astronomical Profits

Bush's space plans could give the flagging aerospace industry a major boost.

Tue Jan. 20, 2004 3:00 AM EST

President Bush’s new space plans may be enormously expensive, maddeningly vague, and scientifically dubious, but they came as good news to the aerospace industry.

Thanks to the shuttle disaster, a budget crisis at NASA, and the failure of the International Space Station to generate much interest, the U.S. space program has been faltering. So, too, has the industry that serves it. As Flight International, a trade publication, recently put it, the past two years have been "among the most miserable ever for many parts of the aerospace industry."

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An example: In the late 1960s, during the peak of the U.S. space program, more than 26, 000 jobs were linked to the space program in Florida alone. Today, that number has dwindled to 16,000. So plans for a station on the moon and a manned journey to Mars mean the space industry stands to gain billions of dollars from contracts. Rep. Dave Weldon (R), who represents Florida’s space coast, said; ''I think it's definitely good news. If this is followed up on, we're going to be in the space business for generations.''

Many companies consolidated in the 1990s, with Boeing and Lockheed Martin emerging as the dominant contractors by far. One or the other oversees virtually every major NASA program, and a Boeing-Lockheed joint venture, the United Space Alliance, manages the space shuttle program.

These companies are likely to do very well out of the new plans, to the detriment, once again, of smaller firms As Space.com, a space news site, says, "So far, the Bush plan does not appear to include development of new generation of less expensive launch vehicles, but would rely instead on the recently introduced stable evolved expendable launch vehicles built by Boeing and Lockheed Martin."

Cost is the largest criticism to Bush’s space plans. Bush is expected to recommend a modest increase — $800 million to $1 billion — to the $15 billion NASA budget for the next 5 years, but beyond that, the costs are unknown. Some estimates cite a figure in the region of $1 trillion by completion, quite a strain given the unbroken horizon of budget deficits that seem to lie before the country.

Some experts argue that part of the problem is NASA’s method of contracting with a few large companies is not the most efficient way of doing business. Space entrepreneur Dennis Wingo says, "If this is going to be the old NASA contractor model, it going to fail because there is no way that's going to produce the cost effective solutions this venture needs."

Space.com says that for the $100 million cost of awarding a commercial launch contract to Boeing or Lockheed Martin, NASA could entice more innovative players into the market. For instance, one California-based company, Space Exploration Technologies, is finishing development on a small reusable rocket priced at $6 million per launch.

While the space industry is eager for the work, companies aren't counting their gains yet. Says the vice president of the Transportation Workers Union, which represents some shutttle technicians, said: ''Everybody is on pins and needles. Until the money hits the budgets of private contractors, it's just talk.''

The extent to which industry may have shaped Bush’s Mars plans is in question. An article in Oil & Gas Journal in 2000 titled "Drilling Technology for Mars Research Useful for Oil, Gas Industries," co-written by an executive from Dick Cheney's Halliburton discusses the potential for an oil industry on Mars, and goes into detail about the steps needed to make equipment that would work on the red planet. The article said:

"NASA's Mars exploration program, despite recent setbacks, presents an unprecedented opportunity for both investigating the possibility of life on Mars and for improving our abilities to support oil and gas demands on Earth. This is an opportunity that warrants the support of both government and industry leaders. During initial planning workshops, researchers and officials from NASA, the NADET Institute, the US Department of Energy, three national laboratories, and select industry representatives identified 16 technologies that would be required to meet the drilling, downhole evaluation, and safety needs of the Mars missions. They also agreed that success requires cooperation between NASA, DOE, and industry."

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